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What changed in Devon Energy's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Devon Energy's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+191 added−156 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in Devon Energy's 2025 10-K

191 paragraphs added · 156 removed · 129 edited across 6 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

40 edited+33 added−5 removed117 unchanged
Biggest changeFor example, we have exposure to financial institutions and insurance companies through our hedging arrangements, our 2023 Senior Credit Facility and our insurance policies. Disruptions in the financial markets or otherwise may impact these counterparties and affect their ability to fulfill their existing obligations and their willingness to enter into future transactions with us.
Biggest changeDisruptions in the financial markets or otherwise may impact these counterparties and affect their ability to fulfill their existing obligations and their willingness to enter into future transactions with us. 24 Table of Contents In addition, we are exposed to the risk of financial loss from trade, joint interest billing and other receivables.
Such actions could adversely impact our business by distracting our Board of Directors and employees from our long-term strategy, requiring us to incur increased advisory fees and related costs, interfering with our ability to successfully execute on core business operations and strategic transactions or plans and provoking perceived uncertainty about the future direction of our business.
Such actions could adversely impact our business by distracting our Board of Directors and employees from our long-term strategy, requiring us to incur increased advisory fees and related costs, interfering with our ability to successfully execute on business operations and strategic transactions or plans and provoking perceived uncertainty about the future direction of our business.
For instance, members of the European Union agreed to a price-cap framework in December 2022 for the trading of natural gas in response to rising energy costs in Europe. Similarly, during 2021 and 2022, President Biden authorized several releases from the U.S. Strategic Petroleum Reserve in an effort to lower domestic energy prices.
For instance, members of the European Union agreed to a price-cap framework in December 2022 for the trading of natural gas in response to rising energy costs in Europe. Similarly, during 2021 and 2022, former President Biden authorized several releases from the U.S. Strategic Petroleum Reserve in an effort to lower domestic energy prices.
Any credit downgrades could adversely impact our ability to access financing and trade credit, require us to provide additional letters of credit or other assurances under contractual arrangements and increase our interest rate under the 2023 Senior Credit Facility and the Term Loan, as well as the cost of any other future debt.
Any credit downgrades could adversely impact our ability to access financing and trade credit, require us to provide additional letters of credit or other assurances under contractual arrangements and increase our interest rate under the Senior Credit Facility and the Term Loan, as well as the cost of any other future debt.
If we are unable to generate sufficient funds from operations or raise additional capital for any reason, we may be unable to replace our reserves, which would adversely affect our business, financial condition and results of operations. 16 Table of Contents Our Operations Are Uncertain and Involve Substantial Costs and Risks Our operating activities are subject to numerous costs and risks, including the risk that we will not encounter commercially productive oil or gas reservoirs.
If we are unable to generate sufficient funds from operations or raise additional capital for any reason, we may be unable to replace our reserves, which would adversely affect our business, financial condition and results of operations. 17 Table of Contents Our Operations Are Uncertain and Involve Substantial Costs and Risks Our operating activities are subject to numerous costs and risks, including the risk that we will not encounter commercially productive oil or gas reservoirs.
Moreover, non-governmental organizations, trade groups and other private parties have filed lawsuits challenging leasing, permitting and other regulatory decisions relating to our and other industry participants’ oil and gas development on federal lands, which, if successful, could further hinder development activities or otherwise adversely impact operations.
Moreover, non-governmental organizations, trade groups and other private parties have filed lawsuits challenging leasing, permitting and other regulatory decisions relating to our and other industry participants’ oil and gas development on federal lands, which, if successful, could hinder or delay development activities or otherwise adversely impact operations.
Historically, market prices and our realized prices have been volatile. For example, over the last five years, monthly NYMEX WTI oil and NYMEX Henry Hub gas prices ranged from highs of over $120 per Bbl and $9.50 per MMBtu, respectively, to lows of under $30 per Bbl and $1.50 per MMBtu, respectively.
Historically, market prices and our realized prices have been volatile. For example, over the last five years, monthly NYMEX WTI oil and NYMEX Henry Hub gas prices ranged from highs of over $120 per Bbl and $9.50 per MMBtu, respectively, to lows of under $50 per Bbl and $1.60 per MMBtu, respectively.
Cybersecurity Incidents May Adversely Impact Our Operations We rely heavily on information systems, operational technologies and other digital technologies to conduct our business, and we anticipate expanding the use of and reliance on these systems and technologies, including through artificial intelligence, process automation and data analytics.
Cybersecurity Incidents May Adversely Impact Our Operations We rely heavily on information systems, operational technologies and other digital technologies to conduct our business, and we are expanding the use of and reliance on these systems and technologies, including through artificial intelligence, process automation and data analytics.
Moreover, certain regulations require the plugging and abandonment of wells, removal of production facilities and other restorative actions by current and former operators, including corporate successors of former operators, which means that we are exposed to the risk that owners or operators of assets acquired from us (or our predecessors) become unable to satisfy plugging or abandonment and other restorative obligations that attach to those assets.
Moreover, certain regulations require the plugging and abandonment of wells, removal of production facilities and other restorative actions by current and former operators, including corporate successors of former 19 Table of Contents operators, which means that we are exposed to the risk that owners or operators of assets acquired from us (or our predecessors) become unable to satisfy plugging or abandonment and other restorative obligations that attach to those assets.
Such volatility is likely to continue in the future due to numerous factors beyond our control, including, but not limited to: • the domestic and worldwide supply of and demand for oil, gas and NGLs; • volatility and trading patterns in the commodity-futures markets; • climate change incentives and conservation and environmental protection efforts; • production levels of members of OPEC, Russia, the U.S. or other producing countries; • geopolitical risks, including the conflict between Russia and Ukraine, the Israel-Gaza and Hezbollah conflicts and hostilities in Yemen and the Red Sea, as well as other hostilities or political and civil unrest in the Middle East, Africa, Europe and South America; • adverse weather conditions, natural disasters and other catastrophic events, such as tornadoes, earthquakes, hurricanes and acts of terrorism; 15 Table of Contents • pandemics (such as COVID-19) and epidemics of infectious diseases and other public health events, as well as any related governmental actions; • regional pricing differentials, including in the Delaware Basin and other areas of our operations; • differing quality of production, including NGL content of gas produced; • the level of imports and exports of oil, gas and NGLs and the level of global oil, gas and NGL inventories; • the price and availability of alternative energy sources; • technological advances affecting energy consumption and production, including with respect to electric vehicles; • stockholder activism or activities by non-governmental organizations to restrict the exploration and production of oil and natural gas in order to reduce GHG emissions; • the overall economic environment, including inflationary pressures and fluctuations in interest rates; • market and geopolitical uncertainty as a result of shifts or potential further shifts in domestic and international policies following the 2024 U.S. presidential and congressional elections; • changes in trade relations and policies, such as (i) the imposition of tariffs by the U.S., China or other countries, (ii) environmental performance standards or similar fossil fuel import restrictions in certain international markets, (iii) economic sanctions, including embargoes, on Russia or other producing countries or (iv) restrictions on oil, gas and NGL exports by the U.S.; and • other governmental regulations and taxes.
Such volatility is likely to continue in the future due to numerous factors beyond our control, including, but not limited to: • the domestic and worldwide supply of and demand for oil, gas and NGLs; • volatility and trading patterns in the commodity-futures markets; • climate change incentives and conservation and environmental protection efforts; • production levels of members of OPEC, Russia, the U.S. or other producing countries; • geopolitical risks, including the conflict between Russia and Ukraine, the Israel-Gaza and Hezbollah conflicts and hostilities in Yemen and the Red Sea, as well as other hostilities or political and civil unrest in the Middle East, Africa, Europe and South America, including Venezuela; • adverse weather conditions, natural disasters and other catastrophic events, such as tornadoes, earthquakes, hurricanes and acts of terrorism; • pandemics (such as COVID-19) and epidemics of infectious diseases and other public health events, as well as any related governmental actions; 16 Table of Contents • regional pricing differentials, including in the Delaware Basin and other areas of our operations; • differing quality of production, including NGL content of gas produced; • the level of imports and exports of oil, gas and NGLs and the level of global oil, gas and NGL inventories; • the price and availability of alternative energy sources; • technological advances affecting energy consumption and production, including with respect to electric vehicles; • stockholder activism or activities by non-governmental organizations to restrict the exploration and production of oil and natural gas in order to reduce GHG emissions; • the overall economic environment, including inflationary pressures, fluctuations in interest rates, economic slowdowns or recessions; • market and geopolitical uncertainty as a result of shifts or potential further shifts in domestic and international policies; • changes in trade relations and policies, such as (i) the imposition of new or increased tariffs or other trade protection measures by the U.S., China or other countries, (ii) environmental performance standards or similar fossil fuel import restrictions in certain international markets, (iii) economic sanctions, including embargoes, on Russia or other producing countries or (iv) restrictions on oil, gas and NGL exports by the U.S.; and • other governmental regulations and taxes.
We can provide no assurance that we will continue to pay dividends or execute share repurchases at the current rate or at all. Any elimination of, or downward revision in, our dividend payout or share repurchase program could have an adverse effect on the market price of our common stock. 24 Table of Contents
We can provide no assurance that we will continue to pay dividends or execute share repurchases at the current rate or at all. Any elimination of, or downward revision in, our dividend payout or share repurchase program could have an adverse effect on the market price of our common stock.
In addition, our hedging arrangements may expose us to the risk of financial loss in certain circumstances, 17 Table of Contents including instances in which the contract counterparties fail to perform under the contracts.
In addition, our hedging arrangements may expose us to the risk of financial loss in certain circumstances, 18 Table of Contents including instances in which the contract counterparties fail to perform under the contracts.
In that event, due to 18 Table of Contents operation of law, we may be required to assume such obligations, which could be material. We have incurred and will continue to incur substantial capital, operating and remediation costs as a result of these and other laws, regulations, permits and orders to which we are subject.
In that event, due to operation of law, we may be required to assume such obligations, which could be material. We have incurred and will continue to incur substantial capital, operating and remediation costs as a result of these and other laws, regulations, permits and orders to which we are subject.
While it is not possible at this time to predict the ultimate impact of these actions or any other future regulatory changes, including any potential actions by the Trump Administration, any additional restrictions or burdens on our ability to operate on federal lands could adversely impact our business in the Delaware and Powder River Basins, as well as other areas where we operate under federal leases.
While it is not possible at this time to predict the ultimate impact of these actions or any other future regulatory changes, including any potential actions by the current U.S. administration, any additional restrictions or burdens on our ability to operate on federal lands could adversely impact our business in the Delaware and Powder River Basins, as well as other areas where we operate under federal leases.
As a result, we may also face heightened scrutiny, reputational risk, lawsuits or market access restrictions from these parties regarding our ESG initiatives.
As a result, we may also face heightened scrutiny, reputational risk, lawsuits or market access restrictions from these parties regarding our sustainability initiatives.
Our Environmental Performance Targets and Other ESG Initiatives May Expose Us to Risks We have developed, and may continue to develop, voluntary targets related to our ESG initiatives, including our environmental performance targets and strategy.
