10-QPeriod: Q1 FY2026

DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2026

Filed May 6, 2026For Securities:DVN

Summary

Devon Energy Corporation (DVN) reported financial results for the first quarter ended March 31, 2026. The company generated total revenues of $3.81 billion, a decrease from $4.45 billion in the prior year's comparable quarter. Net earnings attributable to Devon were $120 million ($0.19 per diluted share), significantly lower than $494 million ($0.77 per diluted share) in the first quarter of 2025. This decline was primarily driven by lower commodity prices and negative impacts from commodity derivative valuation changes, partially offset by increased production volumes from new well activity in the Delaware Basin. The company announced a significant development: the all-stock merger of equals with Coterra Energy Inc., expected to close on May 7, 2026. This merger is anticipated to create a leading large-cap shale operator and is projected to unlock substantial shareholder value through enhanced scale, improved margins, increased free cash flow, and an estimated $1.0 billion in annual synergies. Devon ended the quarter with robust liquidity, including $1.8 billion in cash.

Financial Highlights

41 data points
Beta

Revenue

$3.81B

Net Income

$120.00M

3.2% Net Margin

EPS (Diluted)

$0.19

Total Assets

$32.54B

Cash & Equivalents

$1.81B

Free Cash Flow

$1.66B

Financial Statements
Beta
Revenue$3.81B
Operating Expenses$3.69B
Interest Expense$118.00M
Net Income$120.00M
EPS (Basic)$0.19
EPS (Diluted)$0.19
Shares Outstanding (Basic)616.00M
Shares Outstanding (Diluted)618.00M

Key Highlights

  • 1Net earnings attributable to Devon were $120 million ($0.19/share) for Q1 2026, down from $494 million ($0.77/share) in Q1 2025, primarily due to lower realized commodity prices and derivative valuation impacts.
  • 2Total revenues decreased to $3.81 billion in Q1 2026 from $4.45 billion in Q1 2025, influenced by lower oil, gas, and NGL sales.
  • 3The company announced a merger of equals with Coterra Energy Inc., expected to close on May 7, 2026, aiming to create a larger, more efficient shale operator with significant synergy potential.
  • 4Production volumes saw a slight increase overall, with notable growth in the Delaware Basin, contributing to higher earnings compared to the prior year's quarter.
  • 5Devon ended the quarter with strong liquidity, reporting $1.8 billion in cash and cash equivalents, and $4.8 billion in total liquidity.
  • 6The company repurchased approximately 1.9 million shares for $69 million in Q1 2026, continuing its commitment to shareholder returns, though repurchase activity is suspended pending the Coterra merger.
  • 7Significant operational focus remains on optimizing capital and operational efficiencies, with the company on track to achieve its $1.0 billion business optimization plan ahead of schedule.

Frequently Asked Questions

The decrease in net earnings is primarily attributed to a decline in realized commodity prices for oil, gas, and NGLs, as well as unfavorable changes in the fair value of commodity derivative instruments. While production volumes increased overall, particularly in the Delaware Basin, these positive factors were outweighed by the negative impacts of lower commodity prices and derivative valuations.

The merger of equals between Devon Energy and Coterra Energy Inc. has been approved by the shareholders of both companies. The transaction is expected to close on May 7, 2026, subject to customary closing conditions. This merger is intended to create a larger, more scaled company with significant synergy potential.

Devon maintains a strong liquidity position, ending the quarter with $1.8 billion in cash and cash equivalents and $4.8 billion in total liquidity. The company has a $3.0 billion revolving Senior Credit Facility with no outstanding borrowings as of March 31, 2026, and is in compliance with its debt covenants. The debt-to-capitalization ratio was 24.9%.

The fair value changes in commodity derivative instruments had a significant negative impact on net earnings. For Q1 2026, these changes resulted in a non-cash valuation loss of $644 million (before tax), which reduced reported earnings. However, these derivatives are used to hedge future prices, mitigating some downside price risk.