[10-Q] Devon Energy Corporation Quarterly Earnings Report
MRC Global’s Q2-25 10-Q shows weaker operating performance ahead of its planned merger with DNOW. Sales were essentially flat at $798 M (-0.1% YoY) but gross margin fell 220 bp to 18.9%, pulling gross profit down 11% to $151 M. SG&A rose 7% to $130 M, including $6 M of advisory fees tied to the DNOW deal, cutting operating income 55% to $21 M and diluted EPS from continuing ops to $0.15 vs $0.28.
Year-to-date, revenue declined 4% to $1.51 B while operating cash flow swung to an outflow of $30 M (vs +$101 M LY) as working-capital needs expanded (AR +$91 M, inventory +$75 M). Long-term debt rose to $445 M (vs $384 M YE24) with the ABL balance at $106 M; weighted-average interest is 7.25%. Cash finished the quarter at $75 M.
The sale of Canadian operations closed 3/14/25, triggering a $30 M after-tax loss, which pushed YTD net income to a $9 M loss. International sales grew 14% but were offset by a 3% decline in the U.S.
- DNOW merger: each MRC share to be exchanged for 0.9489 DNOW shares; closing subject to shareholder & regulatory approval (deadline 6/26/26).
- Capital returns: repurchased 1.22 M shares for $15 M before repurchases paused under the merger agreement.
Total equity improved to $536 M (vs $516 M YE24) aided by $42 M FX gains released on the Canada sale.
Il 10-Q del secondo trimestre 2025 di MRC Global evidenzia una performance operativa più debole in vista della fusione pianificata con DNOW. Le vendite sono rimaste sostanzialmente stabili a 798 M$ (-0,1% su base annua), ma il margine lordo è sceso di 220 punti base al 18,9%, facendo calare il profitto lordo dell'11% a 151 M$. Le spese SG&A sono aumentate del 7% a 130 M$, inclusi 6 M$ di commissioni di consulenza legate all'accordo con DNOW, riducendo l'utile operativo del 55% a 21 M$ e l'EPS diluito da operazioni continue a 0,15$ rispetto a 0,28$.
Da inizio anno, i ricavi sono diminuiti del 4% a 1,51 B$, mentre il flusso di cassa operativo è passato a un deflusso di 30 M$ (rispetto a un afflusso di 101 M$ l'anno precedente) a causa dell'aumento del capitale circolante (crediti +91 M$, inventario +75 M$). Il debito a lungo termine è salito a 445 M$ (contro 384 M$ a fine 2024) con un saldo ABL di 106 M$; il tasso di interesse medio ponderato è del 7,25%. La liquidità a fine trimestre era di 75 M$.
La vendita delle operazioni canadesi si è conclusa il 14/03/25, generando una perdita netta post-tasse di 30 M$, che ha portato la perdita netta da inizio anno a 9 M$. Le vendite internazionali sono cresciute del 14%, compensate però da un calo del 3% negli Stati Uniti.
- Fusione con DNOW: ogni azione MRC sarà scambiata con 0,9489 azioni DNOW; la chiusura è soggetta all'approvazione degli azionisti e delle autorità regolatorie (scadenza 26/06/26).
- Ritorni per il capitale: riacquistate 1,22 milioni di azioni per 15 M$ prima della sospensione dei riacquisti in base all'accordo di fusione.
Il patrimonio netto complessivo è migliorato a 536 M$ (contro 516 M$ a fine 2024), grazie a guadagni valutari di 42 M$ realizzati con la vendita delle attività canadesi.
El informe 10-Q del segundo trimestre de 2025 de MRC Global muestra un desempeño operativo más débil antes de su fusión planificada con DNOW. Las ventas se mantuvieron prácticamente estables en 798 M$ (-0.1% interanual), pero el margen bruto cayó 220 puntos básicos hasta el 18.9%, reduciendo la ganancia bruta un 11% a 151 M$. Los gastos SG&A aumentaron un 7% a 130 M$, incluyendo 6 M$ en honorarios de asesoría relacionados con el acuerdo con DNOW, lo que redujo el ingreso operativo un 55% a 21 M$ y el EPS diluido de operaciones continuas a 0.15$ frente a 0.28$.
En lo que va del año, los ingresos disminuyeron un 4% a 1.51 B$, mientras que el flujo de caja operativo pasó a ser una salida de 30 M$ (frente a una entrada de 101 M$ el año anterior) debido al aumento en las necesidades de capital de trabajo (cuentas por cobrar +91 M$, inventario +75 M$). La deuda a largo plazo aumentó a 445 M$ (frente a 384 M$ a fin de 2024) con un saldo ABL de 106 M$; el interés promedio ponderado es del 7.25%. El efectivo al cierre del trimestre fue de 75 M$.
La venta de las operaciones en Canadá se cerró el 14/03/25, generando una pérdida neta después de impuestos de 30 M$, que llevó la pérdida neta acumulada a 9 M$. Las ventas internacionales crecieron un 14%, pero fueron compensadas por una caída del 3% en EE.UU.
- Fusión con DNOW: cada acción de MRC se intercambiará por 0.9489 acciones de DNOW; el cierre está sujeto a la aprobación de accionistas y reguladores (fecha límite 26/06/26).
- Devoluciones de capital: se recompraron 1.22 millones de acciones por 15 M$ antes de pausar las recompras bajo el acuerdo de fusión.
El patrimonio total mejoró a 536 M$ (frente a 516 M$ a fin de 2024), impulsado por ganancias cambiarias de 42 M$ liberadas con la venta de Canadá.
MRC Global의 2025년 2분기 10-Q 보고서는 DNOW와의 예정된 합병을 앞두고 운영 실적이 약화되었음을 보여줍니다. 매출은 전년 대비 -0.1%로 7억 9,800만 달러로 거의 변동이 없었으나, 총 마진은 220bp 하락한 18.9%를 기록하며 총이익은 11% 감소한 1억 5,100만 달러에 그쳤습니다. SG&A 비용은 DNOW 거래 관련 자문 수수료 600만 달러를 포함하여 7% 증가한 1억 3,000만 달러였으며, 이로 인해 영업이익은 55% 감소한 2,100만 달러, 계속 영업 기준 희석 주당순이익(EPS)은 0.28달러에서 0.15달러로 줄었습니다.
연초 이후 매출은 4% 감소한 15억 1천만 달러였으며, 운전자본 수요 증가(매출채권 +9,100만 달러, 재고 +7,500만 달러)로 인해 영업현금흐름은 3,000만 달러 유출로 전환(전년 동기 1억 100만 달러 유입)되었습니다. 장기 부채는 2024년 말 3억 8,400만 달러에서 4억 4,500만 달러로 증가했으며, ABL 잔액은 1억 600만 달러, 가중평균 이자율은 7.25%입니다. 분기 말 현금은 7,500만 달러였습니다.
캐나다 사업 매각은 2025년 3월 14일에 완료되어 3,000만 달러의 세후 손실을 발생시켰으며, 이에 따라 연초 이후 순손실은 900만 달러가 되었습니다. 국제 매출은 14% 증가했으나 미국 매출은 3% 감소했습니다.
- DNOW 합병: MRC 주식 1주당 DNOW 주식 0.9489주로 교환 예정이며, 거래 종료는 주주 및 규제 기관 승인(마감 기한 2026년 6월 26일)을 조건으로 합니다.
- 자본 환원: 합병 계약에 따라 자사주 매입이 중단되기 전 122만 주를 1,500만 달러에 재매입했습니다.
캐나다 매각으로 인한 4,200만 달러의 외환 이익 덕분에 총 자본은 2024년 말 5억 1,600만 달러에서 5억 3,600만 달러로 개선되었습니다.
Le rapport 10-Q du deuxième trimestre 2025 de MRC Global révèle une performance opérationnelle affaiblie avant sa fusion prévue avec DNOW. Les ventes sont restées quasiment stables à 798 M$ (-0,1% en glissement annuel), mais la marge brute a chuté de 220 points de base à 18,9%, faisant baisser le bénéfice brut de 11% à 151 M$. Les frais SG&A ont augmenté de 7% à 130 M$, incluant 6 M$ de frais de conseil liés à l'accord DNOW, réduisant le résultat opérationnel de 55% à 21 M$ et le BPA dilué des opérations continues à 0,15$ contre 0,28$.
Depuis le début de l'année, le chiffre d'affaires a diminué de 4% à 1,51 Md$, tandis que les flux de trésorerie opérationnels sont passés à une sortie de 30 M$ (contre une entrée de 101 M$ l'an dernier) en raison de l'augmentation des besoins en fonds de roulement (créances +91 M$, stocks +75 M$). La dette à long terme a augmenté à 445 M$ (contre 384 M$ fin 2024) avec un solde ABL de 106 M$ ; le taux d'intérêt moyen pondéré est de 7,25%. La trésorerie en fin de trimestre s'élevait à 75 M$.
La vente des opérations canadiennes a été finalisée le 14/03/25, entraînant une perte après impôts de 30 M$, ce qui a porté la perte nette cumulée à 9 M$. Les ventes internationales ont progressé de 14%, compensées par une baisse de 3% aux États-Unis.
- Fusion avec DNOW : chaque action MRC sera échangée contre 0,9489 action DNOW ; la clôture est soumise à l'approbation des actionnaires et des régulateurs (date limite 26/06/26).
- Retours aux actionnaires : 1,22 million d'actions ont été rachetées pour 15 M$ avant la suspension des rachats dans le cadre de l'accord de fusion.
Les capitaux propres totaux se sont améliorés à 536 M$ (contre 516 M$ fin 2024), grâce à des gains de change de 42 M$ liés à la vente des activités canadiennes.
Der 10-Q-Bericht von MRC Global für das zweite Quartal 2025 zeigt eine schwächere operative Leistung vor der geplanten Fusion mit DNOW. Der Umsatz blieb mit 798 M$ nahezu unverändert (-0,1% im Jahresvergleich), aber die Bruttomarge sank um 220 Basispunkte auf 18,9%, wodurch der Bruttogewinn um 11% auf 151 M$ zurückging. Die SG&A-Kosten stiegen um 7% auf 130 M$, darunter 6 M$ an Beratungskosten im Zusammenhang mit dem DNOW-Deal, was das Betriebsergebnis um 55% auf 21 M$ und das verwässerte Ergebnis je Aktie aus fortgeführten Geschäften von 0,28$ auf 0,15$ reduzierte.
Im bisherigen Jahresverlauf sanken die Umsatzerlöse um 4% auf 1,51 Mrd.$, während der operative Cashflow aufgrund gestiegener Working-Capital-Anforderungen (Forderungen +91 M$, Lagerbestand +75 M$) von einem Zufluss von 101 M$ im Vorjahr auf einen Abfluss von 30 M$ kippte. Die langfristigen Schulden stiegen auf 445 M$ (gegenüber 384 M$ Ende 2024) bei einem ABL-Saldo von 106 M$; der gewichtete durchschnittliche Zinssatz beträgt 7,25%. Der Kassenbestand am Quartalsende betrug 75 M$.
Der Verkauf der kanadischen Geschäftseinheiten wurde am 14.03.2025 abgeschlossen und führte zu einem Nachsteuerverlust von 30 M$, wodurch der Nettogewinn im Jahresverlauf auf einen Verlust von 9 M$ gedrückt wurde. Die internationalen Umsätze stiegen um 14%, wurden jedoch durch einen Rückgang von 3% in den USA ausgeglichen.
- DNOW-Fusion: Jede MRC-Aktie wird gegen 0,9489 DNOW-Aktien getauscht; der Abschluss steht unter dem Vorbehalt der Zustimmung der Aktionäre und der Regulierungsbehörden (Frist 26.06.2026).
- Kapitalrückführungen: Es wurden 1,22 Mio. Aktien für 15 M$ zurückgekauft, bevor die Rückkäufe gemäß der Fusionsvereinbarung ausgesetzt wurden.
Das Gesamteigenkapital verbesserte sich auf 536 M$ (gegenüber 516 M$ Ende 2024), unterstützt durch 42 M$ Währungsgewinne, die durch den Verkauf der kanadischen Einheiten realisiert wurden.
- None.
- None.
Insights
TL;DR – Margin compression, negative cash flow and higher leverage outweigh flat revenue.
Gross margin slid below 19%, and SG&A inflation—partly M&A-related—halved operating profit. Cash burn of $30 M stems from inventory and receivable build, a red flag this late in a cycle. Leverage climbed to 2.4× EBITDA (using LTM data implied by filing) and interest expense rose 43%. While Canada exit cleans the portfolio, it created a $30 M hit and lowers FY-25 EPS. Without the DNOW deal, the equity story would look challenged. I view the quarter as fundamentally negative.
TL;DR – DNOW merger offers strategic scale and all-stock consideration, mitigating standalone weaknesses.
The 0.9489 exchange ratio gives MRC holders majority exposure to a larger, more diversified distributor. No cash is required, protecting liquidity, and the $45.5 M reciprocal break fee keeps both parties aligned. Term-loan holders may be repaid at closing; DNOW’s commitment letter reduces refinancing risk. One-time advisory costs ($7 M YTD) are manageable. The transaction should be value-accretive if closed on current terms.
Il 10-Q del secondo trimestre 2025 di MRC Global evidenzia una performance operativa più debole in vista della fusione pianificata con DNOW. Le vendite sono rimaste sostanzialmente stabili a 798 M$ (-0,1% su base annua), ma il margine lordo è sceso di 220 punti base al 18,9%, facendo calare il profitto lordo dell'11% a 151 M$. Le spese SG&A sono aumentate del 7% a 130 M$, inclusi 6 M$ di commissioni di consulenza legate all'accordo con DNOW, riducendo l'utile operativo del 55% a 21 M$ e l'EPS diluito da operazioni continue a 0,15$ rispetto a 0,28$.
Da inizio anno, i ricavi sono diminuiti del 4% a 1,51 B$, mentre il flusso di cassa operativo è passato a un deflusso di 30 M$ (rispetto a un afflusso di 101 M$ l'anno precedente) a causa dell'aumento del capitale circolante (crediti +91 M$, inventario +75 M$). Il debito a lungo termine è salito a 445 M$ (contro 384 M$ a fine 2024) con un saldo ABL di 106 M$; il tasso di interesse medio ponderato è del 7,25%. La liquidità a fine trimestre era di 75 M$.
La vendita delle operazioni canadesi si è conclusa il 14/03/25, generando una perdita netta post-tasse di 30 M$, che ha portato la perdita netta da inizio anno a 9 M$. Le vendite internazionali sono cresciute del 14%, compensate però da un calo del 3% negli Stati Uniti.
- Fusione con DNOW: ogni azione MRC sarà scambiata con 0,9489 azioni DNOW; la chiusura è soggetta all'approvazione degli azionisti e delle autorità regolatorie (scadenza 26/06/26).
