DEVON ENERGY CORP/DE 8-K

What Happened

• On Feb. 1, 2026 (8-K filed Feb. 2, 2026), Devon Energy Corporation entered into a definitive Agreement and Plan of Merger to combine with Coterra Energy, Inc. Under the agreement, Merger Sub (a Devon subsidiary) will merge into Coterra, with Coterra surviving as a wholly owned subsidiary of Devon. Each outstanding share of Coterra common stock (other than excluded shares) will convert into the right to receive 0.70 shares of Devon common stock. The combined company will continue as Devon Energy Corporation and trade on the NYSE under the ticker DVN.

Key Details

• Exchange ratio: 0.70 shares of Devon common stock per Coterra share; no fractional shares (cash paid in lieu of fractions).
• Ownership split after closing: Devon existing shareholders ~54%; Coterra shareholders ~46%.
• Closing conditions & timing: subject to Coterra and Devon shareholder approvals, HSR antitrust clearance, effectiveness of a Form S-4, NYSE listing approval; outside termination date Aug. 1, 2026 (extendable for antitrust to Nov. 1, 2026 and further to Feb. 1, 2027).
• Break fee and expense reimbursement: Termination fee of $865,000,000; in certain cases the party whose shareholders fail to approve may pay up to $40,000,000 for documented expenses.
• Governance and leadership: combined board of 11 directors (6 Devon designees, 5 Coterra designees); Devon’s current CEO will serve as CEO of the combined company and Coterra’s Chair/CEO will serve as Chair. A two‑year corporate governance policy with supermajority (75%) protections will be adopted.
• Executive changes (contingent on close): Shannon E. Young, III (Coterra CFO) will become principal financial officer of the combined company; Devon CFO Jeffrey L. Ritenour will move to lead Commercial operations; Dennis C. Cameron (Devon EVP & GC) will leave and may be eligible for severance.
• Equity treatment: vested Coterra RSUs/PSUs convert into Devon shares at the exchange ratio (certain over-target PSUs paid in cash); Coterra options will be cashed out for the value (if any) based on the pre-close Coterra stock price.

Why It Matters

• This is a material, stock‑for‑stock combination that would create a larger publicly traded oil & gas company under the Devon name and DVN ticker, shifting ownership to roughly 54% Devon / 46% Coterra. The exchange ratio, governance plan, and leadership commitments are concrete, near‑term factors that will affect shareholder dilution, voting outcomes and management direction.
• Important near-term milestones for investors include shareholder votes at both companies, antitrust clearance, and the filing/effectiveness of the Form S-4 (which will contain detailed financial information). The sizable termination fee and governance protections also signal the parties’ commitment to the deal and the conditions under which it could be abandoned.