8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2024

Devon Energy Corporation

(Exact name of registrant as specified in its charter)

DELAWARE

001-32318

73-1567067

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

333 W. SHERIDAN AVE.,

OKLAHOMA CITY, OKLAHOMA

73102-5015

(Address of principal executive offices)

(Zip Code)

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

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class

Trading
Symbol(s)

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

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

Item 2.02

Results of Operations and Financial Condition.

On August 6, 2024, Devon Energy Corporation (the “Company”) announced its financial and operational results for the quarterly period ended June 30, 2024. In connection with this announcement, the Company provided an earnings release and certain supplemental financial information (including guidance and hedging information). Copies of these documents are furnished as Exhibits 99.1 and 99.2, respectively, to this report and, along with certain other materials, will be available on the Company’s website at www.devonenergy.com.

The information contained in this report and the exhibits hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.		Description of Exhibits

99.1		Earnings release, dated August 6, 2024.

99.2		Supplemental financial information (including guidance and hedging information).

104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

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


DEVON ENERGY CORPORATION

By:		/s/ Jeffrey L. Ritenour
		Jeffrey L. Ritenour
		Executive Vice President and Chief Financial Officer

Date: August 6, 2024

EX-99.1

Exhibit 99.1

LOGO

Devon Energy Corporation

333 West Sheridan Avenue

Oklahoma City, OK 73102-5015

Devon Energy Reports Second-Quarter 2024 Results and Declares Quarterly Dividend

OKLAHOMA CITY – Aug. 6, 2024 – Devon Energy Corp. (NYSE: DVN) today reported financial and operational results for the second-quarter 2024. Supplemental financial tables and forward-looking guidance are available on the company’s website at www.devonenergy.com.

KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS

•

Net earnings of $844 million, or $1.34 per diluted share; core earnings of $885 million, or $1.41 per diluted share

•

Second quarter oil production reached an all-time high of 335,000 barrels per day, exceeding guidance by 3 percent

•

Delivered second quarter operating cash flow of $1.5 billion and free cash flow of $587 million

•

Strengthened the balance sheet with cash balances reaching $1.2 billion

•

Declared fixed-plus-variable dividend payout of $0.44 per share based on second quarter results

•

Repurchased 5.2 million shares of common stock at a total cost of $256 million in the second quarter

•

Raised full-year 2024 production outlook for second consecutive quarter

•

Board of directors increased share-repurchase authorization by 67 percent to $5 billion

•

Announced strategic acquisition on July 8, enhancing scale and transforming Williston Basin business

CEO PERSPECTIVE

“Devon delivered a strong second quarter driven by record oil production and effective cost management,” said Rick Muncrief, president and CEO. “Our outstanding operational performance was highlighted by excellent well productivity in the Delaware. We also saw improved cycle times across the entire company, setting multiple drilling and completion records.

“Based on our solid performance for the first half of 2024, we now expect our full-year 2024 production guidance to be 5 percent higher than our original outlook. This improved production outlook coupled with our disciplined capital plan strengthens our free cash flow generation capabilities.

“In July, we took an important step to further strengthen the quality and depth of our portfolio with the acquisition of Grayson Mill in the Williston Basin. These assets are an excellent addition to Devon, expanding our oil production, project inventory and operating scale.

“Importantly, as a result of our improved outlook and recent acquisition, we expanded our share-repurchase authorization by 67 percent to $5 billion. This upsized program provides us additional runway to further compound per-share growth as we continue to execute on the tenets of our disciplined business model,” Muncrief added.

FINANCIAL RESULTS

Devon reported net earnings of $844 million, or $1.34 per diluted share, in the second quarter of 2024. Adjusting for items analysts typically exclude from estimates, the company’s core earnings were $885 million, or $1.41 per diluted share.

Devon’s operating cash flow totaled $1.5 billion in the second quarter, a 9 percent increase versus the year-ago period. The company funded its capital requirements and had $587 million of free cash flow for the quarter.

The company’s investment-grade financial position continued to strengthen in the second quarter with cash balances reaching $1.2 billion. Devon exited the quarter with outstanding debt of $6.1 billion and a net debt-to-EBITDAX ratio of 0.6 times.

RETURN OF CAPITAL

Based on the second quarter financial performance, Devon declared a fixed-plus-variable dividend of $0.44 per share, payable on Sept. 30, 2024, to shareholders of record at the close of business on Sept. 13, 2024. The dividend payout consists of the fixed dividend at $0.22 per share and a variable distribution of $0.22 per share.

The company also returned capital to shareholders through the continued execution of its share repurchase program. In the second quarter, Devon repurchased 5.2 million shares at a total cost of $256 million. Since program inception in late 2021, the company has repurchased 54.7 million shares, at a total cost of $2.7 billion.

