10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-32318

 

DEVON ENERGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	73-1567067
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer identification No.)
333 West Sheridan Avenue, Oklahoma City, Oklahoma	73102-5015
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (405) 235-3611

Former name, address and former fiscal year, if changed from last report: Not applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.10 per share	DVN	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

On July 20, 2022, 654.8 million shares of common stock were outstanding.

DEVON ENERGY CORPORATION

FORM 10-Q

TABLE OF CONTENTS

Part I. Financial Information
Item 1.	Financial Statements	6
	Consolidated Statements of Comprehensive Earnings	6
	Consolidated Statements of Cash Flows	7
	Consolidated Balance Sheets	8
	Consolidated Statements of Equity	9
	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	13
	Note 5 – Restructuring and Transaction Costs	15
	Note 6 – Other, Net	15
	Note 7 – Income Taxes	16
	Note 8 – Net Earnings Per Share	17
	Note 9 – Other Comprehensive Earnings (Loss)	17
	Note 10 – Supplemental Information to Statements of Cash Flows	18
	Note 11 – Accounts Receivable	18
	Note 12 – Property, Plant and Equipment	18
	Note 13 – Debt and Related Expenses	19
	Note 14 – Leases	20
	Note 15 – Asset Retirement Obligations	20
	Note 16 – Stockholders’ Equity	20
	Note 17 – Commitments and Contingencies	21
	Note 18 – Fair Value Measurements	23
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Executive Overview	24
	Results of Operations	26
	Capital Resources, Uses and Liquidity	34
	Critical Accounting Estimates	37
	Non-GAAP Measures	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
Part II. Other Information
Item 1.	Legal Proceedings	41
Item 1A.	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		43

2

DEFINITIONS

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:

"2017 Plan" means the Devon Energy Corporation 2017 Long-Term Incentive Plan.

"2022 Plan" means the Devon Energy Corporation 2022 Long-Term Incentive Plan.

“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.

“Canada” means the division of Devon encompassing oil and gas properties located in Canada. On June 27, 2019, all of Devon’s Canadian operating assets and operations were divested. All dollar amounts associated with Canada are in U.S. dollars, unless stated otherwise.

“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.

“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.

“MBbls” means thousand barrels.

“MBoe” means thousand Boe.

“Mcf” means thousand cubic feet.

“Merger” means the merger of Merger Sub with and into WPX, with WPX continuing as the surviving corporation and a wholly-owned subsidiary of the Company, pursuant to the terms of the Merger Agreement.

“Merger Agreement” means that certain Agreement and Plan of Merger, dated September 26, 2020, by and among the Company, Merger Sub and WPX.

“Merger Sub” means East Merger Sub, Inc., a wholly-owned subsidiary of the Company.

“MMBoe” means million Boe.

“MMBtu” means million Btu.

3

“MMcf” means million cubic feet.

“N/M” means not meaningful.

"NCI" means noncontrolling interests.

“NGL” or “NGLs” means natural gas liquids.

“NYMEX” means New York Mercantile Exchange.

“OPEC” means Organization of the Petroleum Exporting Countries.

“SEC” means United States Securities and Exchange Commission.

“Senior Credit Facility” means Devon’s syndicated unsecured revolving line of credit, effective as of October 5, 2018.

“TSR” means total shareholder return.

“U.S.” means United States of America.

“VIE” means variable interest entity.

“WPX” means WPX Energy, Inc.

“WTI” means West Texas Intermediate.

“/Bbl” means per barrel.

“/d” means per day.

“/MMBtu” means per MMBtu.

4

INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This report includes “forward-looking statements” as defined by the SEC. Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words and phrases “expects,” “believes,” “will,” “would,” “could,” “continue,” “may,” “aims,” “likely to be,” “intends,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this report that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but not limited to:

•the volatility of oil, gas and NGL prices;

•risks relating to the COVID-19 pandemic or other future pandemics;

•uncertainties inherent in estimating oil, gas and NGL reserves;

•the extent to which we are successful in acquiring and discovering additional reserves;

•regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to environmental matters;

•risks related to regulatory, social and market efforts to address climate change;

•the uncertainties, costs and risks involved in our operations, including as a result of employee misconduct;

•risks related to our hedging activities;

•counterparty credit risks;

•risks relating to our indebtedness;

•cyberattack risks;

•our limited control over third parties who operate some of our oil and gas properties;

•midstream capacity constraints and potential interruptions in production;

•the extent to which insurance covers any losses we may experience;

•competition for assets, materials, people and capital;

•risks related to investors attempting to effect change;

•our ability to successfully complete mergers, acquisitions and divestitures;

•our ability to pay dividends and make share repurchases; and

•any of the other risks and uncertainties discussed in this report, our 2021 Annual Report on Form 10-K and our other filings with the SEC.

All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We assume no duty to update or revise our forward-looking statements based on new information, future events or otherwise.

5

Part I. Financial Information

Item 1. Financial Statements

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(Unaudited)
Oil, gas and NGL sales	$	4,100		$	2,154		$	7,275		$	3,911
Oil, gas and NGL derivatives		(170	)		(703	)		(853	)		(1,231	)
Marketing and midstream revenues		1,696			966			3,016			1,787
Total revenues		5,626			2,417			9,438			4,467
Production expenses		729			513			1,347			971
Exploration expenses		10			3			12			6
Marketing and midstream expenses		1,700			965			3,024			1,807
Depreciation, depletion and amortization		528			536			1,017			1,003
Asset dispositions		(14	)		(87	)		(15	)		(119	)
General and administrative expenses		84			94			178			201
Financing costs, net		84			80			169			157
Restructuring and transaction costs		—			23			—			212
Other, net		10			(14	)		(51	)		(43	)
Total expenses		3,131			2,113			5,681			4,195
Earnings before income taxes		2,495			304			3,757			272
Income tax expense (benefit)		557			43			824			(205	)
Net earnings		1,938			261			2,933			477
Net earnings attributable to noncontrolling interests		6			5			12			8
Net earnings attributable to Devon	$	1,932		$	256		$	2,921		$	469
Net earnings per share:
Basic net earnings per share:	$	2.94		$	0.38		$	4.42		$	0.70
Diluted net earnings per share:	$	2.93		$	0.38		$	4.40		$	0.70
Comprehensive earnings:
Net earnings	$	1,938		$	261		$	2,933		$	477
Other comprehensive earnings, net of tax:
Pension and postretirement plans		1			3			2			26
Other comprehensive earnings, net of tax		1			3			2			26
Comprehensive earnings:	$	1,939		$	264		$	2,935		$	503
Comprehensive earnings attributable to noncontrolling interests		6			5			12			8
Comprehensive earnings attributable to Devon	$	1,933		$	259		$	2,923		$	495

See accompanying notes to consolidated financial statements

6

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(Unaudited)
Cash flows from operating activities:
Net earnings	$	1,938		$	261		$	2,933		$	477
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation, depletion and amortization		528			536			1,017			1,003
Leasehold impairments		7			1			8			2
Amortization of liabilities		(9	)		(7	)		(15	)		(14	)
Total losses on commodity derivatives		170			703			853			1,231
Cash settlements on commodity derivatives		(472	)		(367	)		(816	)		(599	)
Gains on asset dispositions		(14	)		(87	)		(15	)		(119	)
Deferred income tax expense (benefit)		305			24			469			(219	)
Share-based compensation		23			20			43			61
Early retirement of debt		—			(10	)		—			(30	)
Other		4			2			(17	)		2
Changes in assets and liabilities, net		198			17			55			(110	)
Net cash from operating activities		2,678			1,093			4,515			1,685
Cash flows from investing activities:
Capital expenditures		(573	)		(504	)		(1,110	)		(1,003	)
Acquisitions of property and equipment		(100	)		(5	)		(101	)		(5	)
Divestitures of property and equipment		9			49			35			64
WPX acquired cash		—			—			—			344
Distributions from equity method investments		15			8			23			18
Contributions to equity method investments		(21	)		—			(43	)		—
Net cash from investing activities		(670	)		(452	)		(1,196	)		(582	)
Cash flows from financing activities:
Repayments of long-term debt		—			(710	)		—			(1,243	)
Early retirement of debt		—			(32	)		—			(59	)
Repurchases of common stock		(324	)		—			(535	)		—
Dividends paid on common stock		(830	)		(229	)		(1,497	)		(432	)
Contributions from noncontrolling interests		—			3			—			3
Distributions to noncontrolling interests		(5	)		(5	)		(13	)		(9	)
Acquisition of noncontrolling interests		—			—			—			(24	)
Shares exchanged for tax withholdings and other		(12	)		(9	)		(85	)		(42	)
Net cash from financing activities		(1,171	)		(982	)		(2,130	)		(1,806	)
Effect of exchange rate changes on cash		(5	)		2			(3	)		5
Net change in cash, cash equivalents and restricted cash		832			(339	)		1,186			(698	)
Cash, cash equivalents and restricted cash at beginning of period		2,625			1,878			2,271			2,237
Cash, cash equivalents and restricted cash at end of period	$	3,457		$	1,539		$	3,457		$	1,539
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	3,300		$	1,348		$	3,300		$	1,348
Restricted cash		157			191			157			191
Total cash, cash equivalents and restricted cash	$	3,457		$	1,539		$	3,457		$	1,539

See accompanying notes to consolidated financial statements

7

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		June 30, 2022			December 31, 2021
	(Unaudited)
ASSETS
Current assets:
Cash, cash equivalents and restricted cash		$	3,457		$	2,271
Accounts receivable			2,348			1,543
Other current assets			546			435
Total current assets			6,351			4,249
Oil and gas property and equipment, based on successful efforts    accounting, net			13,588			13,536
Other property and equipment, net ($122 million and $111 million related to CDM in 2022 and 2021, respectively)			1,525			1,472
Total property and equipment, net			15,113			15,008
Goodwill			753			753
Right-of-use assets			236			235
Investments			423			402
Other long-term assets			318			378
Total assets		$	23,194		$	21,025
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable		$	668		$	500
Revenues and royalties payable			2,108			1,456
Other current liabilities			1,318			1,131
Total current liabilities			4,094			3,087
Long-term debt			6,461			6,482
Lease liabilities			259			252
Asset retirement obligations			452			468
Other long-term liabilities			949			1,050
Deferred income taxes			753			287
Stockholders' equity:
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued    656 million and 663 million shares in 2022 and 2021, respectively			66			66
Additional paid-in capital			7,060			7,636
Retained earnings			3,107			1,692
Accumulated other comprehensive loss			(130	)		(132	)
Treasury stock, at cost, 0.2 million shares in 2022			(13	)		—
Total stockholders’ equity attributable to Devon			10,090			9,262
Noncontrolling interests			136			137
Total equity			10,226			9,399
Total liabilities and equity		$	23,194		$	21,025

See accompanying notes to consolidated financial statements

8

DEVON ENERGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

													Other
							Additional						Comprehensive
	Common Stock						Paid-In			Retained			Earnings			Treasury			Noncontrolling			Total
	Shares			Amount			Capital			Earnings			(Loss)			Stock			Interests			Equity
	(Unaudited)
Three Months Ended June 30, 2022
Balance as of March 31, 2022		661		$	66		$	7,371		$	2,013		$	(131	)	$	(19	)	$	135		$	9,435
Net earnings		—			—			—			1,932			—			—			6			1,938
Other comprehensive earnings, net of tax		—			—			—			—			1			—			—			1
Restricted stock grants, net of cancellations		—			1			—			—			—			—			—			1
Common stock repurchased		—			—			—			—			—			(329	)		—			(329	)
Common stock retired		(5	)		(1	)		(334	)		—			—			335			—			—
Common stock dividends		—			—			—			(838	)		—			—			—			(838	)
Share-based compensation		—			—			23			—			—			—			—			23
Distributions to noncontrolling interests		—			—			—			—			—			—			(5	)		(5	)
Balance as of June 30, 2022		656		$	66		$	7,060		$	3,107		$	(130	)	$	(13	)	$	136		$	10,226
Three Months Ended June 30, 2021
Balance as of March 31, 2021		675		$	67		$	8,172		$	218		$	(104	)	$	—		$	133		$	8,486
Net earnings		—			—			—			256			—			—			5			261
Other comprehensive earnings, net of tax		—			—			—			—			3			—			—			3
Restricted stock grants, net of cancellations		2			1			(1	)		—			—			—			—			—
Common stock repurchased		—			—			—			—			—			(2	)		—			(2	)
Common stock retired		—			—			(2	)		—			—			2			—			—
Common stock dividends		—			—			—			(231	)		—			—			—			(231	)
Share-based compensation		—			—			20			—			—			—			—			20
Contributions from noncontrolling interests		—			—			—			—			—			—			2			2
Distributions to noncontrolling interests		—			—			—			—			—			—			(4	)		(4	)
Balance as of June 30, 2021		677		$	68		$	8,189		$	243		$	(101	)	$	—		$	136		$	8,535
Six Months Ended June 30, 2022
Balance as of December 31, 2021		663		$	66		$	7,636		$	1,692		$	(132	)	$	—		$	137		$	9,399
Net earnings		—			—			—			2,921			—			—			12			2,933
Other comprehensive earnings, net of tax		—			—			—			—			2			—			—			2
Restricted stock grants, net of cancellations		2			1			1			—			—			—			—			2
Common stock repurchased		—			—			—			—			—			(634	)		—			(634	)
Common stock retired		(10	)		(1	)		(620	)		—			—			621			—			—
Common stock dividends		—			—			—			(1,506	)		—			—			—			(1,506	)
Share-based compensation		1			—			43			—			—			—			—			43
Distributions to noncontrolling interests		—			—			—			—			—			—			(13	)		(13	)
Balance as of June 30, 2022		656		$	66		$	7,060		$	3,107		$	(130	)	$	(13	)	$	136		$	10,226
Six Months Ended June 30, 2021
Balance as of December 31, 2020		382		$	38		$	2,766		$	208		$	(127	)	$	—		$	134		$	3,019
Net earnings		—			—			—			469			—			—			8			477
Other comprehensive earnings, net of tax		—			—			—			—			26			—			—			26
Restricted stock grants, net of cancellations		6			1			(1	)		—			—			—			—			—
Common stock repurchased		—			—			—			—			—			(40	)		—			(40	)
Common stock retired		(2	)		—			(40	)		—			—			40			—			—
Common stock dividends		—			—			—			(434	)		—			—			—			(434	)
Common stock issued		290			29			5,403			—			—			—			—			5,432
Share-based compensation		1			—			61			—			—			—			—			61
Contributions from noncontrolling interests		—			—			—			—			—			—			2			2
Distributions to noncontrolling interests		—			—			—			—			—			—			(8	)		(8	)
Balance as of June 30, 2021		677		$	68		$	8,189		$	243		$	(101	)	$	—		$	136		$	8,535

See accompanying notes to consolidated financial statements

9

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Summary 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 2021 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, 2022 and 2021 and Devon’s financial position as of June 30, 2022.

Devon and WPX completed an all-stock merger of equals on January 7, 2021. On the closing date of the Merger, each share of WPX common stock was automatically converted into the right to receive 0.5165 of a share of Devon common stock. The transaction has been accounted for using the acquisition method of accounting, with Devon being treated as the accounting acquirer. See Note 2 for further discussion.

Restricted Cash

As of June 30, 2022, Devon classified approximately $140 million of cash as restricted cash on the consolidated balance sheets for obligations retained related to the Barnett Shale assets and the Canadian business. Cash payments for these charges related to the Barnett assets and Canada business total approximately $10 million per quarter.

Variable Interest Entity

Cotton Draw Midstream, L.L.C. (“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

In conjunction with the Merger, Devon acquired an interest in Catalyst, which is a joint venture established among WPX, an affiliate of Howard Energy Partners, LLC (“HEP”) and certain other investors, to develop oil gathering and natural gas processing infrastructure in the Stateline area of the Delaware Basin. Under the terms of the arrangement, Devon and a holding company owned by the other joint venture investors each have a 50% voting interest in the joint venture legal entity, and HEP serves as the operator. Through 2038, Devon’s production from 50,000 net acres in the Stateline area of the Delaware Basin has been dedicated to Catalyst subject to fixed-fee oil gathering and natural gas processing agreements. The agreements do not include any minimum volume commitments. Devon accounts for the investment in Catalyst as an equity method investment.

