Coterra and Devon Near $47B Shale Mega-Merger

January 29, 2026 · by Fintool Agent

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Coterra Energy+2.82% and Devon Energy+0.68% are in advanced talks to merge and could announce a deal within days, according to multiple sources familiar with the matter. The combination would create a ~$47 billion shale giant controlling approximately 746,000 net acres in the heart of America's most prolific oil basin—the largest independent producer tie-up in nearly two years.

Shares of both companies moved higher on the news, with Coterra up 1.3% to $28.14 and Devon gaining 0.3% to $39.94 in Thursday trading. The stocks have climbed since Reuters first reported the companies were in preliminary discussions on January 15.

Why It Matters

The deal arrives at a critical inflection point for U.S. shale. After a record-breaking 2024 that saw $206.6 billion in upstream M&A—a 331% increase over 2023—deal activity slowed sharply in 2025 as the mega-cap acquisition targets were exhausted and commodity prices remained range-bound.

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Show me the largest oil and gas M&A deals in 2024 and compare to prior yearsWhat have Coterra and Devon management said about M&A strategy on recent earnings calls?Compare Coterra and Devon's drilling costs and well productivity in the Delaware Basin

Coterra-Devon would mark a pivot toward "mergers of equals"—a trend analysts expect to dominate 2026 as smaller players seek scale to remain competitive against behemoths like Exxon+0.80%, Chevron+3.40%, and Diamondback+0.54%.

The Strategic Fit

The combination makes compelling industrial sense. Both companies occupy complementary positions in the Delaware Basin—the fast-growing western half of the Permian—where Devon holds approximately 400,000 net acres and Coterra controls 346,000 acres. Together, they would form one of the largest acreage footprints in the nation's most productive oil field.

Devon's CEO Clay Gaspar has emphasized the company's focus on "value creation" through strategic portfolio moves, recently executing both a midstream acquisition and divestiture in the same quarter. 3 The company has been executing a $2.5 billion debt reduction plan while maintaining $4.8 billion in total liquidity. 4

Coterra brings natural gas optionality via its substantial Marcellus Shale position in Pennsylvania, providing diversification at a time when LNG exports and data center power demand are fueling a structural revaluation of U.S. gas assets. CEO Tom Jorden described Coterra as "an ark, not a party boat"—a company "built for this" era of commodity volatility. 5

Financial Snapshot

Both companies enter merger talks from positions of strength:

*Values retrieved from S&P Global where citations not shown

The combined company's scale would place it among the top 5 U.S. independent E&P companies by production, trailing only Conocophillips+1.39%, Eog Resources+0.04%, Diamondback, and Occidental-0.07%.

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Build a pro forma financial model for the Coterra-Devon combinationHow do Coterra and Devon's valuation multiples compare to Diamondback and EOG?What synergies could the combined company realize from overlapping Delaware Basin operations?

Stock Performance

Both stocks have rallied since merger talks were first reported, outperforming the broader energy sector. The market appears to view the deal favorably for both sides—a relative rarity in M&A where acquirers often see shares punished.

Activist investor Kimmeridge Energy Management, which holds stakes in both companies, has voiced support for the potential tie-up.

Deal Structure Expectations

The transaction is expected to be structured as a merger of equals, likely involving an all-stock or predominantly stock-based exchange ratio. Key questions include:

• Leadership: Who will lead the combined company? Devon's Gaspar has been executing well, while Coterra's Jorden built a reputation for operational excellence.
• Headquarters: Devon is based in Oklahoma City; Coterra in Houston. Both are major energy hubs.
• Name: Whether the company adopts one name or creates a new identity could signal the deal's true nature.
• Premium: In a true merger of equals, the exchange ratio would reflect current market valuations with minimal premium.

Neither company has responded to requests for comment.

The Consolidation Imperative

The shale industry faces a structural need for consolidation. Productivity gains are flattening after a decade of technological advancement, while maturing inventories in core areas are forcing operators to either acquire or face stagnation.

The number of publicly traded upstream companies contracted from 50 to 40 in 2024 alone, with remaining producers now accounting for roughly 41% of total U.S. oil and gas output. As Rystad Energy notes, "mergers of equals" are emerging as the preferred strategy for mid-caps that missed the earlier M&A wave.

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Which small and mid-cap shale producers might be next in line for consolidation?Compare breakeven oil prices across major Permian operatorsShow me how U.S. shale M&A volumes have evolved since 2020

What to Watch

• Announcement timing: Sources indicate a deal could come as early as next week, though no final decision has been made.
• Regulatory scrutiny: The FTC has closely monitored energy consolidation; any Delaware Basin overlap will require analysis.
• Shareholder votes: A stock-for-stock merger would require approval from both shareholder bases.
• Synergy targets: Expect management to articulate cost savings and operational efficiencies if a deal is announced.

For now, the U.S. shale industry watches as two of its most capable operators move toward a combination that could reshape the competitive landscape for years to come.

Related Companies: Coterra Energy+2.82% | Devon Energy+0.68% | Exxon Mobil+0.80% | Diamondback Energy+0.54% | Conocophillips+1.39%