- Ritorni per il capitale: riacquistate 1,22 milioni di azioni per 15 M$ prima della sospensione dei riacquisti in base all'accordo di fusione.
Il patrimonio netto complessivo è migliorato a 536 M$ (contro 516 M$ a fine 2024), grazie a guadagni valutari di 42 M$ realizzati con la vendita delle attività canadesi.
El informe 10-Q del segundo trimestre de 2025 de MRC Global muestra un desempeño operativo más débil antes de su fusión planificada con DNOW. Las ventas se mantuvieron prácticamente estables en 798 M$ (-0.1% interanual), pero el margen bruto cayó 220 puntos básicos hasta el 18.9%, reduciendo la ganancia bruta un 11% a 151 M$. Los gastos SG&A aumentaron un 7% a 130 M$, incluyendo 6 M$ en honorarios de asesoría relacionados con el acuerdo con DNOW, lo que redujo el ingreso operativo un 55% a 21 M$ y el EPS diluido de operaciones continuas a 0.15$ frente a 0.28$.
En lo que va del año, los ingresos disminuyeron un 4% a 1.51 B$, mientras que el flujo de caja operativo pasó a ser una salida de 30 M$ (frente a una entrada de 101 M$ el año anterior) debido al aumento en las necesidades de capital de trabajo (cuentas por cobrar +91 M$, inventario +75 M$). La deuda a largo plazo aumentó a 445 M$ (frente a 384 M$ a fin de 2024) con un saldo ABL de 106 M$; el interés promedio ponderado es del 7.25%. El efectivo al cierre del trimestre fue de 75 M$.
La venta de las operaciones en Canadá se cerró el 14/03/25, generando una pérdida neta después de impuestos de 30 M$, que llevó la pérdida neta acumulada a 9 M$. Las ventas internacionales crecieron un 14%, pero fueron compensadas por una caída del 3% en EE.UU.
- Fusión con DNOW: cada acción de MRC se intercambiará por 0.9489 acciones de DNOW; el cierre está sujeto a la aprobación de accionistas y reguladores (fecha límite 26/06/26).
- Devoluciones de capital: se recompraron 1.22 millones de acciones por 15 M$ antes de pausar las recompras bajo el acuerdo de fusión.
El patrimonio total mejoró a 536 M$ (frente a 516 M$ a fin de 2024), impulsado por ganancias cambiarias de 42 M$ liberadas con la venta de Canadá.
MRC Global의 2025년 2분기 10-Q 보고서는 DNOW와의 예정된 합병을 앞두고 운영 실적이 약화되었음을 보여줍니다. 매출은 전년 대비 -0.1%로 7억 9,800만 달러로 거의 변동이 없었으나, 총 마진은 220bp 하락한 18.9%를 기록하며 총이익은 11% 감소한 1억 5,100만 달러에 그쳤습니다. SG&A 비용은 DNOW 거래 관련 자문 수수료 600만 달러를 포함하여 7% 증가한 1억 3,000만 달러였으며, 이로 인해 영업이익은 55% 감소한 2,100만 달러, 계속 영업 기준 희석 주당순이익(EPS)은 0.28달러에서 0.15달러로 줄었습니다.
연초 이후 매출은 4% 감소한 15억 1천만 달러였으며, 운전자본 수요 증가(매출채권 +9,100만 달러, 재고 +7,500만 달러)로 인해 영업현금흐름은 3,000만 달러 유출로 전환(전년 동기 1억 100만 달러 유입)되었습니다. 장기 부채는 2024년 말 3억 8,400만 달러에서 4억 4,500만 달러로 증가했으며, ABL 잔액은 1억 600만 달러, 가중평균 이자율은 7.25%입니다. 분기 말 현금은 7,500만 달러였습니다.
캐나다 사업 매각은 2025년 3월 14일에 완료되어 3,000만 달러의 세후 손실을 발생시켰으며, 이에 따라 연초 이후 순손실은 900만 달러가 되었습니다. 국제 매출은 14% 증가했으나 미국 매출은 3% 감소했습니다.
- DNOW 합병: MRC 주식 1주당 DNOW 주식 0.9489주로 교환 예정이며, 거래 종료는 주주 및 규제 기관 승인(마감 기한 2026년 6월 26일)을 조건으로 합니다.
- 자본 환원: 합병 계약에 따라 자사주 매입이 중단되기 전 122만 주를 1,500만 달러에 재매입했습니다.
캐나다 매각으로 인한 4,200만 달러의 외환 이익 덕분에 총 자본은 2024년 말 5억 1,600만 달러에서 5억 3,600만 달러로 개선되었습니다.
Le rapport 10-Q du deuxième trimestre 2025 de MRC Global révèle une performance opérationnelle affaiblie avant sa fusion prévue avec DNOW. Les ventes sont restées quasiment stables à 798 M$ (-0,1% en glissement annuel), mais la marge brute a chuté de 220 points de base à 18,9%, faisant baisser le bénéfice brut de 11% à 151 M$. Les frais SG&A ont augmenté de 7% à 130 M$, incluant 6 M$ de frais de conseil liés à l'accord DNOW, réduisant le résultat opérationnel de 55% à 21 M$ et le BPA dilué des opérations continues à 0,15$ contre 0,28$.
Depuis le début de l'année, le chiffre d'affaires a diminué de 4% à 1,51 Md$, tandis que les flux de trésorerie opérationnels sont passés à une sortie de 30 M$ (contre une entrée de 101 M$ l'an dernier) en raison de l'augmentation des besoins en fonds de roulement (créances +91 M$, stocks +75 M$). La dette à long terme a augmenté à 445 M$ (contre 384 M$ fin 2024) avec un solde ABL de 106 M$ ; le taux d'intérêt moyen pondéré est de 7,25%. La trésorerie en fin de trimestre s'élevait à 75 M$.
La vente des opérations canadiennes a été finalisée le 14/03/25, entraînant une perte après impôts de 30 M$, ce qui a porté la perte nette cumulée à 9 M$. Les ventes internationales ont progressé de 14%, compensées par une baisse de 3% aux États-Unis.
- Fusion avec DNOW : chaque action MRC sera échangée contre 0,9489 action DNOW ; la clôture est soumise à l'approbation des actionnaires et des régulateurs (date limite 26/06/26).
- Retours aux actionnaires : 1,22 million d'actions ont été rachetées pour 15 M$ avant la suspension des rachats dans le cadre de l'accord de fusion.
Les capitaux propres totaux se sont améliorés à 536 M$ (contre 516 M$ fin 2024), grâce à des gains de change de 42 M$ liés à la vente des activités canadiennes.
Der 10-Q-Bericht von MRC Global für das zweite Quartal 2025 zeigt eine schwächere operative Leistung vor der geplanten Fusion mit DNOW. Der Umsatz blieb mit 798 M$ nahezu unverändert (-0,1% im Jahresvergleich), aber die Bruttomarge sank um 220 Basispunkte auf 18,9%, wodurch der Bruttogewinn um 11% auf 151 M$ zurückging. Die SG&A-Kosten stiegen um 7% auf 130 M$, darunter 6 M$ an Beratungskosten im Zusammenhang mit dem DNOW-Deal, was das Betriebsergebnis um 55% auf 21 M$ und das verwässerte Ergebnis je Aktie aus fortgeführten Geschäften von 0,28$ auf 0,15$ reduzierte.
Im bisherigen Jahresverlauf sanken die Umsatzerlöse um 4% auf 1,51 Mrd.$, während der operative Cashflow aufgrund gestiegener Working-Capital-Anforderungen (Forderungen +91 M$, Lagerbestand +75 M$) von einem Zufluss von 101 M$ im Vorjahr auf einen Abfluss von 30 M$ kippte. Die langfristigen Schulden stiegen auf 445 M$ (gegenüber 384 M$ Ende 2024) bei einem ABL-Saldo von 106 M$; der gewichtete durchschnittliche Zinssatz beträgt 7,25%. Der Kassenbestand am Quartalsende betrug 75 M$.
Der Verkauf der kanadischen Geschäftseinheiten wurde am 14.03.2025 abgeschlossen und führte zu einem Nachsteuerverlust von 30 M$, wodurch der Nettogewinn im Jahresverlauf auf einen Verlust von 9 M$ gedrückt wurde. Die internationalen Umsätze stiegen um 14%, wurden jedoch durch einen Rückgang von 3% in den USA ausgeglichen.
- DNOW-Fusion: Jede MRC-Aktie wird gegen 0,9489 DNOW-Aktien getauscht; der Abschluss steht unter dem Vorbehalt der Zustimmung der Aktionäre und der Regulierungsbehörden (Frist 26.06.2026).
- Kapitalrückführungen: Es wurden 1,22 Mio. Aktien für 15 M$ zurückgekauft, bevor die Rückkäufe gemäß der Fusionsvereinbarung ausgesetzt wurden.
Das Gesamteigenkapital verbesserte sich auf 536 M$ (gegenüber 516 M$ Ende 2024), unterstützt durch 42 M$ Währungsgewinne, die durch den Verkauf der kanadischen Einheiten realisiert wurden.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer identification No.) |
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(Address of principal executive offices) |
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(Zip code) |
Registrant’s telephone number, including area code: (
Former name, address and former fiscal year, if changed from last report: Not applicable
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
On July 23, 2025,
Table of Contents
DEVON ENERGY CORPORATION
FORM 10-Q
TABLE OF CONTENTS
Part I. Financial Information |
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Item 1. |
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Financial Statements |
6 |
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Consolidated Statements of Comprehensive Earnings |
6 |
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Consolidated Balance Sheets |
7 |
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Consolidated Statements of Cash Flows |
8 |
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Consolidated Statements of Equity |
9 |
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Notes to Consolidated Financial Statements |
10 |
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Note 1 – Summary of Significant Accounting Policies |
10 |
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Note 2 – Acquisitions and Divestitures |
11 |
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Note 3 – Derivative Financial Instruments |
12 |
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Note 4 – Share-Based Compensation |
14 |
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Note 5 – Asset Impairments |
15 |
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Note 6 – Income Taxes |
15 |
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Note 7 – Net Earnings Per Share |
16 |
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Note 8 – Other Comprehensive Earnings (Loss) |
16 |
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Note 9 – Supplemental Information to Statements of Cash Flows |
16 |
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Note 10 – Accounts Receivable |
17 |
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Note 11 – Property, Plant and Equipment |
17 |
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Note 12 – Investments |
17 |
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Note 13 – Debt and Related Expenses |
18 |
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Note 14 – Leases |
19 |
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Note 15 – Asset Retirement Obligations |
20 |
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Note 16 – Stockholders’ Equity |
20 |
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Note 17 – Commitments and Contingencies |
21 |
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Note 18 – Fair Value Measurements |
23 |
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Note 19 – Reportable Segments |
24 |
Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
25 |
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Executive Overview |
25 |
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Results of Operations |
26 |
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Capital Resources, Uses and Liquidity |
36 |
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Critical Accounting Estimates |
39 |
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Non-GAAP Measures |
40 |
Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
41 |
Item 4. |
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Controls and Procedures |
41 |
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Part II. Other Information |
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Item 1. |
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Legal Proceedings |
42 |
Item 1A. |
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Risk Factors |
42 |
Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
42 |
Item 3. |
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Defaults Upon Senior Securities |
42 |
Item 4. |
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Mine Safety Disclosures |
42 |
Item 5. |
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Other Information |
42 |
Item 6. |
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Exhibits |
43 |
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Signatures |
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43 |
2
Table of Contents
DEFINITIONS
Unless the context otherwise indicates, references to “us,” “we,” “our,” “ours,” “Devon,” the “Company” and “Registrant” refer to Devon Energy Corporation and its consolidated subsidiaries. All monetary values, other than per unit and per share amounts, are stated in millions of U.S. dollars unless otherwise specified. In addition, the following are other abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:
“ASU” means Accounting Standards Update.
“Bbl” or “Bbls” means barrel or barrels.
“Boe” means barrel of oil equivalent. Gas proved reserves and production are converted to Boe, at the pressure and temperature base standard of each respective state in which the gas is produced, at the rate of six Mcf of gas per Bbl of oil, based upon the approximate relative energy content of gas and oil. NGL proved reserves and production are converted to Boe on a one-to-one basis with oil.
“Btu” means British thermal units, a measure of heating value.
“Catalyst” means Catalyst Midstream Partners, LLC.
“CDM” means Cotton Draw Midstream, L.L.C.
“DD&A” means depreciation, depletion and amortization expenses.
“EPA” means the United States Environmental Protection Agency.
“ESG” means environmental, social and governance.
“FASB” means Financial Accounting Standards Board.
“Fervo” means Fervo Energy Company.
“G&A” means general and administrative expenses.
“GAAP” means U.S. generally accepted accounting principles.
“Grayson Mill” means Grayson Mill Intermediate HoldCo II, LLC and Grayson Mill Intermediate HoldCo III, LLC.
“Inside FERC” refers to the publication Inside FERC’s Gas Market Report.
“LOE” means lease operating expenses.
“Matterhorn” refers to Matterhorn Express Pipeline, LLC and, as applicable, its direct parent, MXP Parent, LLC.
“MBbls” means thousand barrels.
“MBoe” means thousand Boe.
“Mcf” means thousand cubic feet.
“MMBoe” means million Boe.
“MMBtu” means million Btu.
“MMcf” means million cubic feet.
“N/M” means not meaningful.
3
Table of Contents
“NCI” means noncontrolling interests.
“NGL” or “NGLs” means natural gas liquids.
“NOV” means notice of violation.
“NYMEX” means New York Mercantile Exchange.
“OBBB” means One Big Beautiful Bill Act.
“OPEC” means Organization of the Petroleum Exporting Countries.
“SEC” means United States Securities and Exchange Commission.
“Senior Credit Facility” means Devon’s syndicated unsecured revolving line of credit, effective as of March 24, 2023.
"SOFR" means secured overnight financing rate.
“TSR” means total shareholder return.
“U.S.” means United States of America.
“VIE” means variable interest entity.
“Water JV” means NDB Midstream L.L.C.
“WTI” means West Texas Intermediate.
“/Bbl” means per barrel.
“/d” means per day.
“/MMBtu” means per MMBtu.
4
Table of Contents
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This report includes “forward-looking statements” within the meaning of the federal securities laws. Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words and phrases “expects,” “believes,” “will,” “would,” “could,” “continue,” “may,” “aims,” “likely to be,” “intends,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this report that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but not limited to:
The forward-looking statements included in this filing speak only as of the date of this report, represent management’s current reasonable expectations as of the date of this filing and are subject to the risks and uncertainties identified above as well as those described elsewhere in this report and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in this report and in other documents we file from time to time with the SEC. All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We do not undertake, and expressly disclaim, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.