Our Environmental Performance Targets and Other Sustainability Initiatives May Expose Us to Risks We have developed, and may continue to develop, voluntary targets related to our sustainability initiatives, including our environmental performance targets and strategy.
These and other initiatives could negatively impact our business through restrictions or cancellations of oil and natural gas activities, greater costs of compliance or consumption (thereby reducing demand for our products) or an impairment in our ability to continue our operations in an economic manner.
These and other initiatives could negatively impact our business through restrictions or cancellations of oil and natural gas activities, a requirement to pay damages, greater costs of compliance or consumption (thereby reducing demand for our products) or an impairment in our ability to continue our operations in an economic manner.
We devote significant resources to prevent cybersecurity incidents and protect our data, but our systems and procedures for identifying and protecting against such attacks and mitigating such risks may prove to be insufficient due to system vulnerabilities, human error or malfeasance or other factors.
We devote significant resources to prevent cybersecurity incidents and protect our data, but 25 Table of Contents our systems and procedures for identifying and protecting against such attacks and mitigating such risks may prove to be insufficient due to system vulnerabilities, human error or malfeasance or other factors.
Furthermore, even if we do make acquisitions, such as the recently completed Grayson Mill acquisition, they may not result in an increase in our cash flow from operations or otherwise result in the benefits anticipated due to various risks, including, but not limited to: • mistaken estimates or assumptions about reserves, potential drilling locations, revenues and costs, including synergies and the overall costs of equity or debt; • difficulties in integrating the operations, technologies, products and personnel of the acquired assets or business; and • unknown and unforeseen liabilities or other issues related to any acquisition for which contractual protections prove inadequate, including environmental liabilities and title defects.
Furthermore, even if we do make acquisitions, they may not result in an increase in our cash flow from operations or otherwise result in the benefits anticipated due to various risks, including, but not limited to: • mistaken estimates or assumptions about reserves, potential drilling locations, revenues and costs, including synergies and the overall costs of equity or debt; 26 Table of Contents • difficulties in integrating the operations, technologies, products and personnel of the acquired assets or business; and • unknown and unforeseen liabilities or other issues related to any acquisition for which contractual protections prove inadequate, including environmental liabilities and title defects.
The European Union has also recently adopted a set of policy initiatives, including the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, which impose expansive sustainability reporting and due diligence requirements for both European Union and certain 20 Table of Contents non-European Union companies.
The European Union has also adopted a set of policy initiatives, including the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, which impose expansive sustainability reporting and due diligence requirements for both European Union and certain non-European Union companies.
Increased regulation and attention given to water disposal activities could lead to greater efforts, including through litigation, to limit or prohibit oil and gas 19 Table of Contents activities relying on injection wells for produced water disposal.
Increased regulation and attention given to water disposal activities could lead to greater efforts, including through litigation, to limit or prohibit oil and gas activities relying on injection wells for produced water disposal.
A wide variety of individuals or groups may perpetuate cyberattacks, ranging from highly sophisticated criminal organizations and state-sponsored actors to disgruntled employees, and the nature of, and methods used in, cyberattacks are similarly diverse and constantly evolving, with examples including phishing attempts, distributed denial of service attacks or ransomware.
A wide variety of individuals or groups may perpetuate cyberattacks, ranging from highly sophisticated criminal organizations and state-sponsored actors to disgruntled employees, and the nature of, and methods used in, cyberattacks are similarly diverse and constantly evolving, with examples including phishing attempts, distributed denial of service attacks or ransomware, which could be enhanced or facilitated by artificial intelligence.
Moreover, as emission measurement protocols mature and related technologies continue to develop, we may be required to revise our emissions estimates and reduction goals or otherwise revise the strategies outlined in our ESG initiatives.
Moreover, as 22 Table of Contents emission measurement protocols mature and related technologies continue to develop, we may be required to revise our emissions estimates and reduction goals or otherwise revise the strategies outlined in our sustainability initiatives.
Moreover, any bankruptcy involving, or any misconduct or other improper activities committed by, our business partners or other counterparties could negatively impact our own business or reputation.
Moreover, any bankruptcy involving, or any misconduct or other improper activities committed by, our business partners or other counterparties could negatively impact the value of our investments, as well as our own business or reputation.
At the state level, there have been attempts to introduce legislation whereby certain entities found responsible for contributing toward climate change over a period of time are required to pay into a fund used for climate-related projects.
As a result, the United States’ participation in future United Nations climate-related efforts is unclear. At the state level, there have been attempts to introduce legislation whereby certain entities found responsible for contributing toward climate change over a period of time are required to pay into a fund used for climate-related projects.
While we are still assessing the applicability of the European Union directives and California legislation and are awaiting resolution of the review of the SEC climate change rules, we would expect to incur substantial additional compliance costs to the extent these or similar disclosure requirements apply to us.
While we are still assessing the applicability of the European Union directives, we would expect to incur substantial additional compliance costs to the extent these or similar disclosure requirements apply to us.
Any future environmental costs of fulfilling our commitments to the environment are uncertain and will be governed by several factors, including future changes to regulatory requirements. Any such changes could have a significant impact on our operations and profitability.
Any future environmental costs of fulfilling our commitments to the environment are uncertain and will be governed by several factors, including future changes to regulatory requirements.
Water Disposal – Earthquakes in southeastern New Mexico, western Texas and elsewhere have prompted concerns about seismic activity and possible relationships with the oil and gas industry, particularly the disposal of wastewater in salt-water disposal wells.
Any such changes could have a significant impact on our operations and profitability. 20 Table of Contents Water Disposal – Earthquakes in southeastern New Mexico, western Texas and elsewhere have prompted concerns about seismic activity and possible relationships with the oil and gas industry, particularly the disposal of wastewater in salt-water disposal wells.
In addition, we are exposed to the risk of financial loss from trade, joint interest billing and other receivables. We sell our oil, gas and NGLs to a variety of purchasers, and, as an operator, we pay expenses and bill our non-operating partners for their respective share of costs.
We sell our oil, gas and NGLs to a variety of purchasers, and, as an operator, we pay expenses and bill our non-operating partners for their respective share of costs.
Relatedly, the IRA imposed a new charge or fee with respect to excess methane emissions from certain petroleum and natural gas facilities starting in 2024 and annually increasing through 2026, and we cannot predict whether or how the Trump Administration may seek to revise or repeal these rules or the timing of any such actions.
Relatedly, the IRA imposed a new charge or fee with respect to excess methane emissions from certain petroleum and natural gas facilities starting in 2024 and annually increasing through 2026.
Moreover, as the sophistication and volume of cyberattacks continue to increase, we may be required to expend significant additional resources to further enhance our digital security or to remediate vulnerabilities, and we may face difficulties in fully anticipating or implementing adequate preventive measures or mitigating potential harm. 23 Table of Contents Insurance Does Not Cover All Risks As discussed above, our business is hazardous and is subject to all of the operating risks normally associated with the exploration, development and production of oil, gas and NGLs.
Moreover, as the sophistication and volume of cyberattacks continue to increase, we may be required to expend significant additional resources to further enhance our digital security or to remediate vulnerabilities, and we may face difficulties in fully anticipating or implementing adequate preventive measures or mitigating potential harm.
If our ESG initiatives do not meet our investors’ or other stakeholders’ evolving expectations and standards, investment in us may be viewed as less attractive and our reputation and business may be adversely impacted. 21 Table of Contents Additionally, public statements with respect to environmental targets or other ESG-related goals are becoming increasingly subject to heightened scrutiny from public and governmental authorities, as well as other parties, with respect to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential ESG benefits.
Additionally, public statements with respect to environmental targets or other ESG-related goals are becoming increasingly subject to heightened scrutiny from public and governmental authorities, as well as other parties, with respect to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential ESG benefits.
While we are still assessing the potential impacts of the CAMT and the Pillar Two rules to our business, any incremental taxes attributable to CAMT, Pillar Two or any other tax law changes, or a change in our current interpretation thereof, could be significant and adversely impact our financial condition, results of operations and cash flows.
For example, the IRA included a 15% CAMT on certain financial statement income. Any incremental taxes attributable to CAMT or any other tax law changes, or a change in our current interpretation thereof, could be significant and adversely impact our financial condition, results of operations and cash flows. Moreover, we are regularly audited by tax authorities.
In April 2024, the SEC stayed the effectiveness of these rules pending the completion of a judicial review of certain legal challenges. Similarly, California enacted legislation in October 2023 requiring extensive climate-related disclosures for companies deemed to be doing business in California, and other states are considering similar laws.
Similarly, California enacted legislation in October 2023 requiring extensive climate-related disclosures for 21 Table of Contents companies deemed to be doing business in California, and other states are considering similar laws.
Our business has been adversely impacted by counterparty defaults in the past, and we may experience similar defaults again in the future. 22 Table of Contents Our Debt May Limit Our Liquidity and Financial Flexibility, and Any Downgrade of Our Credit Rating Could Adversely Impact Us As of December 31, 2024, we had total indebtedness of $8.9 billion.
Our Debt May Limit Our Liquidity and Financial Flexibility, and Any Downgrade of Our Credit Rating Could Adversely Impact Us As of December 31, 2025, we had total indebtedness of $8.4 billion.
Any such interventions could adversely impact our business, including by depressing the price of our production and generally introducing greater uncertainty to our operations. General and Other Risks Facing our Business The Credit Risk of Our Counterparties Could Adversely Affect Us We enter into a variety of transactions that expose us to counterparty credit risk.
Any such interventions could adversely impact our business, including by depressing the price of our production and generally introducing greater uncertainty to our operations.
Any such default may result in us being forced to cover the costs of those obligations and liabilities.
Any such default may result in us being forced to cover the costs of those obligations and liabilities. Our business has been adversely impacted by counterparty defaults in the past, and we may experience similar defaults again in the future.
Subsequent United Nations climate conferences have called for additional action to transition away from fossil fuels or otherwise reduce GHG emissions. The Trump Administration re-withdrew the United States from the Paris Agreement in January 2025, and the United States’ participation in future United Nations climate-related efforts is unclear.
Subsequent United Nations climate conferences have called for additional action to transition away from fossil fuels or otherwise reduce GHG emissions.
These actions may be prompted or exacerbated by unfavorable recommendations or ratings from proxy advisory firms or other third parties, including with respect to our performance (or the perception of our performance) under ESG metrics.
Activist shareholders could seek to engage in proxy solicitations, advance shareholder proposals or otherwise attempt to assert influence on our Board of Directors and management. These actions may be prompted or exacerbated by unfavorable recommendations or ratings from proxy advisory firms or other third parties.
In addition, the SEC finalized rules in March 2024 that require public companies to include extensive climate-related disclosures in their SEC filings, such as new disclosures on (i) material Scope 1 and 2 GHG emissions, including an independent assurance report, and (ii) financial statement information regarding the effects of severe weather events and other natural conditions.
In addition, the SEC finalized rules in March 2024 that would have required public companies to include extensive climate-related disclosures in their SEC filings.
Removed
For example, we experienced higher operating costs throughout 2023 due to steep cost inflation. Although cost inflation moderated somewhat in 2024, such inflationary pressures could continue or increase in 2025. Competition is also prevalent in the marketing of oil, gas and NGLs.
