Coterra Energy (CTRA) +3.2% in Thursday’s trading following a Bloomberg report that it is holding talks with Devon Energy (DVN) about a potential merger, a deal that would rank among the biggest oil and gas deals in years.
The companies – both with large positions in the Permian Basin – are still negotiating the terms and structure of a potential deal, according to the report, which also said Coterra (CTRA) has held merger talks with at least one other company in the recent past.
Devon (DVN) owns ~400K net acres in the Permian’s Delaware Basin, where Coterra (CTRA) also has a 346K-acre position, and a deal would enable the combined company to better compete with Permian giants such as Exxon Mobil and Diamondback Energy.
Devon (DVN) also has drilling operations in the Rocky Mountain region, southeast Texas and Oklahoma, while Coterra’s (CTRA) other operations cover western Oklahoma as well as Pennsylvania’s Marcellus Shale.