How much dilution will Devon shareholders face on a pro forma basis?

Pro forma 2025 basic EPS would be $3.24, compared with Devon's standalone $4.18, a decline of about 22%. About 531.5 million new shares are issued to Coterra holders, raising pro forma weighted basic shares to about 1,163 million from 632 million. Pro forma net earnings are reduced by roughly $591 million, mainly from higher depreciation, depletion and amortization on the stepped-up asset base. Synergies are excluded, so the filing does not show how much of this dilution could be offset.

What is the deal worth, and how sensitive is it to Devon's share price?

Based on Devon's $44.00 closing price on March 3, 2026, the preliminary consideration is about $23.4 billion. A 10% rise in Devon's share price would lift it to about $25.7 billion, and a 10% decline would lower it to about $21.0 billion. Because the consideration is paid in stock, the final value will depend on Devon's price at closing, and the purchase price allocation will be adjusted accordingly.

How does the acquisition change Devon's balance sheet and leverage?

Pro forma long-term debt rises to about $10.9 billion from Devon's $7.4 billion, with short-term debt of $1.2 billion. Total assets increase to $66.7 billion from $31.6 billion, largely due to a $10.9 billion increase in the book value of oil and gas properties. Deferred tax liabilities increase by about $2.6 billion, and equity rises to $38.9 billion. No goodwill is recorded because the purchase price is fully allocated to net assets acquired.

How much larger would the combined company's reserve base and cash flow be?

At year-end 2025, pro forma proved reserves total about 4,993 MMBoe, including roughly 1,346 MMBbl of oil, 14,993 Bcf of natural gas, and 1,148 MMBbl of NGLs, compared with Devon's 2,428 MMBoe. The pro forma standardized measure of discounted future net cash flows is $32.4 billion, versus $18.8 billion for Devon alone. Pro forma 2025 combined production is about 593 MMBoe. These reserve estimates were prepared separately by each company and have not been updated for post-year-end changes.

Are these pro forma figures a reliable guide to future results?

Not directly. The filing states the statements are illustrative, do not project future results, and are based on preliminary fair value estimates that may change materially as final valuations, tax bases, and the closing share price are determined. They also exclude expected cost savings, revenue opportunities, and integration costs, and do not reflect future regulatory actions. Investors should review the proxy/prospectus filed March 30, 2026, and Devon's and Coterra's 10-K filings for additional context.

DVN 8-K SEC Disclosure — Apr 10, 2026

01—Abstract

Summary

Summary of the 8-K filed April 10, 2026. Cited figures are marked; the original filing is the authoritative source.

Devon Energy's 8-K provides unaudited pro forma combined financial statements for its proposed all-stock acquisition of Coterra Energy, under which Coterra holders would receive 0.70 Devon shares per Coterra share.

The filing is informational and does not change the deal terms. Using Devon as the accounting acquirer, the pro forma figures show a much larger combined company: 2025 pro forma revenue of $24.8 billion^a (versus Devon's $17.2 billion), total assets of $66.7 billion (versus $31.6 billion), and proved reserves of roughly 4,993 MMBoe (versus Devon's 2,428 MMBoe). The preliminary purchase consideration is about $23.4 billion at Devon's $44.00 share price on March 3, 2026, and would rise to about $25.7 billion or fall to about $21.0 billion if Devon's share price moved up or down 10%.

The pro forma earnings profile is the key point for investors. Pro forma 2025 net earnings attributable to Devon are $3.77 billion, but basic EPS falls to $3.24^b from Devon's standalone $4.18, a decline of about 22%. The dilution comes mainly from roughly 531.5 million new shares (pro forma weighted shares of about 1,163 million versus 632 million) and a $717 million increase in depreciation, depletion and amortization from the stepped-up asset basis.

The filing excludes expected synergies and the costs to achieve them, so reported results after closing could differ materially from these illustrative figures. Acquisition-related accounting also adds a $10.9 billion^c step-up in oil and gas property, a $2.6 billion increase in deferred tax liabilities, and no new goodwill, since the purchase price is fully allocated to net assets. Balance sheet leverage rises meaningfully.

