filings.toolsDevon Energy (DVN) 10-K risk factor changes: FY2019 vs FY2018
The 2019-12-31 10-K against the 2018-12-31 one, compared heading by heading and sentence by sentence.
Item 1A48 rewritten13 added38 removed165 unchanged
All filing items1,247 rewritten835 added1,133 removed1,788 unchanged
Summary
counted, not written
- Item 1A headings could not be compared: only 0 carried over between the two years, which usually means one filing was read wrongly, so none is reported as new or removed.
- Sentence by sentence, 835 added, 1,133 removed, 1,247 rewritten and 1,788 unchanged across 17 items that differ.
Sentences by item
20 items, with every count and a link to each item that changed
Underlined words on a shaded ground are new in FY2019; struck-through words were in FY2018. Sentences that are wholly new or wholly gone are labelled rather than marked.
Item 1A. Risk Factors
48 rewritten, 13 added, 38 removed, 165 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
[removed: Volatile] [added: Volatile] Oil, Gas and NGL Prices Significantly Impact [removed: our Business][added: Our Business]
For example, over the last five years, NYMEX WTI oil and NYMEX Henry Hub prices ranged from [removed: a high] [added: highs] of over [removed: $100] [added: $75] per Bbl and [removed: $6] [added: $4.80] per MMBtu, respectively, to [removed: a low] [added: lows] of under $27 per Bbl and $1.70 per MMBtu, respectively.
| | • | production levels of members of OPEC, [removed: Russia] [added: Russia, the U.S.] or other producing countries; |
| | • | adverse weather [removed: conditions and] [added: conditions,] natural disasters, [added: public health crises and other catastrophic events,] such as tornadoes, [removed: earthquakes] [added: earthquakes, hurricanes] and [removed: hurricanes;] [added: epidemics of infectious diseases;] |
| | • | regional pricing differentials, including in [removed: Canada,] the Delaware Basin and other areas of our operations; |
| | • | the price and availability of alternative [removed: fuels;] [added: energy sources;] |
| | • | technological advances affecting energy consumption and [removed: production;] [added: production, including with respect to electric vehicles;] |
Consequently, material revisions to existing [removed: reserve] [added: reserves] estimates may occur as a result of changes in any of these factors.
Such revisions to proved reserves could have [removed: a material] [added: an] adverse effect on our financial condition and the value of our properties, as well as the estimates of our future net revenue and profitability.
[removed: Discoveries] [added: Discoveries] or Acquisitions of Reserves Are Needed to Avoid a Material Decline in Reserves and [removed: Production][added: Production]
[removed: Our Operations] [added: Our Operations] Are Uncertain and Involve Substantial Costs and [removed: Risks][added: Risks]
Our operations are subject to extensive federal, state, [removed: provincial, tribal,] local and other laws, rules and regulations, including with respect to environmental matters, worker health and safety, wildlife conservation, the gathering and transportation of oil, gas and NGLs, conservation policies, reporting obligations, royalty payments, unclaimed property and the imposition of taxes.
[added: Such] regulations include requirements for permits to drill and to conduct other operations and for provision of financial assurances (such as bonds) covering drilling, completion and well operations and decommissioning obligations.
For example, certain regulations require the plugging and abandonment of wells and removal of production facilities by current and former operators, [removed: which may result in significant costs associated with the removal of tangible equipment and other restorative actions at the end] [added: including corporate successors] of [removed: operations.][added: former operators.]
[removed: Our operating and] other compliance costs could increase further if existing laws and regulations are revised or [removed: reinterpreted] [added: reinterpreted,] or if new laws and regulations become applicable to our operations.
Although we are unable to predict changes to existing laws and regulations, such changes could significantly impact our profitability, financial condition and liquidity, particularly changes related to hydraulic fracturing, [removed: pipeline safety,] [added: environmental matters more generally,] seismic activity and income taxes, as discussed below.
For example, the EPA has issued [removed: final] regulations under the federal Clean Air Act establishing performance standards for oil and gas activities, including standards for the capture of air emissions released during hydraulic fracturing, and [added: it] finalized in 2016 regulations that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants.
The EPA also released a [removed: study] [added: report] in 2016 finding that certain aspects of hydraulic fracturing, such as water withdrawals and wastewater management practices, could result in impacts to water [removed: resources, although the report did not identify a direct link between hydraulic fracturing and impacts to groundwater] resources.
The BLM previously finalized regulations to regulate hydraulic fracturing on federal [removed: lands,] [added: lands] but subsequently issued a repeal of those regulations in 2017.
[removed: Several] [added: Moreover, several] states in which we operate have [removed: already adopted and more states are considering adopting] [added: adopted, or stated intentions to adopt,] laws or regulations that [removed: require] [added: mandate further restrictions on hydraulic fracturing, such as requiring] disclosure of chemicals used in hydraulic [removed: fracturing and impose] [added: fracturing, imposing] more stringent permitting, disclosure and well-construction requirements on hydraulic fracturing [removed: operations.][added: operations and establishing standards for the capture of air emissions released during hydraulic fracturing.]
Although it is not possible at this time to predict the [removed: final] outcome of these [added: or other] proposals, any new [removed: federal, state or local] restrictions on hydraulic fracturing that may be imposed in areas in which we conduct business could potentially result in increased compliance costs, delays [added: or cessation] in development or [added: other] restrictions on our operations.
Seismic Activity – Earthquakes in northern and central Oklahoma and elsewhere have prompted concerns about seismic activity and possible relationships with the [removed: energy] [added: oil and gas] industry.
[removed: *Changes] [added: Changes] to Tax [removed: Laws*] [added: Laws] – We are subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions, and our operating cash flow is sensitive to the amount of income taxes we must pay.
[removed: Concerns] [added: Concerns] About Climate Change and Related Regulatory, Social and Market Actions May Adversely Affect Our [removed: Business][added: Business]
Nevertheless, several states where we operate, including [removed: Wyoming,] [added: Wyoming and New Mexico,] have already [removed: imposed venting and flaring limitations] [added: imposed, or stated intentions to impose, laws or regulations] designed to reduce methane emissions from oil and gas exploration and production activities.
For example, in an effort to promote a lower-carbon economy, there are various public and private initiatives subsidizing the development [added: and adoption] of alternative energy [removed: sources,] [added: sources and technologies,] including by mandating the use of specific fuels or technologies.
Such restrictions in capital could [added: decrease the value of our business and] make it more difficult to [removed: secure funding to operate] [added: fund] our [removed: business.][added: operations.]
These and the other regulatory, social and market risks relating to climate change described above could result in unexpected costs, increase our operating expense and reduce the demand for our products, which in turn could lower the value of our reserves and have [removed: a material] [added: an] adverse effect on our profitability, financial condition and liquidity.
Moreover, as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act and other [removed: legislation,] [added: legislation and regulation,] hedging transactions and many of our contract counterparties have become subject to increased governmental oversight and regulations in recent years.
Although we cannot predict the ultimate impact of these laws and the related rulemaking, some of which is ongoing, existing or future regulations may adversely affect the cost [added: and availability of our hedging arrangements.]
We also frequently look to buyers of oil and gas properties from us [added: or our predecessors] to perform certain obligations associated with the disposed assets, including the removal of production facilities and plugging and abandonment of wells.
Certain of these counterparties [added: or their successors] may experience insolvency, liquidity problems or other issues and may not be able to meet their obligations and liabilities (including contingent liabilities) owed to, and assumed from, us, particularly during a depressed or volatile commodity price environment.
Any such default [removed: by these counterparties] may result in us being forced to cover the costs of those obligations and liabilities, which could adversely impact our financial results and condition.
[removed: Our] [added: Our] Debt May Limit Our Liquidity and Financial Flexibility, and Any Downgrade of Our Credit Rating Could Adversely Impact [removed: Us][added: Us]
As of December 31, [removed: 2018,] [added: 2019,] we had total indebtedness of [removed: $5.9] [added: $4.3] billion.
[removed: As an owner, lessee or operator of oil and gas properties,] [added: Environmental Laws Generally – In addition to regulatory efforts focused on hydraulic fracturing,] we are subject to various [added: other] federal, [removed: state, provincial, tribal] [added: state] and local laws and regulations relating to discharge of materials into, and protection of, the environment.
[removed: Changes in or additions to public policy regarding the protection of the environment] [added: Any such changes] could have a significant impact on our operations and profitability.
Our business has become increasingly dependent on digital technologies, and we anticipate expanding [removed: our] [added: the] use of technology in our operations, including through [added: artificial intelligence,] process automation and data analytics.
Concurrent with this growing dependence on technology is greater sensitivity to [removed: cyberattack] [added: cyber attack related] activities, which have [removed: been increasing against] [added: frequently targeted] our industry.
Cyber attackers often attempt to gain unauthorized access to digital systems for purposes of misappropriating sensitive information, intellectual property or financial assets, [added: corrupting data or causing operational disruptions as well as to prevent users from accessing systems or information and demand payment in order to regain access.]
| | • | stockholder activism or activities by non-governmental organizations to restrict the exploration and production of oil and natural gas in order to reduce greenhouse gas emissions; |
Moreover, our current development activity is focused on unconventional oil and gas assets, which generally have significantly higher decline rates as compared to conventional assets.
For example, we have from time to time experienced well-control events that have resulted in various remediation and clean-up costs and certain of the other impacts described above.
These requirements may result in significant costs associated with the removal of tangible equipment and other restorative actions.
Our operating and
Hydraulic Fracturing – In recent years, various federal agencies have asserted regulatory authority over certain aspects of the hydraulic fracturing process.
In addition to state laws, local land use restrictions, such as city ordinances, may restrict drilling in general or hydraulic fracturing in particular.
Beyond these regulatory efforts, various policy makers, regulatory agencies and political candidates at the federal, state and local levels have proposed implementing even further restrictions on hydraulic fracturing, including prohibiting the technology outright.
For example, certain candidates running to be elected President of the United States in 2020 have pledged to impose a ban on hydraulic fracturing.
It is possible that any such restrictions may particularly target industry activity on federal lands, which could adversely impact our operations in the Delaware and Powder River Basins, as well as other areas where we operate under federal leases.
As of December 31, 2019, approximately 20% of our total leasehold resides on federal lands, and approximately 40% and 60% of our leasehold in the Delaware and Powder River Basins, respectively, resides on federal lands.
With respect to more comprehensive regulation, policy makers and political candidates have made, or expressed support for, a variety of proposals, such as the development of cap-and-trade or carbon tax programs, as well as the more sweeping “green new deal” resolutions introduced in Congress in early 2019.
The “green new deal” resolutions call for a 10-year national mobilization effort to, among other things, transition 100% of power demand in the U.S. to zero-emission sources and overhaul transportation systems in the U.S. to remove greenhouse gas emissions as much as is technologically feasible.
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The differential between WTI and Western Canadian Select, a benchmark for the Canadian oil market, recently expanded, widening to nearly $46 per barrel in November 2018.
As a result, our Canadian heavy oil unhedged realized price for the fourth quarter was near zero.
This negatively affected our results of operations in 2018, and a sustained weakness or further deterioration in differentials or commodity prices could materially and adversely impact our business by resulting in, or exacerbating, the following effects:
| | • | reducing the amount of oil, bitumen, gas and NGLs that we can produce economically; |
| | • | limiting our financial flexibility, liquidity and access to sources of capital, such as equity and debt; |
| | • | reducing our revenues, operating cash flows and profitability; |
| | • | causing us to decrease our capital expenditures or maintain reduced capital spending for an extended period, resulting in lower future production of oil, gas and NGLs; and |
| | • | reducing the carrying value of our properties, resulting in noncash write-downs. |
Such
Hydraulic Fracturing – In recent years, the EPA has made proposals that subject hydraulic fracturing to further regulation and that could potentially restrict the practice of hydraulic fracturing.