Given this substantial progress and the expected free cash flow accretion from the recent Grayson Mill acquisition, the company has increased its share-repurchase authorization by 67 percent to $5 billion. The expanded authorization extends through mid-year 2026.

OPERATING RESULTS

Devon’s capital activity in the second quarter averaged 22 operated drilling rigs and 6 completion crews across its asset portfolio. This level of activity resulted in 114 gross operated wells being placed online, with an average lateral length of 9,300 feet.

Upstream capital spending in the second quarter totaled $828 million. This level of investment was below guidance expectations and represents a 14 percent decrease in upstream spending compared to the second quarter of 2023. Midstream, carbon and corporate capital totaled $62 million in the quarter. The company also executed $81 million in multiple leasehold transactions across its portfolio, including the Delaware Basin.

Devon’s oil production in the second quarter reached an all-time high of 335,000 barrels per day, exceeding guidance by 3 percent. Total companywide production averaged 707,000 oil-equivalent barrels (Boe) per day in the second quarter. This represents a 7 percent increase in production compared to the year-ago period.

Devon’s growth in the second quarter was driven by its Delaware Basin asset, which accounted for 65 percent of companywide volumes at 461,000 Boe per day. This production result represents a growth rate of 5 percent quarter-over-quarter, driven by 62 gross operated wells being placed online during the quarter.

Additionally, the company achieved notable operational efficiencies year-to-date in the Delaware. Drilled and completed feet per day metrics improved 12 percent and 6 percent year-to-date compared to 2023, respectively.

Production costs, including taxes, averaged $12.25 per Boe in the second quarter, a decline of 1 percent from the prior period. This low-cost structure, coupled with the benefits of higher commodity prices, expanded field-level cash margins by 6 percent year-over-year to $31.19 per Boe.

2024 OUTLOOK

Devon is raising its full-year 2024 production forecast for the second time this year to a range of 677,000 to 688,000 Boe per day. The updated volume outlook is due to better-than-expected well performance year-to-date and improving cycle times. The company maintains its full-year capital range of $3.3 billion to $3.6 billion but expects to be in the upper half due to efficiency gains bringing activity forward.

In the third quarter, Devon expects capital spending to approximate $900 million, and its oil production to average 319,000 to 325,000 barrels per day.

Devon will provide updated forward-looking guidance for 2024 following the closing of the Grayson Mill transaction.

Additional details of Devon’s forward-looking guidance for the third quarter and full-year 2024 are available on the company’s website at www.devonenergy.com.

STRATEGIC ACQUISITION IN THE WILLISTON BASIN

On July 8, 2024, Devon announced that it had entered into a definitive purchase agreement to acquire the Williston Basin business of Grayson Mill Energy in a transaction valued at $5 billion, consisting of $3.25 billion of cash and $1.75 billion of stock to the seller.

The acquisition will add a high-margin production mix that positions Devon as one of the largest oil producers in the U.S. upon closing of the transaction. The acquisition will also transform the company’s Williston Basin business, with the addition of 307,000 net acres and approximately 100,000 Boe per day. The transaction is subject to customary terms and conditions and is expected to close by the end of the third quarter of 2024.

CONFERENCE CALL WEBCAST AND SUPPLEMENTAL EARNINGS MATERIALS

Also provided with today’s release is the company’s detailed earnings presentation that is available on the company’s website at www.devonenergy.com. The company’s second-quarter conference call will be held at 10:00 a.m. Central (11:00 a.m. Eastern) on Wednesday, Aug. 7, 2024, and will serve primarily as a forum for analyst and investor questions and answers.

ABOUT DEVON ENERGY

Devon Energy is a leading oil and gas producer in the U.S. with a premier multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devon’s disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations. For more information, please visit www.devonenergy.com.


Investor Contacts		Media Contact
Rosy Zuklic, 405-552-7802		Michelle Hindmarch, 405-552-7460
Chris Carr, 405-228-2496

NON-GAAP DISCLOSURES

This press release includes non-GAAP (generally accepted accounting principles) financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of results as reported under GAAP. Reconciliations of these non-GAAP measures and other disclosures are provided within the supplemental financial tables that are available on the company’s website and in the related Form 10-Q filed with the Securities and Exchange Commission (the “SEC”).

FORWARD LOOKING STATEMENTS

This press release 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 press release that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks 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; 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; midstream capacity constraints and potential interruptions in production, including from limits to the build out of midstream infrastructure; competition for assets, materials, people and capital; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands, environmental matters and seismicity; climate change and risks related to regulatory, social and market efforts to address climate change; governmental interventions in energy markets; counterparty credit risks; risks relating to our indebtedness; cybersecurity risks; risks relating to global pandemics; 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 Devon’s 2023 Annual Report on Form 10-K (the “2023 Form 10-K”) or other filings with the SEC.

