Coterra Energy Inc. 8-K

What Happened
Coterra Energy Inc. (CTRA) announced on Feb. 1, 2026 that it entered into an Agreement and Plan of Merger with Devon Energy Corporation and a Devon subsidiary. Under the deal, Merger Sub will merge into Coterra and Coterra will become a wholly‑owned subsidiary of Devon. Each outstanding share of Coterra common stock (other than excluded shares) will be converted into the right to receive 0.70 shares of Devon common stock; fractional shares will be paid in cash. After closing, existing Coterra and Devon stockholders are expected to own about 46% and 54% of the combined company, respectively. Coterra’s board unanimously approved the merger and recommended that Coterra stockholders vote to approve it. Devon and Coterra intend the transaction to qualify as a tax‑free reorganization under Section 368.

Key Details

• Merger Agreement signed: February 1, 2026; joint press release and investor presentation filed Feb. 2, 2026.
• Exchange Ratio: 0.70 shares of Devon common stock per Coterra share; cash paid for fractional shares.
• Governance: Combined board of 11 directors (6 Devon designees, 5 Coterra designees). Devon’s CEO will serve as CEO of the combined company; Coterra CEO Thomas E. Jorden will become Chair.
• Executive committee: Devon CEO plus eight members (five designated by Coterra; three existing Devon officers). Devon’s name and NYSE ticker will be used for the combined company.
• Closing conditions & timing: customary conditions including stockholder approvals, HSR clearance, effectiveness of Devon’s Form S‑4 and NYSE listing approval. Outside date Aug. 1, 2026 (extensions to Nov. 1, 2026 and Feb. 1, 2027 for antitrust clearance).
• Breakup/termination fees: reciprocal termination fee of $865 million in specified circumstances; up to $40 million reimbursement in certain stockholder‑vote failures.
• Executive severance updates (filed Jan. 31, 2026): amended agreements for CEO Thomas Jorden, CFO Shannon Young III and two other senior officers extend the change‑in‑control protection period to 24 months and provide accelerated vesting/earn‑out treatment for awards on a change in control and qualifying termination.

Why It Matters
This is a transformational merger for two large U.S. oil & gas companies. Key investor takeaways: the stock‑for‑stock exchange ratio (0.70) and the expected post‑deal ownership split (approx. 46% Coterra / 54% Devon) determine the combined company’s shareholder mix and dilution. Governance and leadership arrangements (Devon CEO as CEO; Coterra CEO as Chair) and a two‑year governance policy provide near‑term stability. Large termination fees ($865M) and antitrust review timelines mean the deal has significant protections and regulatory hurdles; closing is not certain until required approvals and clearances are obtained. Updated executive severance and acceleration provisions could affect executive compensation outcomes if the deal closes or if qualifying terminations occur.