US shale driller Devon updates 2026 outlook following close of Coterra merger

US shale producer Devon Energy provided an updated 2026 outlook this week, which follows the closing of its merger with Coterra Energy in May.

The merger created one of the largest independent oil and gas producers in the US, with an enterprise value of around $58bn, based on Devon’s closing stock price on January 30, 2026. The combined company’s operations are centred on the Permian Basin’s Delaware sub-basin, which is estimated to account for roughly 53% of its total production. It also has operations in the Marcellus and Eagle Ford shales, the Anadarko Basin and the Rockies region. However, the company, which has retained Devon’s name, confirmed this week that it is reviewing its business following the completion of the merger. Indeed, it was reported in late May that Stone Ridge Asset ‌Management had offered to buy Devon’s Marcellus assets for around $8bn, according to sources familiar with the matter that were cited by Reuters. Whether Devon opts to take the offer is as yet unknown.

In the meantime, though, Devon said it now expects its production to average 1.38mn barrels of oil equivalent per day (boepd) this year, including oil output of 500,000 barrels per day (bpd). The company has also updated its capital expenditure guidance for the year, which is now expected to amount to $4.9bn. More than 60% of this has been earmarked for spending on activity in the Permian Basin. In its June 9 update, Devon said the plan reflected a “disciplined” activity level of 31 rigs and 10 completion crews, with 460-480 net wells expected online during the year. The plan is “optimised for free cash flow generation”, the company added.

In keeping with the broader shale industry trend of prioritising returns in recent years, Devon highlighted “enhanced” shareholder returns in its announcement. It is targeting the return of up to 70% of free cash flow to shareholders, through a quarterly fixed dividend of $0.32 per share and a previously announced $8bn share repurchase authorisation.

Devon said it anticipated to capture $600mn worth of synergies stemming from the merger in 2027, adding that it was on track to deliver $1.0bn of annual pretax synergies on a run-rate basis by the end of that year.

“Shared best practices and technology are driving material progress on capital optimisation, operating margin improvements and corporate cost structure,” the company noted.

Additionally, it confirmed that it was in the process of reviewing its portfolio as it moves “expeditiously” to concentrate the portfolio around its Permian position.

“We are carrying a sense of urgency into all aspects of our business, including integration, execution and our portfolio review,” stated Devon’s president and CEO, Clay Gaspar. “Optimising our portfolio remains a top priority, and a complete review of our strategic and financial criteria is well underway.”

In a presentation accompanying the announcement, Devon also highlighted the impact AI deployment was having on its operations.

“We are putting AI to work where it matters most, turning our vast stores of data into faster, sharper decisions that create value,” a quote from Gaspar that was included in the presentation read. “It's already changing how our teams operate every day, and we're still in the early innings of the value it can create. AI is driving and enhancing synergy capture and long-term value creation.”