Devon Energy (NYSE: DVN) Q1 2026 results and Coterra merger update
Rhea-AI Filing Summary
Devon Energy reported first-quarter 2026 net earnings of $120 million, or $0.19 per diluted share, with core earnings of $641 million, or $1.04 per share, after adjusting for derivative and other items. Operating cash flow reached about $1.7 billion, funding capital spending and generating $816 million of free cash flow as production averaged 833,000 Boe per day, with oil at the top end of guidance.
The company highlighted strong balance sheet metrics, ending the quarter with $1.8 billion in cash, an undrawn $3.0 billion credit facility, total debt of $8.4 billion and a net debt‑to‑EBITDAX ratio of 0.9x. Capital investment excluding acquisitions was $848 million, about 6% below guidance, while total capital including leasehold acquisitions was $999 million.
Strategically, Devon is advancing an all‑stock merger with Coterra Energy, approved by both companies’ shareholders and expected to close on or around May 7, 2026. The combined company, to be named Devon Energy, targets $1.0 billion in sustainable annual pre‑tax synergies by year‑end 2027, with Devon shareholders expected to own about 54% and Coterra shareholders about 46% of the combined entity.
Positive
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Insights
Strong free cash flow, low leverage and a near-term transformative merger define a pivotal quarter for Devon.
Devon generated $816 million of free cash flow in Q1 2026 on operating cash flow of $1.7 billion, while capital spending of $848 million came in about 6% below guidance. Production averaged 833,000 Boe/d, with oil at 46% of volume and at the top end of guidance, indicating solid operational execution.
The balance sheet remains conservative, with net debt of $6.57 billion and net debt‑to‑EBITDAX at 0.9% (0.9x), supported by a cash balance of $1.8 billion and an undrawn $3.0 billion credit facility. This provides flexibility as the company advances a business optimization plan targeting $1 billion in annual pre‑tax free cash flow improvement.
Shareholders of Devon and Coterra approved their all‑stock merger, expected to close on or around May 7, 2026. The combined company aims for $1.0 billion in sustainable annual pre‑tax synergies by year‑end 2027, with Devon shareholders owning about 54% of the new Devon Energy. Subsequent filings in mid‑June 2026 are expected to provide guidance for the combined entity.
8-K Event Classification
Key Figures
Key Terms
core earnings financial
EBITDAX financial
free cash flow financial
three way collars financial
net debt-to-EBITDAX financial
business optimization plan financial
Earnings Snapshot
For Q2 2026 on a standalone basis, Devon expects production of 851,000–868,000 Boe per day (46% oil) and approximately $900 million in capital spending; full-year 2026 guidance for the combined Devon–Coterra entity will be provided in mid-June 2026.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
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. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On May 5, 2026, Devon Energy Corporation (the “Company”) announced its financial and operational results for the quarterly period ended March 31, 2026. In connection with this announcement, the Company provided an earnings release and certain supplemental financial information (including guidance and hedging information). Copies of these documents are furnished as Exhibits 99.1 and 99.2, respectively, to this report and, along with certain other materials, will be available on the Company’s website at www.devonenergy.com.
The information contained in this report and the exhibits hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit No. |
Description of Exhibits | |
| 99.1 | Earnings release, dated May 5, 2026. | |
| 99.2 | Supplemental financial information (including guidance and hedging information). | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
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 hereunto duly authorized.
| DEVON ENERGY CORPORATION | ||
| By: | /s/ Jeffrey L. Ritenour | |
| Jeffrey L. Ritenour | ||
| Executive Vice President and Chief Financial Officer | ||
Date: May 5, 2026
Exhibit 99.1
|
|
Devon Energy Corporation | |
| 333 West Sheridan Avenue | ||
| Oklahoma City, OK 73102-5015 |
Devon Energy Reports First-Quarter 2026 Results
OKLAHOMA CITY – May 5, 2026 – Devon Energy Corp. (NYSE: DVN) today reports first-quarter 2026 results. Supplemental financial tables and forward-looking guidance are available on the company’s website at www.devonenergy.com.
KEY FINANCIAL & OPERATIONAL HIGHLIGHTS
| • | Production Outperformance: Averaged 387,000 barrels of oil production per day in the first quarter, reaching the top-end of guidance |
| • | Disciplined Cost Management: Invested $848 million of capital in the first quarter, 6 percent below midpoint guidance |
| • | Business Optimization Success: Projected to reach 100 percent of the $1 billion annual pre-tax free cash flow improvement target well ahead of schedule, providing a strong foundation ahead of merger close |
| • | Robust Cash Generation: Operations generated $1.7 billion of operating cash flow and $816 million of free cash flow during the first quarter |
| • | Accelerated Shareholder Returns: Repurchased $69 million of shares during the first quarter. Announced plans for a new share repurchase authorization in excess of $5 billion and an increase to the quarterly fixed dividend, both following the closing of the Coterra merger and subject to Board approval |
| • | Merger Progress: Both Devon and Coterra shareholders approved the transformative merger on May 4, 2026, with the transaction expected to close on or around May 7, 2026 |
CEO COMMENTARY
“Devon delivered another strong quarter in the first quarter of 2026, beating guidance across major value drivers, including oil production and capital,” said Clay Gaspar, president and CEO. “Our relentless focus on operational excellence and cost discipline continues to drive significant free cash flow and meaningful returns to shareholders. We are also on track to achieve a significant milestone with the full delivery of our $1 billion business optimization target well ahead of schedule, further strengthening our future margins and positioning Devon for long-term success as we head into the close of our transformative merger with Coterra.”
“With the overwhelming support of both companies’ shareholders, we have cleared a major milestone and are excited to move toward closing this transformative merger with Coterra Energy,” Gaspar added. “As we bring these two organizations together, we are confident in our ability to unlock significant synergies, accelerate free cash flow growth, and deliver enhanced returns to shareholders of the combined company.”
STRATEGIC MERGER WITH COTERRA ENERGY
On Feb. 2, 2026, Devon announced that it had entered into an agreement to combine in an all-stock merger with Coterra Energy.
The combination will create one of the largest shale operators in the world with an asset base anchored by a premier position in the economic core of the Delaware Basin. The go-forward company, to be named Devon Energy, is expected to unlock substantial value for shareholders by leveraging enhanced scale to improve margins, increase free cash flow, and accelerate cash returns through the capture of $1.0 billion in sustainable annual pre-tax synergies, expected to be fully achieved by year-end 2027.
Shareholders of both companies approved the transaction on May 4, 2026, and the merger is expected to close on or around May 7, 2026. Upon completion of the transaction, Devon shareholders will own approximately 54 percent of the combined company and Coterra shareholders will own approximately 46 percent of the combined company on a fully diluted basis.
