It’s been such an exciting week for sports fans! The Winter Olympics started in Italy, and the Seattle Seahawks won Super Bowl LX.
Another exciting thing happened last week as well. BP’s VP for Exploration Bryan Ritchie and Rystad’s Head of Exploration, Oil and Gas Research Aatisha Mahajan joined me for the AAPG Academy webinar entitled “The Future of Exploration.” More than 1,100 people from 80 countries registered for the event. The dialogue was enthusiastically attended, with more than 40 questions submitted.
A big thank-you to Aatisha and Rystad, and to BP and its exploration partners for allowing Aatisha and Bryan to share their insights and stories with the global AAPG family. To watch the webinar free on-demand, register here.
Shangyou Nie
Editor, Well Read
Devon and Coterra Join Forces to Fight Low Oil Prices
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Devon and Coterra, two of the largest independent shale producers in the United States, have merged to create a $58-billion company. The new Devon will be the second-largest producer in the Delaware Basin. The no-premium merger is the latest sign that the industry is seeking ways to cope with the prolonged period of low oil prices.
The announcement said that the combination will lead to $1 billion in synergy savings before the end of 2027, higher than analysts initially expected.
The combined company will assume the Devon Energy name and has an enterprise value of $58 billion, including a $47 billion combined market cap and about $11 billion in debt, according to the WSJ.
After the merger, Devon shareholders will own about 54 percent of the new company, while Coterra shareholders will own the remainder.
Coterra shareholders will receive 0.70 Devon common stock for each Coterra share based on the closing price on 30 January.
The merger is subject to shareholder approval from both companies and is expected to close in Q2 2026.
Production potential: The new Devon will be second only to ConocoPhillips as a producer in the Delaware Basin, with 863,000 barrels of oil equivalent per day, and 10 years of “top-tier inventory.”
Using data from Enverus, the new Devon said that in the Delaware Basin, it has 4,641 operated locations. Of these, roughly 80 percent have break-even prices below $50/barrel, and approximately 45 percent have break-even prices below $40/barrel.
The new Devon will have 1.6 million barrels of oil equivalent per day of production, with a 56:44 oil-to-gas ratio.
The new Devon will also have acreage in the Anadarko Basin, Eagle Ford and Marcellus shales, the Williston Basin, and the Powder River Basin.
About Devon:
Devon was founded in 1971 with its headquarters in Oklahoma City. It has an estimated 2,300 employees.
Devon has a market cap of $27 billion as of 9 February.
Its share price has risen 16 percent YTD. There was little market movement upon the announcement of the merger, as the market had already factored in earlier reports of the pending merger.
About Coterra:
Coterra was formed by an all-stock combination of Cabot and Cimarex in 2021.
It is headquartered in Houston and has 915 employees.
Coterra has a market cap of $23 billion as of 9 February.
The new Devon will be headquartered in Houston, with a “significant presence” in Oklahoma City.
Clay Gaspar, Devon’s current CEO and president, will become the new Devon’s president and CEO post-merger.
Tom Jorden, the former chairman, CEO, and president of Coterra, will be the non-executive chairman of the new Devon’s board.
The new board will consist of 11 members, six from Devon, and five from Coterra.
A key question raised during the analyst call was whether the new Devon will start to divest some of its holdings.
The big picture:
When companies attempt to acquire another company, they typically pay an acquisition premium. This is especially true when a bigger company tries to acquire a smaller competitor.
These premium levels are already lower than the typical 25–30 percent premium from earlier deals.
A no-premium merger typically happens during low oil price times between two companies of similar size.
In these no-premium deals, the two parties can combine their portfolio, capital, and human resources to lower costs to fend off a challenging price environment.
Oil prices have been on a general decline since October 2023. According to the EIA, the January 2026 average WTI price is $60.04/per barrel, down 30 percent from the October 2023 average WTI of $85.64/barrel.
Webinar: Leveraging RGT Models to Enhance 4D Seismic Monitoring in PaleoScan™
Join us for a Webinar on February 5th to explore how Relative Geological Time (RGT) models can be integrated with 4D seismic data to improve reservoir monitoring.
TotalEnergies Signs MoU to Evaluate Growth Potential in Kuwait
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French major TotalEnergies announced that it signed a Memorandum of Understanding (MoU) with Kuwait’s state Kuwait Oil Company to “strengthen their cooperation, exchange expertise, and conduct technical studies.” Kuwait has an ambitious plan to bring its production from the current 3 million barrels per day to 4 million barrels per day by 2035.
About the MoU:
According to TotalEnergies, the MoU was signed on 3 February during the 5th Kuwait Oil & Gas Show and Conference.
Patrick Pouyanné, chairman and CEO of TotalEnergies, Sheikh Nawaf Saud Al-Sabah, deputy chairman and CEO of Kuwait Petroleum Corporation, and Ahmad Jaber Al-Eidan, CEO of KOC attended.
KOC is a subsidiary of Kuwait Petroleum Corporation.
The MoU includes studies “related to new exploration opportunities in the country.”
According to OPEC, Kuwait has a required production of 2.58 million barrels of oil per day until March 2026.
Together with Saudi Arabia, Russia, Iraq, the UAE, Kazakhstan, Algeria, and Oman, Kuwait is one of the eight key OPEC+ countries that hold bi-monthly meetings to monitor the global oil market.
Why it matters:
An MoU is often a document expressing a collaboration interest, not a legally binding agreement, so it doesn’t often warrant news media attention.
By issuing a special press release on an MoU, TotalEnergies has helped draw attention to the special significance of this collaboration.
Kuwait historically holds ownership of oil production, providing only service-type contracts to foreign companies and service companies.
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