Added
For example, we experienced some increase in operating costs throughout 2025 due to the economic uncertainty in global trade arising from geopolitical events and shifting trade policies.
Removed
For example, the IRA included a 15% CAMT on certain financial statement income, and the Organization for Economic Co-operation and Development has adopted a set of model international tax rules known as the “Pillar Two” framework, a central component of which is the imposition of a global minimum corporate tax rate of 15% on certain multinational enterprises.
Added
While we actively work to mitigate the impact of these potential risks through operational efficiencies gained from the scale of our operations as well as by leveraging long-standing relationships with our suppliers, the ultimate impacts remain uncertain. Competition is also prevalent in the marketing of oil, gas and NGLs.
Removed
Moreover, we are regularly audited by tax authorities.
Added
While Congress and the current U.S. administration have taken various actions to slow or limit the availability of funding under the IRA, some of these efforts have been challenged and the ultimate effect of the IRA remains uncertain. For example, OBBB includes provisions that roll back certain aspects of the IRA, which could further restrict access to funding and incentives.
Removed
Our Business Could Be Adversely Impacted by Shareholder Activism, Proxy Contests or Similar Actions In recent years, proxy contests and other forms of shareholder activism have been directed against numerous public companies.
Added
Although the current U.S. administration delayed the imposition of the fee until 2034, we cannot predict whether this or any future administration may seek to revise or repeal this delay or the timing of any such actions.
Removed
Investors may from time to time seek to involve themselves in the governance, strategic direction and operations of the Company, whether by stockholder proposals, public campaigns, proxy solicitations or otherwise.
Added
In April 2024, the SEC stayed the effectiveness of these rules pending the completion of a judicial review of certain legal challenges, and the current U.S. administration has declined to defend the rules in the legal challenges, which has resulted in a stay of the challenges that will remain in effect until the rules are withdrawn or the government resumes its defense of the rules.
Added
The current U.S. administration re-withdrew the United States from the Paris Agreement in January 2025, and, in January 2026, the current U.S. administration announced that the United States was withdrawing from the United Nations Framework Convention on Climate Change and the various climate-related programs under this Framework.
Added
If our sustainability initiatives do not meet our investors’ or other stakeholders’ evolving expectations and standards (including those in support of or in opposition to ESG principles), investment in us may be viewed as less attractive and our reputation and business may be adversely impacted.
Added
Risks Relating to the Merger We May Fail to Realize the Anticipated Benefits of the Merger, and Any Failure to Successfully Integrate the Businesses and Operations of Devon and Coterra May Adversely Affect Our Future Results The success of the Merger will depend on, among other things, the combined company’s ability to realize anticipated synergies and benefits.
Added
If the combined company is not able to successfully achieve these synergies, or the cost to achieve these synergies is greater than expected, then the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected.
Added
Moreover, if we do not realize such benefits or for any other reason, the board of directors of the combined company may not approve, or delay the approval of, the anticipated increases in our dividends and share repurchase authorization following the Merger, which could negatively impact our stock price. 23 Table of Contents We and Coterra have operated and, until the completion of the Merger, will continue to operate independently.
Added
There can be no assurances that our businesses can be integrated successfully.
Added
It is possible that the integration process could result in the loss of key Devon employees or key Coterra employees, the loss of customers, the disruption of our or Coterra’s ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated.
Added
Devon and Coterra and certain of their respective subsidiaries also have contracts with various business partners, which contracts may grant the counterparties certain rights in connection with the Merger or which may require Devon or Coterra, as applicable, to obtain consents from these counterparties.
Added
If such rights are triggered or such consents cannot be obtained, the counterparties to these contracts may have the ability to terminate, reduce the scope of or otherwise seek to vary the terms of their relationships or the terms of such contracts with either or both parties, and the combined company may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the business of the combined company.
Added
Furthermore, the combined company’s board of directors and management team will consist of directors and employees from each of Devon and Coterra, as applicable.
Added
Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and strategic philosophies, which may not be successful or take longer than anticipated.
Added
We Are Subject to Certain Restrictions in the Merger Agreement That May Hinder Operations Pending the Consummation of the Merger, and We May Be the Target of Securities Class Action and Derivative Lawsuits as a Result of the Merger Whether or not the Merger is completed, the pending Merger may disrupt our current plans and operations, which could adversely impact our business operations and financial results.
Added
During the pendency of the Merger, the Merger Agreement restricts us from engaging in specified types of actions, including, among other things, acquisition, divestiture and financing activities and unbudgeted capital expenditures, in each case subject to certain exceptions.
Added
These restrictions could be in place for an extended period of time if the consummation of the Merger is delayed, which may delay or prevent us from undertaking business opportunities that, absent the Merger Agreement, we might have pursued, or from effectively responding to competitive pressures or industry developments.
Added
In addition, litigation is common in connection with mergers and acquisitions of public companies, regardless of any merits related to the claims. Defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages.
Added
Moreover, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, the injunction may delay or prevent the Merger from being completed, which may adversely affect our business, results of operations and financial condition.
Added
The Merger Agreement Could Be Terminated, Which Could Negatively Impact Us The Merger is subject to a number of conditions that must be satisfied or waived (to the extent permissible) prior to the completion of the Merger.
Added
These conditions to the completion of the Merger, some of which are beyond our control, may not be satisfied or waived in a timely manner or at all, and, accordingly, the Merger may be delayed or not completed.
Added
The Merger Agreement also contains certain termination rights for both Devon and Coterra, including if the Merger is not consummated by August 1, 2026 (subject to certain extensions due to delay in antitrust approvals), and further provides that, upon termination of the Merger Agreement under certain circumstances, we may be required to pay Coterra a termination fee equal to $865 million.
Added
If the Merger is not completed, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Merger, we may experience certain negative effects.
Added
Among others: (i) we may experience negative reactions from the financial markets and business partners; (ii) we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting and other advisory fees and printing costs; and (iii) matters relating to the Merger (including integration planning) require substantial commitments of time and resources by our management, which may result in the distraction of our management from ongoing business operations and pursuing other opportunities that could have been beneficial to us.
Added
General and Other Risks Facing Our Business The Credit Risk of Our Counterparties Could Adversely Affect Us We enter into a variety of transactions that expose us to counterparty credit risk. For example, we have exposure to financial institutions and insurance companies through our hedging arrangements, our Senior Credit Facility and our insurance policies.
Added
We Face Risks Associated with Artificial Intelligence and Other Emerging Technologies We increasingly use artificial intelligence (“AI”) and other emerging technologies to improve our business processes, including through the integration of various AI tools into certain of our information systems.
Added
However, we may not properly implement these technologies into our business, and there can be no assurance that we will realize the anticipated efficiency gains or other benefits from their adoption.
Added
Failure to effectively integrate AI and other emerging technologies into our operations could put us at a competitive disadvantage to other oil and gas companies who have more successfully implemented such technologies.
Added
In addition, the use of AI presents certain risks, including, among other things: (i) the generation of and reliance upon inaccurate, misleading or otherwise flawed content in our business processes, (ii) the unauthorized use or disclosure of confidential or proprietary information and (iii) potential exposure to new or enhanced governmental or regulatory scrutiny, all of which could negatively impact our business.
Added
Insurance Does Not Cover All Risks As discussed above, our business is hazardous and is subject to all of the operating risks normally associated with the exploration, development and production of oil, gas and NGLs.
Added
Activist Shareholders Could Cause Us to Incur Significant Expense, Hinder Execution of our Business Strategy and Impact Our Stock Price Publicly traded companies are increasingly subject to campaigns by activist shareholders advocating corporate actions, such as operational, governance or management changes, sales of assets or entire business units or business combination transactions.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+2 added−4 removed3 unchanged
Biggest changeOn May 29, 2024, we received a NOV from the Oil Conservation Division of New Mexico relating to alleged reporting violations by Devon Energy Production Company, L.P. On February 10, 2025, CDM, a joint venture of the Company, received a NOV from the NMED relating to alleged air emission and reporting violations under New Mexico environmental laws.
Biggest changeOn August 28, 2025, we received a NOV from the EPA relating to alleged air permit violations by Devon Energy Production Company, L.P. and WPX Energy Permian, LLC during 2024 in New Mexico and western Texas.
On February 1, 2023, we received a notice of violation from the EPA relating to alleged air permit violations by WPX Energy Permian, LLC during 2020 in New Mexico.
On February 1, 2023, we received a NOV from the EPA relating to alleged air permit violations by WPX Energy Permian, LLC during 2020 in New Mexico.
The Company has been engaging with the EPA to resolve each of these matters, which remain ongoing, and management cannot predict their ultimate outcome; however, resolution of each of these matters may result in a fine or penalty in excess of $300,000. For more information on the North Dakota NOV matter with the EPA, see Note 18 in “Item 8.
The Company has been engaging with the EPA to resolve each of these matters, which remain ongoing, and management cannot predict their ultimate outcome; however, resolution of each of these matters may result in a fine or penalty in excess of $1 million.
Financial Statements and Supplementary Data” of this report. 25 Table of Contents Environmental Matters On April 7, 2020, WPX Energy, Inc., a wholly-owned subsidiary of the Company, received a notice of violation (“NOV”) from the EPA relating to specific historical air emission events occurring on the Fort Berthold Indian Reservation in North Dakota.
Devon believes proceedings under this threshold are not material to Devon’s business, financial condition and results of operations. On April 7, 2020, WPX Energy, Inc., a wholly-owned subsidiary of the Company, received a notice of violation (“NOV”) from the EPA relating to specific historical air emission events occurring on the Fort Berthold Indian Reservation in North Dakota.
Removed
For more information on our legal contingencies, see Note 18 in “Item 8.
Added
For more information on our legal contingencies, see Note 18 in “Item 8. Financial Statements and Supplementary Data” of this report. Environmental Matters Devon has elected to use a $1 million threshold for disclosing certain proceedings arising under federal, state or local environmental laws when a governmental authority is a party.
Removed
Financial Statements and Supplementary Data” of this report. On March 5, 2024, we received a NOV from the New Mexico Environment Department (“NMED”) relating to alleged violations by WPX Energy Permian, LLC of certain notice, repair and facility design requirements under New Mexico environmental laws.
Added
For more information on the North Dakota NOV matter with the EPA, see Note 18 in “Item 8. Financial Statements and Supplementary Data” of this report. Item 4. Mine Saf ety Disclosures Not applicable. 28 Table of Contents PART II
Removed
The Company and CDM have, as applicable, been engaging with the applicable New Mexico regulatory body to resolve each of these respective matters, which remain ongoing, and management cannot predict their ultimate outcome; however, resolution of each of these matters may result in a fine or penalty in excess of $300,000. Item 4.
Removed
Mine Saf ety Disclosures Not applicable. 26 Table of Contents PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 26 PART II 27 Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6. [Reserved] 28 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 29 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 45 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 28 PART II 29 Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6. [Reserved] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 48 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changePeriod Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 - October 31 2,560 $ 40.18 2,559 $ 1,854 November 1 - November 30 4,961 $ 38.78 4,960 $ 1,662 December 1 - December 31 134 $ 37.39 134 $ 1,657 Total 7,655 $ 39.22 7,653 (1) In addition to shares purchased under the share repurchase program described below, these amounts also include approximately two thousand shares received by us from employees for the payment of personal income tax withholding on vesting transactions.