In addition, some states and municipalities have significantly limited drilling activities or hydraulic fracturing or are considering doing so or banning the practice altogether.
Pipeline Safety – The pipeline assets in which we own interests, are subject to stringent and complex regulations related to pipeline safety and integrity management.
The PHMSA has established a series of rules that require pipeline operators to develop and implement integrity management programs for gas, NGL and condensate transmission pipelines as well as certain low stress pipelines and gathering lines transporting hazardous liquids, such as oil, that, in the event of a failure, could affect “high consequence areas.” Additional action by PHMSA with respect to pipeline integrity management requirements may occur in the future.
For example, in 2016 PHMSA proposed new rules for gas pipelines that extend pipeline safety programs beyond high consequence areas to newly proposed “moderate consequence areas” and would also impose more rigorous testing and reporting requirements on such pipelines.
To date, no further action has been taken.
PHMSA has announced its intent to address the 2016 proposed rules for gas pipelines through three separate final rulemakings in 2019.
More recently, in January 2017, PHMSA finalized regulations for hazardous liquid pipelines that significantly extend and expand the reach of certain PHMSA integrity management requirements (i.e., periodic assessments, leak detection and repairs), regardless of the pipeline’s proximity to a high consequence area.
The final rule also imposes new reporting requirements for certain unregulated pipelines, including all hazardous liquid gathering lines.
Following the change in presidential administrations, implementation of this rule was delayed, but the final rule is expected to be published in the Federal Register and become effective during the first half of 2019.
At this time, we cannot predict the cost of such requirements, but they could be significant.
Moreover, violations of pipeline safety regulations can result in the imposition of significant penalties.
With respect to more comprehensive regulation, federal and state initiatives to date have generally focused on the development of cap-and-trade or carbon tax programs.
In Canada, greenhouse gas emissions are also being addressed at both the federal and provincial level.
Devon will continue to be subject to Alberta’s climate change laws and regulations until at least 2021.
Those laws and regulations include a legislated oil sands emission limit, with forthcoming regulations involving methane emissions reduction targets.
Beginning January 2019, the Greenhouse Gas Pollution Pricing Act subjects all of Canada to a federal price on greenhouse gas emissions unless a province or territory has implemented a compliant carbon pricing regime.
Litigation concerning the act is ongoing, and it is unclear how the act will ultimately treat provincial plans.
In Alberta, large industrial emitters are subject to the Carbon Competitiveness Incentive Regulation (CCIR).
The CCIR prices carbon, but provides cost protection to emission-intensive / trade-exposed industries, including Devon’s oil sands operations.
The impact to our operations from these laws and regulations is expected to be minimal in the near term.
Oil and gas facilities that are not subject to the CCIR are exempt from its economy-wide carbon levy until 2023.
and availability of our hedging arrangements, including by causing our contract counterparties, which are generally financial institutions and other market participants, to curtail or cease their derivatives activities.
Environmental Matters and Related Costs Can Be Significant
corrupting data or causing operational disruptions.
An excerpt. Shown here: 40 of 48 rewritten, all 13 added and all 38 removed. The counts are complete. For every sentence, read Item 1A. Risk Factors in the FY2019 filing and the FY2018 filing.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
287 rewritten, 310 added, 391 removed, 316 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
Financial Statements and Supplementary Data” [removed: of] [added: in] this report.
Overview of [removed: 2018] [added: 2019] Results
| | • | Completed workforce reduction and [added: other] cost reduction [removed: initiatives expected to generate $150] [added: initiatives, reaching approximately $240] million of annualized [added: G&A] savings. |
| | • | Increased our quarterly common stock dividend [removed: 33%] [added: 12.5%] to [removed: $0.08] [added: $0.09] per share beginning in the second quarter of [removed: 2018.] [added: 2019.] |
| | • | Exited [removed: 2018] [added: 2019] with [removed: $2.4] [added: $1.8] billion of [removed: cash and $2.9] [added: cash, inclusive of $380 million restricted for discontinued operations, $3.0] billion of available credit under our Senior Credit Facility and have no [removed: significant] debt maturities until [removed: 2021.] [added: 2025.] |
| [removed: ] [added: ] | | As presented in the graph at the left, our operating achievements are subject to the volatility of commodity prices. Over the last four years, NYMEX WTI oil and NYMEX Henry Hub prices ranged from [removed: an] average [removed: high] [added: highs] of $64.79 per Bbl and $3.11 per MMBtu, respectively, to [removed: an] average [removed: low] [added: lows] of $43.36 per Bbl and $2.46 per MMBtu, respectively. [removed: Widening Western Canadian Select differentials negatively impacted the prices we realized on our heavy oil production in the fourth quarter of 2018. In the first two months of 2019, Western Canadian Select differentials have improved significantly.] |
| | | 2018 | | | | [removed: Change | | | |] 2017 | | | | Change [removed: | | | | 2016] [added: in earnings] | | |
| [removed: Total: | | | |] [added: Total] | | | [added: 77] | | | | [added: 100] | [added: %] | | | [added: 71] | | | | [added: +9] | [added: %] |
| Continuing [removed: Operations: | | | | | | | | | | | | | | | | | | | |] [added: Operations] |
| Discontinued [removed: Operations:] [added: Operations] | | | | | | | | | | | | | | | | | | | | |
| Core earnings attributable to Devon [removed: (1) |] [added: (Non-GAAP)] | $ | [removed: 68 | | | | +127] [added: 108] | [removed: %] | | $ | [removed: 30] [added: 72] | | | [added: $] | [removed: +580] [added: 72] | [removed: %] | | $ | [removed: 4] [added: 0.13] | |
| Other [removed: Metrics:] | | | [removed: | | | |] [added: 6] | | | | [added: 4] | [added: %] | | | [added: 5] | | | | [added: +4] | [added: %] |
| Operating cash flow from continuing operations | | $ | [removed: 2,228 | | | | +1] [added: 2,043] | [removed: %] | | $ | [removed: 2,209 | | | | +165] [added: 1,583] | [removed: %] | | $ | [removed: 834] [added: 1,243] | |
[removed: | (1) | Core earnings] [added: “Core earnings”] and [removed: core earnings per share attributable to Devon] [added: “EBITDAX”] are financial measures not prepared in accordance with GAAP. [removed: For a description of core earnings and core earnings per share attributable to Devon, as well as reconciliations to the comparable GAAP measures, see “Non-GAAP Measures” in this Item 7. |]
[removed: Business] [added: Business] and Industry [removed: Outlook][added: Outlook]
[removed: In 2018,] Devon marked its [removed: 30th year as a public company and 47th] [added: 48th] anniversary in the oil and gas [removed: business, so we are experienced in dealing with the volatile nature of commodity prices.][added: business and its 31st year as a public company during 2019.]
To mitigate our exposure to commodity [removed: market] [added: price] volatility and ensure our financial strength, we [removed: use] [added: continue to execute] a disciplined, risk-management hedging program.
We [added: are adding 2020 positions at desirable prices, and we currently] have approximately [removed: 50%] [added: 40%] of our anticipated [removed: 2019] oil [added: volumes] and [added: 25% of our anticipated] gas volumes [removed: hedged, and we are currently adding hedges for 2020 as well.][added: hedged.]
[removed: We expect to deliver 70% of these annualized] [added: In 2019, we aggressively optimized our] cost [removed: savings] [added: structure] in [removed: 2019, as the] [added: conjunction with our] Canadian and Barnett Shale [removed: assets are separated, and] [added: asset divestitures, as] we [added: focus on our remaining four U.S. oil plays,] align our workforce with the retained business and reduce outstanding debt.
Further, when considering the current commodity price environment and our current hedge position, we [removed: can] [added: expect to] achieve [removed: all] our capital [removed: allocation priorities at $46/Bbl WTI and $3.00/Mcf Henry Hub.][added: investment priorities.]
Should WTI drop closer to [removed: $40/Bbl] [added: $45/Bbl] for an extended period, we would shift our focus to preserving our financial strength and operational continuity.
However, as [removed: WTI] [added: WTI/Bbl] rises above [removed: $46/Bbl,] [added: $50,] our free cash flow will accelerate, providing additional capital allocation opportunities.
[removed: Specifically, the] [added: The] graph below shows the change in net earnings from 2017 to 2018.
[removed: ][added: ]
[removed: ][added: ]
| | [removed: (2)] [added: (1)] | As further discussed in [Note 1](#SummaryOfSignificantAccountingPolicies) in “Item 8. Financial Statements and Supplementary Data” [removed: in] [added: of] this report, [removed: in 2018] the presentation of certain processing arrangements changed from a net to a gross [removed: presentation.] [added: presentation in 2018.] The change resulted in an increase to our upstream revenues and production expenses by [removed: $254] [added: $191] million during 2018 with no impact to net earnings. |
[removed: Oil, Gas] [added: | Oil] and [removed: NGL Production][added: gas | | $ | 1,398 | | | $ | 1,134 | | | | +23 | % |]
| Oil [removed: and bitumen] (MBbls/d) | | | | | | | | | | | | | | | | |
| Delaware Basin | | | [removed: 42] [added: 70] | | | | [removed: 17] [added: 47] | % | | | [removed: 29] [added: 42] | | | | [removed: +42] [added: +67] | % |
| STACK | | | [removed: 32] [added: 31] | | | | [removed: 13] [added: 20] | % | | | [removed: 25] [added: 32] | | | | [removed: +28] [added: \- 4] | % |
| Eagle Ford | | | [removed: 28] [added: 23] | | | | [removed: 12] [added: 16] | % | | | [removed: 34] [added: 28] | | | | \- 17 | % |
| Barnett Shale | | | [removed: 1 | | | | 0] [added: 37] | [removed: %] | | | [removed: 1] [added: 45] | | | | [removed: \- 7] [added: 56] | [removed: %] |
| Other | | | [removed: 5] [added: 1] | | | | [removed: 2] [added: 0] | % | | | [removed: 5] [added: 1] | | | | \- [removed: 3] [added: 18] | % |
| U.S. [removed: divested] [added: divest] assets | | | [removed: 9] [added: 3] | | | | [removed: 4] [added: 2] | % | | | [removed: 12] [added: 9] | | | | \- [removed: 23] [added: 70] | % |
| Delaware Basin | | | 105 | | | | [removed: 10] [added: 19] | % | | | 86 | | | | +22 | % |
| STACK | | | 334 | | | | [removed: 30] [added: 59] | % | | | 294 | | | | +13 | % |
| Eagle Ford | | | 79 | | | | [removed: 7] [added: 13] | % | | | [removed: 95] [added: 79] | | | | \- [removed: 17] [added: 0] | % |
| Total | | | [removed: 1,100] [added: 71] | | | | 100 | % | | | [removed: 1,203] [added: 58] | | | | [removed: \- 9] [added: +23] | % |
| Delaware Basin | | | [removed: 16] [added: 27] | | | | [removed: 15] [added: 36] | % | | | [removed: 10] [added: 16] | | | | [removed: +53] [added: +74] | % |
| STACK | | | [removed: 37] [added: 36] | | | | [removed: 35] [added: 46] | % | | | [removed: 30] [added: 37] | | | | [removed: +24] [added: \- 5] | % |
During 2019, we completed our transformation to a U.S. oil growth company with our exit from Canada and pending sale of the Barnett Shale.
These transactions accelerate efforts to focus exclusively on our resource-rich U.S. oil portfolio, which provides us with a strong foundation to grow returns, margin and profitability.
