What exactly is Covenant Merit (meritum ex pacto)? By definition, "covenant merit" must denote a type of merit that functions within a covenant. In other words, the term must be defined as generically as possible, according to its referent ("covenant"), without any specific and arbitrary restriction in its basic definition.
In a covenant, which can be defined simply as an "oath-bound agreement," an agreement between two parties is envisioned. One party sets the condition, or gives a promise, to the other party. If it is a condition, then the other party (X) has to fulfill the conditions to get the promised rewards, failing which there might be sanctions. If it is a promise, then the party promising it has to fulfill the promise, and X can hold him to his word to fulfill it.
For a covenant with conditions, for someone, X, to fulfill the condition indicates that he merits the reward promised. This meriting is a purely logical construct, in the form of fulfilling the condition of the arrangement "If p, then q" where p is the condition, and q the reward. As a purely logical construction, it is solely interested in the logical relation in the argument form known as modus ponens. It is noted that the logical construction is totally uninterested in how p is accomplished. p can be achieved purely by grace, by one's own virtue or a mixture of them, and however p is achieved is absolutely irrelevant to the topic at hand. The question is this, "Is p fulfilled by the party given this covenant obligation?" If so, then the party X has covenant merit before God, and God is obligated to reward the meritorious person X, because He has so promised in His word. After all, that is what "merit" means. One has done something which deserves a reward, and in the logical sense, X in accomplishing p does deserve the reward, not in an ontological sense but in a logical sense.
This it seems to me is the most basic meaning of "covenant merit." Being a logical relational construct, it has no bearings on ontology. Therefore, the denial of merit in the Reformed Confessions are inapplicable in dealing with the idea of "covenant merit."