Biggest changePeriod Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) October 1 - October 31 2,266 $ 33.22 2,263 $ 782 November 1 - November 30 2,723 $ 35.18 2,721 $ 686 December 1 - December 31 2,142 $ 37.07 2,135 $ 607 Total 7,131 $ 35.12 7,119 (1) In addition to shares purchased under the share repurchase program described below, these amounts also include approximately thirteen thousand shares received by us from employees for the payment of personal income tax withholding on vesting transactions.
The graph was prepared assuming $100 was invested on December 31, 2019 in Devon’s common stock, the S&P 500 Index and the XOP U.S. Equity Index and dividends have been reinvested subsequent to the initial investment.
The graph was prepared assuming $100 was invested on December 31, 2020 in Devon’s common stock, the S&P 500 Index and the XOP U.S. Equity Index and dividends have been reinvested subsequent to the initial investment.
The graph and information are included for historical comparative purposes only and should not be considered indicative of future stock performance. 27 Table of Contents Issuer Purchases of Equity Securities The following table provides information regarding purchases of our common stock that were made by us during the fourth quarter of 2024 (shares in thousands).
The graph and information are included for historical comparative purposes only and should not be considered indicative of future stock performance. 29 Table of Contents Issuer Purchases of Equity Securities The following table provides information regarding purchases of our common stock that were made by us during the fourth quarter of 2025 (shares in thousands).
Item 5. Market for Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NYSE under the “DVN” ticker symbol. On February 5, 2025, there were 10,800 holders of record of our common stock. We began paying regular quarterly cash dividends in the second quarter of 1993.
Item 5. Market for Common Equity, Related Stock holder Matters and Issuer Purchases of Equity Securities Our common stock is traded on the NYSE under the “DVN” ticker symbol. On February 4, 2026, there were 10,200 holders of record of our common stock. We began paying regular quarterly cash dividends in the second quarter of 1993.
In the fourth quarter of 2024, we repurchased 7.7 million common shares for $300 million, or $39.22 per share, under this share repurchase program. For additional information, see Note 17 in “Item 8. Financial Statements and Supplementary Data” of this report.
In the fourth quarter of 2025, we repurchased 7.1 million common shares for $250 million, or $35.12 per share, under this share repurchase program. For additional information, see Note 17 in “Item 8. Financial Statements and Supplementary Data” of this report.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeYear Ended December 31, Before Tax After Tax After NCI Per Diluted Share 2024: Earnings attributable to Devon (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 attributable to Devon (Non-GAAP) $ 3,919 $ 3,105 $ 3,054 $ 4.82 2023: Earnings attributable to Devon (GAAP) $ 4,623 $ 3,782 $ 3,747 $ 5.84 Adjustments: Asset dispositions (30 ) (24 ) (24 ) (0.04 ) Asset and exploration impairments 5 3 3 — Deferred tax asset valuation allowance — (1 ) (1 ) — Fair value changes in financial instruments (74 ) (58 ) (58 ) (0.09 ) Core earnings attributable to Devon (Non-GAAP) $ 4,524 $ 3,702 $ 3,667 $ 5.71 2022: Earnings attributable to Devon (GAAP) $ 7,775 $ 6,037 $ 6,015 $ 9.12 Adjustments: Asset dispositions (44 ) (34 ) (34 ) (0.05 ) Asset and exploration impairments 13 10 10 0.02 Deferred tax asset valuation allowance — 17 17 0.03 Fair value changes in financial instruments (690 ) (532 ) (532 ) (0.81 ) Core earnings attributable to Devon (Non-GAAP) $ 7,054 $ 5,498 $ 5,476 $ 8.31 EBITDAX and Field-Level Cash Margin To assess the performance of our assets, we use EBITDAX and Field-Level Cash Margin.
Biggest changeYear Ended December 31, Before Tax After Tax After NCI Per Diluted Share 2025: Earnings attributable to Devon (GAAP) $ 3,466 $ 2,681 $ 2,642 $ 4.17 Adjustments: Asset dispositions (343 ) (266 ) (266 ) (0.42 ) Asset and exploration impairments 265 206 206 0.33 Change in tax legislation — 5 5 0.01 Fair value changes in financial instruments (172 ) (134 ) (134 ) (0.21 ) Restructuring and transaction costs 36 28 28 0.04 Core earnings attributable to Devon (Non-GAAP) $ 3,252 $ 2,520 $ 2,481 $ 3.92 2024: Earnings attributable to Devon (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 attributable to Devon (Non-GAAP) $ 3,919 $ 3,105 $ 3,054 $ 4.82 2023: Earnings attributable to Devon (GAAP) $ 4,623 $ 3,782 $ 3,747 $ 5.84 Adjustments: Asset dispositions (30 ) (24 ) (24 ) (0.04 ) Asset and exploration impairments 5 3 3 — Deferred tax asset valuation allowance — (1 ) (1 ) — Fair value changes in financial instruments (74 ) (58 ) (58 ) (0.09 ) Core earnings attributable to Devon (Non-GAAP) $ 4,524 $ 3,702 $ 3,667 $ 5.71 46 Table of Contents EBITDAX and Field-Level Cash Margin To assess the performance of our assets, we use EBITDAX and Field-Level Cash Margin.
Executive Overview We are a leading independent oil and natural gas exploration and production company whose operations are focused onshore in the United States. Our operations are currently focused in four core areas: the Delaware Basin, Rockies, Eagle Ford and Anadarko.
Executive Overview We are a leading independent oil and natural gas exploration and production company whose operations are focused onshore in the United States. Our operations are currently focused in four core areas: the Delaware Basin, Rockies, Eagle Ford and Anadarko Basin.
While our credit agreement includes provisions qualified by material adverse effect as well as a covenant that requires us to report a condition or event having a material adverse effect, the obligation of the banks to fund the 2023 Senior Credit Facility is not conditioned on the absence of a material adverse effect.
While our credit agreement includes provisions qualified by material adverse effect as well as a covenant that requires us to report a condition or event having a material adverse effect, the obligation of the banks to fund the Senior Credit Facility is not conditioned on the absence of a material adverse effect.
Based on currently available information, we do not believe an ownership change has occurred during 2024 for Devon. Non-GAAP Measures Core Earnings We make reference to “core earnings attributable to Devon” and “core earnings per share attributable to Devon” in “Overview of 2024 Results” in this Item 7 that are not required by or presented in accordance with GAAP.
Based on currently available information, we do not believe an ownership change has occurred during 2025 for Devon. Non-GAAP Measures Core Earnings We make reference to “core earnings attributable to Devon” and “core earnings per share attributable to Devon” in “Overview of 2025 Results” in this Item 7 that are not required by or presented in accordance with GAAP.
This information is intended to provide investors with an understanding of our past performance, current financial condition and outlook for the future and should be read in conjunction with “Item 8. Financial Statements and Supplementary Data” of this report. The following discussion and analyses primarily focus on 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This information is intended to provide investors with an understanding of our past performance, current financial condition and outlook for the future and should be read in conjunction with “Item 8. Financial Statements and Supplementary Data” of this report. The following discussion and analyses primarily focus on 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
The key terms to our oil, gas and NGL derivative financial instruments as of December 31, 2024 are presented in Note 3 in “Item 8. Financial Statements and Supplementary Data” of this report. Further, when considering the current commodity price environment and our current hedge position, we expect to achieve our capital investment priorities.
The key terms to our oil, gas and NGL derivative financial instruments as of December 31, 2025 are presented in Note 3 in “Item 8. Financial Statements and Supplementary Data” of this report. Further, when considering the current commodity price environment and our current hedge position, we expect to achieve our capital investment priorities.
In the past five years, annual revisions other than price to our proved reserve estimates, which have been both increases and decreases in individual years, have averaged approximately 3% of the previous year’s estimate. However, there can be no assurance that more significant revisions will not be necessary in the future.
In the past five years, annual revisions other than price to our proved reserve estimates, which have been both increases and decreases in individual years, have averaged approximately 4% of the previous year’s estimate. However, there can be no assurance that more significant revisions will not be necessary in the future.
Financial Statements and Supplementary Data” of this report for further discussion. 39 Table of Contents Tax Contingencies As we are regularly audited by tax authorities, we have and will continue to have our tax positions challenged. Certain tax authorities require material cash deposits be made to further dispute and respond to any of our challenged tax positions.
Financial Statements and Supplementary Data” of this report for further discussion. 42 Table of Contents Tax Contingencies As we are regularly audited by tax authorities, we have and will continue to have our tax positions challenged. Certain tax authorities require material cash deposits be made to further dispute and respond to any of our challenged tax positions.
Changes to any of the reserves or market-based assumptions can significantly affect estimates of undiscounted and discounted pre-tax cash flows and impact the recognition and amount of impairments. None of our oil and gas assets were at risk of impairment as of December 31, 2024.
Changes to any of the reserves or market-based assumptions can significantly affect estimates of undiscounted and discounted pre-tax cash flows and impact the recognition and amount of impairments. None of our oil and gas assets were at risk of impairment as of December 31, 2025.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our 2023 Annual Report on Form 10-K .
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our 2024 Annual Report on Form 10-K .
Our credit rating from Standard and Poor’s Financial Services is BBB with a stable outlook. Our credit rating from Fitch is BBB+ with a stable outlook. Our credit rating from Moody’s Investor Service is Baa2 with a stable outlook. Any rating downgrades may result in additional letters of credit or cash collateral being posted under certain contractual arrangements.
Our credit rating from Standard and Poor’s Financial Services is BBB with a positive outlook. Our credit rating from Fitch is BBB+ with a positive outlook. Our credit rating from Moody’s Investor Service is Baa2 with a positive outlook. Any rating downgrades may result in additional letters of credit or cash collateral being posted under certain contractual arrangements.
At December 31, 2024, all material suspended well costs have been suspended for less than one year. Similar to the evaluation of suspended exploratory well costs, costs for undeveloped leasehold, for which reserves have not been proven, must also be evaluated for continued capitalization or impairment.
At December 31, 2025, all material suspended well costs have been suspended for less than one year. Similar to the evaluation of suspended exploratory well costs, costs for undeveloped leasehold, for which reserves have not been proven, must also be evaluated for continued capitalization or impairment.
In general, these provisions can remove the obligation of the banks to fund the credit line if any condition or event would reasonably be expected to have a material and adverse effect on the borrower’s financial condition, operations, properties or business considered as a whole, the borrower’s ability to make timely debt payments or the enforceability of material terms of the credit agreement.
In general, these provisions can remove the obligation of the banks to fund the credit line if any condition or event would reasonably be expected to have a material 41 Table of Contents and adverse effect on the borrower’s financial condition, operations, properties or business considered as a whole, the borrower’s ability to make timely debt payments or the enforceability of material terms of the credit agreement.
We utilize a variety of mechanisms to limit our exposure to the credit risks of our customers, joint interest owners and counterparties. Such mechanisms include, under certain conditions, requiring letters of credit, prepayments or collateral postings. Credit Availability We had approximately $3.0 billion of available borrowing capacity under our 2023 Senior Credit Facility at December 31, 2024.