FINANCIAL RESULTS
Devon reported net earnings of $120 million, or $0.19 per diluted share, in the first quarter of 2026. Adjusting for items analysts typically exclude from estimates, the company’s core earnings were $641 million, or $1.04 per diluted share.
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Devon’s operating cash flow totaled $1.7 billion in the first quarter. The company funded its capital requirements and had $816 million in free cash flow for the quarter.
At the end of the first quarter, Devon had a cash balance of $1.8 billion and an undrawn credit facility of $3.0 billion. Outstanding debt totaled $8.4 billion and the company’s net debt-to-EBITDAX ratio was 0.9 times.
RETURN OF CAPITAL
Devon has not yet declared a quarterly dividend during the second quarter due to the pending merger with Coterra Energy. Following the closing of the merger and subject to Board approval, the company expects to declare a quarterly dividend for the second quarter of $0.315 per share.
The company returned capital to shareholders through the ongoing execution of its $5.0 billion share repurchase program. During the first quarter, Devon repurchased shares for $69 million. In connection with the pending merger with Coterra Energy, the company has suspended share repurchasing activity through the expected closing.
Following the closing of the merger with Coterra Energy, the company expects to establish a new share repurchase authorization in excess of $5 billion, subject to Board approval.
OPERATING RESULTS
Devon’s capital activity in the first quarter averaged 19 operated drilling rigs and 6 completion crews across its asset portfolio. This level of activity resulted in 110 gross operated wells being placed online, with an average lateral length of 10,500 feet. Capital investment, excluding acquisition capital, was $848 million, or 6 percent below guidance. This positive variance was primarily attributable to effective cost management and timing of facility spend. The company also completed $151 million in leasehold acquisitions, primarily in the Delaware Basin, across its portfolio.
Production averaged 833,000 Boe per day in the first quarter, in line with guidance. Oil totaled 387,000 barrels per day in the quarter, which was 46 percent of total volume and at the top-end of the company’s guidance.
Underpinning these results is the continued strong progress in advancing the company’s business optimization plan. With strong momentum established, the company expects to fully achieve its $1 billion annual pre-tax free cash flow improvement target well ahead of schedule with the upcoming repayment of the $1 billion term loan. These actions will continue to strengthen margins and maximize capital efficiency across Devon’s assets.
Q2 2026 OUTLOOK
On a Devon standalone basis, production in the second quarter of 2026 is expected to average 851,000 to 868,000 Boe per day (46 percent oil). Capital spending in the second quarter is expected to be approximately $900 million.
Given the expected closing of the merger with Coterra Energy, the company is not providing full-year 2026 guidance at this time. Guidance for the combined entity will be provided in mid-June 2026.
Additional details of Devon’s forward-looking guidance are available on the company’s website at www.devonenergy.com.
CONFERENCE CALL WEBCAST AND SUPPLEMENTAL EARNINGS MATERIALS
Also provided with today’s release is the company’s earnings presentation that is available on the company’s website at www.devonenergy.com. The company’s first-quarter conference call will be held at 10:00 a.m. Central (11:00 a.m. Eastern) on May 6, 2026, and will serve primarily as a forum for analyst and investor questions and answers.
ABOUT DEVON ENERGY
Devon Energy is a leading oil and gas producer in the U.S. with a diversified multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devon’s disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations. For more information, please visit www.devonenergy.com.
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| Investor Contact | Media Contact | |
| investor.relations@dvn.com | Michelle Hindmarch | |
| 405-228-4450 | 405-552-7460 |
NON-GAAP DISCLOSURES
This press release includes non-GAAP (generally accepted accounting principles) financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of results as reported under GAAP. Reconciliations of these non-GAAP measures and other disclosures are provided within the supplemental financial tables that are available on the company’s website and in the related Form 10-Q filed with the Securities and Exchange Commission (the “SEC”).
FORWARD LOOKING STATEMENTS
This press release 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 press release 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 volatility of oil, gas and NGL prices, including from changes in trade relations and policies, such as the imposition of new or increased tariffs or other trade protection measures by the U.S., China or other countries; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved in our operations; risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties and investments; midstream capacity constraints and potential interruptions in production, including from limits to the build out of midstream infrastructure; competition for assets, materials, people and capital, which can be exacerbated by supply chain disruptions, including as a result of tariffs or other changes in trade policy; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands, environmental matters, water disposal and tax matters; climate change and risks related to regulatory, social and market efforts to address climate change; risks relating to our sustainability initiatives; claims, audits and other proceedings impacting our business, including with respect to historic and legacy operations; governmental interventions in energy markets; counterparty credit risks; risks relating to our indebtedness; cybersecurity risks; risks associated with artificial intelligence and other emerging technologies; the extent to which insurance covers any losses we may experience; risks related to shareholder activism; our ability to successfully complete mergers, acquisitions and divestitures; our ability to pay dividends and make share repurchases; risks related to the merger with Coterra, including restrictions on our operations during the pendency of the merger, litigation risk, the risk that the merger agreement may be terminated and the risk that we may not realize the anticipated benefits of the merger or successfully integrate the two companies; the risk that we are unable to successfully maintain the cost savings or other improvements contemplated by the business optimization plan; commodity prices, cost structures and the other assumptions underlying our forecasted value uplift from the business optimization plan could differ materially from actual results; and any of the other risks and uncertainties discussed in Devon’s 2025 Annual Report on Form 10-K (the “2025 Form 10-K”) or other filings with the SEC.
The forward-looking statements included in this press release speak only as of the date of this press release, represent management’s current reasonable expectations as of the date of this press release and are subject to the risks and uncertainties identified above as well as those described elsewhere in the 2025 Form 10-K 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 the 2025 Form 10-K 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.