Devon's investment in Catalyst is shown within investments on the consolidated balance sheets and Devon's share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

		Carrying Amount
Investments	% Interest	June 30, 2022		December 31, 2021
Catalyst	50%	$	354	$	368
Other	Various		69		34
Total		$	423	$	402

10

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

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,
	2022		2021		2022		2021
Oil	$	2,970	$	1,686	$	5,376	$	3,017
Gas		557		188		864		390
NGL		573		280		1,035		504
Oil, gas and NGL sales		4,100		2,154		7,275		3,911
Oil		952		610		1,728		1,109
Gas		322		134		531		281
NGL		422		222		757		397
Marketing and midstream revenues		1,696		966		3,016		1,787
Total revenues from contracts with customers	$	5,796	$	3,120	$	10,291	$	5,698

2. Acquisitions and Divestitures

WPX Merger

On January 7, 2021, Devon and WPX completed an all-stock merger of equals. WPX was an oil and gas exploration and production company with assets in the Delaware Basin in Texas and New Mexico and the Williston Basin in North Dakota. On the closing date of the Merger, each share of WPX common stock was automatically converted into the right to receive 0.5165 of a share of Devon common stock. No fractional shares of Devon’s common stock were issued in the Merger, and holders of WPX common stock instead received cash in lieu of fractional shares of Devon common stock, if any. Based on the closing price of Devon’s common stock on January 7, 2021, the total value of Devon common stock issued to holders of WPX common stock as part of this transaction was approximately $5.4 billion. The Merger was structured as a tax-free reorganization for United States federal income tax purposes. The final allocation of the total purchase price of WPX to the identifiable assets acquired and the liabilities assumed was finalized at December 31, 2021.

Acquisitions

In July 2022, Devon completed its acquisition of producing properties and leasehold interests located in the Williston Basin for cash consideration of approximately $830 million, net of purchase price adjustments. In the second quarter of 2022, Devon paid an $87 million cash deposit related to this acquisition, which is included within other current assets in the June 30, 2022 consolidated balance sheet and within acquisitions of property and equipment in the consolidated statement of cash flows.

Divestitures

In the first quarter of 2021, Devon completed the sale of non-core assets in the Rockies for proceeds of $9 million, net of purchase price adjustments, and recognized a $35 million gain related to the sale. Devon received $4 million in contingent earnout payments related to this transaction in the first quarter of 2022 with the potential for up to an additional $4 million in the future. The total estimated proved reserves associated with these divested assets was approximately 3 MMBoe.

Contingent Earnout Payments

Devon is entitled to contingent earnout payments associated with the sale of its Barnett Shale assets in 2020 with upside participation beginning at a $2.75 Henry Hub natural gas price or a $50 WTI oil price. The contingent payment period commenced on January 1, 2021 and has a term of four years. Devon received $65 million in contingent earnout payments related to this transaction in the first quarter of 2022 and could receive up to an additional $195 million in contingent earnout payments for the remaining performance periods depending on future commodity prices. The valuation of the future contingent earnout payments included within other current assets and other long-term assets in the June 30, 2022 consolidated balance sheet was approximately $65 million and $60 million, respectively. The value was derived utilizing a Monte Carlo valuation model and qualifies as a level 3 fair value measurement.

11

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

3.Derivative Financial 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, costless price collars and call options. Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility. As of June 30, 2022, Devon did not have any open interest rate swap contracts.

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 June 30, 2022, Devon neither held cash collateral of its counterparties nor posted cash collateral to its counterparties. Given Devon's current credit ratings and the terms of the underlying contracts, Devon is not currently required to post collateral to its counterparties with respect to its open derivative positions, and we would not be required to post any such collateral as a result of any change to the amount of Devon's net liability for such positions.

Commodity Derivatives

As of June 30, 2022, 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 (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q3-Q4 2022		35,000	$	44.61		36,500	$	57.96	$	78.08
Q1-Q4 2023		—	$	—		6,193	$	61.32	$	97.65

	Oil Basis Swaps
Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q3-Q4 2022	BRENT		1,000	$	(7.75	)
Q3-Q4 2022	NYMEX Roll		29,000	$	0.45
Q1-Q4 2023	Midland Sweet		12,296	$	0.52

12

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

As of June 30, 2022, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index and the end of month NYMEX index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.

	Price Swaps (1)				Price Collars (2)
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q3-Q4 2022		117,500	$	3.08		193,000	$	3.05	$	4.55
Q1-Q4 2023		8,658	$	5.24		96,436	$	3.55	$	7.63

(1)Related to the 2022 open positions, 17,500 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $5.25 and 100,000 MMBtu/d settle against the end of month NYMEX index at an average price of $2.70. All 2023 open positions settle against the Inside FERC first of month Henry Hub index.

(2)Price collars settle against the Inside FERC first of month Henry Hub Index.

	Natural Gas Basis Swaps
Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q3-Q4 2022	El Paso Natural Gas		50,000	$	(0.85	)
Q3-Q4 2022	Houston Ship Channel		40,000	$	(0.15	)
Q3-Q4 2022	WAHA		70,000	$	(0.57	)
Q1-Q4 2023	El Paso Natural Gas		125,000	$	(1.59	)
Q1-Q4 2023	Houston Ship Channel		50,000	$	(0.13	)
Q1-Q4 2023	WAHA		70,000	$	(0.51	)
Q1-Q4 2024	WAHA		40,000	$	(0.51	)

As of June 30, 2022, Devon did not have any open NGL positions.

Financial Statement Presentation

All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the consolidated balance sheets. Amounts related to contracts allowed to be netted upon payment subject to a master netting arrangement with the same counterparty are reported on a net basis in the consolidated balance sheets. The tables below present a summary of these positions as of June 30, 2022 and December 31, 2021.

	June 30, 2022									December 31, 2021
	Gross Fair Value			Amounts Netted			Net Fair Value			Gross Fair Value			Amounts Netted			Net Fair Value			Balance Sheet Classification
Commodity derivatives:
Short-term derivative asset	$	37		$	(26	)	$	11		$	6		$	(4	)	$	2		Other current assets
Long-term derivative asset		31			(1	)		30			6			—			6		Other long-term assets
Short-term derivative liability		(672	)		26			(646	)		(579	)		4			(575	)	Other current liabilities
Long-term derivative liability		(2	)		1			(1	)		(2	)		—			(2	)	Other long-term liabilities
Total derivative liability	$	(606	)	$	—		$	(606	)	$	(569	)	$	—		$	(569	)

4.Share-Based Compensation

In the second quarter of 2022, Devon's stockholders approved the 2022 Plan. The 2022 Plan replaces the 2017 Plan. From the effective date of the 2022 Plan, no further awards may be made under the 2017 Plan; however, awards previously granted will continue to be governed by the terms of the respective award documents. The 2022 Plan authorizes the grant of nonqualified and incentive stock options, restricted stock awards or units and stock appreciation rights to eligible employees. Restricted stock awards or restricted stock units granted under the 2022 Plan may be subject to performance-based conditions. The 2022 Plan also authorizes the grant of nonqualified stock options, restricted stock awards or units and stock appreciation rights to non-employee directors. To

13

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

calculate the number of shares that may be granted in awards under the 2022 Plan, options and stock appreciation rights represent one share and other awards represent 1.74 shares.

The table below presents the share-based compensation expense included in Devon’s accompanying consolidated statements of comprehensive earnings. The vesting for certain share-based awards was accelerated in 2021 in conjunction with the reduction of workforce described in Note 5 and is included in restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

	Six Months Ended June 30,
	2022		2021
G&A	$	42	$	40
Exploration expenses		1		—
Restructuring and transaction costs		—		21
Total	$	43	$	61
Related income tax benefit	$	26	$	—

Under its approved long-term incentive plan, Devon grants share-based awards to its employees. The following table presents a summary of Devon’s unvested restricted stock awards and units and performance share units granted under the plan.

	Restricted Stock Awards & Units					Performance Share Units
	Awards/Units			Weighted Average Grant-Date Fair Value		Units				Weighted Average Grant-Date Fair Value
	(Thousands, except fair value data)
Unvested at 12/31/21		7,656		$	22.15		2,076			$	24.12
Granted		1,296		$	52.98		964			$	44.05
Vested		(3,104	)	$	23.00		(1,194	)		$	28.91
Forfeited		(59	)	$	33.03		(5	)		$	68.68
Unvested at 6/30/22		5,789		$	28.49		1,841		(1)	$	31.33

(1)A maximum of 3.7 million common shares could be awarded based upon Devon’s final TSR ranking.

The following table presents the assumptions related to the performance share units granted in 2022, as indicated in the previous summary table. The grants in the previous summary table also include the impact of performance share units granted in a prior year that vested higher than 100% of target due to Devon's TSR performance compared to our peers.

	2022
Grant-date fair value	$	68.68
Risk-free interest rate		1.81	%
Volatility factor		70.1	%
Contractual term (years)		2.89

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units as of June 30, 2022.

	Restricted Stock		Performance
	Awards/Units		Share Units
Unrecognized compensation cost	$	109	$	27
Weighted average period for recognition (years)		2.7		1.9

14

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

5. Restructuring and Transaction Costs

The following table summarizes Devon’s restructuring and transaction costs.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Restructuring costs	$	—	$	23	$	—	$	166
Transaction costs		—		—		—		46
Total costs	$	—	$	23	$	—	$	212

In conjunction with the Merger closing, Devon recognized $166 million of restructuring expenses during the first six months of 2021 related to employee severance and termination benefits, settlements and curtailments from defined retirement benefits and contract terminations. Of these expenses, $40 million and $21 million resulted from settlements and curtailments of defined retirement benefits and accelerated vesting of share-based grants, respectively, which were non-cash charges. Additionally, in conjunction with the Merger closing, Devon recognized $46 million of transaction costs primarily comprised of bank, legal and accounting fees.

The following table summarizes Devon’s restructuring liabilities.

	Other			Other
	Current			Long-term
	Liabilities			Liabilities			Total
Balance as of December 31, 2021	$	38		$	111		$	149
Changes related to prior years' restructurings		(10	)		(12	)		(22	)
Balance as of June 30, 2022	$	28		$	99		$	127
Balance as of December 31, 2020	$	35		$	137		$	172
Changes related to prior years' restructurings		48			(15	)		33
Balance as of June 30, 2021	$	83		$	122		$	205

6. Other, Net

The following table summarizes Devon's other expenses (income) presented in the accompanying consolidated comprehensive statement of earnings.

	Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021			2022			2021
Estimated future obligation under a performance guarantee	$	—	$	(18	)	$	(96	)	$	(18	)
Ukraine charitable pledge		—		—			20			—
Asset retirement obligation accretion		6		7			13			14
Severance and other non-income tax refunds		—		(3	)		(3	)		(39	)
Other		4		—			15			—
Total	$	10	$	(14	)	$	(51	)	$	(43	)

The first six months of 2022 includes a $96 million benefit related to the revision of a future obligation under a performance guarantee liability for previously divested assets. Due to improved commodity prices and market conditions, the purchaser of these assets was able to fully satisfy a $35 million obligation due in the first quarter of 2022. Further, during the first quarter of 2022, Devon also reduced the estimated future exposure of the performance guarantee by $61 million based on probability-weighted cash flows for the remainder of the contract term of four years. Additionally, the first six months of 2021 included an $18 million benefit related to the revision of a future obligation under a performance guarantee liability for which the purchaser of these assets was able to partially satisfy an obligation.

The first six months of 2022 also includes a $20 million pledge for humanitarian relief for the Ukrainian people and surrounding countries supporting refugees.

During the first six months of 2021, Devon received severance and other non-income tax refunds of $39 million.

15

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

7. Income Taxes

The following table presents Devon’s total income tax expense (benefit) and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Earnings before income taxes	$	2,495	$	304	$	3,757	$	272
Current income tax expense	$	252	$	19	$	355	$	14
Deferred income tax expense (benefit)		305		24		469		(219	)
Total income tax expense (benefit)	$	557	$	43	$	824	$	(205	)

U.S. statutory income tax rate	21	%	21	%	21	%	21	%
State income taxes	1	%	0	%	1	%	1	%
Subsidiary reorganization	0	%	6	%	0	%	7	%
Deferred tax asset valuation allowance	0	%	(19	%)	0	%	(116	%)
Other	0	%	6	%	0	%	12	%
Effective income tax rate	22	%	14	%	22	%	(75	%)

Prior to December 31, 2021, Devon maintained a valuation allowance against all U.S. federal deferred tax assets. Devon recognized approximately $250 million of deferred tax liabilities to account for the Merger. The recognition of these deferred tax liabilities caused a decrease to Devon’s net deferred tax assets and a corresponding decrease to the valuation allowance Devon had recognized on its U.S. federal deferred tax assets in the first quarter of 2021.

Due to significant increases in commodity pricing and projections of future income, in the fourth quarter of 2021, Devon reassessed its evaluation of the realizability of deferred tax assets in future years and determined that a U.S. federal valuation allowance was no longer necessary at December 31, 2021.

In the fourth quarter of 2020, Devon recorded a deferred tax asset representing the deductible outside basis difference in its investment in a consolidated subsidiary. In the second quarter of 2021, Devon realized this deferred tax asset, increasing its U.S. federal net operating loss carryforwards by $1.8 billion.

In the table above, the "other" effect for 2021 is composed primarily of permanent differences related to costs incurred in connection with the Merger. Such items represent $18 million of income tax expense in the first six months of 2021.

Pursuant to the tax sharing agreement with The Williams Companies, Inc. ("Williams") assumed in the Merger, Devon has remained responsible for the tax from audit adjustments related to the WPX business for periods prior to WPX’s spin-off from Williams on December 31, 2011. The 2011 consolidated tax filing by Williams was audited by the Internal Revenue Service (“IRS”) during which the IRS proposed adjustments related to the WPX business. After a lengthy appeals process, these matters were effectively settled with the IRS during the second quarter of 2022 upon review and approval by the Joint Committee on Taxation. Accordingly, Devon believes these matters have now been effectively settled with no material impacts to Devon.

16

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

8.Net Earnings Per Share

The following table reconciles net earnings and weighted-average common shares outstanding used in the calculations of basic and diluted net earnings per share.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net earnings:
Net earnings	$	1,932		$	256		$	2,921		$	469
Attributable to participating securities		(17	)		(3	)		(33	)		(5	)
Basic and diluted earnings	$	1,915		$	253		$	2,888		$	464
Common shares:
Common shares outstanding - total		658			677			661			666
Attributable to participating securities		(6	)		(6	)		(7	)		(6	)
Common shares outstanding - basic		652			671			654			660
Dilutive effect of potential common shares issuable		2			2			2			2
Common shares outstanding - diluted		654			673			656			662
Net earnings per share:
Basic	$	2.94		$	0.38		$	4.42		$	0.70
Diluted	$	2.93		$	0.38		$	4.40		$	0.70

9. Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) consist of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Pension and postretirement benefit plans:
Beginning accumulated pension and postretirement benefits	$	(131	)	$	(104	)	$	(132	)	$	(127	)
Recognition of net actuarial loss and prior service cost in earnings (1)		2			—			3			1
Settlement of pension benefits (2)		—			3			—			18
Other (3)		—			—			—			7
Income tax expense		(1	)		—			(1	)		—
Accumulated other comprehensive loss, net of tax	$	(130	)	$	(101	)	$	(130	)	$	(101	)

(1)Recognition of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost, which is a component of other, net in the accompanying consolidated statements of comprehensive earnings.

(2)The Merger triggered settlement payments to certain plan participants, and the expense associated with this settlement is recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

(3)Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.

17

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

10.Supplemental Information to Statements of Cash Flows

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Changes in assets and liabilities, net:
Accounts receivable	$	(346	)	$	(100	)	$	(803	)	$	(163	)
Other current assets		(85	)		88			(21	)		78
Other long-term assets		9			(14	)		75			(24	)
Accounts payable and revenues and royalties payable		540			72			787			88
Other current liabilities		93			52			101			19
Other long-term liabilities		(13	)		(81	)		(84	)		(108	)
Total	$	198		$	17		$	55		$	(110	)
Supplementary cash flow data:
Interest paid	$	85		$	105		$	185		$	219
Income taxes paid (refunded)	$	133		$	(106	)	$	110		$	(112	)

11.Accounts Receivable

Components of accounts receivable include the following:

	June 30, 2022			December 31, 2021
Oil, gas and NGL sales	$	1,520		$	984
Joint interest billings		192			158
Marketing and midstream revenues		602			370
Other		42			38
Gross accounts receivable		2,356			1,550
Allowance for doubtful accounts		(8	)		(7	)
Net accounts receivable	$	2,348		$	1,543

12. Property, Plant and Equipment

The following table presents the aggregate capitalized costs related to Devon’s oil and gas and non-oil and gas activities.

	June 30, 2022			December 31, 2021
Property and equipment:
Proved	$	39,216		$	38,051
Unproved and properties under development		937			1,081
Total oil and gas		40,153			39,132
Less accumulated DD&A		(26,565	)		(25,596	)
Oil and gas property and equipment, net		13,588			13,536
Other property and equipment		2,224			2,139
Less accumulated DD&A		(699	)		(667	)
Other property and equipment, net (1)		1,525			1,472
Property and equipment, net	$	15,113		$	15,008

(1)$122 million and $111 million related to CDM in 2022 and 2021, respectively.

18

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

13.Debt and Related Expenses

See below for a summary of debt instruments and balances. The notes and debentures are senior, unsecured obligations of Devon.