5
Table of Contents
Part I. Financial Information
Item 1. Financial Statements
DEVON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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(Unaudited) |
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Oil, gas and NGL sales |
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$ |
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$ |
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$ |
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$ |
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Oil, gas and NGL derivatives |
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Marketing and midstream revenues |
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Total revenues |
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Production expenses |
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Exploration expenses |
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Marketing and midstream expenses |
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Depreciation, depletion and amortization |
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Asset impairments |
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Asset dispositions |
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General and administrative expenses |
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Financing costs, net |
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Other, net |
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Total expenses |
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Earnings before income taxes |
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Income tax expense |
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Net earnings |
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Net earnings attributable to noncontrolling interests |
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Net earnings attributable to Devon |
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$ |
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$ |
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$ |
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$ |
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Net earnings per share: |
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Basic net earnings per share |
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$ |
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$ |
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$ |
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$ |
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Diluted net earnings per share |
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$ |
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$ |
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$ |
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$ |
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Comprehensive earnings: |
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Net earnings |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive earnings, net of tax: |
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Pension and postretirement plans |
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Other comprehensive earnings, net of tax |
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Comprehensive earnings: |
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$ |
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$ |
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$ |
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$ |
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Comprehensive earnings attributable to noncontrolling interests |
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Comprehensive earnings attributable to Devon |
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$ |
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$ |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
6
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
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June 30, 2025 |
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December 31, 2024 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash, cash equivalents and restricted cash |
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$ |
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$ |
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Accounts receivable |
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Inventory |
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Other current assets |
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Total current assets |
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Oil and gas property and equipment, based on successful efforts accounting, net |
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Other property and equipment, net ($ |
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Total property and equipment, net |
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Goodwill |
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Right-of-use assets |
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Investments |
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Other long-term assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Revenues and royalties payable |
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Short-term debt |
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Income taxes payable |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Lease liabilities |
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Asset retirement obligations |
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Other long-term liabilities |
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Deferred income taxes |
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Stockholders' equity: |
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Common stock, $ |
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Additional paid-in capital |
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Retained earnings |
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Accumulated other comprehensive loss |
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( |
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Total stockholders’ equity attributable to Devon |
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Noncontrolling interests |
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Total equity |
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Total liabilities and equity |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
7
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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(Unaudited) |
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Cash flows from operating activities: |
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Net earnings |
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$ |
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$ |
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$ |
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$ |
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Adjustments to reconcile net earnings to net cash from operating activities: |
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Depreciation, depletion and amortization |
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Asset impairments |
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Leasehold impairments |
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Accretion of liabilities |
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Total (gains) losses on commodity derivatives |
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( |
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( |
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( |
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Cash settlements on commodity derivatives |
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(Gains) losses on asset dispositions |
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( |
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( |
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Deferred income tax expense |
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Share-based compensation |
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Other |
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( |
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Changes in assets and liabilities, net |
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( |
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( |
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Net cash from operating activities |
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Cash flows from investing activities: |
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Capital expenditures |
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( |
) |
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( |
) |
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( |
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( |
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Acquisitions of property and equipment |
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( |
) |
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( |
) |
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( |
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( |
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Divestitures of property, equipment and investments |
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Distributions from investments |
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Contributions to investments and other |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Net cash from investing activities |
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( |
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( |
) |
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( |
) |
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( |
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Cash flows from financing activities: |
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Repurchases of common stock |
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( |
) |
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( |
) |
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( |
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( |
) |
Dividends paid on common stock |
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( |
) |
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( |
) |
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( |
) |
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( |
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Contributions from noncontrolling interests |
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Distributions to noncontrolling interests |
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( |
) |
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( |
) |
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( |
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( |
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Repayment of finance lease |
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( |
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Shares exchanged for tax withholdings and other |
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( |
) |
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( |
) |
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( |
) |
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( |
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Net cash from financing activities |
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( |
) |
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( |
) |
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( |
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( |
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Effect of exchange rate changes on cash |
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( |
) |
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( |
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Net change in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
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$ |
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$ |
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$ |
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$ |
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Reconciliation of cash, cash equivalents and restricted cash: |
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Cash and cash equivalents |
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$ |
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$ |
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$ |
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$ |
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Restricted cash |
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Total cash, cash equivalents and restricted cash |
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$ |
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$ |
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$ |
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$ |
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||||
See accompanying notes to consolidated financial statements.
8
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
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Other |
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|
|
|
Additional |
|
|
|
|
|
Comprehensive |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Paid-In |
|
|
Retained |
|
|
Earnings |
|
|
Treasury |
|
|
Noncontrolling |
|
|
Total |
|
|||||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Earnings |
|
|
(Loss) |
|
|
Stock |
|
|
Interests |
|
|
Equity |
|
||||||||
|
|
(Unaudited) |
|
|||||||||||||||||||||||||||||
Three Months Ended June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Other comprehensive earnings, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Common stock repurchased |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Common stock retired |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Common stock dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Distributions to noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Three Months Ended June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Net earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Other comprehensive earnings, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Common stock repurchased |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Common stock retired |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Common stock dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Contributions from noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Distributions to noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Six Months Ended June 30, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|
$ |
|
||||||
Net earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Other comprehensive earnings, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Restricted stock grants, net of cancellations |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Common stock repurchased |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Common stock retired |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Common stock dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Share-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Contributions from noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Distributions to noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
Six Months Ended June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Net earnings |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|||
Other comprehensive earnings, net of tax |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Restricted stock grants, net of cancellations |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Common stock repurchased |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Common stock retired |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
Common stock dividends |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Share-based compensation |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Contributions from noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Distributions to noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||||
See accompanying notes to consolidated financial statements.
9
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The accompanying unaudited interim financial statements and notes of Devon have been prepared pursuant to the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying unaudited interim financial statements and notes should be read in conjunction with the financial statements and notes included in Devon’s 2024 Annual Report on Form 10-K. The accompanying unaudited interim financial statements in this report reflect all adjustments that are, in the opinion of management, necessary for a fair statement of Devon’s results of operations and cash flows for the three-month and six-month periods ended June 30, 2025 and 2024 and Devon’s financial position as of June 30, 2025.
On September 27, 2024, Devon acquired the Williston Basin business of Grayson Mill for total consideration of approximately $
Variable Interest Entity
CDM is a joint venture entity formed by Devon and an affiliate of QL Capital Partners, LP. CDM provides gathering, compression and dehydration services for natural gas production in the Cotton Draw area of the Delaware Basin. Devon holds a controlling interest in CDM and the portions of CDM’s net earnings and equity not attributable to Devon’s controlling interest are shown separately as noncontrolling interests in the accompanying consolidated statements of comprehensive earnings and consolidated balance sheets. CDM is considered a VIE to Devon. The assets of CDM cannot be used by Devon for general corporate purposes and are included in, and disclosed parenthetically, on Devon's consolidated balance sheets. The carrying amount of liabilities related to CDM for which the creditors do not have recourse to Devon's assets are also included in, and disclosed parenthetically, if material, on Devon's consolidated balance sheets.
Disaggregation of Revenue
The following table presents revenue from contracts with customers that are disaggregated based on the type of good or service.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Oil |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gas |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NGL |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil, gas and NGL sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gas |
|
|
|
|
|
|
|
|
|
|
|
|
||||
NGL |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketing and midstream revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues from contracts with customers |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Recently Issued Accounting Standards Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 intends to provide investors with enhanced information about an entity’s income taxes by requiring disclosure of items such as disaggregation of the effective tax rate reconciliation as well as information regarding income taxes paid. This ASU will result in additional disclosures for annual reporting periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued. This ASU will result in additional disclosures for Devon beginning with our 2025 annual reporting and interim periods beginning in 2026.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. ASU 2024-03 requires disclosures about specific types of expenses included in the expense captions presented on the face of the statement of operations as well as disclosures about selling expenses. This ASU is effective for Devon beginning with its 2027 annual reporting and interim periods beginning in 2028. Devon is evaluating the impact this ASU will have on the disclosures that accompany its consolidated financial statements.
10
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Grayson Mill Acquisition
On September 27, 2024, Devon completed its acquisition of the Williston Basin business of Grayson Mill for total consideration of approximately $
Purchase Price Allocation
This transaction was accounted for using the acquisition method of accounting. Under the acquisition method of accounting, the assets and liabilities of Grayson Mill and its subsidiaries were recorded at their respective fair values as of the date of completion of the acquisition and added to Devon’s. Determining the fair value of the assets and liabilities of Grayson Mill required judgment and certain assumptions to be made, the most significant of these being related to the valuation of Grayson Mill’s oil and gas properties. The inputs and assumptions related to the oil and gas properties were categorized as level 3 in the fair value hierarchy.
The following table represents the allocation of the total purchase price of Grayson Mill to the identifiable assets acquired and the liabilities assumed based on the fair values as of the acquisition date.
|
|
Final Purchase |
|
|
|
|
Price Allocation |
|
|
Consideration: |
|
|
|
|
Devon common stock issued |
|
|
|
|
Devon closing price on September 27, 2024 |
|
$ |
|
|
Total common equity consideration |
|
$ |
|
|
Cash consideration |
|
|
|
|
Total consideration |
|
$ |
|
|
Assets acquired: |
|
|
|
|
Cash, cash equivalents and restricted cash |
|
$ |
|
|
Accounts receivable |
|
|
|
|
Inventory |
|
|
|
|
Other current assets |
|
|
|
|
Proved oil and gas property and equipment |
|
|
|
|
Unproved oil and gas property and equipment |
|
|
|
|
Other property and equipment, net |
|
|
|
|
Right-of-use assets |
|
|
|
|
Total assets acquired |
|
$ |
|
|
Liabilities assumed: |
|
|
|
|
Accounts payable |
|
$ |
|
|
Revenue and royalties payable |
|
|
|
|
Other current liabilities |
|
|
|
|
Asset retirement obligations |
|
|
|
|
Lease liabilities |
|
|
|
|
Total liabilities assumed |
|
|
|
|
Net assets acquired |
|
$ |
|
|
Asset Exchange
On April 1, 2025, Devon and BPX Energy dissolved their partnership and divided their acreage in the Eagle Ford Blackhawk field located in Texas' DeWitt County, resulting in increased operational flexibility for both parties. The assets exchanged were in close proximity and shared similar geological characteristics. The transaction was accounted for as an equal, non-monetary exchange, as it did not result in a significant change to the risks, expected future cash flows or the timing of those cash flows, and therefore was determined to lack commercial substance. As a result, the new acreage and underlying property costs were recorded at the historical cost of the assets exchanged.
11
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Divestiture of Matterhorn Investment
During the second quarter of 2025, Devon sold its investment in Matterhorn for $
Contingent Earnout Payments
Devon was entitled to contingent earnout payments associated with the sale of its Barnett Shale assets in 2020 with upside participation beginning at a $
Objectives and Strategies
Devon enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production to hedge future prices received. Additionally, Devon periodically enters into derivative financial instruments with respect to a portion of its oil, gas and NGL marketing activities. These commodity derivative financial instruments include financial price swaps, basis swaps and costless price collars.
Devon does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment.
Counterparty Credit Risk
By using derivative financial instruments, Devon is exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, the hedging instruments are placed with a number of counterparties whom Devon believes are acceptable credit risks. It is Devon’s policy to enter into derivative contracts only with investment-grade rated counterparties deemed by management to be competent and competitive market makers. Additionally, Devon’s derivative contracts generally contain provisions that provide for collateral payments if Devon’s or its counterparty’s credit rating falls below certain credit rating levels. As of June 30, 2025, Devon neither held cash collateral of its counterparties
Commodity Derivatives
As of June 30, 2025, Devon had the following open oil derivative positions. The first two tables present Devon’s oil derivatives that settle against the average of the prompt month NYMEX WTI futures price. The third table presents Devon’s oil derivatives that settle against the respective indices noted within the table.
|
|
Price Swaps |
|
|
Price Collars |
|
|
||||||||||||||
Period |
|
Volume |
|
|
Weighted |
|
|
Volume |
|
|
Weighted |
|
|
Weighted |
|
|
|||||
Q3-Q4 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
|||||
|
|
Three-Way Price Collars |
|
|||||||||||||
Period |
|
Volume |
|
|
Weighted |
|
|
Weighted |
|
|
Weighted |
|
||||
Q3-Q4 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Q1-Q4 2026 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
12
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
|
|
Oil Basis Swaps |
|
|||||||
Period |
|
Index |
|
Volume |
|
|
Weighted Average |
|
||
Q3-Q4 2025 |
|
Midland Sweet |
|
|
|
|
$ |
|
||
Q3-Q4 2025 |
|
NYMEX Roll |
|
|
|
|
$ |
|
||
Q1-Q4 2026 |
|
Midland Sweet |
|
|
|
|
$ |
|
||
Q1-Q4 2027 |
|
Midland Sweet |
|
|
|
|
$ |
|
||
As of June 30, 2025, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.
|
|
Price Swaps |
|
|
Price Collars |
|
||||||||||||||
Period |
|
Volume (MMBtu/d) |
|
|
Weighted Average Price ($/MMBtu) |
|
|
Volume (MMBtu/d) |
|
|
Weighted Average Floor Price ($/MMBtu) |
|
|
Weighted Average |
|
|||||
Q3-Q4 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|||||
Q1-Q4 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|||||
|
|
Natural Gas Basis Swaps |
|
|||||||
Period |
|
Index |
|
Volume |
|
|
Weighted Average |
|
||
Q3-Q4 2025 |
|
Houston Ship Channel |
|
|
|
|
$ |
( |
) |
|
Q3-Q4 2025 |
|
WAHA |
|
|
|
|
$ |
( |
) |
|
Q1-Q4 2026 |
|
Houston Ship Channel |
|
|
|
|
$ |
( |
) |
|
Q1-Q4 2026 |
|
WAHA |
|
|
|
|
$ |
( |
) |
|
As of June 30, 2025, Devon had the following open NGL derivative positions. Devon's NGL positions settle against the average of the prompt month OPIS Mont Belvieu, Texas index.
|
|
|
|
Price Swaps |
|
|||||
Period |
|
Product |
|
Volume (Bbls/d) |
|
|
Weighted Average Price ($/Bbl) |
|
||
Q3-Q4 2025 |
|
Natural Gasoline |
|
|
|
|
$ |
|
||
Q3-Q4 2025 |
|
Normal Butane |
|
|
|
|
$ |
|
||
Q3-Q4 2025 |
|
Propane |
|
|
|
|
$ |
|
||
13
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Financial Statement Presentation
All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the consolidated balance sheets. Amounts related to contracts allowed to be netted upon payment subject to a master netting arrangement with the same counterparty are reported on a net basis in the consolidated balance sheets.
|
June 30, 2025 |
|
December 31, 2024 |
|
|
||||||||||||||
|
Gross Fair Value |
|
Amounts Netted |
|
Net Fair Value |
|
Gross Fair Value |
|
Amounts Netted |
|
Net Fair Value |
|
Balance Sheet Classification |
||||||
Commodity derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Short-term derivative asset |
$ |
|
$ |
( |
) |
$ |
|
$ |
|
$ |
( |
) |
$ |
|
Other current assets |
||||
Long-term derivative asset |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Other long-term assets |
||||
Short-term derivative liability |
|
( |
) |
|
|
|
( |
) |
|
( |
) |
|
|
|
( |
) |
Other current liabilities |
||
Long-term derivative liability |
|
( |
) |
|
|
|
( |
) |
|
( |
) |
|
|
|
( |
) |
Other long-term liabilities |
||
Total derivative asset |
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
||||||
The table below presents the share-based compensation expense included in Devon’s accompanying consolidated statements of comprehensive earnings.
