8-K
Devon Energy Corp/De (DVN)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 18, 2025
Devon Energy Corporation
(Exact name of registrant as specified in its charter)
| DELAWARE | 001-32318 | 73-1567067 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Identification No.) |
| 333 W. SHERIDAN AVE.,<br> <br>OKLAHOMA CITY, OKLAHOMA | 73102-5015 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (405) 235-3611
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br> <br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock, par value $0.10 per share | DVN | The New York Stock Exchange |
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 February 18, 2025, Devon Energy Corporation (the “Company”) announced its financial and operational results for the year and quarter ended December 31, 2024. 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<br> <br>No. | Description of Exhibits |
|---|---|
| 99.1 | Earnings release, dated February 18, 2025. |
| 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: February 18, 2025
EX-99.1
Exhibit 99.1
| Devon Energy Corporation<br> <br>333 West Sheridan<br>Avenue |
|---|
| Oklahoma City, OK 73102-5015 |
Devon Energy Reports Fourth-Quarter Results
Declares and Raises Quarterly Fixed Dividend
HIGHLIGHTS
FOURTH-QUARTER 2024
| • | Delivered $639 million of net earnings, or $0.98 per share; $756 million of core earnings, or $1.16 per<br>share |
|---|---|
| • | Achieved record production of 398,000 barrels of oil per day, exceeding guidance by 3 percent<br> |
| --- | --- |
| • | Generated $1.7 billion of operating cash flow and $738 million of free cash flow |
| --- | --- |
| • | Returned $444 million to shareholders through the fixed dividend and share repurchases<br> |
| --- | --- |
| • | Strengthened the balance sheet by increasing cash balance to $846 million |
| --- | --- |
FULL-YEAR 2024
| • | Delivered $2.9 billion of net earnings, or $4.56 per share; $3.1 billion of core earnings, or $4.82 per<br>share |
|---|---|
| • | Record performance of 737,000 barrels of oil equivalent production (Boe) per day |
| --- | --- |
| • | Generated $6.6 billion of operating cash flow and $3.0 billion of free cash flow |
| --- | --- |
| • | Returned $2.0 billion to shareholders through dividends and share repurchases |
| --- | --- |
| • | Exceeded environmental and safety targets, reducing emissions, spills and serious incidents<br> |
| --- | --- |
| • | Increased operating scale and economic drilling inventory with the acquisition of Grayson Mill<br> |
| --- | --- |
| • | Board approved a 9 percent increase to the quarterly fixed dividend in 2025 to $0.24 per share<br> |
| --- | --- |
2025 OUTLOOK
| • | 2025 capital program expected to be $3.8 to $4.0 billion, with more than 50 percent allocated to the<br>Delaware Basin |
|---|---|
| • | 2025 production anticipated to be 805,000 to 825,000 Boe per day, including 380,000 to 386,000 barrels of oil per<br>day |
| --- | --- |
| • | Reached agreement with BPX to dissolve partnership in the Eagle Ford |
| --- | --- |
| • | Extended joint venture with Dow to develop an additional 49 wells in the Anadarko Basin |
| --- | --- |
OKLAHOMA CITY – Feb. 18, 2025 – Devon Energy Corp. (NYSE: DVN) today reports fourth-quarter results, as well as declares and raises the quarterly fixed dividend. Supplemental financial tables and forward-looking guidance are available on the company’s website at www.devonenergy.com.
“I am proud to report that Devon ended 2024 with exceptionally strong results,” said Rick Muncrief, president and CEO. “Our operational performance was outstanding, underpinning robust financial outcomes and generating significant free cash flow. This success is a testament to the dedication and hard work of our entire team.
“During the fourth quarter, our diversified, multi-basin portfolio once again delivered across our assets, with the Rockies and Eagle Ford exceeding estimates due to strong new well productivity and solid base performance. In addition, the company achieved a 154 percent proved reserve replacement ratio in 2024.
“We continue to see tremendous value in our company and leaned-in on our share repurchases this quarter, buying approximately $300 million for a total $1.1 billion repurchased for the year. In addition, the Board approved a 9 percent increase to the fixed dividend beginning with the first quarter of 2025, reflecting confidence in the energy outlook and Devon’s future free cash flows.
“Looking ahead, we’re excited for the next chapter of the company under Clay’s leadership. I have complete confidence in him and the new management team and look forward to the opportunities they create for shareholders, employees, and all stakeholders by remaining true to our values and focused on Devon’s strategic priorities.” Muncrief concluded.
1
FINANCIAL RESULTS
Devon reported net earnings of $639 million, or $0.98 per diluted share, in the fourth quarter of 2024. Adjusting for items analysts typically exclude from estimates, the company’s core earnings were $756 million, or $1.16 per diluted share.
Operating cash flow was $1.7 billion in the fourth quarter, which fully funded the company’s capital requirements and resulted in $738 million of free cash flow for the quarter.
During the quarter, Devon’s investment-grade financial position strengthened with cash balances increasing by $170 million to a total of $846 million. The company ended the year with outstanding debt of $8.9 billion and a net debt-to-EBITDAX ratio of 1.0 times.
RETURN OF CAPITAL
Devon is committed to rewarding its shareholders by returning capital through the quarterly fixed dividend and share repurchases. During the fourth quarter the company paid $143 million in dividends and repurchased 7.7 million of its shares for $301 million. Since the inception of the share repurchase program, the company has repurchased 69.0 million shares, at a total cost of $3.3 billion.
Consistent with Devon’s strategic priority of delivering value to shareholders through a sustainable, annually growing fixed dividend, the Board of Directors raised the quarterly fixed dividend rate by 9 percent to $0.24 per share for the first quarter of 2025. The dividend is payable on Mar. 31, 2025, to shareholders of record at the close of business on Mar. 14, 2025.
OPERATING RESULTS
Devon’s capital activity in the fourth quarter averaged 24 operated drilling rigs and 6 completion crews across its asset portfolio. This level of activity resulted in 128 gross operated wells being placed online, with an average lateral length of 9,900 feet. Upstream capital spending in the fourth quarter was $872 million, 3 percent below guidance expectations. Midstream, carbon and corporate capital totaled $54 million in the quarter. The company also executed $116 million in multiple leasehold acquisitions across its portfolio, including in the Delaware, Williston and Anadarko Basins.
Devon’s oil production in the fourth quarter reached a record 398,000 barrels per day, exceeding guidance by 3 percent. Total companywide production averaged 848,000 oil-equivalent barrels (Boe) per day in the fourth quarter. This represents a 16 percent increase in production compared to the previous quarter. Production in the quarter benefited from the closing on the company’s Grayson Mill acquisition in late September, which contributed 117,000 Boe per day and 63,000 barrels of oil per day to the quarterly average.
Devon’s remaining production outperformance was primarily driven by its Eagle Ford asset, which reached 92,000 Boe per day. This production result represents a growth rate of 23 percent quarter-over-quarter, driven by 23 gross operated wells being placed online during the quarter. The outperformance was driven by strong well productivity and base production that exceeded expectations.
