Devon Energy 10-Q 2025-03-31

Filed 2025-05-07. 8 sections, 146K characters. Original on sec.gov · Markdown · JSON

Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-32318

DEVON ENERGY CORPORATION

(Exact name of registrant as specified in its charter)


Delaware		73-1567067
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer identification No.)

333 West Sheridan Avenue, Oklahoma City, Oklahoma		73102-5015
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (405) 235-3611

Former name, address and former fiscal year, if changed from last report: Not applicable

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.10 per share	DVN	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer		☑	Accelerated filer		☐	Non-accelerated filer		☐
Smaller reporting company		☐	Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

On April 23, 2025, 642.1 million shares of common stock were outstanding.

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DEVON ENERGY CORPORATION

FORM 10-Q

TABLE OF CONTEN****TS


Part I. Financial Information
Item 1.	Financial Statements	6
	Consolidated Statements of Comprehensive Earnings	6
	Consolidated Balance Sheets	7
	Consolidated Statements of Cash Flows	8
	Consolidated Statements of Equity	9
	Notes to Consolidated Financial Statements	10
	Note 1 – Summary of Significant Accounting Policies	10
	Note 2 – Acquisitions and Divestitures	11
	Note 3 – Derivative Financial Instruments	12
	Note 4 – Share-Based Compensation	14
	Note 5 – Asset Impairments	15
	Note 6 – Income Taxes	16
	Note 7 – Net Earnings Per Share	16
	Note 8 – Other Comprehensive Earnings (Loss)	16
	Note 9 – Supplemental Information to Statements of Cash Flows	17
	Note 10 – Accounts Receivable	17
	Note 11 – Property, Plant and Equipment	17
	Note 12 – Investments	18
	Note 13 – Debt and Related Expenses	18
	Note 14 – Leases	20
	Note 15 – Asset Retirement Obligations	20
	Note 16 – Stockholders’ Equity	21
	Note 17 – Commitments and Contingencies	22
	Note 18 – Fair Value Measurements	24
	Note 19 – Reportable Segments	25
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Executive Overview	26
	Results of Operations	27
	Capital Resources, Uses and Liquidity	35
	Critical Accounting Estimates	38
	Non-GAAP Measures	39
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41

Part II. Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43

Signatures		43

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DEFINI****TIONS

Unless the context otherwise indicates, references to “us,” “we,” “our,” “ours,” “Devon,” the “Company” and “Registrant” refer to Devon Energy Corporation and its consolidated subsidiaries. All monetary values, other than per unit and per share amounts, are stated in millions of U.S. dollars unless otherwise specified. In addition, the following are other abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:

“ASU” means Accounting Standards Update.

“Bbl” or “Bbls” means barrel or barrels.

“Boe” means barrel of oil equivalent. Gas proved reserves and production are converted to Boe, at the pressure and temperature base standard of each respective state in which the gas is produced, at the rate of six Mcf of gas per Bbl of oil, based upon the approximate relative energy content of gas and oil. NGL proved reserves and production are converted to Boe on a one-to-one basis with oil.

“Btu” means British thermal units, a measure of heating value.

“Catalyst” means Catalyst Midstream Partners, LLC.

“CDM” means Cotton Draw Midstream, L.L.C.

“DD&A” means depreciation, depletion and amortization expenses.

“EPA” means the United States Environmental Protection Agency.

“ESG” means environmental, social and governance.

“FASB” means Financial Accounting Standards Board.

“Fervo” means Fervo Energy Company.

“G&A” means general and administrative expenses.

“GAAP” means U.S. generally accepted accounting principles.

“Grayson Mill” means Grayson Mill Intermediate HoldCo II, LLC and Grayson Mill Intermediate HoldCo III, LLC.

“Inside FERC” refers to the publication Inside FERC’s Gas Market Report.

“LOE” means lease operating expenses.

“Matterhorn” refers to Matterhorn Express Pipeline, LLC and, as applicable, its direct parent, MXP Parent, LLC.

“MBbls” means thousand barrels.

“MBoe” means thousand Boe.

“Mcf” means thousand cubic feet.

“MMBoe” means million Boe.

“MMBtu” means million Btu.

“MMcf” means million cubic feet.

“N/M” means not meaningful.

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“NCI” means noncontrolling interests.

“NGL” or “NGLs” means natural gas liquids.

“NOV” means notice of violation.

“NYMEX” means New York Mercantile Exchange.

“OPEC” means Organization of the Petroleum Exporting Countries.

“SEC” means United States Securities and Exchange Commission.

“Senior Credit Facility” means Devon’s syndicated unsecured revolving line of credit, effective as of March 24, 2023.

"SOFR" means secured overnight financing rate.

“TSR” means total shareholder return.

“U.S.” means United States of America.

“VIE” means variable interest entity.

“Water JV” means NDB Midstream L.L.C.

“WTI” means West Texas Intermediate.

“/Bbl” means per barrel.

“/d” means per day.

“/MMBtu” means per MMBtu.

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INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements” within the meaning of the federal securities laws. Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words and phrases “expects,” “believes,” “will,” “would,” “could,” “continue,” “may,” “aims,” “likely to be,” “intends,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this report that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but not limited to:

the volatility of oil, gas and NGL prices, including from changes in trade relations and policies, such as the imposition of tariffs by the U.S., China or other countries;

uncertainties inherent in estimating oil, gas and NGL reserves;

the extent to which we are successful in acquiring and discovering additional reserves;

the uncertainties, costs and risks involved in our operations;

risks related to our hedging activities;

our limited control over third parties who operate some of our oil and gas properties and investments;

midstream capacity constraints and potential interruptions in production, including from limits to the build out of midstream infrastructure;

competition for assets, materials, people and capital, which can be exacerbated by supply chain disruptions, including as a result of tariffs or other changes in trade policy;

regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands, environmental matters and water disposal;

climate change and risks related to regulatory, social and market efforts to address climate change;

risks relating to our ESG initiatives;

claims, audits and other proceedings impacting our business, including with respect to historic and legacy operations;

governmental interventions in energy markets;

counterparty credit risks;

risks relating to our indebtedness;

cybersecurity risks;

the extent to which insurance covers any losses we may experience;

risks related to shareholder activism;

our ability to successfully complete mergers, acquisitions and divestitures;

our ability to pay dividends and make share repurchases; and

any of the other risks and uncertainties discussed in this report, our 2024 Annual Report on Form 10-K and our other filings with the SEC.

