Sources: Devon Energy and Coterra Energy, two US shale producers, are in merger talks.

People familiar with the matter have confirmed that Devon Energy and Coterra Energy were exploring the possibility of merging, which could result in one of the biggest independent shale producers in the United States.

The U.S. oil market is still under pressure from the?near term global oil glut, and Venezuela's increased supply in the coming years.

Sources said that the two companies were in early stage talks about a merger. They cautioned, however, that a deal was not guaranteed.

Devon's shares fell?3% while Coterra's stock rose more than 6% in response to the story. Devon's market value is around $24 billion while Coterra's is about $20 billion.

Devon and Coterra didn't immediately respond to comments.

Although energy deals were less active in 2025 compared to previous record-breaking year, the arguments for 'consolidation' among U.S. producers of oil and gas remain valid. The benefits include economies of size which will help control costs in a low-price environment for crude oil, and securing more resources at a moment when many'shale basins' are maturing.

Both companies are active in multiple shale formations. They have operations in the Delaware portion?of?the Permian Basin in Texas and New Mexico, as well as Oklahoma's Anadarko Basin.

Devon has also acquired assets in the Eagle Ford play of South Texas, as well as North Dakota’s Williston Basin. Coterra, formed in 2021 by the merger of Marcellus-focused Cabot Oil & Gas and Cimarex Energy, has a strong presence in Appalachia. (Reporting and editing by David French, New York; Chizu Nomiyama Chris Reese Mark Potter

(source: Reuters)