We utilize a variety of mechanisms to limit our exposure to the credit risks of our customers, joint interest owners and counterparties. Such mechanisms include, under certain conditions, requiring letters of credit, prepayments or collateral postings. Credit Availability We had approximately $3.0 billion of available borrowing capacity under our Senior Credit Facility at December 31, 2025.
At the end of each quarter, management reviews the status of all suspended exploratory drilling costs to determine whether the costs should continue to remain capitalized or shall be expensed. When making this determination, management considers current activities, 40 Table of Contents near-term plans for additional exploratory or appraisal drilling and the likelihood of reaching a development program.
At the end of each quarter, management reviews the status of all suspended exploratory drilling costs to determine whether the costs should continue to remain capitalized or shall be expensed. When making this determination, management considers current activities, near-term plans for additional exploratory or appraisal drilling and the likelihood of reaching a development program.
Our asset base is underpinned by premium acreage in the economic core of the Delaware Basin and our diverse, top-tier resource plays provide a deep inventory of opportunities for years to come.
Our asset base is underpinned by premium acreage in the economic core of the Delaware Basin and our diverse, top-tier resource plays, providing a deep inventory of opportunities for years to come.
Financial Statements and Supplementary Data” of this report. 35 Table of Contents Capital Resources, Uses and Liquidity Sources and Uses of Cash The following table presents the major changes in cash and cash equivalents for the time periods presented below.
Financial Statements and Supplementary Data” of this report. 37 Table of Contents Capital Resources, Uses and Liquidity Sources and Uses of Cash The following table presents the major changes in cash and cash equivalents for the time periods presented below.
Contractual Obligations As of December 31, 2024, our material contractual obligations include debt, interest expense, asset retirement obligations, lease obligations, operational agreements, drilling and facility obligations, various tax obligations and retained obligations related to our divested Canadian business.
Contractual Obligations As of December 31, 2025, our material contractual obligations include debt, interest expense, asset retirement obligations, lease obligations, operational agreements, drilling and facility obligations, various tax obligations and retained obligations related to our divested Canadian business.
Core earnings attributable to Devon, as well as the per share amount, represent net earnings excluding certain noncash and other items that are typically excluded by securities analysts in their published estimates of our quarterly financial results. Our non-GAAP measures are typically used as a quarterly performance measure.
Core earnings attributable to Devon, as well as the per share amount, represent net earnings excluding certain noncash and other items that are typically excluded by securities analysts in their published estimates of our quarterly financial results. Our 45 Table of Contents non-GAAP measures are typically used as a quarterly performance measure.
EBITDAX and Field-Level Cash Margin as defined by Devon may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net earnings from operations. 43 Table of Contents Below are reconciliations of net earnings to EBITDAX and a further reconciliation to Field-Level Cash Margin.
EBITDAX and Field-Level Cash Margin as defined by Devon may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net earnings from operations. Below are reconciliations of net earnings to EBITDAX and a further reconciliation to Field-Level Cash Margin.
The determination of common operating fields is largely based on geological structural features or stratigraphic condition, which requires judgment. Management also considers the nature of production, common infrastructure, common sales points, common processing plants, common regulation and management oversight to make common operating field determinations.
The determination of common operating fields is largely based on geological structural features or stratigraphic condition, which requires judgment. Management also considers the nature of production, common infrastructure, common sales points, common processing plants, common regulation and management oversight 44 Table of Contents to make common operating field determinations.
Our engineers prepare our reserve estimates. We then subject certain of our reserve estimates to audits performed by a third-party petroleum consulting firm. In 2024, 89% of our proved reserves were subjected to such an audit. The passage of time provides additional information which may result in revisions to previous estimates to reflect updated information.
Our engineers prepare our reserve estimates. We then subject certain of our reserve estimates to audits performed by a third-party petroleum consulting firm. In 2025, 91% of our proved reserves were subjected to such an audit. The passage of time provides additional information which may result in revisions to previous estimates to reflect updated information.
As evidenced by this acquisition, we remain focused on building economic value by executing on our strategic priorities of moderating production growth, emphasizing capital and operational efficiencies, optimizing reinvestment rates to maximize free cash flow, maintaining low leverage, delivering cash returns to our shareholders and pursuing operational excellence.
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.
For our impairment determinations, we utilize NYMEX forward strip prices and 41 Table of Contents incorporate internally generated price forecasts along with price forecasts published by reputable investment banks and reservoir engineering firms to estimate our future revenues.
For our impairment determinations, we utilize NYMEX forward strip prices and incorporate internally generated price forecasts along with price forecasts published by reputable investment banks and reservoir engineering firms to estimate our future revenues.
Of the remaining undeveloped leasehold costs at December 31, 2024, none is scheduled to expire in 2025. Reserves Our estimates of proved and proved developed reserves are a major component of DD&A calculations. Additionally, our proved reserves represent the element of these calculations that require the most subjective judgments.
Of the remaining undeveloped leasehold costs at December 31, 2025, $17 million is scheduled to expire in 2026. Reserves Our estimates of proved and proved developed reserves are a major component of DD&A calculations. Additionally, our proved reserves represent the element of these calculations that require the most subjective judgments.
For additional information, see Note 17 in “Item 8. Financial Statements and Supplementary Data” in this report. The following table summarizes our common stock dividends in 2024 and 2023. Devon most recently raised its fixed dividend by 10% from $0.20 to $0.22 per share in the first quarter of 2024.
For additional information, see Note 17 in “Item 8. Financial Statements and Supplementary Data” in this report. The following table summarizes our common stock dividends in 2025 and 2024. Devon most recently raised its fixed dividend by 9% from $0.22 to $0.24 per share in the first quarter of 2025.
Additionally, to help mitigate the volatility of commodity prices and protect ourselves from downside risk, we currently have approximately 30% of our anticipated 2025 oil and gas production hedged. 30 Table of Contents Business and Industry Outlook In 2024, Devon marked its 53rd anniversary in the oil and gas business and its 36th year as a public company.
Additionally, to help mitigate the volatility of commodity prices and protect ourselves from downside risk, we currently have approximately 30% of our anticipated 2026 oil and gas production hedged. 32 Table of Contents Business and Industry Outlook In 2025, Devon marked its 54th anniversary in the oil and gas business and its 37th year as a public company.
At the end of each quarter, management assesses undeveloped leasehold costs for impairment by considering future drilling plans, drilling activity results, commodity price outlooks, planned future sales or expiration of all or a portion of such projects. At December 31, 2024, Devon had approximately $1.9 billion of undeveloped leasehold costs.
At the end of each quarter, management assesses undeveloped leasehold costs for impairment by considering future drilling plans, drilling activity results, commodity price outlooks, planned future sales or expiration of all or a portion of such projects. At December 31, 2025, Devon had approximately $800 million of undeveloped leasehold costs.
Operating Cash Flow Key inputs into determining our planned capital investment is the amount of cash we hold and operating cash flow we expect to generate over the next one to three or more years. At the end of 2024, we held approximately $850 million of cash.
Operating Cash Flow Key inputs into determining our planned capital investment is the amount of cash we hold and operating cash flow we expect to generate over the next one to three or more years. At the end of 2025, we held approximately $1.4 billion of cash.
Since sufficient market data was not available regarding the fair values of proved and unproved oil and gas properties, we prepared estimates and engaged third-party valuation experts.
The most significant assumptions relate to the estimated fair values of proved and unproved oil and gas properties. Since sufficient market data was not available regarding the fair values of proved and unproved oil and gas properties, we prepared estimates and engaged third-party valuation experts.
Our 2024 net earnings were $2.9 billion, compared to net earnings of $3.8 billion for 2023. The graph below shows the change in net earnings from 2023 to 2024.
Our 2025 net earnings were $2.7 billion, compared to net earnings of $2.9 billion for 2024. The graph below shows the change in net earnings from 2024 to 2025.
We exited 2024 with $3.8 billion of liquidity, comprised of $0.8 billion of cash and $3.0 billion of available credit under our 2023 Senior Credit Facility. We currently have $8.9 billion of debt outstanding, of which approximately $485 million is classified as short-term.
We exited 2025 with $4.4 billion of liquidity, comprised of $1.4 billion of cash and $3.0 billion of available credit under our Senior Credit Facility. We currently have $8.4 billion of debt outstanding, of which approximately $1.0 billion is classified as short-term.
As a result, the demand and cost for people, services, equipment and materials may also decrease, causing a positive impact on our cash flow as the prices paid for services and equipment decline. However, the inverse is also generally true during periods of rising commodity prices.
Significant commodity price decreases can lead to a decrease in drilling and development activities. As a result, the demand and cost for people, services, equipment and materials may also decrease, causing a positive impact on our cash flow as the prices paid for services and equipment decline. However, the inverse is also generally true during periods of rising commodity prices.
We believe these non-GAAP measures facilitate comparisons of our performance to earnings estimates published by securities analysts. We also believe these non-GAAP measures can facilitate comparisons of our performance between periods and to the performance of our peers. 42 Table of Contents Below are reconciliations of our core earnings and earnings per share to their comparable GAAP measures.
We also believe these non-GAAP measures can facilitate comparisons of our performance between periods and to the performance of our peers. Below are reconciliations of our core earnings and earnings per share to their comparable GAAP measures.
During 2023, we repaid $242 million of senior notes at maturity. Shareholder Distributions and Stock Activity We repurchased 24.2 million shares of common stock for $1.1 billion in 2024 and 19.1 million shares of common stock for $979 million in 2023 under the share repurchase program authorized by our Board of Directors.
During 2024, we repaid $472 million of senior notes at maturity. 39 Table of Contents Shareholder Distributions and Stock Activity We repurchased 30.8 million shares of common stock for $1.1 billion in 2025 and 24.2 million shares of common stock for $1.1 billion in 2024 under the share repurchase program authorized by our Board of Directors.
In the first quarter of 2024, Devon exercised its option to extend the 2023 Senior Credit Facility maturity date from March 24, 2028 to March 24, 2029. Devon has the option to extend the March 24, 2029 maturity date by two additional one-year periods subject to lender consent.
In the first quarter of 2025, Devon exercised its option to extend the Senior Credit Facility maturity date from March 24, 2029 to March 24, 2030. Devon has the option to extend the March 24, 2030 maturity date by an additional year subject to lender consent.
Amounts excluded for 2024 relate to asset dispositions, noncash asset impairments (including unproved asset impairments), fair value changes in derivative financial instruments and restructuring and transaction costs. Amounts excluded for 2023 and 2022 relate to asset dispositions, noncash asset impairments (including unproved asset impairments), deferred tax asset valuation allowance and fair value changes in derivative financial instruments.
Amounts excluded for 2025 relate to asset dispositions, noncash asset impairments (including unproved asset impairments), change in tax legislation, fair value changes in derivative financial instruments and restructuring and transaction costs. Amounts excluded for 2024 relate to asset dispositions, noncash asset impairments (including unproved asset impairments), fair value changes in derivative financial instruments and restructuring and transaction costs.