	June 30, 2022			December 31, 2021
8.25% due August 1, 2023	$	242		$	242
5.25% due September 15, 2024		472			472
5.85% due December 15, 2025		485			485
7.50% due September 15, 2027		73			73
5.25% due October 15, 2027		390			390
5.875% due June 15, 2028		325			325
4.50% due January 15, 2030		585			585
7.875% due September 30, 2031		675			675
7.95% due April 15, 2032		366			366
5.60% due July 15, 2041		1,250			1,250
4.75% due May 15, 2042		750			750
5.00% due June 15, 2045		750			750
Net premium on debentures and notes		126			149
Debt issuance costs		(28	)		(30	)
Total long-term debt	$	6,461		$	6,482

Retirement of Senior Notes

In the first six months of 2021, Devon redeemed $43 million of the 6.00% senior notes due 2022, $175 million of the 5.875% senior notes due 2028, $315 million of the 4.50% senior notes due 2030, $210 million of the 5.35% senior notes due 2027 and $500 million of the 5.75% senior notes due 2026. In the first six months of 2021, Devon recognized $30 million of gains on early retirement of debt, consisting of $89 million of non-cash premium accelerations, partially offset by $59 million of cash retirement costs. The gain on early retirement is included in net financing costs in the consolidated comprehensive statements of earnings.

Credit Lines

Devon has a $3.0 billion Senior Credit Facility. As of June 30, 2022, Devon had no outstanding borrowings under the Senior Credit Facility and had issued $2 million in outstanding letters of credit under this facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon’s ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65%. Under the terms of the credit agreement, total capitalization is adjusted to add back non-cash financial write-downs such as impairments. As of June 30, 2022, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 23.9%.

Net Financing Costs

The following schedule includes the components of net financing costs.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Interest based on debt outstanding	$	93		$	98		$	185		$	203
Gain on early retirement of debt		—			(10	)		—			(30	)
Interest income		(2	)		—			(3	)		(1	)
Other		(7	)		(8	)		(13	)		(15	)
Total net financing costs	$	84		$	80		$	169		$	157

19

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

14. Leases

The following table presents Devon’s right-of-use assets and lease liabilities as of June 30, 2022 and December 31, 2021.

	June 30, 2022						December 31, 2021
	Finance		Operating		Total		Finance		Operating		Total
Right-of-use assets	$	207	$	29	$	236	$	211	$	24	$	235
Lease liabilities:
Current lease liabilities (1)	$	8	$	18	$	26	$	8	$	18	$	26
Long-term lease liabilities		248		11		259		247		5		252
Total lease liabilities	$	256	$	29	$	285	$	255	$	23	$	278

(1) Current lease liabilities are included in other current liabilities on the consolidated balance sheets.

Devon’s right-of-use operating lease assets are for certain leases related to real estate, drilling rigs and other equipment related to the exploration, development and production of oil and gas. Devon’s right-of-use financing lease assets are related to real estate.

15.Asset Retirement Obligations

The following table presents the changes in Devon’s asset retirement obligations.

	Six Months Ended June 30,
	2022			2021
Asset retirement obligations as of beginning of period	$	485		$	369
Assumed WPX obligations		—			98
Liabilities incurred		15			20
Liabilities settled and divested		(9	)		(47	)
Revision of estimated obligation		(35	)		11
Accretion expense on discounted obligation		13			14
Asset retirement obligations as of end of period		469			465
Less current portion		17			15
Asset retirement obligations, long-term	$	452		$	450

During the first six months of 2022, Devon reduced its asset retirement obligations by $35 million primarily due to extended retirement dates for oil and gas assets, partially offset by inflation-driven increases to current settlement costs.

16.Stockholders’ Equity

Share Repurchases

In November 2021, Devon authorized a share repurchase program of $1.0 billion with a December 31, 2022 expiration date. In February 2022, the Board of Directors authorized an expansion of the share repurchase program to $1.6 billion, and in May 2022, authorized a further expansion to $2.0 billion and extended the expiration date to May 4, 2023. The table below provides information regarding purchases of Devon’s common stock under the $2.0 billion share repurchase program (shares in thousands).

	Total Number of Shares Purchased		Dollar Value of Shares Purchased		Average Price Paid per Share
2021:
Fourth quarter		13,983	$	589	$	42.15
2022:
First quarter		3,979	$	230	$	57.74
Second quarter		5,052		318	$	63.07
Total plan		23,014	$	1,137	$	49.44

20

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

Dividends

Upon completion of the Merger, Devon continued its commitment to pay a quarterly dividend at a fixed rate and instituted a variable quarterly dividend, which is dependent on quarterly cash flows, among other factors. Devon raised its fixed quarterly dividend by 45%, to $0.16 per share, beginning in the first quarter of 2022 and again by 13%, to $0.18 per share, beginning in the third quarter of 2022. The following table summarizes Devon’s fixed and variable dividends for the first six months of 2022 and 2021, respectively.

	Fixed		Variable		Total		Rate Per Share
2022:
First quarter	$	109	$	558	$	667	$	1.00
Second quarter		105		725		830	$	1.27
Total year-to-date	$	214	$	1,283	$	1,497
2021:
First quarter	$	76	$	127	$	203	$	0.30
Second quarter		75		154		229	$	0.34
Total year-to-date	$	151	$	281	$	432

In August 2022, Devon announced a cash dividend in the amount of $1.55 per share payable in the third quarter of 2022. The dividend consists of an $0.18 per share fixed quarterly dividend and a $1.37 per share variable quarterly dividend and will total approximately $1.0 billion.

Noncontrolling Interests

The noncontrolling interests’ share of CDM’s net earnings and the contributions from and distributions to the noncontrolling interests are presented as components of equity.

17.Commitments and Contingencies

Devon is party to various legal actions arising in connection with its business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to likely involve future amounts that would be material to Devon’s financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates.

Royalty Matters

Numerous oil and natural gas producers and related parties, including Devon, have been named in various lawsuits alleging royalty underpayments. Devon is currently named as a defendant in a number of such lawsuits, including some lawsuits in which the plaintiffs seek to certify classes of similarly situated plaintiffs. Among the allegations typically asserted in these suits are claims that Devon used below-market prices, made improper deductions, paid royalty proceeds in an untimely manner without including required interest, used improper measurement techniques and entered into gas purchase and processing arrangements with affiliates that resulted in underpayment of royalties in connection with oil, natural gas and NGLs produced and sold. Devon is also involved in governmental agency proceedings and royalty audits and is subject to related contracts and regulatory controls in the ordinary course of business, some that may lead to additional royalty claims. As of June 30, 2022, Devon has accrued approximately $25 million in other current liabilities pertaining to such royalty matters.

Environmental and Climate Change Matters

Devon’s business is subject to numerous federal, state, tribal and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal fines and penalties, as well as remediation costs. Although Devon believes that it is in substantial compliance with applicable environmental laws and regulations and that continued compliance with existing requirements will not have a material adverse impact on its business, there can be no assurance that this will continue in the future.

Beginning in 2013, various parishes in Louisiana filed suit against numerous oil and gas companies, including Devon, alleging that the companies’ operations and activities in certain fields violated the State and Local Coastal Resource Management Act of 1978, as amended, and caused substantial environmental contamination, subsidence and other environmental damages to land and water

21

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

bodies located in the coastal zone of Louisiana. The plaintiffs’ claims against Devon relate primarily to the operations of several of Devon’s corporate predecessors. The plaintiffs seek, among other things, payment of the costs necessary to clear, re-vegetate and otherwise restore the allegedly impacted areas. Although Devon cannot predict the ultimate outcome of these matters, Devon intends to vigorously defend against these claims.

The State of Delaware and various municipalities and other governmental and private parties in California have filed legal proceedings against numerous oil and gas companies, including Devon, seeking relief to abate alleged impacts of climate change. These proceedings include far-reaching claims for monetary damages and injunctive relief. Although Devon cannot predict the ultimate outcome of these matters, Devon intends to vigorously defend against the proceedings.

Other Indemnifications and Legacy Matters

Pursuant to various sale agreements relating to divested businesses and assets, Devon has indemnified various purchasers against liabilities that they may incur with respect to the businesses and assets acquired from Devon. Additionally, federal, state and other laws in areas of former operations may require previous operators (including corporate successors of previous operators) to perform or make payments in certain circumstances where the current operator may no longer be able to satisfy the applicable obligation. Such obligations may include plugging and abandoning wells, removing production facilities or performing requirements under surface agreements in existence at the time of disposition.

In November 2020, the Department of the Interior, Bureau of Safety and Environmental Enforcement, ordered several oil and gas operators, including Devon, to perform decommissioning and reclamation activities related to two California offshore oil and gas production platforms and related facilities. The current operator and owner of the platforms contends that it does not have the financial ability to perform these obligations and relinquished the related federal lease in October 2020. In response to the apparent insolvency of the current operator, the government has ordered the former operators and alleged former lease record title owners to decommission the platforms and related facilities. The government contends that an alleged corporate predecessor of Devon owned a partial interest in the subject lease and platforms. Although Devon cannot predict the ultimate outcome of this matter, Devon denies any obligation to decommission the subject platforms, has appealed the order, and believes any decommissioning obligation related to the subject platforms should be assumed by others.

22

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

(Unaudited)

18.Fair Value Measurements

The following table provides carrying value and fair value measurement information for certain of Devon’s financial assets and liabilities. The carrying values of cash, accounts receivable, other current receivables, accounts payable, other current payables, accrued expenses and lease liabilities included in the accompanying consolidated balance sheets approximated fair value at June 30, 2022 and December 31, 2021, as applicable. Therefore, such financial assets and liabilities are not presented in the following table.

							Fair Value Measurements Using:
	Carrying			Total Fair			Level 1		Level 2			Level 3
	Amount			Value			Inputs		Inputs			Inputs
June 30, 2022 assets (liabilities):
Cash equivalents	$	3,063		$	3,063		$	3,063	$	—		$	—
Commodity derivatives	$	41		$	41		$	—	$	41		$	—
Commodity derivatives	$	(647	)	$	(647	)	$	—	$	(647	)	$	—
Debt	$	(6,461	)	$	(6,440	)	$	—	$	(6,440	)	$	—
Contingent earnout payments	$	129		$	129		$	—	$	—		$	129
December 31, 2021 assets (liabilities):
Cash equivalents	$	1,421		$	1,421		$	1,421	$	—		$	—
Commodity derivatives	$	8		$	8		$	—	$	8		$	—
Commodity derivatives	$	(577	)	$	(577	)	$	—	$	(577	)	$	—
Debt	$	(6,482	)	$	(7,644	)	$	—	$	(7,644	)	$	—
Contingent earnout payments	$	184		$	184		$	—	$	—		$	184

The following methods and assumptions were used to estimate the fair values in the table above.

Level 1 Fair Value Measurements

Cash equivalents – Amounts consist primarily of money market investments and the fair value approximates the carrying value.

Level 2 Fair Value Measurements

Commodity derivatives – The fair value of commodity derivatives is estimated using internal discounted cash flow calculations based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.

Debt – Devon’s debt instruments do not consistently trade actively in an established market. The fair values of its debt are estimated based on rates available for debt with similar terms and maturity when active trading is not available.

Level 3 Fair Value Measurements

Contingent Earnout Payments – Devon has the right to receive contingent consideration related to the Barnett and non-core Rockies asset divestitures based on future oil and gas prices. These values were derived using a Monte Carlo valuation model and qualify as a level 3 fair value measurement. For additional information, see Note 2.

23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis addresses material changes in our results of operations for the three-month and six-month periods ended June 30, 2022, compared to previous periods and in our financial condition and liquidity since December 31, 2021. For information regarding our critical accounting policies and estimates, see our 2021 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Executive Overview

The Merger has helped us become a leading unconventional oil producer in the U.S., with an asset base underpinned by premium acreage in the economic core of the Delaware Basin. This strategic combination accelerated our transition to a cash-return business model, including the implementation of a fixed plus variable dividend strategy. In July 2022, we acquired additional producing properties and leasehold interests in the Williston Basin that are complementary to our existing acreage, offer operational synergies and add high-quality inventory. We remain focused on building economic value by executing on our strategic priorities of moderating growth, emphasizing capital efficiencies, maintaining and improving operational and corporate synergies, reducing reinvestment rates to maximize free cash flow, maintaining low leverage, delivering cash returns to our shareholders and pursuing ESG excellence. Our recent performance highlights for these priorities include the following items:

•Second quarter oil production totaled 300 MBbls/d, exceeding our plan by 3%.

•As of June 30, 2022, completed approximately 57% of our authorized $2.0 billion share repurchase program, with approximately 23 million of our common shares repurchased for approximately $1.1 billion, or $49.44 per share since inception of the plan.

•Exited the second quarter with $6.5 billion of liquidity, including $3.5 billion of cash, with no debt maturities until the third quarter of 2023.

•Generated $2.7 billion of operating cash flow in the second quarter of 2022 and $4.5 billion in the first six months of 2022.

•Announced a 13% increase to the fixed dividend beginning in the third quarter of 2022.

•Including variable dividends, paid dividends of approximately $1.5 billion in the first six months of 2022 and have declared $1.0 billion of dividends to be paid in the third quarter of 2022.

We remain committed to capital discipline and delivering the objectives that underpin our current plan. Those objectives prioritize value creation through moderated capital investment and production growth, particularly with a view of the steep backwardation in commodity prices, supply chain constraints and the economic uncertainty arising from recent geopolitical events.

Commodity prices strengthened throughout 2021 and oil prices have continued to remain high in the first six months of 2022, which has significantly improved our earnings and cash flow generation. The increase in commodity prices during 2021 was primarily driven by increased demand resulting from the initial recovery from the COVID-19 pandemic, as well as OPEC+ and other oil and natural gas producers not rapidly increasing production levels. The military conflict between Russia and Ukraine and related economic sanctions imposed on Russia has further exacerbated supply shortages, causing oil prices to increase even more during the first six months of 2022.

24

Trends of our quarterly earnings, operating cash flow, EBITDAX and capital expenditures are shown below. “Core earnings” and “EBITDAX” are financial measures not prepared in accordance with GAAP. For a description of these measures, including reconciliations to the comparable GAAP measures, see “Non-GAAP Measures” in this Item 2.

 

Our earnings increased from the first quarter of 2022 to the second quarter of 2022 primarily due to higher commodity prices as well as higher sold volumes resulting from winter weather downtime experienced in the first quarter of 2022. WTI and Henry Hub increased 15% and 45%, respectively, from the first quarter of 2022 to the second quarter of 2022. This contributed to a 19% increase in our unhedged combined realized prices.

Our net earnings in recent quarters have been significantly impacted by non-cash adjustments to the value of our commodity hedges. Net earnings in the second quarter of 2021 and the first quarter of 2022 each included a hedge valuation loss, net of tax of $0.3 billion. Net earnings in the fourth quarter of 2021 and second quarter of 2022 each included a hedge valuation gain, net of tax of $0.4 billion and $0.2 billion, respectively. Excluding these amounts, our core earnings have been more stable over recent quarters and continue to trend upward while remaining sensitive to volatile commodity prices.

 

Like earnings, our operating cash flow is sensitive to volatile commodity prices. Our cash flow and EBITDAX have continued to trend upward primarily due to improved commodity prices and overall market conditions as well as strong operating performance.

We exited the second quarter of 2022 with $6.5 billion of liquidity, comprised of $3.5 billion of cash and $3.0 billion of available credit under our Senior Credit Facility. We currently have $6.5 billion of debt outstanding with no maturities until August 2023. We currently have approximately 25% and 30% of our anticipated remaining 2022 oil and gas production hedged, respectively.

25

These contracts consist of collars and swaps based off the WTI oil benchmark and the Henry Hub and NYMEX last day natural gas indices. Additionally, we have entered into regional basis swaps in an effort to protect price realizations across our portfolio.

As commodity prices and our operating performance strengthen and bolster our financial condition, we have authorized opportunistic repurchases of up to $2.0 billion of our common shares with an expiration date of May 4, 2023. We repurchased approximately 5.1 million shares in the second quarter of 2022 for approximately $318 million, or $63.07 per share. As of June 30, 2022, we have repurchased approximately 23.0 million shares for approximately $1.1 billion, or $49.44 per share, since the inception of the program. Additionally, we continue funding our fixed plus variable dividends, which totaled $1.5 billion in the first six months of 2022. We recently declared a dividend payable in the third quarter of 2022 for $1.0 billion and increased our fixed dividend by 13% beginning in the third quarter of 2022.

Results of Operations

The following graphs, discussion and analysis are intended to provide an understanding of our results of operations and current financial condition. To facilitate the review, these numbers are being presented before consideration of noncontrolling interests.

Q2 2022 vs. Q1 2022

Our second quarter 2022 net earnings were $1.9 billion, compared to net earnings of $1.0 billion for the first quarter of 2022. The graph below shows the change in net earnings from the first quarter of 2022 to the second quarter of 2022. The material changes are further discussed by category on the following pages.