For the fourth quarter, Devon’s oil, gas and NGL sales totaled $3.1 billion, a 16 percent increase in revenues compared to the prior quarter. The improvement was primarily due to the increased oil production quarter over quarter, as well as from higher natural gas liquids (NGL) and natural gas pricing. The company’s realized price during the period, including commodity hedges, was $40.32 per Boe, down $0.39 per Boe from prior quarter. The decreased price realization largely reflected lower crude benchmark prices, partially offset by higher NGL and natural gas prices.
Production costs, including taxes, averaged $11.30 per Boe in the fourth quarter, a decline of 1 percent from the prior period. The largest component of production costs is lease operating expense and gathering, processing and transportation costs, which totaled $8.44 per Boe in the quarter. Effective cost management efforts and lower well workovers drove per-unit rates 10 percent below guidance expectations for the quarter.
Financing cost, net totaled $123 million in the quarter, a $35 million increase from the prior quarter. The higher expense is primarily related to the debt issued in the prior quarter related to the Grayson Mill acquisition.
Devon exited the year with estimated proved reserves of 2.2 billion Boe. Proved undeveloped reserves accounted for 20 percent of the total. Extensions and discoveries and performance revisions from the company’s drilling program added 415 million Boe of reserves in 2024, equating to a replacement rate of 154 percent of production. The capital costs (excluding property acquisition costs) to deliver these additions totaled $3.5 billion, resulting in a finding and development cost of $8.54 per Boe.
2
EAGLE FORD POSITION UPDATE
On Jan. 31, 2025, Devon and BPX, its partner in the Blackhawk Field in the Eagle Ford, agreed to dissolve the partnership within the play. The transaction is expected to close on Apr. 1, 2025, at which time Devon will hold approximately 46,000 net acres with greater than a 95 percent working interest and operatorship. The company will gain greater flexibility to allocate capital and anticipates material drilling & completion savings per well, significantly enhancing returns.
DOW JV EXTENSION
On Jan. 22, 2025, Devon entered into an extension agreement with Dow (NYSE: DOW) to jointly develop a portion of Devon’s Anadarko acreage in central Oklahoma. Under this agreement, Devon will monetize half of its working interest in 49 undrilled locations in exchange for approximately a $40 million drilling carry.
The average working interest is estimated at 70 percent across a mix of drilling locations. Activity in 2025 will start with the development of two drilling units in Blaine County, where drilling operations are expected to commence in the second quarter of 2025. Devon will serve as operator and is responsible for capital allocation and project timing subject to the agreement.
2025 OUTLOOK
For the full-year 2025, Devon expects production to be in the range of 805,000 to 825,000 Boe per day, representing a 2 percent increase from the company’s previous outlook. Oil volumes are expected to be in the range of 380,000 to 386,000 barrels per day. The capital requirements to deliver this production are expected to range from $3.8 billion to $4.0 billion, representing a 5 percent, or $200 million, decline from the company’s previous outlook.
In the first quarter of 2025, Devon expects oil production to average 380,000 to 386,000 barrels per day. Capital spending in the first quarter is expected to approximate $1.0 billion.
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 fourth-quarter conference call will be held at 10:00 a.m. Central (11:00 a.m. Eastern) on Wednesday, Feb. 19, 2025, 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.
| 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 asreported 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 relatedForm 10-K filed with the Securities and Exchange Commission (the “SEC”).
3
FORWARD LOOKING STATEMENTS
This press release includes “forward-looking statements” within the meaning of the federal securities laws. Such statements include thoseconcerning 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 thispress 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 anduncertainties, 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 NGLprices; 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 ourhedging activities; our limited control over third parties who operate some of our oil and gas properties; 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; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands, environmental matters and water disposal; climate changeand risks related to regulatory, social and market efforts to address climate change; risks relating to our ESG 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; the extent to which insurance covers any losses we may experience; risks related to shareholder activism; our abilityto successfully complete mergers, acquisitions and divestitures; our ability to pay dividends and make share repurchases; and any of the other risks and uncertainties discussed in Devon’s 2024 Annual Report on Form 10-K (the “2024 Form 10-K”) or other filings with the SEC.
Theforward-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 anduncertainties identified above as well as those described elsewhere in the 2024 Form 10-K and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-lookingstatements, and readers are urged to carefully review and consider the various disclosures made in the 2024 Form 10-K and in other documents we file from time to time with the SEC. All subsequent written andoral 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 ourforward-looking statements based on new information, future events or otherwise.
