Devon and Cotera merge to create US shale giant in $58 billion deal
Feb 2 (Reuters) – Devon Energy and Coterra Energy decided on Monday to merge in a $58 billion all-stock deal to become the Permian Basin’s top large-cap producer as the shale sector consolidates to cut costs and increase scale.
The sector’s biggest deal since Diamondback’s $26 billion deal for Endeavor Energy Resources in 2024 came as a global oil glut and the growing likelihood of more Venezuelan barrels returning to the market weighed on U.S. oil prices and hurt margins for shale producers.
Although M&A in the sector subsided in 2025, producers in the shale region continue to pursue advantages of scale, from lower costs per barrel to extended drilling runways in mature basins such as the Permian and Anadarko.
Since trade talks were first reported on Jan. 15, Cotera shares have risen nearly 14%, and Devon shares have risen about 6%.
Both stocks were down before the market opened on Monday. Devon fell about 3% and Cotera fell 2.7%, tracking a roughly 5% drop in oil prices.
Under the agreement, shareholders will receive 0.70 Devon shares for each share they own. Mr. Devon will own approximately 54% of the combined company. The deal has an equity value of $21.4 billion, according to Reuters calculations.
“This combination is incrementally positive for both shareholders, as it combines two high-quality companies to create a larger company that will capture even more investor interest in today’s volatile energy tapes,” said Gabriele Sorbara, an analyst at Siebert Williams Shank & Company.
Operations in major basins
Devon and Koterra operate in several major shale formations in the United States, with overlapping locations in the Delaware portion of the Permian Basin in Texas and New Mexico, and the Anadarko Basin in Oklahoma.
Estimated third quarter 2025 production totals more than 1.6 million barrels of oil equivalent per day, including more than 550,000 barrels of oil and 4.3 billion cubic feet of gas.
More than half of production and cash flow comes from the Delaware Basin, and the combined company will have approximately 750,000 net acres of land in its core operations.
leadership and headquarters
The merger is expected to close in the second quarter of 2026, after which the combined company will retain the Devon name, be based in Houston, and maintain a major presence in Oklahoma City.
Devon CEO Clay Gaspar will lead the company, while Kotera CEO Tom Jorden will become non-executive chairman.
Reporting by Pooja Menon, Sumit Saha and Arunima Kumar from Bengaluru. Editing: Tasim Zahid, Arun Koyyur
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