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Exhibit 99.2
Devon Energy First-Quarter 2026
Supplemental Tables
| TABLE OF CONTENTS: | PAGE: | |||
| Consolidated Statements of Earnings |
2 | |||
| Supplemental Information for Consolidated Statements of Earnings |
3 | |||
| Consolidated Balance Sheets |
4 | |||
| Consolidated Statements of Cash Flows |
5 | |||
| Production |
6 | |||
| Capital Expenditures and Supplemental Information for Capital Expenditures |
7 | |||
| Realized Pricing |
8 | |||
| Asset Margins |
9 | |||
| Core Earnings |
10 | |||
| EBITDAX |
11 | |||
| Net Debt, Net Debt-to-EBITDAX, Free Cash Flow and Reinvestment Rate |
12 | |||
1
CONSOLIDATED STATEMENTS OF EARNINGS
| (in millions, except per share amounts) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Oil, gas and NGL sales |
$ | 2,977 | $ | 2,578 | $ | 2,809 | $ | 2,710 | $ | 3,126 | ||||||||||
| Oil, gas and NGL derivatives (1) |
(701 | ) | 184 | 80 | 236 | (98 | ) | |||||||||||||
| Marketing and midstream revenues |
1,531 | 1,359 | 1,442 | 1,338 | 1,424 | |||||||||||||||
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| Total revenues |
3,807 | 4,121 | 4,331 | 4,284 | 4,452 | |||||||||||||||
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| Production expenses (2) |
894 | 861 | 895 | 899 | 912 | |||||||||||||||
| Exploration expenses |
25 | 5 | 8 | 20 | 10 | |||||||||||||||
| Marketing and midstream expenses |
1,547 | 1,389 | 1,453 | 1,357 | 1,436 | |||||||||||||||
| Depreciation, depletion and amortization |
904 | 890 | 879 | 914 | 912 | |||||||||||||||
| Asset impairments |
— | — | — | — | 254 | |||||||||||||||
| Asset dispositions |
1 | (1 | ) | (37 | ) | (307 | ) | 2 | ||||||||||||
| General and administrative expenses |
125 | 135 | 114 | 113 | 130 | |||||||||||||||
| Financing costs, net (3) |
109 | 107 | 109 | 116 | 123 | |||||||||||||||
| Restructuring and transaction costs |
19 | — | 9 | 9 | 18 | |||||||||||||||
| Other, net |
17 | (12 | ) | (11 | ) | 2 | 9 | |||||||||||||
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| Total expenses |
3,641 | 3,374 | 3,419 | 3,123 | 3,806 | |||||||||||||||
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| Earnings before income taxes |
166 | 747 | 912 | 1,161 | 646 | |||||||||||||||
| Income tax expense (4) |
46 | 185 | 219 | 244 | 137 | |||||||||||||||
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| Net earnings |
120 | 562 | 693 | 917 | 509 | |||||||||||||||
| Net earnings attributable to noncontrolling interests |
— | — | 6 | 18 | 15 | |||||||||||||||
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| Net earnings attributable to Devon |
$ | 120 | $ | 562 | $ | 687 | $ | 899 | $ | 494 | ||||||||||
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| Net earnings per share: |
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| Basic net earnings per share |
$ | 0.19 | $ | 0.91 | $ | 1.09 | $ | 1.42 | $ | 0.77 | ||||||||||
| Diluted net earnings per share |
$ | 0.19 | $ | 0.90 | $ | 1.09 | $ | 1.41 | $ | 0.77 | ||||||||||
| Weighted average common shares outstanding: |
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| Basic |
616 | 621 | 628 | 635 | 643 | |||||||||||||||
| Diluted |
618 | 622 | 629 | 636 | 645 | |||||||||||||||
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SUPPLEMENTAL INFORMATION FOR CONSOLIDATED STATEMENTS OF EARNINGS
(1) OIL, GAS AND NGL DERIVATIVES
| (in millions) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Derivative cash settlements |
$ | (57 | ) | $ | 125 | $ | 50 | $ | 67 | $ | (10 | ) | ||||||||
| Derivative valuation changes |
(644 | ) | 59 | 30 | 169 | (88 | ) | |||||||||||||
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| Oil, gas and NGL derivatives |
$ | (701 | ) | $ | 184 | $ | 80 | $ | 236 | $ | (98 | ) | ||||||||
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| (2) PRODUCTION EXPENSES | ||||||||||||||||||||
| (in millions) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Lease operating expense |
$ | 486 | $ | 479 | $ | 481 | $ | 483 | $ | 479 | ||||||||||
| Gathering, processing & transportation |
191 | 195 | 213 | 219 | 204 | |||||||||||||||
| Production taxes |
205 | 172 | 184 | 180 | 212 | |||||||||||||||
| Property taxes |
12 | 15 | 17 | 17 | 17 | |||||||||||||||
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| Production expenses |
$ | 894 | $ | 861 | $ | 895 | $ | 899 | $ | 912 | ||||||||||
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| (3) FINANCING COSTS, NET | ||||||||||||||||||||
| (in millions) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Interest based on debt outstanding |
$ | 118 | $ | 119 | $ | 125 | $ | 126 | $ | 127 | ||||||||||
| Interest income |
(14 | ) | (14 | ) | (18 | ) | (14 | ) | (10 | ) | ||||||||||
| Other |
5 | 2 | 2 | 4 | 6 | |||||||||||||||
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| Financing costs, net |
$ | 109 | $ | 107 | $ | 109 | $ | 116 | $ | 123 | ||||||||||
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| (4) INCOME TAX EXPENSE | ||||||||||||||||||||
| (in millions) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Current expense (benefit) (1) |
$ | (188 | ) | $ | 23 | $ | (44 | ) | $ | 226 | $ | 96 | ||||||||
| Deferred expense |
234 | 162 | 263 | 18 | 41 | |||||||||||||||
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| Income tax expense |
$ | 46 | $ | 185 | $ | 219 | $ | 244 | $ | 137 | ||||||||||
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| (1) | Reflects the impact of new tax guidance released in the first quarter of 2026 which established a new adjustment to the corporate alternative minimum tax associated with the amortization of research costs beginning in 2025 under the One Big Beautiful Bill Act transition rule. |
3
CONSOLIDATED BALANCE SHEETS
| (in millions) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Current assets: |
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| Cash, cash equivalents and restricted cash |
$ | 1,815 | $ | 1,434 | $ | 1,278 | $ | 1,759 | $ | 1,234 | ||||||||||
| Accounts receivable |
2,250 | 1,792 | 1,835 | 1,853 | 2,036 | |||||||||||||||
| Inventory |
319 | 336 | 361 | 327 | 332 | |||||||||||||||
| Other current assets |
378 | 444 | 393 | 384 | 303 | |||||||||||||||
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| Total current assets |