The forward-looking statements included in this filing speak only as of the date of this report, represent management’s current reasonable expectations as of the date of this filing and are subject to the risks and uncertainties identified above as well as those described elsewhere in this report and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in this report and in other documents we file from time to time with the SEC. All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We do not undertake, and expressly disclaim, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.

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Part I. Financial Information

Item 1. Financial Statements

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS


	Three Months Ended March 31,
	2025			2024
	(Unaudited)
Oil, gas and NGL sales	$	3,126		$	2,629
Oil, gas and NGL derivatives		(98	)		(145	)
Marketing and midstream revenues		1,424			1,112
Total revenues		4,452			3,596
Production expenses		912			751
Exploration expenses		10			9
Marketing and midstream expenses		1,436			1,133
Depreciation, depletion and amortization		912			722
Asset impairments		254			—
Asset dispositions		2			1
General and administrative expenses		130			114
Financing costs, net		123			76
Other, net		27			22
Total expenses		3,806			2,828
Earnings before income taxes		646			768
Income tax expense		137			159
Net earnings		509			609
Net earnings attributable to noncontrolling interests		15			13
Net earnings attributable to Devon	$	494		$	596
Net earnings per share:
Basic net earnings per share	$	0.77		$	0.95
Diluted net earnings per share	$	0.77		$	0.94
Comprehensive earnings:
Net earnings	$	509		$	609
Other comprehensive earnings, net of tax:
Pension and postretirement plans		1			1
Other comprehensive earnings, net of tax		1			1
Comprehensive earnings:		510			610
Comprehensive earnings attributable to noncontrolling interests		15			13
Comprehensive earnings attributable to Devon	$	495		$	597

See accompanying notes to consolidated financial statements.

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DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET****S


	March 31, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and restricted cash	$	1,234		$	846
Accounts receivable		2,036			1,972
Inventory		332			294
Other current assets		303			315
Total current assets		3,905			3,427
Oil and gas property and equipment, based on successful efforts accounting, net		23,429			23,198
Other property and equipment, net ($189 million and $178 million related to CDM in 2025 and 2024, respectively)		1,653			1,813
Total property and equipment, net		25,082			25,011
Goodwill		753			753
Right-of-use assets		127			303
Investments		713			727
Other long-term assets		348			268
Total assets	$	30,928		$	30,489
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	923		$	806
Revenues and royalties payable		1,588			1,432
Short-term debt		485			485
Other current liabilities		622			586
Total current liabilities		3,618			3,309
Long-term debt		8,395			8,398
Lease liabilities		77			320
Asset retirement obligations		835			770
Other long-term liabilities		1,041			840
Deferred income taxes		2,189			2,148
Stockholders' equity:
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued644 million and 651 million shares in 2025 and 2024, respectively		64			65
Additional paid-in capital		6,096			6,387
Retained earnings		8,506			8,166
Accumulated other comprehensive loss		(121	)		(122	)
Total stockholders’ equity attributable to Devon		14,545			14,496
Noncontrolling interests		228			208
Total equity		14,773			14,704
Total liabilities and equity	$	30,928		$	30,489

See accompanying notes to consolidated financial statements.

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DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2025			2024
	(Unaudited)
Cash flows from operating activities:
Net earnings	$	509		$	609
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation, depletion and amortization		912			722
Asset impairments		254			—
Leasehold impairments		5			—
Accretion of liabilities		6			—
Total losses on commodity derivatives		98			145
Cash settlements on commodity derivatives		(10	)		24
Losses on asset dispositions		2			1
Deferred income tax expense		41			40
Share-based compensation		30			24
Other		(22	)		3
Changes in assets and liabilities, net		117			170
Net cash from operating activities		1,942			1,738
Cash flows from investing activities:
Capital expenditures		(934	)		(894	)
Acquisitions of property and equipment		(8	)		(8	)
Divestitures of property and equipment		133			17
Distributions from investments		9			11
Contributions to investments and other		(2	)		(47	)
Net cash from investing activities		(802	)		(921	)
Cash flows from financing activities:
Repurchases of common stock		(301	)		(205	)
Dividends paid on common stock		(163	)		(299	)
Contributions from noncontrolling interests		14			12
Distributions to noncontrolling interests		(9	)		(7	)
Repayment of finance lease		(274	)		—
Shares exchanged for tax withholdings and other		(19	)		(42	)
Net cash from financing activities		(752	)		(541	)
Effect of exchange rate changes on cash		—			(2	)
Net change in cash, cash equivalents and restricted cash		388			274
Cash, cash equivalents and restricted cash at beginning of period		846			875
Cash, cash equivalents and restricted cash at end of period	$	1,234		$	1,149

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equiv

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Item 2. . Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis addresses material changes in our results of operations for the three-month period ended March 31, 2025 compared to previous periods, and in our financial condition and liquidity since December 31, 2024. For information regarding our critical accounting policies and estimates, see our 2024 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Executive Over****view

We are a leading independent oil and natural gas exploration and production company whose operations are focused onshore in the United States. Our operations are currently focused in four core areas: the Delaware Basin, Rockies, Eagle Ford and Anadarko. Our asset base is underpinned by premium acreage in the economic core of the Delaware Basin and our diverse, top-tier resource plays, providing a deep inventory of opportunities for years to come.

On September 27, 2024, we acquired the Williston Basin business of Grayson Mill for total consideration of approximately $5.0 billion, consisting of $3.5 billion of cash and approximately 37.3 million shares of Devon common stock, including purchase price adjustments. The acquisition allows us to efficiently expand our oil production and operating scale, creating immediate and long-term, sustainable value to shareholders over time.

As evidenced by this acquisition, we remain focused on building economic value by executing on our strategic priorities of moderating production growth, emphasizing capital and operational efficiencies, optimizing reinvestment rates to maximize free cash flow, maintaining low leverage, delivering cash returns to our shareholders and pursuing operational excellence. Our recent performance highlights for these priorities include the following items for the first quarter of 2025:

Oil production totaled 388 MBbls/d, exceeding our plan by 1%.

