Coterra Energy ( CTRA) +3.2% in Thursday's trading following a Bloomberg report that it is holding talks with Devon Energy ( DVN) about a potential merger, a deal that would rank among the biggest oil and gas deals in years.

The companies - both with large positions in the Permian Basin - are still negotiating the terms and structure of a potential deal, according to the report, which also said Coterra ( CTRA) has held merger talks with at least one other company in the recent past.

Devon ( DVN) owns ~400K net acres in the Permian's Delaware Basin, where Coterra ( CTRA) also has a 346K-acre position, and a deal would enable the combined company to better compete with Permian giants such as Exxon Mobil and Diamondback Energy.

Devon ( DVN) also has drilling operations in the Rocky Mountain region, southeast Texas and Oklahoma, while Coterra’s ( CTRA) other operations cover western Oklahoma as well as Pennsylvania's Marcellus Shale.