A possible combination, which would rank among the largest between U.S. energy producers in recent years, comes as U.S. crude prices are pressured by a near-term global oil glut and the prospect of more supplies entering the market in the coming years from Venezuela.
Sign up here.
The two companies are 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.
Devon shares finished 4.2% lower, giving it a market capitalization of roughly $24 billion, while Coterra’s stock gained 1.5% to value the Houston-based company at nearly $20 billion.
Devon and Coterra did not respond to requests for comment.
ECONOMIES OF SCALE WOULD CONTROL COSTS
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.
“We would be supportive of a transaction that allowed the combined company to focus on their premier Delaware assets,” Kimmeridge Managing Partner Mark Viviano said. “We see material operational synergies from the enhanced scale and offsetting acreage positions.”
Reporting by David French in New York; Editing by Chizu Nomiyama, Mark Potter, Rod Nickel
Our Standards: The Thomson Reuters Trust Principles.