4,762 | 4,006 | 3,867 | 4,323 | 3,905 | |||||||||||||||
| Oil and gas property and equipment, based on successful efforts accounting, net |
23,912 | 23,731 | 23,591 | 23,428 | 23,429 | |||||||||||||||
| Other property and equipment, net |
1,686 | 1,688 | 1,698 | 1,687 | 1,653 | |||||||||||||||
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| Total property and equipment, net |
25,598 | 25,419 | 25,289 | 25,115 | 25,082 | |||||||||||||||
| Goodwill |
753 | 753 | 753 | 753 | 753 | |||||||||||||||
| Right-of-use assets |
312 | 299 | 247 | 185 | 127 | |||||||||||||||
| Investments |
715 | 727 | 679 | 640 | 713 | |||||||||||||||
| Other long-term assets |
403 | 395 | 386 | 374 | 348 | |||||||||||||||
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| Total assets |
$ | 32,543 | $ | 31,599 | $ | 31,221 | $ | 31,390 | $ | 30,928 | ||||||||||
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| Current liabilities: |
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| Accounts payable |
$ | 975 | $ | 790 | $ | 934 | $ | 885 | $ | 923 | ||||||||||
| Revenues and royalties payable |
1,678 | 1,491 | 1,464 | 1,440 | 1,588 | |||||||||||||||
| Short-term debt |
999 | 998 | 998 | 485 | 485 | |||||||||||||||
| Other current liabilities |
1,082 | 807 | 646 | 727 | 622 | |||||||||||||||
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| Total current liabilities |
4,734 | 4,086 | 4,042 | 3,537 | 3,618 | |||||||||||||||
| Long-term debt |
7,387 | 7,391 | 7,393 | 8,393 | 8,395 | |||||||||||||||
| Lease liabilities |
206 | 197 | 158 | 113 | 77 | |||||||||||||||
| Asset retirement obligations |
986 | 863 | 850 | 839 | 835 | |||||||||||||||
| Other long-term liabilities |
940 | 907 | 962 | 1,008 | 1,041 | |||||||||||||||
| Deferred income taxes |
2,862 | 2,627 | 2,466 | 2,208 | 2,189 | |||||||||||||||
| Stockholders’ equity: |
||||||||||||||||||||
| Common stock |
62 | 62 | 63 | 64 | 64 | |||||||||||||||
| Additional paid-in capital |
5,316 | 5,388 | 5,618 | 5,864 | 6,096 | |||||||||||||||
| Retained earnings |
10,171 | 10,200 | 9,788 | 9,252 | 8,506 | |||||||||||||||
| Accumulated other comprehensive loss |
(121 | ) | (122 | ) | (119 | ) | (120 | ) | (121 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total stockholders’ equity attributable to Devon |
15,428 | 15,528 | 15,350 | 15,060 | 14,545 | |||||||||||||||
| Noncontrolling interests |
— | — | — | 232 | 228 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total equity |
15,428 | 15,528 | 15,350 | 15,292 | 14,773 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total liabilities and equity |
$ | 32,543 | $ | 31,599 | $ | 31,221 | $ | 31,390 | $ | 30,928 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
| (in millions) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Cash flows from operating activities: |
||||||||||||||||||||
| Net earnings |
$ | 120 | $ | 562 | $ | 693 | $ | 917 | $ | 509 | ||||||||||
| Adjustments to reconcile net earnings to net cash from operating activities: |
||||||||||||||||||||
| Depreciation, depletion and amortization |
904 | 890 | 879 | 914 | 912 | |||||||||||||||
| Asset impairments |
— | — | — | — | 254 | |||||||||||||||
| Leasehold impairments |
3 | (2 | ) | 1 | 7 | 5 | ||||||||||||||
| Accretion of liabilities |
4 | 3 | 4 | 3 | 6 | |||||||||||||||
| Total (gains) losses on commodity derivatives |
701 | (184 | ) | (80 | ) | (236 | ) | 98 | ||||||||||||
| Cash settlements on commodity derivatives |
(57 | ) | 125 | 50 | 67 | (10 | ) | |||||||||||||
| (Gains) losses on asset dispositions |
1 | (1 | ) | (37 | ) | (307 | ) | 2 | ||||||||||||
| Deferred income tax expense |
234 | 162 | 263 | 18 | 41 | |||||||||||||||
| Share-based compensation |
22 | 22 | 24 | 23 | 30 | |||||||||||||||
| Other |
22 | (5 | ) | (45 | ) | 5 | (22 | ) | ||||||||||||
| Changes in assets and liabilities, net |
(299 | ) | (38 | ) | (62 | ) | 134 | 117 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net cash from operating activities |
1,655 | 1,534 | 1,690 | 1,545 | 1,942 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flows from investing activities: |
||||||||||||||||||||
| Capital expenditures |
(839 | ) | (832 | ) | (870 | ) | (956 | ) | (934 | ) | ||||||||||
| Acquisitions of property and equipment |
(190 | ) | (101 | ) | (197 | ) | (16 | ) | (8 | ) | ||||||||||
| Divestitures of property and equipment and investments |
2 | 2 | 38 | 372 | 133 | |||||||||||||||
| Distributions from investments |
9 | 11 | 7 | 11 | 9 | |||||||||||||||
| Contributions to investments and other |
(2 | ) | (50 | ) | (2 | ) | (8 | ) | (2 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net cash from investing activities |
(1,020 | ) | (970 | ) | (1,024 | ) | (597 | ) | (802 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash flows from financing activities: |
||||||||||||||||||||
| Repayments of long-term debt |
— | — | (485 | ) | — | — | ||||||||||||||
| Repurchases of common stock |
(69 | ) | (250 | ) | (250 | ) | (249 | ) | (301 | ) | ||||||||||
| Dividends paid on common stock |
(155 | ) | (149 | ) | (151 | ) | (156 | ) | (163 | ) | ||||||||||
| Contributions from noncontrolling interests |
— | — | — | — | 14 | |||||||||||||||
| Distributions to noncontrolling interests |
— | — | — | (14 | ) | (9 | ) | |||||||||||||
| Acquisition of noncontrolling interests |
— | — | (260 | ) | — | — | ||||||||||||||
| Repayment of finance leases |
(3 | ) | (8 | ) | — | — | (274 | ) | ||||||||||||
| Shares exchanged for tax withholdings and other |
(27 | ) | — | (1 | ) | (5 | ) | (19 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net cash from financing activities |
(254 | ) | (407 | ) | (1,147 | ) | (424 | ) | (752 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Effect of exchange rate changes on cash |
— | (1 | ) | — | 1 | — | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net change in cash, cash equivalents and restricted cash |
381 | 156 | (481 | ) | 525 | 388 | ||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period |
1,434 | 1,278 | 1,759 | 1,234 | 846 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cash, cash equivalents and restricted cash at end of period |
$ | 1,815 | $ | 1,434 | $ | 1,278 | $ | 1,759 | $ | 1,234 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Reconciliation of cash, cash equivalents and restricted cash: |