The forward-looking statements included in this press release speak only as of the date of this press release, represent management’s current reasonable expectations as of the date of this press release and are subject to the risks and uncertainties identified above as well as those described elsewhere in the 2023 Form 10-K 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 the 2023 Form 10-K 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.

EX-99.2

Exhibit 99.2

Devon Energy Second-Quarter 2024

Supplemental Tables


TABLE OF CONTENTS:	PAGE:

Consolidated Statements of Earnings		2

Supplemental Information for Consolidated Statements of Earnings		3

Consolidated Balance Sheets		4

Consolidated Statements of Cash Flows		5

Production		6

Capital Expenditures and Supplemental Information for Capital Expenditures		7

Realized Pricing		8

Asset Margins		9

Core Earnings and EBITDAX		10

Net Debt, Net Debt-to-EBITDAX, Free Cash Flow, Adjusted Free Cash Flow and Reinvestment Rate		11

CONSOLIDATED STATEMENTS OF EARNINGS


(in millions, except per share amounts)	2024					2023
	Quarter 2		Quarter 1			Quarter 4		Quarter 3			Quarter 2
Oil, gas and NGL sales	$	2,796	$	2,629		$	2,737	$	2,882		$	2,493
Oil, gas and NGL derivatives ⁽¹⁾		23		(145	)		324		(194	)		(76	)
Marketing and midstream revenues		1,098		1,112			1,084		1,148			1,037

Total revenues		3,917		3,596			4,145		3,836			3,454

Production expenses ⁽²⁾		788		751			759		757			719
Exploration expenses		3		9			4		3			10
Marketing and midstream expenses		1,108		1,133			1,093		1,160			1,051
Depreciation, depletion and amortization		768		722			650		651			638
Asset dispositions		15		1			11		—			(41	)
General and administrative expenses		114		114			111		99			92
Financing costs, net ⁽³⁾		76		76			77		81			78
Other, net		5		22			10		13			10

Total expenses		2,877		2,828			2,715		2,764			2,557

Earnings before income taxes		1,040		768			1,430		1,072			897
Income tax expense ⁽⁴⁾		185		159			269		152			199

Net earnings		855		609			1,161		920			698
Net earnings attributable to noncontrolling interests		11		13			9		10			8

Net earnings attributable to Devon	$	844	$	596		$	1,152	$	910		$	690

Net earnings per share:
Basic net earnings per share	$	1.35	$	0.95		$	1.81	$	1.43		$	1.08
Diluted net earnings per share	$	1.34	$	0.94		$	1.81	$	1.42		$	1.07
Weighted average common shares outstanding:
Basic		626		629			635		637			638
Diluted		628		632			638		639			639

SUPPLEMENTAL INFORMATION FOR CONSOLIDATED STATEMENTS OF EARNINGS

(1) OIL, GAS AND NGL DERIVATIVES


(in millions)	2024						2023
	Quarter 2			Quarter 1			Quarter 4		Quarter 3			Quarter 2
Derivative cash settlements	$	54		$	24		$	8	$	(11	)	$	37
Derivative valuation changes		(31	)		(169	)		316		(183	)		(113	)

Oil, gas and NGL derivatives	$	23		$	(145	)	$	324	$	(194	)	$	(76	)

(2) PRODUCTION EXPENSES


(in millions)	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Lease operating expense	$	383	$	380	$	381	$	367	$	353
Gathering, processing & transportation		197		180		181		178		177
Production taxes		188		175		182		191		165
Property taxes		20		16		15		21		24

Production expenses	$	788	$	751	$	759	$	757	$	719

(3) FINANCING COSTS, NET


(in millions)	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Interest based on outstanding debt	$	88		$	87		$	87		$	93		$	96
Interest income		(14	)		(13	)		(12	)		(11	)		(15	)
Other		2			2			2			(1	)		(3	)

Financing costs, net	$	76		$	76		$	77		$	81		$	78

(4) INCOME TAX EXPENSE


(in millions)	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Current expense	$	146	$	119	$	105	$	139	$	80
Deferred expense		39		40		164		13		119

Income tax expense	$	185	$	159	$	269	$	152	$	199

CONSOLIDATED BALANCE SHEETS


(in millions)	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Current assets:
Cash, cash equivalents and restricted cash	$	1,169		$	1,149		$	875		$	761		$	488
Accounts receivable		1,589			1,670			1,573			1,853			1,519
Inventory		258			234			249			233			201
Other current assets		343			345			460			365			397

Total current assets		3,359			3,398			3,157			3,212			2,605
Oil and gas property and equipment, based on successful efforts accounting, net		18,216			18,033			17,825			17,563			17,317
Other property and equipment, net		1,569			1,551			1,503			1,468			1,446

Total property and equipment, net		19,785			19,584			19,328			19,031			18,763
Goodwill		753			753			753			753			753
Right-of-use assets		297			276			267			261			266
Investments		704			713			666			671			675
Other long-term assets		264			254			319			313			293

