Private equity firm Kimmeridge Energy Management has acquired stakes in Devon Energy and Coterra Energy, arguing that both companies’ Permian Basin oil positions are undervalued due to their broader exposure to gas-heavy basins, such as the Marcellus and Anadarko.
Kimmeridge disclosed ownership of approximately 5.7 million Devon shares and an undisclosed position in Coterra in its November filings. The firm said both companies “share similarities in that their premium Permian positions are undervalued within multi-basin companies.”
Coterra’s diversified structure was created through the 2021 merger of Cabot Oil & Gas and Cimarex Energy, combining gas production in the Marcellus with Permian and Anadarko oil assets. Kimmeridge contends that this mix has produced complexity and valuation compression rather than synergy.
Devon Energy, meanwhile, maintains strong positions in the Delaware Basin and Cana-Woodford plays, yet also carries legacy acreage in Oklahoma’s Anadarko.
Why It Matters
Kimmeridge’s move underscores the growing investor push for simplification among large independents:
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Unlocking Permian value – The Permian Basin remains North America’s highest-margin oil play, while gas-weighted assets drag on valuation multiples.
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Portfolio streamlining – The firm advocates divesting Marcellus and Anadarko assets to create pure-play Permian operators.
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Capital efficiency – Consolidated single-basin focus could enhance free cash flow and shareholder returns.
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Strategic signal – Kimmeridge has applied similar pressure on Coterra and holds positions in Civitas and Viper Energy, signaling a wider activist strategy targeting undervalued shale portfolios.
What the Map Shows
In Rextag Energy DataLink, the visualization highlights how Devon and Coterra’s multi-basin structures disperse operational focus and midstream exposure:
● Permian Basin (TX–NM):
High-density oil production with overlapping Devon and Coterra acreage.
Key midstream operators: Energy Transfer, Kinder Morgan, Enterprise Products.
● Greater Anadarko Basin (OK):
Devon’s legacy Cana-Woodford and STACK assets surrounded by major gas pipeline corridors.
Extensive Energy Transfer and Kinder Morgan coverage indicating mature infrastructure.
● Marcellus Shale (PA):
Coterra’s gas acreage concentrated in Susquehanna and Wyoming counties.
Interstate takeaway via Kinder Morgan and Energy Transfer trunklines to Northeast markets.
Together, these layers illustrate the geographic diversification that Kimmeridge believes dilutes shareholder value, contrasting premium Permian oil assets with gas-centric regions in Oklahoma and Pennsylvania.
A Deeper Dive with DataLink
- Filter Acreages by operator to isolate Devon’s and Coterra’s positions across all basins.
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Overlay Natural Gas Pipelines (ET, KMI, EPD) to analyze infrastructure overlap and takeaway options.
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Zoom into the Permian sub-basins to visualize development density and operator adjacency.
- Compare gas-heavy Marcellus acreage to oil-dominant Permian holdings to evaluate portfolio balance.
- Assess potential buyer fit by reviewing operator acreage overlap and regional concentration — useful if certain Anadarko or Marcellus positions come to market.
Through these layers, users can visually assess the multi-basin complexity and midstream interconnectivity shaping investor perceptions of Devon and Coterra.