||||||||||||||||||||
| Cash and cash equivalents |
$ | 1,763 | $ | 1,384 | $ | 1,229 | $ | 1,713 | $ | 1,198 | ||||||||||
| Restricted cash |
52 | 50 | 49 | 46 | 36 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total cash, cash equivalents and restricted cash |
$ | 1,815 | $ | 1,434 | $ | 1,278 | $ | 1,759 | $ | 1,234 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
5
PRODUCTION
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Oil (MBbls/d) |
||||||||||||||||||||
| Delaware Basin |
225 | 234 | 223 | 228 | 216 | |||||||||||||||
| Rockies |
103 | 102 | 111 | 104 | 112 | |||||||||||||||
| Eagle Ford |
43 | 39 | 41 | 39 | 45 | |||||||||||||||
| Anadarko Basin |
12 | 12 | 12 | 13 | 11 | |||||||||||||||
| Other |
4 | 3 | 3 | 3 | 4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
387 | 390 | 390 | 387 | 388 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Natural gas liquids (MBbls/d) |
||||||||||||||||||||
| Delaware Basin |
137 | 146 | 134 | 133 | 118 | |||||||||||||||
| Rockies |
46 | 51 | 53 | 47 | 44 | |||||||||||||||
| Eagle Ford |
11 | 10 | 11 | 11 | 15 | |||||||||||||||
| Anadarko Basin |
24 | 24 | 30 | 31 | 26 | |||||||||||||||
| Other |
— | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
218 | 231 | 228 | 222 | 203 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gas (MMcf/d) |
||||||||||||||||||||
| Delaware Basin |
831 | 848 | 834 | 823 | 744 | |||||||||||||||
| Rockies |
230 | 234 | 245 | 228 | 233 | |||||||||||||||
| Eagle Ford |
76 | 56 | 70 | 62 | 117 | |||||||||||||||
| Anadarko Basin |
235 | 246 | 261 | 274 | 252 | |||||||||||||||
| Other |
1 | 1 | — | 1 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
1,373 | 1,385 | 1,410 | 1,388 | 1,346 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total oil equivalent (MBoe/d) |
||||||||||||||||||||
| Delaware Basin |
501 | 521 | 496 | 498 | 458 | |||||||||||||||
| Rockies |
187 | 192 | 205 | 189 | 195 | |||||||||||||||
| Eagle Ford |
66 | 57 | 63 | 60 | 79 | |||||||||||||||
| Anadarko Basin |
75 | 77 | 85 | 90 | 79 | |||||||||||||||
| Other |
4 | 4 | 4 | 4 | 4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
833 | 851 | 853 | 841 | 815 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
6
CAPITAL EXPENDITURES
| (in millions) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Delaware Basin |
$ | 451 | $ | 454 | $ | 465 | $ | 482 | $ | 502 | ||||||||||
| Rockies |
218 | 231 | 191 | 228 | 216 | |||||||||||||||
| Eagle Ford |
120 | 137 | 141 | 122 | 156 | |||||||||||||||
| Anadarko Basin |
38 | 32 | 25 | 45 | 47 | |||||||||||||||
| Other |
1 | 2 | 1 | 2 | 2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total upstream capital |
$ | 828 | $ | 856 | $ | 823 | $ | 879 | $ | 923 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Midstream and Corporate |
20 | 27 | 36 | 53 | 41 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Capital expenditures |
$ | 848 | $ | 883 | $ | 859 | $ | 932 | $ | 964 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Acquisitions |
151 | 141 | 197 | 16 | 8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total capital |
$ | 999 | $ | 1,024 | $ | 1,056 | $ | 948 | $ | 972 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
SUPPLEMENTAL INFORMATION FOR CAPITAL EXPENDITURES
| GROSS OPERATED SPUDS
|
||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Delaware Basin |
57 | 48 | 60 | 57 | 73 | |||||||||||||||
| Rockies |
27 | 26 | 21 | 23 | 24 | |||||||||||||||
| Eagle Ford |
12 | 18 | 24 | 22 | 30 | |||||||||||||||
| Anadarko Basin |
7 | 8 | 10 | 11 | 5 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
103 | 100 | 115 | 113 | 132 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| GROSS OPERATED WELLS TIED-IN
|
||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Delaware Basin |
53 | 45 | 61 | 57 | 79 | |||||||||||||||
| Rockies |
33 | 17 | 22 | 30 | 16 | |||||||||||||||
| Eagle Ford |
24 | 23 | 10 | 10 | 35 | |||||||||||||||
| Anadarko Basin |
— | 10 | 9 | 13 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
110 | 95 | 102 | 110 | 136 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| NET OPERATED WELLS TIED-IN
|
||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Delaware Basin |
49 | 35 | 40 | 46 | 54 | |||||||||||||||
| Rockies |
27 | 14 | 18 | 27 | 13 | |||||||||||||||
| Eagle Ford |
23 | 19 | 10 | 7 | 26 | |||||||||||||||
| Anadarko Basin |
— | 4 | 5 | 5 | 2 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
99 | 72 | 73 | 85 | 95 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| AVERAGE LATERAL LENGTH
|
||||||||||||||||||||
| (based on wells tied-in) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Delaware Basin |
11,000’ | 11,800’ | 11,100’ | 10,500’ | 10,300’ | |||||||||||||||
| Rockies |
12,500’ | 11,600’ | 13,000’ | 12,300’ | 12,200’ | |||||||||||||||
| Eagle Ford |
7,000’ | 5,900’ | 7,200’ | 8,200’ | 7,800’ | |||||||||||||||
| Anadarko Basin |
— | 10,100’ | 10,000’ | 10,000’ | 12,500’ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
10,500’ | 10,200’ | 10,300’ | 10,300’ | 10,700’ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
7
REALIZED PRICING
| BENCHMARK PRICES
|
||||||||||||||||||||
| (average prices) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Oil ($/Bbl) - West Texas Intermediate (Cushing) |
$ | 72.10 | $ | 59.09 | $ | 64.92 | $ | 63.95 | $ | 71.50 | ||||||||||
| Natural Gas ($/Mcf) - Henry Hub |
$ | 5.05 | $ | 3.55 | $ | 3.07 | $ | 3.44 | $ | 3.65 | ||||||||||
| NGL ($/Bbl) - Mont Belvieu Blended |
$ | 24.86 | $ | 23.67 | $ | 24.25 | $ | 25.58 | $ | 29.65 | ||||||||||
|
REALIZED PRICES
|
||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Oil (Per Bbl) |
||||||||||||||||||||
| Delaware Basin |
$ | 70.89 | $ | 57.94 | $ | 63.89 | $ | 62.60 | $ | 70.28 | ||||||||||
| Rockies |
67.14 | 54.99 | 61.14 | 59.05 | 66.40 | |||||||||||||||
| Eagle Ford |
68.98 | 58.18 | 64.87 | 63.14 | 69.85 | |||||||||||||||
| Anadarko Basin |
70.24 | 57.46 | 63.68 | 62.09 | 71.15 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price without hedges |
69.66 | 57.19 | 63.21 | 61.70 | 69.13 | |||||||||||||||
| Cash settlements |
(1.72 | ) | 2.47 | 0.78 | 1.27 | 0.02 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price, including cash settlements |
$ | 67.94 | $ | 59.66 | $ | 63.99 | $ | 62.97 | $ | 69.15 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Natural gas liquids (Per Bbl) |
