Devon Energy is evaluating long-term international growth opportunities but has no immediate plans for overseas expansion, emphasizing its continued confidence in its US shale assets and the value of its impending merger with Coterra Energy.

International Strategy and Kuwait Interest

The company's leadership confirmed it is exploring various international ideas and engaging in conversations to understand above-ground risks, but stressed this is part of long-term planning and distant from committing material capital. While not commenting on specific reports, this addresses news that Kuwait Oil Co. had contacted Devon and others regarding potential shale development in Kuwait.

AI-Driven Performance and Efficiency

Devon reported strong 2025 earnings, partly due to better-than-expected Permian basin output. The company attributes improved capital efficiency and profitability to AI-driven optimization, which helped keep capital investment 4% below guidance and reduced operating costs by 8%. Investments in AI platforms are yielding results in production and drilling, with further cost reductions and production improvements expected in 2026 as these technologies are scaled across the organization.

Merger with Coterra Energy

The merger, announced on February 2, will create a single operator with a $58 billion enterprise value, described as one of the world's largest shale operators. The combined company, to be named Devon Energy and headquartered in Houston, will have leading operations anchored in the Delaware Basin. Post-merger leadership will see Devon's CEO become CEO of the combined company, while Coterra's CEO will become non-executive chairman of a board with 11 members split between the two companies.

The merger is projected to yield annual savings of $1 billion, with some cost cuts involving layoffs. Shareholders from both companies must approve the deal, which is expected to close in the second quarter. Upon completion, Devon shareholders will own about 54% of the new entity, with Coterra shareholders owning 46% via a fixed exchange ratio of 0.7 Devon shares per Coterra share.

Scale and Asset Profile Post-Merger

The combined company is estimated to produce about 1.6 million barrels of oil equivalent per day, surpassing several major US rivals and trailing only the largest US operators. Its Delaware Basin asset inventory is projected to last at least a decade. Analysts suggest Devon could divest some assets after the merger closes, including holdings in the Anadarko Basin and the Marcellus Shale.