Coterra Energy is reportedly in discussions with rival US shale producer Devon Energy regarding a potential merger.
The merger would create one of the largest independent shale producers in the US, reported Reuters.
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Currently in preliminary talks, both companies involved are yet to decide on a final agreement, the news agency said, citing sources familiar with the negotiations. It has been further reported that there is no assurance that the merger will proceed.
The sources preferred to remain anonymous due to the confidential nature of the discussions.
The prospective merger comes at a time when US crude prices face pressure from a near-term global oil surplus and future supply prospects from Venezuela.
Devon Energy’s shares saw a decrease of 4.2%, bringing its market capitalisation to around $24bn, while Coterra Energy’s stock increased by 1.5%, valuing it at close to $20bn.
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By GlobalDataThe companies operate across various shale formations including the Delaware Basin within the Permian region of Texas and New Mexico, as well as Oklahoma’s Anadarko Basin.
Coterra Energy’s strategic pressures include demands from Kimmeridge Energy Management for governance changes, having gone public with these demands in November 2025.
Kimmeridge managing partner Mark Viviano has been quoted by Reuters as saying: “We would be supportive of a transaction that allowed the combined company to focus on their premier Delaware assets
“We see material operational synergies from the enhanced scale and offsetting acreage positions.”
Both companies have extensive operations beyond their joint presence in the Permian Basin.
Devon Energy holds assets in South Texas’ Eagle Ford play and North Dakota’s Williston Basin, while Coterra Energy has significant operations in Appalachia.
Coterra Energy was formed in late 2021 through the merger of Cimarex Energy and Cabot Oil & Gas.
In November 2024, Coterra Energy announced definitive agreements to purchase assets from Franklin Mountain Energy and Avant Natural Resources, with a total transaction value of $3.95bn. The deal was closed in January 2025.
Through the deals, Coterra Energy bolstered its portfolio in Lea County, New Mexico, with the addition of roughly 49,000 highly contiguous net acres and 400–550 net locations.