4
EX-99.2
Exhibit 99.2
Devon Energy Fourth-Quarter 2024
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, Costs Incurred and Reserves Reconciliation | 7 | |
| Supplemental Information for Capital Expenditures | 8 | |
| Realized Pricing | 9 | |
| Asset Margins | 10 | |
| Core Earnings | 11 | |
| EBITDAX | 12 | |
| Net Debt, Net<br>Debt-to-EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Reinvestment Rate | 13 |
1
CONSOLIDATED STATEMENTS OF EARNINGS
| (in millions, except per share amounts) | 2024 | 2023 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||
| Oil, gas and NGL sales | $ | 11,176 | $ | 3,086 | $ | 2,665 | $ | 2,796 | $ | 2,629 | $ | 2,737 | ||
| Oil, gas and NGL derivatives ^(1)^ | 21 | (84 | ) | 227 | 23 | (145 | ) | 324 | ||||||
| Marketing and midstream revenues | 4,743 | 1,401 | 1,132 | 1,098 | 1,112 | 1,084 | ||||||||
| Total revenues | 15,940 | 4,403 | 4,024 | 3,917 | 3,596 | 4,145 | ||||||||
| Production expenses ^(2)^ | 3,183 | 881 | 763 | 788 | 751 | 759 | ||||||||
| Exploration expenses | 28 | 12 | 4 | 3 | 9 | 4 | ||||||||
| Marketing and midstream expenses | 4,792 | 1,402 | 1,149 | 1,108 | 1,133 | 1,093 | ||||||||
| Depreciation, depletion and amortization | 3,255 | 971 | 794 | 768 | 722 | 650 | ||||||||
| Asset dispositions | 11 | (5 | ) | — | 15 | 1 | 11 | |||||||
| General and administrative expenses | 500 | 155 | 117 | 114 | 114 | 111 | ||||||||
| Financing costs, net ^(3)^ | 363 | 123 | 88 | 76 | 76 | 77 | ||||||||
| Other, net | 96 | 24 | 45 | 5 | 22 | 10 | ||||||||
| Total expenses | 12,228 | 3,563 | 2,960 | 2,877 | 2,828 | 2,715 | ||||||||
| Earnings before income taxes | 3,712 | 840 | 1,064 | 1,040 | 768 | 1,430 | ||||||||
| Income tax expense ^(4)^ | 770 | 187 | 239 | 185 | 159 | 269 | ||||||||
| Net earnings | 2,942 | 653 | 825 | 855 | 609 | 1,161 | ||||||||
| Net earnings attributable to noncontrolling interests | 51 | 14 | 13 | 11 | 13 | 9 | ||||||||
| Net earnings attributable to Devon | $ | 2,891 | $ | 639 | $ | 812 | $ | 844 | $ | 596 | $ | 1,152 | ||
| Net earnings per share: | ||||||||||||||
| Basic net earnings per share | $ | 4.58 | $ | 0.98 | $ | 1.31 | $ | 1.35 | $ | 0.95 | $ | 1.81 | ||
| Diluted net earnings per share | $ | 4.56 | $ | 0.98 | $ | 1.30 | $ | 1.34 | $ | 0.94 | $ | 1.81 | ||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 632 | 650 | 622 | 626 | 629 | 635 | ||||||||
| Diluted | 634 | 651 | 623 | 628 | 632 | 638 |
2
SUPPLEMENTAL INFORMATION FOR CONSOLIDATED STATEMENTS OF EARNINGS
| (1) OIL, GAS AND NGL DERIVATIVES | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in millions) | 2024 | 2023 | ||||||||||||||||
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Derivative cash settlements | $ | 197 | $ | 58 | $ | 61 | $ | 54 | $ | 24 | $ | 8 | ||||||
| Derivative valuation changes | (176 | ) | (142 | ) | 166 | (31 | ) | (169 | ) | 316 | ||||||||
| Oil, gas and NGL derivatives | $ | 21 | $ | (84 | ) | $ | 227 | $ | 23 | $ | (145 | ) | $ | 324 | ||||
| (2) PRODUCTION EXPENSES | ||||||||||||||||||
| (in millions) | 2024 | 2023 | ||||||||||||||||
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Lease operating expense | $ | 1,574 | $ | 445 | $ | 366 | $ | 383 | $ | 380 | $ | 381 | ||||||
| Gathering, processing & transportation | 790 | 213 | 200 | 197 | 180 | 181 | ||||||||||||
| Production taxes | 748 | 206 | 179 | 188 | 175 | 182 | ||||||||||||
| Property taxes | 71 | 17 | 18 | 20 | 16 | 15 | ||||||||||||
| Production expenses | $ | 3,183 | $ | 881 | $ | 763 | $ | 788 | $ | 751 | $ | 759 | ||||||
| (3) FINANCING COSTS, NET | ||||||||||||||||||
| (in millions) | 2024 | 2023 | ||||||||||||||||
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Interest based on outstanding debt | $ | 401 | $ | 128 | $ | 98 | $ | 88 | $ | 87 | $ | 87 | ||||||
| Interest income | (62 | ) | (16 | ) | (19 | ) | (14 | ) | (13 | ) | (12 | ) | ||||||
| Other | 24 | 11 | 9 | 2 | 2 | 2 | ||||||||||||
| Financing costs, net | $ | 363 | $ | 123 | $ | 88 | $ | 76 | $ | 76 | $ | 77 | ||||||
| (4) INCOME TAX EXPENSE | ||||||||||||||||||
| (in millions) | 2024 | 2023 | ||||||||||||||||
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Current expense | $ | 459 | $ | 119 | $ | 75 | $ | 146 | $ | 119 | $ | 105 | ||||||
| Deferred expense | 311 | 68 | 164 | 39 | 40 | 164 | ||||||||||||
| Income tax expense | $ | 770 | $ | 187 | $ | 239 | $ | 185 | $ | 159 | $ | 269 |
3
CONSOLIDATED BALANCE SHEETS
| (in millions) | 2024 | 2023 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||
| Current assets: | |||||||||||||||
| Cash, cash equivalents and restricted cash | $ | 846 | $ | 676 | $ | 1,169 | $ | 1,149 | $ | 875 | |||||
| Accounts receivable | 1,972 | 1,779 | 1,589 | 1,670 | 1,573 | ||||||||||
| Inventory | 294 | 293 | 258 | 234 | 249 | ||||||||||
| Other current assets | 315 | 484 | 343 | 345 | 460 | ||||||||||
| Total current assets | 3,427 | 3,232 | 3,359 | 3,398 | 3,157 | ||||||||||
| Oil and gas property and equipment, based on successful efforts accounting, net | 23,198 | 23,155 | 18,216 | 18,033 | 17,825 | ||||||||||
| Other property and equipment, net | 1,813 | 1,795 | 1,569 | 1,551 | 1,503 | ||||||||||
| Total property and equipment, net | 25,011 | 24,950 | 19,785 | 19,584 | 19,328 | ||||||||||
| Goodwill | 753 | 753 | 753 | 753 | 753 | ||||||||||
| Right-of-use<br>assets | 303 | 317 | 297 | 276 | 267 | ||||||||||
| Investments | 727 | 718 | 704 | 713 | 666 | ||||||||||
| Other long-term assets | 268 | 293 | 264 | 254 | 319 | ||||||||||
| Total assets | $ | 30,489 | $ | 30,263 | $ | 25,162 | $ | 24,978 | $ | 24,490 | |||||
| Current liabilities: | |||||||||||||||
| Accounts payable | $ | 806 | $ | 995 | $ | 754 | $ | 879 | $ | 760 | |||||