By operating under a disciplined returns-driven strategy focused on delivering strong operational results, financial strength and value to our shareholders and continuing our commitment to environmental, social and governance excellence, we completed our transformation to “New Devon” and made significant progress toward our cost reduction objectives as evidenced by these 2019 highlights:
| | • | Closed on the sale of our Canadian business for $2.6 billion ($3.4 billion Canadian dollars) in June 2019. |
| | • | Announced the sale of our Barnett Shale assets for $770 million (expected closing in the second quarter of 2020). |
| | • | Improved capital efficiency by reducing capital expenditures approximately 10% and increasing oil production 21% compared to 2018. |
| | • | Retired $1.7 billion of senior notes, reducing annualized financing costs by $60 million. |
| | • | Repurchased $4.8 billion of our total $5.8 billion share repurchase authorizations, representing an outstanding share count reduction of nearly 30% since the program’s inception. |
| | • | Increased Delaware Basin and Powder River Basin production over 60% in 2019 compared to 2018. |
| | • | Reduced methane emissions by nearly 20% over the last three years and established a target to further reduce methane intensity rates by 2025. |
| | | |
Trends of our annual earnings, operating cash flow, EBITDAX and capital expenditures are shown below.
The annual earnings chart presents amounts pertaining to both Devon’s continuing and discontinued operations.
The annual cash flow chart presents amounts pertaining to Devon’s continuing operations.
For a description of these measures, including reconciliations to the comparable GAAP measures, see “Non-GAAP Measures” in this Item 7.
Our net earnings in recent years have been significantly impacted by divestiture transactions and temporary, noncash adjustments to the value of our commodity hedges.
Net earnings in 2017 included a $0.1 billion gain on asset dispositions from continuing operations and a $0.2 billion hedge valuation gain, both net of taxes.
Net earnings in 2018 included a $2.2 billion gain on our EnLink disposition, a $0.5 billion hedge valuation gain and a $0.2 billion gain on asset dispositions from continuing operations, all net of taxes.
Net earnings in 2019 included a $0.4 billion hedge valuation loss, $0.2 billion net gains and charges related to our Canadian disposition and a $0.6 billion asset impairment related to our Barnett Shale disposition, all net of taxes.
Excluding these amounts, our core earnings have been more stable over recent years but continue to be heavily influenced by commodity prices.
Like earnings, our operating cash flow is sensitive to volatile commodity prices.
EBITDAX, which excludes financial amounts related to discontinued operations, has been increasing over the past three years as a result of our New Devon production growth and cost reductions.
Regardless of cash flow fluctuations, we remain focused on managing our capital investment to generate free cash flow.
As operating cash flow has declined, we have adjusted our capital development plans accordingly.
As an established company with a strong leadership team, we have experience operating through periods of volatile commodity prices.
With our focused strategy and portfolio of quality assets, we are committed to navigating the current environment while safeguarding our long-term financial strength.
In 2019, WTI oil prices averaged approximately $57.02/Bbl versus $64.79/Bbl in 2018.
Despite price support in the first half of 2019 driven by supply tightness and geopolitical tensions, 2019 WTI oil prices overall were negatively impacted by trade concerns and economic slowdown fears, even with strong supply and demand fundamentals.
Looking ahead, crude oil has experienced near term downward pressure as a result of softer demand from the growing impact of the coronavirus related crisis.
Positive factors that could reduce these recent negative factors and create more demand for crude oil are the extension of OPEC cuts through 2020, as well as the International Maritime Organization 2020 regulations.
Henry Hub gas prices averaged approximately $2.63/MMBtu in 2019 versus $3.09/MMBtu in 2018.
Mt.
Belvieu Blended Index NGL prices averaged approximately $19.22/Bbl in 2019 versus $28.31/Bbl in 2018.
Natural gas and NGL prices faced strong headwinds in 2019 due to U.S. supply growth far outpacing demand for both commodities domestically and internationally.
These factors continue to weigh on current natural gas and NGL prices.
As discussed in our [Critical Accounting Estimates](#Critical_Accounting_Estimates), our STACK assets are susceptible to a material asset impairment should prices decrease from current levels.
While such an impairment would materially impact our reported net earnings, it would not impact our operating cash flow or our current near-term drilling plans.
Additionally, we are actively adding attractive hedges for 2021.
Further insulating our cash flow, we continue to examine and, when appropriate, execute attractive regional basis swap hedges in an effort to protect price realizations across our portfolio.
Throughout 2019, our operational efficiencies continued to accelerate.
2018 was a pivotal year for Devon as we took several significant steps toward achieving our long-term strategic goals.
Operationally, we successfully transitioned our U.S. oil business into full-field development, which resulted in high-return, light-oil production advancing 14 percent in 2018.
In addition to this strong operating performance, we made substantial progress high-grading our asset portfolio, building per-share value through our share-repurchase program and reducing our financial leverage by more than 40 percent.
| | • | Increased STACK and Delaware Basin production 27% in 2018 compared to 2017. |
| | • | Maintained our 2018 capital expenditure forecast. |
| | • | Substantially achieved $5.0 billion in asset sales, including the monetization of EnLink and the General Partner. |
| | • | Repurchased $3.0 billion of common stock, representing a 14% share count reduction since December 31, 2017. |
| | • | Reduced long-term debt by $922 million, which is expected to reduce annualized financing costs by $66 million. |
| | Key measures of our financial performance in 2018 are summarized in the following table. Increased oil and natural gas liquids prices as well as continued focus cost management improved our 2018 financial performance as compared to 2017, as seen in the table below. Additionally, we recognized a gain of approximately $2.6 billion ($2.2 billion after-tax) related to the sale of EnLink and the General Partner during 2018. More details for these metrics are found within the “Results of Operations – 2018 vs. 2017” below. | |
[Index to Financial Statements](#IndexToFinancialStatements)
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net earnings (loss) attributable to Devon | | $ | 3,064 | | | | +241 | % | | $ | 898 | | | | +185 | % | | $ | (1,056 | ) |
| Net earnings (loss) per diluted share attributable to Devon | | $ | 6.10 | | | | +259 | % | | $ | 1.70 | | | | +181 | % | | $ | (2.09 | ) |
| Core earnings (loss) attributable to Devon (1) | | $ | 655 | | | | +53 | % | | $ | 427 | | | | +216 | % | | $ | (367 | ) |
| Core earnings (loss) attributable to Devon per diluted share (1) | | $ | 1.30 | | | | +60 | % | | $ | 0.81 | | | | +212 | % | | $ | (0.73 | ) |
| Net earnings (loss) | | $ | 764 | | | | +1 | % | | $ | 758 | | | | +232 | % | | $ | (574 | ) |
| Net earnings (loss) per diluted share | | $ | 1.52 | | | | +6 | % | | $ | 1.43 | | | | +225 | % | | $ | (1.14 | ) |
| Core earnings (loss) (1) | | $ | 587 | | | | +48 | % | | $ | 397 | | | | +207 | % | | $ | (371 | ) |
| Core earnings (loss) per diluted share (1) | | $ | 1.17 | | | | +57 | % | | $ | 0.75 | | | | +202 | % | | $ | (0.73 | ) |
| Net earnings (loss) attributable to Devon | | $ | 2,300 | | | | +1543 | % | | $ | 140 | | | | +129 | % | | $ | (481 | ) |
| Net earnings (loss) per diluted share attributable to Devon | | $ | 4.58 | | | | +1596 | % | | $ | 0.27 | | | | +128 | % | | $ | (0.95 | ) |
| Core earnings attributable to Devon per diluted share (1) | | $ | 0.13 | | | | +120 | % | | $ | 0.06 | | | | +1628 | % | | $ | 0.00 | |
| Retained production (MBoe/d) | | | 500 | | | | +4 | % | | | 481 | | | | \- 3 | % | | | 497 | |
| Total production (MBoe/d) | | | 535 | | | | \- 2 | % | | | 543 | | | | \- 11 | % | | | 611 | |
| Realized price per Boe (2) | | $ | 29.08 | | | | +12 | % | | $ | 25.96 | | | | +39 | % | | $ | 18.72 | |
| Capitalized expenditures, including acquisitions | | $ | 2,576 | | | | +19 | % | | $ | 2,169 | | | | \- 23 | % | | $ | 2,826 | |
| Cash and cash equivalents | | $ | 2,414 | | | | \- 9 | % | | $ | 2,642 | | | | +36 | % | | $ | 1,947 | |
| Total debt | | $ | 5,947 | | | | \- 13 | % | | $ | 6,864 | | | | +0 | % | | $ | 6,859 | |
| Reserves (MMBoe) | | | 1,927 | | | | \- 10 | % | | | 2,152 | | | | +5 | % | | | 2,058 | |
| --- | --- |
| (2) | Excludes any impact of oil, gas and NGL derivatives. |
| --- | --- |
Therefore, we cannot predict with certainty the future prices for the commodities we produce and sell.
In 2018, WTI oil prices averaged approximately $67/Bbl through October, supported by stronger-than-expected oil demand, market management by both OPEC and non-OPEC partners and unplanned supply outages.
However, oil prices markedly declined in November and December, averaging approximately $53/Bbl and reaching as low as $42.53/Bbl in December.
The deterioration of WTI was driven by OPEC and non-OPEC partners unwinding their production cut agreement, compounded by rising supply and concerns over slowing global economic growth.
Western Canadian Select basis differentials were challenged in the fourth quarter of 2018 due to robust production outpacing local demand, pipeline capacity and rail capacity out of the region.
Looking ahead, current market fundamentals indicate that 2019 crude pricing is expected to improve from its fourth quarter 2018 levels.
Additionally, Western Canadian Select differentials are also projected to improve, driven by provincially mandated production cuts combined with takeaway capacity additions expected in late 2019.
Changes in OPEC production strategies, the macro-economic environment, geopolitical risks and other factors could impact our current forecasts.
An excerpt. Shown here: 40 of 287 rewritten, 40 of 310 added and 40 of 391 removed. The counts are complete. For every sentence, read Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in the FY2019 filing and the FY2018 filing.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
10 rewritten, 2 added, 8 removed, 13 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
The term “market risk” refers to our risk of loss arising from adverse changes in oil, [removed: bitumen,] gas and NGL prices, interest rates and foreign currency exchange rates.
Our major market risk exposure is the pricing applicable to our oil, [removed: bitumen,] gas and NGL production.
Realized pricing is primarily driven by the prevailing worldwide price for crude oil and spot market prices applicable to our [removed: U.S. and Canadian] gas and NGL production.
The key terms to our oil and gas derivative financial instruments as of December 31, [removed: 2018] [added: 2019] are presented in [Note 3](#Derivatives) in “Item 8.
Financial Statements and Supplementary Data” [removed: of] [added: in] this [removed: report.][added: report for additional information.]
At December 31, [removed: 2018,] [added: 2019,] a 10% change in the forward curves associated with our commodity derivative instruments would have changed our net asset positions by approximately [removed: $270] [added: $115] million.
At December 31, [removed: 2018,] [added: 2019,] we had total debt of [removed: $5.9] [added: $4.3] billion.
All of our debt is based on fixed interest rates averaging [removed: 5.4%.][added: 6.0%.]
A 10% [added: unfavorable] change in [removed: these forward curves] [added: the Canadian-to-U.S. dollar exchange rate] would not have materially impacted our [removed: balance sheet or liquidity at] December 31, [removed: 2018.][added: 2019 balance sheet for these items.]
[removed: Assets and liabilities of the Canadian subsidiaries] [added: These balances] are [removed: translated to U.S. dollars] [added: remeasured] using the applicable exchange rate as of the end of [removed: a] [added: the] reporting period.
Devon has certain Canadian dollar obligations associated with its divested Canadian operations which are to be paid with the cash restricted for discontinued operations.
See [Note 18](#Discops) in “Item 8.
As of December 31, 2018, we had one open interest rate swap position that is presented in [Note 3](#Derivatives) in “Item 8.
The fair value of our interest rate swap is largely determined by estimates of the forward curves of the three month LIBOR rate.
