DEVON ENERGY CORP/DE
For the period ended Mar 31, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
DVN$42.21-1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001193125-25-268574
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsExecutive OverviewCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001193125-26-208143
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsExecutive OverviewThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 17 previous paragraphs and 15 current paragraphs.
3 unchanged; 8 reworded; 4 added; 5 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Oil production totaled 387 MBbls/d, delivering at the top end of guidance.
Current report
On track to achieve 100% of our $1.0 billion optimization plan ahead of schedule.
Current report
Our net earnings and operating cash flow are highly dependent upon oil, gas and NGL prices, which can be volatile due to several varying factors. As shown in the graph below, during the first quarter of 2026, commodity prices have experienced heightened volatility, driven primarily by significant geopolitical events, including conflict in the Middle East and disruptions to global oil supply, along with continued uncertainty in global trade policy and OPEC+ production decisions. As a result, our net earnings were reduced by a $0.6 billion non-cash valuation loss on our commodity derivatives.
Removed paragraphs (5)
Previous report
On September 27, 2024, we acquired the Williston Basin business of Grayson Mill for total consideration of approximately $5.0 billion, consisting of $3.5 billion of cash and approximately 37.3 million shares of Devon common stock, including purchase price adjustments. The acquisition has allowed us to efficiently expand our oil production and operating scale, creating immediate and long-term, sustainable value to shareholders.
Previous report
Production totaled 853 MBoe/d, exceeding guidance by 2%.
Previous report
Paid dividends of $151 million and have declared approximately $150 million of dividends to be paid in the fourth quarter of 2025.
Previous report
Early redeemed the $485 million of 5.85% senior notes due December 15, 2025.
Previous report
Closed acquisition of outstanding noncontrolling interests in Cotton Draw Midstream for $260 million.
Reworded paragraphs (8)
Previous wording
The following discussion and analysis addresses material changes in our results of operations for the three-month and nine-month periods ended September 30, 2025 compared to previous periods, and in our financial condition and liquidity since December 31, 2024. For information regarding our critical accounting policies and estimates, see our 2024 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Current wording
The following discussion and analysis addresses material changes in our results of operations for the three-month period ended March 31, 2026 compared to previous periods, and in our financial condition and liquidity since December 31, 2025. For information regarding our critical accounting policies and estimates, see our 2025 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Previous wording
As a company, we remain focused on building economic value by executing on our strategic priorities of moderating production growth, emphasizing capital and operational efficiencies, optimizing reinvestment rates to maximize free cash flow, maintaining low leverage, delivering cash returns to our shareholders and pursuing operational excellence. Our recent performance highlights for these priorities include the following items for the third quarter of 2025:
Current wording
On February 1, 2026, we entered into the Merger Agreement, providing for an all-stock merger of equals with Coterra. The Merger will create a leading large-cap shale operator with an asset base anchored by a premier position in the economic core of the Delaware Basin. The Merger 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 synergies. As a company, we remain focused on building economic value by executing on our strategic priorities of moderating production growth, emphasizing capital and operational efficiencies, optimizing reinvestment rates to maximize free cash flow, maintaining low leverage, delivering cash returns to our shareholders and pursuing operational excellence. Our recent performance highlights for these priorities include the following items for the first quarter of 2026:
Previous wording
As of September 30, 2025, completed approximately 83% of our authorized $5.0 billion share repurchase program with approximately 92.7 million of our common shares purchased for approximately $4.1 billion, or $44.70 per share since inception of the plan.
Current wording
As of March 31, 2026, completed approximately 89% of our authorized $5.0 billion share repurchase program with approximately 102 million of our common shares purchased for approximately $4.5 billion, or $43.90 per share since inception of the plan.
Previous wording
Exited with $4.3 billion of liquidity, including $1.3 billion of cash.
Current wording
Exited with $4.8 billion of liquidity, including $1.8 billion of cash.
Previous wording
Generated $1.7 billion of operating cash flow and $6.8 billion for the past twelve trailing months.
Current wording
Generated $1.7 billion of operating cash flow and $6.4 billion for the trailing twelve months.
Previous wording
Earnings attributable to Devon were $687 million, or $1.09 per diluted share.
Current wording
Earnings attributable to Devon were $120 million, or $0.19 per diluted share.
Previous wording
Core earnings (Non-GAAP) were $656 million, or $1.04 per diluted share.
Current wording
Core earnings (Non-GAAP) were $641 million, or $1.04 per diluted share.
Previous wording
Our net earnings and operating cash flow are highly dependent upon oil, gas and NGL prices, which can be volatile due to several varying factors. During the first nine months of 2025, commodity prices have experienced heightened volatility and declines, driven primarily by economic uncertainty in global trade arising from geopolitical events and shifting trade policies, such as the imposition of tariffs by the U.S. and planned oil output increases by OPEC+. Despite the potential negative impacts of higher inflation rates and supply chain disruptions created by these developments, we remain committed to capital discipline and delivering the objectives that underpin our current plan. Our disciplined, returns-driven strategy is designed to adapt to market fluctuations by reducing activity when necessary to maximize free cash flow generation. We will continue to prioritize value creation through moderated capital investment and production growth, particularly with a view of the volatility in commodity prices, supply chain constraints and the economic uncertainty arising from inflation and geopolitical events. Our cash-return objectives remain focused on opportunistic share repurchases, funding our dividends, repaying debt at upcoming maturities and building cash balances.
Current wording
Despite the potential negative impacts of higher inflation rates and supply chain disruptions created by these developments, we remain committed to capital discipline and delivering the objectives that underpin our current plan. Our disciplined, returns-driven strategy is designed to adapt to market fluctuations by reducing activity when necessary to maximize free cash flow generation. We will continue to prioritize value creation through moderated capital investment and production growth, particularly with a view of the volatility in commodity prices, supply chain constraints and the economic uncertainty arising from inflation and geopolitical events. Our cash-return objectives remain focused on opportunistic share repurchases, funding our dividends, repaying debt at upcoming maturities and building cash balances. To emphasize our commitment to maximizing free cash flow and creating value for shareholders, we implemented a business optimization plan early in 2025 targeting a $1.0 billion improvement in annual pre-tax cash flow. The plan included actions to achieve more efficient field-level operations and improvements in drilling and completion costs, along with enhanced operating margins and reduced corporate costs. We are on track to achieve the full $1.0 billion target ahead of our original year-end 2026 timeline.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
To emphasize our commitment to maximizing free cash flow and creating value for shareholders, we have implemented a business optimization plan which is anticipated to improve our annual pre-tax cash flow by $1.0 billion. The plan includes actions to achieve more efficient field-level operations and improvements in drilling and completion costs while improving operating margins and corporate costs. These savings are on track to be achieved by the end of 2026 with approximately $600 million expected to be completed by the end of 2025.