Total assets	$	25,162		$	24,978		$	24,490		$	24,241		$	23,355

Current liabilities:
Accounts payable	$	754		$	879		$	760		$	812		$	843
Revenues and royalties payable		1,363			1,268			1,222			1,434			1,199
Short-term debt		475			479			483			487			244
Other current liabilities		424			640			484			597			383

Total current liabilities		3,016			3,266			2,949			3,330			2,669
Long-term debt		5,665			5,668			5,672			5,675			6,169
Lease liabilities		315			301			295			290			299
Asset retirement obligations		691			683			643			641			548
Other long-term liabilities		829			841			876			850			858
Deferred income taxes		1,917			1,878			1,838			1,676			1,662
Stockholders’ equity:
Common stock		63			63			64			64			64
Additional paid-in capital		5,478			5,718			5,939			6,153			6,131
Retained earnings		7,132			6,509			6,195			5,535			4,940
Accumulated other comprehensive loss		(122	)		(123	)		(124	)		(113	)		(114	)
Treasury stock		—			—			(13	)		—			—

Total stockholders’ equity attributable to Devon		12,551			12,167			12,061			11,639			11,021
Noncontrolling interests		178			174			156			140			129

Total equity		12,729			12,341			12,217			11,779			11,150

Total liabilities and equity	$	25,162		$	24,978		$	24,490		$	24,241		$	23,355

CONSOLIDATED STATEMENTS OF CASH FLOWS


(in millions)	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Cash flows from operating activities:
Net earnings	$	855		$	609		$	1,161		$	920		$	698
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation, depletion and amortization		768			722			650			651			638
Leasehold impairments		1			—			1			1			3
Accretion (amortization) of liabilities		—			—			1			(2	)		(8	)
Total (gains) losses on commodity derivatives		(23	)		145			(324	)		194			76
Cash settlements on commodity derivatives		54			24			8			(11	)		37
(Gains) losses on asset dispositions		15			1			11			—			(41	)
Deferred income tax expense		39			40			164			13			119
Share-based compensation		27			24			23			22			25
Other		—			3			(3	)		(2	)		(2	)
Changes in assets and liabilities, net		(201	)		170			45			(61	)		(140	)

Net cash from operating activities		1,535			1,738			1,737			1,725			1,405

Cash flows from investing activities:
Capital expenditures		(948	)		(894	)		(910	)		(882	)		(1,079	)
Acquisitions of property and equipment		(82	)		(8	)		(10	)		(23	)		(18	)
Divestitures of property and equipment		1			17			3			1			1
Distributions from investments		11			11			8			7			9
Contributions to investments and other		(1	)		(47	)		(1	)		—			(15	)

Net cash from investing activities		(1,019	)		(921	)		(910	)		(897	)		(1,102	)

Cash flows from financing activities:
Repayments of long-term debt		—			—			—			(242	)		—
Repurchases of common stock		(256	)		(205	)		(234	)		—			(228	)
Dividends paid on common stock		(223	)		(299	)		(488	)		(312	)		(462	)
Contributions from noncontrolling interests		12			12			19			10			8
Distributions to noncontrolling interests		(19	)		(7	)		(12	)		(9	)		(13	)
Shares exchanged for tax withholdings and other		(9	)		(42	)		(1	)		—			(9	)

Net cash from financing activities		(495	)		(541	)		(716	)		(553	)		(704	)

Effect of exchange rate changes on cash		(1	)		(2	)		3			(2	)		2

Net change in cash, cash equivalents and restricted cash		20			274			114			273			(399	)
Cash, cash equivalents and restricted cash at beginning of period		1,149			875			761			488			887

Cash, cash equivalents and restricted cash at end of period	$	1,169		$	1,149		$	875		$	761		$	488

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	1,140		$	1,126		$	853		$	654		$	372
Restricted cash		29			23			22			107			116

Total cash, cash equivalents and restricted cash	$	1,169		$	1,149		$	875		$	761		$	488

PRODUCTION


	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Oil (MBbls/d)
Delaware Basin		221		208		208		215		209
Eagle Ford		46		43		43		40		45
Anadarko Basin		14		11		13		14		15
Williston Basin		37		40		36		35		36
Powder River Basin		13		13		13		13		14
Other		4		4		4		4		4

Total		335		319		317		321		323

Natural gas liquids (MBbls/d)
Delaware Basin		121		113		112		112		105
Eagle Ford		17		14		15		15		16
Anadarko Basin		30		26		29		27		31
Williston Basin		12		10		10		9		9
Powder River Basin		2		2		3		2		2
Other		—		—		—		1		1

Total		182		165		169		166		164

Gas (MMcf/d)
Delaware Basin		712		695		673		680		636
Eagle Ford		92		79		81		78		86
Anadarko Basin		244		223		225		235		254
Williston Basin		71		63		61		58		59
Powder River Basin		18		18		20		18		18
Other		—		1		1		1		1

