Devon Energy Targets 1.38 Million Boe Per Day After Coterra Merger, Deploying $4.9 Billion in 2026

Devon Energy published its updated 2026 production and capital guidance on June 9, the first formal plan released after its all-stock combination with Coterra Energy closed on May 7. The combined company targets average production of 1.38 million barrels of oil equivalent per day for 2026, with oil volumes of 500,000 barrels per day. Total capital spending is approximately $4.9 billion, with more than 60 percent directed at the Permian Basin.

Two Delaware Basin Lineages, One Combined Position

Devon's current Delaware Basin position traces to two separate corporate lineages. The first came through Devon's January 2021 all-stock merger with WPX Energy. WPX had been spun off by Williams Companies in January 2012 and entered the Delaware Basin through a series of acquisitions, including the $2.5 billion purchase of Felix Energy in 2019. Felix Energy's Loving and Winkler county acreage became the starting point for Devon's Delaware Basin scale after the 2021 merger.

The second Delaware Basin layer came with Coterra Energy, which Devon absorbed in May 2026. Coterra formed in October 2021 from the all-stock merger of Cabot Oil and Gas and Cimarex Energy. Cimarex had built a Delaware position in Reeves County, Texas, through Wolfcamp and Bone Spring development over the prior decade. Those two acreage blocks combined give Devon more than 750,000 net acres across the economic core of the play, with the Delaware Basin now underlying over 50 percent of enterprise production and free cash flow.

Revenue Math at Monday's WTI Settlement

WTI crude settled at $77.60 per barrel on the CME front-month contract on Monday, July 13, up 8.66 percent from Friday's close of $71.41 per barrel. The driver is President Trump's announcement of plans to reimpose a naval blockade on Iranian tankers through the Strait of Hormuz. At $77.60 per barrel, Devon's guided oil rate of 500,000 barrels per day generates gross oil revenue of $38.8 million per day, or approximately $14.2 billion annualized before royalties, transportation, and operating costs. Monday's gain of $6.19 per barrel over Friday's close adds approximately $3.1 million per day in gross oil revenue for Devon at its guided oil rate, equal to roughly $1.1 billion annualized. Devon's planned $1.25 billion debt retirement in 2026 equals roughly 32 days of gross oil revenue at Monday's settlement price.

Capital Program and Well Count

Devon is running 31 drilling rigs and 10 completion crews, with 460 to 480 net wells expected online in 2026. The full-year production guidance range runs from 1.355 million to 1.405 million boe per day. CEO Clay Gaspar described the company's approach in the June guidance release. He said Devon operates "with a sense of urgency into all aspects of our business" and aims to translate "the power of this combination into durable free cash flow growth and improved shareholder returns." Devon has authorized an $8 billion share repurchase program alongside a $0.32 per share quarterly dividend, with up to 70 percent of free cash flow targeted for shareholder distributions.

Synergy Targets in Context

Devon's integration team targets $600 million in annual pretax synergies for 2027, advancing toward $1.0 billion on a run-rate basis by year-end 2027. Synergy categories include capital optimization, margin improvements, and corporate cost reductions. At $1 billion per year in savings, the combined efficiency gain equals approximately 25.8 days of gross oil revenue at Monday's WTI settlement. Devon also plans to retire $1.25 billion of debt in 2026, reducing net leverage ahead of the full synergy ramp.

Coterra's Gas Assets Broaden Devon's Commodity Mix

Coterra's Cabot Oil and Gas heritage contributed a Marcellus Shale position in Susquehanna County, Pennsylvania, one of the most productive dry gas columns in the Appalachian basin. Coterra's Anadarko Basin footprint, assembled through Cimarex's Mid-Continent operations, provides NGL and dry gas production alongside the oil-weighted Delaware. The combined 2026 production target reflects 34 percent oil, 22 percent NGL, and 44 percent natural gas by volume, giving Devon commodity diversification against oil-price volatility. Oil Authority's prior coverage of WCS-WTI spread movements during Iran escalation established the price environment in which Devon's Delaware Basin production is now generating revenue at the elevated WTI levels that prevail on July 13.