As of March 31, 2025, completed approximately 73% of our authorized $5.0 billion share repurchase program with approximately 77.5 million of our common shares purchased for approximately $3.6 billion, or $47.02 per share since inception of the plan.

Exited with $4.2 billion of liquidity, including $1.2 billion of cash.

Generated $1.9 billion of operating cash flow and $6.8 billion for the past twelve trailing months.

Paid dividends of $163 million and have declared approximately $154 million of dividends to be paid in the second quarter of 2025.

Earnings attributable to Devon were $494 million, or $0.77 per diluted share.

Core earnings (Non-GAAP) were $779 million, or $1.21 per diluted share.

Our net earnings and operating cash flow are highly dependent upon oil, gas and NGL prices which can be volatile due to several varying factors. During the first quarter of 2025, commodity prices have experienced heightened volatility and declines, driven primarily by economic uncertainty in global trade arising from geopolitical events and shifting trade policies, such as the imposition of tariffs by the U.S. and planned oil output increases by OPEC+. Despite the potential negative impacts of higher inflation rates and supply chain disruptions created by these developments, we remain committed to capital discipline and delivering the objectives that underpin our current plan. Our disciplined, returns-driven strategy is designed to adapt to market fluctuations by reducing activity when necessary to maximize free cash flow generation. We will continue to prioritize value creation through moderated capital investment and production growth, particularly with a view of the volatility in commodity prices, supply chain constraints and the economic uncertainty arising from inflation and geopolitical events. Our cash-return objectives remain focused on opportunistic share repurchases, funding our dividends, repaying debt at upcoming maturities and building cash balances.

To emphasize our commitment to maximizing free cash flow and creating value for shareholders, we recently announced a business optimization plan which is anticipated to improve our annual pre-tax cash flow by $1.0 billion. The plan includes actions to achieve more efficient field-level operations and improvements in drilling and completion costs while improving operating margins and corporate costs. These savings are on track to be achieved by the end of 2026 with approximately $400 million expected to be completed by the end of 2025.

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Res****ults of Operations

The following graphs, discussion and analysis are intended to provide an understanding of our results of operations and current financial condition. To facilitate the review, these numbers are being presented before consideration of noncontrolling interests.

Q1 2025 vs. Q4 2024

Our first quarter 2025 and fourth quarter 2024 net earnings were $509 million and $653 million, respectively. The graph below shows the change in net earnings from the fourth quarter of 2024 to the first quarter of 2025. The material changes are further discussed by category on the following pages.

Production Volumes


	Q1 2025		% of Total			Q4 2024		Change
Oil (MBbls/d)
Delaware Basin		216		56	%		221		-2	%
Rockies		112		29	%		110		2	%
Eagle Ford		45		11	%		49		-10	%
Anadarko Basin		11		3	%		14		-19	%
Other		4		1	%		4	N/M
Total		388		100	%		398		-3	%


	Q1 2025		% of Total			Q4 2024		Change
Gas (MMcf/d)
Delaware Basin		744		55	%		755		-1	%
Rockies		233		17	%		230		1	%
Eagle Ford		117		9	%		130		-10	%
Anadarko Basin		252		19	%		255		-1	%
Other		—		0	%		1	N/M
Total		1,346		100	%		1,371		-2	%


	Q1 2025		% of Total			Q4 2024		Change
NGLs (MBbls/d)
Delaware Basin		118		58	%		127		-7	%
Rockies		44		22	%		43		4	%
Eagle Ford		15		7	%		21		-29	%
Anadarko Basin		26		13	%		30		-16	%
Other		—		0	%		—	N/M
Total		203		100	%		221		-8	%

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	Q1 2025		% of Total			Q4 2024		Change
Combined (MBoe/d)
Delaware Basin		458		56	%		474		-3	%
Rockies		195		24	%		191		2	%
Eagle Ford		79		10	%		92		-14	%
Anadarko Basin		79		10	%		87		-9	%
Other		4		0	%		4	N/M
Total		815		100	%		848		-4	%

From the fourth quarter of 2024 to the first quarter of 2025, the change in volumes contributed to a $165 million decrease in earnings. The decrease in volumes was primarily due to natural well declines in the Delaware Basin, Eagle Ford and Anadarko Basin, as well as winter weather impacts in the Delaware and Anadarko Basins.

Realized Prices


	Q1 2025		Realization	Q4 2024		Change
Oil (per Bbl)
WTI index	$	71.50		$	70.32		2	%
Realized price, unhedged	$	69.13	97%	$	68.11		2	%
Cash settlements	$	0.02		$	1.08
Realized price, with hedges	$	69.15	97%	$	69.19		0	%


	Q1 2025			Realization	Q4 2024		Change
Gas (per Mcf)
Henry Hub index	$	3.65			$	2.79		31	%
Realized price, unhedged	$	2.55		70%	$	1.30		96	%
Cash settlements	$	(0.07	)		$	0.16
Realized price, with hedges	$	2.48		68%	$	1.46		70	%


	Q1 2025			Realization	Q4 2024			Change
NGLs (per Bbl)
WTI index	$	71.50			$	70.32			2	%
Realized price, unhedged	$	22.03		31%	$	21.07			5	%
Cash settlements	$	(0.10	)		$	(0.06	)
Realized price, with hedges	$	21.93		31%	$	21.01			4	%


	Q1 2025			Q4 2024		Change
Combined (per Boe)
Realized price, unhedged	$	42.58		$	39.57		8	%
Cash settlements	$	(0.13	)	$	0.75
Realized price, with hedges	$	42.45		$	40.32		5	%

From the fourth quarter of 2024 to the first quarter of 2025, realized prices contributed to a $205 million increase in earnings. Unhedged oil, gas and NGL prices increased primarily due to higher WTI, Henry Hub and Mont Belvieu index prices, respectively. The increase in unhedged prices was partially offset by unfavorable gas and NGL hedge cash settlements.

We currently have approximately 30% and 35% of our remaining anticipated 2025 oil and gas production hedged, respectively.