Total		1,137		1,079		1,061		1,070		1,054

Total oil equivalent (MBoe/d)
Delaware Basin		461		437		433		440		420
Eagle Ford		79		70		72		68		74
Anadarko Basin		84		74		79		80		89
Williston Basin		61		61		55		54		56
Powder River Basin		18		18		19		19		19
Other		4		4		4		4		4

Total		707		664		662		665		662

CAPITAL EXPENDITURES


(in millions)	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin	$	505	$	555	$	506	$	503	$	583
Eagle Ford		180		156		194		198		179
Anadarko Basin		56		59		51		13		67
Williston Basin		38		27		55		69		89
Powder River Basin		46		43		55		45		39
Other		3		2		3		2		1

Total upstream capital	$	828	$	842	$	864	$	830	$	958

Carbon capital		24		32		31		25		30
Midstream and Corporate		38		63		45		41		30

Capital expenditures (excluding acquisitions)	$	890	$	937	$	940	$	896	$	1,018

Acquisitions		81		8		11		23		18

SUPPLEMENTAL INFORMATION FOR CAPITAL EXPENDITURES

GROSS OPERATED SPUDS


	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin		73		76		60		64		65
Eagle Ford		28		30		26		28		18
Anadarko Basin		13		4		17		10		9
Williston Basin		6		1		—		7		8
Powder River Basin		6		3		5		4		3

Total		126		114		108		113		103

GROSS OPERATED WELLS TIED-IN


	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin		62		59		62		59		76
Eagle Ford		23		26		24		13		29
Anadarko Basin		26		5		4		—		16
Williston Basin		—		10		6		6		8
Powder River Basin		3		2		4		3		2

Total		114		102		100		81		131

NET OPERATED WELLS TIED-IN


	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin		44		50		47		49		61
Eagle Ford		15		21		20		12		25
Anadarko Basin		14		2		1		—		7
Williston Basin		—		10		3		4		6
Powder River Basin		2		2		4		3		2

Total		75		85		75		68		101

AVERAGE LATERAL LENGTH

(based on wells tied-in)

2024

2023

Quarter 2

Quarter 1

Quarter 4

Quarter 3

Quarter 2

Delaware Basin

10,200’

10,300’

9,700’

10,100’

Eagle Ford

6,800’

6,700’

7,900’

5,000’

6,200’

Anadarko Basin

8,700’

10,000’

12,500’

—

9,100’

Williston Basin

—

9,600’

12,300’

10,000’

Powder River Basin

15,500’

9,600’

13,300’

15,000’

Total

9,300’

9,900’

9,300’

9,200’

REALIZED PRICING

BENCHMARK PRICES


(average prices)	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	80.62		$	77.01		$	78.48		$	82.06		$	73.76
Natural Gas ($/Mcf) - Henry Hub	$	1.89		$	2.25		$	2.88		$	2.54		$	2.09
NGL ($/Bbl) - Mont Belvieu Blended	$	26.33		$	27.51		$	25.52		$	26.62		$	23.99

REALIZED PRICES
	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Oil (Per Bbl)
Delaware Basin	$	79.62		$	76.23		$	77.75		$	80.72		$	71.86
Eagle Ford		80.45			76.51			78.51			80.85			72.36
Anadarko Basin		78.36			74.91			77.09			79.86			71.52
Williston Basin		75.81			71.13			74.26			79.50			70.80
Powder River Basin		75.48			71.93			74.58			78.51			70.75

Realized price without hedges		79.10			75.40			77.32			80.48			71.74
Cash settlements		(0.15	)		(0.25	)		(0.34	)		(0.67	)		—

Realized price, including cash settlements	$	78.95		$	75.15		$	76.98		$	79.81		$	71.74

Natural gas liquids (Per Bbl)
Delaware Basin	$	19.59		$	20.55		$	19.93		$	20.76		$	18.07
Eagle Ford		23.07			23.67			22.67			23.70			20.22
Anadarko Basin		22.16			24.77			21.44			23.37			19.42
Williston Basin		5.49			6.27			2.95			4.09			2.52
Powder River Basin		30.75			32.91			28.80			29.63			24.52

Realized price without hedges		19.60			20.81			19.67			20.72			17.79
Cash settlements		0.11			(0.08	)		—			—			—

Realized price, including cash settlements	$	19.71		$	20.73		$	19.67		$	20.72		$	17.79

Gas (Per Mcf)
Delaware Basin	$	0.17		$	1.19		$	1.76		$	1.94		$	1.18
Eagle Ford		1.48			1.89			2.44			2.31			1.80
Anadarko Basin		1.70			1.92			2.38			2.17			1.72
Williston Basin		N/M			N/M			N/M			N/M			N/M
Powder River Basin		1.64			2.29			2.52			2.53			2.41