Our net assets, net earnings and cash flows from our Canadian subsidiaries are based on the U.S. dollar equivalent of such amounts measured in the Canadian dollar functional currency.
Revenues, expenses and cash flow are translated using an average exchange rate during the reporting period.
A 10% unfavorable change in the Canadian-to-U.S. dollar exchange rate would not have materially impacted our December 31, 2018 balance sheet.
Devon engages in intercompany loan activity between subsidiaries with different functional currencies.
The value of these foreign currency denominated intercompany loans increases or decreases from the remeasurement into the subsidiaries’ functional currency.
Based on the amount of the intercompany loans as of December 31, 2018, a 10% change in the foreign currency exchange rates would not have materially impacted our balance sheet.
Item 3. Legal Proceedings
1 rewritten, 2 added, 1 removed, 2 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
[added: On April 4, 2019,] Devon Energy Production Company, L.P., a wholly-owned subsidiary of the [removed: Company, is currently in] [added: Company (“DEPCO”), agreed to settle its previously disclosed] negotiations with the EPA [removed: with respect] [added: relating] to [added: certain] alleged [removed: noncompliance with the leak detection and repair requirements of EPA regulations promulgated under the] Clean Air Act [added: violations] at its Beaver Creek Gas Plant located near Riverton, [removed: Wyoming.][added: Wyoming by executing an agreed order with the EPA.]
The order included a penalty of $150,000 and was approved by the regional EPA judicial officer on June 12, 2019.
Moreover, in connection with the resolution of this matter with the EPA, DEPCO entered into a consent decree on May 9, 2019 with respect to the same matter with the Wyoming Department of Environmental Quality, which also included a separate penalty of $150,000.
Although management cannot predict the outcome of settlement negotiations, the resolution of this matter may result in a fine or penalty in excess of $100,000.
Cover and table of contents
109 rewritten, 61 added, 145 removed, 313 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
| [removed: ☒] [added: ☒] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, [removed: 2018][added: 2019]
| [removed: ☐] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
[removed: ][added: ]
Registrant’s telephone number, including area code: [added: (405) 235-3611]
| | Title of each class | | [added: Trading Symbol | |] Name of each exchange on which registered | |
| | Common stock, par value $0.10 per share | | [added: DVN | |] The New York Stock Exchange | |
The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June [removed: 29, 2018] [added: 28, 2019] was approximately [removed: $22.5] [added: $11.6] billion, based upon the closing price of [removed: $43.96] [added: $28.52] per share as reported by the New York Stock Exchange on such date.
On February [removed: 6, 2019, 438.3] [added: 5, 2020, 382.9] million shares of common stock were outstanding.
Portions of Registrant’s definitive Proxy Statement relating to Registrant’s [removed: 2019] [added: 2020] annual meeting of stockholders have been incorporated by reference in Part III of this Annual Report on Form 10-K.
| [Item 1A. Risk Factors](#ITEM_1A_RISK_FACTORS) | | [removed: 14] [added: 13] |
| [Item 1B. Unresolved Staff Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS) | | [removed: 21] [added: 20] |
| [Item 3. Legal Proceedings](#ITEM_3_LEGAL_PROCEEDINGS) | | [removed: 21] [added: 20] |
| [Item 4. Mine Safety Disclosures](#ITEM_4_MINE_SAFETY_DISCLOSURES) | | [removed: 21] [added: 20] |
| [PART II](#PART_II) | | [removed: 22] [added: 21] |
| [Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ITEM_5) | | [removed: 22] [added: 21] |
| [Item 6. Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | | [removed: 24] [added: 23] |
| [Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ITEM_7) | | [removed: 25] [added: 24] |
| [Item 7A. Quantitative and Qualitative Disclosures about Market Risk](#ITEM_7A) | | [removed: 49] [added: 46] |
| [Item 8. Financial Statements and Supplementary Data](#ITEM_8) | | [removed: 50] [added: 47] |
| [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ITEM_9) | | [removed: 109] [added: 100] |
| [Item 9A. Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURE_S) | | [removed: 109] [added: 100] |
| [Item 9B. Other Information](#ITEM_9B_OR_INFORMATION) | | [removed: 109] [added: 100] |
| [PART III](#PART_III) | | [removed: 110] [added: 101] |
| [Item 10. Directors, Executive Officers and Corporate Governance](#ITEM_10) | | [removed: 110] [added: 101] |
| [Item 11. Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | | [removed: 110] [added: 101] |
| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12) | | [removed: 110] [added: 101] |
| [Item 13. Certain Relationships and Related Transactions, and Director Independence](#ITEM_13) | | [removed: 110] [added: 101] |
| [Item 14. Principal Accountant Fees and Services](#ITEM_14) | | [removed: 110] [added: 101] |
| [Item 15. Exhibits and Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STMTS_SCHED) | | [removed: 111] [added: 102] |
| [Item 16. Form 10-K Summary](#ITEM_16_Form10K_Summary) | | [removed: 116] [added: 107] |
[removed: “2012 Senior] [added: “Senior] Credit Facility” means Devon’s syndicated unsecured revolving line of credit, effective as of October [removed: 24, 2012.][added: 5, 2018.]
Our operations are concentrated in various [removed: North American] onshore areas in the U.S. [added: In June 2019, we completed the sale of substantially all of our oil] and [added: gas assets and operations in] Canada.
As of December 31, [removed: 2018,] [added: 2019,] Devon and its consolidated subsidiaries had approximately [removed: 2,900] [added: 1,800] employees.
Because the business of exploring for, developing and producing oil and natural gas is capital intensive, delivering [removed: sustainable] [added: sustainable,] capital efficient cash flow growth is a key tenant to our success.
While our cash flow is highly dependent on volatile and uncertain commodity prices, we pursue our strategy throughout all commodity price cycles with [removed: three] [added: four] fundamental principles.
A premier, sustainable portfolio of assets – As discussed in the next section of this Annual Report, we own a portfolio of assets located in the United [removed: States and Alberta, Canada.][added: States.]
[removed: Because of] [added: Due to] the strength of oil prices relative to natural gas, we have been positioning our portfolio to be more heavily weighted to U.S. oil assets in recent years.
During [removed: 2018,] [added: 2019,] we [removed: made significant progress in] [added: completed] our transition to a U.S. oil company.
[removed: After] [added: As a result of] these [removed: separations,] [added: divestitures,] we expect our oil production growth, price realizations and field-level margins will all improve, as we sharpen our focus on four [removed: core] U.S. oil plays located in the Delaware Basin, STACK, [removed: Eagle Ford] [added: Powder River Basin] and [removed: Rockies.][added: Eagle Ford.]
| | |
| | |
| --- | --- | --- | --- | --- | --- | --- |
| [PART IV](#PART_IV) | | 102 |
| [Signatures](#SIGNATURES) | | 108 |
“BKV” means Banpu Kalnin Ventures.
“CDM” means Cotton Draw Midstream, L.L.C.
“VIE” means variable interest entity.
| | • | risks related to environmental regulations; |
| | • | risks related to investors attempting to effect change; |
Proven and responsible operator – We operate our business with the interests of our stakeholders and our environmental, social and governance progress in mind.
With our vision to be a premier independent oil and natural gas exploration and production company, the work our employees do every day contributes to the local, national and global economies.
We produce a valuable commodity that is fundamental to society, and we endeavor to do so in a safe, environmentally responsible and ethical way, while striving to deliver strong returns to our shareholders.
We have an ongoing commitment to transparency in reporting our environmental, social and governance performance.
See our Sustainability Report published on our company website for performance highlights and additional information.
Information contained in our Sustainability Report is not incorporated by reference into, and does not constitute a part of, this Annual Report on Form 10-K.
We sold our Canadian business, generating $2.6 billion in proceeds, and announced the sale of our Barnett Shale assets for approximately $770 million, before purchase price adjustments.
We have realized annualized cost savings by reducing well costs, production expense, financing costs and G&A costs.
Canadian Business and Barnett Shale Assets – Discontinued Operations
As a result of our divestment of substantially all of our oil and gas assets and operations in Canada, as well as the recently announced divestiture of our Barnett Shale assets, amounts associated with these assets are presented as discontinued operations.
Therefore, financial and operational data, such as reserves, production, wells and acreage, provided in this document exclude amounts related to our Canadian and Barnett Shale assets unless otherwise noted.
Included within the amounts presented as discontinued operations associated with the Barnett Shale are properties divested in previous reporting periods located primarily in Johnson and Wise counties, Texas.
For additional information, please see [Note 2](#Acquisitions_Divestitures) in “Item 8.
*Delaware Basin* – The Delaware Basin is Devon’s most active program in the portfolio.
With a significant inventory of oil and liquids-rich drilling opportunities that have multi-zone development potential, Devon has a robust platform to deliver high-margin growth for many years to come.
In December 2019, we announced an agreement with Dow to jointly develop a portion of our STACK acreage.
Dow will fund approximately 65% of the partnership capital requirements through a drilling carry of $100 million over the next four years.
In 2020, we plan approximately $350 million of capital investment.
Our Eagle Ford production is leveraged to oil and has low-cost access to premium Gulf Coast pricing, providing for solid operating margins.
During 2019, we engaged LaRoche Petroleum Consultants, Ltd. to audit approximately 85% of our proved reserves.
The committee consists of five independent members of our Board of Directors with education or business backgrounds relevant to the reserves estimation process.
| 2019 | | | | | | | | | | | | | | | | |
| STACK | | | 11 | | | | 114 | | | | 13 | | | | 43 | |
| Delaware Basin | | | 26 | | | | 65 | | | | 10 | | | | 46 | |
| U.S. | | | 55 | | | | 219 | | | | 28 | | | | 119 | |
| Delaware Basin | | | 16 | | | | 42 | | | | 6 | | | | 30 | |
| U.S. | | | 47 | | | | 206 | | | | 26 | | | | 108 | |
| Delaware Basin | | | 12 | | | | 37 | | | | 4 | | | | 23 | |
| U.S. | | | 42 | | | | 189 | | | | 21 | | | | 95 | |
| 2019 (1) | | | | | | | | | | | | | | | | |
[Index to Financial Statements](#IndexToFinancialStatements)
| --- | --- |
| --- | --- |
(405) 235-3611
| --- | --- | --- | --- | --- |
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| [PART IV](#PART_IV) | | 111 |
| [Signatures](#SIGNATURES) | | 117 |
“2009 Plan” means the Devon Energy Corporation 2009 Long-Term Incentive Plan, as amended and restated.
“2018 Senior Credit Facility” means Devon’s syndicated unsecured revolving line of credit, effective as of October 5, 2018.
“Canadian Plan” means Devon Canada Corporation Incentive Savings Plan.
“PHMSA” means United States Department of Transportation Pipeline and Hazardous Materials Safety Administration.
“Upstream operations” means upstream revenues minus production expenses.
In July 2018, we exited the midstream business by divesting our aggregate ownership interests in EnLink and the General Partner.
We sold our midstream business and certain non-core upstream assets, generating nearly $5 billion in proceeds.
In February 2019, we announced our intent to separate our Canadian business and our Barnett Shale assets from the Company.
We expect to realize about 70% of the annualized savings by the end of 2019.
Our retained U.S. oil business is expected to realize $300 million of annual well cost savings by 2021, as we increase our focus on development drilling, reduce our facility costs and optimize well spacing in the STACK.
Additionally, we will streamline and align our workforce with our go-forward business, which should result in $300 million of annual cost savings by the end of the three-year period.
As we continue deleveraging, we expect to reduce annual interest costs by $130 million.
Finally, we have plans to reduce our annual production expenses by $50 million over the next three years.
As we dispose of our Canadian and Barnett Shale assets in 2019, we expect to use the proceeds to reduce debt further and repurchase additional common shares.
