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Kimmeridge on Tuesday urged shale producer Devon Energy's (DVN.N) incoming board to ​swiftly pursue asset sales, improve capital allocation ‌and revamp executive pay to boost shareholder returns after its merger with Coterra Energy (CTRA.N) closes.

Investment firm Kimmeridge, a ​well-known activist investor in the energy sector, ​holds about a 1.4% stake in Devon, according ⁠to LSEG data.

Kimmeridge said the combined company ​risks a "conglomerate discount" unless it streamlines its business and ​focuses on high-margin assets, even as the deal creates scale and free cash flow potential.

The deal, announced in February ​and expected to close on May 4, will ​create a giant U.S. shale producer with an enterprise value of ‌about $58 ⁠billion.

Devon and Coterra did not immediately respond to Reuters' request for comment.

Kimmeridge urged Devon to quickly outline its post-merger strategy, including clear priorities on ​capital allocation, asset ​ownership and ⁠return thresholds.

It also called for an "accelerated" divestment of non-core assets, saying a ​more focused business would improve capital efficiency.

"Scale ​alone ⁠does not create value, but discipline and execution do," Managing Partner Mark Viviano said in an ⁠open letter ​to the future board.

Kimmeridge also ​pressed for changes to executive compensation, recommending fully performance-based incentives.