Realized price without hedges		0.55			1.30			1.83			1.92			1.27
Cash settlements		0.55			0.32			0.19			0.09			0.39

Realized price, including cash settlements	$	1.10		$	1.62		$	2.02		$	2.01		$	1.66

Total oil equivalent (Per Boe)
Delaware Basin	$	43.63		$	43.55		$	45.38		$	47.68		$	42.05
Eagle Ford		54.03			53.81			54.64			55.71			49.69
Anadarko Basin		25.53			25.48			26.96			27.88			24.04
Williston Basin		46.32			47.37			47.77			52.64			45.94
Powder River Basin		58.99			57.60			57.99			62.21			56.33

Realized price without hedges		43.44			43.52			44.93			47.10			41.39
Cash settlements		0.85			0.39			0.14			(0.18	)		0.61

Realized price, including cash settlements	$	44.29		$	43.91		$	45.07		$	46.92		$	42.00

ASSET MARGINS

BENCHMARK PRICES


(average prices)	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	80.62		$	77.01		$	78.48		$	82.06		$	73.76
Natural Gas ($/Mcf) - Henry Hub	$	1.89		$	2.25		$	2.88		$	2.54		$	2.09
NGL ($/Bbl) - Mont Belvieu Blended	$	26.33		$	27.51		$	25.52		$	26.62		$	23.99

PER-UNIT CASH MARGIN BY ASSET (per Boe)
	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Delaware Basin
Realized price	$	43.63		$	43.55		$	45.38		$	47.68		$	42.05
Lease operating expenses		(5.31	)		(5.54	)		(5.46	)		(5.03	)		(4.96	)
Gathering, processing & transportation		(2.89	)		(2.79	)		(2.75	)		(2.63	)		(2.63	)
Production & property taxes		(3.31	)		(3.16	)		(3.24	)		(3.48	)		(3.18	)

Field-level cash margin	$	32.12		$	32.06		$	33.93		$	36.54		$	31.28

Eagle Ford
Realized price	$	54.03		$	53.81		$	54.64		$	55.71		$	49.69
Lease operating expenses		(7.03	)		(7.59	)		(7.05	)		(7.52	)		(6.18	)
Gathering, processing & transportation		(2.03	)		(1.67	)		(1.62	)		(1.63	)		(1.67	)
Production & property taxes		(2.82	)		(2.73	)		(2.95	)		(3.18	)		(2.97	)

Field-level cash margin	$	42.15		$	41.82		$	43.02		$	43.38		$	38.87

Anadarko Basin
Realized price	$	25.53		$	25.48		$	26.96		$	27.88		$	24.04
Lease operating expenses		(3.16	)		(3.33	)		(3.26	)		(3.43	)		(3.13	)
Gathering, processing & transportation		(5.70	)		(6.27	)		(5.98	)		(6.11	)		(5.97	)
Production & property taxes		(1.19	)		(1.24	)		(1.40	)		(1.36	)		(1.22	)

Field-level cash margin	$	15.48		$	14.64		$	16.32		$	16.98		$	13.72

Williston Basin
Realized price	$	46.32		$	47.37		$	47.77		$	52.64		$	45.94
Lease operating expenses		(10.71	)		(10.88	)		(13.07	)		(13.04	)		(13.43	)
Gathering, processing & transportation		(2.29	)		(2.03	)		(2.34	)		(2.31	)		(2.29	)
Production & property taxes		(4.70	)		(4.72	)		(4.78	)		(5.13	)		(4.68	)

Field-level cash margin	$	28.62		$	29.74		$	27.58		$	32.16		$	25.54

Powder River Basin
Realized price	$	58.99		$	57.60		$	57.99		$	62.21		$	56.33
Lease operating expenses		(9.49	)		(11.66	)		(8.65	)		(8.45	)		(10.03	)
Gathering, processing & transportation		(3.07	)		(3.03	)		(3.17	)		(3.02	)		(2.97	)
Production & property taxes		(6.99	)		(6.91	)		(6.75	)		(7.45	)		(6.79	)

Field-level cash margin	$	39.44		$	36.00		$	39.42		$	43.29		$	36.54

Devon - Total
Realized price	$	43.44		$	43.52		$	44.93		$	47.10		$	41.39
Lease operating expenses		(5.95	)		(6.29	)		(6.25	)		(6.00	)		(5.86	)
Gathering, processing & transportation		(3.07	)		(2.98	)		(2.97	)		(2.91	)		(2.94	)
Production & property taxes		(3.23	)		(3.16	)		(3.24	)		(3.46	)		(3.14	)

Field-level cash margin	$	31.19		$	31.09		$	32.47		$	34.73		$	29.45

NON-GAAP MEASURES

(all monetary values in millions, except per share amounts)

Devon’s earnings materials include non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in the earnings materials, including reconciliations to their most directly comparable GAAP measure.