| Revenues and royalties payable | 1,432 | 1,423 | 1,363 | 1,268 | 1,222 | ||||||||||
| Short-term debt | 485 | — | 475 | 479 | 483 | ||||||||||
| Other current liabilities | 586 | 488 | 424 | 640 | 484 | ||||||||||
| Total current liabilities | 3,309 | 2,906 | 3,016 | 3,266 | 2,949 | ||||||||||
| Long-term debt | 8,398 | 8,884 | 5,665 | 5,668 | 5,672 | ||||||||||
| Lease liabilities | 320 | 328 | 315 | 301 | 295 | ||||||||||
| Asset retirement obligations | 770 | 765 | 691 | 683 | 643 | ||||||||||
| Other long-term liabilities | 840 | 820 | 829 | 841 | 876 | ||||||||||
| Deferred income taxes | 2,148 | 2,082 | 1,917 | 1,878 | 1,838 | ||||||||||
| Stockholders’ equity: | |||||||||||||||
| Common stock | 65 | 66 | 63 | 63 | 64 | ||||||||||
| Additional paid-in capital | 6,387 | 6,662 | 5,478 | 5,718 | 5,939 | ||||||||||
| Retained earnings | 8,166 | 7,670 | 7,132 | 6,509 | 6,195 | ||||||||||
| Accumulated other comprehensive loss | (122 | ) | (121 | ) | (122 | ) | (123 | ) | (124 | ) | |||||
| Treasury stock | — | — | — | — | (13 | ) | |||||||||
| Total stockholders’ equity attributable to Devon | 14,496 | 14,277 | 12,551 | 12,167 | 12,061 | ||||||||||
| Noncontrolling interests | 208 | 201 | 178 | 174 | 156 | ||||||||||
| Total equity | 14,704 | 14,478 | 12,729 | 12,341 | 12,217 | ||||||||||
| Total liabilities and equity | $ | 30,489 | $ | 30,263 | $ | 25,162 | $ | 24,978 | $ | 24,490 |
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
| (in millions) | 2024 | 2023 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||
| Net earnings | $ | 2,942 | $ | 653 | $ | 825 | $ | 855 | $ | 609 | $ | 1,161 | ||||||
| Adjustments to reconcile net earnings to net cash from operating activities: | ||||||||||||||||||
| Depreciation, depletion and amortization | 3,255 | 971 | 794 | 768 | 722 | 650 | ||||||||||||
| Leasehold impairments | 5 | 3 | 1 | 1 | — | 1 | ||||||||||||
| Accretion of liabilities | 8 | 6 | 2 | — | — | 1 | ||||||||||||
| Total (gains) losses on commodity derivatives | (21 | ) | 84 | (227 | ) | (23 | ) | 145 | (324 | ) | ||||||||
| Cash settlements on commodity derivatives | 197 | 58 | 61 | 54 | 24 | 8 | ||||||||||||
| (Gains) losses on asset dispositions | 11 | (5 | ) | — | 15 | 1 | 11 | |||||||||||
| Deferred income tax expense | 311 | 68 | 164 | 39 | 40 | 164 | ||||||||||||
| Share-based compensation | 99 | 24 | 24 | 27 | 24 | 23 | ||||||||||||
| Other | 10 | 4 | 3 | — | 3 | (3 | ) | |||||||||||
| Changes in assets and liabilities, net | (217 | ) | (202 | ) | 16 | (201 | ) | 170 | 45 | |||||||||
| Net cash from operating activities | 6,600 | 1,664 | 1,663 | 1,535 | 1,738 | 1,737 | ||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||
| Capital expenditures | (3,645 | ) | (926 | ) | (877 | ) | (948 | ) | (894 | ) | (910 | ) | ||||||
| Acquisitions of property and equipment | (3,808 | ) | (116 | ) | (3,602 | ) | (82 | ) | (8 | ) | (10 | ) | ||||||
| Divestitures of property and equipment | 24 | 6 | — | 1 | 17 | 3 | ||||||||||||
| Grayson Mill acquired cash | 147 | — | 147 | — | — | — | ||||||||||||
| Distributions from investments | 68 | 33 | 13 | 11 | 11 | 8 | ||||||||||||
| Contributions to investments and other | (118 | ) | (40 | ) | (30 | ) | (1 | ) | (47 | ) | (1 | ) | ||||||
| Net cash from investing activities | (7,332 | ) | (1,043 | ) | (4,349 | ) | (1,019 | ) | (921 | ) | (910 | ) | ||||||
| Cash flows from financing activities: | ||||||||||||||||||
| Borrowings of long-term debt, net of issuance costs | 3,219 | — | 3,219 | — | — | — | ||||||||||||
| Repayments of long-term debt | (472 | ) | — | (472 | ) | — | — | — | ||||||||||
| Repurchases of common stock | (1,057 | ) | (301 | ) | (295 | ) | (256 | ) | (205 | ) | (234 | ) | ||||||
| Dividends paid on common stock | (937 | ) | (143 | ) | (272 | ) | (223 | ) | (299 | ) | (488 | ) | ||||||
| Contributions from noncontrolling interests | 52 | 8 | 20 | 12 | 12 | 19 | ||||||||||||
| Distributions to noncontrolling interests | (51 | ) | (15 | ) | (10 | ) | (19 | ) | (7 | ) | (12 | ) | ||||||
| Shares exchanged for tax withholdings and other | (48 | ) | 1 | 2 | (9 | ) | (42 | ) | (1 | ) | ||||||||
| Net cash from financing activities | 706 | (450 | ) | 2,192 | (495 | ) | (541 | ) | (716 | ) | ||||||||
| Effect of exchange rate changes on cash | (3 | ) | (1 | ) | 1 | (1 | ) | (2 | ) | 3 | ||||||||
| Net change in cash, cash equivalents and restricted cash | (29 | ) | 170 | (493 | ) | 20 | 274 | 114 | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 875 | 676 | 1,169 | 1,149 | 875 | 761 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 846 | $ | 846 | $ | 676 | $ | 1,169 | $ | 1,149 | $ | 875 | ||||||
| Reconciliation of cash, cash equivalents and restricted cash: | ||||||||||||||||||
| Cash and cash equivalents | $ | 811 | $ | 811 | $ | 645 | $ | 1,140 | $ | 1,126 | $ | 853 | ||||||
| Restricted cash | 35 | 35 | 31 | 29 | 23 | 22 | ||||||||||||
| Total cash, cash equivalents and restricted cash | $ | 846 | $ | 846 | $ | 676 | $ | 1,169 | $ | 1,149 | $ | 875 |
5
PRODUCTION
| 2024 | 2023 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||
| Oil (MBbls/d) | ||||||||||||
| Delaware Basin | 220 | 221 | 227 | 221 | 208 | 208 | ||||||
| Rockies | 65 | 110 | 48 | 50 | 53 | 49 | ||||||
| Eagle Ford | 46 | 49 | 44 | 46 | 43 | 43 | ||||||
| Anadarko Basin | 13 | 14 | 13 | 14 | 11 | 13 | ||||||
| Other | 3 | 4 | 3 | 4 | 4 | 4 | ||||||
| Total | 347 | 398 | 335 | 335 | 319 | 317 | ||||||
| Natural gas liquids (MBbls/d) | ||||||||||||
| Delaware Basin | 123 | 127 | 134 | 121 | 113 | 112 | ||||||
| Rockies | 21 | 43 | 15 | 14 | 12 | 13 | ||||||
| Eagle Ford | 17 | 21 | 16 | 17 | 14 | 15 | ||||||
| Anadarko Basin | 29 | 30 | 29 | 30 | 26 | 29 | ||||||
| Other | 1 | — | — | — | — | — | ||||||
