Devon Energy (DVN) investor relations material

Deal rationale and strategic fit

• The merger creates a premier large-cap shale operator with a $58 billion pro forma enterprise value, establishing a leading position in the Delaware Basin and other key U.S. shale plays.

• The combined entity gains scale, resource depth, and resilience, with over 1.6 million barrels of oil equivalent per day pro forma 2026 production and more than 10 years of competitive inventory.

• Portfolio diversification across oil, gas, and NGLs enhances capital allocation flexibility and free cash flow stability.

• Technology-driven platform leverages AI for operational optimization, capital efficiency, and decision-making.

• Both companies share complementary cultures, values, and a focus on technology and innovation, aiming to exceed the performance of either company alone.

Financial terms and conditions

• The transaction is an all-stock merger, with Coterra shareholders receiving 0.70 Devon shares per Coterra share and pro forma equity ownership of 54% Devon, 46% Coterra.

• Implied combined enterprise value is approximately $58 billion based on Devon's closing price on January 30, 2026.

• Pro forma net-debt-to-EBITDAX is 0.9x and $4.4 billion in liquidity as of Q3 2025.

• Plans include a quarterly dividend of $0.315 per share and a new share repurchase authorization exceeding $5 billion, subject to board approval.

Synergies and expected cost savings

• Targeting $1 billion in annual pre-tax synergies by year-end 2027, representing about 20% of the combined market cap.

• Synergies include $350 million from capital optimization, $350 million from operating margin improvements, and $300 million from corporate cost reductions.

• Technology integration and AI-driven optimization to enhance capital efficiency and operational performance.

• Synergies are expected to be realized within 18 months, with some benefits achievable in the first six months post-close.

• Identified opportunities for immediate capital reallocation, supply chain efficiencies, and elimination of redundant expenses.