Devon Energy and Coterra Energy are merging in an all-stock deal valued at $58 billion to create a new U.S. shale oil and gas heavyweight.
Why it matters: It’s among the biggest oil and gas deals in years.
- Oil prices are modest and lots of the good Permian Basin acreage is drilled.
- That means scale and efficiency are increasingly coveted — especially after other tie-ups in recent years and as giants including Exxon boost shale output.
Driving the news: The deal gives the combined company very large adjacent holdings in the Permian, but also assets in the Rockies, Oklahoma, Texas’ Eagle Ford and Pennsylvania’s Marcellus shale.
- Combined output in the Delaware Basin — an especially prolific part of the Permian — would be 863,000 barrels of oil-equivalent per day.
- The deal will bring $1 billion worth of synergies by the end of 2027, the announcement states.
- The company will keep Devon’s name and be headquartered in Houston. The firms hope to close the deal in Q2, assuming regulators sign off.
- Devon’s stock is down 3% in pre-market trading, but that follows increases this month as word of the talks emerged.
- Coterra dipped 4% pre-market but has similarly climbed a lot this month.