Devon Energy and Coterra Energy have agreed to merge in an all-stock transaction with an enterprise value of $58 billion. The proforma equity ownership is 54% Devon and 46% Coterra.
Devon has its headquarters in Oklahoma City while Coterra’s head office is in Houston. The combined entity will be named Devon Energy but have its head office in Houston.
Clay Gasper, the CEO of Devon, will become the CEO of the combined group, while Tom Jorden, the CEO of Coterra, will become Non-Executive Chairman. The rest of the Executive Leadership team has not yet been announced.
The combined company would have an expected output of 1.6 million barrels of oil equivalent a day, with half of that coming from the Delaware Basin. Its other major operations are in the Marcellus, Anadarko & Eagle Ford and the Rockies.
Coterra was formed from the 2021 merger of of Cabot Oil & Gas (its head office was in Houston, but its main operations were in the Marcellus) and Cimarex (its head office was in Denver).
Activist Investor
Coterra came under fire from an activist investor, Kimmeridge, in November 2025, for its perceived lack of shareholder returns and having a mismatched portfolio (gas from Marcellus, oil from the Permian and Anadarko basins). Kimmeridge is also a shareholder in Devon and supports the merger. It remains to be seen whether, post-merger, the company divests the Marcellus assets in accordance with Kimmeridge’s wishes.
Merger Synergies
In its investor presentation, the company outlined $1 billion in merger synergies
- $350 million from operating margin improvements through use of complementary assets and enhanced infrastructure capabilities.
- $350 million from capital optimization from better allocation of capital, supply chain improvements.
- $300 million from elimination of redundant corporate costs.
These savings are targeted to be achieved by the end of 2027.
The deal is expected to close in the second quarter of 2026.