 

Production Volumes

	Q2 2022		% of Total			Q1 2022		Change
Oil (MBbls/d)
Delaware Basin		222		74	%		209		6	%
Anadarko Basin		14		5	%		14		-5	%
Williston Basin		27		9	%		32		-13	%
Eagle Ford		19		6	%		17		9	%
Powder River Basin		14		5	%		12		12	%
Other		4		1	%		4		11	%
Total		300		100	%		288		4	%

	Q2 2022		% of Total			Q1 2022		Change
Gas (MMcf/d)
Delaware Basin		618		64	%		561		10	%
Anadarko Basin		212		22	%		210		1	%
Williston Basin		52		6	%		54		-4	%
Eagle Ford		60		6	%		61		-2	%
Powder River Basin		18		2	%		19		-3	%
Other		1		0	%		1		13	%
Total		961		100	%		906		6	%

26

	Q2 2022		% of Total			Q1 2022		Change
NGLs (MBbls/d)
Delaware Basin		111		71	%		92		21	%
Anadarko Basin		25		16	%		25		-2	%
Williston Basin		9		6	%		8		17	%
Eagle Ford		9		6	%		9		10	%
Powder River Basin		2		1	%		2		2	%
Other		—		0	%		—	N/M
Total		156		100	%		136		15	%

	Q2 2022		% of Total			Q1 2022		Change
Combined (MBoe/d)
Delaware Basin		436		71	%		394		11	%
Anadarko Basin		74		12	%		75		-1	%
Williston Basin		45		7	%		48		-6	%
Eagle Ford		38		6	%		36		6	%
Powder River Basin		19		3	%		18		8	%
Other		4		1	%		4		-4	%
Total		616		100	%		575		7	%

From the first quarter of 2022 to the second quarter of 2022, the change in volumes contributed to a $224 million increase in earnings. The increase in volumes was primarily due to new well activity in the Delaware Basin as well as winter weather downtime experienced in the first quarter of 2022. We expect volumes to increase approximately 15 MBoe/d in the third quarter of 2022 due to the acquired Williston Basin assets in July 2022.

Realized Prices

	Q2 2022			Realization	Q1 2022			Change
Oil (per Bbl)
WTI index	$	108.70			$	94.45			15	%
Realized price, unhedged	$	108.93		100%	$	92.94			17	%
Cash settlements	$	(13.13	)		$	(11.32	)
Realized price, with hedges	$	95.80		88%	$	81.62			17	%

	Q2 2022			Realization	Q1 2022			Change
Gas (per Mcf)
Henry Hub index	$	7.17			$	4.96			45	%
Realized price, unhedged	$	6.37		89%	$	3.77			69	%
Cash settlements	$	(1.31	)		$	(0.62	)
Realized price, with hedges	$	5.06		71%	$	3.15			61	%

	Q2 2022		Realization	Q1 2022		Change
NGLs (per Bbl)
WTI index	$	108.70		$	94.45		15	%
Realized price, unhedged	$	40.28	37%	$	37.76		7	%
Cash settlements	$	—		$	—
Realized price, with hedges	$	40.28	37%	$	37.76		7	%

	Q2 2022			Q1 2022			Change
Combined (per Boe)
Realized price, unhedged	$	73.13		$	61.40			19	%
Cash settlements	$	(8.43	)	$	(6.65	)
Realized price, with hedges	$	64.70		$	54.75			18	%

From the first quarter of 2022 to the second quarter of 2022, realized prices contributed to a $701 million increase in earnings. Unhedged realized oil, gas and NGL prices increased primarily due to higher WTI, Henry Hub and Mont Belvieu index prices. The increase in index prices was partially offset by hedge cash settlements related to oil and gas commodities.

We currently have approximately 25% and 30% of our anticipated remaining 2022 oil and gas production hedged, respectively.

27

Hedge Settlements

	Q2 2022			Q1 2022			Change
	Q
Oil	$	(358	)	$	(293	)		-22	%
Natural gas		(114	)		(51	)		-124	%
Total cash settlements (1)	$	(472	)	$	(344	)		-37	%

(1)Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

Cash settlements as presented in the tables above represent realized gains or losses related to the instruments described in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Production Expenses

	Q2 2022			Q1 2022			Change
LOE	$	255		$	224			14	%
Gathering, processing & transportation		177			161			10	%
Production taxes		278			214			30	%
Property taxes		19			19			0	%
Total	$	729		$	618			18	%
Per Boe:
LOE	$	4.56		$	4.33			5	%
Gathering, processing & transportation	$	3.15		$	3.11			2	%
Percent of oil, gas and NGL sales:
Production taxes		6.8	%		6.7	%		0	%

Production expenses increased from the first quarter of 2022 to the second quarter of 2022 primarily due to higher volumes. Production taxes also increased due to higher commodity prices.

Field-Level Cash Margin

The table below presents the field-level cash margin for each of our operating areas. Field-level cash margin is computed as oil, gas and NGL sales less production expenses and is not a measure defined by GAAP. A reconciliation to the comparable GAAP measures is found in “Non-GAAP Measures” in this Item 2. The changes in production volumes, realized prices and production expenses, shown above, had the following impact on our field-level cash margins by asset.

	Q2 2022		$ per BOE		Q1 2022		$ per BOE
Field-level cash margin (Non-GAAP)
Delaware Basin	$	2,511	$	63.32	$	1,877	$	52.99
Anadarko Basin		277	$	41.15		204	$	30.31
Williston Basin		224	$	54.56		207	$	47.65
Eagle Ford		206	$	59.71		158	$	48.92
Powder River Basin		119	$	68.41		86	$	54.32
Other		34	N/M			25	N/M
Total	$	3,371	$	60.12	$	2,557	$	49.45

DD&A

	Q2 2022		Q1 2022		Change
Oil and gas per Boe	$	9.02	$	8.95		1	%
Oil and gas	$	506	$	463		9	%
Other property and equipment		22		26		-16	%
Total	$	528	$	489		8	%

DD&A increased in the second quarter of 2022 primarily due to higher volumes resulting from new well activity and winter weather downtime experienced in the first quarter of 2022.

28

General and Administrative Expense

	Q2 2022		Q1 2022		Change
G&A per Boe	$	1.51	$	1.82		-17	%
Labor and benefits	$	44	$	58		-24	%
Non-labor		40		36		11	%
Total	$	84	$	94		-11	%

G&A decreased in the second quarter of 2022 due to lower labor and benefit costs. The G&A per BOE rate also decreased in the second quarter of 2022 due to higher volumes resulting from new well activity and winter weather downtime experienced in the first quarter of 2022.

Other Items

	Q2 2022			Q1 2022			Change in earnings
Commodity hedge valuation changes (1)	$	302		$	(339	)	$	641
Marketing and midstream operations		(4	)		(4	)		—
Exploration expenses		10			2			(8	)
Asset dispositions		(14	)		(1	)		13
Net financing costs		84			85			1
Other, net		10			(61	)		(71	)
							$	576

(1)Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

We recognize fair value changes on our oil, gas and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. For additional information, see Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

For discussion on other, net, see Note 6 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Income Taxes

	Q2 2022			Q1 2022
Current expense	$	252		$	103
Deferred expense		305			164
Total expense	$	557		$	267
Effective income tax rate		22	%		21	%

For discussion on income taxes, see Note 7 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

29

June 30, YTD 2022 vs. June 30, YTD 2021

Our six months ended June 30, 2022 net earnings were $2.9 billion, compared to net earnings of $477 million for the first six months ended June 30, 2021. The graph below shows the change in net earnings from the six months ended June 30, 2021 to the six months ended June 30, 2022. The material changes are further discussed by category on the following pages.

 

Production Volumes

	Six Months Ended June 30,
	2022		% of Total			2021		Change
Oil (MBbls/d)
Delaware Basin		216		74	%		181		19	%
Anadarko Basin		14		5	%		15		-5	%
Williston Basin		29		10	%		45		-35	%
Eagle Ford		18		6	%		17		5	%
Powder River Basin		13		4	%		16		-21	%
Other		4		1	%		5		-15	%
Total		294		100	%		279		5	%

	Six Months Ended June 30,
	2022		% of Total			2021		Change
Gas (MMcf/d)
Delaware Basin		589		63	%		492		20	%
Anadarko Basin		211		23	%		213		-1	%
Williston Basin		53		6	%		55		-4	%
Eagle Ford		61		6	%		53		16	%
Powder River Basin		19		2	%		21		-12	%
Other		1		0	%		2		-64	%
Total		934		100	%		836		12	%

	Six Months Ended June 30,
	2022		% of Total			2021		Change
NGLs (MBbls/d)
Delaware Basin		101		69	%		71		43	%
Anadarko Basin		25		17	%		23		7	%
Williston Basin		9		6	%		9		-2	%
Eagle Ford		9		6	%		8		17	%
Powder River Basin		2		2	%		3		-19	%
Other		—		0	%		—	N/M
Total		146		100	%		114		28	%

30

	Six Months Ended June 30,
	2022		% of Total			2021		Change
Combined (MBoe/d)
Delaware Basin		415		70	%		334		24	%
Anadarko Basin		74		12	%		74		1	%
Williston Basin		47		8	%		63		-26	%
Eagle Ford		37		6	%		33		10	%
Powder River Basin		18		3	%		23		-19	%
Other		4		1	%		6		-23	%
Total		595		100	%		533		12	%

From the six months ended 2021 to the six months ended 2022, the change in volumes contributed to a $341 million increase in earnings. The increase in volumes was primarily due to continued development in the Delaware Basin as well as increased activity in Eagle Ford. These increases were partially offset by lower volumes in the Williston Basin and Powder River Basin primarily due to natural declines.

Realized Prices

	Six Months Ended June 30,
	2022			Realization	2021			Change
Oil (per Bbl)
WTI index	$	101.57			$	61.95			64	%
Realized price, unhedged	$	101.14		100%	$	59.65			70	%
Cash settlements	$	(12.25	)		$	(11.30	)
Realized price, with hedges	$	88.89		88%	$	48.35			84	%

	Six Months Ended June 30,
	2022			Realization	2021			Change
Gas (per Mcf)
Henry Hub index	$	6.06			$	2.77			119	%
Realized price, unhedged	$	5.11		84%	$	2.58			98	%
Cash settlements	$	(0.97	)		$	(0.15	)
Realized price, with hedges	$	4.14		68%	$	2.43			70	%

	Six Months Ended June 30,
	2022		Realization	2021			Change
NGLs (per Bbl)
WTI index	$	101.57		$	61.95			64	%
Realized price, unhedged	$	39.11	39%	$	24.37			60	%
Cash settlements	$	—		$	(0.23	)
Realized price, with hedges	$	39.11	39%	$	24.14			62	%

	Six Months Ended June 30,
	2022			2021			Change
Combined (per Boe)
Realized price, unhedged	$	67.50		$	40.54			67	%
Cash settlements	$	(7.57	)	$	(6.21	)
Realized price, with hedges	$	59.93		$	34.33			75	%

From the six months ended 2021 to the six months ended 2022, realized prices contributed to a $3.0 billion increase in earnings. Unhedged realized oil, gas and NGL prices increased primarily due to higher WTI, Henry Hub and Mont Belvieu index prices. The increase in index prices was partially offset by hedge cash settlements related to oil and gas commodities.

31

Hedge Settlements

	Six Months Ended June 30,
	2022			2021			Change
Oil	$	(651	)	$	(572	)		-14	%
Natural gas		(165	)		(22	)		-650	%
NGL		—			(5	)	N/M
Total cash settlements (1)	$	(816	)	$	(599	)		-36	%

(1)Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

Cash settlements as presented in the tables above represent realized gains or losses related to the instruments described in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Production Expenses

	Six Months Ended June 30,
	2022			2021			Change
LOE	$	479		$	409			17	%
Gathering, processing & transportation		338			276			22	%
Production taxes		492			260			89	%
Property taxes		38			26			46	%
Total	$	1,347		$	971			39	%
Per Boe:
LOE	$	4.45		$	4.24			5	%
Gathering, processing & transportation	$	3.13		$	2.86			9	%
Percent of oil, gas and NGL sales:
Production taxes		6.8	%		6.7	%		1	%

Production expenses increased primarily due to higher volumes as well as an increase in production taxes resulting from higher commodity prices.

Field-Level Cash Margin

The table below presents the field-level cash margin for each of our operating areas. Field-level cash margin is computed as oil, gas and NGL sales less production expenses and is not a measure defined by GAAP. A reconciliation to the comparable GAAP measures is found in “Non-GAAP Measures” in this Item 2. The changes in production volumes, realized prices and production expenses, shown above, had the following impact on our field-level cash margins by asset.

	Six Months Ended June 30,
	2022		$ per BOE		2021		$ per BOE
Field-level cash margin (Non-GAAP)
Delaware Basin	$	4,388	$	58.45	$	1,997	$	33.00
Anadarko Basin		481	$	35.73		230	$	17.20
Williston Basin		431	$	51.01		358	$	31.42
Eagle Ford		364	$	54.49		178	$	29.50
Powder River Basin		205	$	61.67		141	$	34.36
Other		59	N/M			36	N/M
Total	$	5,928	$	55.00	$	2,940	$	30.48

DD&A

	Six Months Ended June 30,
	2022		2021		Change
Oil and gas per Boe	$	8.99	$	9.83		-9	%
Oil and gas	$	969	$	949		2	%
Other property and equipment		48		54		-12	%
Total	$	1,017	$	1,003		1	%

DD&A increased primarily due to higher volumes which was partially offset by lower DD&A rates. The decrease in DD&A

32

rates was primarily due to increases to oil, gas and NGL reserve estimates at December 31, 2021, resulting from higher prices.

General and Administrative Expense

	Six Months Ended June 30,
	2022		2021		Change
G&A per Boe	$	1.66	$	2.08		-20	%
Labor and benefits	$	102	$	132		-23	%
Non-labor		76		69		10	%
Total	$	178	$	201		-11	%

General and administrative expenses decreased primarily due to synergies resulting from the Merger.

Other Items

	Six Months Ended June 30,
	2022			2021			Change in earnings
Commodity hedge valuation changes (1)	$	(37	)	$	(632	)	$	595
Marketing and midstream operations		(8	)		(20	)		12
Exploration expenses		12			6			(6	)
Asset dispositions		(15	)		(119	)		(104	)
Net financing costs		169			157			(12	)
Restructuring and transaction costs		—			212			212
Other, net		(51	)		(43	)		8
							$	705

(1)Included as a component of oil, gas and NGL derivatives on the consolidated statements of comprehensive earnings.

We recognize fair value changes on our oil, gas and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. For additional information, see Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Asset dispositions include $65 million and $35 million in the first six months of 2021 related to the re-valuation of contingent earnout payments associated with our divested Barnett Shale assets and the sale of non-core assets in the Rockies, respectively. For additional information, see Note 2 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Net financing costs include a $30 million gain in the first six months of 2021 related to debt retirements. For additional information, see Note 13 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Restructuring and transaction costs in the first six months of 2021 reflect workforce reductions in conjunction with the Merger, as well as various transaction costs related to the Merger. For additional information, see Note 5 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

For discussion on other, net, see Note 6 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Income Taxes

	Six Months Ended June 30,
	2022			2021
Current expense	$	355		$	14
Deferred expense (benefit)		469			(219	)
Total expense (benefit)	$	824		$	(205	)
Effective income tax rate		22	%		(75	%)

For discussion on income taxes, see Note 7 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

33

Capital Resources, Uses and Liquidity

Sources and Uses of Cash

The following table presents the major changes in cash and cash equivalents for the three and six months ended June 30, 2022 and 2021.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Operating cash flow	$	2,678		$	1,093		$	4,515		$	1,685
WPX acquired cash		—			—			—			344
Acquisitions of property and equipment		(100	)		(5	)		(101	)		(5	)
Divestitures of property and equipment		9			49			35			64
Capital expenditures		(573	)		(504	)		(1,110	)		(1,003	)
Equity method investment activity, net		(6	)		8			(20	)		18
Debt activity, net		—			(742	)		—			(1,302	)
Repurchases of common stock		(324	)		—			(535	)		—
Common stock dividends		(830	)		(229	)		(1,497	)		(432	)
Noncontrolling interest activity, net		(5	)		(2	)		(13	)		(30	)
Other		(17	)		(7	)		(88	)		(37	)
Net change in cash, cash equivalents and restricted cash	$	832		$	(339	)	$	1,186		$	(698	)
Cash, cash equivalents and restricted cash at end of period	$	3,457		$	1,539		$	3,457		$	1,539

Operating Cash Flow and WPX Acquired Cash

As presented in the table above, net cash provided by operating activities continued to be a significant source of capital and liquidity. Operating cash flow more than doubled during the six months ended June 30, 2022 compared to the six months ended June 30, 2021. The increase was primarily due to significantly increased commodity prices as well as higher volumes for the first six months of 2022 compared to 2021.

Acquisitions of Property and Equipment

During the first six months of 2022, we paid an $87 million deposit towards the acquisition of producing properties and leasehold interests located in the Williston Basin, which was completed in July 2022. For additional information, please see Note 2 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Divestitures of Property and Equipment

During the first six months of 2022 and 2021, we received contingent consideration related to asset divestitures and sold non-core assets, respectfully. For additional information, please see Note 2 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Capital Expenditures

The amounts in the table below reflect cash payments for capital expenditures, including cash paid for capital expenditures incurred in prior periods.