The earnings materials may include forward-looking non-GAAP measures. The company is unable to provide reconciliations of these forward-looking non-GAAP measures, because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, the timing of changes in capital accruals, unknown future events and estimating certain future GAAP measures. The inability to reliably quantify certain components of the calculation would significantly affect the usefulness and accuracy of a reconciliation.

CORE EARNINGS

Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on second-quarter 2024 earnings.


	Quarter Ended June 30, 2024
	Before-tax		After-tax		After NCI		Per Diluted Share
Total
Earnings (GAAP)	$	1,040	$	855	$	844	$	1.34
Adjustments:
Asset dispositions		15		11		11		0.02
Asset and exploration impairments		1		1		1		—
Deferred tax asset valuation allowance		—		4		4		0.01
Fair value changes in financial instruments		32		25		25		0.04

Core earnings (Non-GAAP)	$	1,088	$	896	$	885	$	1.41

EBITDAX

Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings before financing costs, net; income tax expense; exploration expenses; depreciation, depletion and amortization; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; accretion on discounted liabilities; and other items not related to normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies.


	Q2 ‘24		Q1 ‘24		Q4 ‘23			Q3 ‘23		TTM		Q2 ‘23
Net earnings (GAAP)	$	855	$	609	$	1,161		$	920	$	3,545	$	698
Financing costs, net		76		76		77			81		310		78
Income tax expense		185		159		269			152		765		199
Exploration expenses		3		9		4			3		19		10
Depreciation, depletion and amortization		768		722		650			651		2,791		638
Asset dispositions		15		1		11			—		27		(41	)
Share-based compensation (G&A)		26		24		22			22		94		25
Derivative & financial instrument non-cash val. changes		31		169		(316	)		183		67		113
Accretion on discounted liabilities and other		5		22		10			13		50		10

EBITDAX (Non-GAAP)	$	1,964	$	1,791	$	1,888		$	2,025	$	7,668	$	1,730

NET DEBT

Devon defines net debt as debt (includes short-term and long-term debt) less cash, cash equivalents and restricted cash. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.


	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Total debt (GAAP)	$	6,140		$	6,147		$	6,155		$	6,162		$	6,413
Less:
Cash, cash equivalents and restricted cash		(1,169	)		(1,149	)		(875	)		(761	)		(488	)

Net debt (Non-GAAP)	$	4,971		$	4,998		$	5,280		$	5,401		$	5,925

NET DEBT-TO-EBITDAX

Devon defines net debt-to-EBITDAX as net debt divided by an annualized EBITDAX measure. Devon believes this ratio provides information useful to investors in assessing the company’s credit position and debt leverage.


	2024				2023
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Net debt (Non-GAAP)	$	4,971	$	4,998	$	5,280	$	5,401	$	5,925
EBITDAX (Non-GAAP) ⁽¹⁾	$	7,668	$	7,434	$	7,534	$	7,776	$	8,239

Net debt-to-EBITDAX (Non-GAAP)		0.6		0.7		0.7		0.7		0.7

(1)	EBITDAX is an annualized measure using a trailing twelve-month calculation.

FREE CASH FLOW

Devon defines free cash flow as total operating cash flow less capital expenditures. Devon believes free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.


	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Total operating cash flow (GAAP)	$	1,535		$	1,738		$	1,737		$	1,725		$	1,405
Less capital expenditures:		(948	)		(894	)		(910	)		(882	)		(1,079	)

Free cash flow (Non-GAAP)	$	587		$	844		$	827		$	843		$	326

ADJUSTED FREE CASH FLOW

Devon is committed to returning approximately 70% of our adjusted free cash flow to shareholders through a fixed dividend, variable dividend and share repurchases. Adjusted free cash flow is calculated as total operating cash flow before balance sheet changes less accrued capital expenditures.


	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Total operating cash flow (GAAP)	$	1,535		$	1,738		$	1,737		$	1,725		$	1,405
Changes in assets and liabilities		201			(170	)		(45	)		61			140

Cash flow before balance sheet changes (Non-GAAP)		1,736			1,568			1,692			1,786			1,545
Capital expenditures (Accrued)		(971	)		(945	)		(951	)		(919	)		(1,036	)

Adjusted free cash flow (Non-GAAP)	$	765		$	623		$	741		$	867		$	509

REINVESTMENT RATE

Devon defines reinvestment rate as accrued capital expenditures divided by operating cash flow. Devon believes this measure provides useful information to our investors as an indicator of the capital demands of our business relative to the cash flow generated from normal business operations.