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Hedge Settlements


	Q1 2025			Q4 2024			Change
	Q
Oil	$	—		$	40		N/M
Natural gas		(8	)		20		N/M
NGL		(2	)		(2	)	N/M
Total cash settlements (1)	$	(10	)	$	58			-117	%

(1)

Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

Cash settlements as presented in the tables above represent realized gains or losses related to the instruments described in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Production Expenses


	Q1 2025			Q4 2024			Change
LOE	$	479		$	445			8	%
Gathering, processing & transportation		204			213			-4	%
Production taxes		212			206			3	%
Property taxes		17			17			0	%
Total	$	912		$	881			4	%
Per Boe:
LOE	$	6.53		$	5.70			14	%
Gathering, processing & transportation	$	2.78		$	2.74			2	%
Percent of oil, gas and NGL sales:
Production taxes		6.8	%		6.7	%		2	%

Production expenses increased primarily due to the timing of new well activity in the Delaware Basin and Rockies, which led to higher LOE in the first quarter of 2025.

Field-Level Cash Margin

The table below presents the field-level cash margin for each of our operating areas. Field-level cash margin is computed as oil, gas and NGL sales less production expenses and is not a measure defined by GAAP. A reconciliation to the comparable GAAP measures is found in “Non-GAAP Measures” in this Item 2. The changes in production volumes, realized prices and production expenses, shown above, had the following impact on our field-level cash margins by asset.


	Q1 2025		$ per BOE		Q4 2024		$ per BOE
Field-level cash margin (Non-GAAP)
Delaware Basin	$	1,283	$	31.13	$	1,259	$	28.90
Rockies		509	$	29.01		489	$	27.86
Eagle Ford		270	$	37.98		308	$	36.25
Anadarko Basin		136	$	19.13		135	$	16.88
Other		16	N/M			14	N/M
Total	$	2,214	$	30.16	$	2,205	$	28.27

DD&A and Asset Impairments


	Q1 2025		Q4 2024		Change
Oil and gas per Boe	$	12.07	$	12.08		0	%

Oil and gas	$	886	$	943		-6	%
Other property and equipment		26		28		-7	%
Total DD&A	$	912	$	971		-6	%

Asset impairments	$	254	$	—	N/M

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by approximately $20 million due to the extinguishment of the associated financing lease. See Note 5 in "Part I. Financial Information – Item 1. Financial Statements" of this report for further discussion.

G&A


	Q1 2025		Q4 2024		Change
G&A per Boe	$	1.77	$	1.97		-10	%

Labor and benefits	$	70	$	90		-22	%
Non-labor		60		65		-8	%
Total	$	130	$	155		-16	%

G&A costs were lower in the first quarter of 2025 primarily due to lower labor and benefit costs.

Other Items


	Q1 2025			Q4 2024			Change in earnings
Commodity hedge valuation changes (1)	$	(88	)	$	(142	)	$	54
Marketing and midstream operations		(12	)		(1	)		(11	)
Exploration expenses		10			12			2
Asset dispositions		2			(5	)		(7	)
Net financing costs		123			123			—
Other, net		27			24			(3	)
							$	35

(1)

Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

We recognize fair value changes on our oil, gas and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. For additional information, see Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Income Taxes


	Q1 2025			Q4 2024
Current expense	$	96		$	119
Deferred expense		41			68
Total expense	$	137		$	187
Current tax rate		15	%		14	%
Deferred tax rate		6	%		8	%
Effective income tax rate		21	%		22	%

For additional information on income taxes, see Note 6 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

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Q1 2025 vs. Q1 2024

Our first quarter 2025 and first quarter 2024 net earnings were $509 million and $609 million, respectively. The graph below shows the change in net earnings from the first quarter of 2024 to the first quarter of 2025. The material changes are further discussed by category on the following pages.

Production Volumes


	Q1 2025		% of Total			Q1 2024		Change
Oil (MBbls/d)
Delaware Basin		216		56	%		208		4	%
Rockies		112		29	%		53		111	%
Eagle Ford		45		11	%		43		4	%
Anadarko Basin		11		3	%		11		6	%
Other		4		1	%		4	N/M
Total		388		100	%		319		22	%


	Q1 2025		% of Total			Q1 2024		Change
Gas (MMcf/d)
Delaware Basin		744		55	%		695		7	%
Rockies		233		17	%		81		188	%
Eagle Ford		117		9	%		79		48	%
Anadarko Basin		252		19	%		223		13	%
Other		—		0	%		1	N/M
Total		1,346		100	%		1,079		25	%


	Q1 2025		% of Total			Q1 2024		Change
NGLs (MBbls/d)
Delaware Basin		118		58	%		113		5	%
Rockies		44		22	%		12		262	%
Eagle Ford		15		7	%		14		9	%
Anadarko Basin		26		13	%		26		-1	%
Other		—		0	%		—	N/M
Total		203		100	%		165		23	%


	Q1 2025		% of Total			Q1 2024		Change
Combined (MBoe/d)
Delaware Basin		458		56	%		437		5	%
Rockies		195		24	%		79		148	%
Eagle Ford		79		10	%		70		13	%
Anadarko Basin		79		10	%		74		7	%
Other		4		0	%		4	N/M
Total		815		100	%		664		23	%

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From the first quarter of 2024 to the first quarter of 2025, the change in volumes contributed to a $542 million increase in earnings. Volumes increased primarily due to the Grayson Mill acquisition in the Rockies, which closed in the third quarter of 2024 as well as new well activity across our portfolio, particularly in the Delaware Basin.

