Devon Energy Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Devon Energy Corp. filed its Q1 2024 10-Q, detailing financial performance, debt instruments, and equity awards.</b>

AI Summary

DEVON ENERGY CORP/DE (DVN) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. Devon Energy Corp. filed its 10-Q report for the quarterly period ended March 31, 2024. The filing includes financial data related to oil and gas sales, marketing, and midstream operations. Key financial instruments mentioned include various debt issuances with different maturity dates and interest rates. The company references share repurchase programs, including a $3 billion program that closed in prior periods. Performance shares and restricted stock units are noted in relation to executive compensation and equity awards.

Why It Matters

For investors and stakeholders tracking DEVON ENERGY CORP/DE, this filing contains several important signals. This 10-Q provides investors with the latest financial snapshot of Devon Energy's operations, including revenue streams from oil, gas, and midstream activities, allowing for an assessment of recent performance. The detailed information on debt obligations and equity awards offers insight into the company's capital structure, financial commitments, and executive compensation strategies.

Risk Assessment

Risk Level: medium — DEVON ENERGY CORP/DE shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) for a publicly traded energy company, which inherently carries market and operational risks associated with the volatile oil and gas industry, but does not indicate immediate severe financial distress.

Analyst Insight

Review the detailed financial statements and segment reporting within the 10-Q to understand revenue drivers and cost structures for Q1 2024.

Revenue Breakdown

Key Numbers

• 2024-03-31 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-02 — Filing Date (FILED AS OF DATE)
• 001-32318 — SEC File Number (SEC FILE NUMBER)
• 1999-07-07 — Date of Name Change (FORMER COMPANY)

Key Players & Entities

• DEVON ENERGY CORP/DE (company) — FILER
• 0000950170-24-051757 (other) — ACCESSION NUMBER
• 20240331 (date) — CONFORMED PERIOD OF REPORT
• 20240502 (date) — FILED AS OF DATE
• 0001090012 (company) — CENTRAL INDEX KEY
• 1311 (other) — STANDARD INDUSTRIAL CLASSIFICATION
• DE (other) — STATE OF INCORPORATION
• OKLAHOMA CITY (location) — BUSINESS ADDRESS CITY

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: The company's financial performance is significantly impacted by fluctuations in the prices of oil, natural gas, and natural gas liquids.
• Production and Operational Risks [medium — operational]: Risks related to exploration, drilling, production operations, and the ability to maintain production levels.
• Debt Obligations [medium — financial]: The company has various debt instruments, and its ability to service this debt is subject to financial market conditions and operational performance.

Key Dates

• 2024-03-31: Quarter End — End of the reporting period for the 10-Q filing.

Key Financial Figures

• $0.10 — ch registered Common Stock, par value $0.10 per share DVN The New York Stock Ex

Filing Documents

• dvn-20240331.htm (10-Q) — 2708KB
• dvn-ex10_1.htm (EX-10.1) — 98KB
• dvn-ex10_2.htm (EX-10.2) — 117KB
• dvn-ex10_3.htm (EX-10.3) — 152KB
• dvn-ex31_1.htm (EX-31.1) — 13KB
• dvn-ex31_2.htm (EX-31.2) — 13KB
• dvn-ex32_1.htm (EX-32.1) — 7KB
• dvn-ex32_2.htm (EX-32.2) — 7KB
• img131115314_0.jpg (GRAPHIC) — 9KB
• img131115314_1.jpg (GRAPHIC) — 15KB
• img131115314_2.jpg (GRAPHIC) — 15KB
• 0000950170-24-051757.txt (&nbsp;) — 11129KB
• dvn-20240331.xsd (EX-101.SCH) — 1706KB
• dvn-20240331_htm.xml (XML) — 1878KB

Financial Information

Part I. Financial Information Item 1.

Financial Statements

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

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 – Income Taxes 15 Note 6 – Net Earnings Per Share 15 Note 7 – Other Comprehensive Earnings (Loss) 15 Note 8 – Supplemental Information to Statements of Cash Flows 16 Note 9 – Accounts Receivable 16 Note 10 – Property, Plant and Equipment 16 Note 11 – Debt and Related Expenses 17 Note 12 – Leases 18 Note 13 – Asset Retirement Obligations 18 Note 14 – Stockholders' Equity 19 Note 15 – Commitments and Contingencies 19 Note 16 – Fair Value Measurements 21 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 22 Executive Overview 22 Results of Operations 23 Capital Resources, Uses and Liquidity 30 Critical Accounting Estimates 33 Non-GAAP Measures 33 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 34 Item 4.

Controls and Procedures

Controls and Procedures 34

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 35 Item 1A.

Risk Factors

Risk Factors 35 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 35 Item 3. Defaults Upon Senior Securities 35 Item 4. Mine Safety Disclosures 35 Item 5. Other Information 35 Item 6. Exhibits 36

Signatures

Signatures 37 2 Table of Contents 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: "2018 Senior Credit Facility" means Devon's syndicated unsecured revolving line of credit, effective as of October 5, 2018. "2023 Senior Credit Facility" means Devon's syndicated unsecured revolving line of credit, effective as of March 24, 2023. "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. "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. "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. "MBo

