Coterra Energy (CTRA) M&A announcement summary

Deal rationale and strategic fit

• Merger creates a premier large-cap shale operator with a $58 billion pro forma enterprise value, enhanced asset quality, and leading scale in the Delaware Basin.

• Combined company will have a diversified, high-margin portfolio and balanced commodity mix across top U.S. shale basins, designed for durability and top-tier shareholder returns.

• Over 10 years of highly competitive inventory, with the Delaware Basin accounting for over 50% of production and cash flow.

• Enhanced technology and AI capabilities will drive operational excellence, capital allocation efficiency, and data-driven decision-making.

• Shared values, complementary cultures, and mutual respect underpin the integration, aiming for operational excellence and disciplined capital allocation.

Financial terms and conditions

• All-stock transaction with an exchange ratio of 0.70 Devon shares for each Coterra share; pro forma equity ownership: 54% Devon, 46% Coterra.

• Structured as an at-market merger, maximizing value for both shareholder bases.

• Combined company will have $4.4 billion in liquidity and a net debt to EBITDAX ratio of 0.9x as of Q3 2025.

• Plans to declare a quarterly dividend of $0.315 per share and authorize over $5 billion in share repurchases, subject to board approval.

• Transaction unanimously approved by both boards and expected to close in Q2 2026, subject to regulatory and shareholder approvals.

Synergies and expected cost savings

• Targeting $1 billion in annual pre-tax synergies by year-end 2027, split across capital optimization, operating margin improvements, and corporate cost reductions.

• Synergies expected to drive meaningful accretion and enhanced free cash flow for both shareholder bases.

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

• Execution plan includes a dedicated integration team, rigorous tracking mechanisms, and immediate capital reallocation opportunities.