As a result of our planned dispositions, our Board of Directors has increased our share repurchase program to $5 billion in February 2019 and raised our quarterly dividend 12.5% to $0.09 per share.
[Notes 22](#SegmentInfo) and [23](#SupplementalOilAndGas) to the financial statements included in “Item 8.
We expect these oil and liquids-rich opportunities across our acreage in the Delaware Basin to deliver high-margin growth for many years to come.
During 2018, our continued appraisal and development work enabled us to increase our proved reserves in this area by approximately 24%.
At December 31, 2018, we had five operated rigs with drilling focused in the Meramec formation.
The STACK is Devon’s second highest funded asset in the portfolio for 2019.
Since acquiring these assets, we have delivered tremendous results by producing 173 million oil-equivalent barrels.
In 2019, we plan approximately $300 million of capital investment and adding two additional operated rigs.
Heavy Oil – Our operations in Canada are focused on our heavy oil assets in Alberta, Canada.
Our most significant Canadian operation is our Jackfish complex, an industry-leading thermal heavy oil operation in the non-conventional oil sands of east central Alberta.
We employ a recovery method known as steam-assisted gravity drainage at Jackfish.
The Jackfish operation consists of three facilities.
We expect Jackfish to maintain a reasonably flat production profile for greater than 15 years requiring approximately $200 million of annual maintenance capital based on current economic conditions.
Our Pike oil sands acreage is situated directly to the southeast of our Jackfish acreage in east central Alberta and has similar reservoir characteristics to Jackfish.
The Pike leasehold is currently undeveloped and has no proved reserves or production as of December 31, 2018.
Currently, we have minimal planned capital outlays for Pike in the near future.
The majority of our Pike leasehold does not expire until 2025 and 2026.
An excerpt. Shown here: 40 of 109 rewritten, 40 of 61 added and 40 of 145 removed. The counts are complete. For every sentence, read Cover and table of contents in the FY2019 filing and the FY2018 filing.
Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
10 rewritten, 7 added, 7 removed, 16 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
On February [removed: 6, 2019,] [added: 5, 2020,] there were [removed: 7,094] [added: 6,771] holders of record of our common stock.
Additional information on our dividends can be found in [Note [removed: 18](#StockholdersEquity)] [added: 17](#StockholdersEquity)] in “Item 8.
The peer group includes [removed: Anadarko Petroleum Corporation,] Apache Corporation, Chesapeake Energy Corporation, Concho Resources, Inc., ConocoPhillips, Continental Resources, Inc., Encana Corporation, EOG Resources, Inc., Hess Corporation, Marathon Oil Corporation, Murphy Oil Corporation, Noble Energy, Inc., Occidental Petroleum Corporation and Pioneer Natural Resources Company.
The graph was prepared assuming $100 was invested on December 31, [removed: 2013] [added: 2014] in Devon’s common stock, the [removed: S&P 500 Index] [added: peer group] and the [removed: peer group,] [added: S&P 500 Index,] and dividends have been reinvested subsequent to the initial investment.
[removed: ][added: ]
The following table provides information regarding purchases of our common stock that were made by us during the fourth quarter of [removed: 2018] [added: 2019] (shares in thousands).
| | (1) | In addition to shares purchased under the share repurchase program described below, these amounts also included approximately [removed: 19,000] [added: 76,000] shares received by us from employees for the payment of personal income tax withholding on vesting transactions. |
| | (2) | On March 7, 2018, we announced a $1.0 billion share repurchase program. On June 6, 2018, we announced the expansion of this program to $4.0 billion. On February 19, 2019, we announced a further expansion to $5.0 billion with a December 31, 2019 expiration date. [added: Of the $5.0 billion authorized amount, $4.8 billion was repurchased when the program expired on December 31, 2019. On December 17, 2019, we announced a new $1.0 billion share repurchase program with a December 31, 2020 expiration date. Under the new program, $800 million of the $1.0 billion authorization is conditioned upon the closing of the pending Barnett Shale divestiture.] During [removed: 2018,] [added: 2019,] we repurchased [removed: 78.1] [added: 68.6] million shares of common stock for [removed: $3.0] [added: $1.8] billion, or [removed: $38.11] [added: $26.62] per share. Future purchases under the program will be made in the open market, private transactions or through the use of ASR programs. |
Under the Devon Plan, eligible employees [removed: may] [added: previously had the option to] purchase shares of our common stock through an investment in the Devon Stock Fund, which is administered by an independent trustee.
Eligible employees purchased approximately [removed: 39,000] [added: 27,000] shares of our common stock in [removed: 2018,] [added: 2019,] at then-prevailing stock prices, that they held through their ownership in the Devon Stock Fund.
Anadarko Petroleum Corporation was a part of this peer group prior to being acquired by Occidental Petroleum Corporation in 2019.
Commencing in 2020, Devon will use a recalibrated peer group for performance and compensation purposes.
This new peer group was selected to better align with Devon’s go-forward size and operations in light of our strategic transformation in 2019.
| October 1 - October 31 | | | 4,285 | | | $ | 21.27 | | | | 4,244 | | | $ | 199 | |
| November 1 - November 30 | | | 218 | | | $ | 22.33 | | | | 192 | | | $ | 195 | |
| December 1 - December 31 | | | 9 | | | $ | 22.58 | | | | — | | | $ | 1,000 | |
| Total | | | 4,512 | | | $ | 21.32 | | | | 4,436 | | | | | |
| October 1 - October 31 | | | 10,532 | | | $ | 36.01 | | | | 10,529 | | | $ | 2,388 | |
| November 1 - November 30 | | | 7,079 | | | $ | 31.55 | | | | 7,068 | | | $ | 2,165 | |
| December 1 - December 31 | | | 6,020 | | | $ | 23.82 | | | | 6,015 | | | $ | 2,022 | |
| Total | | | 23,631 | | | $ | 31.57 | | | | 23,612 | | | | | |
Similarly, eligible Canadian employees may purchase shares of our common stock through an investment in the Canadian Plan, which is administered by an independent trustee.
Shares sold under the Canadian Plan were acquired through open-market purchases.
These shares and any interest in the Canadian Plan were offered and sold in reliance on the exemptions for offers and sales of securities made outside of the U.S., including under Regulation S for offers and sales of securities to employees pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the U.S. In 2018, there were no shares purchased by Canadian employees under the plan.
Item 6. Selected Financial Data
9 rewritten, 7 added, 5 removed, 11 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
| | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |
| Net earnings (loss) from continuing operations (2) | | $ | [removed: 764] [added: (79] | [added: )] | | $ | [removed: 758] [added: 714] | | | $ | [removed: (574] [added: 33] | [removed: )] | | $ | [removed: (12,231] [added: (871] | ) | | $ | [removed: (1,004] [added: (7,989] | ) |
| Cash dividends per common share | | $ | [removed: 0.30] [added: 0.35] | | | $ | [removed: 0.24] [added: 0.30] | | | $ | [removed: 0.42] [added: 0.24] | | | $ | [removed: 0.96] [added: 0.42] | | | $ | [removed: 0.94] [added: 0.96] | |
| Total assets [removed: (2)(3)] [added: (3)] | | $ | [removed: 19,566] [added: 13,717] | | | $ | [removed: 30,241] [added: 19,566] | | | $ | [removed: 28,675] [added: 30,241] | | | $ | [removed: 29,673] [added: 28,675] | | | $ | [removed: 49,253] [added: 29,673] | |
| Stockholders' equity | | $ | [removed: 9,186] [added: 5,920] | | | $ | [removed: 14,104] [added: 9,186] | | | $ | [removed: 12,722] [added: 14,104] | | | $ | [removed: 11,111] [added: 12,722] | | | $ | [removed: 24,789] [added: 11,111] | |
| Common shares outstanding | | | [removed: 450] [added: 382] | | | | [removed: 525] [added: 450] | | | | [removed: 523] [added: 525] | | | | [removed: 418] [added: 523] | | | | [removed: 409] [added: 418] | |
| | (1) | In January 2018, Devon adopted ASC 606 – *Revenue from Contracts with Customers* using the modified retrospective method and has applied the standard to all existing contracts. The impact of adoption [removed: for 2018] is further discussed in [Note 1](#SummaryOfSignificantAccountingPolicies) of “Item 8. Financial Statements and Supplementary Data” of this report. Prior periods have not been restated. |
| | (2) | Material asset impairments and acquisition and divestiture activity had significant impacts on operating results and the carrying value of our oil and gas assets. Specifically, there were asset impairments of [removed: $0.4] [added: $0.3] billion, [removed: $16.1] [added: $0.2 billion, $0.5] billion and [removed: $3.4] [added: $10.3] billion in [removed: 2016, 2015] [added: 2018, 2017, 2016] and [removed: 2014,] [added: 2015,] respectively. More discussion on these items can be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in [Note 2](#Acquisitions_Divestitures) and [Note 5](#AssetImpairments) of “Item 8. Financial Statements and Supplementary Data” of this report. |
| | (3) | Amounts [removed: in 2014 through 2017] include assets related to our [added: divested Canadian business and] aggregate ownership interest in EnLink and the General [removed: Partner. As discussed further] [added: Partner as well as our recently announced Barnett Shale assets that will be divested] in [added: 2020. For additional information, see] [Note [removed: 19](#Discops)] [added: 18](#Discops)] of “Item 8. Financial Statements and Supplementary Data” of this [removed: report, the 2018 divestment of our aggregate ownership interests in EnLink and the General Partner] [added: report. These divestitures] resulted in the reclassification of [removed: EnLink and] the [removed: General Partners’] [added: respective] assets to assets [removed: held for sale,] [added: associated with discontinued operations,] which are included within this amount. |
| Upstream revenues (1) | | $ | 3,355 | | | $ | 4,542 | | | $ | 2,988 | | | $ | 2,325 | | | $ | 4,082 | |
| Total revenues (1) | | $ | 6,220 | | | $ | 8,896 | | | $ | 6,501 | | | $ | 5,054 | | | $ | 7,547 | |
| Basic (2) | | $ | (0.21 | ) | | $ | 1.43 | | | $ | 0.06 | | | $ | (1.72 | ) | | $ | (19.66 | ) |
| Diluted (2) | | $ | (0.21 | ) | | $ | 1.42 | | | $ | 0.06 | | | $ | (1.72 | ) | | $ | (19.66 | ) |
| Long-term debt (4) | | $ | 4,294 | | | $ | 4,292 | | | $ | 5,258 | | | $ | 5,359 | | | $ | 7,488 | |
| | (4) | Long-term debt balance excludes amounts that were classified as liabilities associated with discontinued operations in the respective periods related to the sale of Devon’s Canadian business and ownership interests in EnLink and the General Partner. See [Note 18](#Discops) of “Item 8. Financial Statements and Supplementary Data” of this report for additional details. |
| --- | --- | --- |
| Upstream revenues (1) | | $ | 6,285 | | | $ | 5,307 | | | $ | 3,981 | | | $ | 5,885 | | | $ | 11,619 | |
| Total revenues (1) | | $ | 10,734 | | | $ | 8,878 | | | $ | 6,753 | | | $ | 9,372 | | | $ | 16,636 | |
| Basic (2) | | $ | 1.53 | | | $ | 1.44 | | | $ | (1.14 | ) | | $ | (30.09 | ) | | $ | (2.49 | ) |
| Diluted (2) | | $ | 1.52 | | | $ | 1.43 | | | $ | (1.14 | ) | | $ | (30.09 | ) | | $ | (2.49 | ) |
| Long-term debt | | $ | 5,785 | | | $ | 6,749 | | | $ | 6,859 | | | $ | 8,990 | | | $ | 7,738 | |
Item 8. Financial Statements and Supplementary Data
690 rewritten, 406 added, 529 removed, 783 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