| Total | 191 | 221 | 194 | 182 | 165 | 169 | ||||||
| Gas (MMcf/d) | ||||||||||||
| Delaware Basin | 732 | 755 | 764 | 712 | 695 | 673 | ||||||
| Rockies | 124 | 230 | 96 | 89 | 81 | 81 | ||||||
| Eagle Ford | 98 | 130 | 93 | 92 | 79 | 81 | ||||||
| Anadarko Basin | 241 | 255 | 241 | 244 | 223 | 225 | ||||||
| Other | 1 | 1 | — | — | 1 | 1 | ||||||
| Total | 1,196 | 1,371 | 1,194 | 1,137 | 1,079 | 1,061 | ||||||
| Total oil equivalent (MBoe/d) | ||||||||||||
| Delaware Basin | 465 | 474 | 488 | 461 | 437 | 433 | ||||||
| Rockies | 107 | 191 | 79 | 79 | 79 | 74 | ||||||
| Eagle Ford | 79 | 92 | 75 | 79 | 70 | 72 | ||||||
| Anadarko Basin | 82 | 87 | 82 | 84 | 74 | 79 | ||||||
| Other | 4 | 4 | 4 | 4 | 4 | 4 | ||||||
| Total | 737 | 848 | 728 | 707 | 664 | 662 |
6
CAPITAL EXPENDITURES
| (in millions) | 2024 | 2023 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||
| Delaware Basin | $ | 2,003 | $ | 448 | $ | 495 | $ | 505 | $ | 555 | $ | 506 |
| Rockies | 511 | 268 | 89 | 84 | 70 | 110 | ||||||
| Eagle Ford | 616 | 107 | 173 | 180 | 156 | 194 | ||||||
| Anadarko Basin | 215 | 44 | 56 | 56 | 59 | 51 | ||||||
| Other | 14 | 5 | 4 | 3 | 2 | 3 | ||||||
| Total upstream capital | $ | 3,359 | $ | 872 | $ | 817 | $ | 828 | $ | 842 | $ | 864 |
| Carbon capital | 94 | 12 | 26 | 24 | 32 | 31 | ||||||
| Midstream and Corporate | 178 | 42 | 35 | 38 | 63 | 45 | ||||||
| Capital expenditures | $ | 3,631 | $ | 926 | $ | 878 | $ | 890 | $ | 937 | $ | 940 |
| Acquisitions ^(1)^ | 243 | 116 | 38 | 81 | 8 | 11 | ||||||
| Total capital | $ | 3,874 | $ | 1,042 | $ | 916 | $ | 971 | $ | 945 | $ | 951 |
| (1) | Full Year and Q3 2024 exclude $5,045 million related to the Grayson Mill acquisition.<br> | |||||||||||
| --- | --- |
COSTS INCURRED AND RESERVES RECONCILIATION
| COSTS INCURRED | Year Ended December 31, | |||
|---|---|---|---|---|
| (in millions) | 2024 | 2023 | ||
| Property acquisition costs: | ||||
| Proved properties | 3,058 | $ | 2 | |
| Unproved properties | 1,949 | 63 | ||
| Exploration costs | 690 | 534 | ||
| Development costs | 2,856 | 3,160 | ||
| Costs incurred | 8,553 | $ | 3,759 |
RESERVES RECONCILIATION
| Oil(MMBbls) | Gas(Bcf) | NGL(MMBbls) | Total(MMBoe) | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| As of December 31, 2023: | ||||||||||||
| Proved developed | 603 | 2,560 | 395 | 1,425 | ||||||||
| Proved undeveloped | 183 | 622 | 105 | 392 | ||||||||
| Total Proved | **** | 786 | **** | **** | 3,182 | **** | **** | 500 | **** | **** | 1,817 | **** |
| Revisions due to prices | (9 | ) | (187 | ) | (14 | ) | (54 | ) | ||||
| Revisions other than price | 3 | 245 | 31 | 75 | ||||||||
| Extensions and discoveries | 129 | 646 | 104 | 340 | ||||||||
| Purchase of reserves | 120 | 328 | 73 | 247 | ||||||||
| Production | (127 | ) | (438 | ) | (70 | ) | (270 | ) | ||||
| As of December 31, 2024: | ||||||||||||
| Proved developed | 706 | 3,057 | 500 | 1,715 | ||||||||
| Proved undeveloped | 196 | 719 | 124 | 440 | ||||||||
| Total Proved | **** | 902 | **** | **** | 3,776 | **** | **** | 624 | **** | **** | 2,155 | **** |
7
SUPPLEMENTAL INFORMATION FOR CAPITAL EXPENDITURES
GROSS OPERATED SPUDS
| 2024 | 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | ||||||
| Delaware Basin | 67 | 75 | 73 | 76 | 60 | |||||
| Rockies | 24 | 8 | 12 | 4 | 5 | |||||
| Eagle Ford | 12 | 28 | 28 | 30 | 26 | |||||
| Anadarko Basin | 2 | 9 | 13 | 4 | 17 | |||||
| Total | 105 | 120 | 126 | 114 | 108 | |||||
| GROSS OPERATED WELLS TIED-IN | ||||||||||
| 2024 | 2023 | |||||||||
| Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | ||||||
| Delaware Basin | 55 | 55 | 62 | 59 | 62 | |||||
| Rockies | 30 | 7 | 3 | 12 | 10 | |||||
| Eagle Ford | 23 | 31 | 23 | 26 | 24 | |||||
| Anadarko Basin | 20 | 15 | 26 | 5 | 4 | |||||
| Total | 128 | 108 | 114 | 102 | 100 | |||||
| NET OPERATED WELLS TIED-IN | ||||||||||
| 2024 | 2023 | |||||||||
| Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | ||||||
| Delaware Basin | 50 | 39 | 44 | 50 | 47 | |||||
| Rockies | 27 | 6 | 2 | 12 | 7 | |||||
| Eagle Ford | 13 | 24 | 15 | 21 | 20 | |||||
| Anadarko Basin | 8 | 6 | 14 | 2 | 1 | |||||
| Total | 98 | 75 | 75 | 85 | 75 | |||||
| AVERAGE LATERAL LENGTH | ||||||||||
| (based on wells tied-in) | 2024 | 2023 | ||||||||
| Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | ||||||
| Delaware Basin | 11,500’ | 10,500’ | 10,200’ | 10,300’ | 10,300’ | |||||
| Rockies | 10,150’ | 14,500’ | 15,500’ | 9,600’ | 10,950’ | |||||
| Eagle Ford | 7,700’ | 7,600’ | 6,800’ | 6,700’ | 7,900’ | |||||
| Anadarko Basin | 10,000’ | 11,000’ | 8,700’ | 10,000’ | 12,500’ | |||||
| Total | 9,900’ | 10,000’ | 9,300’ | 9,300’ | 9,900’ |
8
REALIZED PRICING
BENCHMARK PRICES
| (average prices) | 2024 | 2023 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | ||||||||||||
| Oil ($/Bbl) - West Texas Intermediate (Cushing) | $ | 75.79 | $ | 70.32 | $ | 75.20 | $ | 80.62 | $ | 77.01 | $ | 78.48 | |||||
| Natural Gas ($/Mcf) - Henry Hub | $ | 2.27 | $ | 2.79 | $ | 2.15 | $ | 1.89 | $ | 2.25 | $ | 2.88 | |||||
| NGL ($/Bbl) - Mont Belvieu Blended | $ | 26.71 | $ | 27.80 | $ | 25.20 | $ | 26.33 | $ | 27.51 | $ | 25.52 | |||||
| REALIZED PRICES | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | ||||||||||||
| Oil (Per Bbl) | |||||||||||||||||
| Delaware Basin | $ | 74.75 | $ | 69.06 | $ | 74.24 | $ | 79.62 | $ | 76.23 | $ | 77.75 | |||||
| Rockies | 69.61 | 65.67 | 70.39 | 75.73 | 71.33 | 74.35 | |||||||||||
| Eagle Ford | 75.15 | 69.25 | 74.92 | 80.45 | 76.51 | 78.51 | |||||||||||
| Anadarko Basin | 73.32 | 67.46 | 73.13 | 78.36 | 74.91 | 77.09 | |||||||||||
| Realized price without hedges | 73.78 | 68.11 | 73.74 | 79.10 | 75.40 | 77.32 | |||||||||||
| Cash settlements | 0.35 | 1.08 | 0.52 | (0.15 | ) | (0.25 | ) | (0.34 | ) | ||||||||
