As part of a planned merger with Coterra Energy set for later this year, Oklahoma City-based Devon Energy will move its headquarters to Houston, Texas, and make budget cuts totalling an estimated $1 billion.
News 9 spoke to Oklahoma Energy Today managing editor Jerry Bohnen to learn more about what the merger and move will mean for Oklahomans.
State and local leaders respond to news of Devon Energy’s planned merger with Houston-based Coterra Energy, as well as Devon’s future headquarters shift to Texas.
What is your reaction to the news of this merger and Devon moving its headquarters to Houston?
Bohnen: It’s not a surprise, because they’ve been in intense negotiations over the past couple of weeks. What is a surprise is that the headquarters are being moved to Houston, and unlike everyone else, what will be the impact at Devon Tower? Even though they maintain that there will be a significant presence of Devon in Oklahoma City, the extent [of] the definition of the word “significant” is what’s important here. How many of the 2,000 employees will remain in Oklahoma City is still up in the air. We just have to rely on the assurances of the two companies.
Coterra has about 900 employees or close to 1,000. What is the impact on the energy industry, with this merger making them one of the largest natural gas producers in the country?
Bohnen: It’s not just natural gas, it’s the oil that they’re getting out of the Permian Basin in west Texas and southeast New Mexico, and that’s what is at play here, where those two companies have significant operations. Plus, Coterra is quite active in Oklahoma in the Anadarko Basin. If you recall, over the past several years, Coterra has produced some major producing wells in what we call the STACK (Sooner Trend oil field, Anadarko basin, Canadian and Kingfisher counties) and the SCOOP (South Central Oklahoma Oil Province) Plays of Oklahoma. This will create quite a monster company in terms of oil production and gas production.
Devon acquired WPX Energy out of Tulsa a couple of years ago. Is there any indication of how that is going to be impacted by this merger?
Bohnen: None so far. If you recall, that was in 2020, and the company there still maintain the headquarters in Oklahoma City, and they reduce their headquarters in Tulsa. This is definitely going to have an impact, although I’ve noticed already shares of Coterra falling about 2% this morning. Devon shares are down about less than 1%. So we’ll see what happens here, they’re promising, I think, $5 billion share repurchase for this matter. It is definitely shocking the industry this morning. I think we’ll see more fallout as it goes on, but I’m like everyone else. What will be the impact on Devon Tower? That’s the big question.