	Three Months Ended June 30,				Six months Ended June 30,
	2022		2021		2022		2021
Delaware Basin	$	412	$	378	$	807	$	775
Anadarko Basin		32		9		42		18
Williston Basin		16		18		39		46
Eagle Ford		33		29		59		43
Powder River Basin		28		7		61		40
Other		3		—		6		—
Total oil and gas		524		441		1,014		922
Midstream		28		43		57		48
Other		21		20		39		33
Total capital expenditures	$	573	$	504	$	1,110	$	1,003

34

Capital expenditures consist primarily of amounts related to our oil and gas exploration and development operations, midstream operations and other corporate activities. Our capital investment program is driven by a disciplined allocation process focused on moderating our production growth and maximizing our returns. As such, our 2022 capital expenditures represent approximately 25% of our operating cash flow.

Equity Method Investments

During the first six months of 2022 and 2021, Devon received distributions from our equity method investments of $23 million and $18 million, respectively. Devon contributed $43 million to our equity method investments during the first six months of 2022.

Debt Activity

Subsequent to the Merger closing, we redeemed $1.2 billion of senior notes in the first half of 2021. We also paid $59 million of cash retirement costs related to these redemptions.

Shareholder Distributions and Stock Activity

We repurchased approximately 9.0 million shares of common stock for $548 million in the first half of 2022 under the share repurchase program authorized by our Board of Directors. For additional information, see Note 16 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

The following table summarizes our common stock dividends during the second quarter and total for the first six months of 2022 and 2021. In February 2022, our Board of Directors increased our fixed dividend rate by 45% to $0.16 per share and again by 13% to $0.18 per share beginning in the third quarter of 2022. In addition to the fixed quarterly dividend, we paid a variable dividend in the first and second quarters of 2022 and 2021.

	Fixed		Variable		Total		Rate Per Share
2022:
First quarter	$	109	$	558	$	667	$	1.00
Second quarter		105		725		830	$	1.27
Total year-to-date	$	214	$	1,283	$	1,497
2021:
First quarter	$	76	$	127	$	203	$	0.30
Second quarter		75		154		229	$	0.34
Total year-to-date	$	151	$	281	$	432

Noncontrolling Interest Activity, net

During the first six months of 2022 and 2021, we distributed $13 million and $9 million, respectively, to our noncontrolling interests in CDM. During the first six months of 2021, we received contributions of $3 million related to our noncontrolling interests in CDM.

In the first quarter of 2021, we paid $24 million to purchase the noncontrolling interest portion of a partnership that WPX had formed to acquire minerals in the Delaware Basin.

Liquidity

The business of exploring for, developing and producing oil and natural gas is capital intensive. Because oil, natural gas and NGL reserves are a depleting resource, we, like all upstream operators, must continually make capital investments to grow and even sustain production. Generally, our capital investments are focused on drilling and completing new wells and maintaining production from existing wells. At opportunistic times, we also acquire operations and properties from other operators or landowners to enhance our existing portfolio of assets.

Historically, our primary sources of capital funding and liquidity have been our operating cash flow, cash on hand and asset divestiture proceeds. Additionally, we maintain a commercial paper program, supported by our revolving line of credit, which can be accessed as needed to supplement operating cash flow and cash balances. If needed, we can also issue debt and equity securities, including through transactions under our shelf registration statement filed with the SEC. We estimate the combination of our sources of capital will continue to be adequate to fund our planned capital requirements as discussed in this section as well as accelerate our cash-return business model.

35

Operating Cash Flow

Key inputs into determining our planned capital investment are the amount of cash we hold and operating cash flow we expect to generate over the next one to three or more years. At the end of the second quarter of 2022, we held approximately $3.5 billion of cash, inclusive of approximately $140 million of cash restricted primarily for retained obligations related to divested assets. Our operating cash flow forecasts are sensitive to many variables and include a measure of uncertainty as actual results may differ from our expectations.

Commodity Prices – The most uncertain and volatile variables for our operating cash flow are the prices of the oil, gas and NGLs we produce and sell. Prices are determined primarily by prevailing market conditions. Regional and worldwide economic activity, weather and other highly variable factors influence market conditions for these products. These factors, which are difficult to predict, create volatility in prices and are beyond our control.

To mitigate some of the risk inherent in prices, we utilize various derivative financial instruments to protect a portion of our production against downside price risk. The key terms to our oil, gas and NGL derivative financial instruments as of June 30, 2022 are presented in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” of this report.

Further, when considering the current commodity price environment and our current hedge position, we expect to achieve our capital investment priorities. Additionally, we remain committed to capital discipline and focused on delivering the objectives that underpin our capital plan for 2022. We will continue to prioritize economic value over growing volumes, which is driven partially by current commodity price backwardation, supply chain constraints and economic uncertainty arising from recent geopolitical events.

Operating Expenses – Commodity prices can also affect our operating cash flow through an indirect effect on operating expenses. Significant commodity price decreases can lead to a decrease in drilling and development activities. As a result, the demand and cost for people, services, equipment and materials may also decrease, causing a positive impact on our cash flow as the prices paid for services and equipment decline. However, the inverse is also generally true during periods of rising commodity prices. Furthermore, the COVID-19 pandemic has contributed to disruption and volatility in our supply chain, which has resulted, and may continue to result in labor shortages, increased costs and delays for pipe and other materials needed for our operations.

Credit Losses – Our operating cash flow is also exposed to credit risk in a variety of ways. This includes the credit risk related to customers who purchase our oil, gas and NGL production, the collection of receivables from our joint interest owners for their proportionate share of expenditures made on projects we operate and counterparties to our derivative financial contracts. We utilize a variety of mechanisms to limit our exposure to the credit risks of our customers, partners and counterparties. Such mechanisms include, under certain conditions, requiring letters of credit, prepayments or cash collateral postings.

Credit Availability

As of June 30, 2022, we had approximately $3.0 billion of available borrowing capacity under our Senior Credit Facility. This credit facility supports our $3.0 billion of short-term credit under our commercial paper program. At June 30, 2022, there were no borrowings under our commercial paper program, and we were in compliance with the Senior Credit Facility’s financial covenant.

Debt Ratings

We receive debt ratings from the major ratings agencies in the U.S. In determining our debt ratings, the agencies consider a number of qualitative and quantitative items including, but not limited to, commodity pricing levels, our liquidity, asset quality, reserve mix, debt levels, cost structure, planned asset sales and production growth opportunities. Our credit rating from Standard and Poor’s Financial Services is BBB with a stable outlook. Our credit rating from Fitch is BBB+ with a stable outlook. Our credit rating from Moody’s Investor Service is Baa3 with a stable outlook. Any rating downgrades may result in additional letters of credit or cash collateral being posted under certain contractual arrangements.

There are no “rating triggers” in any of our contractual debt obligations that would accelerate scheduled maturities should our debt rating fall below a specified level. However, a downgrade could adversely impact our interest rate on any credit facility borrowings and the ability to economically access debt markets in the future.

Fixed Plus Variable Dividend

We are committed to a “fixed plus variable” dividend strategy. Our Board of Directors will consider a number of factors when setting the quarterly dividend, if any, including a general target of paying out approximately 10% of operating cash flow through the

36

fixed dividend. In February 2022, our Board of Directors increased our quarterly fixed dividend rate by 45% to $0.16 per share. We will raise it again by 13% to $0.18 per share beginning in the third quarter of 2022. In addition to the fixed quarterly dividend, we may pay a variable dividend up to 50% of our excess free cash flow, which is a non-GAAP measure. Each quarter’s excess free cash flow is computed as operating cash flow (a GAAP measure) before balance sheet changes, less capital expenditures and the fixed dividend. The declaration and payment of any future dividend, whether fixed or variable, will remain at the full discretion of our Board of Directors and will depend on our financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

In August 2022, Devon announced a cash dividend in the amount of $1.55 per share payable in the third quarter of 2022. The dividend consists of an $0.18 per share fixed quarterly dividend and a $1.37 per share variable quarterly dividend and will total approximately $1.0 billion.

Share Repurchases

In May 2022, our Board of Directors increased our share repurchase program by $0.4 billion to a total authorized amount of $2.0 billion, and extended the expiration date to May 4, 2023. Through July 2022, we had executed $1.2 billion of the authorized program.

Acquisitions

In July 2022, Devon completed our acquisition of producing properties and leasehold interest in the Williston Basin for cash consideration of approximately $830 million, net of purchase price adjustments.

Capital Expenditures

Our 2022 exploration and development budget for the remainder of 2022 is expected to range from approximately $1.2 billion to $1.4 billion.

Critical Accounting Estimates

Income Taxes

The amount of income taxes recorded requires interpretations of complex rules and regulations of federal, state, provincial and foreign tax jurisdictions. We recognize current tax expense based on estimated taxable income for the current period and the applicable statutory tax rates. We routinely assess potential uncertain tax positions and, if required, estimate and establish accruals for such amounts. We have recognized deferred tax assets and liabilities for temporary differences, operating losses and other tax carryforwards. We routinely assess our deferred tax assets and reduce such assets by a valuation allowance if we deem it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Further, in the event we were to undergo an “ownership change” (as defined in Section 382 of the Internal Revenue Code of 1986, as amended), our ability to use net operating losses and tax credits generated prior to the ownership change may be limited. Generally, an “ownership change” occurs if one or more shareholders, each of whom owns five percent or more in value of a corporation’s stock, increase their aggregate percentage ownership by more than 50 percent over the lowest percentage of stock owned by those shareholders at any time during the preceding three-year period. Based on currently available information, we do not believe an ownership change has occurred during 2022 for Devon, but the Merger did cause an ownership change for WPX and increased the likelihood Devon could experience an ownership change over the next two years.

For additional information regarding our critical accounting policies and estimates, see our 2021 Annual Report on Form 10-K.

Non-GAAP Measures

We make reference to “core earnings attributable to Devon” and “core earnings per share attributable to Devon” in “Executive Overview” in this Item 2 that are not required by or presented in accordance with GAAP. These non-GAAP measures are not alternatives to GAAP measures and should not be considered in isolation or as a substitute for analysis of our results reported under GAAP. Core earnings attributable to Devon, as well as the per share amount, represent net earnings excluding certain non-cash and other items that are typically excluded by securities analysts in their published estimates of our financial results. Our non-GAAP measures are typically used as a quarterly performance measure. Amounts excluded relate to asset dispositions, non-cash asset impairments (including non-cash unproved asset impairments), deferred tax asset valuation allowance, changes in tax legislation, fair

37

value changes in derivative financial instruments and foreign currency, costs associated with early retirement of debt and restructuring and transaction costs associated with the workforce reductions described further in Note 5.

We believe these non-GAAP measures facilitate comparisons of our performance to earnings estimates published by securities analysts. We also believe these non-GAAP measures can facilitate comparisons of our performance between periods and to the performance of our peers.

Below are reconciliations of core earnings and core earnings per share attributable to Devon to comparable GAAP measures.

	Three Months Ended June 30,												Six Months Ended June 30,
	Before Tax			After Tax			After NCI			Per Diluted Share			Before Tax			After Tax			After NCI			Per Diluted Share
2022
Earnings attributable to Devon (GAAP)	$	2,495		$	1,938		$	1,932		$	2.93		$	3,757		$	2,933		$	2,921		$	4.40
Adjustments:
Asset dispositions		(14	)		(11	)		(11	)		(0.02	)		(15	)		(11	)		(11	)		(0.02	)
Asset and exploration impairments		8			6			6			0.01			8			6			6			0.01
Deferred tax asset valuation allowance		—			10			10			0.02			—			16			16			0.02
Fair value changes in financial instruments		(299	)		(230	)		(230	)		(0.35	)		39			30			30			0.05
Core earnings attributable to Devon (Non-GAAP)	$	2,190		$	1,713		$	1,707		$	2.59		$	3,789		$	2,974		$	2,962		$	4.46
2021
Earnings attributable to Devon (GAAP)	$	304		$	261		$	256		$	0.38		$	272		$	477		$	469		$	0.70
Adjustments:
Asset dispositions		(87	)		(67	)		(67	)		(0.10	)		(119	)		(91	)		(91	)		(0.13	)
Asset and exploration impairments		1			1			1			—			2			1			1			—
Deferred tax asset valuation allowance		—			(115	)		(115	)		(0.17	)		—			(378	)		(378	)		(0.57	)
Change in tax legislation		—			62			62			0.09			—			62			62			0.09
Fair value changes in financial instruments and foreign currency		334			258			258			0.38			628			483			483			0.72
Restructuring and transaction costs		23			21			21			0.03			212			183			183			0.28
Early retirement of debt		(10	)		(8	)		(8	)		(0.01	)		(30	)		(23	)		(23	)		(0.03	)
Core earnings attributable to Devon (Non-GAAP)	$	565		$	413		$	408		$	0.60		$	965		$	714		$	706		$	1.06

EBITDAX and Field-Level Cash Margin

To assess the performance of our assets, we use EBITDAX and Field-Level Cash Margin. We compute EBITDAX as net earnings before income tax expense; financing costs, net; exploration expenses; DD&A; asset impairments; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; restructuring and transaction costs; accretion on discounted liabilities; and other items not related to our normal operations. Field-Level Cash Margin is computed as oil, gas and NGL sales less production expenses. Production expenses consist of lease operating, gathering, processing and transportation expenses, as well as production and property taxes.

We exclude financing costs from EBITDAX to assess our operating results without regard to our financing methods or capital structure. Exploration expenses and asset disposition gains and losses are excluded from EBITDAX because they generally are not indicators of operating efficiency for a given reporting period. DD&A and impairments are excluded from EBITDAX because capital expenditures are evaluated at the time capital costs are incurred. We exclude share-based compensation, valuation changes, restructuring and transaction costs, accretion on discounted liabilities and other items from EBITDAX because they are not considered a measure of asset operating performance.

We believe EBITDAX and Field-Level Cash Margin provide information useful in assessing our operating and financial performance across periods. EBITDAX and Field-Level Cash Margin as defined by Devon may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net earnings from operations.

38

Below are reconciliations of net earnings to EBITDAX and a further reconciliation to Field-Level Cash Margin.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net earnings (GAAP)	$	1,938		$	261		$	2,933		$	477
Financing costs, net		84			80			169			157
Income tax expense (benefit)		557			43			824			(205	)
Exploration expenses		10			3			12			6
Depreciation, depletion and amortization		528			536			1,017			1,003
Asset dispositions		(14	)		(87	)		(15	)		(119	)
Share-based compensation		22			20			42			40
Derivative and financial instrument non-cash valuation changes		(302	)		336			37			632
Restructuring and transaction costs		—			23			—			212
Accretion on discounted liabilities and other		10			(14	)		(51	)		(43	)
EBITDAX (Non-GAAP)		2,833			1,201			4,968			2,160
Marketing and midstream revenues and expenses, net		4			(1	)		8			20
Commodity derivative cash settlements		472			367			816			599
General and administrative expenses, cash-based		62			74			136			161
Field-level cash margin (Non-GAAP)	$	3,371		$	1,641		$	5,928		$	2,940

39

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Commodity Price Risk

As of June 30, 2022, we have commodity derivatives that pertain to a portion of our estimated production for the last six months of 2022, as well as for 2023 and 2024. The key terms to our open oil, gas and NGL derivative financial instruments are presented in Note 3 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

The fair values of our commodity derivatives are largely determined by the forward curves of the relevant price indices. At June 30, 2022, a 10% change in the forward curves associated with our commodity derivative instruments would have changed our net positions by approximately $155 million.

Interest Rate Risk

As of June 30, 2022, we had total debt of $6.5 billion. All of our debt is based on fixed interest rates averaging 5.8%.

Foreign Currency Risk

We had no material foreign currency risk at June 30, 2022.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to Devon, including its consolidated subsidiaries, is made known to the officers who certify Devon’s financial reports and to other members of senior management and the Board of Directors.

Based on their evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of June 30, 2022 to ensure that the information required to be disclosed by Devon in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

40

PART II. Other Information

Item 1. Legal Proceedings

We are involved in various legal proceedings incidental to our business. However, to our knowledge as of the date of this report and subject to the environmental matters noted in Part I, Item 3. Legal Proceedings of our 2021 Annual Report on Form 10-K, there were no material pending legal proceedings to which we are a party or to which any of our property is subject.

Please see our 2021 Annual Report on Form 10-K and other SEC filings for additional information.

Item 1A. Risk Factors

There have been no material changes to the information included in Item 1A. “Risk Factors” in our 2021 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information regarding purchases of our common stock that were made by us during the second quarter of 2022 (shares in thousands).

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs (2)		Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
April 1 - April 30		1,352	$	60.47		1,187	$	709
May 1 - May 31		2,114	$	65.27		2,104	$	972
June 1 - June 30		1,762	$	62.15		1,761	$	862
Total		5,228	$	62.97		5,052

(1)In addition to shares purchased under the share repurchase program described below, these amounts also include approximately 0.2 million shares received by us from employees for the payment of personal income tax withholdings on vesting transactions.