	2024						2023
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Capital expenditures (Accrued)	$	971		$	945		$	951		$	919		$	1,036
Operating cash flow	$	1,535		$	1,738		$	1,737		$	1,725		$	1,405

Reinvestment rate (Non-GAAP)		63	%		54	%		55	%		53	%		74	%


THIRD-QUARTER AND FULL-YEAR 2024 GUIDANCE

Note: Q3 and full-year 2024 guidance does not include the Grayson Mill acquisition that is expected to close by the end of Q3 2024.

PRODUCTION GUIDANCE



	Quarter 3				Full Year
	Low		High		Low		High
Oil (MBbls/d)		319		325		322		326
Natural gas liquids (MBbls/d)		171		177		172		175
Gas (MMcf/d)		1,080		1,130		1,095		1,120

Total oil equivalent (MBoe/d)		670		690		677		688

CAPITAL EXPENDITURES GUIDANCE



	Quarter 3				Full Year
(in millions)	Low		High		Low		High
Upstream capital	$	820	$	860	$	3,050	$	3,250
Carbon capital		20		30		100		150
Midstream & other capital		30		40		150		200

Total capital	$	870	$	930	$	3,300	$	3,600

PRICE REALIZATIONS GUIDANCE



	Quarter 3						Full Year
	Low			High			Low			High
Oil - % of WTI		95	%		100	%		95	%		100	%
NGL - % of WTI		20	%		30	%		20	%		30	%
Natural gas - % of Henry Hub⁽¹⁾		25	%		45	%		35	%		45	%

(1)	Realizations do not include impact from natural gas basis swaps.

OTHER GUIDANCE ITEMS



	Quarter 3						Full Year
($ millions, except Boe and %)	Low			High			Low			High
Marketing & midstream operating profit	$	(15	)	$	(5	)	$	(50	)	$	(40	)
LOE & GP&T per BOE	$	9.30		$	9.60		$	9.20		$	9.40
Production & property taxes as % of upstream sales		7.0	%		8.0	%		7.0	%		8.0	%
Exploration expenses	$	—		$	5		$	15		$	25
Depreciation, depletion and amortization	$	730		$	770		$	2,950		$	3,025
General & administrative expenses	$	115		$	125		$	450		$	490
Net financing costs, net	$	70		$	80		$	290		$	310
Other expenses	$	—		$	10		$	30		$	40

INCOME TAX GUIDANCE



	Quarter 3						Full Year
(% of pre-tax earnings)	Low			High			Low			High
Current income tax rate		14	%		16	%		14	%		16	%
Deferred income tax rate		6	%		8	%		6	%		8	%

Total income tax rate		~22%						~22%


CONTINGENT PAYMENTS FOR BARNETT SHALE DIVESTITURE (through 2024)


WTI Threshold		WTI Annual Earnout Amount		Henry Hub Threshold		Henry Hub Annual Earnout Amount
$	50.00	$	10,000,000	$	2.75	$	20,000,000
$	55.00	$	12,500,000	$	3.00	$	25,000,000
$	60.00	$	15,000,000	$	3.25	$	35,000,000
$	65.00	$	20,000,000	$	3.50	$	45,000,000

2024 & 2025 HEDGING POSITIONS


Oil Commodity Hedges
	Price Swaps				Price Collars
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q3 2024		28,000	$	78.97		88,000	$	67.35	$	85.10
Q4 2024		28,000	$	78.97		78,000	$	68.29	$	84.96
Q1-Q4 2025		4,468	$	72.83		5,992	$	70.00	$	77.97

Oil Basis Swaps


Period	Index		Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q3-Q4 2024		Midland Sweet		69,500	$	1.17
Q3-Q4 2024		NYMEX Roll		26,000	$	0.82
Q1-Q4 2025		Midland Sweet		63,000	$	1.00

Natural Gas Commodity Hedges - Henry Hub


	Price Swaps				Price Collars
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q3 2024		306,000	$	3.19		15,000	$	3.00	$	3.65
Q4 2024		252,000	$	3.16		15,000	$	3.00	$	3.65
Q1-Q4 2025		200,537	$	3.34		15,000	$	3.00	$	3.65

Natural Gas Basis Swaps


Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q3-Q4 2024	El Paso Permian		10,000	$	(1.00	)
Q3-Q4 2024	Houston Ship Channel		160,000	$	(0.28	)
Q3-Q4 2024	WAHA		80,000	$	(0.74	)
Q1-Q4 2025	WAHA		10,000	$	(0.63	)
Q1-Q4 2025	Houston Ship Channel		40,000	$	(0.35	)


2024 & 2025 HEDGING POSITIONS (continued)

NGL Commodity Hedges


		Price Swaps
Period	Product	Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q3-Q4 2024	Natural Gasoline		3,000	$	69.11
Q3-Q4 2024	Normal Butane		3,350	$	37.58
Q3-Q4 2024	Propane		5,250	$	33.01

Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index. Devon’s NGL derivatives settle against the average of the prompt month OPIS Mont Belvieu, Texas index. Commodity hedge positions are shown as of June 30, 2024.