| Realized price, including cash settlements | $ | 74.13 | $ | 69.19 | $ | 74.26 | $ | 78.95 | $ | 75.15 | $ | 76.98 | |||||
| Natural gas liquids (Per Bbl) | |||||||||||||||||
| Delaware Basin | $ | 20.27 | $ | 21.79 | $ | 19.21 | $ | 19.59 | $ | 20.55 | $ | 19.93 | |||||
| Rockies | 11.15 | 12.88 | 8.09 | 9.44 | 10.95 | 8.53 | |||||||||||
| Eagle Ford | 24.49 | 26.40 | 24.18 | 23.07 | 23.67 | 22.67 | |||||||||||
| Anadarko Basin | 23.67 | 25.45 | 22.35 | 22.16 | 24.77 | 21.44 | |||||||||||
| Realized price without hedges | 20.20 | 21.07 | 19.25 | 19.60 | 20.81 | 19.67 | |||||||||||
| Cash settlements | 0.02 | (0.06 | ) | 0.11 | 0.11 | (0.08 | ) | — | |||||||||
| Realized price, including cash settlements | $ | 20.22 | $ | 21.01 | $ | 19.36 | $ | 19.71 | $ | 20.73 | $ | 19.67 | |||||
| Gas (Per Mcf) | |||||||||||||||||
| Delaware Basin | $ | 0.59 | $ | 1.01 | $ | 0.04 | $ | 0.17 | $ | 1.19 | $ | 1.76 | |||||
| Rockies | 0.03 | 0.59 | (0.85 | ) | (0.46 | ) | (0.02 | ) | 0.30 | ||||||||
| Eagle Ford | 1.91 | 2.31 | 1.80 | 1.48 | 1.89 | 2.44 | |||||||||||
| Anadarko Basin | 1.91 | 2.27 | 1.74 | 1.70 | 1.92 | 2.38 | |||||||||||
| Realized price without hedges | 0.91 | 1.30 | 0.45 | 0.55 | 1.30 | 1.83 | |||||||||||
| Cash settlements | 0.35 | 0.16 | 0.39 | 0.55 | 0.32 | 0.19 | |||||||||||
| Realized price, including cash settlements | $ | 1.26 | $ | 1.46 | $ | 0.84 | $ | 1.10 | $ | 1.62 | $ | 2.02 | |||||
| Total oil equivalent (Per Boe) | |||||||||||||||||
| Delaware Basin | $ | 41.60 | $ | 39.66 | $ | 39.85 | $ | 43.63 | $ | 43.55 | $ | 45.38 | |||||
| Rockies | 44.67 | 41.37 | 43.11 | 49.22 | 49.74 | 50.41 | |||||||||||
| Eagle Ford | 51.01 | 46.46 | 50.89 | 54.03 | 53.81 | 54.64 | |||||||||||
| Anadarko Basin | 25.58 | 26.54 | 24.69 | 25.53 | 25.48 | 26.96 | |||||||||||
| Realized price without hedges | 41.44 | 39.57 | 39.80 | 43.44 | 43.52 | 44.93 | |||||||||||
| Cash settlements | 0.73 | 0.75 | 0.91 | 0.85 | 0.39 | 0.14 | |||||||||||
| Realized price, including cash settlements | $ | 42.17 | $ | 40.32 | $ | 40.71 | $ | 44.29 | $ | 43.91 | $ | 45.07 |
9
ASSET MARGINS
BENCHMARK PRICES
| (average prices) | 2024 | 2023 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Oil ($/Bbl) - West Texas Intermediate (Cushing) | $ | 75.79 | $ | 70.32 | $ | 75.20 | $ | 80.62 | $ | 77.01 | $ | 78.48 | ||||||
| Natural Gas ($/Mcf) - Henry Hub | $ | 2.27 | $ | 2.79 | $ | 2.15 | $ | 1.89 | $ | 2.25 | $ | 2.88 | ||||||
| NGL ($/Bbl) - Mont Belvieu Blended | $ | 26.71 | $ | 27.80 | $ | 25.20 | $ | 26.33 | $ | 27.51 | $ | 25.52 | ||||||
| PER-UNIT CASH MARGIN BY ASSET (per Boe) | ||||||||||||||||||
| 2024 | 2023 | |||||||||||||||||
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Delaware Basin | ||||||||||||||||||
| Realized price | $ | 41.60 | $ | 39.66 | $ | 39.85 | $ | 43.63 | $ | 43.55 | $ | 45.38 | ||||||
| Lease operating expenses | (5.10 | ) | (4.93 | ) | (4.69 | ) | (5.31 | ) | (5.54 | ) | (5.46 | ) | ||||||
| Gathering, processing & transportation | (2.85 | ) | (2.92 | ) | (2.79 | ) | (2.89 | ) | (2.79 | ) | (2.75 | ) | ||||||
| Production & property taxes | (3.09 | ) | (2.91 | ) | (2.99 | ) | (3.31 | ) | (3.16 | ) | (3.24 | ) | ||||||
| Field-level cash margin | $ | 30.56 | $ | 28.90 | $ | 29.38 | $ | 32.12 | $ | 32.06 | $ | 33.93 | ||||||
| Rockies | ||||||||||||||||||
| Realized price | $ | 44.67 | $ | 41.37 | $ | 43.11 | $ | 49.22 | $ | 49.74 | $ | 50.41 | ||||||
| Lease operating expenses | (9.82 | ) | (8.63 | ) | (10.83 | ) | (10.43 | ) | (11.06 | ) | (11.93 | ) | ||||||
| Gathering, processing & transportation | (1.85 | ) | (1.22 | ) | (2.33 | ) | (2.47 | ) | (2.26 | ) | (2.56 | ) | ||||||
| Production & property taxes | (4.39 | ) | (3.66 | ) | (4.56 | ) | (5.22 | ) | (5.23 | ) | (5.28 | ) | ||||||
| Field-level cash margin | $ | 28.61 | $ | 27.86 | $ | 25.39 | $ | 31.10 | $ | 31.19 | $ | 30.64 | ||||||
| Eagle Ford | ||||||||||||||||||
| Realized price | $ | 51.01 | $ | 46.46 | $ | 50.89 | $ | 54.03 | $ | 53.81 | $ | 54.64 | ||||||
| Lease operating expenses | (6.62 | ) | (5.59 | ) | (6.57 | ) | (7.03 | ) | (7.59 | ) | (7.05 | ) | ||||||
| Gathering, processing & transportation | (2.00 | ) | (2.21 | ) | (2.02 | ) | (2.03 | ) | (1.67 | ) | (1.62 | ) | ||||||
| Production & property taxes | (2.67 | ) | (2.41 | ) | (2.79 | ) | (2.82 | ) | (2.73 | ) | (2.95 | ) | ||||||
| Field-level cash margin | $ | 39.72 | $ | 36.25 | $ | 39.51 | $ | 42.15 | $ | 41.82 | $ | 43.02 | ||||||
| Anadarko Basin | ||||||||||||||||||
| Realized price | $ | 25.58 | $ | 26.54 | $ | 24.69 | $ | 25.53 | $ | 25.48 | $ | 26.96 | ||||||
| Lease operating expenses | (3.02 | ) | (2.72 | ) | (2.92 | ) | (3.16 | ) | (3.33 | ) | (3.26 | ) | ||||||
| Gathering, processing & transportation | (5.86 | ) | (5.74 | ) | (5.78 | ) | (5.70 | ) | (6.27 | ) | (5.98 | ) | ||||||
| Production & property taxes | (1.20 | ) | (1.20 | ) | (1.17 | ) | (1.19 | ) | (1.24 | ) | (1.40 | ) | ||||||
| Field-level cash margin | $ | 15.50 | $ | 16.88 | $ | 14.82 | $ | 15.48 | $ | 14.64 | $ | 16.32 | ||||||
| Devon - Total | ||||||||||||||||||
| Realized price | $ | 41.44 | $ | 39.57 | $ | 39.80 | $ | 43.44 | $ | 43.52 | $ | 44.93 | ||||||
| Lease operating expenses | (5.83 | ) | (5.70 | ) | (5.46 | ) | (5.95 | ) | (6.29 | ) | (6.25 | ) | ||||||
| Gathering, processing & transportation | (2.93 | ) | (2.74 | ) | (2.98 | ) | (3.07 | ) | (2.98 | ) | (2.97 | ) | ||||||
| Production & property taxes | (3.05 | ) | (2.86 | ) | (2.95 | ) | (3.23 | ) | (3.16 | ) | (3.24 | ) | ||||||
| Field-level cash margin | $ | 29.63 | $ | 28.27 | $ | 28.41 | $ | 31.19 | $ | 31.09 | $ | 32.47 |
10
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 tables summarize the effects of these items on full-year, fourth-quarter and third-quarter 2024 earnings.