Realized Prices


	Q1 2025		Realization	Q1 2024			Change
Oil (per Bbl)
WTI index	$	71.50		$	77.01			-7	%
Realized price, unhedged	$	69.13	97%	$	75.40			-8	%
Cash settlements	$	0.02		$	(0.25	)
Realized price, with hedges	$	69.15	97%	$	75.15			-8	%


	Q1 2025			Realization	Q1 2024		Change
Gas (per Mcf)
Henry Hub index	$	3.65			$	2.25		62	%
Realized price, unhedged	$	2.55		70%	$	1.30		97	%
Cash settlements	$	(0.07	)		$	0.32
Realized price, with hedges	$	2.48		68%	$	1.62		53	%


	Q1 2025			Realization	Q1 2024			Change
NGLs (per Bbl)
WTI index	$	71.50			$	77.01			-7	%
Realized price, unhedged	$	22.03		31%	$	20.81			6	%
Cash settlements	$	(0.10	)		$	(0.08	)
Realized price, with hedges	$	21.93		31%	$	20.73			6	%


	Q1 2025			Q1 2024		Change
Combined (per Boe)
Realized price, unhedged	$	42.58		$	43.52		-2	%
Cash settlements	$	(0.13	)	$	0.39
Realized price, with hedges	$	42.45		$	43.91		-3	%

From the first quarter of 2024 to the first quarter of 2025, realized prices contributed to a $45 million decrease in earnings. This decrease was due to lower unhedged realized oil prices which decreased primarily due to lower WTI index prices. This decrease was partially offset by an increase in unhedged realized gas and NGL prices which were primarily due to higher Henry Hub and Mont Belvieu index prices. Realized prices were also negatively impacted by unfavorable gas and NGL hedge cash settlements.

Hedge Settlements


	Q1 2025			Q1 2024			Change
Oil	$	—		$	(7	)	N/M
Natural gas		(8	)		32		N/M
NGL		(2	)		(1	)	N/M
Total cash settlements (1)	$	(10	)	$	24			-142	%

(1)

Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

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Production Expenses


	Q1 2025			Q1 2024			Change
LOE	$	479		$	380			26	%
Gathering, processing & transportation		204			180			13	%
Production taxes		212			175			21	%
Property taxes		17			16			6	%
Total	$	912		$	751			21	%
Per Boe:
LOE	$	6.53		$	6.29			4	%
Gathering, processing & transportation	$	2.78		$	2.98			-7	%
Percent of oil, gas and NGL sales:
Production taxes		6.8	%		6.7	%		2	%

Production expenses increased in the first quarter of 2025 primarily due to increased activity in the Rockies related to the Grayson Mill acquisition as well as new well activity across the portfolio.

Field-Level Cash Margin


	Q1 2025		$ per BOE		Q1 2024		$ per BOE
Field-level cash margin (Non-GAAP)
Delaware Basin	$	1,283	$	31.13	$	1,275	$	32.06
Rockies		509	$	29.01		224	$	31.19
Eagle Ford		270	$	37.98		266	$	41.82
Anadarko Basin		136	$	19.13		98	$	14.64
Other		16	N/M			15	N/M
Total	$	2,214	$	30.16	$	1,878	$	31.09

DD&A and Asset Impairments


	Q1 2025		Q1 2024		Change
Oil and gas per Boe	$	12.07	$	11.57		4	%

Oil and gas	$	886	$	699		27	%
Other property and equipment		26		23		12	%
Total DD&A	$	912	$	722		26	%

Asset impairments	$	254	$	—	N/M

DD&A increased in the first quarter of 2025 primarily due to higher volumes driven by the Grayson Mill acquisition and new well activity across our portfolio.

In the first quarter of 2025, Devon rationalized two headquarters-related real estate assets resulting in total asset impairments of $254 million. As a result, our annual DD&A will be reduced by approximately $15 million and our net financing costs will be reduced by approximately $20 million due to the extinguishment of the associated financing lease. See Note 5 in "Part I. Financial Information – Item 1. Financial Statements" of this report for further discussion.

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G&A


	Q1 2025		Q1 2024		Change
G&A per Boe	$	1.77	$	1.89		-6	%

Labor and benefits	$	70	$	63		11	%
Non-labor		60		51		18	%
Total	$	130	$	114		14	%

G&A increased in the first quarter of 2025 primarily due to higher employee compensation, driven in part by inflationary adjustments and the Grayson Mill acquisition. However, our G&A per Boe rate decreased due to the Grayson Mill acquisition efficiently expanding our operating scale and production.

Other Items


	Q1 2025			Q1 2024			Change in earnings
Commodity hedge valuation changes (1)	$	(88	)	$	(169	)	$	81
Marketing and midstream operations		(12	)		(21	)		9
Exploration expenses		10			9			(1	)
Asset dispositions		2			1			(1	)
Net financing costs		123			76			(47	)
Other, net		27			22			(5	)
							$	36

(1)

Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

During the third quarter of 2024, we issued $3.25 billion of debt to partially fund the Grayson Mill acquisition. Additionally, we retired $472 million of debt in the third quarter of 2024. For additional information, see Note 13 in "Part I. Financial Information - Item 1. Financial Statements" in this report.

Income Taxes


	Q1 2025			Q1 2024
Current expense	$	96		$	119
Deferred expense		41			40
Total expense	$	137		$	159
Current tax rate		15	%		16	%
Deferred tax rate		6	%		5	%
Effective income tax rate		21	%		21	%

For information on income taxes, see Note 6 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

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Cap****ital Resources, Uses and Liquidity

Sources and Uses of Cash

The following table presents the major changes in cash and cash equivalents for the three months ended March 31, 2025 and 2024.


	Three Months Ended March 31,
	2025			2024
Operating cash flow	$	1,942		$	1,738
Capital expenditures		(934	)		(894	)
Acquisitions of property and equipment		(8	)		(8	)
Divestitures of property and equipment		133			17
Investment activity, net		7			(36	)
Repurchases of common stock		(301	)		(205	)
Common stock dividends		(163	)		(299	)
Noncontrolling interest activity, net		5			5
Repayment of finance lease		(274	)		—
Other		(19	)		(44	)
Net change in cash, cash equivalents and restricted cash	$	388		$	274
Cash, cash equivalents and restricted cash at end of period	$	1,234		$	1,149

Operating Cash Flow

As presented in the table above, net cash provided by operating activities continued to be a significant source of capital and liquidity. Operating cash flow funded our capital expenditures, and we continued to return value to our shareholders by utilizing cash flow and cash balances for share repurchases and dividends.

Capital Expenditures

The amounts in the table below reflect cash payments for capital expenditures, including cash paid for capital expenditures incurred in prior periods.