||||||||||||||||||||
| Delaware Basin |
$ | 19.60 | $ | 18.42 | $ | 18.25 | $ | 19.10 | $ | 22.76 | ||||||||||
| Rockies |
7.83 | 9.02 | 10.26 | 9.27 | 14.72 | |||||||||||||||
| Eagle Ford |
24.54 | 22.28 | 22.85 | 23.03 | 28.65 | |||||||||||||||
| Anadarko Basin |
23.23 | 21.50 | 20.94 | 22.41 | 26.91 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price without hedges |
17.80 | 16.86 | 17.01 | 17.71 | 22.03 | |||||||||||||||
| Cash settlements |
— | 0.23 | 0.17 | 0.11 | (0.10 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price, including cash settlements |
$ | 17.80 | $ | 17.09 | $ | 17.18 | $ | 17.82 | $ | 21.93 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gas (Per Mcf) |
||||||||||||||||||||
| Delaware Basin |
$ | 0.73 | $ | 0.96 | $ | 1.50 | $ | 1.34 | $ | 2.47 | ||||||||||
| Rockies |
1.80 | 0.33 | (0.42 | ) | (0.50 | ) | 1.48 | |||||||||||||
| Eagle Ford |
4.01 | 3.14 | 2.78 | 3.01 | 3.36 | |||||||||||||||
| Anadarko Basin |
4.03 | 3.13 | 2.57 | 2.86 | 3.42 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price without hedges |
1.66 | 1.33 | 1.43 | 1.41 | 2.55 | |||||||||||||||
| Cash settlements |
0.02 | 0.25 | 0.15 | 0.15 | (0.07 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price, including cash settlements |
$ | 1.68 | $ | 1.58 | $ | 1.58 | $ | 1.56 | $ | 2.48 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total oil equivalent (Per Boe) |
||||||||||||||||||||
| Delaware Basin |
$ | 38.44 | $ | 32.72 | $ | 36.18 | $ | 35.92 | $ | 43.00 | ||||||||||
| Rockies |
41.18 | 32.04 | 35.33 | 34.29 | 43.29 | |||||||||||||||
| Eagle Ford |
53.11 | 45.82 | 48.85 | 48.32 | 49.75 | |||||||||||||||
| Anadarko Basin |
31.29 | 25.62 | 23.97 | 25.28 | 29.96 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price without hedges |
39.70 | 32.92 | 35.82 | 35.43 | 42.58 | |||||||||||||||
| Cash settlements |
(0.76 | ) | 1.60 | 0.64 | 0.87 | (0.13 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Realized price, including cash settlements |
$ | 38.94 | $ | 34.52 | $ | 36.46 | $ | 36.30 | $ | 42.45 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
8
ASSET MARGINS
| BENCHMARK PRICES
|
||||||||||||||||||||
| (average prices) | 2026 | 2025 | ||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Oil ($/Bbl) - West Texas Intermediate (Cushing) |
$ | 72.10 | $ | 59.09 | $ | 64.92 | $ | 63.95 | $ | 71.50 | ||||||||||
| Natural Gas ($/Mcf) - Henry Hub |
$ | 5.05 | $ | 3.55 | $ | 3.07 | $ | 3.44 | $ | 3.65 | ||||||||||
| NGL ($/Bbl) - Mont Belvieu Blended |
$ | 24.86 | $ | 23.67 | $ | 24.25 | $ | 25.58 | $ | 29.65 | ||||||||||
|
PER-UNIT CASH MARGIN BY ASSET (per Boe)
|
||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Delaware Basin |
||||||||||||||||||||
| Realized price |
$ | 38.44 | $ | 32.72 | $ | 36.18 | $ | 35.92 | $ | 43.00 | ||||||||||
| Lease operating expenses |
(5.19 | ) | (5.11 | ) | (5.38 | ) | (5.54 | ) | (5.74 | ) | ||||||||||
| Gathering, processing & transportation |
(2.57 | ) | (2.57 | ) | (2.94 | ) | (3.17 | ) | (3.00 | ) | ||||||||||
| Production & property taxes |
(2.91 | ) | (2.44 | ) | (2.52 | ) | (2.63 | ) | (3.13 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Field-level cash margin |
$ | 27.77 | $ | 22.60 | $ | 25.34 | $ | 24.58 | $ | 31.13 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Rockies |
||||||||||||||||||||
| Realized price |
$ | 41.18 | $ | 32.04 | $ | 35.33 | $ | 34.29 | $ | 43.29 | ||||||||||
| Lease operating expenses |
(10.02 | ) | (9.05 | ) | (8.27 | ) | (9.13 | ) | (9.31 | ) | ||||||||||
| Gathering, processing & transportation |
(1.04 | ) | (1.03 | ) | (0.99 | ) | (0.86 | ) | (1.14 | ) | ||||||||||
| Production & property taxes |
(3.32 | ) | (2.64 | ) | (3.04 | ) | (2.85 | ) | (3.83 | ) | ||||||||||
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| Field-level cash margin |
$ | 26.80 | $ | 19.32 | $ | 23.03 | $ | 21.45 | $ | 29.01 | ||||||||||
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| Eagle Ford |
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| Realized price |
$ | 53.11 | $ | 45.82 | $ | 48.85 | $ | 48.32 | $ | 49.75 | ||||||||||
| Lease operating expenses |
(7.98 | ) | (7.90 | ) | (7.83 | ) | (7.52 | ) | (6.65 | ) | ||||||||||
| Gathering, processing & transportation |
(2.14 | ) | (1.98 | ) | (2.27 | ) | (1.94 | ) | (2.47 | ) | ||||||||||
| Production & property taxes |
(2.81 | ) | (2.43 | ) | (2.89 | ) | (3.02 | ) | (2.65 | ) | ||||||||||
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| Field-level cash margin |
$ | 40.18 | $ | 33.51 | $ | 35.86 | $ | 35.84 | $ | 37.98 | ||||||||||
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| Anadarko Basin |
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| Realized price |
$ | 31.29 | $ | 25.62 | $ | 23.97 | $ | 25.28 | $ | 29.96 | ||||||||||
| Lease operating expenses |
(3.76 | ) | (3.19 | ) | (3.25 | ) | (2.98 | ) | (3.20 | ) | ||||||||||
| Gathering, processing & transportation |
(6.64 | ) | (6.19 | ) | (5.98 | ) | (6.13 | ) | (6.01 | ) | ||||||||||
| Production & property taxes |
(1.71 | ) | (1.22 | ) | (1.30 | ) | (1.32 | ) | (1.62 | ) | ||||||||||
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| Field-level cash margin |
$ | 19.18 | $ | 15.02 | $ | 13.44 | $ | 14.85 | $ | 19.13 | ||||||||||
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| Devon - Total |
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| Realized price |
$ | 39.70 | $ | 32.92 | $ | 35.82 | $ | 35.43 | $ | 42.58 | ||||||||||
| Lease operating expenses |
(6.48 | ) | (6.11 | ) | (6.14 | ) | (6.31 | ) | (6.53 | ) | ||||||||||
| Gathering, processing & transportation |
(2.54 | ) | (2.49 | ) | (2.71 | ) | (2.86 | ) | (2.78 | ) | ||||||||||
| Production & property taxes |
(2.90 | ) | (2.39 | ) | (2.56 | ) | (2.58 | ) | (3.11 | ) | ||||||||||
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| Field-level cash margin |
$ | 27.78 | $ | 21.93 | $ | 24.41 | $ | 23.68 | $ | 30.16 | ||||||||||
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9
NON-GAAP MEASURES
(all monetary values in millions, except per share amounts)
Devon’s earnings materials include non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in the earnings materials, including reconciliations to their most directly comparable GAAP measure.