Since the inception of our authorized $5.0 billion share repurchase program, we have repurchased approximately 69 million common shares for approximately $3.3 billion, or $48.46 per share. We also returned value to shareholders by paying dividends of $937 million during 2024.
Since the inception of our authorized $5.0 billion share repurchase program, we have repurchased approximately 100 million common shares for approximately $4.4 billion, or $44.02 per share. We also returned value to shareholders by paying dividends of $619 million during 2025.
This covenant requires us to maintain a ratio of total funded debt to total capitalization, as defined in the credit agreement, of no more than 65%.
This covenant requires us to maintain a ratio of total funded debt to total capitalization, as defined in the credit agreement, of no more than 65%. As of December 31, 2025, we were in compliance with this covenant with a 24.8% debt-to-capitalization ratio.
We expect to mitigate the impact of cost inflation through efficiencies gained from the scale of our operations as well as by leveraging our long-standing relationships with our suppliers. Credit Losses – Our operating cash flow is also exposed to credit risk in a variety of ways.
While we actively work to mitigate the impact of these potential risks through operational efficiencies gained from the scale of our operations as well as by leveraging long-standing relationships with our suppliers, the ultimate impacts remain uncertain. Credit Losses – Our operating cash flow is also exposed to credit risk in a variety of ways.
Year Ended December 31, 2024 2023 2022 Net earnings (GAAP) $ 2,942 $ 3,782 $ 6,037 Financing costs, net 363 308 309 Income tax expense 770 841 1,738 Exploration expenses 28 20 29 Depreciation, depletion and amortization 3,255 2,554 2,223 Asset dispositions 11 (30 ) (44 ) Share-based compensation 98 92 87 Derivative and financial instrument non-cash valuation changes 176 (71 ) (698 ) Accretion on discounted liabilities and other 96 38 (95 ) EBITDAX (Non-GAAP) 7,739 7,534 9,586 Marketing and midstream revenues and expenses, net 49 60 35 Commodity derivative cash settlements (197 ) (47 ) 1,356 General and administrative expenses, cash-based 402 316 308 Field-level cash margin (Non-GAAP) $ 7,993 $ 7,863 $ 11,285 44 Table of Contents
Year Ended December 31, 2025 2024 2023 Net earnings (GAAP) $ 2,681 $ 2,942 $ 3,782 Financing costs, net 455 363 308 Income tax expense 785 770 841 Exploration expenses 43 28 20 Depreciation, depletion and amortization 3,595 3,255 2,554 Asset impairments 254 — — Asset dispositions (343 ) 11 (30 ) Share-based compensation 89 98 92 Derivative and financial instrument non-cash valuation changes (170 ) 176 (71 ) Accretion on discounted liabilities and other 24 96 38 EBITDAX (Non-GAAP) 7,413 7,739 7,534 Marketing and midstream revenues and expenses, net 72 49 60 Commodity derivative cash settlements (232 ) (197 ) (47 ) General and administrative expenses, cash-based 403 402 316 Field-level cash margin (Non-GAAP) $ 7,656 $ 7,993 $ 7,863 47 Table of Contents
Financial Statements and Supplementary Data” of this report. During the third quarter of 2024, we issued $3.25 billion of debt to partially fund the Grayson Mill acquisition. Additionally, we retired $472 million of debt in the third quarter of 2024. The net impact of this debt activity is expected to increase our annual net financing costs by approximately $180 million.
Financial Statements and Supplementary Data” in this report. During the third quarter of 2024, we issued $3.25 billion of debt to partially fund the Grayson Mill acquisition. Additionally, we retired $472 million of debt in the third quarter of 2024.
Year Ended December 31, 2024 2023 Operating cash flow $ 6,600 $ 6,544 Grayson Mill acquired cash 147 — Capital expenditures (3,645 ) (3,883 ) Acquisitions of property and equipment (3,808 ) (64 ) Divestitures of property and equipment 24 26 Investment activity, net (50 ) (21 ) Debt activity, net 2,747 (242 ) Repurchases of common stock (1,057 ) (979 ) Common stock dividends (937 ) (1,858 ) Noncontrolling interest activity, net 1 (8 ) Other (51 ) (94 ) Net change in cash, cash equivalents and restricted cash $ (29 ) $ (579 ) Cash, cash equivalents and restricted cash at end of period $ 846 $ 875 Operating Cash Flow As presented in the table above, net cash provided by operating activities continued to be a significant source of capital and liquidity.
Year Ended December 31, 2025 2024 Operating cash flow $ 6,711 $ 6,600 Grayson Mill acquired cash — 147 Capital expenditures (3,592 ) (3,645 ) Acquisitions of property and equipment (322 ) (3,808 ) Divestitures of property, equipment and investments 545 24 Investment activity, net (24 ) (50 ) Debt activity, net (485 ) 2,747 Repurchases of common stock (1,050 ) (1,057 ) Common stock dividends (619 ) (937 ) Noncontrolling interest activity, net (269 ) 1 Repayment of finance leases (282 ) — Other (25 ) (51 ) Net change in cash, cash equivalents and restricted cash $ 588 $ (29 ) Cash, cash equivalents and restricted cash at end of period $ 1,434 $ 846 Operating Cash Flow As presented in the table above, net cash provided by operating activities continued to be a significant source of capital and liquidity.
Income Taxes 2024 2023 Current expense $ 459 $ 465 Deferred expense 311 376 Total expense $ 770 $ 841 Current tax rate 12 % 10 % Deferred tax rate 9 % 8 % Effective income tax rate 21 % 18 % For discussion on income taxes, see Note 6 in “Item 8.
Income Taxes 2025 2024 Current expense $ 301 $ 459 Deferred expense 484 311 Total expense $ 785 $ 770 Current tax rate 9 % 12 % Deferred tax rate 14 % 9 % Effective income tax rate 23 % 21 % For discussion on income taxes, see Note 6 in “Item 8.
In February 2025, we raised our fixed dividend by 9%, to $0.24 per share, beginning in the first quarter of 2025. The dividend is payable in the first quarter of 2025 and is expected to total approximately $156 million. Our Board of Directors has authorized a $5.0 billion share repurchase program that expires on June 30, 2026.
In February 2026, we announced a cash dividend of $0.24 per share payable in the first quarter of 2026, which is expected to total approximately $149 million. Our Board of Directors has authorized a $5.0 billion share repurchase program that expires on June 30, 2026. Through February 1, 2026, we had executed $4.5 billion of the authorized program.
Production Expenses 2024 2023 Change LOE $ 1,574 $ 1,428 10 % Gathering, processing & transportation 790 702 13 % Production taxes 748 713 5 % Property taxes 71 85 -16 % Total $ 3,183 $ 2,928 9 % Per Boe: LOE $ 5.83 $ 5.95 -2 % Gathering, processing & transportation $ 2.93 $ 2.92 0 % Percent of oil, gas and NGL sales: Production taxes 6.7 % 6.6 % 1 % LOE and gathering, processing and transportation and production taxes increased primarily due to increased activity and the Grayson Mill acquisition in the Rockies. 33 Table of Contents Field-Level Cash Margin The table below presents the field-level cash margin for each of our operating areas.
Production Expenses 2025 2024 Change LOE $ 1,922 $ 1,574 22 % Gathering, processing & transportation 831 790 5 % Production taxes 748 748 0 % Property taxes 66 71 -7 % Total $ 3,567 $ 3,183 12 % Per Boe: LOE $ 6.27 $ 5.83 8 % Gathering, processing & transportation $ 2.71 $ 2.93 -8 % Percent of oil, gas and NGL sales: Production taxes 6.7 % 6.7 % 0 % Production expenses increased in 2025 primarily due to increased activity in the Rockies related to the Grayson Mill acquisition in addition to new well activity in the Delaware Basin. 35 Table of Contents Field-Level Cash Margin The table below presents the field-level cash margin for each of our operating areas.
Hedge Settlements 2024 2023 Change Oil $ 44 $ (33 ) 233 % Natural gas 152 80 90 % NGL 1 — N/M Total cash settlements (1) $ 197 $ 47 319 % (1) Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.
Hedge Settlements 2025 2024 Change Oil $ 162 $ 44 268 % Natural gas 61 152 -60 % NGL 9 1 N/M Total cash settlements (1) $ 232 $ 197 18 % (1) Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.
The material changes are further discussed by category on the following pages. 31 Table of Contents Production Volumes 2024 % of Total 2023 Change Oil (MBbls/d) Delaware Basin 220 63 % 211 4 % Rockies 65 19 % 50 30 % Eagle Ford 46 13 % 42 10 % Anadarko Basin 13 4 % 14 -7 % Other 3 1 % 3 N/M Total 347 100 % 320 8 % 2024 % of Total 2023 Change Gas (MMcf/d) Delaware Basin 732 61 % 657 11 % Rockies 124 10 % 76 63 % Eagle Ford 98 9 % 82 20 % Anadarko Basin 241 20 % 238 1 % Other 1 0 % 1 N/M Total 1,196 100 % 1,054 13 % 2024 % of Total 2023 Change NGLs (MBbls/d) Delaware Basin 123 64 % 107 16 % Rockies 21 11 % 11 91 % Eagle Ford 17 9 % 15 13 % Anadarko Basin 29 15 % 28 4 % Other 1 1 % 1 N/M Total 191 100 % 162 18 % 2024 % of Total 2023 Change Combined (MBoe/d) Delaware Basin 465 63 % 427 9 % Rockies 107 15 % 73 47 % Eagle Ford 79 11 % 71 11 % Anadarko Basin 82 11 % 82 0 % Other 4 0 % 5 -6 % Total 737 100 % 658 12 % From 2023 to 2024, the change in volumes contributed to a $1.1 billion increase in earnings.
The material changes are further discussed by category on the following pages. 33 Table of Contents Production Volumes 2025 % of Total 2024 Change Oil (MBbls/d) Delaware Basin 225 58 % 220 2 % Rockies 107 28 % 65 64 % Eagle Ford 41 10 % 46 -11 % Anadarko Basin 12 3 % 13 -9 % Other 4 1 % 3 N/M Total 389 100 % 347 12 % 2025 % of Total 2024 Change Gas (MMcf/d) Delaware Basin 812 59 % 732 11 % Rockies 235 17 % 124 89 % Eagle Ford 76 5 % 98 -23 % Anadarko Basin 258 19 % 241 7 % Other 1 0 % 1 N/M Total 1,382 100 % 1,196 16 % 2025 % of Total 2024 Change NGLs (MBbls/d) Delaware Basin 133 60 % 123 8 % Rockies 49 22 % 21 130 % Eagle Ford 11 5 % 17 -33 % Anadarko Basin 28 13 % 29 -4 % Other — 0 % 1 N/M Total 221 100 % 191 16 % 2025 % of Total 2024 Change Combined (MBoe/d) Delaware Basin 493 59 % 465 6 % Rockies 195 23 % 107 82 % Eagle Ford 65 8 % 79 -18 % Anadarko Basin 83 10 % 82 1 % Other 4 0 % 4 N/M Total 840 100 % 737 14 % From 2024 to 2025, the change in volumes contributed to a $1.4 billion increase in earnings.