	Three Months Ended March 31,
	2025		2024
Delaware Basin	$	468	$	534
Rockies		222		75
Eagle Ford		151		157
Anadarko Basin		45		60
Other		1		2
Total oil and gas		887		828
Midstream		32		37
Other		15		29
Total capital expenditures	$	934	$	894

Capital expenditures consist primarily of amounts related to our oil and gas exploration and development operations, midstream operations and other corporate activities. Our capital investment program is driven by a disciplined allocation process focused on moderating our production growth and maximizing our returns. As such, our capital expenditures for the first three months of 2025 represented approximately 48% of our operating cash flow.

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Divestitures of Property and Equipment

During the first three months of 2025, we generated $133 million in proceeds primarily from the sale of headquarters-related real estate assets as part of our real estate rationalization initiatives. For additional information, see Note 5 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

During the first three months of 2025 and 2024, we received $20 million in contingent earnout payments related to assets previously sold. For additional information, see Note 2 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Repayment of Finance Lease

During the first three months of 2025, we paid $274 million in cash to extinguish a financing lease related to a headquarters-related real estate asset as part of our real estate rationalization initiatives. For additional information, see Note 14 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Investment Activity

During the first three months of 2025 and 2024, Devon received distributions from our investments of $9 million and $11 million, respectively. Devon contributed $2 million and $47 million to our investments during the first three months of 2025 and 2024, respectively.

Shareholder Distributions and Stock Activity

We repurchased approximately 8.5 million shares of common stock for $301 million and approximately 4.4 million shares of common stock for $193 million under the share repurchase program authorized by our Board of Directors in the first three months of 2025 and 2024, respectively. For additional information, see Note 16 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

The following table summarizes our common stock dividends during the first quarter of 2025 and 2024. Devon most recently raised its fixed dividend by 9% from $0.22 to $0.24 per share in the first quarter of 2025.


	Dividends		Rate Per Share
2025:
First quarter	$	163	$	0.24
2024:
First quarter (1)	$	299	$	0.44

(1)

In the first quarter of 2024, Devon paid a variable dividend of $0.22 per share for a total of $156 million in addition to its fixed dividend.

Noncontrolling Interest Activity, net

During the first three months of 2025 and 2024, we distributed $9 million and $7 million, respectively, to our noncontrolling interests in CDM. During the first three months of 2025 and 2024, we received $14 million and $12 million, respectively, in contributions from our noncontrolling interests.

Liquidity

The business of exploring for, developing and producing oil and natural gas is capital intensive. Because oil, natural gas and NGL reserves are a depleting resource, we, like all upstream operators, must continually make capital investments to grow and even sustain production. Generally, our capital investments are focused on drilling and completing new wells and maintaining production from existing wells. At opportunistic times, we also acquire operations and properties from other operators or landowners to enhance our existing portfolio of assets.

On September 27, 2024, Devon acquired the Williston Basin business of Grayson Mill. This acquisition adds a high-margin production mix that enhances our position and efficiently expands our operating scale and production. The acquisition delivers sustainable accretion to earnings and free cash flow further supporting our cash-return business model, which moderates growth, emphasizes capital efficiencies and prioritizes cash returns to shareholders.

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will be primarily focused on capital efficiencies, production optimization, commercial opportunities and corporate cost reductions. These savings are on track to be achieved by the end of 2026 with approximately $400 million expected to be completed by the end of 2025.

Historically, our primary sources of capital funding and liquidity have been our operating cash flow, cash on hand and asset divestiture proceeds. Additionally, we maintain a commercial paper program, supported by our revolving line of credit, which can be accessed as needed to supplement operating cash flow and cash balances. If needed, we can also issue debt and equity securities, including through transactions under our shelf registration statement filed with the SEC. We estimate the combination of our sources of capital will continue to be adequate to fund our planned capital requirements as discussed in this section as well as return cash to shareholders.

Operating Cash Flow

Key inputs into determining our planned capital investment are the amount of cash we hold and operating cash flow we expect to generate over the next one to three or more years. At the end of the first quarter of 2025, we held approximately $1.2 billion of cash. Our operating cash flow forecasts are sensitive to many variables and include a measure of uncertainty as actual results may differ from our expectations.

Commodity Prices – The most uncertain and volatile variables for our operating cash flow are the prices of the oil, gas and NGLs we produce and sell. Prices are determined primarily by prevailing market conditions. Regional and worldwide economic activity, weather, changes in public policy, including the imposition of tariffs by the U.S. or other countries, and other highly variable factors influence market conditions for these products. These factors, which are difficult to predict, create volatility in prices and are beyond our control.

To mitigate some of the risk inherent in prices, we utilize various derivative financial instruments to protect a portion of our production against downside price risk. The key terms to our oil, gas and NGL derivative financial instruments as of March 31, 2025 are presented in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” of this report.

Further, when considering the current commodity price environment and our current hedge position, we expect to achieve our capital investment priorities. We remain committed to capital discipline and focused on delivering the objectives that underpin our capital plan for 2025. However, if commodity prices decline further, we will adapt our plan by reducing activity in order to maximize free cash flow.

Operating Expenses – Commodity prices can also affect our operating cash flow through an indirect effect on operating expenses. Significant commodity price decreases can lead to a decrease in drilling and development activities. As a result, the demand and cost for people, services, equipment and materials may also decrease, causing a positive impact on our cash flow as the prices paid for services and equipment decline. However, the inverse is also generally true during periods of rising commodity prices.

Additionally, the economic uncertainty in global trade arising from geopolitical events and shifting trade policies, such as the imposition of tariffs by the U.S., may contribute to higher inflation rates and disrupt supply chains, negatively impacting our cash flow. While we actively work to mitigate the impact of these potential risks through operational efficiencies gained from the scale of our operations as well as by leveraging long-standing relationships with our suppliers, the ultimate impacts remain uncertain.

Credit Losses – Our operating cash flow is also exposed to credit risk in a variety of ways. This includes the credit risk related to customers who purchase our oil, gas and NGL production, the collection of receivables from our joint interest owners for their proportionate share of expenditures made on projects we operate and counterparties to our derivative financial contracts. We utilize a variety of mechanisms to limit our exposure to the credit risks of our customers, joint interest owners and counterparties. Such mechanisms include, under certain conditions, requiring letters of credit, prepayments or cash collateral postings.