(2)On November 2, 2021, we announced a $1.0 billion share repurchase program with an expiration date of December 31, 2022. In February 2022, we announced the expansion of this program to $1.6 billion, and in May 2022, we announced a further expansion to $2.0 billion and extended the expiration date to May 4, 2023. In the second quarter of 2022, we repurchased 5.1 million common shares for $318 million, or $63.07 per share, under this share repurchase program. For additional information, see Note 16 in “Part I. Financial Information – Item 1. Financial Statements” in this report.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

41

Item 6. Exhibits

Exhibit Number		Description
10.1*	Devon Energy Corporation 2022 Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to Registrant’s Registration Statement on Form S-8, filed June 8, 2022; File No. 333-265472).
10.2*	2022 Form of Notice of Grant of Restricted Stock Award and Award Agreement under the 2022 Long-Term Incentive Plan between the Company and all non-management directors for restricted stock awarded.
31.1	Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*	Indicates management contract or compensatory plan or arrangement.

42

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DEVON ENERGY CORPORATION
Date: August 2, 2022	/s/ Jeremy D. Humphers
	Jeremy D. Humphers
	Senior Vice President and Chief Accounting Officer

43

EX-10.2

Exhibit 10.2

Devon Energy Corporation

ID:73-1567067

333 West Sheridan Avenue

Oklahoma City, Oklahoma 73102-5015

Notice of Grant of RESTRICTED STOCK Award
and Award Agreement

Participant Name Grant Date:Grant Date

Grant Type:RSA

Award No.:Client Grant ID

Effective Grant Date, you have been granted a Restricted Stock Award of Number of Shares Granted shares of Devon Energy Corporation (the “Company”) Common Stockunder the 2022 Devon Energy Corporation Long-Term Incentive Plan. These shares are restricted until the vesting date shown below.*

Anniversary of Grant Date	% of Shares to Vest
1st Anniversary	100%

*Vesting Schedule

By accepting this agreement online, you and the Company agree that this award is granted under and governed by the terms and conditions of the Company's 2022 Long-Term Incentive Plan and the Award Agreement, both of which are attached and made a part of this document.

DEVON ENERGY CORPORATION

2022 LONG-TERM INCENTIVE PLAN

NON-MANAGEMENT DIRECTOR

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Award Agreement”) is entered into as of Grant Date (the “Date of Grant”), by and between Devon Energy Corporation, a Delaware corporation (the “Company”), and Participant Name (the “Participant”).

WITNESSETH:

WHEREAS, the Company has previously adopted the “Devon Energy Corporation 2022 Long-Term Incentive Plan” (the “Plan”);

WHEREAS, the Participant is a nonemployee director of the Company and it is important to the Company that the Participant be encouraged to remain a director of the Company; and

WHEREAS, in recognition of such facts, the Company desires to award to the Participant Number of Shares Granted shares of the Company’s Common Stock under the Plan subject to the terms and conditions of this Award Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants herein contained, the Participant and the Company agree as follows:

1. The Plan. The Plan, a copy of which is attached hereto, is hereby incorporated by reference herein and made a part hereof for all purposes, and when taken with this Award Agreement shall govern the rights of the Participant and the Company with respect to the Award.

2. Grant of Award. The Company hereby grants to the Participant an award (the “Award”) of Number of Shares Granted shares of the Company’s Common Stock (the “Restricted Stock”), on the terms and conditions set forth herein and in the Plan.

3.Terms of Award.

(a) Escrow of Shares. A certificate or book-entry registration representing the Restricted Stock shall be issued in the name of the Participant and shall be escrowed with the Secretary subject to removal of the restrictions placed thereon or forfeiture pursuant to the terms of this Award Agreement.

(b) Vesting. 100% of the shares of the Restricted Stock is scheduled to vest on the first anniversary date of the Date of Grant (the “Vesting Date”). If the Participant’s Date of Termination has not occurred as of a Vesting Date, then the Participant shall be entitled, subject to the applicable provisions of the Plan and this Award Agreement having been satisfied, to receive on or within a reasonable time after the Vesting Date, the shares scheduled to vest as of the Vesting Date. The portion of the Restricted Stock that has vested pursuant to the terms of this Award Agreement shall be deemed “Vested Stock.”

The Participant shall forfeit the unvested portion of the Award (including the underlying Restricted Stock and Accrued Dividends) upon the occurrence of the Participant’s Date of Termination unless the Award becomes vested under the circumstances described in paragraphs (i) or (ii) below.

(i) The Award shall become fully vested upon the Participant’s Date of Termination if the Participant’s Date of Termination occurs by reason of the Participant’s death. The Committee may, in its sole discretion, elect to accelerate vesting of all or any portion of the Award if the Date of Termination occurs by reason of the Participant’s disability or occurs under other special circumstances (as determined by the Committee and permitted pursuant to the Plan).

(ii) The Award shall become fully vested upon the Participant’s Date of Termination if the Participant’s Date of Termination occurs by reason of the Participant’s Mandatory Retirement.

(c) Voting Rights and Dividends. The Participant shall have all of the voting rights attributable to the shares of Restricted Stock. Any dividends declared and paid by the Company with respect to shares of Restricted Stock (“Accrued Dividends”) shall not be paid to the Participant until such Restricted Stock becomes Vested Stock. Accrued Dividends shall be held by the Company as a general obligation of the Company and paid to the Participant reasonably promptly following the time the underlying Restricted Stock becomes Vested Stock (but in no event later than March 15 of the calendar year following the year in which such vesting occurs). Accordingly, Accrued Dividends shall be forfeited to the extent that the related Restricted Stock does not vest and is forfeited or cancelled. No interest shall be credited on Accrued Dividends.

(d) Vested Stock – Removal of Restrictions. Upon Restricted Stock becoming Vested Stock, all restrictions shall be removed from the certificates or book-entry registrations and the Participant shall be provided a confirmation of the release of such Vested Stock, representing such Vested Stock as free and clear of all restrictions, except for any applicable securities laws restrictions. Reasonably promptly thereafter (but in no event later than March 15 of the calendar year following the year in which such vesting occurs), the Participant shall receive a payment in the amount of all Accrued Dividends attributed to such Vested Stock without interest thereon.

4.Legend. The shares of Restricted Stock covered by the Award shall be subject to the restrictions described in the following legend, which shall appear on any individual certificate or book-entry registration representing the Award; provided, however, that in the case of book entry registration, a notation or other precautionary device may be used to denote such restrictions:

“THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE OR BOOK-ENTRY REGISTRATION ARE SUBJECT TO AND ARE TRANSFERRABLE ONLY IN ACCORDANCE WITH THAT CERTAIN RESTRICTED STOCK AWARD AGREEMENT DATED Grant Date UNDER THE DEVON ENERGY CORPORATION 2022 LONG-TERM INCENTIVE PLAN. ANY ATTEMPTED TRANSFER OF THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE OR BOOK-ENTRY REGISTRATION IN VIOLATION OF SUCH AWARD AGREEMENT SHALL BE NULL AND VOID AND WITHOUT EFFECT. A COPY OF THE AWARD AGREEMENT MAY BE OBTAINED FROM THE SECRETARY OF DEVON ENERGY CORPORATION.”

5.Delivery of Forfeited Shares. The Participant authorizes the Secretary to deliver to the Company any and all shares of Restricted Stock that are forfeited under the provisions of this Award Agreement.

6. Non-transferability of Award. The Participant shall not have the right to sell, assign, transfer, convey, dispose, pledge, hypothecate, burden, encumber, or charge the Award or any Restricted Stock or any interest therein in any manner whatsoever.

7. Notices. All notices or other communications relating to the Plan and this Award Agreement as it relates to the Participant shall be in writing and shall be delivered electronically, personally, or

mailed (U.S. mail) by the Company to the Participant at the then current address as maintained by the Company or such other address as the Participant may advise the Company in writing.

8. Binding Effect; No Third-party Beneficiaries; Governing Law and Venue; Compliance with Law. This Award Agreement shall be (i) binding upon and inure to the benefit of the parties hereto and their respective heirs, successors, and permitted assigns except as may be limited by the Plan, and (ii) governed by and construed under the laws of the State of Delaware.This Award Agreement shall not confer any rights or remedies upon any person other than the Company and the Participant and each of their respective heirs, representatives, successors and permitted assigns. The issuance of shares of Common Stock, if any, to the Participant pursuant to this Award Agreement is subject to any applicable taxes and other laws or regulations of the United States or of any state, municipality or other country having jurisdiction thereof. Any action arising out of, or relating to, any of the provisions of this Award Agreement shall be brought only in the United States District Court for the Southern District of Delaware, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in Delaware, and the jurisdiction of such court in any such proceeding shall be exclusive.

9. Award Subject to Claims of Creditors. The Participant shall not have any interest in any particular assets of the Company, its parent, if applicable, or any Subsidiary or Affiliated Entity by reason of the right to earn an Award (including Accrued Dividends) under the Plan and this Award Agreement, and the Participant or any other person shall have only the rights of a general unsecured creditor of the Company, its parent, if applicable, or a Subsidiary or Affiliated Entity with respect to any rights under the Plan or this Award Agreement.

10. Company Policies. The Participant agrees that the Award, and the right to receive and/or retain any Vested Stock or cash payments covered by this Award, will be subject to any applicable clawback or recoupment policies, share trading policies and other policies that may be implemented from time to time by the Company’s Board of Directors, a duly authorized committee thereof or the Company, or as required by applicable law or any applicable securities exchange listings standards. By accepting this Award under the Plan, the Participant agrees and acknowledges that the Participant is obligated to cooperate with, and provide any and all assistance necessary to, the Company to recover or recoup any Award or amounts paid under the Plan subject to clawback pursuant to such policy, law or standard. Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to recover or recoup any Award or amounts paid pursuant to this Award.

11. Captions. The captions of specific provisions of this Award Agreement are for convenience and reference only, and in no way define, describe, extend or limit the scope of this Award Agreement or the intent of any provision hereof.

12. Counterparts. This Award Agreement may be executed in any number of identical counterparts, each of which shall be deemed an original for all purposes, but all of which taken together shall form one agreement.

13.Amendment. Except as permitted by the Plan, this Award Agreement may not be amended, modified, terminated or otherwise altered except by the written consent of the Company and the Participant.

14. Entire Agreement. Except as otherwise provided herein, the Plan and this Award Agreement constitute the entire agreement between the Participant and the Company and supersede any prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they relate in any way to the subject matter of this Award Agreement.

15. Section 83(b) Election. The Participant hereby acknowledges that the Participant has been informed that, with respect to the shares of Restricted Stock, the Participant may file an election

with the Internal Revenue Service, within 30 days following the Date of Grant, electing pursuant to Section 83(b) of the Code (“Section 83(b)”) to be taxed currently on Fair Market Value (as defined in the Plan) of the shares of Restricted Stock on the Date of Grant, in which case any future appreciation in the shares of Common Stock covered by the Award will be taxed as capital gains. Absent such an election, ordinary income will be measured and recognized by the Participant at the time or times which the Restricted Stock vests. The Participant is strongly encouraged to seek the advice of the Participant’s tax consultants in connection with the advisability of the filing of the election under Section 83(b). A form of election under Section 83(b) may be obtained from the administrator of the Plan. The Participant acknowledges that it is not the Company’s, but rather the Participant’s sole responsibility to file the election under Section 83(b).

16. Application of Section 409A of the Code. The Award covered by this Award Agreement is intended to be exempt from, or otherwise comply with the provisions of, Section 409A of the Code, and the regulations and other guidance promulgated thereunder (“409A”). Notwithstanding the foregoing or any other provision of this Award Agreement or the Plan to the contrary, if the Award is subject to the provisions of 409A (and not exempt therefrom), the provisions of this Award Agreement and the Plan shall be administered, interpreted and construed in a manner necessary to comply with 409A (or disregarded to the extent such provision cannot be so administered, interpreted or construed). If any payments or benefits hereunder constitute non-conforming “deferred compensation” subject to taxation under 409A, the Participant agrees that the Company may, without the Participant’s consent, modify the Award Agreement to the extent and in the manner the Company deems necessary or advisable or take such other action or actions, including an amendment or action with retroactive effect, that the Company deems appropriate in order either to preclude any such payment or benefit from being deemed “deferred compensation” without the meaning of 409A or to provide such payment or benefits in a manner that complies with the provisions of 409A such that they will not be subject to the imposition of taxes and/or interest thereunder. If, at the time of the Participant’s separation from service (within the meaning of 409A), (A) the Participant is a specified employee (within the meaning of 409A and using the identification methodology selected by the Company from time to time) and (B) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of 409A) the settlement of which is required to be delayed pursuant to the six-month delay rule set forth in 409A in order to avoid taxes or penalties under 409A, then the Company shall not settle such amount on the otherwise scheduled settlement date, but shall instead settle it, without interest, within 30 days after such six-month period. Each payment under the Award shall be treated as a right to a separate payment. In no event shall the Participant, directly or indirectly, designate the calendar year of payment. Notwithstanding the foregoing, the Company makes no representations and/or warranties with respect to compliance with 409A, and the Participant recognizes and acknowledges that 409A could potentially impose upon the Participant certain taxes and/or interest charges for which the Participant is and shall remain solely responsible,

17. Definitions. Words, terms, or phrases used in this Award Agreement shall have the meaning set forth in this Section 17. Capitalized terms used in this Award Agreement but not defined herein shall have the meaning designated in the Plan.

(a) “Accrued Dividends” has the meaning set forth in Section 3(c).

(b) “Award” has the meaning set forth in Section 2.

(c) “Award Agreement” has the meaning set forth in the preamble.

(d) “Company” has the meaning set forth in the preamble.

(e) “Date of Grant” has the meaning set forth in the preamble.

(f) “Date of Termination” means the first day occurring on or after the Date of Grant on which the Participant is not a member of the Board.

(g) “Mandatory Retirement” means the Participant’s retirement from the Board pursuant to the mandatory retirement policy reflected in the Company’s Corporate Governance Guidelines or similar corporate governance document.

(h) “Participant” has the meaning set forth in the preamble.

(i) “Plan” has the meaning set forth in the recitals.

(j) “Restricted Stock” has the meaning set forth in Section 2.

(k) “Vested Stock” has the meaning set forth in Section 3(b).

(l) “Vesting Date” has the meaning set forth in Section 3(b).

IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement on the day and year first above written.

“COMPANY” DEVON ENERGY CORPORATION,

a Delaware corporation

“PARTICIPANT” Participant Name

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard E. Muncrief, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Devon Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2022
	/s/ Richard E. Muncrief
	Richard E. Muncrief
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey L. Ritenour, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Devon Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 2, 2022
	/s/ Jeffrey L. Ritenour
	Jeffrey L. Ritenour
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Devon Energy Corporation (“Devon”) on Form 10-Q for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard E. Muncrief, President and Chief Executive Officer of Devon, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Devon.

/s/ Richard E. Muncrief

Richard E. Muncrief

President and Chief Executive Officer

August 2, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Devon Energy Corporation (“Devon”) on Form 10-Q for the period ended June 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey L. Ritenour, Executive Vice President and Chief Financial Officer of Devon, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Devon.

