Activist investor Toms Capital Investment Management has taken a significant stake in Devon Energy, positioning itself as one of the US shale producer’s top shareholders following the company’s recent large-scale merger activity, according to a report by the Financial Times.

The report cites unnamed people familiar with the matter as revealing that the hedge fund, which is backed by Citadel and manages around $2.8bn in assets, has become a top-five investor in Devon. It is not yet clear what specific changes the firm is seeking at the energy group.

Devon Energy, valued at nearly $50bn, recently completed a major merger with Coterra Energy, forming one of the largest independent oil producers in the United States with approximately 750,000 acres in the Permian Basin.

The Permian has been at the centre of a renewed wave of dealmaking in the US energy sector, with total transactions reaching $362bn since the start of the year, reflecting a 39% increase compared with the same period last year, according to LSEG data.

The dealmaking resurgence follows several years of consolidation in the sector, including major transactions by ExxonMobil and Chevron, which have completed acquisitions of Pioneer Natural Resources and Hess respectively. Analysts expect further strategic M&A activity as major producers seek to expand reserves and streamline portfolios.

Devon is already under scrutiny from activist investor Kimmeridge Energy Management, which has been pushing for operational improvements and potential asset sales.

The addition of Toms Capital adds further activist interest in the company at a time when US energy equities are benefiting from higher oil prices and stronger cash flows following geopolitical tensions and supply constraints.

TCIM has a track record of taking constructive activist positions, typically engaging privately with management rather than pursuing public campaigns. The firm has previously taken stakes in companies including Kellanova, US Steel, Kenvue and Target, often advocating for strategic or operational change.

The investor recently received a $500mn capital commitment from Citadel, underscoring growing institutional backing for its investment approach.

Neither Devon Energy nor Toms Capital reportedly commented on the stake.