Devon Energy, Coterra To Form $58 Billion Shale Behemoth - DVN, CTRA Stocks Slip Pre-Market

• The combined company will be named Devon Energy and will be headquartered in Houston.
• The merged company is expected to produce more than 1.6 million barrels of oil equivalent per day in Q3.
• The transaction is expected to close in Q2.

Devon Energy (DVN), on Monday, announced a definitive all-stock merger agreement with Coterra Energy (CTRA) to form a large-cap shale operator with an enterprise value of about $58 billion.

The combined company will be named Devon Energy and will be headquartered in Houston.

DVN shares fell 2.9% in pre-market trading but gained marginally after the opening bell. CTRA stock was down 2.7%.

Transaction Details

As part of the agreement, Coterra shareholders will receive 0.7 shares of Devon common stock for every Coterra share. After the transaction closes, Devon shareholders are expected to own approximately 54% of the combined company, while Coterra shareholders will hold the remaining 46%.

Upon closing, which is expected in the second quarter (Q2) of fiscal 2026, the merged company plans to declare a quarterly dividend of $0.315 per share and establish a new share repurchase authorization of more than $5 billion post-close.

The merged company is expected to produce more than 1.6 million barrels of oil equivalent per day in Q3, including more than 550,000 barrels of oil and 4.3 billion cubic feet of gas daily. The combined company expects to generate about $1 billion in annual pre-tax synergies by the end of 2027.

“We've now built a diverse asset base of high-quality, long duration inventory to drive resilient value creation and returns for shareholders through cycles. Underpinned by our leading position in the best part of the Delaware Basin, and a deep set of complementary assets, we expect to capture annual pre-tax synergies of $1 billion. This will drive higher free cash flow and greater shareholder returns beyond what either company could achieve alone,”  said Clay Gaspar, Devon’s President and CEO. 

Following the merger, the board will consist of 11 members, six directors from Devon and five from Coterra. Clay Gaspar will serve as President and CEO, while Tom Jorden will become a non-executive Chairman.

Retail Reaction

Retail sentiment for DVN and CRTA on Stocktwits was in the ‘bullish’ zone, accompanied by ‘high’ message volumes.  

One user was sceptical about DVN’s price action.

DVN shares have gained 10%, while CTRA stock has increased 7% so far this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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