/s/ Jeffrey L. Ritenour

Jeffrey L. Ritenour

Executive Vice President and Chief Financial Officer

August 2, 2022

XML

Document And Entity Information - shares shares in Millions	6 Months Ended
	Jun. 30, 2022	Jul. 20, 2022
Cover [Abstract]
Document Type	10-Q
Document Period End Date	Jun. 30, 2022
Amendment Flag	false
Trading Symbol	DVN
Entity Registrant Name	DEVON ENERGY CORP/DE
Entity Central Index Key	0001090012
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Document Fiscal Period Focus	Q2
Entity Common Stock, Shares Outstanding		654.8
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-32318
Entity Tax Identification Number	73-1567067
Entity Address, Address Line One	333 West Sheridan Avenue
Entity Address, City or Town	Oklahoma City
Entity Address, State or Province	OK
Entity Address, Postal Zip Code	73102-5015
City Area Code	405
Local Phone Number	235-3611
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, par value $0.10 per share
Security Exchange Name	NYSE
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false

XML

Consolidated Statements of Comprehensive Earnings - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Revenues from contracts with customers	$ 5,796	$ 3,120	$ 10,291	$ 5,698
Oil, gas and NGL derivatives	(170)	(703)	(853)	(1,231)
Total revenues	5,626	2,417	9,438	4,467
Production expenses	729	513	1,347	971
Exploration expenses	10	3	12	6
Depreciation, depletion and amortization	528	536	1,017	1,003
Asset dispositions	(14)	(87)	(15)	(119)
General and administrative expenses	84	94	178	201
Financing costs, net	84	80	169	157
Restructuring and transaction costs	0	23	0	212
Other, net	10	(14)	(51)	(43)
Total expenses	3,131	2,113	5,681	4,195
Earnings before income taxes	2,495	304	3,757	272
Income tax expense (benefit)	557	43	824	(205)
Net earnings (loss)	1,938	261	2,933	477
Net earnings attributable to noncontrolling interests	6	5	12	8
Net earnings (loss) attributable to Devon	$ 1,932	$ 256	$ 2,921	$ 469
Net earnings per share:
Basic net earnings per share:	$ 2.94	$ 0.38	$ 4.42	$ 0.70
Diluted net earnings per share:	$ 2.93	$ 0.38	$ 4.40	$ 0.70
Comprehensive earnings:
Net earnings	$ 1,938	$ 261	$ 2,933	$ 477
Other comprehensive earnings, net of tax:
Pension and postretirement plans	1	3	2	26
Other comprehensive earnings, net of tax	1	3	2	26
Comprehensive earnings:	1,939	264	2,935	503
Comprehensive earnings attributable to noncontrolling interests	6	5	12	8
Comprehensive earnings attributable to Devon	1,933	259	2,923	495
Oil, Gas and NGL Sales [Member]
Revenues from contracts with customers	4,100	2,154	7,275	3,911
Marketing and Midstream Revenues [Member]
Revenues from contracts with customers	1,696	966	3,016	1,787
Marketing and Midstream Expenses [Member]
Expenses	$ 1,700	$ 965	$ 3,024	$ 1,807

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net earnings	$ 1,938	$ 261	$ 2,933	$ 477
Adjustments to reconcile net earnings (loss) to net cash from operating activities:
Depreciation, depletion and amortization	528	536	1,017	1,003
Leasehold impairments	7	1	8	2
Amortization of liabilities	(9)	(7)	(15)	(14)
Total losses on commodity derivatives	170	703	853	1,231
Cash settlements on commodity derivatives	(472)	(367)	(816)	(599)
Gains on asset dispositions	(14)	(87)	(15)	(119)
Deferred income tax expense (benefit)	305	24	469	(219)
Share-based compensation	23	20	43	61
Early retirement of debt	0	(10)	0	(30)
Other	4	2	(17)	2
Changes in assets and liabilities, net	198	17	55	(110)
Net cash from operating activities	2,678	1,093	4,515	1,685
Cash flows from investing activities:
Capital expenditures	(573)	(504)	(1,110)	(1,003)
Acquisitions of property and equipment	(100)	(5)	(101)	(5)
Divestitures of property and equipment	9	49	35	64
WPX acquired cash	0	0	0	344
Distributions from equity method investments	15	8	23	18
Contributions to equity method investments	(21)	0	(43)	0
Net cash from investing activities	(670)	(452)	(1,196)	(582)
Cash flows from financing activities:
Repayments of long-term debt	0	(710)	0	(1,243)
Early retirement of debt		(32)		(59)
Repurchases of common stock	(324)	0	(535)	0
Dividends paid on common stock	(830)	(229)	(1,497)	(432)
Contributions from noncontrolling interests	0	3	0	3
Distributions to noncontrolling interests	(5)	(5)	(13)	(9)
Acquisition of noncontrolling interests	0	0	0	(24)
Shares exchanged for tax withholdings and other	(12)	(9)	(85)	(42)
Net cash from financing activities	(1,171)	(982)	(2,130)	(1,806)
Effect of exchange rate changes on cash	(5)	2	(3)	5
Net change in cash, cash equivalents and restricted cash	832	(339)	1,186	(698)
Cash, cash equivalents and restricted cash at beginning of period	2,625	1,878	2,271	2,237
Cash, cash equivalents and restricted cash at end of period	3,457	1,539	3,457	1,539
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	3,300	1,348	3,300	1,348
Restricted cash	157	191	157	191
Total cash, cash equivalents and restricted cash	$ 3,457	$ 1,539	$ 3,457	$ 1,539

XML

Consolidated Balance Sheets - USD ($) $ in Millions		Jun. 30, 2022	Dec. 31, 2021
ASSETS
Cash, cash equivalents and restricted cash		$ 3,457	$ 2,271
Accounts receivable		2,348	1,543
Other current assets		546	435
Total current assets		6,351	4,249
Oil and gas property and equipment, based on successful efforts accounting, net		13,588	13,536
Other property and equipment, net ($122 million and $111 million related to CDM in 2022 and 2021, respectively)	[1]	1,525	1,472
Total property and equipment, net		15,113	15,008
Goodwill		753	753
Right-of-use assets		236	235
Investments		423	402
Other long-term assets		318	378
Total assets		23,194	21,025
LIABILITIES AND EQUITY
Accounts payable		668	500
Revenues and royalties payable		2,108	1,456
Other current liabilities		1,318	1,131
Total current liabilities		4,094	3,087
Long-term debt		6,461	6,482
Lease liabilities		259	252
Asset retirement obligations		452	468
Other long-term liabilities		949	1,050
Deferred income taxes		753	287
Stockholders' equity:
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 656 million and 663 million shares in 2022 and 2021, respectively		66	66
Additional paid-in capital		7,060	7,636
Retained earnings		3,107	1,692
Accumulated other comprehensive loss		(130)	(132)
Treasury stock value		(13)	0
Total stockholders’ equity attributable to Devon		10,090	9,262
Noncontrolling interests		136	137
Total equity		10,226	9,399
Total liabilities and equity		$ 23,194	$ 21,025

[1] $122 million and $111 million related to CDM in 2022 and 2021, respectively.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions		Jun. 30, 2022	Dec. 31, 2021
Other property and equipment, net	[1]	$ 1,525	$ 1,472
Common stock, par value (in dollars per share)		$ 0.10	$ 0.10
Common stock, shares authorized (in shares)		1,000,000,000.0	1,000,000,000.0
Common stock, shares issued (in shares)		656,000,000	663,000,000
Treasury Stock, Shares		200,000
CDM [Member]
Other property and equipment, net		$ 122	$ 111

[1] $122 million and $111 million related to CDM in 2022 and 2021, respectively.

XML

Consolidated Statements Of Equity - USD ($) shares in Millions, $ in Millions	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Other Comprehensive Earnings (Loss) [Member]	Treasury Stock [Member]	Noncontrolling Interests [Member]
Balance at Dec. 31, 2020	$ 3,019	$ 38	$ 2,766	$ 208	$ (127)		$ 134
Balance, shares at Dec. 31, 2020		382
Net earnings	477			469			8
Other comprehensive earnings (loss), net of tax	26				26
Restricted stock grants, net of cancellations, value		$ 1	(1)
Restricted stock grants, net of cancellations, shares		6
Common stock repurchased	(40)					$ (40)
Common stock retired			(40)			(40)
Common stock retired, shares		(2)
Common stock dividends	(434)			(434)
Common stock issued	5,432	$ 29	5,403
Common stock issued, Shares		290
Share-based compensation	61		61
Share-based compensation, shares		1
Contributions from noncontrolling interests	2						2
Distributions to noncontrolling interests	(8)						(8)
Balance at Jun. 30, 2021	8,535	$ 68	8,189	243	(101)	0	136
Balance, shares at Jun. 30, 2021		677
Balance at Mar. 31, 2021	8,486	$ 67	8,172	218	(104)	0	133
Balance, shares at Mar. 31, 2021		675
Net earnings	261			256			5
Other comprehensive earnings (loss), net of tax	3				3
Restricted stock grants, net of cancellations, value		$ 1	(1)
Restricted stock grants, net of cancellations, shares		2
Common stock repurchased	(2)					(2)
Common stock retired			(2)			2
Common stock dividends	(231)			(231)
Share-based compensation	20		20
Contributions from noncontrolling interests	2						2
Distributions to noncontrolling interests	(4)						(4)
Balance at Jun. 30, 2021	8,535	$ 68	8,189	243	(101)	0	136
Balance, shares at Jun. 30, 2021		677
Balance at Dec. 31, 2021	9,399	$ 66	7,636	1,692	(132)	0	137
Balance, shares at Dec. 31, 2021		663
Net earnings	2,933			2,921			12
Other comprehensive earnings (loss), net of tax	2				2
Restricted stock grants, net of cancellations, value	2	$ 1	1
Restricted stock grants, net of cancellations, shares		2
Common stock repurchased	(634)					(634)
Common stock retired		$ (1)	(620)			621
Common stock retired, shares		(10)
Common stock dividends	(1,506)			(1,506)
Share-based compensation	43		43
Share-based compensation, shares		1
Distributions to noncontrolling interests	(13)						(13)
Balance at Jun. 30, 2022	10,226	$ 66	7,060	3,107	(130)	(13)	136
Balance, shares at Jun. 30, 2022		656
Balance at Mar. 31, 2022	9,435	$ 66	7,371	2,013	(131)	(19)	135
Balance, shares at Mar. 31, 2022		661
Net earnings	1,938			1,932			6
Other comprehensive earnings (loss), net of tax	1				1
Restricted stock grants, net of cancellations, value	1	$ 1
Common stock repurchased	(329)					(329)
Common stock retired		$ (1)	(334)			335
Common stock retired, shares		(5)
Common stock dividends	(838)			(838)
Share-based compensation	23		23
Distributions to noncontrolling interests	(5)						(5)
Balance at Jun. 30, 2022	$ 10,226	$ 66	$ 7,060	$ 3,107	$ (130)	$ (13)	$ 136
Balance, shares at Jun. 30, 2022		656

XML

Summary Of Significant Accounting Policies

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1.Summary 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 2021 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, 2022 and 2021 and Devon’s financial position as of June 30, 2022.

Devon and WPX completed an all-stock merger of equals on January 7, 2021. On the closing date of the Merger, each share of WPX common stock was automatically converted into the right to receive 0.5165 of a share of Devon common stock. The transaction has been accounted for using the acquisition method of accounting, with Devon being treated as the accounting acquirer. See Note 2 for further discussion.

Restricted Cash

As of June 30, 2022, Devon classified approximately $140 million of cash as restricted cash on the consolidated balance sheets for obligations retained related to the Barnett Shale assets and the Canadian business. Cash payments for these charges related to the Barnett assets and Canada business total approximately $10 million per quarter.

Variable Interest Entity

Cotton Draw Midstream, L.L.C. (“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

In conjunction with the Merger, Devon acquired an interest in Catalyst, which is a joint venture established among WPX, an affiliate of Howard Energy Partners, LLC (“HEP”) and certain other investors, to develop oil gathering and natural gas processing infrastructure in the Stateline area of the Delaware Basin. Under the terms of the arrangement, Devon and a holding company owned by the other joint venture investors each have a 50% voting interest in the joint venture legal entity, and HEP serves as the operator. Through 2038, Devon’s production from 50,000 net acres in the Stateline area of the Delaware Basin has been dedicated to Catalyst subject to fixed-fee oil gathering and natural gas processing agreements. The agreements do not include any minimum volume commitments. Devon accounts for the investment in Catalyst as an equity method investment.

Devon's investment in Catalyst is shown within investments on the consolidated balance sheets and Devon's share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

		Carrying Amount
Investments	% Interest	June 30, 2022		December 31, 2021
Catalyst	50%	$	354	$	368
Other	Various		69		34
Total		$	423	$	402

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,
	2022		2021		2022		2021
Oil	$	2,970	$	1,686	$	5,376	$	3,017
Gas		557		188		864		390
NGL		573		280		1,035		504
Oil, gas and NGL sales		4,100		2,154		7,275		3,911
Oil		952		610		1,728		1,109
Gas		322		134		531		281
NGL		422		222		757		397
Marketing and midstream revenues		1,696		966		3,016		1,787
Total revenues from contracts with customers	$	5,796	$	3,120	$	10,291	$	5,698

XML

Acquisition and Divestitures

6 Months Ended

Jun. 30, 2022

Business Combinations [Abstract]

Acquisition and Divestitures

2. Acquisitions and Divestitures

WPX Merger

On January 7, 2021, Devon and WPX completed an all-stock merger of equals. WPX was an oil and gas exploration and production company with assets in the Delaware Basin in Texas and New Mexico and the Williston Basin in North Dakota. On the closing date of the Merger, each share of WPX common stock was automatically converted into the right to receive 0.5165 of a share of Devon common stock. No fractional shares of Devon’s common stock were issued in the Merger, and holders of WPX common stock instead received cash in lieu of fractional shares of Devon common stock, if any. Based on the closing price of Devon’s common stock on January 7, 2021, the total value of Devon common stock issued to holders of WPX common stock as part of this transaction was approximately $5.4 billion. The Merger was structured as a tax-free reorganization for United States federal income tax purposes. The final allocation of the total purchase price of WPX to the identifiable assets acquired and the liabilities assumed was finalized at December 31, 2021.

Acquisitions

In July 2022, Devon completed its acquisition of producing properties and leasehold interests located in the Williston Basin for cash consideration of approximately $830 million, net of purchase price adjustments. In the second quarter of 2022, Devon paid an $87 million cash deposit related to this acquisition, which is included within other current assets in the June 30, 2022 consolidated balance sheet and within acquisitions of property and equipment in the consolidated statement of cash flows.

Divestitures

In the first quarter of 2021, Devon completed the sale of non-core assets in the Rockies for proceeds of $9 million, net of purchase price adjustments, and recognized a $35 million gain related to the sale. Devon received $4 million in contingent earnout payments related to this transaction in the first quarter of 2022 with the potential for up to an additional $4 million in the future. The total estimated proved reserves associated with these divested assets was approximately 3 MMBoe.

Contingent Earnout Payments

Devon is entitled to contingent earnout payments associated with the sale of its Barnett Shale assets in 2020 with upside participation beginning at a $2.75 Henry Hub natural gas price or a $50 WTI oil price. The contingent payment period commenced on January 1, 2021 and has a term of four years. Devon received $65 million in contingent earnout payments related to this transaction in the first quarter of 2022 and could receive up to an additional $195 million in contingent earnout payments for the remaining performance periods depending on future commodity prices. The valuation of the future contingent earnout payments included within other current assets and other long-term assets in the June 30, 2022 consolidated balance sheet was approximately $65 million and $60 million, respectively. The value was derived utilizing a Monte Carlo valuation model and qualifies as a level 3 fair value measurement.

XML

Derivative Financial Instruments

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

3.Derivative Financial 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, costless price collars and call options. Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility. As of June 30, 2022, Devon did not have any open interest rate swap contracts.

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 June 30, 2022, Devon neither held cash collateral of its counterparties nor posted cash collateral to its counterparties. Given Devon's current credit ratings and the terms of the underlying contracts, Devon is not currently required to post collateral to its counterparties with respect to its open derivative positions, and we would not be required to post any such collateral as a result of any change to the amount of Devon's net liability for such positions.

Commodity Derivatives

As of June 30, 2022, 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 (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q3-Q4 2022		35,000	$	44.61		36,500	$	57.96	$	78.08
Q1-Q4 2023		—	$	—		6,193	$	61.32	$	97.65

	Oil Basis Swaps
Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q3-Q4 2022	BRENT		1,000	$	(7.75	)
Q3-Q4 2022	NYMEX Roll		29,000	$	0.45
Q1-Q4 2023	Midland Sweet		12,296	$	0.52

As of June 30, 2022, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index and the end of month NYMEX index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.

	Price Swaps (1)				Price Collars (2)
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q3-Q4 2022		117,500	$	3.08		193,000	$	3.05	$	4.55
Q1-Q4 2023		8,658	$	5.24		96,436	$	3.55	$	7.63

(1)Related to the 2022 open positions, 17,500 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $5.25 and 100,000 MMBtu/d settle against the end of month NYMEX index at an average price of $2.70. All 2023 open positions settle against the Inside FERC first of month Henry Hub index.

(2)Price collars settle against the Inside FERC first of month Henry Hub Index.

	Natural Gas Basis Swaps
Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q3-Q4 2022	El Paso Natural Gas		50,000	$	(0.85	)
Q3-Q4 2022	Houston Ship Channel		40,000	$	(0.15	)
Q3-Q4 2022	WAHA		70,000	$	(0.57	)
Q1-Q4 2023	El Paso Natural Gas		125,000	$	(1.59	)
Q1-Q4 2023	Houston Ship Channel		50,000	$	(0.13	)
Q1-Q4 2023	WAHA		70,000	$	(0.51	)
Q1-Q4 2024	WAHA		40,000	$	(0.51	)

As of June 30, 2022, Devon did not have any open NGL positions.

Financial Statement Presentation

All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the consolidated balance sheets. Amounts related to contracts allowed to be netted upon payment subject to a master netting arrangement with the same counterparty are reported on a net basis in the consolidated balance sheets. The tables below present a summary of these positions as of June 30, 2022 and December 31, 2021.

	June 30, 2022									December 31, 2021
	Gross Fair Value			Amounts Netted			Net Fair Value			Gross Fair Value			Amounts Netted			Net Fair Value			Balance Sheet Classification
Commodity derivatives:
Short-term derivative asset	$	37		$	(26	)	$	11		$	6		$	(4	)	$	2		Other current assets
Long-term derivative asset		31			(1	)		30			6			—			6		Other long-term assets
Short-term derivative liability		(672	)		26			(646	)		(579	)		4			(575	)	Other current liabilities
Long-term derivative liability		(2	)		1			(1	)		(2	)		—			(2	)	Other long-term liabilities
Total derivative liability	$	(606	)	$	—		$	(606	)	$	(569	)	$	—		$	(569	)

XML

Share-Based Compensation

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

4.Share-Based Compensation

In the second quarter of 2022, Devon's stockholders approved the 2022 Plan. The 2022 Plan replaces the 2017 Plan. From the effective date of the 2022 Plan, no further awards may be made under the 2017 Plan; however, awards previously granted will continue to be governed by the terms of the respective award documents. The 2022 Plan authorizes the grant of nonqualified and incentive stock options, restricted stock awards or units and stock appreciation rights to eligible employees. Restricted stock awards or restricted stock units granted under the 2022 Plan may be subject to performance-based conditions. The 2022 Plan also authorizes the grant of nonqualified stock options, restricted stock awards or units and stock appreciation rights to non-employee directors. To

calculate the number of shares that may be granted in awards under the 2022 Plan, options and stock appreciation rights represent one share and other awards represent 1.74 shares.

