The February 2 announcement that Devon Energy and Coterra Energy have agreed to merge didn’t come as a huge surprise — it had been rumored for weeks. The two large oil and gas producers have highly complementary assets in two major basins (the Permian’s Delaware and the Anadarko) and, as they see it, their combination will likely provide $1 billion in synergy-related savings by the end of next year. Finally — and this is important — a Devon/Coterra combination had been urged on by activist investor Kimmeridge Energy Management, with Coterra in particular, for falling short of its potential. In today’s RBN blog, we’ll discuss the deal and its implications.
The RBN NATGAS Haynesville is a weekly natural gas fundamentals analysis focused on supply, flow, and LNG-driven demand dynamics within the Haynesville basin.
The often-frenetic pace of M&A activity in the upstream sector the past half-decade has made many of us wonder, “How long can it continue?” Well, the apparent answer is at least into early 2026, as evidenced by the prospective Devon/Coterra merger, under which Devon will provide Coterra shareholders with a 0.7 share of Devon stock for each share they own. The deal, valued at about $21.4 billion, is expected to close in Q2 2026 and the combined company — to be named Devon Energy and be headquartered in Houston — will have an estimated 2026 production of more than 1.6 MMboe/d. With an enterprise value of $58 billion, the combo will rank fourth among U.S.-based E&Ps, behind only ConocoPhillips ($146 billion), Diamondback Energy ($70 billion) and EOG Resources ($65 billion). (ExxonMobil and Chevron — each of which are considered integrated majors, and not simple E&Ps, because of their refining operations — are even larger U.S. producers. Each has just over 2 MMboe/d in U.S. production, about 1.5 MMb/d of it in the form of oil.)
In many ways, the Devon/Coterra deal reminds us of ConocoPhillips’s $22.5 billion acquisition of Marathon Oil, which closed in November 2024 and which we discussed in Everybody Dance Now. It’s not just the almost-equal value of the deals, it’s also the fact that, like pre-combo ConocoPhillips and Marathon, Devon and Coterra are both active in multiple U.S. shale plays and have significant amounts of side-by-side (or close-by) acreage in at least a couple of them. The deal also echoes at least some elements of SM Energy’s merger with Civitas Resources (see Started From the Bottom), which closed on January 30 and combined two similarly sized E&Ps with acreage in several plays, including the Permian.
Devon Energy and Coterra Energy’s Acreage in the Delaware Basin
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About the song
“(You Are My) Only One” was written by James Taylor and appears as the third song on side two of James Taylor’s 11th studio album, That’s Why I’m Here. The soft-rock love ballad was released as a single in January 1986 and went to #6 on the Billboard Adult Contemporary Singles chart. Personnel on the record were: James Taylor (lead, backing vocals, guitar), Bill Payne, Don Grolnick (keyboards), Tony Levin (bass), Russ Kunkel (drums), Jimmy Maelen (percussion) and David Lasley (backing vocals).
That’s Why I’m Here was recorded in 1985 at Right Track Studios in New York City and AIR Studios in Montserrat. It was produced by Peter Asher, Frank Filipett and James Taylor and was the first new album from Taylor in four years, following a period of personal turmoil and a divorce from Carly Simon. Released in October 1985, it went to #34 on the Billboard 200 Albums chart and has been certified Platinum by the Recording Industry Association of America. Four singles were released from the LP.
James Taylor is an American singer, songwriter and guitarist. His professional career was launched when he became the first non-British artist signed to The Beatles’ Apple Records label in 1968. That was where he met his future manager and producer, Peter Asher. Taylor has released 20 studio albums, four live albums, seven compilation albums, one EP and 42 singles and has sold more than 100 million records worldwide. He co-starred, along with Beach Boy Dennis Wilson and Warren Oates, in the cult motion picture about street racing, Two-Lane Blacktop, in 1971. He has won six Grammy Awards and is a member of the Rock and Roll Hall of Fame and the Songwriters Hall of Fame. Taylor has received Kennedy Center Honors, a National Medal of the Arts, a Presidential Medal of Freedom and an Honorary Doctorate of Music from Williams College. He continues to record and tour, and will begin a U.S. tour in April.
"About the Song" -- written by Mickey McMahan , RBN Director of Musicology
