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Coterra Energy and Devon Energy are nearing a deal to merge in what would be the largest oil and gas deal in the US shale industry for almost two years.
Talks are at an advanced stage and a deal, likely to be billed as a merger of equals, could come together as soon as early next week, according to people familiar with discussions. It is possible the timeline could slip or the deal could fall apart altogether, the people warned.
Both companies own a large number of assets in the Permian Basin, the largest US oilfield, and combining their operations would enable them to compete against larger rivals at a time when low US oil prices are putting many companies in the shale sector under strain.
A combination of Devon and Coterra would create a company with an enterprise value of about $57bn, based on share prices on Thursday afternoon. The exact terms of the deal could not immediately be established.
The tie-up between Devon and Coterra would be the largest tie-up in the US shale industry since Diamondback acquired Endeavor Energy Resources for about $26bn in February 2024 in a cash and stock deal.
Analysts have speculated that a possible combination could kick-start a new wave of mergers and acquisitions in the US shale industry after a slowdown in dealmaking over the past two years.
Bloomberg first reported on Thursday that the pair were in advanced talks over a deal. Shares in Devon and Coterra have advanced by 7 per cent and 12 per cent, respectively, since the first report of merger talks.
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