According to a Bloomberg report, Coterra Energy and Devon Energy are in advanced discussions about a potential merger that could be announced soon. Coterra shares rose 3% on Thursday, reaching a market value of roughly $21.8 billion. Devon Energy's shares also increased, up 1.97%, valuing the company at around $25.4 billion. This potential deal would reshape the oil and gas sector.

The merger would unite two significant players with substantial holdings in the Delaware Basin, a key area within the Permian Basin. Devon controls about 400,000 net acres in this region. Coterra also has a 346,000-acre position there, plus significant natural gas assets in Pennsylvania's Marcellus Shale. Such a deal would consolidate their positions.

While talks are advanced, no final decision has been made, and negotiations could still collapse. The timing of any announcement could also shift. The Permian Basin is experiencing a surge in production, making scale and efficiency gains highly attractive. Any successful deal would create a formidable player in the energy market.

This potential merger follows a trend of consolidation in the energy industry, where companies seek to enhance their portfolios and achieve operational efficiencies. Investors will be watching closely to see if a deal is reached and what the terms might be. The combination of these two companies would create a major force, impacting the competitive dynamic.