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
G&A |
|
$ |
|
|
$ |
|
||
Exploration expenses |
|
|
|
|
|
|
||
Restructuring and transaction costs |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Related income tax benefit |
|
$ |
|
|
$ |
|
||
Under its approved long-term incentive plan, Devon grants share-based awards to its employees.
|
|
Restricted Stock Awards & Units |
|
|
Performance Share Units |
|
||||||||||
|
|
Awards/Units |
|
|
Weighted |
|
|
Units |
|
|
Weighted |
|
||||
|
|
(Thousands, except fair value data) |
|
|||||||||||||
Unvested at 12/31/24 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested |
|
|
( |
) |
|
$ |
|
|
|
( |
) |
|
$ |
|
||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
( |
) |
|
$ |
|
||
Unvested at 6/30/25 |
|
|
|
|
$ |
|
|
|
|
(1) |
$ |
|
||||
14
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
The following table presents the assumptions related to the performance share units granted in 2025, as indicated in the previous summary table.
|
|
2025 |
|
|
Grant-date fair value |
|
$ |
|
|
Risk-free interest rate |
|
|
% |
|
Volatility factor |
|
|
% |
|
Contractual term (years) |
|
|
|
|
The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units as of June 30, 2025.
|
|
Restricted Stock |
|
|
Performance |
|
||
|
|
Awards/Units |
|
|
Share Units |
|
||
Unrecognized compensation cost |
|
$ |
|
|
$ |
|
||
Weighted average period for recognition (years) |
|
|
|
|
|
|
||
In the first quarter of 2025, Devon rationalized two headquarters-related real estate assets, triggering assets held for sale and recording asset impairments of $
The following table presents Devon’s total income tax expense and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
||||||||
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
||||
Earnings before income taxes |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
Current income tax expense |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
Deferred income tax expense |
|
|
|
|
|
|
|
|
|
||||
Total income tax expense |
|
$ |
|
$ |
|
$ |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
||||
U.S. statutory income tax rate |
|
|
% |
|
% |
|
% |
|
% |
||||
State income taxes |
|
|
% |
|
% |
|
% |
|
% |
||||
Income tax credits |
|
|
( |
%) |
|
( |
%) |
|
( |
%) |
|
( |
%) |
Effective income tax rate |
|
|
% |
|
% |
|
% |
|
% |
||||
The increase in current income tax expense during the second quarter of 2025 is due to the sale of Devon’s investment in Matterhorn. For additional information, see Note 12.
On July 4, 2025, the OBBB was signed into law. The OBBB includes permanent reinstatement of
15
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
The following table reconciles net earnings available to common shareholders and weighted-average common shares outstanding used in the calculations of basic and diluted net earnings per share.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net earnings |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average common shares outstanding - basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of potential common shares issuable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Average common shares outstanding - diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings per share available to common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Components of other comprehensive earnings (loss) consist of the following:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Pension and postretirement benefit plans: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Beginning accumulated pension and postretirement benefits |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Recognition of net actuarial loss and prior service cost in earnings (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss, net of tax |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Changes in assets and liabilities, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accounts receivable |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
Other current assets |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Other long-term assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Accounts payable and revenues and royalties payable |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Other current liabilities |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Other long-term liabilities |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Supplementary cash flow data: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest paid |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Income taxes paid |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
16
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Components of accounts receivable include the following:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Oil, gas and NGL sales |
|
$ |
|
|
$ |
|
||
Joint interest billings |
|
|
|
|
|
|
||
Marketing and midstream revenues |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Gross accounts receivable |
|
|
|
|
|
|
||
Allowance for doubtful accounts |
|
|
( |
) |
|
|
( |
) |
Net accounts receivable |
|
$ |
|
|
$ |
|
||
The following table presents the aggregate capitalized costs related to Devon’s oil and gas and non-oil and gas activities.
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Property and equipment: |
|
|
|
|
|
|
||
Proved |
|
$ |
|
|
$ |
|
||
Unproved and properties under development |
|
|
|
|
|
|
||
Total oil and gas |
|
|
|
|
|
|
||
Less accumulated DD&A |
|
|
( |
) |
|
|
( |
) |
Oil and gas property and equipment, net |
|
|
|
|
|
|
||
Other property and equipment |
|
|
|
|
|
|
||
Less accumulated DD&A |
|
|
( |
) |
|
|
( |
) |
Other property and equipment, net (1) |
|
|
|
|
|
|
||
Property and equipment, net |
|
$ |
|
|
$ |
|
||
The following table presents Devon's investments shown on the consolidated balance sheets.
|
|
|
|
Carrying Amount |
|
|||||
Investments |
|
% Interest |
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Catalyst |
|
|
$ |
|
|
$ |
|
|||
Water JV |
|
|
|
|
|
|
|
|||
Fervo |
|
|
|
|
|
|
|
|||
Matterhorn |
|
|
|
|
|
|
|
|||
Other |
|
Various |
|
|
|
|
|
|
||
Total |
|
|
|
$ |
|
|
$ |
|
||
During the second quarter of 2025, Devon sold its investment in Matterhorn for $
17
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
See below for a summary of debt instruments and balances. The notes, debentures and Term Loan reflected below are senior, unsecured obligations of Devon.
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
|
$ |
|
|
$ |
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Term Loan due |
|
|
|
|
|
|
||
Net premium on debentures and notes |
|
|
|
|
|
|
||
Debt issuance costs |
|
|
( |
) |
|
|
( |
) |
Total debt |
|
$ |
|
|
$ |
|
||
Less amount classified as short-term debt |
|
|
|
|
|
|
||
Total long-term debt |
|
$ |
|
|
$ |
|
||
Credit Lines
Devon has a $
Term Loan Credit Agreement
In August 2024, Devon entered into a delayed draw term loan credit agreement (the “Term Loan Credit Agreement”), providing for delayed draw term loans in an aggregate principal amount not to exceed $
The Term Loan Credit Agreement contains substantially the same financial covenant as the Senior Credit Facility. As of June 30, 2025, Devon was in compliance with this covenant with a debt-to-capitalization ratio of
Issuance of Senior Notes
In August 2024, Devon issued $
18
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Retirement of Senior Notes
On September 15, 2024, Devon repaid $
In September 2025, Devon will early redeem the $
Net Financing Costs
The following schedule includes the components of net financing costs.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net financing costs: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest based on debt outstanding |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total net financing costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Devon’s operating lease right-of-use assets relate to real estate, drilling rigs and other equipment related to the exploration, development and production of oil and gas. As of June 30, 2025, Devon’s financing lease right-of-use assets primarily relate to equipment related to the exploration, development and production of oil and gas. During the first quarter of 2025, Devon extinguished an approximately $
The following table presents Devon’s right-of-use assets and lease liabilities as of June 30, 2025 and December 31, 2024.
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||
|
|
Finance |
|
|
Operating |
|
|
Total |
|
|
Finance |
|
|
Operating |
|
|
Total |
|
||||||
Right-of-use assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Current lease liabilities (1) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Long-term lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total lease liabilities (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
19
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
The following table presents the changes in Devon’s asset retirement obligations.
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Asset retirement obligations as of beginning of period |
|
$ |
|
|
$ |
|
||
Liabilities incurred |
|
|
|
|
|
|
||
Liabilities settled and divested |
|
|
( |
) |
|
|
( |
) |
Revision and reclassification of estimated obligation |
|
|
|
|
|
|
||
Accretion expense on discounted obligation |
|
|
|
|
|
|
||
Asset retirement obligations as of end of period |
|
|
|
|
|
|
||
Less current portion |
|
|
|
|
|
|
||
Asset retirement obligations, long-term |
|
$ |
|
|
$ |
|
||
During the first six months of 2025 and 2024, Devon increased its asset retirement obligations by approximately $
Share Issuance
On September 27, 2024, Devon completed its acquisition of the Williston Basin business of Grayson Mill for total consideration of approximately $
Share Repurchases
Devon's Board of Directors has authorized a $
|
|
Total Number of |
|
|
Dollar Value of |
|
|
Average Price Paid |
|
|||
$5.0 Billion Plan |
|
|
|
|
|
|
|
|
|
|||
2021 |
|
|
|
|
$ |
|
|
$ |
|
|||
2022 |
|
|
|
|
|
|
|
$ |
|
|||
2023 |
|
|
|
|
|
|
|
$ |
|
|||
2024: |
|
|
|
|
|
|
|
|
|
|||
First quarter |
|
|
|
|
|
|
|
$ |
|
|||
Second quarter |
|
|
|
|
|
|
|
$ |
|
|||
Third quarter |
|
|
|
|
|
|
|
$ |
|
|||
Fourth quarter |
|
|
|
|
|
|
|
$ |
|
|||
2024 Total |
|
|
|
|
|
|
|
$ |
|
|||
2025: |
|
|
|
|
|
|
|
|
|
|||
First quarter |
|
|
|
|
|
|
|
$ |
|
|||
Second quarter |
|
|
|
|
|
|
|
$ |
|
|||
2025 Total |
|
|
|
|
|
|
|
$ |
|
|||
Total plan |
|
|
|
|
$ |
|
|
$ |
|
|||
20
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Dividends
Devon pays a quarterly dividend which can be comprised of a fixed dividend and a variable dividend. The variable dividend is dependent on quarterly cash flows, among other factors. Devon has raised its fixed dividend multiple times over the past two calendar years and most recently raised it by
|
Dividends |
|
|
Rate Per Share |
|
||
2025: |
|
|
|
|
|
||
First quarter |
$ |
|
|
$ |
|
||
Second quarter |
|
|
|
$ |
|
||
Total year-to-date |
$ |
|
|
|
|
||
2024: |
|
|
|
|
|
||
First quarter |
$ |
|
|
$ |
|
||
Second quarter |
|
|
|
$ |
|
||
Total year-to-date (1) |
$ |
|
|
|
|
||
In August 2025, Devon announced a fixed cash dividend in the amount of $
Noncontrolling Interests
The noncontrolling interests’ share of CDM’s net earnings and the contributions from and distributions to the noncontrolling interests are presented as components of equity.
On August 1, 2025, Devon completed the acquisition of all the outstanding noncontrolling interests in CDM for $
Devon is party to various legal actions arising in connection with its business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to likely involve future amounts that would be material to Devon’s financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates.
Royalty Matters
Numerous oil and natural gas producers and related parties, including Devon, have been named in various lawsuits alleging royalty underpayments. Devon is currently named as a defendant in a number of such lawsuits, including some lawsuits in which the plaintiffs seek to certify classes of similarly situated plaintiffs. Among the allegations typically asserted in these suits are claims that Devon used below-market prices, made improper deductions, paid royalty proceeds in an untimely manner without including required interest, used improper measurement techniques and entered into gas purchase and processing arrangements with affiliates that resulted in underpayment of royalties in connection with oil, natural gas and NGLs produced and sold. Devon is also involved in governmental agency proceedings and royalty audits and is subject to related contracts and regulatory controls in the ordinary course of business, some that may lead to additional royalty claims. As of June 30, 2025, Devon has accrued approximately $
Environmental and Climate Change Matters
Devon’s business is subject to numerous federal, state, tribal and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Failure to comply with these laws and regulations may result
21
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
in the assessment of administrative, civil and criminal fines and penalties, as well as remediation costs. Although Devon believes that it is in substantial compliance with applicable environmental laws and regulations and that continued compliance with existing requirements will not have a material adverse impact on its business, there can be no assurance that this will continue in the future.
The Company has previously received separate NOVs from the EPA alleging emissions and permitting violations relating to certain of our historic operations in North Dakota, western Texas and New Mexico, respectively. The Company has been engaging with the EPA to resolve each of these matters, and Devon is actively negotiating a draft consent decree with the EPA and the Department of Justice with respect to the North Dakota NOV matter. If finalized, the consent decree may include monetary sanctions and obligations to complete mitigation projects and implement specific injunctive relief. Given that negotiations of the draft consent decree are ongoing and the uncertainty as to the ultimate result of the North Dakota NOV matter, we are currently unable to provide an estimate of potential loss; however, the costs associated with the resolution of the North Dakota NOV matter or any of the other NOV matters could be significant in amount and may include monetary penalties.
Beginning in 2013, various parishes in Louisiana filed suit against numerous oil and gas companies, including Devon, alleging that the companies’ operations and activities in certain fields violated the State and Local Coastal Resource Management Act of 1978, as amended, and caused substantial environmental contamination, subsidence and other environmental damages to land and water bodies located in the coastal zone of Louisiana. The plaintiffs’ claims against Devon relate primarily to the operations of several of Devon’s corporate predecessors. The plaintiffs seek, among other things, payment of the costs necessary to clear, re-vegetate and otherwise restore the allegedly impacted areas. Although Devon cannot predict the ultimate outcome of these matters, Devon denies the allegations in these lawsuits and intends to vigorously defend against these claims.
The State of Delaware has filed legal proceedings against numerous oil and gas companies, including Devon, seeking relief to abate alleged impacts of climate change. These proceedings include far-reaching claims for monetary damages and injunctive relief. Although Devon cannot predict the ultimate outcome of this matter, Devon denies the allegations asserted in this lawsuit and intends to vigorously defend against these claims.
Other Indemnifications and Legacy Matters
Pursuant to various sale agreements relating to divested businesses and assets, Devon has indemnified various purchasers against liabilities that they may incur with respect to the businesses and assets acquired from Devon. Additionally, federal, state and other laws in areas of former operations may require previous operators (including corporate successors of previous operators) to perform or make payments in certain circumstances where the current operator may no longer be able to satisfy the applicable obligation. Such obligations may include plugging and abandoning wells, removing production facilities, undertaking other restorative actions or performing requirements under surface agreements in existence at the time of disposition. For example, a predecessor entity of a Devon subsidiary previously sold certain private, state and federal oil and gas leases covering properties in shallow waters off the coast of Louisiana in the Gulf of America. These assets are generally referred to as the East Bay Field. The current operator of the East Bay Field has filed for protection under Chapter 11 of the U.S. Bankruptcy Code and will likely be unable to satisfy the eventual decommissioning obligations associated with the East Bay Field. Other companies in the chain of title of the East Bay Field have also sought bankruptcy protection and will also likely be unable to satisfy the eventual decommissioning obligations associated with the East Bay Field.
