Shares of Devon Energy (NYSE:DVN) slid about 3% and Coterra Energy (NYSE:CTRA) fell roughly 4.2% in premarket trading on Monday after the two companies announced a stock-for-stock merger that will form one of the largest shale operators in the United States.
Under the agreement, Coterra investors will receive 0.70 shares of Devon common stock for each Coterra share they hold. The transaction values the combined business at around $58 billion, with Devon shareholders expected to own approximately 54% of the merged company and Coterra shareholders about 46%.
The enlarged group will operate under the Devon Energy name and be headquartered in Houston, while maintaining a significant operational presence in Oklahoma City. Management said the combination brings together complementary asset bases and technical expertise, with a strategic emphasis on the Delaware Basin.
The companies forecast around $1 billion in annual pre-tax synergies by the end of 2027, driven by a more efficient capital program, improved operating margins, and lower corporate overheads. The merger is expected to be accretive to key per-share metrics, including free cash flow.
On a pro forma basis, the combined company would have produced more than 1.6 million barrels of oil equivalent per day in the third quarter of 2025, including over 550,000 barrels per day of oil. Its Delaware Basin footprint would total nearly 750,000 net acres, generating about 863,000 barrels of oil equivalent per day—more than half of overall production and cash flow.
Devon’s President and CEO Clay Gaspar will remain in his role following the merger, while Coterra’s Chairman, CEO and President Tom Jorden will assume the position of non-executive chair. The post-merger board will comprise 11 directors, split between six from Devon and five from Coterra.
The companies expect the deal to close in the second quarter of 2026, subject to regulatory clearances and approval by shareholders of both firms.