By Micah Jonah
January 16, 2026
U.S. shale producers Devon Energy and Coterra Energy are in early-stage talks for a potential merger, which could create one of the largest independent shale companies in the country, three sources familiar with the matter told Reuters.
The possible combination comes as U.S. crude prices face pressure from a near-term global oil surplus and the potential for increased supplies from Venezuela. Sources cautioned that the talks are preliminary and a deal is not guaranteed.
Devon shares ended 4.2% lower, giving the company a market value of around $24 billion, while Coterra’s stock rose 1.5%, valuing the Houston-based company at nearly $20 billion. Both companies declined to comment.
Experts say consolidation among U.S. oil and gas producers could provide economies of scale to control costs, particularly as many shale basins mature and prime development land becomes scarce.
Both companies operate across multiple U.S. shale formations, including the Delaware portion of the Permian Basin in Texas and New Mexico, the Anadarko Basin in Oklahoma. Devon also has assets in South Texas’ Eagle Ford and North Dakota’s Williston Basin, while Coterra is active in Appalachia, formed in 2021 from the merger of Cimarex Energy and Cabot Oil & Gas.
Coterra is under pressure from activist investor, Kimmeridge Energy Management, which has stakes in both companies and advocates governance and strategy changes. Kimmeridge said it would support a merger that focuses on combining the Delaware assets and capturing operational synergies.
