Devon Energy Files Q3 2024 10-Q

TL;DR

DEVON ENERGY Q3 10-Q FILED. FINANCIALS & DEBT DETAILS OUT.

AI Summary

Devon Energy Corp/DE filed its 10-Q for the period ending September 30, 2024. The filing details financial performance and operational activities, including information on common stock, accumulated other comprehensive income, and noncontrolling interests. Specific financial instruments like the 7.95% Due April Fifteenth Two Thousand and Thirty-Two notes and the 5.25% Due October Fifteen Two Thousand Twenty-Seven notes are mentioned, alongside details on marketing and midstream expenses.

Why It Matters

This filing provides investors with a detailed look at Devon Energy's financial health and operational status for the third quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — The filing contains detailed financial information, including debt instruments and operational expenses, which are crucial for assessing the company's financial risk.

Key Numbers

• 2024-09-30 — Reporting Period End Date (Indicates the end of the fiscal quarter for which financial data is reported.)
• 2023-09-30 — Prior Year Period End Date (Provides a comparative point for financial performance analysis.)
• 2022-12-31 — Previous Fiscal Year End (Used for year-over-year financial comparisons.)

Key Players & Entities

• DEVON ENERGY CORP/DE (company) — Filer
• 20240930 (date) — Period of Report
• 7.95% Due April Fifteenth Two Thousand and Thirty-Two (dollar_amount) — Debt Instrument
• 5.25% Due October Fifteen Two Thousand Twenty-Seven (dollar_amount) — Debt Instrument
• Marketing and Midstream Expenses (dollar_amount) — Expense Category

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-20240930.htm (10-Q) — 3719KB
• dvn-ex2_2.htm (EX-2.2) — 49KB
• dvn-ex4_4.htm (EX-4.4) — 128KB
• 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
• img131121079_0.jpg (GRAPHIC) — 9KB
• img131121079_1.jpg (GRAPHIC) — 24KB
• img131121079_2.jpg (GRAPHIC) — 26KB
• 0000950170-24-121981.txt ( ) — 13779KB
• dvn-20240930.xsd (EX-101.SCH) — 1747KB
• dvn-20240930_htm.xml (XML) — 2602KB

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 13 Note 4 – Share-Based Compensation 15 Note 5 – Income Taxes 16 Note 6 – Net Earnings Per Share 17 Note 7 – Other Comprehensive Earnings (Loss) 17 Note 8 – Supplemental Information to Statements of Cash Flows 17 Note 9 – Accounts Receivable 18 Note 10 – Property, Plant and Equipment 18 Note 11 – Debt and Related Expenses 19 Note 12 – Leases 20 Note 13 – Asset Retirement Obligations 20 Note 14 – Stockholders' Equity 21 Note 15 – Commitments and Contingencies 22 Note 16 – Fair Value Measurements 24 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 25 Executive Overview 25 Results of Operations 26 Capital Resources, Uses and Liquidity 34 Critical Accounting Estimates 37 Non-GAAP Measures 38 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 39 Item 4.

Controls and Procedures

Controls and Procedures 40

Other Information

Part II. Other Information Item 1.

Legal Proceedings

Legal Proceedings 41 Item 1A.

Risk Factors

Risk Factors 41 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 41 Item 3. Defaults Upon Senior Securities 41 Item 4. Mine Safety Disclosures 41 Item 5. Other Information 41 Item 6. Exhibits 42

Signatures

Signatures 43 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. "Grayson Mill" means Grayson Mill Intermediate HoldCo II, LLC and Grayson Mill Intermediate HoldCo III, LLC. "Inside FERC" refers to the publication Inside FERC's Gas Market Report . "LOE" means lease operating expenses. "Matterhorn" refers to Matterhorn Express

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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 (Unaudited) Oil, gas and NGL sales $ 2,665 $ 2,882 $ 8,090 $ 8,054 Oil, gas and NGL derivatives 227 ( 194 ) 105 ( 206 ) Marketing and midstream revenues 1,132 1,148 3,342 3,265 Total revenues 4,024 3,836 11,537 11,113 Production expenses 763 757 2,302 2,169 Exploration expenses 4 3 16 16 Marketing and midstream expenses 1,149 1,160 3,390 3,316 Depreciation, depletion and amortization 794 651 2,284 1,904 Asset dispositions — — 16 ( 41 ) General and administrative expenses 117 99 345 297 Financing costs, net 88 81 240 231 Restructuring and transaction costs 8 — 8 — Other, net 37 13 64 28 Total expenses 2,960 2,764 8,665 7,920 Earnings before income taxes 1,064 1,072 2,872 3,193 Income tax expense 239 152 583 572 Net earnings 825 920 2,289 2,621 Net earnings attributable to noncontrolling interests 13 10 37 26 Net earnings attributable to Devon $ 812 $ 910 $ 2,252 $ 2,595 Net earnings per share: Basic net earnings per share $ 1.31 $ 1.43 $ 3.60 $ 4.05 Diluted net earnings per share $ 1.30 $ 1.42 $ 3.59 $ 4.03 Comprehensive earnings: Net earnings $ 825 $ 920 $ 2,289 $ 2,621 Other comprehensive earnings, net of tax: Pension and postretirement plans 1 1 3 3 Other comprehensive earnings, net of tax 1 1 3 3 Comprehensive earnings: 826 921 2,292 2,624 Comprehensive earnings attributable to noncontrolling interests 13 10 37 26 Comprehensive earnings attributable to Devon $ 813 $ 911 $ 2,255 $ 2,598 See accompanying notes to conso

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 nine-month periods ended September 30, 2024 and 2023 and Devon's financial position as of September 30, 2024. On September 27, 2024, Devon acquired the Williston Basin business of Grayson Mill for total consideration of approximately $ 5.0 billion, consisting of $ 3.5 billion of cash and approximately 37.3 million shares of Devon common stock, including purchase price adjustments. The transaction has been accounted for using the acquisition method of accounting. See Note 2 for further discussion. 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 an

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued) (Unaudited) Devon accounts for the investment in the Water JV as an equity method investment. Devon's investment in the Water JV is shown within investments on the consolidated balance sheets and Devon's share of the Water JV earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings. Devon has an interest in Matterhorn, which is a joint venture in a natural gas pipeline which transports 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 September 30, 2024, Devon has funded approximately $ 78 million of the commitment and expects to fund the remaining $ 22 million commitment in the fourth quarter of 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 September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Oil $ 2,273 $ 2,377 $ 6,875 $ 6,626 Gas 49 189 234 524 NGL 343 316 981 904 Oil, gas and NGL sales 2,665 2,882 8,090 8,054 Oil 815 795 2,423 2,260 Gas 105 153 326 428 NGL 212 200 593 577 Marketing and midstream revenues 1,132 1,148 3,342 3,2

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