| Year Ended December 31, 2024 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Before-tax | After-tax | After NCI | Per DilutedShare | |||||||||
| Total | ||||||||||||
| Earnings (GAAP) | $ | 3,712 | $ | 2,942 | $ | 2,891 | $ | 4.56 | ||||
| Adjustments: | ||||||||||||
| Asset dispositions | 11 | 9 | 9 | 0.01 | ||||||||
| Asset and exploration impairments | 5 | 4 | 4 | 0.01 | ||||||||
| Fair value changes in financial instruments | 182 | 143 | 143 | 0.23 | ||||||||
| Restructuring and transaction costs | 9 | 7 | 7 | 0.01 | ||||||||
| Core earnings (Non-GAAP) | $ | 3,919 | $ | 3,105 | $ | 3,054 | $ | 4.82 | ||||
| Quarter Ended December 31, 2024 | ||||||||||||
| Before-tax | After-tax | After NCI | Per DilutedShare | |||||||||
| Total | ||||||||||||
| Earnings (GAAP) | $ | 840 | $ | 653 | $ | 639 | $ | 0.98 | ||||
| Adjustments: | ||||||||||||
| Asset dispositions | (5 | ) | (3 | ) | (3 | ) | (0.01 | ) | ||||
| Asset and exploration impairments | 3 | 2 | 2 | 0.01 | ||||||||
| Deferred tax asset valuation allowance | — | 4 | 4 | 0.01 | ||||||||
| Fair value changes in financial instruments | 145 | 113 | 113 | 0.17 | ||||||||
| Restructuring and transaction costs | 1 | 1 | 1 | — | ||||||||
| Core earnings (Non-GAAP) | $ | 984 | $ | 770 | $ | 756 | $ | 1.16 | ||||
| Quarter Ended September 30, 2024 | ||||||||||||
| Before-tax | After-tax | After NCI | Per DilutedShare | |||||||||
| Total | ||||||||||||
| Earnings (GAAP) | $ | 1,064 | $ | 825 | $ | 812 | $ | 1.30 | ||||
| Adjustments: | ||||||||||||
| Asset and exploration impairments | 1 | 1 | 1 | — | ||||||||
| Deferred tax asset valuation allowance | — | (7 | ) | (7 | ) | (0.01 | ) | |||||
| Fair value changes in financial instruments | (167 | ) | (129 | ) | (129 | ) | (0.20 | ) | ||||
| Restructuring and transaction costs | 8 | 6 | 6 | 0.01 | ||||||||
| Core earnings (Non-GAAP) | $ | 906 | $ | 696 | $ | 683 | $ | 1.10 |
11
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 disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; 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.
| Q4 ’24 | Q3 ’24 | Q2 ’24 | Q1 ’24 | TTM | Q4 ’23 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net earnings (GAAP) | $ | 653 | $ | 825 | $ | 855 | $ | 609 | $ | 2,942 | $ | 1,161 | |||
| Financing costs, net | 123 | 88 | 76 | 76 | 363 | 77 | |||||||||
| Income tax expense | 187 | 239 | 185 | 159 | 770 | 269 | |||||||||
| Exploration expenses | 12 | 4 | 3 | 9 | 28 | 4 | |||||||||
| Depreciation, depletion and amortization | 971 | 794 | 768 | 722 | 3,255 | 650 | |||||||||
| Asset dispositions | (5 | ) | — | 15 | 1 | 11 | 11 | ||||||||
| Share-based compensation | 24 | 24 | 26 | 24 | 98 | 22 | |||||||||
| Derivative & financial instrument non-cash val.<br>changes | 142 | (166 | ) | 31 | 169 | 176 | (316 | ) | |||||||
| Accretion on discounted liabilities and other | 24 | 45 | 5 | 22 | 96 | 10 | |||||||||
| EBITDAX (Non-GAAP) | $ | 2,131 | $ | 1,853 | $ | 1,964 | $ | 1,791 | $ | 7,739 | $ | 1,888 |
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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.
| 2024 | 2023 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||
| Total debt (GAAP) | $ | 8,883 | $ | 8,884 | $ | 6,140 | $ | 6,147 | $ | 6,155 | |||||
| Less: | |||||||||||||||
| Cash, cash equivalents and restricted cash | (846 | ) | (676 | ) | (1,169 | ) | (1,149 | ) | (875 | ) | |||||
| Net debt (Non-GAAP) | $ | 8,037 | $ | 8,208 | $ | 4,971 | $ | 4,998 | $ | 5,280 |
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.
| 2024 | 2023 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | ||||||
| Net debt (Non-GAAP) | $ | 8,037 | $ | 8,208 | $ | 4,971 | $ | 4,998 | $ | 5,280 |
| EBITDAX (Non-GAAP) ^(1)^ | $ | 7,739 | $ | 7,496 | $ | 7,668 | $ | 7,434 | $ | 7,534 |
| Net<br>debt-to-EBITDAX (Non-GAAP) | 1.0 | 1.1 | 0.6 | 0.7 | 0.7 | |||||
| (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.
| 2024 | 2023 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Total operating cash flow (GAAP) | $ | 6,600 | $ | 1,664 | $ | 1,663 | $ | 1,535 | $ | 1,738 | $ | 1,737 | ||||||
| Less capital expenditures: | (3,645 | ) | (926 | ) | (877 | ) | (948 | ) | (894 | ) | (910 | ) | ||||||
| Free cash flow (Non-GAAP) | $ | 2,955 | $ | 738 | $ | 786 | $ | 587 | $ | 844 | $ | 827 |
ADJUSTED FREE CASH FLOW
Devon is committed to returning cash flow to shareholders through dividends and share repurchases. Adjusted free cash flow is calculated as total operating cash flow before balance sheet changes less accrued capital expenditures.
| 2024 | 2023 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Total operating cash flow (GAAP) | $ | 6,600 | $ | 1,664 | $ | 1,663 | $ | 1,535 | $ | 1,738 | $ | 1,737 | ||||||
| Changes in assets and liabilities | 217 | 202 | (16 | ) | 201 | (170 | ) | (45 | ) | |||||||||
| Cash flow before balance sheet changes (Non-GAAP) | 6,817 | 1,866 | 1,647 | 1,736 | 1,568 | 1,692 | ||||||||||||
| Capital expenditures (Accrued) ^(1)^ | (3,874 | ) | (1,042 | ) | (916 | ) | (971 | ) | (945 | ) | (951 | ) | ||||||
| Adjusted free cash flow (Non-GAAP) | $ | 2,943 | $ | 824 | $ | 731 | $ | 765 | $ | 623 | $ | 741 | ||||||
| (1) | Full Year and Q3 2024 exclude $5,045 million related to the Grayson Mill acquisition.<br> | |||||||||||||||||
| --- | --- |
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.