| [Report of Independent Registered Public Accounting Firm](#Report_of_Independent_Registered_Public) | | [removed: 51] [added: 48] |
| [Consolidated [removed: Comprehensive] Statements of [added: Comprehensive] Earnings](#Comprehensive_Statements) | | [removed: 53] [added: 51] |
| [Consolidated Statements of Cash Flows](#CONSOLIDATED_STATEMENTS_CASH_FLOWS) | | [removed: 54] [added: 52] |
| [Consolidated Balance Sheets](#CONSOLIDATED_BALANCE_SHEETS) | | [removed: 55] [added: 53] |
| [Consolidated Statements of Equity](#CONSOLIDATED_STATEMENTS_OF_STOCKHOLDERS) | | [removed: 56] [added: 54] |
| [Notes to Consolidated Financial Statements](#Note) | | [removed: 57] [added: 55] |
| [Note 1 – Summary of Significant Accounting Policies](#SummaryOfSignificantAccountingPolicies) | | [removed: 57] [added: 55] |
| [Note 2 – [removed: Acquisitions and] Divestitures](#Acquisitions_Divestitures) | | [removed: 67] [added: 65] |
| [Note 3 – Derivative Financial Instruments](#Derivatives) | | [removed: 69] [added: 66] |
| [Note 4 – Share-Based Compensation](#ShareBasedComp) | | [removed: 71] [added: 67] |
| [Note 5 – Asset Impairments](#AssetImpairments) | | [removed: 74] [added: 70] |
| [Note 6 – Restructuring and Transaction Costs](#Restructuring) | | [removed: 74] [added: 70] |
| [removed: [Note 7 –] Other [removed: Expenses](#OtherExpenses)] [added: expenses] | | [removed: 75] | [added: 4 | | | | (7 | ) | | | 10 | |]
| [Note [removed: 8] [added: 7] – Income Taxes](#Income_Taxes) | | [removed: 76] [added: 71] |
| [Note [removed: 9] [added: 8] – Net Earnings (Loss) Per Share From Continuing Operations](#EPS) | | [removed: 81] [added: 74] |
| [Note [removed: 10] [added: 9] – Other Comprehensive Earnings](#N10_OR_COMPREHENSIVE_EARNINGS) | | [removed: 81] [added: 75] |
| [Note [removed: 11] [added: 10] – Supplemental Information to Statements of Cash Flows](#SupplementalCashFlow) | | [removed: 82] [added: 75] |
| [Note [removed: 12] [added: 11] – Accounts Receivable](#AccountsReceivable) | | [removed: 82] [added: 76] |
| [Note [removed: 13] [added: 12] – Property, Plant and Equipment](#N13_PROPERTY_PLANT_EQUIPMENT) | | [removed: 83] [added: 76] |
| [removed: [Note 14 –] Other [removed: Current Liabilities](#N14_OR_CURRENT_LIABILITIES)] [added: current liabilities] | | [removed: 84] [added: $] | [added: 30 | | | $ | 32 | |]
| [Note [removed: 15] [added: 13] – Debt and Related Expenses](#Debt) | | [removed: 85] [added: 77] |
| [Note [removed: 16] [added: 15] – Asset Retirement Obligations](#ARO) | | [removed: 87] [added: 81] |
| [Note [removed: 17] [added: 16] – Retirement Plans](#RetirementPlans) | | [removed: 87] [added: 82] |
| [Note [removed: 18] [added: 17] – Stockholders’ Equity](#StockholdersEquity) | | [removed: 91] [added: 85] |
| [Note [removed: 19] [added: 18] – Discontinued Operations and Assets Held For Sale](#Discops) | | [removed: 93] [added: 87] |
| [Note [removed: 20] [added: 19] – Commitments and Contingencies](#Commitments) | | [removed: 95] [added: 91] |
| [Note [removed: 21] [added: 20] – Fair Value Measurements](#FairValue) | | [removed: 97] [added: 93] |
[removed: | [Note 22 –] Segment [removed: Information](#SegmentInfo) | | 98 |][added: Information]
| [Note [removed: 23] [added: 21] – Supplemental Information on Oil and Gas Operations (Unaudited)](#SupplementalOilAndGas) | | [removed: 100] [added: 94] |
| [Note [removed: 24] [added: 22] – Supplemental Quarterly Financial Information (Unaudited)](#QuarterlyFinancialInfo) | | [removed: 107] [added: 99] |
[removed: The] [added: To the Stockholders and] Board of Directors [removed: and Stockholders]
We have audited the accompanying consolidated balance sheets of Devon Energy Corporation and subsidiaries (the [removed: “Company”)] [added: Company)] as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] the related consolidated statements of comprehensive earnings, [removed: stockholders’] equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2018,] [added: 2019,] and the related notes (collectively, the [removed: “consolidated] [added: consolidated] financial [removed: statements”).][added: statements).]
We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in *Internal Control – Integrated Framework* *(2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2018,] [added: 2019,] in conformity with U.S. generally accepted accounting principles.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.
As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for revenue [removed: from contracts with customers] in 2018 due to the adoption of Accounting Standards [removed: Update 2014-09,] [added: Codification 606,] *Revenue from Contracts with Customers (ASC 606)*.
Basis for [removed: Opinion][added: Opinions]
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) [removed: (“PCAOB”)] [added: (PCAOB)] and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the [removed: maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the]
[added: maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the] company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
| [Note 14 – Leases](#Leases) | | 79 |
Changes in Accounting Principles
As discussed in Note 14 to the consolidated financial statements, the Company has changed its method of accounting for leases in 2019 due to the adoption of Accounting Standards Update 2016-02, *Leases (Topic 842)*.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.
The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of the estimate of proved and unproved oil and gas reserves used to assess the recoverability of the carrying value of oil and gas properties in the STACK common operating field
As discussed in Notes 1, 5, and 12 to the consolidated financial statements, the Company performs recoverability tests for the carrying value of its proved oil and gas properties subject to amortization.
The recoverability tests are performed on an annual basis or more often if events and circumstances indicate that the carrying value of such properties may not be recoverable.
The determination of the undiscounted cash flows is driven by the underlying estimate of proved and unproved oil and gas reserves for oil and gas properties as determined by the Company’s internal reservoir engineers.
Estimating common operating fields’ future cash flows requires the expertise of reservoir engineers who take into consideration the estimate of future production quantities, future operating and capital cost assumptions, and projected oil and gas prices inclusive of market differentials.
The STACK common operating field had a carrying value of $3.7 billion as of December 31, 2019.
We identified the evaluation of the estimate of proved and unproved oil and gas reserves used to assess the recoverability of the carrying value of the STACK common operating field’s oil and gas properties as a critical audit matter.
Based on current and forecasted commodity prices and costs, production volumes and drilling plans, and the risk adjustment factors associated with the unproved reserve volumes, the STACK common operating field required more judgment to evaluate the estimate of both proved and unproved oil and gas reserves used in determining undiscounted future net cash flows for the asset group.
The primary procedures we performed to address this critical audit matter included the following.
We tested certain internal controls over the Company’s processes to develop and monitor the estimate of proved and unproved oil and gas reserves used to determine future cash flows.
We assessed compliance of the methodology used by the Company’s internal reservoir engineers and external reservoir engineers to estimate proved and unproved oil and gas reserves with industry and regulatory standards.
To assess the Company’s ability to accurately estimate future proved and unproved production quantities, we compared the future production quantity assumptions used by the Company in prior periods to the actual production amounts in the current year and the year-end forecasted future production quantities.
We compared the estimated future proved and unproved production quantities used by the Company in the current period to historical production trends and investigated differences.
In addition, we assessed the competence, objectivity, and capabilities of the Company’s internal reservoir engineers and third-party reservoir engineers.
We read and considered the report of the Company’s external reservoir engineers in connection with our evaluation of the Company’s reserve estimates.
We also tested the processes and methodologies used by internal reservoir engineers to estimate unproved future production quantities.
We have compared the risk adjustment factors for unproved reserves selected by the Company by prospect to the guideline risk adjustment factor ranges by reserve class in published industry surveys.
We have also evaluated the Company’s selected risk adjustment factors by evaluation of the proximity of the unproved reserves to proved producing reserves.
We evaluated the future operating and capital cost assumptions used by the internal reservoir engineers to estimate future cash flows by comparing them to historical costs.
We also tested the projected oil and gas prices used by the internal reservoir engineers to estimate future cash flows by comparing those prices to publicly available prices and tested the relevant market differentials based on past results and any contractual changes in marketing and/or transportation and processing agreements that would impact future cash flows to be received.
*Assessment of the estimate of proved oil and gas reserves used in the depletion of proved oil and gas properties*
As discussed in Notes 1 and 12 to the consolidated financial statements, the Company calculates depletion for its proved oil and gas properties subject to amortization using a units-of-production method.
The rates used to deplete the balance of oil and gas properties subject to amortization are set using the estimate of proved oil and gas reserves by common operating field.
Under the units-of-production method, a rate is set annually using the beginning of year balance of oil and gas properties subject to amortization and estimated proved oil and gas reserves for each common operating field.
That rate is then applied to production throughout the year to determine the amount of depletion expense to be recorded by common operating field.
The Company’s internal reservoir engineers estimate proved oil and gas reserves, and the Company engages external reservoir engineers to perform an independent evaluation of a portion of the estimates of proved oil and gas reserves.
These common operating fields had depletion expense of $1.4 billion for the year ended December 31, 2019.
We identified the assessment of the estimate of proved oil and gas reserves used in the depletion of proved oil and gas properties as a critical audit matter.
There was a high degree of subjectivity in evaluating the Company’s estimate of the proved oil and gas reserves used as an input to determine depletion for each common operating field.
The primary procedures we performed to address this critical audit matter including the following.
We tested certain internal controls over the Company’s depletion expense calculation process, including controls related to the determination and monitoring of the estimate of proved oil and gas reserves.
We analyzed the grouping of costs and proved oil and gas reserves by common operating field.
We analyzed and assessed the determination of depletion expense for compliance with industry and regulatory standards.
To assess the Company’s ability to accurately estimate proved oil and gas reserves, we compared the estimated future production quantities assumptions used by the Company in prior periods to the actual production amounts received and the year-end future production quantities forecasted.