The earnings materials may include forward-looking non-GAAP measures. The company is unable to provide reconciliations of these forward-looking non-GAAP measures, because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, the timing of changes in capital accruals, unknown future events and estimating certain future GAAP measures. The inability to reliably quantify certain components of the calculation would significantly affect the usefulness and accuracy of a reconciliation.
CORE EARNINGS
Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on first-quarter 2026 and fourth-quarter 2025 earnings.
| Quarter Ended March 31, 2026 | ||||||||||||||||
| Before-tax | After-tax | After NCI | Per Diluted Share |
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| Total |
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| Earnings (GAAP) |
$ | 166 | $ | 120 | $ | 120 | $ | 0.19 | ||||||||
| Adjustments: |
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| Asset dispositions |
1 | 1 | 1 | — | ||||||||||||
| Asset and exploration impairments |
2 | 2 | 2 | 0.01 | ||||||||||||
| Fair value changes in financial instruments |
644 | 499 | 499 | 0.81 | ||||||||||||
| Restructuring and transaction costs |
19 | 19 | 19 | 0.03 | ||||||||||||
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| Core earnings (Non-GAAP) |
$ | 832 | $ | 641 | $ | 641 | $ | 1.04 | ||||||||
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| Quarter Ended December 31, 2025 | ||||||||||||||||
| Before-tax | After-tax | After NCI | Per Diluted Share |
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| Total |
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| Earnings (GAAP) |
$ | 747 | $ | 562 | $ | 562 | $ | 0.90 | ||||||||
| Adjustments: |
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| Asset dispositions |
(1 | ) | — | — | — | |||||||||||
| Asset and exploration impairments |
1 | 1 | 1 | — | ||||||||||||
| Change in tax legislation |
— | (6 | ) | (6 | ) | (0.01 | ) | |||||||||
| Fair value changes in financial instruments |
(59 | ) | (47 | ) | (47 | ) | (0.07 | ) | ||||||||
| Restructuring and transaction costs |
— | — | — | — | ||||||||||||
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| Core earnings (Non-GAAP) |
$ | 688 | $ | 510 | $ | 510 | $ | 0.82 | ||||||||
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10
EBITDAX
Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings before financing costs, net; income tax expense; exploration expenses; depreciation, depletion and amortization; 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 normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies.
| Q1 ‘26 | Q4 ‘25 | Q3 ‘25 | Q2 ‘25 | TTM | Q1 ‘25 | |||||||||||||||||||
| Net earnings (GAAP) |
$ | 120 | $ | 562 | $ | 693 | $ | 917 | $ | 2,292 | $ | 509 | ||||||||||||
| Financing costs, net |
109 | 107 | 109 | 116 | 441 | 123 | ||||||||||||||||||
| Income tax expense |
46 | 185 | 219 | 244 | 694 | 137 | ||||||||||||||||||
| Exploration expenses |
25 | 5 | 8 | 20 | 58 | 10 | ||||||||||||||||||
| Depreciation, depletion and amortization |
904 | 890 | 879 | 914 | 3,587 | 912 | ||||||||||||||||||
| Asset impairments |
— | — | — | — | — | 254 | ||||||||||||||||||
| Asset dispositions |
1 | (1 | ) | (37 | ) | (307 | ) | (344 | ) | 2 | ||||||||||||||
| Share-based compensation |
22 | 22 | 21 | 22 | 87 | 24 | ||||||||||||||||||
| Derivative & financial instrument non-cash val. changes |
644 | (59 | ) | (30 | ) | (169 | ) | 386 | 88 | |||||||||||||||
| Restructuring and transaction costs |
19 | — | 9 | 9 | 37 | 18 | ||||||||||||||||||
| Accretion on discounted liabilities and other |
17 | (12 | ) | (11 | ) | 2 | (4 | ) | 9 | |||||||||||||||
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| EBITDAX (Non-GAAP) |
$ | 1,907 | $ | 1,699 | $ | 1,860 | $ | 1,768 | $ | 7,234 | $ | 2,086 | ||||||||||||
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11
NET DEBT
Devon defines net debt as debt (includes short-term and long-term debt) less cash, cash equivalents and restricted cash. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Total debt (GAAP) |
$ | 8,386 | $ | 8,389 | $ | 8,391 | $ | 8,878 | $ | 8,880 | ||||||||||
| Less: |
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| Cash, cash equivalents and restricted cash |
(1,815 | ) | (1,434 | ) | (1,278 | ) | (1,759 | ) | (1,234 | ) | ||||||||||
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| Net debt (Non-GAAP) |
$ | 6,571 | $ | 6,955 | $ | 7,113 | $ | 7,119 | $ | 7,646 | ||||||||||
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NET DEBT-TO-EBITDAX
Devon defines net debt-to-EBITDAX as net debt divided by an annualized EBITDAX measure. Devon believes this ratio provides information useful to investors in assessing the company’s credit position and debt leverage.
