Devon Energy and Coterra Energy to merge, creating premier independent shale operator

The combined company will deliver higher free cash flow and enhanced shareholder returns

Published on Feb. 26, 2026

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Devon Energy, the Oklahoma City energy company, has announced a merger agreement with Coterra Energy. The combined company will create one of the largest shale operators in the world, with a premier position in the Delaware Basin. The merger is expected to unlock substantial value for shareholders through increased scale, improved margins, higher free cash flow, and accelerated cash returns.

Why it matters

The merger between Devon Energy and Coterra Energy represents a significant consolidation in the shale oil and gas industry. The combined company will have enhanced scale, operational efficiencies, and financial strength, allowing it to better navigate the challenges facing the sector, such as volatile commodity prices and investor pressure for capital discipline.

The details

Under the terms of the agreement, Devon shareholders will own approximately 54% of the combined company, while Coterra shareholders will own around 46%. The transaction is expected to close in the second quarter of 2026 and is subject to regulatory and shareholder approvals. The new company, to be named Devon Energy, is expected to capture $1 billion in annual pre-tax synergies. Devon also plans to increase its quarterly dividend by 31% to $0.315 per share and establish a new $5 billion-plus share repurchase program following the merger close.

  • The merger announcement was made on February 2, 2026.
  • The transaction is expected to close in the second quarter of 2026.
  • Devon plans to increase its quarterly dividend to $0.315 per share following the merger close, subject to board approval.
  • For the first quarter of 2026, a dividend of $0.24 per share is payable on March 31, 2026, to shareholders of record at the close of business on March 13, 2026.

The players

Devon Energy

An Oklahoma City-based energy company that is merging with Coterra Energy to create a premier independent shale operator.

Coterra Energy

An energy company that is merging with Devon Energy to create a combined entity that will be one of the largest shale operators in the world.

Clay Gaspar

The president and CEO of Devon Energy, who described 2025 as a 'banner year' for the company and the merger with Coterra as an effort to take 'bold, strategic steps to significantly strengthen our portfolio.'

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What they’re saying

“Devon's disciplined execution and operational excellence defined 2025, culminating in outstanding results that exceeded fourth quarter expectations across all major value drivers.”

— Clay Gaspar, President and CEO, Devon Energy (okenergytoday.com)

“This powerful combination brings together two industry-leading companies with complementary assets and proven track records of value creation, establishing a premier independent shale operator. This advantaged platform will deliver higher free cash flow and enhanced shareholder returns, well beyond what either company could achieve on its own.”

— Clay Gaspar, President and CEO, Devon Energy (okenergytoday.com)

What’s next

The merger between Devon Energy and Coterra Energy is expected to close in the second quarter of 2026, subject to regulatory and shareholder approvals. Following the completion of the transaction, the combined company will provide updated full-year guidance for the combined entity.

The takeaway

The merger between Devon Energy and Coterra Energy represents a significant consolidation in the shale oil and gas industry, creating a premier independent operator with enhanced scale, operational efficiencies, and financial strength. The combined company is expected to deliver higher free cash flow and increased shareholder returns, underscoring the industry's ongoing efforts to adapt to the challenges of volatile commodity prices and investor demands for capital discipline.