| 2024 | 2023 | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full Year | Quarter 4 | Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | |||||||||||||
| Capital expenditures (Accrued) ^(1)^ | $ | 3,874 | $ | 1,042 | $ | 916 | $ | 971 | $ | 945 | $ | 951 | ||||||
| Operating cash flow | $ | 6,600 | $ | 1,664 | $ | 1,663 | $ | 1,535 | $ | 1,738 | $ | 1,737 | ||||||
| Reinvestment rate (Non-GAAP) | 59 | % | 63 | % | 55 | % | 63 | % | 54 | % | 55 | % | ||||||
| (1) | Full Year and Q3 2024 exclude $5,045 million related to the Grayson Mill acquisition.<br> | |||||||||||||||||
| --- | --- |
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| FIRST-QUARTER AND FULL-YEAR 2025 GUIDANCE | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PRODUCTION GUIDANCE | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Quarter 1 | Full Year | |||||||||||
| Low | High | Low | High | |||||||||
| Oil (MBbls/d) | 380 | 386 | 380 | 386 | ||||||||
| Natural gas liquids (MBbls/d) | 205 | 211 | 205 | 211 | ||||||||
| Gas (MMcf/d) | 1,320 | 1,365 | 1,320 | 1,365 | ||||||||
| Total oil equivalent (MBoe/d) | 805 | 825 | 805 | 825 | ||||||||
| CAPITAL EXPENDITURES GUIDANCE | ||||||||||||
| Quarter 1 | Full Year | |||||||||||
| (in millions) | Low | High | Low | High | ||||||||
| Upstream capital | $ | 925 | $ | 975 | $ | 3,575 | $ | 3,725 | ||||
| Carbon capital | 20 | 25 | 100 | 125 | ||||||||
| Midstream and other capital | 35 | 45 | 125 | 150 | ||||||||
| Total capital | $ | 980 | $ | 1,045 | $ | 3,800 | $ | 4,000 | ||||
| PRICE REALIZATIONS GUIDANCE | ||||||||||||
| Quarter 1 | Full Year | |||||||||||
| Low | High | Low | High | |||||||||
| Oil - % of WTI | 95 | % | 99 | % | 95 | % | 99 | % | ||||
| NGL - % of WTI | 28 | % | 32 | % | 28 | % | 32 | % | ||||
| Natural gas - % of Henry Hub | 55 | % | 65 | % | 50 | % | 60 | % | ||||
| OTHER GUIDANCE ITEMS | ||||||||||||
| Quarter 1 | Full Year | |||||||||||
| ($ millions, except Boe and %) | Low | High | Low | High | ||||||||
| Marketing and midstream operating profit | $ | (20 | ) | $ | (10 | ) | $ | (60 | ) | $ | (40 | ) |
| LOE and GP&T per BOE | $ | 8.90 | $ | 9.30 | $ | 8.80 | $ | 9.20 | ||||
| Production and property taxes as % of upstream sales | 7.0 | % | 8.0 | % | 7.0 | % | 8.0 | % | ||||
| Exploration expenses | $ | — | $ | 5 | $ | 30 | $ | 50 | ||||
| Depreciation, depletion and amortization | $ | 890 | $ | 930 | $ | 3,600 | $ | 3,700 | ||||
| General and administrative expenses | $ | 135 | $ | 145 | $ | 450 | $ | 490 | ||||
| Financing costs, net | $ | 120 | $ | 130 | $ | 450 | $ | 490 | ||||
| Other expenses | $ | — | $ | 10 | $ | 15 | $ | 30 | ||||
| INCOME TAX GUIDANCE | ||||||||||||
| Quarter 1 | Full Year | |||||||||||
| (% of pre-tax earnings) | Low | High | Low | High | ||||||||
| Current income tax rate | 14 | % | 16 | % | 14 | % | 16 | % | ||||
| Deferred income tax rate | 4 | % | 6 | % | 4 | % | 6 | % | ||||
| Total income tax rate | ~20% | ~20% |
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| 2025 & 2026 HEDGING POSITIONS |
|---|
Oil CommodityHedges
| Price Swaps | Price Collars | ||||||
|---|---|---|---|---|---|---|---|
| Period | Volume (Bbls/d) | WeightedAverage Price(/Bbl) | Volume<br>(Bbls/d) | WeightedAverage FloorPrice (/Bbl) | WeightedAverage CeilingPrice (/Bbl) | ||
| Q1 2025 | 17,000 | 80,000 | |||||
| Q2 2025 | 15,000 | 80,000 | |||||
| Q3-Q4 2025 | 9,000 | 86,000 |
All values are in US Dollars.
| Three Way Collars | |||||
|---|---|---|---|---|---|
| Period | Volume (Bbls/d) | WeightedAverage FloorSold Price(/Bbl) | WeightedAverage FloorPurchasedPrice (/Bbl) | WeightedAverage CeilingPrice (/Bbl) | |
| Q1-Q4 2025 | 8,000 |
All values are in US Dollars.
Oil Basis Swaps
| Period | Index | Volume (Bbls/d) | Weighted AverageDifferential to WTI(/Bbl) | |
|---|---|---|---|---|
| Q1-Q4 2025 | Midland Sweet | 63,000 | ||
| Q1-Q4 2026 | Midland Sweet | 20,000 |
All values are in US Dollars.
Natural Gas Commodity Hedges - Henry Hub
| Price Swaps | Price Collars | ||||||
|---|---|---|---|---|---|---|---|
| Period | Volume (MMBtu/d) | WeightedAverage Price(/MMBtu) | Volume<br>(MMBtu/d) | WeightedAverage FloorPrice (/MMBtu) | WeightedAverage CeilingPrice(/MMBtu) | ||
| Q1 2025 | 365,000 | 115,000 | |||||
| Q2 2025 | 322,000 | 155,000 | |||||
| Q3 2025 | 282,000 | 155,000 | |||||
| Q4 2025 | 225,000 | 155,000 | |||||
| Q1-Q4 2026 | 215,000 | 120,000 |
All values are in US Dollars.
Natural Gas Basis Swaps
| Period | Index | Volume (MMBtu/d) | Weighted AverageDifferential to HenryHub (/MMBtu) | ||
|---|---|---|---|---|---|
| Q1–Q4 2025 | Houston Ship Channel | 230,000 | ) | ||
| Q1–Q4 2025 | WAHA | 110,000 | ) | ||
| Q1–Q4 2026 | Houston Ship Channel | 50,000 | ) | ||
| Q1–Q4 2026 | WAHA | 20,000 | ) |
All values are in US Dollars.
2
| 2025 & 2026 HEDGING POSITIONS (continued) |
|---|
NGL CommodityHedges
| Price Swaps | ||||
|---|---|---|---|---|
| Period | Product | Volume (Bbls/d) | Weighted AveragePrice (/Bbl) | |
| Q1-Q4 2025 | Natural Gasoline | 3,000 | ||
| Q1-Q4 2025 | Normal Butane | 323 | ||
| Q1-Q4 2025 | Propane | 3,000 |
All values are in US Dollars.
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 December 31, 2024.
3