Year Ended December 31, 2024 2023 Delaware Basin $ 2,049 $ 2,257 Rockies 504 489 Eagle Ford 670 775 Anadarko Basin 225 196 Other 7 6 Total oil and gas 3,455 3,723 Midstream 101 81 Other 89 79 Total capital expenditures $ 3,645 $ 3,883 Capital expenditures consist primarily of amounts related to our oil and gas exploration and development operations, midstream operations and other corporate activities.
Year Ended December 31, 2025 2024 Delaware Basin $ 1,834 $ 2,049 Rockies 858 504 Eagle Ford 575 670 Anadarko Basin 150 225 Other 4 7 Total oil and gas 3,421 3,455 Midstream 118 101 Other 53 89 Total capital expenditures $ 3,592 $ 3,645 38 Table of Contents Capital expenditures consist primarily of amounts related to our oil and gas exploration and development operations, midstream operations and other corporate activities.
Our capital investment program is driven by a disciplined allocation process focused on moderating our production growth and maximizing our returns. As such, our capital expenditures for 2024 represent approximately 55% of our operating cash flow. Acquisitions of Property and Equipment During the third quarter of 2024, we acquired the Williston Basin business of Grayson Mill.
Our capital investment program is driven by a disciplined allocation process focused on moderating our production growth and maximizing our returns. As such, our capital expenditures for 2025 represent approximately 54% of our operating cash flow. Acquisitions of Property and Equipment During 2025, we completed acquisitions of property primarily related to state and federal land sales in the Delaware Basin.
The transaction consisted of $3.5 billion of cash and approximately 37.3 million shares of Devon common stock. For additional information, please see Note 2 in “Part II. Item 8. Financial Statements and Supplementary Data” in this report. 36 Table of Contents Divestitures of Property and Equipment During 2024 and 2023, we received contingent earnout payments related to assets previously sold.
During the third quarter of 2024, we acquired the Williston Basin business of Grayson Mill. The transaction consisted of $3.5 billion of cash and approximately 37.3 million shares of Devon common stock. For additional information, please see Note 2 in “Part II. Item 8. Financial Statements and Supplementary Data” in this report.
The 2023 Senior Credit Facility supports our $3.0 billion of short-term credit under our commercial paper program. As of December 31, 2024, there were no borrowings under our commercial paper program. See Note 13 in “Item 8. Financial Statements and Supplementary Data” of this report for further discussion. The 2023 Senior Credit Facility contains only one material financial covenant.
As of December 31, 2025, Devon had no outstanding borrowings under the Senior Credit Facility and had less than $1.0 million in outstanding letters of credit under this facility. See Note 13 in “Item 8. Financial Statements and Supplementary Data” of this report for further discussion. The Senior Credit Facility contains only one material financial covenant.
For additional information, please see Note 2 in “Part II. Item 8. Financial Statements and Supplementary Data” in this report. Investment Activity During 2024 and 2023, Devon received distributions from our investments of $68 million and $32 million, respectively. Devon contributed $118 million and $53 million to our investments during 2024 and 2023, respectively.
Financial Statements and Supplementary Data” in this report. Investment Activity During 2025 and 2024, Devon received distributions from our investments of $38 million and $68 million, respectively. Devon contributed $62 million and $118 million to our investments during 2025 and 2024, respectively.
Realized Prices 2024 Realization 2023 Change Oil (per Bbl) WTI index $ 75.79 $ 77.62 -2 % Realized price, unhedged $ 73.78 97% $ 75.98 -3 % Cash settlements $ 0.35 $ (0.28 ) Realized price, with hedges $ 74.13 98% $ 75.70 -2 % 32 Table of Contents 2024 Realization 2023 Change Gas (per Mcf) Henry Hub index $ 2.27 $ 2.74 -17 % Realized price, unhedged $ 0.91 40% $ 1.83 -50 % Cash settlements $ 0.35 $ 0.20 Realized price, with hedges $ 1.26 56% $ 2.03 -38 % 2024 Realization 2023 Change NGLs (per Bbl) WTI index $ 75.79 $ 77.62 -2 % Realized price, unhedged $ 20.20 27% $ 20.48 -1 % Cash settlements $ 0.02 $ — Realized price, with hedges $ 20.22 27% $ 20.48 -1 % 2024 2023 Change Combined (per Boe) Realized price, unhedged $ 41.44 $ 44.96 -8 % Cash settlements $ 0.73 $ 0.19 Realized price, with hedges $ 42.17 $ 45.15 -7 % From 2023 to 2024, realized prices contributed to an approximately $700 million decrease in earnings.
Realized Prices 2025 Realization 2024 Change Oil (per Bbl) WTI index $ 64.87 $ 75.79 -14 % Realized price, unhedged $ 62.77 97% $ 73.78 -15 % Cash settlements $ 1.14 $ 0.35 Realized price, with hedges $ 63.91 99% $ 74.13 -14 % 34 Table of Contents 2025 Realization 2024 Change Gas (per Mcf) Henry Hub index $ 3.43 $ 2.27 51 % Realized price, unhedged $ 1.67 49% $ 0.91 84 % Cash settlements $ 0.12 $ 0.35 Realized price, with hedges $ 1.79 52% $ 1.26 42 % 2025 Realization 2024 Change NGLs (per Bbl) WTI index $ 64.87 $ 75.79 -14 % Realized price, unhedged $ 18.28 28% $ 20.20 -9 % Cash settlements $ 0.11 $ 0.02 Realized price, with hedges $ 18.39 28% $ 20.22 -9 % 2025 2024 Change Combined (per Boe) Realized price, unhedged $ 36.60 $ 41.44 -12 % Cash settlements $ 0.76 $ 0.73 Realized price, with hedges $ 37.36 $ 42.17 -11 % From 2024 to 2025, realized prices contributed to an approximately $1.3 billion decrease in earnings.
The changes in production volumes, realized prices and production expenses, shown above, had the following impacts on our field-level cash margins by asset. 2024 $ per BOE 2023 $ per BOE Field-level cash margin (Non-GAAP) Delaware Basin $ 5,197 $ 30.56 $ 5,359 $ 34.38 Rockies 1,122 $ 28.61 863 $ 32.19 Eagle Ford 1,150 $ 39.72 1,074 $ 41.71 Anadarko Basin 464 $ 15.50 508 $ 16.94 Other 60 N/M 59 N/M Total $ 7,993 $ 29.63 $ 7,863 $ 32.76 DD&A 2024 2023 Change Oil and gas per Boe $ 11.70 $ 10.27 14 % Oil and gas $ 3,156 $ 2,464 28 % Other property and equipment 99 90 11 % Total $ 3,255 $ 2,554 27 % DD&A increased in 2024 primarily due to higher volumes as well as an increase in the oil and gas DD&A rate.
The changes in production volumes, realized prices and production expenses, shown above, had the following impacts on our field-level cash margins by asset. 2025 $ per BOE 2024 $ per BOE Field-level cash margin (Non-GAAP) Delaware Basin $ 4,636 $ 25.74 $ 5,197 $ 30.56 Rockies 1,652 $ 23.20 1,122 $ 28.61 Eagle Ford 853 $ 35.96 1,150 $ 39.72 Anadarko Basin 468 $ 15.54 464 $ 15.50 Other 47 N/M 60 N/M Total $ 7,656 $ 24.97 $ 7,993 $ 29.63 DD&A and Asset Impairments 2025 2024 Change Oil and gas per Boe $ 11.35 $ 11.70 -3 % Oil and gas $ 3,479 $ 3,156 10 % Other property and equipment 116 99 17 % Total DD&A $ 3,595 $ 3,255 10 % Asset impairments $ 254 $ — N/M DD&A increased in 2025 primarily due to higher volumes driven by the Grayson Mill acquisition and new well activity in the Delaware Basin.
As of December 31, 2024, we were in compliance with this covenant with a 26.5% debt-to-capitalization ratio. 38 Table of Contents Our access to funds from the 2023 Senior Credit Facility is not subject to a specific funding condition requiring the absence of a “material adverse effect”. It is not uncommon for credit agreements to include such provisions.
Our access to funds from the Senior Credit Facility is not subject to a specific funding condition requiring the absence of a “material adverse effect”. It is not uncommon for credit agreements to include such provisions.
Additionally, we remain committed to capital discipline and focused on delivering the objectives that underpin our capital plan for 2025. Operating Expenses – Commodity prices can also affect our operating cash flow through an indirect effect on operating expenses. Significant commodity price decreases can lead to a decrease in drilling and development activities.
Additionally, we remain committed to capital discipline and focused on delivering the objectives that underpin our capital plan for 2026. However, if commodity prices decline further, we will adapt our plan by reducing activity in order to maximize free cash flow. Operating Expenses – Commodity prices can also affect our operating cash flow through an indirect effect on operating expenses.
In connection with the acquisition, we allocated the $5.0 billion of purchase price consideration to the assets acquired and liabilities assumed based on estimated fair values as of the date of the acquisition. The preliminary purchase price assessment remains an ongoing process and is subject to change for up to one year subsequent to the closing date of the acquisition.
In connection with the acquisition, we allocated the $5.0 billion of purchase price consideration to the assets acquired and liabilities assumed based on estimated fair values as of the date of the acquisition. We made a number of assumptions in estimating the fair value of assets acquired and liabilities assumed in the acquisition.
Our recent performance highlights for these priorities include the following items for 2024: • Oil production totaled 347 MBbls/d, an 8% increase year over year. • Through 2024, completed approximately 67% of our authorized $5.0 billion share repurchase program, with approximately 69 million of our common shares repurchased for approximately $3.3 billion, or $48.46 per share, since inception of the plan. • Retired $472 million of senior notes. • Exited with $3.8 billion of liquidity, including $0.8 billion of cash. • Generated $6.6 billion of operating cash flow. • Including variable dividends, paid dividends of $937 million. • Earnings attributable to Devon were $2.9 billion, or $4.56 per diluted share. • Core earnings (Non-GAAP) were $3.1 billion, or $4.82 per diluted share.
Our recent performance highlights for these priorities include the following items for 2025: • Oil production totaled 389 MBbls/d, a 12% increase year over year. • Through 2025, completed approximately 88% of our authorized $5.0 billion share repurchase program, with approximately 100 million of our common shares repurchased for approximately $4.4 billion, or $44.02 per share, since inception of the plan. • Retired $485 million of senior notes. • Exited with $4.4 billion of liquidity, including $1.4 billion of cash. • Generated $6.7 billion of operating cash flow. • Paid dividends of $619 million. • Completed acquisition of outstanding noncontrolling interests in Cotton Draw Midstream for $260 million. • Received $545 million of cash proceeds from the sale of property and investments, including $409 million related to the sale of our investment in Matterhorn. • Through 2025, achieved approximately 85% of our $1.0 billion business optimization plan. • Earnings attributable to Devon were $2.6 billion, or $4.17 per diluted share. • Core earnings (Non-GAAP) were $2.5 billion, or $3.92 per diluted share.
Because oil, natural gas and NGL reserves are a depleting resource, we, like all upstream operators, must continually make capital investments to grow and even sustain production. Generally, our capital investments are focused on drilling and completing new wells and maintaining production from existing wells.
