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Devon Energy has approved an $8 billion share repurchase program and increased its quarterly dividend after completing its all-stock merger with Coterra Energy, underscoring confidence in the combined company’s cash flow outlook and balance sheet strength.

Houston-based Devon Energy announced Thursday that its board authorized a new $8 billion buyback program, equivalent to nearly 15% of the company’s current market capitalization, alongside a quarterly fixed dividend of $0.320 per share.

The dividend represents a 33% increase from the prior quarter and came in slightly above the company’s previously communicated expectation of $0.315 per share. The payout will be made on June 30 to shareholders of record as of June 15.

The capital return measures follow the completion of Devon’s merger with Coterra Energy earlier Thursday, creating a larger U.S. shale producer with a multi-basin footprint spanning the Delaware Basin, Eagle Ford, Anadarko Basin, Williston Basin, Powder River Basin, and Marcellus Shale.

Chief Executive Officer Clay Gaspar said the enlarged company intends to remain “active and opportunistic” in executing share repurchases while maintaining an investment-grade balance sheet.

The newly approved repurchase authorization runs through June 30, 2029, and gives Devon flexibility to buy back shares through open-market purchases and private transactions depending on commodity prices, market conditions, debt reduction priorities, and free cash flow generation.

The announcement signals confidence among U.S. shale producers that consolidation can support stronger shareholder returns even amid volatile oil and natural gas prices. In recent years, major independent producers have increasingly prioritized dividends and buybacks over aggressive production growth as investors demand capital discipline.

The Devon-Coterra tie-up further consolidates acreage across some of the most prolific U.S. shale basins, particularly the Permian’s Delaware Basin, which remains central to long-term North American oil supply growth. The merger also broadens the combined company’s exposure to natural gas markets through Coterra’s Marcellus assets at a time when LNG export growth is expected to increase U.S. gas demand over the coming decade.

Devon said it expects to release updated operational and financial guidance for the combined company in mid-June.

By Charles Kennedy for Oilprice.com

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