[Index to Financial Statements](#IndexToFinancialStatements)
Adoption of New Accounting Standard
[Index to Financial Statements](#IndexToFinancialStatements)
[Index to Financial Statements](#IndexToFinancialStatements)
DEVON ENERGY CORPORATION AND SUBSIDIARIES
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Upstream revenues | | $ | 6,285 | | | $ | 5,307 | | | $ | 3,981 | |
| Marketing revenues | | | 4,449 | | | | 3,571 | | | | 2,772 | |
| Total revenues | | | 10,734 | | | | 8,878 | | | | 6,753 | |
| Production expenses | | | 2,225 | | | | 1,823 | | | | 1,805 | |
| Marketing expenses | | | 4,363 | | | | 3,619 | | | | 2,821 | |
| Total expenses | | | 9,814 | | | | 8,105 | | | | 7,186 | |
[Index to Financial Statements](#IndexToFinancialStatements)
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Gains on asset dispositions | | | (263 | ) | | | (217 | ) | | | (1,496 | ) |
| Total (gains) losses on foreign exchange | | | 139 | | | | (132 | ) | | | (121 | ) |
| Settlements of intercompany foreign denominated assets/liabilities | | | (241 | ) | | | 9 | | | | 63 | |
| Capital expenditures | | | (2,451 | ) | | | (1,968 | ) | | | (1,384 | ) |
| Issuance of common stock | | | — | | | | — | | | | 1,469 | |
| Settlements of intercompany foreign denominated assets/liabilities | | | 241 | | | | (9 | ) | | | (63 | ) |
| Total effect of exchange rate changes on cash - continuing operations | | | 206 | | | | 6 | | | | (61 | ) |
| Investing activities | | | 2,548 | | | | (611 | ) | | | (1,381 | ) |
| Financing activities | | | 183 | | | | 195 | | | | 974 | |
| | | | | | | | | | | | | |
[Index to Financial Statements](#IndexToFinancialStatements)
| Long-term assets held for sale | | | — | | | | 9,729 | |
| Current liabilities held for sale | | | 69 | | | | 991 | |
| Long-term liabilities held for sale | | | — | | | | 3,936 | |
[Index to Financial Statements](#IndexToFinancialStatements)
| | | | | | | | | | | | | | | Retained | | | | Accumulated | | | | | | | | | | | | | | |
| Balance as of December 31, 2015 | | | 418 | | | $ | 42 | | | $ | 4,996 | | | $ | 1,112 | | | $ | 1,021 | | | $ | — | | | $ | 3,940 | | | $ | 11,111 | |
| Net loss | | | — | | | | — | | | | — | | | | (1,056 | ) | | | — | | | | — | | | | (402 | ) | | | (1,458 | ) |
| Common stock issued | | | 103 | | | | 10 | | | | 2,117 | | | | — | | | | — | | | | — | | | | — | | | | 2,127 | |
| Subsidiary equity transactions | | | — | | | | — | | | | 80 | | | | — | | | | — | | | | — | | | | 1,214 | | | | 1,294 | |
DEVON ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
The impact of adoption in the current period results is as follows:
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | Under ASC 606 | | | | Under ASC 605 | | | | Increase/ (Decrease) | | |
| Upstream revenues | | $ | 6,285 | | | $ | 6,031 | | | $ | 254 | |
An excerpt. Shown here: 40 of 690 rewritten, 40 of 406 added and 40 of 529 removed. The counts are complete. For every sentence, read Item 8. Financial Statements and Supplementary Data in the FY2019 filing and the FY2018 filing.
Item 9A. Controls and Procedures
4 rewritten, 0 added, 0 removed, 7 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
Based on their evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of December 31, [removed: 2018] [added: 2019] to ensure that the information required to be disclosed by Devon in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.
Based on this evaluation under the 2013 COSO Framework, which was completed on February [removed: 20, 2019,] [added: 19, 2020,] management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2018.][added: 2019.]
The effectiveness of our internal control over financial reporting as of December 31, [removed: 2018] [added: 2019] has been audited by KPMG LLP, an independent registered public accounting firm who audited our consolidated financial statements as of and for the year ended December 31, [removed: 2018,] [added: 2019,] as stated in their report, which is included under “Item 8.
There was no change in our internal control over financial reporting during the fourth quarter of [removed: 2018] [added: 2019] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
0 rewritten, 3 added, 1 removed, 2 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
On February 18, 2020, we entered into indemnification agreements with each of our directors.
Subject to various terms and conditions, the indemnification agreements provide for, among other things, (i) indemnification rights for the directors with respect to certain claims and liabilities to the fullest extent permitted by Delaware law, (ii) the right to advancement of expenses for the directors with respect to certain claims and liabilities, (iii) clarification for the processes used to determine whether a director is entitled to indemnification and (iv) the maintenance of directors and officers liability insurance coverage for the directors.
The foregoing description of the indemnification agreements is not complete and is subject to and qualified in its entirety by reference to a form of the indemnification agreement, a copy of which is attached hereto as Exhibit 10.40 and the terms of which are incorporated herein by reference.
Not applicable.
Item 10. Directors, Executive Officers and Corporate Governance
1 rewritten, 0 added, 0 removed, 0 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
The information called for by this Item 10 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 no later than 120 days following the fiscal year ended December 31, [removed: 2018.][added: 2019.]
Item 11. Executive Compensation
1 rewritten, 0 added, 0 removed, 0 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
The information called for by this Item 11 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 no later than 120 days following the fiscal year ended December 31, [removed: 2018.][added: 2019.]
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
1 rewritten, 0 added, 0 removed, 0 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
The information called for by this Item 12 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 no later than 120 days following the fiscal year ended December 31, [removed: 2018.][added: 2019.]
Item 13. Certain Relationships and Related Transactions, and Director Independence
1 rewritten, 0 added, 0 removed, 0 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
The information called for by this Item 13 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 no later than 120 days following the fiscal year ended December 31, [removed: 2018.][added: 2019.]
Item 14. Principal Accountant Fees and Services
1 rewritten, 0 added, 0 removed, 2 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
The information called for by this Item 14 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 no later than 120 days following the fiscal year ended December 31, [removed: 2018.][added: 2019.]
Item 15. Exhibits and Financial Statement Schedules
63 rewritten, 18 added, 5 removed, 119 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
| 2.1 | | Purchase Agreement, dated June [removed: 7,] [added: 5,] 2018, by and among Devon Gas Services, L.P. and Southwestern Gas Pipeline, L.L.C., as sellers, and Enlink Midstream Manager, LLC, Registrant, and GIP III Stetson I, L.P. and GIP III Stetson II, L.P., as acquirors ([incorporated by reference to Exhibit 2.1 to Registrant’s Form 8-K filed June 7, 2018; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312518186899/d603494dex21.htm)). |
| 4.2 | | Supplemental Indenture No. 1, dated as of July 12, 2011, to Indenture dated as of July 12, 2011, between Registrant and UMB Bank, National Association, as Trustee, relating to the [removed: 4.00% Senior Notes due 2021 and the] 5.60% Senior Notes due 2041 ([incorporated by reference to Exhibit 4.2 to Registrant’s Form 8-K filed July 12, 2011; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095012311065185/d83452exv4w2.htm)). |
| 4.3 | | Supplemental Indenture No. 2, dated as of May 14, 2012, to Indenture dated as of July 12, 2011, between Registrant and UMB Bank, National Association, as Trustee, relating to the [removed: 3.250% Senior Notes due 2022 and the] 4.750% Senior Notes due 2042 ([incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed May 14, 2012; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512231109/d352279dex41.htm)). |
| 4.8 | | Supplemental Indenture No. [removed: 3,] [added: 4,] dated as of [removed: January 9, 2009,] [added: March 22, 2018,] to Indenture dated as of March 1, 2002, between Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the [removed: 6.30%] [added: 7.95%] Senior Notes due [removed: 2019] [added: 2032] ([incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed [removed: January 9, 2009;] [added: March 22, 2018;] File No. [removed: 000-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095013409000361/d65819exv4w1.htm)).] [added: 000-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312518092146/d551370dex41.htm)).] |
| 4.9 | | [removed: Supplemental Indenture No. 4,] [added: Indenture,] dated as of [removed: March 22, 2018, to Indenture dated] [added: October 3, 2001, among Devon Financing Company, L.L.C. (f/k/a Devon Financing Corporation, U.L.C.),] as [removed: of March 1, 2002, between Registrant] [added: Issuer, Registrant, as Guarantor,] and The Bank of New York Mellon Trust Company, N.A., [added: originally The Chase Manhattan Bank,] as Trustee, relating to the [removed: 7.95% Senior Notes] [added: 7.875% Debentures] due [removed: 2032] [added: 2031] ([incorporated by reference to Exhibit [removed: 4.1] [added: 4.7] to Registrant’s [added: Registration Statement on] Form [removed: 8-K] [added: S-4] filed [removed: March 22, 2018;] [added: October 31, 2001;] File No. [removed: 000-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312518092146/d551370dex41.htm)).] [added: 333-68694](http://www.sec.gov/Archives/edgar/data/1090012/000095013401507773/d90138a2ex4-7.txt)).] |
| 4.10 | | [added: Assignment and Assumption Agreement, dated as of June 19, 2019, by and between Devon Financing Company, L.L.C. and Registrant, relating to that certain] Indenture, dated as of October 3, 2001, [added: by and] among Devon Financing Company, L.L.C. (f/k/a Devon Financing [removed: Corporation,] [added: Company,] U.L.C.), as Issuer, [removed: Registrant,] [added: Devon Energy Corporation,] as Guarantor, and The Bank of New York Mellon Trust Company, N.A., [removed: originally] [added: as successor to] The Chase Manhattan Bank, as Trustee, [removed: relating to] [added: and] the 7.875% Debentures due 2031 [added: issued thereunder] ([incorporated by reference to Exhibit [removed: 4.7] [added: 4.1] to [removed: Registrant’s Registration Statement on] [added: the Company’s] Form [removed: S-4] [added: 10-Q] filed [removed: October 31, 2001;] [added: August 7, 2019;] File No. [removed: 333-68694](http://www.sec.gov/Archives/edgar/data/1090012/000095013401507773/d90138a2ex4-7.txt)).] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459019029786/dvn-ex41_662.htm)).] |
| [removed: 10.2] [added: 10.3] | | Devon Energy Corporation 2009 Long-Term Incentive Plan (as amended and restated effective June 6, 2012) ([incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed June 8, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512265062/d366787dex102.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512265062/d366787dex102.htm)).] |
| [removed: 10.3] [added: 10.4] | | Devon Energy Corporation 2015 Long-Term Incentive Plan ([incorporated by reference to Exhibit 99.1 to Registrant’s Form S-8 filed June 3, 2015; File No. [removed: 333-204666](http://www.sec.gov/Archives/edgar/data/1090012/000119312515211541/d934016dex991.htm)).*] [added: 333-204666](http://www.sec.gov/Archives/edgar/data/1090012/000119312515211541/d934016dex991.htm)).] |
| [removed: 10.4] [added: 10.5] | | Devon Energy Corporation 2017 Long-Term Incentive Plan ([incorporated by reference to Exhibit 99.1 to Registrant’s Form S-8 filed June 7, 2017; File No. [removed: 333-218561](http://www.sec.gov/Archives/edgar/data/1090012/000119312517197005/d260413dex991.htm)).*] [added: 333-218561](http://www.sec.gov/Archives/edgar/data/1090012/000119312517197005/d260413dex991.htm)).] |
| [removed: 10.5] [added: 10.6] | | 2013 Amendment (effective as of March 6, 2013) to the Devon Energy Corporation 2009 Long-Term Incentive Plan (as amended and restated effective June 6, 2012) ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed May 1, 2013; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513192272/d524180dex101.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513192272/d524180dex101.htm)).] |
| [removed: 10.6] [added: 10.7] | | Devon Energy Corporation Annual Incentive Compensation Plan (amended and restated effective as of January 1, 2017) ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed June 12, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312517201470/d391476dex101.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312517201470/d391476dex101.htm)).] |
| [removed: 10.7] [added: 10.8] | | Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective as of April 15, 2014) ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed August 6, 2014; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514298369/d761940dex101.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514298369/d761940dex101.htm)).] |
| [removed: 10.8] [added: 10.9] | | Amendment 2014-2, executed May 9, 2014, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective April 15, 2014) ([incorporated by reference to Exhibit 10.11 to Registrant’s Form 10-K filed February 20, 2015; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515056497/d859923dex1011.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515056497/d859923dex1011.htm)).] |
| [removed: 10.9] [added: 10.10] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective April 15, 2014) ([incorporated by reference to Exhibit 10.13 to Registrant’s Form 10-K filed February 15, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1013_1996.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1013_1996.htm)).] |
| [removed: 10.10] [added: 10.11] | | [removed: [Amendment] [added: Amendment] 2018-1, executed August 21, 2018, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective April 15, [removed: 2014).](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1010_985.htm)*] [added: 2014) [(incorporated by reference to Exhibit 10.10 to Registrant’s Form 10-K filed February 20, 2019; File No. 001-32318)](http://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1010_985.htm).] |
| [removed: 10.11] [added: 10.12] | | Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.15 to Registrant’s Form 10-K filed February 24, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1015.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1015.htm)).] |
| [removed: 10.12] [added: 10.13] | | Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.6 to Registrant’s Form 10-Q filed May 9, 2014; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex106.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex106.htm)).] |