Financial Information

Part I. Financial Information

Financ ial Statements

Item 1. Financ ial Statements DEVON ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS Three Months Ended March 31, 2024 2023 (Unaudited) Oil, gas and NGL sales $ 2,629 $ 2,679 Oil, gas and NGL derivatives ( 145 ) 64 Marketing and midstream revenues 1,112 1,080 Total revenues 3,596 3,823 Production expenses 751 693 Exploration expenses 9 3 Marketing and midstream expenses 1,133 1,105 Depreciation, depletion and amortization 722 615 Asset dispositions 1 — General and administrative expenses 114 106 Financing costs, net 76 72 Other, net 22 5 Total expenses 2,828 2,599 Earnings before income taxes 768 1,224 Income tax expense 159 221 Net earnings 609 1,003 Net earnings attributable to noncontrolling interests 13 8 Net earnings attributable to Devon $ 596 $ 995 Net earnings per share: Basic net earnings per share $ 0.95 $ 1.53 Diluted net earnings per share $ 0.94 $ 1.53 Comprehensive earnings: Net earnings $ 609 $ 1,003 Other comprehensive earnings, net of tax: Pension and postretirement plans 1 1 Other comprehensive earnings, net of tax 1 1 Comprehensive earnings: 610 1,004 Comprehensive earnings attributable to noncontrolling interests 13 8 Comprehensive earnings attributable to Devon $ 597 $ 996 See accompanying notes to consolidated financial statements. 6 Table of Contents DEVON ENERGY CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET S March 31, 2024 December 31, 2023 (Unaudited) ASSETS Current assets: Cash, cash equivalents and restricted cash $ 1,149 $ 875 Accounts receivable 1,670 1,573 Inventory 234 249 Other current assets 345 460 Total current assets 3,398 3,157 Oil and gas property and equipment, based on successful efforts accounting, net 18,033 17,825 Other

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. S ummary of Significant Accounting Policies The accompanying unaudited interim financial statements and notes of Devon have been prepared pursuant to the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying unaudited interim financial statements and notes should be read in conjunction with the financial statements and notes included in Devon's 2023 Annual Report on Form 10-K . The accompanying unaudited interim financial statements in this report reflect all adjustments that are, in the opinion of management, necessary for a fair statement of Devon's results of operations and cash flows for the three-month periods ended March 31, 2024 and 2023 and Devon's financial position as of March 31, 2024. Variable Interest Entity CDM is a joint venture entity formed by Devon and an affiliate of QL Capital Partners, LP. CDM provides gathering, compression and dehydration services for natural gas production in the Cotton Draw area of the Delaware Basin. Devon holds a controlling interest in CDM and the portions of CDM's net earnings and equity not attributable to Devon's controlling interest are shown separately as noncontrolling interests in the accompanying consolidated statements of comprehensive earnings and consolidated balance sheets. CDM is considered a VIE to Devon. The assets of CDM cannot be used by Devon for general corporate purposes and are included in, and disclosed parenthetically, on Devon's consolidated balance sheets. The carrying amount of liabilities related to CDM for which the creditors do not have recourse to Devon's assets are also included in, and disclosed parenthetically, if material, on Devon's consolidated balance sheets. Investments The following table presents Devon's investments. Carrying Amount Investments % Intere

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (Unaudited) Matterhorn is a joint venture entity and was formed for the purpose of constructing a natural gas pipeline that will transport natural gas from the Permian Basin to the Katy, Texas area. Devon's investment in Matterhorn does not give it the ability to exercise significant influence over Matterhorn. In the first quarter of 2024, Devon committed to invest approximately $ 100 million in Fervo, a company that generates energy from geothermal wells. As of March 31, 2024, Devon has funded approximately $ 55 million of the commitment and expects to fund the remaining $ 45 million commitment throughout 2024. The investment in Fervo allows Devon to exercise significant influence over Fervo, and the investment is accounted for under the equity method of accounting. Devon's investment in Fervo is shown within investments on the consolidated balance sheets and Devon's share of Fervo earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings. Disaggregation of Revenue The following table presents revenue from contracts with customers that are disaggregated based on the type of good or service. Three Months Ended March 31, 2024 2023 Oil $ 2,189 $ 2,143 Gas 128 213 NGL 312 323 Oil, gas and NGL sales 2,629 2,679 Oil 807 730 Gas 121 152 NGL 184 198 Marketing and midstream revenues 1,112 1,080 Total revenues from contracts with customers $ 3,741 $ 3,759 Recently Issued Accounting Standards Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. ASU 2023-09 intends to provide investors with enhanced information about an entity's income taxes by requiring disclosure of items such as disaggregation of the effective tax rate reconciliation as well as information regarding income taxes paid. This ASU is effective for annual reportin

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (Unaudited) 3. Derivative Fin ancial Instruments Objectives and Strategies Devon enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production to hedge future prices received. Additionally, Devon periodically enters into derivative financial instruments with respect to a portion of its oil, gas and NGL marketing activities. These commodity derivative financial instruments include financial price swaps, basis swaps and costless price collars. Devon does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment. Counterparty Credit Risk By using derivative financial instruments, Devon is exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, the hedging instruments are placed with a number of counterparties whom Devon believes are acceptable credit risks. It is Devon's policy to enter into derivative contracts only with investment-grade rated counterparties deemed by management to be competent and competitive market makers. Additionally, Devon's derivative contracts generally contain provisions that provide for collateral payments if Devon's or its counterparty's credit rating falls below certain credit rating levels. As of March 31, 2024, Devon neither held cash collateral of its counterparties no r posted cash collateral to its counterparties. Commodity Derivatives As of March 31, 2024, Devon had the following open oil derivative positions. The first table presents Devon's oil derivatives that settle against the average of the prompt month NYMEX WTI futures price. The second table presents Devon's oil derivatives that settle against the respective indices noted within the table. Price Swaps Price Collars Period Volume

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View this 10-Q filing on SEC EDGAR