In March 2025, Devon received an order from the Department of the Interior, Bureau of Safety and Environmental Enforcement to decommission assets located on certain federal leases in the East Bay Field (the “Federal Assets”). As a result, during the first quarter of 2025, Devon recorded a contingent liability of $
As of June 30, 2025, Devon has accrued approximately $
22
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
The following table provides carrying value and fair value measurement information for certain of Devon’s financial assets and liabilities. The carrying values of cash, accounts receivable, other current receivables, accounts payable, other current payables, accrued expenses and lease liabilities included in the accompanying consolidated balance sheets approximated fair value at June 30, 2025 and December 31, 2024, as applicable.
|
|
|
|
|
|
|
|
Fair Value Measurements Using: |
|
|||||||||||
|
|
Carrying |
|
|
Total Fair |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||||
|
|
Amount |
|
|
Value |
|
|
Inputs |
|
|
Inputs |
|
|
Inputs |
|
|||||
June 30, 2025 assets (liabilities): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|||
Commodity derivatives |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|||
Commodity derivatives |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Debt |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
December 31, 2024 assets (liabilities): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|||
Commodity derivatives |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|||
Commodity derivatives |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Debt |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
— |
|
Contingent earnout payments |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|||
The following methods and assumptions were used to estimate the fair values in the table above.
Level 1 Fair Value Measurements
Cash equivalents – Amounts consist primarily of money market investments and the fair value approximates the carrying value.
Level 2 Fair Value Measurements
Commodity derivatives – The fair value of commodity derivatives is estimated using internal discounted cash flow calculations based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.
Debt – Devon’s debt instruments do not consistently trade actively in an established market. The fair values of our debt are estimated based on rates available for debt with similar terms and maturity when active trading is not available. Our variable rate debt is non-public and consists of our Term Loan. The fair value of our variable rate debt approximates the carrying value as the underlying SOFR resets every month based on the prevailing market rate.
Level 3 Fair Value Measurements
Contingent Earnout Payments – Devon had the right to receive contingent consideration related to the Barnett asset divestiture based on future oil and gas prices. These values were derived using a Monte Carlo valuation model and qualified as a level 3 fair value measurement. For additional information, see Note 2.
23
Table of Contents
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
(Unaudited)
Devon is a leading independent energy company engaged primarily in the exploration, development and production of oil, natural gas and NGLs. Devon’s oil and gas exploration and production activities are solely focused in the U.S. For financial reporting purposes, Devon aggregates its U.S. operating segments into one reporting segment due to the similar nature of these operations.
Devon’s chief operating decision maker is the executive committee, which includes the chief executive officer, chief operating officers and chief financial officer. To assess the performance of our assets, we use net earnings. We believe net earnings provides information useful in assessing our operating and financial performance across periods.
The following table reflects Devon's net earnings, assets and capital expenditures for the time periods presented below.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Total revenues |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
LOE |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gathering, processing & transportation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Production and property taxes |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total significant expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketing and midstream expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
DD&A |
|
|
|
|
|
|
|
|
|
|
|
|
||||
G&A |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financing costs, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (1) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Total expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Capital expenditures, including acquisitions |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
24
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis addresses material changes in our results of operations for the three-month and six-month periods ended June 30, 2025 compared to previous periods, and in our financial condition and liquidity since December 31, 2024. For information regarding our critical accounting policies and estimates, see our 2024 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Executive Overview
We are a leading independent oil and natural gas exploration and production company whose operations are focused onshore in the United States. Our operations are currently focused in four core areas: the Delaware Basin, Rockies, Eagle Ford and Anadarko. Our asset base is underpinned by premium acreage in the economic core of the Delaware Basin and our diverse, top-tier resource plays, providing a deep inventory of opportunities for years to come.
On September 27, 2024, we acquired the Williston Basin business of Grayson Mill for total consideration of approximately $5.0 billion, consisting of $3.5 billion of cash and approximately 37.3 million shares of Devon common stock, including purchase price adjustments. The acquisition has allowed us to efficiently expand our oil production and operating scale, creating immediate and long-term, sustainable value to shareholders.
As evidenced by this acquisition, we remain focused on building economic value by executing on our strategic priorities of moderating production growth, emphasizing capital and operational efficiencies, optimizing reinvestment rates to maximize free cash flow, maintaining low leverage, delivering cash returns to our shareholders and pursuing operational excellence. Our recent performance highlights for these priorities include the following items for the second quarter of 2025:
Our net earnings and operating cash flow are highly dependent upon oil, gas and NGL prices which can be volatile due to several varying factors. During the first six months of 2025, commodity prices have experienced heightened volatility and declines, driven primarily by economic uncertainty in global trade arising from geopolitical events and shifting trade policies, such as the imposition of tariffs by the U.S. and planned oil output increases by OPEC+. Despite the potential negative impacts of higher inflation rates and supply chain disruptions created by these developments, we remain committed to capital discipline and delivering the objectives that underpin our current plan. Our disciplined, returns-driven strategy is designed to adapt to market fluctuations by reducing activity when necessary to maximize free cash flow generation. We will continue to prioritize value creation through moderated capital investment and production growth, particularly with a view of the volatility in commodity prices, supply chain constraints and the economic uncertainty arising from inflation and geopolitical events. Our cash-return objectives remain focused on opportunistic share repurchases, funding our dividends, repaying debt at upcoming maturities and building cash balances.
To emphasize our commitment to maximizing free cash flow and creating value for shareholders, we announced a business optimization plan which is anticipated to improve our annual pre-tax cash flow by $1.0 billion. The plan includes actions to achieve more efficient field-level operations and improvements in drilling and completion costs while improving operating margins and corporate costs. These savings are on track to be achieved by the end of 2026 with approximately $400 million expected to be completed by the end of 2025.
25
Table of Contents
Results of Operations
The following graphs, discussion and analysis are intended to provide an understanding of our results of operations and current financial condition. To facilitate the review, these numbers are being presented before consideration of noncontrolling interests.
Q2 2025 vs. Q1 2025
Our second quarter 2025 and first quarter 2025 net earnings were $917 million and $509 million, respectively. The graph below shows the change in net earnings from the first quarter of 2025 to the second quarter of 2025. The material changes are further discussed by category on the following pages.
Production Volumes
|
|
Q2 2025 |
|
|
% of Total |
|
|
Q1 2025 |
|
|
Change |
|
||||
Oil (MBbls/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
228 |
|
|
|
59 |
% |
|
|
216 |
|
|
|
5 |
% |
Rockies |
|
|
104 |
|
|
|
27 |
% |
|
|
112 |
|
|
|
-7 |
% |
Eagle Ford |
|
|
39 |
|
|
|
10 |
% |
|
|
45 |
|
|
|
-12 |
% |
Anadarko Basin |
|
|
13 |
|
|
|
3 |
% |
|
|
11 |
|
|
|
9 |
% |
Other |
|
|
3 |
|
|
|
1 |
% |
|
|
4 |
|
|
N/M |
|
|
Total |
|
|
387 |
|
|
|
100 |
% |
|
|
388 |
|
|
|
0 |
% |
|
|
Q2 2025 |
|
|
% of Total |
|
|
Q1 2025 |
|
|
Change |
|
||||
Gas (MMcf/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
823 |
|
|
|
59 |
% |
|
|
744 |
|
|
|
11 |
% |
Rockies |
|
|
228 |
|
|
|
16 |
% |
|
|
233 |
|
|
|
-2 |
% |
Eagle Ford |
|
|
62 |
|
|
|
5 |
% |
|
|
117 |
|
|
|
-47 |
% |
Anadarko Basin |
|
|
274 |
|
|
|
20 |
% |
|
|
252 |
|
|
|
9 |
% |
Other |
|
|
1 |
|
|
|
0 |
% |
|
|
— |
|
|
N/M |
|
|
Total |
|
|
1,388 |
|
|
|
100 |
% |
|
|
1,346 |
|
|
|
3 |
% |
|
|
Q2 2025 |
|
|
% of Total |
|
|
Q1 2025 |
|
|
Change |
|
||||
NGLs (MBbls/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
133 |
|
|
|
60 |
% |
|
|
118 |
|
|
|
13 |
% |
Rockies |
|
|
47 |
|
|
|
21 |
% |
|
|
44 |
|
|
|
6 |
% |
Eagle Ford |
|
|
11 |
|
|
|
5 |
% |
|
|
15 |
|
|
|
-29 |
% |
Anadarko Basin |
|
|
31 |
|
|
|
14 |
% |
|
|
26 |
|
|
|
21 |
% |
Other |
|
|
— |
|
|
|
0 |
% |
|
|
— |
|
|
N/M |
|
|
Total |
|
|
222 |
|
|
|
100 |
% |
|
|
203 |
|
|
|
9 |
% |
26
Table of Contents
|
|
Q2 2025 |
|
|
% of Total |
|
|
Q1 2025 |
|
|
Change |
|
||||
Combined (MBoe/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
498 |
|
|
|
59 |
% |
|
|
458 |
|
|
|
9 |
% |
Rockies |
|
|
189 |
|
|
|
23 |
% |
|
|
195 |
|
|
|
-3 |
% |
Eagle Ford |
|
|
60 |
|
|
|
7 |
% |
|
|
79 |
|
|
|
-24 |
% |
Anadarko Basin |
|
|
90 |
|
|
|
11 |
% |
|
|
79 |
|
|
|
14 |
% |
Other |
|
|
4 |
|
|
|
0 |
% |
|
|
4 |
|
|
N/M |
|
|
Total |
|
|
841 |
|
|
|
100 |
% |
|
|
815 |
|
|
|
3 |
% |
From the first quarter of 2025 to the second quarter of 2025, the change in volumes contributed to a $78 million increase in earnings. The increase in volumes was primarily due to new well activity in the Delaware and Anadarko Basins.
Realized Prices
|
|
Q2 2025 |
|
|
Realization |
|
Q1 2025 |
|
|
Change |
|
|||
Oil (per Bbl) |
|
|
|
|
|
|
|
|
|
|
|
|||
WTI index |
|
$ |
63.95 |
|
|
|
|
$ |
71.50 |
|
|
|
-11 |
% |
Realized price, unhedged |
|
$ |
61.70 |
|
|
96% |
|
$ |
69.13 |
|
|
|
-11 |
% |
Cash settlements |
|
$ |
1.27 |
|
|
|
|
$ |
0.02 |
|
|
|
|
|
Realized price, with hedges |
|
$ |
62.97 |
|
|
98% |
|
$ |
69.15 |
|
|
|
-9 |
% |
|
|
Q2 2025 |
|
|
Realization |
|
Q1 2025 |
|
|
Change |
|
|||
Gas (per Mcf) |
|
|
|
|
|
|
|
|
|
|
|
|||
Henry Hub index |
|
$ |
3.44 |
|
|
|
|
$ |
3.65 |
|
|
|
-6 |
% |
Realized price, unhedged |
|
$ |
1.41 |
|
|
41% |
|
$ |
2.55 |
|
|
|
-45 |
% |
Cash settlements |
|
$ |
0.15 |
|
|
|
|
$ |
(0.07 |
) |
|
|
|
|
Realized price, with hedges |
|
$ |
1.56 |
|
|
45% |
|
$ |
2.48 |
|
|
|
-37 |
% |
|
|
Q2 2025 |
|
|
Realization |
|
Q1 2025 |
|
|
Change |
|
|||
NGLs (per Bbl) |
|
|
|
|
|
|
|
|
|
|
|
|||
WTI index |
|
$ |
63.95 |
|
|
|
|
$ |
71.50 |
|
|
|
-11 |
% |
Realized price, unhedged |
|
$ |
17.71 |
|
|
28% |
|
$ |
22.03 |
|
|
|
-20 |
% |
Cash settlements |
|
$ |
0.11 |
|
|
|
|
$ |
(0.10 |
) |
|
|
|
|
Realized price, with hedges |
|
$ |
17.82 |
|
|
28% |
|
$ |
21.93 |
|
|
|
-19 |
% |
|
|
Q2 2025 |
|
|
Q1 2025 |
|
|
Change |
|
|||
Combined (per Boe) |
|
|
|
|
|
|
|
|
|
|||
Realized price, unhedged |
|
$ |
35.43 |
|
|
$ |
42.58 |
|
|
|
-17 |
% |
Cash settlements |
|
$ |
0.87 |
|
|
$ |
(0.13 |
) |
|
|
|
|
Realized price, with hedges |
|
$ |
36.30 |
|
|
$ |
42.45 |
|
|
|
-14 |
% |
From the first quarter of 2025 to the second quarter of 2025, realized prices contributed to a $494 million decrease in earnings. Unhedged oil, gas and NGL prices decreased primarily due to lower WTI, Henry Hub and Mont Belvieu index prices, respectively. The decrease in unhedged prices was partially offset by oil, gas and NGL hedge cash settlements.
We currently have approximately 30% and 35% of our remaining anticipated 2025 oil and gas production hedged, respectively. For 2026, we currently have approximately 20% and 30% of our anticipated oil and gas production hedged, respectively.
27
Table of Contents
Hedge Settlements
|
|
Q2 2025 |
|
|
Q1 2025 |
|
|
Change |
||
|
|
Q |
|
|
|
|
|
|
||
Oil |
|
$ |
45 |
|
|
$ |
— |
|
|
N/M |
Natural gas |
|
|
20 |
|
|
|
(8 |
) |
|
N/M |
NGL |
|
|
2 |
|
|
|
(2 |
) |
|
N/M |
Total cash settlements (1) |
|
$ |
67 |
|
|
$ |
(10 |
) |
|
N/M |
Cash settlements as presented in the tables above represent realized gains or losses related to the instruments described in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
Production Expenses
|
|
Q2 2025 |
|
|
Q1 2025 |
|
|
Change |
|
|||
LOE |
|
$ |
483 |
|
|
$ |
479 |
|
|
|
1 |
% |
Gathering, processing & transportation |
|
|
219 |
|
|
|
204 |
|
|
|
7 |
% |
Production taxes |
|
|
180 |
|
|
|
212 |
|
|
|
-15 |
% |
Property taxes |
|
|
17 |
|
|
|
17 |
|
|
|
0 |
% |
Total |
|
$ |
899 |
|
|
$ |
912 |
|
|
|
-1 |
% |
Per Boe: |
|
|
|
|
|
|
|
|
|
|||
LOE |
|
$ |
6.31 |
|
|
$ |
6.53 |
|
|
|
-3 |
% |
Gathering, processing & transportation |
|
$ |
2.86 |
|
|
$ |
2.78 |
|
|
|
3 |
% |
Percent of oil, gas and NGL sales: |
|
|
|
|
|
|
|
|
|
|||
Production taxes |
|
|
6.6 |
% |
|
|
6.8 |
% |
|
|
-2 |
% |
Production expenses decreased in the second quarter of 2025 primarily due to lower production taxes resulting from lower commodity prices.
