NEW YORK, Jan 16, 2026, 09:09 EST — Premarket
- Coterra shares dipped a bit in premarket trading following merger rumors involving Devon Energy.
- Sources said talks are in the early stages, and a deal is far from certain.
- Options trading surged as Friday’s expiration approached, pushing volatility higher in the short term.
Coterra Energy Inc shares slipped 0.1% to $25.71 in premarket Friday, amid reports the U.S. shale producer is considering a merger with Devon Energy. (Public)
The buzz matters since the shale patch is once again debating scale. Oil prices have seemed capped at times, boards have pledged discipline, and the simplest way to discuss growth without ramping up drilling is often through a deal.
Devon and Coterra are in early talks about a potential merger that could form one of the largest independent shale producers in the U.S., though there’s no guarantee the discussions will lead to a deal, according to three people familiar with the matter. Devon shares dropped 4.2% Thursday, while Coterra’s rose 1.5%, putting the Oklahoma City-based Devon at about $24 billion and Houston’s Coterra close to $20 billion in market value. Neither company responded to requests for comment. Activist investor Kimmeridge Energy Management, which has pushed for governance and strategy changes at Coterra, said it would back a merger focused on Delaware Basin assets. Managing partner Mark Viviano remarked, “We would be supportive of a transaction that allowed the combined company to focus on their premier Delaware assets.” (Reuters)
Coterra gained 1.46% to close at $25.73 on Thursday, extending its winning streak to four sessions. Trading volume soared to 40.1 million shares, well above the 50-day average of 7.9 million, per MarketWatch data. The stock edged higher while peers like EOG Resources, Diamondback Energy, and Civitas Resources slipped. (MarketWatch)
Street opinions diverged. Bank of America cut its price target on Coterra to $31 from $32 but maintained a Buy rating. The firm warned about the 2026 oil outlook, preferring firms with low “breakevens”—the oil price needed for cash flow to cover spending and dividends. (TipRanks)
Options volume surged as well. Nasdaq data showed roughly 65,039 Coterra option contracts changing hands Thursday, with heavy action in $26 strike call options set to expire Jan. 16. Call options let buyers lock in the right to purchase shares at a fixed price before expiration. This type of activity can intensify price swings near expiration as traders tweak their hedges. (Nasdaq)
Deal talk is easy—until it suddenly isn’t. Negotiations can collapse over disagreements on valuation, management positions, or asset allocations. An all-stock deal often sparks fights about dilution and control, especially when commodity prices shift.
Traders will eye the 9:30 a.m. ET open on Friday for volume and follow-through after Thursday’s jump. They’ll also look for any comments or filings that shed light on whether the talks are solid enough to move the needle.