| [removed: 10.13] [added: 10.14] | | Amendment 2015-1, executed April 15, 2015, to the Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed May 6, 2015; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515174003/d913733dex101.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515174003/d913733dex101.htm)).] |
| [removed: 10.14] [added: 10.15] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.17 to Registrant’s Form 10-K filed February 15, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1017_1995.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1017_1995.htm)).] |
| [removed: 10.15] [added: 10.16] | | Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.16 to Registrant’s Form 10-K filed February 24, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1016.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1016.htm)).] |
| [removed: 10.16] [added: 10.17] | | Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.7 to Registrant’s Form 10-Q filed May 9, 2014; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex107.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex107.htm)).] |
| [removed: 10.17] [added: 10.18] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.20 to Registrant’s Form 10-K filed February 15, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1020_1994.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1020_1994.htm)).] |
| [removed: 10.18] [added: 10.19] | | [removed: [Amendment] [added: Amendment] 2018-1, executed August 21, 2018, to the Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, [removed: 2012).](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1018_984.htm)*] [added: 2012) [(incorporated by reference to Exhibit 10.18 to Registrant’s Form 10-K filed February 20, 2019; File No. 001-32318)](http://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1018_984.htm).] |
| [removed: 10.19] [added: 10.21] | | Devon Energy Corporation Supplemental Contribution Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.17 to Registrant’s Form 10-K filed February 24, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1017.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1017.htm)).] |
| [removed: 10.20] [added: 10.22] | | Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Contribution Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.8 to Registrant’s Form 10-Q filed May 9, 2014; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex108.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex108.htm)).] |
| [removed: 10.21] [added: 10.23] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Supplemental Contribution Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.23 to Registrant’s Form 10-K filed February 15, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1023_1993.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1023_1993.htm)).] |
| [removed: 10.22] [added: 10.25] | | Devon Energy Corporation Supplemental Executive Retirement Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.18 to Registrant’s Form 10-K filed February 24, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1018.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1018.htm)).] |
| [removed: 10.23] [added: 10.26] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Supplemental Executive Retirement Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.25 to Registrant’s Form 10-K filed February 15, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1025_1991.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1025_1991.htm)).] |
| [removed: 10.24] [added: 10.28] | | Devon Energy Corporation Supplemental Retirement Income Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.19 to Registrant’s Form 10-K filed February 24, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1019.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1019.htm)).] |
| [removed: 10.25] [added: 10.29] | | Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Retirement Income Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.9 to Registrant’s Form 10-Q filed May 9, 2014; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex109.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex109.htm)).] |
| [removed: 10.26] [added: 10.30] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Supplemental Retirement Income Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.28 to Registrant’s Form 10-K filed February 15, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1028_1992.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1028_1992.htm)).] |
| [removed: 10.27] [added: 10.32] | | Devon Energy Corporation Incentive Savings Plan (amended and restated effective January 1, 2018) ([incorporated by reference to Exhibit 10.28 to Registrant’s Form 10-K filed February 21, 2018; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459018002582/dvn-ex1028_300.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459018002582/dvn-ex1028_300.htm)).] |
| [removed: 10.28] [added: 10.33] | | [removed: [Amendment] [added: Amendment] 2018-1, executed December 14, 2018, to the Devon Energy Corporation Incentive Savings Plan (amended and restated effective January 1, [removed: 2018).](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1028_983.htm)*] [added: 2018) ([incorporated by reference to Exhibit 10.28 to Registrant’s Form 10-K filed February 20, 2019; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1028_983.htm)).] |
| [removed: 10.29] [added: 10.35] | | Amended and Restated Form of Employment Agreement between Registrant and certain executive officers ([incorporated by reference to Exhibit 10.19 to Registrant’s Form 10-K filed February 27, 2009; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095013409003904/d66379exv10w19.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095013409003904/d66379exv10w19.htm)).] |
| [removed: 10.30] [added: 10.36] | | Form of Amendment No. 1 to the Amended and Restated Employment Agreement between Registrant and certain executive officers ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed April 25, 2011; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095012311038626/d81608exv10w1.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095012311038626/d81608exv10w1.htm)).] |
| [removed: 10.31] [added: 10.37] | | Form of Employment Agreement between Registrant and certain executive officers ([incorporated by reference to Exhibit 10.22 to Registrant’s Form 10-K filed February 28, 2014; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514076267/d656849dex1022.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514076267/d656849dex1022.htm)).] |
| [removed: 10.32] [added: 10.38] | | Employment Agreement, dated April 19, 2017, by and between Registrant and Mr. Jeffrey L. Ritenour ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K, filed on April 20, 2017; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312517130689/d372080dex101.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312517130689/d372080dex101.htm)).] |
| [removed: 10.33] [added: 10.42] | | Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the [removed: 2009] [added: 2015] Long-Term Incentive Plan [removed: (as amended and restated June 6, 2012)] between Registrant and executive officers for performance based restricted stock awarded ([incorporated by reference to Exhibit [removed: 10.29] [added: 10.2] to Registrant’s Form [removed: 10-K] [added: 10-Q] filed [removed: February 20, 2015;] [added: May 4, 2016;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515056497/d859923dex1029.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312516577021/d172210dex102.htm)).] |
| [removed: 10.34] [added: 10.41] | | Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the 2015 Long-Term Incentive Plan between Registrant and David A. Hager for performance based restricted stock awarded ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed November 4, 2015; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515365650/d23744dex101.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515365650/d23744dex101.htm)).] |
| [removed: 10.35] [added: 10.43] | | [added: 2017] Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the 2015 Long-Term Incentive Plan between Registrant and executive officers for performance based restricted stock awarded ([incorporated by reference to Exhibit [removed: 10.2] [added: 10.1] to Registrant’s Form 10-Q filed May [removed: 4, 2016;] [added: 3, 2017;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312516577021/d172210dex102.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017008268/dvn-ex101_523.htm)).] |
| 2.2 | | Agreement of Purchase and Sale, dated as of May 28, 2019, among Devon Canada Corporation, Devon Canada Crude Marketing Corporation and Canadian Natural Resources Limited ([incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed May 31, 2019; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312519162861/d754489dex21.htm)). |
| 2.3 | | Purchase and Sale Agreement, dated December 17, 2019, by and between Devon Energy Production Company, L.P. and BKV Barnett, LLC ([incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K filed December 18, 2019; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312519317560/d842688dex21.htm)).* |
| 4.15 | | [Description of Securities Registered under Section 12 of the Securities Exchange Act of 1934](https://www.sec.gov/Archives/edgar/data/1090012/000156459020005182/dvn-ex415_879.htm). |
| 10.2 | | [First Amendment to Credit Agreement and Extension Agreement, dated as of December 13, 2019, by and among Registrant, as U.S. Borrower, Devon Canada Corporation, as Canadian Borrower, Bank of America, N.A., individually and as Administrative Agent, and the Lenders party thereto.](https://www.sec.gov/Archives/edgar/data/1090012/000156459020005182/EX10_2.htm) |
| 10.20 | | Amendment 2019-1, executed June 19, 2019, to the Devon Energy Corporation Defined Contribution Restoration Plan (as amended and restated effective January 1, 2012) [(incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed August 7, 2019; File No. 001-32318)](http://www.sec.gov/Archives/edgar/data/1090012/000156459019029786/dvn-ex101_660.htm). |
| 10.24 | | Amendment 2019-1, executed June 19, 2019, to the Devon Energy Corporation Supplemental Contribution Plan (as amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q filed August 7, 2019; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459019029786/dvn-ex102_661.htm)). |
| 10.27 | | Amendment 2019-1, executed June 19, 2019, to the Devon Energy Corporation Supplemental Executive Retirement Plan (as amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.3 to Registrant’s Form 10-Q filed August 7, 2019; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459019029786/dvn-ex103_659.htm)). |
| 10.31 | | Amendment 2019-1, effective September 10, 2019, to the Devon Energy Corporation Supplemental Retirement Income Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.2 to Registrant’s Form 10-Q filed November 6, 2019; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459019040774/dvn-ex102_398.htm)). |
| 10.34 | | Amendment 2019-1, executed June 19, 2019, to the Devon Energy Corporation Incentive Savings Plan (as amended and restated effective January 1, 2018) ([incorporated by reference to Exhibit 10.4 to Registrant’s Form 10-Q filed August 7, 2019; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459019029786/dvn-ex104_658.htm)). |
| 10.40 | | [Form of Indemnity Agreement between Registrant and non-management directors](https://www.sec.gov/Archives/edgar/data/1090012/000156459020005182/dvn-ex1040_878.htm). |
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| 104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
| * | Portions of this exhibit have been omitted in accordance with Item 601(b)(2)(ii) of Regulation S-K. |
| 10.42 | | Form of Notice of Grant of Nonqualified Stock Options and Award Agreement under the 2009 Long-Term Incentive Plan between Registrant and certain employees and executive officers for nonqualified stock options granted ([incorporated by reference to Exhibit 10.16 to Registrant’s Form 10-K filed February 25, 2011; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095012311018537/d78726exv10w16.htm)).* |
| 10.44 | | Form of Letter Agreement amending the restricted stock award agreements and nonqualified stock option agreements under the 2009 Long-Term Incentive Plan and the 2005 Long-Term Incentive Plan between Registrant and John Richels ([incorporated by reference to Exhibit 10.22 to Registrant’s Form 10-K filed February 25, 2011; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095012311018537/d78726exv10w22.htm)).* |
| 10.45 | | Form of Amendment to Incentive Stock Option Award Agreements between Registrant and post-retirement eligible executives relating to incentive stock options under the 2009 Long-Term Incentive Plan ([incorporated by reference to Exhibit 10.24 to Registrant’s Form 10-K filed February 21, 2013; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513068817/d477194dex1024.htm)).* |
| 23.3 | | [Consent of Deloitte LLP.](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex233_9.htm) |
| 99.2 | | [Report of Deloitte LLP.](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex992_13.htm) |
An excerpt. Shown here: 40 of 63 rewritten, all 18 added and all 5 removed. The counts are complete. For every sentence, read Item 15. Exhibits and Financial Statement Schedules in the FY2019 filing and the FY2018 filing.
Item 16. Form 10-K Summary
11 rewritten, 6 added, 3 removed, 34 unchanged
Read the full itemFY2019 item · filed February 19, 2020FY2018 item · filed February 20, 2019
| /s/ DAVID A. HAGER | | President, Chief Executive Officer and | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ JEFFREY L. RITENOUR | | Executive Vice President | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ JEREMY D. HUMPHERS | | Senior Vice President | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ [removed: JOHN RICHELS] [added: DUANE C. RADTKE] | | Chairman of the Board | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ BARBARA M. BAUMANN | | Director | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ JOHN E. BETHANCOURT | | Director | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ ROBERT H. HENRY | | Director | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ MICHAEL M. KANOVSKY | | Director | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ JOHN KRENICKI JR. | | Director | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ ROBERT A. MOSBACHER, JR. | | Director | February [removed: 20, 2019] [added: 19, 2020] |
| /s/ MARY P. RICCIARDELLO | | Director | February [removed: 20, 2019] [added: 19, 2020] |
February 19, 2020
| /s/ ANN G. FOX | | Director | February 19, 2020 |
| Ann G. Fox | | | |
| /s/ KEITH O. RATTIE | | Director | February 19, 2020 |
| Keith O. Rattie | | | |
| | | | |
February 20, 2019
| John Richels | | | |
| /s/ DUANE C. RADTKE | | Vice Chairman of the Board | February 20, 2019 |