Devon Energy and Coterra Energy are exploring a potential merger, in a deal that could create one of the largest independent U.S. shale producers, people familiar with the matter said.
A possible combination, which would rank among the largest between U.S. energy producers in recent years, comes as U.S. crude prices remain pressured by a near-term global oil glut and the prospect of higher supplies entering the market in coming years from Venezuela.
The two companies are said to be in early-stage talks for a combination, said the sources, who cautioned a transaction was not guaranteed and spoke on condition of anonymity to discuss confidential deliberations.
Shares in Devon slipped 3%, while Coterra’s stock jumped more than 6% on the Reuters story. Devon has a market value of around $24 billion, while Coterra is worth about $20 billion.
Devon and Coterra did not immediately respond to requests for comment.
While energy dealmaking was subdued in 2025, versus prior record-breaking years, arguments for consolidation among U.S. oil and natural gas producers remain valid. Benefits include economies of scale which would help control costs within a depressed price environment for crude, as well as securing additional resources at a time when many shale basins are maturing and new prime development land is at a premium.
Both companies have operations across multiple shale formations, with both present in the Delaware portion of the Permian basin in Texas and New Mexico and Oklahoma’s Anadarko basin.
Devon also has assets in South Texas’ Eagle Ford play, as well as North Dakota’s Williston basin. Coterra has a significant presence in Appalachia, having been formed in 2021 through a merger of Cimarex Energy and Marcellus-focused Cabot Oil & Gas.
(Reporting by David French in New York; Editing by Chizu Nomiyama, Chris Reese and Mark Potter)