Pro forma long-term debt is $10.9 billion^d versus Devon's $7.4 billion, and short-term debt is $1.2 billion. Equity increases to $38.9 billion.

The standardized measure of discounted future net cash flows for proved reserves rises to $32.4 billion from Devon's $18.8 billion. All figures are preliminary and will change with the final share price at closing, final fair value estimates, and tax bases, so investors should treat them as a framework rather than a forecast.

02—Key points

Key Highlights

Exchange ratio of 0.70 Devon shares per Coterra share; about 531.5 million new Devon shares would be issued against 759.3 million Coterra shares outstanding as of March 3, 2026.
Preliminary purchase consideration of $23.4 billion at Devon's $44.00 share price, with sensitivity of about $25.7 billion (+10%) and $21.0 billion (-10%); the share price rose from $40.21 at signing, adding about $2 billion.
Pro forma 2025 revenue of $24.8 billion versus Devon's standalone $17.2 billion; pro forma net earnings attributable to Devon of $3.77 billion versus $2.64 billion.
Pro forma basic EPS of $3.24 versus Devon's standalone $4.18 (about 22% dilution), driven by the larger share count and $717 million of incremental DD&A.
Pro forma long-term debt of $10.9 billion versus Devon's $7.4 billion; total equity rises to $38.9 billion and total assets to $66.7 billion.
Pro forma proved reserves of about 4,993 MMBoe at year-end 2025 (versus 2,428 MMBoe for Devon standalone), with a standardized measure of $32.4 billion versus $18.8 billion.
Figures exclude expected synergies and integration costs, use preliminary purchase price allocations, and carry a 23% blended statutory tax rate; estimated transaction costs are $50 million ($39 million after tax).

03—Questions

Frequently Asked Questions

How much dilution will Devon shareholders face on a pro forma basis?
Pro forma 2025 basic EPS would be $3.24, compared with Devon's standalone $4.18, a decline of about 22%. About 531.5 million new shares are issued to Coterra holders, raising pro forma weighted basic shares to about 1,163 million from 632 million. Pro forma net earnings are reduced by roughly $591 million, mainly from higher depreciation, depletion and amortization on the stepped-up asset base. Synergies are excluded, so the filing does not show how much of this dilution could be offset.
What is the deal worth, and how sensitive is it to Devon's share price?
Based on Devon's $44.00 closing price on March 3, 2026, the preliminary consideration is about $23.4 billion. A 10% rise in Devon's share price would lift it to about $25.7 billion, and a 10% decline would lower it to about $21.0 billion. Because the consideration is paid in stock, the final value will depend on Devon's price at closing, and the purchase price allocation will be adjusted accordingly.
How does the acquisition change Devon's balance sheet and leverage?
Pro forma long-term debt rises to about $10.9 billion from Devon's $7.4 billion, with short-term debt of $1.2 billion. Total assets increase to $66.7 billion from $31.6 billion, largely due to a $10.9 billion increase in the book value of oil and gas properties. Deferred tax liabilities increase by about $2.6 billion, and equity rises to $38.9 billion. No goodwill is recorded because the purchase price is fully allocated to net assets acquired.
How much larger would the combined company's reserve base and cash flow be?
At year-end 2025, pro forma proved reserves total about 4,993 MMBoe, including roughly 1,346 MMBbl of oil, 14,993 Bcf of natural gas, and 1,148 MMBbl of NGLs, compared with Devon's 2,428 MMBoe. The pro forma standardized measure of discounted future net cash flows is $32.4 billion, versus $18.8 billion for Devon alone. Pro forma 2025 combined production is about 593 MMBoe. These reserve estimates were prepared separately by each company and have not been updated for post-year-end changes.
Are these pro forma figures a reliable guide to future results?
Not directly. The filing states the statements are illustrative, do not project future results, and are based on preliminary fair value estimates that may change materially as final valuations, tax bases, and the closing share price are determined. They also exclude expected cost savings, revenue opportunities, and integration costs, and do not reflect future regulatory actions. Investors should review the proxy/prospectus filed March 30, 2026, and Devon's and Coterra's 10-K filings for additional context.

04—Continue

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