Field-Level Cash Margin
The table below presents the field-level cash margin for each of our operating areas. Field-level cash margin is computed as oil, gas and NGL sales less production expenses and is not a measure defined by GAAP. A reconciliation to the comparable GAAP measures is found in “Non-GAAP Measures” in this Item 2. The changes in production volumes, realized prices and production expenses, shown above, had the following impact on our field-level cash margins by asset.
|
|
Q2 2025 |
|
|
$ per BOE |
|
|
Q1 2025 |
|
|
$ per BOE |
|
||||
Field-level cash margin (Non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
$ |
1,114 |
|
|
$ |
24.58 |
|
|
$ |
1,283 |
|
|
$ |
31.13 |
|
Rockies |
|
|
369 |
|
|
$ |
21.45 |
|
|
|
509 |
|
|
$ |
29.01 |
|
Eagle Ford |
|
|
197 |
|
|
$ |
35.84 |
|
|
|
270 |
|
|
$ |
37.98 |
|
Anadarko Basin |
|
|
121 |
|
|
$ |
14.85 |
|
|
|
136 |
|
|
$ |
19.13 |
|
Other |
|
|
10 |
|
|
N/M |
|
|
|
16 |
|
|
N/M |
|
||
Total |
|
$ |
1,811 |
|
|
$ |
23.68 |
|
|
$ |
2,214 |
|
|
$ |
30.16 |
|
28
Table of Contents
DD&A and Asset Impairments
|
|
Q2 2025 |
|
|
Q1 2025 |
|
|
Change |
|
|||
Oil and gas per Boe |
|
$ |
11.63 |
|
|
$ |
12.07 |
|
|
|
-4 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Oil and gas |
|
$ |
890 |
|
|
$ |
886 |
|
|
|
0 |
% |
Other property and equipment |
|
|
24 |
|
|
|
26 |
|
|
|
-9 |
% |
Total DD&A |
|
$ |
914 |
|
|
$ |
912 |
|
|
|
0 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Asset impairments |
|
$ |
— |
|
|
$ |
254 |
|
|
N/M |
|
|
In the first quarter of 2025, Devon rationalized two headquarters-related real estate assets resulting in total asset impairments of $254 million. See Note 5 in "Part I. Financial Information – Item 1. Financial Statements" of this report for further discussion.
G&A
|
|
Q2 2025 |
|
|
Q1 2025 |
|
|
Change |
|
|||
G&A per Boe |
|
$ |
1.47 |
|
|
$ |
1.77 |
|
|
|
-17 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Labor and benefits |
|
$ |
56 |
|
|
$ |
70 |
|
|
|
-20 |
% |
Non-labor |
|
|
57 |
|
|
|
60 |
|
|
|
-5 |
% |
Total |
|
$ |
113 |
|
|
$ |
130 |
|
|
|
-13 |
% |
G&A costs were lower in the second quarter of 2025 primarily due to lower labor and benefit costs.
Other Items
|
|
Q2 2025 |
|
|
Q1 2025 |
|
|
Change in earnings |
|
|||
Commodity hedge valuation changes (1) |
|
$ |
169 |
|
|
$ |
(88 |
) |
|
$ |
257 |
|
Marketing and midstream operations |
|
|
(19 |
) |
|
|
(12 |
) |
|
|
(7 |
) |
Exploration expenses |
|
|
20 |
|
|
|
10 |
|
|
|
(10 |
) |
Asset dispositions |
|
|
(307 |
) |
|
|
2 |
|
|
|
309 |
|
Net financing costs |
|
|
116 |
|
|
|
123 |
|
|
|
7 |
|
Other, net |
|
|
11 |
|
|
|
27 |
|
|
|
16 |
|
|
|
|
|
|
|
|
|
$ |
572 |
|
||
We recognize fair value changes on our oil, gas and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. For additional information, see Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
During the second quarter of 2025, Devon sold its investment in Matterhorn for $372 million and recognized a pre-tax gain of $307 million ($239 million, net of tax), which was recorded to asset dispositions. The monetization of this investment will not change the terms or conditions of Devon's secured capacity on the pipeline. For additional information, see Note 12 in "Part I. Financial Information - Item 1. Financial Statements" in this report.
29
Table of Contents
Income Taxes
|
|
Q2 2025 |
|
|
Q1 2025 |
|
||
Current expense |
|
$ |
226 |
|
|
$ |
96 |
|
Deferred expense |
|
|
18 |
|
|
|
41 |
|
Total expense |
|
$ |
244 |
|
|
$ |
137 |
|
Current tax rate |
|
|
19 |
% |
|
|
15 |
% |
Deferred tax rate |
|
|
2 |
% |
|
|
6 |
% |
Effective income tax rate |
|
|
21 |
% |
|
|
21 |
% |
Following the enactment of the OBBB on July 4, 2025, we anticipate our current tax rates will be lower beginning in the third quarter of 2025 and will continue through the remainder of 2025 and future periods. For additional information on income taxes, see Note 6 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
30
Table of Contents
June 30, 2025 YTD vs. June 30, 2024 YTD
Our six months ended June 30, 2025 net earnings were $1.4 billion, compared to net earnings of $1.5 billion for the first six months ended June 30, 2024. The graph below shows the change in net earnings from the six months ended June 30, 2024 to the six months ended June 30, 2025. The material changes are further discussed by category on the following pages.
Production Volumes
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2025 |
|
|
% of Total |
|
|
2024 |
|
|
Change |
|
||||
Oil (MBbls/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
222 |
|
|
|
57 |
% |
|
|
215 |
|
|
|
3 |
% |
Rockies |
|
|
108 |
|
|
|
28 |
% |
|
|
52 |
|
|
|
109 |
% |
Eagle Ford |
|
|
42 |
|
|
|
11 |
% |
|
|
45 |
|
|
|
-6 |
% |
Anadarko Basin |
|
|
12 |
|
|
|
3 |
% |
|
|
12 |
|
|
|
-2 |
% |
Other |
|
|
4 |
|
|
|
1 |
% |
|
|
3 |
|
|
N/M |
|
|
Total |
|
|
388 |
|
|
|
100 |
% |
|
|
327 |
|
|
|
18 |
% |
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2025 |
|
|
% of Total |
|
|
2024 |
|
|
Change |
|
||||
Gas (MMcf/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
784 |
|
|
|
57 |
% |
|
|
703 |
|
|
|
11 |
% |
Rockies |
|
|
230 |
|
|
|
17 |
% |
|
|
85 |
|
|
|
171 |
% |
Eagle Ford |
|
|
89 |
|
|
|
7 |
% |
|
|
86 |
|
|
|
4 |
% |
Anadarko Basin |
|
|
263 |
|
|
|
19 |
% |
|
|
233 |
|
|
|
13 |
% |
Other |
|
|
1 |
|
|
|
0 |
% |
|
|
1 |
|
|
N/M |
|
|
Total |
|
|
1,367 |
|
|
|
100 |
% |
|
|
1,108 |
|
|
|
23 |
% |
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2025 |
|
|
% of Total |
|
|
2024 |
|
|
Change |
|
||||
NGLs (MBbls/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
126 |
|
|
|
59 |
% |
|
|
117 |
|
|
|
8 |
% |
Rockies |
|
|
46 |
|
|
|
22 |
% |
|
|
13 |
|
|
|
245 |
% |
Eagle Ford |
|
|
13 |
|
|
|
6 |
% |
|
|
16 |
|
|
|
-17 |
% |
Anadarko Basin |
|
|
28 |
|
|
|
13 |
% |
|
|
28 |
|
|
|
2 |
% |
Other |
|
|
— |
|
|
|
0 |
% |
|
|
— |
|
|
N/M |
|
|
Total |
|
|
213 |
|
|
|
100 |
% |
|
|
174 |
|
|
|
23 |
% |
31
Table of Contents
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2025 |
|
|
% of Total |
|
|
2024 |
|
|
Change |
|
||||
Combined (MBoe/d) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
|
478 |
|
|
|
58 |
% |
|
|
449 |
|
|
|
7 |
% |
Rockies |
|
|
192 |
|
|
|
23 |
% |
|
|
79 |
|
|
|
143 |
% |
Eagle Ford |
|
|
70 |
|
|
|
8 |
% |
|
|
75 |
|
|
|
-7 |
% |
Anadarko Basin |
|
|
84 |
|
|
|
10 |
% |
|
|
79 |
|
|
|
7 |
% |
Other |
|
|
4 |
|
|
|
1 |
% |
|
|
4 |
|
|
N/M |
|
|
Total |
|
|
828 |
|
|
|
100 |
% |
|
|
686 |
|
|
|
21 |
% |
From the six months ended June 30, 2024 to the six months ended June 30, 2025, the change in volumes contributed to a $1.0 billion increase in earnings. Volumes increased primarily due to the Grayson Mill acquisition in the Rockies, which closed in the third quarter of 2024, as well as new well activity in the Delaware and Anadarko Basins.
Realized Prices
|
|
Six Months Ended June 30, |
|
|||||||||||
|
|
2025 |
|
|
Realization |
|
2024 |
|
|
Change |
|
|||
Oil (per Bbl) |
|
|
|
|
|
|
|
|
|
|
|
|||
WTI index |
|
$ |
67.72 |
|
|
|
|
$ |
78.82 |
|
|
|
-14 |
% |
Realized price, unhedged |
|
$ |
65.40 |
|
|
97% |
|
$ |
77.30 |
|
|
|
-15 |
% |
Cash settlements |
|
$ |
0.64 |
|
|
|
|
$ |
(0.20 |
) |
|
|
|
|
Realized price, with hedges |
|
$ |
66.04 |
|
|
98% |
|
$ |
77.10 |
|
|
|
-14 |
% |
|
|
Six Months Ended June 30, |
|
|||||||||||
|
|
2025 |
|
|
Realization |
|
2024 |
|
|
Change |
|
|||
Gas (per Mcf) |
|
|
|
|
|
|
|
|
|
|
|
|||
Henry Hub index |
|
$ |
3.55 |
|
|
|
|
$ |
2.07 |
|
|
|
71 |
% |
Realized price, unhedged |
|
$ |
1.97 |
|
|
55% |
|
$ |
0.92 |
|
|
|
115 |
% |
Cash settlements |
|
$ |
0.04 |
|
|
|
|
$ |
0.44 |
|
|
|
|
|
Realized price, with hedges |
|
$ |
2.01 |
|
|
57% |
|
$ |
1.36 |
|
|
|
48 |
% |
|
|
Six Months Ended June 30, |
|
|||||||||||
|
|
2025 |
|
|
Realization |
|
2024 |
|
|
Change |
|
|||
NGLs (per Bbl) |
|
|
|
|
|
|
|
|
|
|
|
|||
WTI index |
|
$ |
67.72 |
|
|
|
|
$ |
78.82 |
|
|
|
-14 |
% |
Realized price, unhedged |
|
$ |
19.76 |
|
|
29% |
|
$ |
20.17 |
|
|
|
-2 |
% |
Cash settlements |
|
$ |
0.01 |
|
|
|
|
$ |
0.02 |
|
|
|
|
|
Realized price, with hedges |
|
$ |
19.77 |
|
|
29% |
|
$ |
20.19 |
|
|
|
-2 |
% |
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
Combined (per Boe) |
|
|
|
|
|
|
|
|
|
|||
Realized price, unhedged |
|
$ |
38.93 |
|
|
$ |
43.48 |
|
|
|
-10 |
% |
Cash settlements |
|
$ |
0.38 |
|
|
$ |
0.62 |
|
|
|
|
|
Realized price, with hedges |
|
$ |
39.31 |
|
|
$ |
44.10 |
|
|
|
-11 |
% |
From the six months ended June 30, 2024 to the six months ended June 30, 2025, realized prices contributed to a $590 million decrease in earnings. This decrease was primarily due to lower unhedged realized oil prices which decreased primarily due to a lower WTI index price. This decrease was partially offset by an increase in unhedged realized gas prices which was primarily due to higher Henry Hub index prices. Realized prices were also positively impacted by oil and gas hedge cash settlements.
32
Table of Contents
Hedge Settlements
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
Oil |
|
$ |
45 |
|
|
$ |
(12 |
) |
|
N/M |
|
|
Natural gas |
|
|
12 |
|
|
|
89 |
|
|
N/M |
|
|
NGL |
|
|
— |
|
|
|
1 |
|
|
N/M |
|
|
Total cash settlements (1) |
|
$ |
57 |
|
|
$ |
78 |
|
|
|
-27 |
% |
Cash settlements as presented in the tables above represent realized gains or losses related to the instruments described in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
Production Expenses
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
LOE |
|
$ |
962 |
|
|
$ |
763 |
|
|
|
26 |
% |
Gathering, processing & transportation |
|
|
423 |
|
|
|
377 |
|
|
|
12 |
% |
Production taxes |
|
|
392 |
|
|
|
363 |
|
|
|
8 |
% |
Property taxes |
|
|
34 |
|
|
|
36 |
|
|
|
-6 |
% |
Total |
|
$ |
1,811 |
|
|
$ |
1,539 |
|
|
|
18 |
% |
Per Boe: |
|
|
|
|
|
|
|
|
|
|||
LOE |
|
$ |
6.42 |
|
|
$ |
6.12 |
|
|
|
5 |
% |
Gathering, processing & transportation |
|
$ |
2.82 |
|
|
$ |
3.02 |
|
|
|
-7 |
% |
Percent of oil, gas and NGL sales: |
|
|
|
|
|
|
|
|
|
|||
Production taxes |
|
|
6.7 |
% |
|
|
6.7 |
% |
|
|
0 |
% |
Production expenses increased in the first six months of 2025 primarily due to increased activity in the Rockies related to the Grayson Mill acquisition in addition to new well activity in the Delaware Basin.