Credit Availability

As of March 31, 2025, we had approximately $3.0 billion of available borrowing capacity under our Senior Credit Facility. This credit facility supports our $3.0 billion of short-term credit under our commercial paper program. At March 31, 2025, there were no borrowings under our commercial paper program, and we were in compliance with the Senior Credit Facility’s financial covenant.

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Debt Ratings

We receive debt ratings from the major ratings agencies in the U.S. In determining our debt ratings, the agencies consider a number of qualitative and quantitative items including, but not limited to, commodity pricing levels, our liquidity, asset quality, reserve mix, debt levels, cost structure, planned asset sales and the size and scale of our production. Our credit rating from Standard and Poor’s Financial Services is BBB with a stable outlook. Our credit rating from Fitch is BBB+ with a stable outlook. Our credit rating from Moody’s Investor Service is Baa2 with a stable outlook. Any rating downgrades may result in additional letters of credit or cash collateral being posted under certain contractual arrangements.

There are no “rating triggers” in any of our contractual debt obligations that would accelerate scheduled maturities should our debt rating fall below a specified level. However, a downgrade could adversely impact our interest rate on our Term Loan or any credit facility borrowings and the ability to economically access debt markets in the future.

Cash Returns to Shareholders

We are committed to returning cash to shareholders through dividends and share repurchases. Our Board of Directors will consider a number of factors when setting the quarterly dividend, if any, including a general target of paying out approximately 10% of operating cash flow through the fixed dividend. In addition to the fixed quarterly dividend, we may pay a variable dividend or complete share repurchases. The declaration and payment of any future dividend, whether fixed or variable, will remain at the full discretion of our Board of Directors and will depend on our financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

In May 2025, Devon announced a cash dividend in the amount of $0.24 per share payable in the second quarter of 2025 and will total approximately $154 million.

Our Board of Directors has authorized a $5.0 billion share repurchase program that expires on June 30, 2026. Through April 2025, we had executed $3.7 billion of the authorized program.

Capital Expenditures

Our capital expenditures budget for the remainder of 2025 is expected to be approximately $2.7 billion to $2.9 billion.

Investment Divestiture

On May 5, 2025, Devon agreed to sell its investment in Matterhorn for approximately $375 million. The transaction is expected to close by the end of the second quarter, subject to customary closing conditions. Proceeds from the divestiture will be used to further strengthen our investment-grade financial position.

Critical Accounting Est****imates

Purchase Accounting

Periodically, we acquire assets and assume liabilities in transactions accounted for as business combinations, such as the acquisition of the Williston Basin business of Grayson Mill. In connection with the acquisition, we allocated the $5.0 billion of purchase price consideration to the assets acquired and liabilities assumed based on estimated fair values as of the date of the acquisition. The preliminary purchase price assessment remains an ongoing process and is subject to change for up to one year subsequent to the closing date of the acquisition.

We made a number of assumptions in estimating the fair value of assets acquired and liabilities assumed in the acquisition. The most significant assumptions relate to the estimated fair values of proved and unproved oil and gas properties. Since sufficient market data was not available regarding the fair values of proved and unproved oil and gas properties, we prepared estimates and engaged third-party valuation experts. Significant judgments and assumptions are inherent in these estimates and include, among other things, estimates of reserve quantities, estimates of future commodity prices, drilling plans, expected development costs, lease operating costs, reserve risk adjustment factors and an estimate of an applicable market participant discount rate that reflects the risk of the underlying cash flow estimates.

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Estimated fair values ascribed to assets acquired can have a significant impact on future results of operations presented in Devon’s financial statements. A higher fair value ascribed to a property results in higher DD&A expense, which results in lower net earnings. Fair values are based on estimates of future commodity prices, reserve quantities, development costs and operating costs. In the event that future commodity prices or reserve quantities are lower than those used as inputs to determine estimates of acquisition date fair values, the likelihood increases that certain costs may be determined to not be recoverable.

For additional information regarding our critical accounting policies and estimates, see our 2024 Annual Report on Form 10-K.

Non-GA****AP Measures

We utilize “core earnings attributable to Devon” and “core earnings per share attributable to Devon” that are not required by or presented in accordance with GAAP. These non-GAAP measures are not alternatives to GAAP measures and should not be considered in isolation or as a substitute for analysis of our results reported under GAAP. Core earnings attributable to Devon, as well as the per share amount, represent net earnings excluding certain non-cash and other items that are typically excluded by securities analysts in their published estimates of our financial results. Our non-GAAP measures are typically used as a quarterly performance measure. Amounts excluded relate to asset dispositions, non-cash asset impairments (including unproved asset impairments), deferred tax asset valuation allowance, fair value changes in derivative financial instruments and restructuring and transaction costs.

We believe these non-GAAP measures facilitate comparisons of our performance to earnings estimates published by securities analysts. We also believe these non-GAAP measures can facilitate comparisons of our performance between periods and to the performance of our peers.

Below are reconciliations of core earnings and core earnings per share attributable to Devon to comparable GAAP measures.


	Three Months Ended March 31,
	Before Tax		After Tax			After NCI			Per Diluted Share
2025:
Earnings attributable to Devon (GAAP)	$	646	$	509		$	494		$	0.77
Adjustments:
Asset dispositions		2		1			1			—
Asset and exploration impairments		259		202			202			0.31
Fair value changes in financial instruments		88		68			68			0.11
Restructuring and transaction costs		18		14			14			0.02
Core earnings attributable to Devon (Non-GAAP)	$	1,013	$	794		$	779		$	1.21
2024:
Earnings attributable to Devon (GAAP)	$	768	$	609		$	596		$	0.94
Adjustments:
Asset dispositions		1		1			1			—
Deferred tax asset valuation allowance		—		(1	)		(1	)		—
Fair value changes in financial instruments		172		134			134			0.22
Core earnings attributable to Devon (Non-GAAP)	$	941	$	743		$	730		$	1.16

EBITDAX and Field-Level Cash Margin

To assess the performance of our assets, we use EBITDAX and Field-Level Cash Margin. We compute EBITDAX as net earnings before income tax expense; financing costs, net; exploration expenses; DD&A; asset impairments; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; restructuring and transaction costs; accretion on discounted liabilities; and other items not related to our normal operations. Field-Level Cash Margin is computed as oil, gas and NGL sales less production expenses. Production expenses consist of lease operating, gathering, processing and transportation expenses, as well as production and property taxes.

