Devon and Coterra will merge in a deal worth $58 billion.

Devon Energy and Coterra Energy have agreed to merge in an all-stock deal valued at approximately $58 billion. The two companies announced on Monday that Coterra shareholders will receive 0.7 shares of Devon stock for each share of Coterra stock they hold, with the implied value of the transaction approximately $58 billion based on Devon's closing price on Friday. The merged company will retain the name Devon Energy, and could have a market value of over $47 billion based on the closing prices of both companies on Friday. Devon shareholders will hold approximately 54% of the merged company, while Coterra shareholders will hold around 46%. The two companies anticipate generating $1 billion in annual pre-tax synergies by the end of 2027 as a result of the merger. The combined Devon Energy is expected to be one of the world's largest shale oil producers, with a projected daily production of 1.6 million barrels of oil equivalent in the third quarter of this year. Coterra CEO Tom Jordan stated, "The combined company will offer top-tier rock quality and reservoir depth, backed by a balanced commodity portfolio, leading cost structure, and sturdy balance sheet." "Devon Energy will be well positioned to achieve top capital efficiency improvements and sustained earnings growth throughout the commodity cycle." Devon President and CEO Clay Gaspar is expected to retain his title in the merged company, while Jordan will serve as the non-executive chairman of the board. Devon will appoint six board members, including a lead independent director, while Coterra will appoint five. The executive leadership team will be selected from the management of Devon and Coterra. The merged company plans to pay a quarterly dividend of $0.315 per share and initiate a stock buyback program exceeding $5 billion to return value to shareholders. The transaction is expected to be completed in the second quarter. In pre-market trading on Monday, Devon's stock price fell by 3% and Coterra's stock price dropped by 3.9%.