Field-Level Cash Margin
The table below presents the field-level cash margin for each of our operating areas. Field-level cash margin is computed as oil, gas and NGL sales less production expenses and is not a measure defined by GAAP. A reconciliation to the comparable GAAP measures is found in “Non-GAAP Measures” in this Item 2. The changes in production volumes, realized prices and production expenses, shown above, had the following impact on our field-level cash margins by asset.
|
|
Six Months Ended June 30, |
|
|||||||||||||
|
|
2025 |
|
|
$ per BOE |
|
|
2024 |
|
|
$ per BOE |
|
||||
Field-level cash margin (Non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Delaware Basin |
|
$ |
2,397 |
|
|
$ |
27.70 |
|
|
$ |
2,621 |
|
|
$ |
32.09 |
|
Rockies |
|
|
878 |
|
|
$ |
25.27 |
|
|
|
448 |
|
|
$ |
31.14 |
|
Eagle Ford |
|
|
467 |
|
|
$ |
37.05 |
|
|
|
570 |
|
|
$ |
41.99 |
|
Anadarko Basin |
|
|
257 |
|
|
$ |
16.85 |
|
|
|
217 |
|
|
$ |
15.09 |
|
Other |
|
|
26 |
|
|
N/M |
|
|
|
30 |
|
|
N/M |
|
||
Total |
|
$ |
4,025 |
|
|
$ |
26.85 |
|
|
$ |
3,886 |
|
|
$ |
31.14 |
|
33
Table of Contents
DD&A and Asset Impairments
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
Oil and gas per Boe |
|
$ |
11.85 |
|
|
$ |
11.56 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Oil and gas |
|
$ |
1,776 |
|
|
$ |
1,443 |
|
|
|
23 |
% |
Other property and equipment |
|
|
50 |
|
|
|
47 |
|
|
|
8 |
% |
Total DD&A |
|
$ |
1,826 |
|
|
$ |
1,490 |
|
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Asset impairments |
|
$ |
254 |
|
|
$ |
— |
|
|
N/M |
|
|
DD&A increased in the first six months of 2025 primarily due to higher volumes driven by the Grayson Mill acquisition and new well activity in the Delaware Basin.
In the first quarter of 2025, Devon rationalized two headquarters-related real estate assets resulting in total asset impairments of $254 million. See Note 5 in "Part I. Financial Information – Item 1. Financial Statements" of this report for further discussion.
G&A
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
G&A per Boe |
|
$ |
1.62 |
|
|
$ |
1.83 |
|
|
|
-12 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Labor and benefits |
|
$ |
126 |
|
|
$ |
125 |
|
|
|
1 |
% |
Non-labor |
|
|
117 |
|
|
|
103 |
|
|
|
14 |
% |
Total |
|
$ |
243 |
|
|
$ |
228 |
|
|
|
7 |
% |
While our G&A increased in the first six months of 2025, our G&A per BOE rate has decreased due to the Grayson Mill acquisition efficiently expanding our operating scale and production.
Other Items
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change in earnings |
|
|||
Commodity hedge valuation changes (1) |
|
$ |
81 |
|
|
$ |
(200 |
) |
|
$ |
281 |
|
Marketing and midstream operations |
|
|
(31 |
) |
|
|
(31 |
) |
|
|
- |
|
Exploration expenses |
|
|
30 |
|
|
|
12 |
|
|
|
(18 |
) |
Asset dispositions |
|
|
(305 |
) |
|
|
16 |
|
|
|
321 |
|
Net financing costs |
|
|
239 |
|
|
|
152 |
|
|
|
(87 |
) |
Other, net |
|
|
38 |
|
|
|
27 |
|
|
|
(11 |
) |
|
|
|
|
|
|
|
|
$ |
486 |
|
||
We recognize fair value changes on our oil, gas and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. For additional information, see Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
During the third quarter of 2024, we issued $3.25 billion of debt to partially fund the Grayson Mill acquisition. Additionally, we retired $472 million of debt in the third quarter of 2024. For additional information, see Note 13 in "Part I. Financial Information - Item 1. Financial Statements" in this report.
During the second quarter of 2025, Devon sold its investment in Matterhorn for $372 million and recognized a pre-tax gain of $307 million ($239 million, net of tax), which was recorded to asset dispositions. The monetization of this investment will not change the terms or conditions of Devon's secured capacity on the pipeline. For additional information, see Note 12 in "Part I. Financial Information - Item 1. Financial Statements" in this report.
34
Table of Contents
Income Taxes
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Current expense |
|
$ |
322 |
|
|
$ |
265 |
|
Deferred expense |
|
|
59 |
|
|
|
79 |
|
Total expense |
|
$ |
381 |
|
|
$ |
344 |
|
Current tax rate |
|
|
18 |
% |
|
|
15 |
% |
Deferred tax rate |
|
|
3 |
% |
|
|
4 |
% |
Effective income tax rate |
|
|
21 |
% |
|
|
19 |
% |
Following the enactment of the OBBB on July 4, 2025, we anticipate our current tax rates will be lower beginning in the third quarter of 2025 and will continue through the remainder of 2025 and future periods. For information on income taxes, see Note 6 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
35
Table of Contents
Capital Resources, Uses and Liquidity
Sources and Uses of Cash
The following table presents the major changes in cash and cash equivalents for the three and six months ended June 30, 2025 and 2024.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Operating cash flow |
|
$ |
1,545 |
|
|
$ |
1,535 |
|
|
$ |
3,487 |
|
|
$ |
3,273 |
|
Capital expenditures |
|
|
(956 |
) |
|
|
(948 |
) |
|
|
(1,890 |
) |
|
|
(1,842 |
) |
Acquisitions of property and equipment |
|
|
(16 |
) |
|
|
(82 |
) |
|
|
(24 |
) |
|
|
(90 |
) |
Divestitures of property, equipment and investments |
|
|
372 |
|
|
|
1 |
|
|
|
505 |
|
|
|
18 |
|
Investment activity, net |
|
|
3 |
|
|
|
10 |
|
|
|
10 |
|
|
|
(26 |
) |
Repurchases of common stock |
|
|
(249 |
) |
|
|
(256 |
) |
|
|
(550 |
) |
|
|
(461 |
) |
Common stock dividends |
|
|
(156 |
) |
|
|
(223 |
) |
|
|
(319 |
) |
|
|
(522 |
) |
Noncontrolling interest activity, net |
|
|
(14 |
) |
|
|
(7 |
) |
|
|
(9 |
) |
|
|
(2 |
) |
Repayment of finance lease |
|
|
— |
|
|
|
— |
|
|
|
(274 |
) |
|
|
— |
|
Other |
|
|
(4 |
) |
|
|
(10 |
) |
|
|
(23 |
) |
|
|
(54 |
) |
Net change in cash, cash equivalents and restricted cash |
|
$ |
525 |
|
|
$ |
20 |
|
|
$ |
913 |
|
|
$ |
294 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
1,759 |
|
|
$ |
1,169 |
|
|
$ |
1,759 |
|
|
$ |
1,169 |
|
Operating Cash Flow
As presented in the table above, net cash provided by operating activities continued to be a significant source of capital and liquidity. Operating cash flow funded our capital expenditures, and we continued to return value to our shareholders by utilizing cash flow and cash balances for share repurchases and dividends.
Capital Expenditures
The amounts in the table below reflect cash payments for capital expenditures, including cash paid for capital expenditures incurred in prior periods.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Delaware Basin |
|
$ |
488 |
|
|
$ |
539 |
|
|
$ |
956 |
|
|
$ |
1,073 |
|
Rockies |
|
|
233 |
|
|
|
95 |
|
|
|
455 |
|
|
|
170 |
|
Eagle Ford |
|
|
142 |
|
|
|
202 |
|
|
|
293 |
|
|
|
359 |
|
Anadarko Basin |
|
|
39 |
|
|
|
59 |
|
|
|
84 |
|
|
|
119 |
|
Other |
|
|
1 |
|
|
|
1 |
|
|
|
2 |
|
|
|
3 |
|
Total oil and gas |
|
|
903 |
|
|
|
896 |
|
|
|
1,790 |
|
|
|
1,724 |
|
Midstream |
|
|
34 |
|
|
|
30 |
|
|
|
66 |
|
|
|
67 |
|
Other |
|
|
19 |
|
|
|
22 |
|
|
|
34 |
|
|
|
51 |
|
Total capital expenditures |
|
$ |
956 |
|
|
$ |
948 |
|
|
$ |
1,890 |
|
|
$ |
1,842 |
|
Capital expenditures consist primarily of amounts related to our oil and gas exploration and development operations, midstream operations and other corporate activities. Our capital investment program is driven by a disciplined allocation process focused on moderating our production growth and maximizing our returns. As such, our capital expenditures for the first six months of 2025 represented approximately 54% of our operating cash flow.
Divestitures of Property, Equipment and Investments
During the first six months of 2025, we generated additional cash flow by monetizing our investment in Matterhorn for $372 million and divesting headquarters-related real estate assets for $134 million as part of our real estate rationalization initiatives. These proceeds will be used to further strengthen our investment-grade financial position. For additional information regarding these divestitures, see Note 12 and Note 5 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
During the first six months of 2025 and 2024, we received $20 million in contingent earnout payments related to assets previously sold. For additional information, see Note 2 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
36
Table of Contents
Investment Activity
During the first six months of 2025 and 2024, we received distributions from our investments of $20 million and $22 million, respectively. We contributed $10 million and $48 million to our investments during the first six months of 2025 and 2024, respectively.
Shareholder Distributions and Stock Activity
We repurchased approximately 16.4 million shares of common stock for $550 million and approximately 9.6 million shares of common stock for $449 million under the share repurchase program authorized by our Board of Directors in the first six months of 2025 and 2024, respectively. For additional information, see Note 16 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
The following table summarizes our common stock dividends during the second quarter and total for the first six months of 2025 and 2024. Devon most recently raised its fixed dividend by 9% from $0.22 to $0.24 per share in the first quarter of 2025.
|
Dividends |
|
|
Rate Per Share |
|
||
2025: |
|
|
|
|
|
||
First quarter |
$ |
163 |
|
|
$ |
0.24 |
|
Second quarter |
|
156 |
|
|
$ |
0.24 |
|
Total year-to-date |
$ |
319 |
|
|
|
|
|
2024: |
|
|
|
|
|
||
First quarter |
$ |
299 |
|
|
$ |
0.44 |
|
Second quarter |
|
223 |
|
|
$ |
0.35 |
|
Total year-to-date (1) |
$ |
522 |
|
|
|
|
|
Noncontrolling Interest Activity, net
During the first six months of 2025 and 2024, we distributed $23 million and $26 million, respectively, to our noncontrolling interests in CDM. During the first six months of 2025 and 2024, we received $14 million and $24 million, respectively, in contributions from our noncontrolling interests.
Repayment of Finance Lease
During the first six months of 2025, we paid $274 million in cash to extinguish a financing lease related to a headquarters-related real estate asset as part of our real estate rationalization initiatives. For additional information, see Note 14 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
Liquidity
The business of exploring for, developing and producing oil and natural gas is capital intensive. Because oil, natural gas and NGL reserves are a depleting resource, we, like all upstream operators, must continually make capital investments to grow and even sustain production. Generally, our capital investments are focused on drilling and completing new wells and maintaining production from existing wells. At opportunistic times, we also acquire operations and properties from other operators or landowners to enhance our existing portfolio of assets.
On September 27, 2024, Devon acquired the Williston Basin business of Grayson Mill. This acquisition added a high-margin production mix that has enhanced our position and efficiently expanded our operating scale and production. The acquisition continues to deliver sustainable accretion to earnings and free cash flow further supporting our cash-return business model, which moderates growth, emphasizes capital efficiencies and prioritizes cash returns to shareholders.
To emphasize our commitment to maximizing free cash flow and creating value for shareholders, we recently announced a business optimization plan which is anticipated to improve our annual pre-tax cash flow by $1.0 billion. These optimization initiatives will be primarily focused on capital efficiencies, production optimization, commercial opportunities and corporate cost reductions. These savings are on track to be achieved by the end of 2026 with approximately $400 million expected to be completed by the end of 2025.
37
Table of Contents
Historically, our primary sources of capital funding and liquidity have been our operating cash flow, cash on hand and asset divestiture proceeds. Additionally, we maintain a commercial paper program, supported by our revolving line of credit, which can be accessed as needed to supplement operating cash flow and cash balances. If needed, we can also issue debt and equity securities, including through transactions under our shelf registration statement filed with the SEC. We estimate the combination of our sources of capital will continue to be adequate to fund our planned capital requirements as discussed in this section as well as return cash to shareholders.
Operating Cash Flow
Key inputs into determining our planned capital investment are the amount of cash we hold and operating cash flow we expect to generate over the next one to three or more years. At the end of the second quarter of 2025, we held approximately $1.8 billion of cash. Our operating cash flow forecasts are sensitive to many variables and include a measure of uncertainty as actual results may differ from our expectations.
Commodity Prices – The most uncertain and volatile variables for our operating cash flow are the prices of the oil, gas and NGLs we produce and sell. Prices are determined primarily by prevailing market conditions. Regional and worldwide economic activity, weather, changes in public policy, including the imposition of tariffs by the U.S. or other countries, and other highly variable factors influence market conditions for these products. These factors, which are difficult to predict, create volatility in prices and are beyond our control.
To mitigate some of the risk inherent in prices, we utilize various derivative financial instruments to protect a portion of our production against downside price risk. The key terms to our oil, gas and NGL derivative financial instruments as of June 30, 2025 are presented in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” of this report.
Further, when considering the current commodity price environment and our current hedge position, we expect to achieve our capital investment priorities. We remain committed to capital discipline and focused on delivering the objectives that underpin our capital plan for 2025. However, if commodity prices decline further, we will adapt our plan by reducing activity in order to maximize free cash flow.
Operating Expenses – Commodity prices can also affect our operating cash flow through an indirect effect on operating expenses. Significant commodity price decreases can lead to a decrease in drilling and development activities. As a result, the demand and cost for people, services, equipment and materials may also decrease, causing a positive impact on our cash flow as the prices paid for services and equipment decline. However, the inverse is also generally true during periods of rising commodity prices.
Additionally, the economic uncertainty in global trade arising from geopolitical events and shifting trade policies, such as the imposition of tariffs by the U.S., may contribute to higher inflation rates and disrupt supply chains, negatively impacting our cash flow. While we actively work to mitigate the impact of these potential risks through operational efficiencies gained from the scale of our operations as well as by leveraging long-standing relationships with our suppliers, the ultimate impacts remain uncertain.
Credit Losses – Our operating cash flow is also exposed to credit risk in a variety of ways. This includes the credit risk related to customers who purchase our oil, gas and NGL production, the collection of receivables from our joint interest owners for their proportionate share of expenditures made on projects we operate and counterparties to our derivative financial contracts. We utilize a variety of mechanisms to limit our exposure to the credit risks of our customers, joint interest owners and counterparties. Such mechanisms include, under certain conditions, requiring letters of credit, prepayments or cash collateral postings.
Credit Availability
As of June 30, 2025, we had approximately $3.0 billion of available borrowing capacity under our Senior Credit Facility. This credit facility supports our $3.0 billion of short-term credit under our commercial paper program. At June 30, 2025, there were no borrowings under our commercial paper program, and we were in compliance with the Senior Credit Facility’s financial covenant.