Liquidity The business of exploring for, developing and producing oil and natural gas is capital intensive. Because oil, natural gas and NGL reserves are a depleting resource, we, like all upstream operators, must continually make capital investments to grow and even sustain production.
In the event that future commodity prices or reserve quantities are lower than those used as inputs to determine estimates of acquisition date fair values, the likelihood increases that certain costs may be determined to not be recoverable.
In the event that future commodity prices or reserve quantities are lower than those used as inputs to determine estimates of acquisition date fair values, the likelihood increases that certain costs may be determined to not be recoverable. 43 Table of Contents Oil and Gas Assets Accounting, Classification, Reserves & Valuation Successful Efforts Method of Accounting and Classification We utilize the successful efforts method of accounting for our oil and natural gas exploration and development activities which requires management’s assessment of the proper designation of wells and associated costs as developmental or exploratory.
Debt Activity In 2024, Devon issued $1.25 billion of 5.20% senior notes due 2034 and $1.0 billion of 5.75% senior notes due 2054. Additionally, in 2024, Devon borrowed $1.0 billion from the Term Loan. These debt issuances helped fund the Grayson Mill acquisition. During 2024, we repaid $472 million of senior notes at maturity.
Additionally, in 2024, Devon borrowed $1.0 billion from the Term Loan. These debt issuances helped fund the Grayson Mill acquisition.
Our 2025 cash flow is partly protected from commodity price volatility due to our current hedge position that covers approximately 30% of our anticipated oil and gas volumes. In order to further insulate our cash flow, we continue to examine and, when appropriate, execute attractive regional basis swap hedges to protect price realizations across our portfolio.
In order to further insulate our cash flow, we continue to examine and, when appropriate, execute attractive regional basis swap hedges to protect price realizations across our portfolio. With continued capital efficiency gains and operational improvements, we expect to generate material amounts of free cash flow at current commodity price levels.
The increase in volumes was primarily due to increased activity in the Delaware Basin and Eagle Ford as well as the Grayson Mill acquisition in the Rockies, which closed in the third quarter of 2024.
Volumes increased primarily due to the Grayson Mill acquisition in the Rockies, which closed in the third quarter of 2024, as well as new well activity in the Delaware Basin. Production volumes for the first quarter of 2026 are expected to decrease by approximately 1%, or 10 MBoe/d, as a result of severe winter weather conditions.
In 2024, we returned approximately $2.0 billion of cash to shareholders through cash dividends and share repurchases, and will continue to prioritize this shareholder return strategy in 2025.
In 2025, we returned approximately $1.7 billion of cash to shareholders through cash dividends and share repurchases, and will continue to prioritize shareholder cash return in 2026. In 2025, WTI oil prices averaged $64.87 per Bbl versus $75.79 per Bbl in 2024, an approximately 14% decline amid continued market volatility.
The acquisition will allow us to efficiently expand our oil production and operating scale, creating immediate and long-term, sustainable value to shareholders over time.
The acquisition has allowed us to efficiently expand our oil production and operating scale, creating immediate and long-term, sustainable value to shareholders. On February 1, 2026, we entered into the Merger Agreement, providing for an all-stock merger of equals with Coterra.
This decrease was due to lower unhedged realized oil, gas and NGL prices which decreased primarily due to lower WTI and Henry Hub index prices. Additionally, gas prices were impacted by expanded regional gas price differentials in the Delaware Basin driven by infrastructure constraints. Realized prices were strengthened by hedge cash settlements across all commodities.
This decrease was due to lower unhedged realized oil and NGL prices which decreased primarily due to lower WTI and Mont Belvieu index prices, respectively. This decrease was partially offset by an increase in unhedged realized gas prices which was primarily due to higher Henry Hub index prices.
Our commitment to capital discipline and capital efficiency remains unchanged with our 2025 capital program. Similar to 2024, the majority of our 2025 capital, or approximately 55%, is expected to be focused on our highest returning oil play, the Delaware Basin.
Our 2026 capital program reflects our continued commitment to capital discipline and efficiency. To maximize free cash flow generation, our 2026 capital is expected to be focused on our highest returning oil play, the Delaware Basin. The remainder of our 2026 capital will continue to be deployed to our other core areas of Rockies, Eagle Ford and Anadarko Basin.
We also had an increase in non-labor costs which were primarily related to technology system upgrade projects. 34 Table of Contents Other Items 2024 2023 Change in earnings Commodity hedge valuation changes (1) $ (176 ) $ 71 $ (247 ) Marketing and midstream operations (49 ) (60 ) 11 Exploration expenses 28 20 (8 ) Asset dispositions 11 (30 ) (41 ) Net financing costs 363 308 (55 ) Other, net 96 38 (58 ) $ (398 ) (1) Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.
General and Administrative Expense 2025 2024 Change G&A per Boe $ 1.60 $ 1.85 -13 % Labor and benefits $ 259 $ 285 -9 % Non-labor 233 215 8 % Total $ 492 $ 500 -2 % G&A per BOE decreased in 2025 due to the Grayson Mill acquisition efficiently expanding our operating scale and production. 36 Table of Contents Other Items 2025 2024 Change in earnings Commodity hedge valuation changes (1) $ 170 $ (176 ) $ 346 Marketing and midstream operations (72 ) (49 ) (23 ) Exploration expenses 43 28 (15 ) Asset dispositions (343 ) 11 354 Net financing costs 455 363 (92 ) Other, net 24 96 72 $ 642 (1) Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.
During 2024 and 2023, we distributed $51 million and $45 million, respectively, to our noncontrolling interests in CDM. Liquidity The business of exploring for, developing and producing oil and natural gas is capital intensive.
During 2025 and 2024, we received $14 million and $52 million, respectively, of contributions from our noncontrolling interests in CDM. During 2025 and 2024, we distributed $23 million and $51 million, respectively, to our noncontrolling interests in CDM.
Our cash-return objectives remain focused on opportunistic share repurchases, funding our dividends, repaying debt at upcoming maturities and building cash balances. Our net earnings and operating cash flow are highly dependent upon oil, gas and NGL prices which can be incredibly volatile due to several varying factors.
These savings are on track to be achieved by the end of 2026 with approximately $850 million achieved through 2025. 31 Table of Contents 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. Commodity pricing remained stable through 2023 and 2024.
Fixed Variable Total Rate Per Share 2024: First quarter $ 143 $ 156 $ 299 $ 0.44 Second quarter 138 85 223 $ 0.35 Third quarter 136 136 272 $ 0.44 Fourth quarter 143 — 143 $ 0.22 Total year-to-date $ 560 $ 377 $ 937 2023: First quarter $ 133 $ 463 $ 596 $ 0.89 Second quarter 128 334 462 $ 0.72 Third quarter 127 185 312 $ 0.49 Fourth quarter 127 361 488 $ 0.77 Total year-to-date $ 515 $ 1,343 $ 1,858 Noncontrolling Interest Activity During 2024 and 2023, we received $52 million and $37 million, respectively, of contributions from our noncontrolling interests in CDM.
Dividends Rate Per Share 2025: First quarter $ 163 $ 0.24 Second quarter 156 $ 0.24 Third quarter 151 $ 0.24 Fourth quarter 149 $ 0.24 Total year-to-date $ 619 2024: First quarter $ 299 $ 0.44 Second quarter 223 $ 0.35 Third quarter 272 $ 0.44 Fourth quarter 143 $ 0.22 Total year-to-date (1) $ 937 (1) During 2024, Devon paid variable dividends totaling $377 million in addition to its recurring fixed dividend.
Through February 14, 2025, we had executed $3.4 billion of the authorized program. Capital Expenditures Our 2025 capital expenditure budget is expected to be approximately $3.8 billion to $4.0 billion, which is approximately 7% higher than our 2024 capital expenditures primarily due to the Grayson Mill acquisition.
Capital Expenditures Our 2026 capital expenditure budget is expected to be approximately $3.5 billion to $3.7 billion, which is approximately 4% lower than our 2025 capital expenditures, driven by continued capital efficiency gains and operational improvements.
We remain committed to continuing our track record of industry leading return of capital to our shareholders, underpinned by low capital reinvestment rates and a disciplined, returns-driven strategy which is designed to be successful through economic cycles.
We achieved approximately 85% of these improvements through 2025, with the remainder to be realized by year-end 2026. We remain committed to industry-leading capital returns to shareholders, supported by capital discipline and a strategy designed to succeed through commodity cycles.
For additional information, see Note 13 in "Part I. Financial Information - Item 1. Financial Statements" in this report. For discussion on other, net, see Note 5 in “Item 8. Financial Statements and Supplementary Data” of this report.
During the third quarter of 2025, Devon early redeemed the $485 million of 5.85% senior notes due in December 2025 pursuant to the "par-call" rights set forth in the indenture document. For additional information, see Note 13 in “Item 8. Financial Statements and Supplementary Data” in this report.
Removed
We remain committed to capital discipline and delivering the objectives that underpin our current plan. Those objectives 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.
Added
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.
Removed
Commodity prices were strong during 2022 as the continued recovery from the COVID-19 pandemic increased demand for oil and gas commodities, while economic sanctions imposed on Russia and restraint from OPEC+ on production growth both simultaneously impacted the supply of these commodities.
Added
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.
Removed
In 2023, commodity prices weakened primarily due to economic uncertainty surrounding inflation and increased interest rates as well as certain geopolitical events. During 2024, oil and NGL prices remained stable from the prior year while gas prices decreased primarily due to warmer weather impacts and excess 29 Table of Contents supply.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed3 unchanged
Biggest changeInterest Rate Risk At December 31, 2024, we had total debt of $8.9 billion. $7.9 billion of this debt was comprised of debentures and notes that have fixed interest rates which average 5.7%. We also have a $1.0 billion Term Loan which has a variable interest rate that is adjusted monthly.
Biggest changeInterest Rate Risk At December 31, 2025, we had total debt of $8.4 billion. $7.4 billion of this debt was comprised of debentures and notes that have fixed interest rates which average 5.7%. We also have a $1.0 billion Term Loan which has a variable interest rate that is adjusted monthly.
Risk Factors” of this report. Consequently, we systematically hedge a portion of our production through various financial transactions. The key terms to our oil and gas derivative financial instruments as of December 31, 2024 are presented in Note 3 in “Item 8. Financial Statements and Supplementary Data” of this report.
Risk Factors” of this report. Consequently, we systematically hedge a portion of our production through various financial transactions. The key terms to our oil and gas derivative financial instruments as of December 31, 2025 are presented in Note 3 in “Item 8. Financial Statements and Supplementary Data” of this report.
The fair values of our commodity derivatives are largely determined by estimates of the forward curves of the relevant price indices. At December 31, 2024, a 10% change in the forward curves associated with our commodity derivative instruments would have changed our net positions by approximately $300 million.
The fair values of our commodity derivatives are largely determined by estimates of the forward curves of the relevant price indices. At December 31, 2025, a 10% change in the forward curves associated with our commodity derivative instruments would have changed our net positions by approximately $150 million.
The interest rate on the Term Loan was 5.81% at December 31, 2024. 45 Table of Contents
The interest rate on the Term Loan was 5.4% at December 31, 2025. 48 Table of Contents