We exclude financing costs from EBITDAX to assess our operating results without regard to our financing methods or capital structure. Exploration expenses and asset disposition gains and losses are excluded from EBITDAX because they generally are not indicators of operating efficiency for a given reporting period. DD&A and impairments are excluded from EBITDAX because capital expenditures are evaluated at the time capital costs are incurred. We exclude share-based compensation, valuation changes,

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restructuring and transaction costs, accretion on discounted liabilities and other items from EBITDAX because they are not considered a measure of asset operating performance.

We believe EBITDAX and Field-Level Cash Margin provide information useful in assessing our operating and financial performance across periods. EBITDAX and Field-Level Cash Margin as defined by Devon may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net earnings from operations.

Below are reconciliations of net earnings to EBITDAX and a further reconciliation to Field-Level Cash Margin.


	Three Months Ended March 31,
	2025		2024
Net earnings (GAAP)	$	509	$	609
Financing costs, net		123		76
Income tax expense		137		159
Exploration expenses		10		9
Depreciation, depletion and amortization		912		722
Asset impairments		254		—
Asset dispositions		2		1
Share-based compensation		24		24
Derivative and financial instrument non-cash valuation changes		88		169
Accretion on discounted liabilities and other		27		22
EBITDAX (Non-GAAP)		2,086		1,791
Marketing and midstream revenues and expenses, net		12		21
Commodity derivative cash settlements		10		(24	)
General and administrative expenses, cash-based		106		90
Field-level cash margin (Non-GAAP)	$	2,214	$	1,878

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

As of March 31, 2025, we have commodity derivatives that pertain to a portion of our estimated production for the last nine months of 2025, as well as for 2026. The key terms to our open oil, gas and NGL derivative financial instruments are presented in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

The fair values of our commodity derivatives are largely determined by the forward curves of the relevant price indices. At March 31, 2025, a 10% change in the forward curves associated with our commodity derivative instruments would have changed our net positions by approximately $275 million.

Interest Rate Risk

At March 31, 2025, we had total debt of $8.9 billion. Of this debt, $7.9 billion was comprised of debentures and notes that have fixed interest rates which averaged 5.7%. We also have a $1.0 billion Term Loan which has a variable interest rate that is adjusted monthly. The interest rate on the Term Loan was 5.8% at March 31, 2025.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to Devon, including its consolidated subsidiaries, is made known to the officers who certify Devon’s financial reports and to other members of senior management and the Board of Directors.

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 March 31, 2025 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.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. Other Information

Item 1. Legal Proceedings

We are involved in various legal proceedings incidental to our business. However, to our knowledge as of the date of this report and subject to the environmental matters noted in Part I, Item 3. Legal Proceedings of our 2024 Annual Report on Form 10-K, there were no material pending legal proceedings to which we are a party or to which any of our property is subject. For more information on our legal contingencies, see Note 17 in “Part I. Financial Information – Item 1. Financial Statements” of this report.

Please see our 2024 Annual Report on Form 10-K and other SEC filings for additional information.

Item 1A. Risk Factors

There have been no material changes to the information included in Item 1A. “Risk Factors” in our 2024 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equi****ty Securities and Use of Proceeds

The following table provides information regarding purchases of our common stock that were made by us during the first quarter of 2025 (shares in thousands).


Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1 - January 31		1,878	$	35.83		1,876	$	1,589
February 1 - February 28		3,387	$	35.56		2,862	$	1,487
March 1 - March 31		3,772	$	34.73		3,767	$	1,356
Total		9,037	$	35.27		8,505

(1)

In addition to shares purchased under the share repurchase program described below, these amounts include approximately 0.5 million shares received by us from employees for the payment of personal income tax withholdings on vesting transactions.

(2)

On November 2, 2021, we announced a $1.0 billion share repurchase program that would expire on December 31, 2022. Through subsequent approvals, including most recently in July 2024, Devon's Board of Directors expanded the share repurchase program authorization to $5.0 billion, with a June 30, 2026 expiration date. In the first quarter of 2025, we repurchased 8.5 million common shares for $301 million, or $35.33 per share, under this share repurchase program. For additional information, see Note 16 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Item 3. Defaults Upo****n Senior Securities

Not applicable.

Item 4. Mine Saf****ety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended March 31, 2025, none of the Company's directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

Table of Contents

Item 6. Exhibits


Exhibit Number		Description

10.1	Extension Agreement, dated as of March 24, 2025, to the Amended and Restated Credit Agreement, dated as of March 24, 2023, among Devon Energy Corporation, as Borrower, Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C Issuer, and each Lender and L/C Issuer from time to time party thereto, with respect to Borrower’s extension of the maturity date from March 24, 2029 to March 24, 2030.

10.2*	2025 Form of Notice of Grant of Restricted Stock Award and Award Agreement under the 2022 Long-Term Incentive Plan between Devon Energy Corporation and certain officers for restricted stock awarded (EVP form).

10.3*	2025 Form of Notice of Grant of Restricted Stock Award and Award Agreement under the 2022 Long-Term Incentive Plan between Devon Energy Corporation and certain officers for restricted stock awarded (SVP form).

10.4*	2025 Form of Notice of Grant of Performance Share Unit Award and Award Agreement under the 2022 Long-Term Incentive Plan between Devon Energy Corporation and certain officers for performance based restricted share units awarded (EVP form).

10.5*	2025 Form of Notice of Grant of Performance Share Unit Award and Award Agreement under the 2022 Long-Term Incentive Plan between Devon Energy Corporation and certain officers for performance based restricted share units awarded (SVP form).

31.1	Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1	Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS	Inline XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH	Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents.

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

	*Indicates management contract or compensatory plan or arrangement.

SIGNAT****URES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				DEVON ENERGY CORPORATION

Date: May 7, 2025				/s/ John B. Sherrer
				John B. Sherrer
				Vice President, Accounting and Controller