Debt Ratings
We receive debt ratings from the major ratings agencies in the U.S. In determining our debt ratings, the agencies consider a number of qualitative and quantitative items including, but not limited to, commodity pricing levels, our liquidity, asset quality, reserve mix, debt levels, cost structure, planned asset sales and the size and scale of our production. Our credit rating from Standard and Poor’s Financial Services is BBB with a stable outlook. Our credit rating from Fitch is BBB+ with a stable outlook. Our credit
38
Table of Contents
rating from Moody’s Investor Service is Baa2 with a stable outlook. Any rating downgrades may result in additional letters of credit or cash collateral being posted under certain contractual arrangements.
There are no “rating triggers” in any of our contractual debt obligations that would accelerate scheduled maturities should our debt rating fall below a specified level. However, a downgrade could adversely impact our interest rate on our Term Loan or any credit facility borrowings and the ability to economically access debt markets in the future.
Cash Returns to Shareholders
We are committed to returning cash to shareholders through dividends and share repurchases. Our Board of Directors will consider a number of factors when setting the quarterly dividend, if any, including a general target of paying out approximately 10% of operating cash flow through the fixed dividend. In addition to the fixed quarterly dividend, we may pay a variable dividend or complete share repurchases. The declaration and payment of any future dividend, whether fixed or variable, will remain at the full discretion of our Board of Directors and will depend on our financial results, cash requirements, future prospects and other factors deemed relevant by the Board.
In August 2025, Devon announced a cash dividend in the amount of $0.24 per share payable in the third quarter of 2025 and will total approximately $151 million.
Our Board of Directors has authorized a $5.0 billion share repurchase program that expires on June 30, 2026. Through July 2025, we had executed $4.0 billion of the authorized program.
Capital Expenditures
Our capital expenditures budget for the remainder of 2025 is expected to be approximately $1.7 billion to $1.9 billion.
Acquisition of Noncontrolling Interests in CDM
On August 1, 2025, Devon completed the acquisition of all the outstanding noncontrolling interests in CDM for $260 million. Following this transaction, we will no longer distribute a portion of CDM’s cash flows to noncontrolling interest holders.
Critical Accounting Estimates
Purchase Accounting
Periodically, we acquire assets and assume liabilities in transactions accounted for as business combinations, such as the acquisition of the Williston Basin business of Grayson Mill. In connection with the acquisition, we allocated the $5.0 billion of purchase price consideration to the assets acquired and liabilities assumed based on estimated fair values as of the date of the acquisition.
We made a number of assumptions in estimating the fair value of assets acquired and liabilities assumed in the acquisition. The most significant assumptions relate to the estimated fair values of proved and unproved oil and gas properties. Since sufficient market data was not available regarding the fair values of proved and unproved oil and gas properties, we prepared estimates and engaged third-party valuation experts. Significant judgments and assumptions are inherent in these estimates and include, among other things, estimates of reserve quantities, estimates of future commodity prices, drilling plans, expected development costs, lease operating costs, reserve risk adjustment factors and an estimate of an applicable market participant discount rate that reflects the risk of the underlying cash flow estimates.
Estimated fair values ascribed to assets acquired can have a significant impact on future results of operations presented in Devon’s financial statements. A higher fair value ascribed to a property results in higher DD&A expense, which results in lower net earnings. Fair values are based on estimates of future commodity prices, reserve quantities, development costs and operating costs. In the event that future commodity prices or reserve quantities are lower than those used as inputs to determine estimates of acquisition date fair values, the likelihood increases that certain costs may be determined to not be recoverable.
For additional information regarding our critical accounting policies and estimates, see our 2024 Annual Report on Form 10-K.
39
Table of Contents
Non-GAAP Measures
We utilize “core earnings attributable to Devon” and “core earnings per share attributable to Devon” that are not required by or presented in accordance with GAAP. These non-GAAP measures are not alternatives to GAAP measures and should not be considered in isolation or as a substitute for analysis of our results reported under GAAP. Core earnings attributable to Devon, as well as the per share amount, represent net earnings excluding certain non-cash and other items that are typically excluded by securities analysts in their published estimates of our financial results. Our non-GAAP measures are typically used as a quarterly performance measure. Amounts excluded relate to asset dispositions, non-cash asset impairments (including unproved asset impairments), deferred tax asset valuation allowance, fair value changes in derivative financial instruments and restructuring and transaction costs.
We believe these non-GAAP measures facilitate comparisons of our performance to earnings estimates published by securities analysts. We also believe these non-GAAP measures can facilitate comparisons of our performance between periods and to the performance of our peers.
Below are reconciliations of core earnings and core earnings per share attributable to Devon to comparable GAAP measures.
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||||||||||||||||||
|
Before Tax |
|
|
After Tax |
|
|
After NCI |
|
|
Per Diluted Share |
|
|
Before Tax |
|
|
After Tax |
|
|
After NCI |
|
|
Per Diluted Share |
|
||||||||
2025: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings attributable to Devon (GAAP) |
$ |
1,161 |
|
|
$ |
917 |
|
|
$ |
899 |
|
|
$ |
1.41 |
|
|
$ |
1,807 |
|
|
$ |
1,426 |
|
|
$ |
1,393 |
|
|
$ |
2.17 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Asset dispositions |
|
(307 |
) |
|
|
(239 |
) |
|
|
(239 |
) |
|
|
(0.38 |
) |
|
|
(305 |
) |
|
|
(238 |
) |
|
|
(238 |
) |
|
|
(0.37 |
) |
Asset and exploration impairments |
|
4 |
|
|
|
2 |
|
|
|
2 |
|
|
|
0.01 |
|
|
|
263 |
|
|
|
204 |
|
|
|
204 |
|
|
|
0.32 |
|
Fair value changes in financial instruments |
|
(172 |
) |
|
|
(133 |
) |
|
|
(133 |
) |
|
|
(0.21 |
) |
|
|
(84 |
) |
|
|
(65 |
) |
|
|
(65 |
) |
|
|
(0.10 |
) |
Restructuring and transaction costs |
|
9 |
|
|
|
7 |
|
|
|
7 |
|
|
|
0.01 |
|
|
|
27 |
|
|
|
21 |
|
|
|
21 |
|
|
|
0.03 |
|
Core earnings attributable to Devon (Non-GAAP) |
$ |
695 |
|
|
$ |
554 |
|
|
$ |
536 |
|
|
$ |
0.84 |
|
|
$ |
1,708 |
|
|
$ |
1,348 |
|
|
$ |
1,315 |
|
|
$ |
2.05 |
|
2024: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings attributable to Devon (GAAP) |
$ |
1,040 |
|
|
$ |
855 |
|
|
$ |
844 |
|
|
$ |
1.34 |
|
|
$ |
1,808 |
|
|
$ |
1,464 |
|
|
$ |
1,440 |
|
|
$ |
2.29 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Asset dispositions |
|
15 |
|
|
|
11 |
|
|
|
11 |
|
|
|
0.02 |
|
|
|
16 |
|
|
|
12 |
|
|
|
12 |
|
|
|
0.02 |
|
Asset and exploration impairments |
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
Deferred tax asset valuation allowance |
|
— |
|
|
|
4 |
|
|
|
4 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
3 |
|
|
|
3 |
|
|
|
— |
|
Fair value changes in financial instruments |
|
32 |
|
|
|
25 |
|
|
|
25 |
|
|
|
0.04 |
|
|
|
204 |
|
|
|
159 |
|
|
|
159 |
|
|
|
0.25 |
|
Core earnings attributable to Devon (Non-GAAP) |
$ |
1,088 |
|
|
$ |
896 |
|
|
$ |
885 |
|
|
$ |
1.41 |
|
|
$ |
2,029 |
|
|
$ |
1,639 |
|
|
$ |
1,615 |
|
|
$ |
2.56 |
|
EBITDAX and Field-Level Cash Margin
To assess the performance of our assets, we use EBITDAX and Field-Level Cash Margin. We compute EBITDAX as net earnings before income tax expense; financing costs, net; exploration expenses; DD&A; asset impairments; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; restructuring and transaction costs; accretion on discounted liabilities; and other items not related to our normal operations. Field-Level Cash Margin is computed as oil, gas and NGL sales less production expenses. Production expenses consist of lease operating, gathering, processing and transportation expenses, as well as production and property taxes.
We exclude financing costs from EBITDAX to assess our operating results without regard to our financing methods or capital structure. Exploration expenses and asset disposition gains and losses are excluded from EBITDAX because they generally are not indicators of operating efficiency for a given reporting period. DD&A and impairments are excluded from EBITDAX because capital expenditures are evaluated at the time capital costs are incurred. We exclude share-based compensation, valuation changes, restructuring and transaction costs, accretion on discounted liabilities and other items from EBITDAX because they are not considered a measure of asset operating performance.
We believe EBITDAX and Field-Level Cash Margin provide information useful in assessing our operating and financial performance across periods. EBITDAX and Field-Level Cash Margin as defined by Devon may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net earnings from operations.
40
Table of Contents
Below are reconciliations of net earnings to EBITDAX and a further reconciliation to Field-Level Cash Margin.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net earnings (GAAP) |
|
$ |
917 |
|
|
$ |
855 |
|
|
$ |
1,426 |
|
|
$ |
1,464 |
|
Financing costs, net |
|
|
116 |
|
|
|
76 |
|
|
|
239 |
|
|
|
152 |
|
Income tax expense |
|
|
244 |
|
|
|
185 |
|
|
|
381 |
|
|
|
344 |
|
Exploration expenses |
|
|
20 |
|
|
|
3 |
|
|
|
30 |
|
|
|
12 |
|
Depreciation, depletion and amortization |
|
|
914 |
|
|
|
768 |
|
|
|
1,826 |
|
|
|
1,490 |
|
Asset impairments |
|
|
— |
|
|
|
— |
|
|
|
254 |
|
|
|
— |
|
Asset dispositions |
|
|
(307 |
) |
|
|
15 |
|
|
|
(305 |
) |
|
|
16 |
|
Share-based compensation |
|
|
22 |
|
|
|
26 |
|
|
|
46 |
|
|
|
50 |
|
Derivative and financial instrument non-cash valuation changes |
|
|
(169 |
) |
|
|
31 |
|
|
|
(81 |
) |
|
|
200 |
|
Accretion on discounted liabilities and other |
|
|
11 |
|
|
|
5 |
|
|
|
38 |
|
|
|
27 |
|
EBITDAX (Non-GAAP) |
|
|
1,768 |
|
|
|
1,964 |
|
|
|
3,854 |
|
|
|
3,755 |
|
Marketing and midstream revenues and expenses, net |
|
|
19 |
|
|
|
10 |
|
|
|
31 |
|
|
|
31 |
|
Commodity derivative cash settlements |
|
|
(67 |
) |
|
|
(54 |
) |
|
|
(57 |
) |
|
|
(78 |
) |
General and administrative expenses, cash-based |
|
|
91 |
|
|
|
88 |
|
|
|
197 |
|
|
|
178 |
|
Field-level cash margin (Non-GAAP) |
|
$ |
1,811 |
|
|
$ |
2,008 |
|
|
$ |
4,025 |
|
|
$ |
3,886 |
|
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Commodity Price Risk
As of June 30, 2025, we have commodity derivatives that pertain to a portion of our estimated production for the last six months of 2025, as well as for 2026 and 2027. The key terms to our open oil, gas and NGL derivative financial instruments are presented in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.
The fair values of our commodity derivatives are largely determined by the forward curves of the relevant price indices. At June 30, 2025, a 10% change in the forward curves associated with our commodity derivative instruments would have changed our net positions by approximately $270 million.
Interest Rate Risk
At June 30, 2025, we had total debt of $8.9 billion. Of this debt, $7.9 billion was comprised of debentures and notes that have fixed interest rates which averaged 5.7%. We also have a $1.0 billion Term Loan which has a variable interest rate that is adjusted monthly. The interest rate on the Term Loan was 5.8% at June 30, 2025.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We have established disclosure controls and procedures to ensure that material information relating to Devon, including its consolidated subsidiaries, is made known to the officers who certify Devon’s financial reports and to other members of senior management and the Board of Directors.
Based on their evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of June 30, 2025 to ensure that the information required to be disclosed by Devon in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
41
Table of Contents
PART II. Other Information
Item 1. Legal Proceedings
We are involved in various legal proceedings incidental to our business. However, to our knowledge as of the date of this report and subject to the environmental matters noted in Part I, Item 3. Legal Proceedings of our 2024 Annual Report on Form 10-K, including the updates below, there were no material pending legal proceedings to which we are a party or to which any of our property is subject. For more information on our legal contingencies, see Note 17 in “Part I. Financial Information – Item 1. Financial Statements” of this report.
As previously disclosed, we received separate notices of violation from the New Mexico Environment Department (“NMED”) relating to certain alleged violations of New Mexico environmental laws by WPX Energy Permian, LLC, a wholly-owned subsidiary of Devon (“WPX Permian”), and CDM, a joint venture of the Company, respectively. WPX Permian and CDM subsequently entered into separate settlement agreements with the NMED to resolve these respective matters, both of which resulted in a fine or penalty below $300,000.
Please see our 2024 Annual Report on Form 10-K and other SEC filings for additional information.
Item 1A. Risk Factors
There have been no material changes to the information included in Item 1A. “Risk Factors” in our 2024 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table provides information regarding purchases of our common stock that were made by us during the second quarter of 2025 (shares in thousands).
Period |
|
Total Number of |
|
|
Average Price |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) |
|
|
Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) |
|
||||
April 1 - April 30 |
|
|
2,719 |
|
|
$ |
30.14 |
|
|
|
2,584 |
|
|
$ |
1,278 |
|
May 1 - May 31 |
|
|
2,398 |
|
|
$ |
32.02 |
|
|
|
2,396 |
|
|
$ |
1,201 |
|
June 1 - June 30 |
|
|
2,891 |
|
|
$ |
32.93 |
|
|
|
2,886 |
|
|
$ |
1,107 |
|
Total |
|
|
8,008 |
|
|
$ |
31.71 |
|
|
|
7,866 |
|
|
|
|
|
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended June 30, 2025, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934)
42
Table of Contents
Item 6. Exhibits
Exhibit Number |
|
Description |
|
|
|
10.1* |
2025 Form of Notice of Grant of Restricted Stock Award and Award Agreement under the 2022 Long-Term Incentive Plan between the Company and non-management directors for restricted stock awarded. |
|
|
|
|
10.2* |
2025 Form of Notice of Grant of Restricted Stock Unit Award and Award Agreement under the 2022 Long-Term Incentive Plan between the Company and non-management directors for restricted stock units awarded. |
|
|
|
|
31.1 |
Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
31.2 |
Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
32.1 |
Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
32.2 |
Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
101.INS |
Inline XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
101.SCH |
Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents. |
|
|
|
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
|
|
|
|
|
*Indicates management contract or compensatory plan or arrangement. |
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
DEVON ENERGY CORPORATION |
|
|
|
||
Date: August 6, 2025 |
|
|
|
/s/ John B. Sherrer |
|
|
|
|
John B. Sherrer |
|
|
|
|
Vice President, Accounting and Controller |
43
