Devon Energy Q2 2024 Update: Share Repurchases & Financials

TL;DR

Devon Energy's Q2 2024 10-Q shows ongoing share buybacks and details on their oil/gas sales and marketing revenues.

AI Summary

Devon Energy Corp/DE filed its 10-Q for the period ending June 30, 2024. The company reported on its financial performance, including revenues and expenses related to oil, gas, and NGL sales, as well as marketing and midstream operations. The filing also references its $5 billion share repurchase program and its $7.875% notes due September 30, 2031.

Why It Matters

This filing provides insight into Devon Energy's financial health and strategic capital allocation, including shareholder returns and debt management, which can influence investor decisions.

Risk Assessment

Risk Level: medium — The company operates in the volatile oil and gas industry, subject to commodity price fluctuations and regulatory changes.

Key Numbers

• $5 Billion — Share Repurchase Program (Indicates significant capital return to shareholders.)
• 2024-06-30 — Reporting Period End (Covers the second quarter of 2024.)

Key Players & Entities

• DEVON ENERGY CORP/DE (company) — Filer
• 0000950170-24-092424 (other) — Accession Number
• 20240630 (date) — Reporting Period End Date
• $5 Billion (dollar_amount) — Share Repurchase Program Amount
• September Thirtieth Two Thousand And Thirty One (date) — Maturity Date for Notes

FAQ

Key Financial Figures

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

Filing Documents

• dvn-20240630.htm (10-Q) — 3471KB
• dvn-ex10_1.htm (EX-10.1) — 221KB
• dvn-ex10_2.htm (EX-10.2) — 55KB
• dvn-ex10_3.htm (EX-10.3) — 56KB
• 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
• img131118196_0.jpg (GRAPHIC) — 9KB
• img131118196_1.jpg (GRAPHIC) — 26KB
• img131118196_2.jpg (GRAPHIC) — 28KB
• 0000950170-24-092424.txt ( ) — 12707KB
• dvn-20240630.xsd (EX-101.SCH) — 1641KB
• dvn-20240630_htm.xml (XML) — 2357KB

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) 16 Note 8 – Supplemental Information to Statements of Cash Flows 16 Note 9 – Accounts Receivable 16 Note 10 – Property, Plant and Equipment 17 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 31 Critical Accounting Estimates 34 Non-GAAP Measures 34 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 35 Item 4.

Controls and Procedures

Controls and Procedures 36

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 37 Item 1A.

Risk Factors

Risk Factors 37 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37 Item 3. Defaults Upon Senior Securities 37 Item 4. Mine Safety Disclosures 37 Item 5. Other Information 37 Item 6. Exhibits 38

Signatures

Signatures 39 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 (Unaudited) Oil, gas and NGL sales $ 2,796 $ 2,493 $ 5,425 $ 5,172 Oil, gas and NGL derivatives 23 ( 76 ) ( 122 ) ( 12 ) Marketing and midstream revenues 1,098 1,037 2,210 2,117 Total revenues 3,917 3,454 7,513 7,277 Production expenses 788 719 1,539 1,412 Exploration expenses 3 10 12 13 Marketing and midstream expenses 1,108 1,051 2,241 2,156 Depreciation, depletion and amortization 768 638 1,490 1,253 Asset dispositions 15 ( 41 ) 16 ( 41 ) General and administrative expenses 114 92 228 198 Financing costs, net 76 78 152 150 Other, net 5 10 27 15 Total expenses 2,877 2,557 5,705 5,156 Earnings before income taxes 1,040 897 1,808 2,121 Income tax expense 185 199 344 420 Net earnings 855 698 1,464 1,701 Net earnings attributable to noncontrolling interests 11 8 24 16 Net earnings attributable to Devon $ 844 $ 690 $ 1,440 $ 1,685 Net earnings per share: Basic net earnings per share $ 1.35 $ 1.08 $ 2.29 $ 2.61 Diluted net earnings per share $ 1.34 $ 1.07 $ 2.29 $ 2.60 Comprehensive earnings: Net earnings $ 855 $ 698 $ 1,464 $ 1,701 Other comprehensive earnings, net of tax: Pension and postretirement plans 1 1 2 2 Other comprehensive earnings, net of tax 1 1 2 2 Comprehensive earnings: $ 856 $ 699 $ 1,466 $ 1,703 Comprehensive earnings attributable to noncontrolling interests 11 8 24 16 Comprehensive earnings attributable to Devon $ 845 $ 691 $ 1,442 $ 1,687 See accompanying notes to consolidated financial statements. 6 Table of

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 and six-month periods ended June 30, 2024 and 2023 and Devon's financial position as of June 30, 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 Investment

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 June 30, 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 June 30, Six Months Ended June 30, 2024 2023 2024 2023 Oil $ 2,413 $ 2,106 $ 4,602 $ 4,249 Gas 57 122 185 335 NGL 326 265 638 588 Oil, gas and NGL sales 2,796 2,493 5,425 5,172 Oil 801 735 1,608 1,465 Gas 100 123 221 275 NGL 197 179 381 377 Marketing and midstream revenues 1,098 1,037 2,210 2,117 Total revenues from contracts with customers $ 3,894 $ 3,530 $ 7,635 $ 7,289 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 requ

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