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Net debt (Non-GAAP) |
$ | 6,571 | $ | 6,955 | $ | 7,113 | $ | 7,119 | $ | 7,646 | ||||||||||
| EBITDAX (Non-GAAP) (1) |
$ | 7,234 | $ | 7,413 | $ | 7,845 | $ | 7,838 | $ | 8,034 | ||||||||||
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| Net debt-to-EBITDAX (Non-GAAP) |
0.9 | 0.9 | 0.9 | 0.9 | 1.0 | |||||||||||||||
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| (1) | EBITDAX is an annualized measure using a trailing twelve-month calculation. |
FREE CASH FLOW
Devon defines free cash flow as total operating cash flow less capital expenditures. Devon believes free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Total operating cash flow (GAAP) |
$ | 1,655 | $ | 1,534 | $ | 1,690 | $ | 1,545 | $ | 1,942 | ||||||||||
| Less capital expenditures (Excluding acquisitions): |
(839 | ) | (832 | ) | (870 | ) | (956 | ) | (934 | ) | ||||||||||
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| Free cash flow (Non-GAAP) |
$ | 816 | $ | 702 | $ | 820 | $ | 589 | $ | 1,008 | ||||||||||
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REINVESTMENT RATE
Devon defines reinvestment rate as accrued capital expenditures divided by operating cash flow. Devon believes this measure provides useful information to our investors as an indicator of the capital demands of our business relative to the cash flow generated from normal business operations.
| 2026 | 2025 | |||||||||||||||||||
| Quarter 1 | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | ||||||||||||||||
| Capital expenditures (Accrued) |
$ | 999 | $ | 1,024 | $ | 1,056 | $ | 948 | $ | 972 | ||||||||||
| Operating cash flow |
$ | 1,655 | $ | 1,534 | $ | 1,690 | $ | 1,545 | $ | 1,942 | ||||||||||
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| Reinvestment rate (Non-GAAP) |
60 | % | 67 | % | 63 | % | 61 | % | 50 | % | ||||||||||
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12
| SECOND-QUARTER 2026 GUIDANCE |
|
Note: Devon’s second-quarter 2026 guidance reflects standalone Devon operations. Full-year guidance for the combined entity will be provided in mid-June 2026.
PRODUCTION GUIDANCE
| Quarter 2 | ||||||||
| Low | High | |||||||
| Oil (MBbls/d) |
389 | 395 | ||||||
| Natural gas liquids (MBbls/d) |
230 | 235 | ||||||
| Gas (MMcf/d) |
1,390 | 1,430 | ||||||
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| Total oil equivalent (MBoe/d) |
851 | 868 | ||||||
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CAPITAL EXPENDITURES GUIDANCE
| Quarter 2 | ||||||||
| (in millions) | Low | High | ||||||
| Upstream capital |
$ | 860 | $ | 900 | ||||
| Midstream and other capital |
15 | 25 | ||||||
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| Total capital |
$ | 875 | $ | 925 | ||||
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PRICE REALIZATIONS GUIDANCE
| Quarter 2 | ||||||||
| Low | High | |||||||
| Oil - % of WTI |
95 | % | 99 | % | ||||
| NGL - % of WTI |
20 | % | 24 | % | ||||
| Natural gas - % of Henry Hub |
10 | % | 30 | % | ||||
OTHER GUIDANCE ITEMS
| Quarter 2 | ||||||||
| ($ millions, except Boe and %) | Low | High | ||||||
| Marketing and midstream operating profit |
$ | (20 | ) | $ | (10 | ) | ||
| LOE and GP&T per BOE |
$ | 8.30 | $ | 8.70 | ||||
| Production and property taxes as % of upstream sales |
7.0 | % | 7.5 | % | ||||
| Exploration expenses |
$ | — | $ | 10 | ||||
| Depreciation, depletion and amortization |
$ | 940 | $ | 990 | ||||
| General and administrative expenses |
$ | 115 | $ | 130 | ||||
| Financing costs, net |
$ | 90 | $ | 100 | ||||
| Other expenses |
$ | — | $ | 10 | ||||
INCOME TAX GUIDANCE
| Quarter 2 | ||||||||
| (% of pre-tax earnings) | Low | High | ||||||
| Current income tax rate (1) |
15 | % | 17 | % | ||||
| Deferred income tax rate |
5 | % | 7 | % | ||||
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| Total income tax rate |
~22% | |||||||
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| (1) | Devon recognized a one-time current tax benefit of approximately $218 million in Q1 2026 related to new tax guidance under the One Big Beautiful Bill Act. With that benefit pulled into Q1 and higher oil pricing, Q2’s 2026 current tax rate reflects a normalized go-forward run-rate. |
1
| 2026 & 2027 HEDGING POSITIONS |
|
Oil Commodity Hedges
| Three Way Collars | ||||||||||||||
| Period |
Volume (Bbls/d) | Weighted Average Floor Sold Price ($/Bbl) |
Weighted Average Floor Purchased Price ($/Bbl) |
Weighted Average Ceiling Price ($/Bbl) |
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| Q2 2026 |
100,000 | $ | 49.86 | $ | 60.11 | $ | 72.07 | |||||||
| Q3-Q4 2026 |
113,000 | $ | 49.36 | $ | 59.36 | $ | 70.85 | |||||||
| Q1-Q4 2027 |
37,397 | $ | 45.78 | $ | 55.78 | $ | 71.89 | |||||||
Oil Basis Swaps
| Period |
Index | Volume (Bbls/d) | Weighted Average Differential to WTI ($/Bbl) |
|||||
| Q2-Q4 2026 |
Midland Sweet | 46,000 | $ | 1.10 | ||||
| Q2 2026 |
WTI/Brent | 9,890 | $ | (5.54 | ) | |||
| Q3-Q4 2026 |
WTI/Brent | 8,000 | $ | (5.66 | ) | |||
| Q2 2026 |
NYMEX Roll | 76,044 | $ | 0.22 | ||||
| Q3-Q4 2026 |
NYMEX Roll | 91,000 | $ | 1.66 | ||||
| Q1-Q4 2027 |
Midland Sweet | 46,000 | $ | 1.00 | ||||
| Q1-Q4 2027 |
Magellan East Houston | 20,000 | $ | 1.77 | ||||
Natural Gas Commodity Hedges - Henry Hub
| Price Swaps | Price Collars | |||||||||||||||||
| Period |
Volume (MMBtu/d) | Weighted Average Price ($/MMBtu) |
Volume (MMBtu/d) |
Weighted Average Floor Price ($/MMBtu) |
Weighted Average Ceiling Price ($/MMBtu) |
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| Q2 2026-Q4 2026 |
247,500 | $ | 3.80 | 230,000 | $ | 3.26 | $ | 4.90 | ||||||||||
| Q1 2027-Q4 2027 |
— | $ | — | 90,000 | $ | 3.50 | $ | 4.31 | ||||||||||
Natural Gas Basis Swaps
| Period |
Index | Volume (MMBtu/d) | Weighted Average Differential to Henry Hub ($/MMBtu) |
|||||
| Q2–Q4 2026 |
Houston Ship Channel | 50,000 | $ | (0.29 | ) | |||
| Q2–Q4 2026 |
WAHA | 150,000 | $ | (1.79 | ) | |||
Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index. Devon’s NGL derivatives settle against the average of the prompt month OPIS Mont Belvieu, Texas index. Commodity hedge positions are shown as of March 31, 2026.
2