The table below presents the share-based compensation expense included in Devon’s accompanying consolidated statements of comprehensive earnings. The vesting for certain share-based awards was accelerated in 2021 in conjunction with the reduction of workforce described in Note 5 and is included in restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

	Six Months Ended June 30,
	2022		2021
G&A	$	42	$	40
Exploration expenses		1		—
Restructuring and transaction costs		—		21
Total	$	43	$	61
Related income tax benefit	$	26	$	—

Under its approved long-term incentive plan, Devon grants share-based awards to its employees. The following table presents a summary of Devon’s unvested restricted stock awards and units and performance share units granted under the plan.

	Restricted Stock Awards & Units					Performance Share Units
	Awards/Units			Weighted Average Grant-Date Fair Value		Units				Weighted Average Grant-Date Fair Value
	(Thousands, except fair value data)
Unvested at 12/31/21		7,656		$	22.15		2,076			$	24.12
Granted		1,296		$	52.98		964			$	44.05
Vested		(3,104	)	$	23.00		(1,194	)		$	28.91
Forfeited		(59	)	$	33.03		(5	)		$	68.68
Unvested at 6/30/22		5,789		$	28.49		1,841		(1)	$	31.33

(1)A maximum of 3.7 million common shares could be awarded based upon Devon’s final TSR ranking.

The following table presents the assumptions related to the performance share units granted in 2022, as indicated in the previous summary table. The grants in the previous summary table also include the impact of performance share units granted in a prior year that vested higher than 100% of target due to Devon's TSR performance compared to our peers.

	2022
Grant-date fair value	$	68.68
Risk-free interest rate		1.81	%
Volatility factor		70.1	%
Contractual term (years)		2.89

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units as of June 30, 2022.

	Restricted Stock		Performance
	Awards/Units		Share Units
Unrecognized compensation cost	$	109	$	27
Weighted average period for recognition (years)		2.7		1.9

XML

Restructuring and Transaction Costs

6 Months Ended

Jun. 30, 2022

Restructuring and Related Activities [Abstract]

Restructuring and Transaction Costs

5. Restructuring and Transaction Costs

The following table summarizes Devon’s restructuring and transaction costs.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Restructuring costs	$	—	$	23	$	—	$	166
Transaction costs		—		—		—		46
Total costs	$	—	$	23	$	—	$	212

In conjunction with the Merger closing, Devon recognized $166 million of restructuring expenses during the first six months of 2021 related to employee severance and termination benefits, settlements and curtailments from defined retirement benefits and contract terminations. Of these expenses, $40 million and $21 million resulted from settlements and curtailments of defined retirement benefits and accelerated vesting of share-based grants, respectively, which were non-cash charges. Additionally, in conjunction with the Merger closing, Devon recognized $46 million of transaction costs primarily comprised of bank, legal and accounting fees.

The following table summarizes Devon’s restructuring liabilities.

	Other			Other
	Current			Long-term
	Liabilities			Liabilities			Total
Balance as of December 31, 2021	$	38		$	111		$	149
Changes related to prior years' restructurings		(10	)		(12	)		(22	)
Balance as of June 30, 2022	$	28		$	99		$	127
Balance as of December 31, 2020	$	35		$	137		$	172
Changes related to prior years' restructurings		48			(15	)		33
Balance as of June 30, 2021	$	83		$	122		$	205

XML

Other, Net

6 Months Ended

Jun. 30, 2022

Other Expenses [Abstract]

Other, Net

6. Other, Net

The following table summarizes Devon's other expenses (income) presented in the accompanying consolidated comprehensive statement of earnings.

	Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021			2022			2021
Estimated future obligation under a performance guarantee	$	—	$	(18	)	$	(96	)	$	(18	)
Ukraine charitable pledge		—		—			20			—
Asset retirement obligation accretion		6		7			13			14
Severance and other non-income tax refunds		—		(3	)		(3	)		(39	)
Other		4		—			15			—
Total	$	10	$	(14	)	$	(51	)	$	(43	)

The first six months of 2022 includes a $96 million benefit related to the revision of a future obligation under a performance guarantee liability for previously divested assets. Due to improved commodity prices and market conditions, the purchaser of these assets was able to fully satisfy a $35 million obligation due in the first quarter of 2022. Further, during the first quarter of 2022, Devon also reduced the estimated future exposure of the performance guarantee by $61 million based on probability-weighted cash flows for the remainder of the contract term of four years. Additionally, the first six months of 2021 included an $18 million benefit related to the revision of a future obligation under a performance guarantee liability for which the purchaser of these assets was able to partially satisfy an obligation.

The first six months of 2022 also includes a $20 million pledge for humanitarian relief for the Ukrainian people and surrounding countries supporting refugees.

During the first six months of 2021, Devon received severance and other non-income tax refunds of $39 million.

XML

Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

The following table presents Devon’s total income tax expense (benefit) and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Earnings before income taxes	$	2,495	$	304	$	3,757	$	272
Current income tax expense	$	252	$	19	$	355	$	14
Deferred income tax expense (benefit)		305		24		469		(219	)
Total income tax expense (benefit)	$	557	$	43	$	824	$	(205	)

U.S. statutory income tax rate	21	%	21	%	21	%	21	%
State income taxes	1	%	0	%	1	%	1	%
Subsidiary reorganization	0	%	6	%	0	%	7	%
Deferred tax asset valuation allowance	0	%	(19	%)	0	%	(116	%)
Other	0	%	6	%	0	%	12	%
Effective income tax rate	22	%	14	%	22	%	(75	%)

Prior to December 31, 2021, Devon maintained a valuation allowance against all U.S. federal deferred tax assets. Devon recognized approximately $250 million of deferred tax liabilities to account for the Merger. The recognition of these deferred tax liabilities caused a decrease to Devon’s net deferred tax assets and a corresponding decrease to the valuation allowance Devon had recognized on its U.S. federal deferred tax assets in the first quarter of 2021.

Due to significant increases in commodity pricing and projections of future income, in the fourth quarter of 2021, Devon reassessed its evaluation of the realizability of deferred tax assets in future years and determined that a U.S. federal valuation allowance was no longer necessary at December 31, 2021.

In the fourth quarter of 2020, Devon recorded a deferred tax asset representing the deductible outside basis difference in its investment in a consolidated subsidiary. In the second quarter of 2021, Devon realized this deferred tax asset, increasing its U.S. federal net operating loss carryforwards by $1.8 billion.

In the table above, the "other" effect for 2021 is composed primarily of permanent differences related to costs incurred in connection with the Merger. Such items represent $18 million of income tax expense in the first six months of 2021.

Pursuant to the tax sharing agreement with The Williams Companies, Inc. ("Williams") assumed in the Merger, Devon has remained responsible for the tax from audit adjustments related to the WPX business for periods prior to WPX’s spin-off from Williams on December 31, 2011. The 2011 consolidated tax filing by Williams was audited by the Internal Revenue Service (“IRS”) during which the IRS proposed adjustments related to the WPX business. After a lengthy appeals process, these matters were effectively settled with the IRS during the second quarter of 2022 upon review and approval by the Joint Committee on Taxation. Accordingly, Devon believes these matters have now been effectively settled with no material impacts to Devon.

XML

Net Earnings Per Share

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Net Earnings Per Share

8.Net Earnings Per Share

The following table reconciles net earnings and weighted-average common shares outstanding used in the calculations of basic and diluted net earnings per share.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net earnings:
Net earnings	$	1,932		$	256		$	2,921		$	469
Attributable to participating securities		(17	)		(3	)		(33	)		(5	)
Basic and diluted earnings	$	1,915		$	253		$	2,888		$	464
Common shares:
Common shares outstanding - total		658			677			661			666
Attributable to participating securities		(6	)		(6	)		(7	)		(6	)
Common shares outstanding - basic		652			671			654			660
Dilutive effect of potential common shares issuable		2			2			2			2
Common shares outstanding - diluted		654			673			656			662
Net earnings per share:
Basic	$	2.94		$	0.38		$	4.42		$	0.70
Diluted	$	2.93		$	0.38		$	4.40		$	0.70

XML

Other Comprehensive Earnings (Loss)

6 Months Ended

Jun. 30, 2022

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Other Comprehensive Earnings (Loss)

9. Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) consist of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Pension and postretirement benefit plans:
Beginning accumulated pension and postretirement benefits	$	(131	)	$	(104	)	$	(132	)	$	(127	)
Recognition of net actuarial loss and prior service cost in earnings (1)		2			—			3			1
Settlement of pension benefits (2)		—			3			—			18
Other (3)		—			—			—			7
Income tax expense		(1	)		—			(1	)		—
Accumulated other comprehensive loss, net of tax	$	(130	)	$	(101	)	$	(130	)	$	(101	)

(1)Recognition of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost, which is a component of other, net in the accompanying consolidated statements of comprehensive earnings.

(2)The Merger triggered settlement payments to certain plan participants, and the expense associated with this settlement is recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

(3)Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.

XML

Supplemental Information To Statements Of Cash Flows

6 Months Ended

Jun. 30, 2022

Supplemental Cash Flow Elements [Abstract]

Supplemental Information To Statements Of Cash Flows

10.Supplemental Information to Statements of Cash Flows

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Changes in assets and liabilities, net:
Accounts receivable	$	(346	)	$	(100	)	$	(803	)	$	(163	)
Other current assets		(85	)		88			(21	)		78
Other long-term assets		9			(14	)		75			(24	)
Accounts payable and revenues and royalties payable		540			72			787			88
Other current liabilities		93			52			101			19
Other long-term liabilities		(13	)		(81	)		(84	)		(108	)
Total	$	198		$	17		$	55		$	(110	)
Supplementary cash flow data:
Interest paid	$	85		$	105		$	185		$	219
Income taxes paid (refunded)	$	133		$	(106	)	$	110		$	(112	)

XML

Accounts Receivable

6 Months Ended

Jun. 30, 2022

Accounts Receivable, after Allowance for Credit Loss [Abstract]

Accounts Receivable

11.Accounts Receivable

Components of accounts receivable include the following:

	June 30, 2022			December 31, 2021
Oil, gas and NGL sales	$	1,520		$	984
Joint interest billings		192			158
Marketing and midstream revenues		602			370
Other		42			38
Gross accounts receivable		2,356			1,550
Allowance for doubtful accounts		(8	)		(7	)
Net accounts receivable	$	2,348		$	1,543

XML

Property, Plant and Equipment

6 Months Ended

Jun. 30, 2022

Extractive Industries [Abstract]

Property, Plant and Equipment

Property, Plant and Equipment

The following table presents the aggregate capitalized costs related to Devon’s oil and gas and non-oil and gas activities.

	June 30, 2022			December 31, 2021
Property and equipment:
Proved	$	39,216		$	38,051
Unproved and properties under development		937			1,081
Total oil and gas		40,153			39,132
Less accumulated DD&A		(26,565	)		(25,596	)
Oil and gas property and equipment, net		13,588			13,536
Other property and equipment		2,224			2,139
Less accumulated DD&A		(699	)		(667	)
Other property and equipment, net (1)		1,525			1,472
Property and equipment, net	$	15,113		$	15,008

(1)$122 million and $111 million related to CDM in 2022 and 2021, respectively.

XML

Debt And Related Expenses

6 Months Ended

Jun. 30, 2022

Debt Disclosure [Abstract]

Debt and Related Expenses

13.Debt and Related Expenses

See below for a summary of debt instruments and balances. The notes and debentures are senior, unsecured obligations of Devon.

	June 30, 2022			December 31, 2021
8.25% due August 1, 2023	$	242		$	242
5.25% due September 15, 2024		472			472
5.85% due December 15, 2025		485			485
7.50% due September 15, 2027		73			73
5.25% due October 15, 2027		390			390
5.875% due June 15, 2028		325			325
4.50% due January 15, 2030		585			585
7.875% due September 30, 2031		675			675
7.95% due April 15, 2032		366			366
5.60% due July 15, 2041		1,250			1,250
4.75% due May 15, 2042		750			750
5.00% due June 15, 2045		750			750
Net premium on debentures and notes		126			149
Debt issuance costs		(28	)		(30	)
Total long-term debt	$	6,461		$	6,482

Retirement of Senior Notes

In the first six months of 2021, Devon redeemed $43 million of the 6.00% senior notes due 2022, $175 million of the 5.875% senior notes due 2028, $315 million of the 4.50% senior notes due 2030, $210 million of the 5.35% senior notes due 2027 and $500 million of the 5.75% senior notes due 2026. In the first six months of 2021, Devon recognized $30 million of gains on early retirement of debt, consisting of $89 million of non-cash premium accelerations, partially offset by $59 million of cash retirement costs. The gain on early retirement is included in net financing costs in the consolidated comprehensive statements of earnings.

Credit Lines

Devon has a $3.0 billion Senior Credit Facility. As of June 30, 2022, Devon had no outstanding borrowings under the Senior Credit Facility and had issued $2 million in outstanding letters of credit under this facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon’s ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65%. Under the terms of the credit agreement, total capitalization is adjusted to add back non-cash financial write-downs such as impairments. As of June 30, 2022, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 23.9%.

Net Financing Costs

The following schedule includes the components of net financing costs.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Interest based on debt outstanding	$	93		$	98		$	185		$	203
Gain on early retirement of debt		—			(10	)		—			(30	)
Interest income		(2	)		—			(3	)		(1	)
Other		(7	)		(8	)		(13	)		(15	)
Total net financing costs	$	84		$	80		$	169		$	157

XML

Leases

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Leases

14. Leases

The following table presents Devon’s right-of-use assets and lease liabilities as of June 30, 2022 and December 31, 2021.

	June 30, 2022						December 31, 2021
	Finance		Operating		Total		Finance		Operating		Total
Right-of-use assets	$	207	$	29	$	236	$	211	$	24	$	235
Lease liabilities:
Current lease liabilities (1)	$	8	$	18	$	26	$	8	$	18	$	26
Long-term lease liabilities		248		11		259		247		5		252
Total lease liabilities	$	256	$	29	$	285	$	255	$	23	$	278

(1) Current lease liabilities are included in other current liabilities on the consolidated balance sheets.

Devon’s right-of-use operating lease assets are for certain leases related to real estate, drilling rigs and other equipment related to the exploration, development and production of oil and gas. Devon’s right-of-use financing lease assets are related to real estate.

XML

Asset Retirement Obligations

6 Months Ended

Jun. 30, 2022

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

15.Asset Retirement Obligations

The following table presents the changes in Devon’s asset retirement obligations.

	Six Months Ended June 30,
	2022			2021
Asset retirement obligations as of beginning of period	$	485		$	369
Assumed WPX obligations		—			98
Liabilities incurred		15			20
Liabilities settled and divested		(9	)		(47	)
Revision of estimated obligation		(35	)		11
Accretion expense on discounted obligation		13			14
Asset retirement obligations as of end of period		469			465
Less current portion		17			15
Asset retirement obligations, long-term	$	452		$	450

During the first six months of 2022, Devon reduced its asset retirement obligations by $35 million primarily due to extended retirement dates for oil and gas assets, partially offset by inflation-driven increases to current settlement costs.

XML

Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

Stockholders' Equity

16.Stockholders’ Equity

Share Repurchases

In November 2021, Devon authorized a share repurchase program of $1.0 billion with a December 31, 2022 expiration date. In February 2022, the Board of Directors authorized an expansion of the share repurchase program to $1.6 billion, and in May 2022, authorized a further expansion to $2.0 billion and extended the expiration date to May 4, 2023. The table below provides information regarding purchases of Devon’s common stock under the $2.0 billion share repurchase program (shares in thousands).

	Total Number of Shares Purchased		Dollar Value of Shares Purchased		Average Price Paid per Share
2021:
Fourth quarter		13,983	$	589	$	42.15
2022:
First quarter		3,979	$	230	$	57.74
Second quarter		5,052		318	$	63.07
Total plan		23,014	$	1,137	$	49.44

Dividends

Upon completion of the Merger, Devon continued its commitment to pay a quarterly dividend at a fixed rate and instituted a variable quarterly dividend, which is dependent on quarterly cash flows, among other factors. Devon raised its fixed quarterly dividend by 45%, to $0.16 per share, beginning in the first quarter of 2022 and again by 13%, to $0.18 per share, beginning in the third quarter of 2022. The following table summarizes Devon’s fixed and variable dividends for the first six months of 2022 and 2021, respectively.

	Fixed		Variable		Total		Rate Per Share
2022:
First quarter	$	109	$	558	$	667	$	1.00
Second quarter		105		725		830	$	1.27
Total year-to-date	$	214	$	1,283	$	1,497
2021:
First quarter	$	76	$	127	$	203	$	0.30
Second quarter		75		154		229	$	0.34
Total year-to-date	$	151	$	281	$	432

In August 2022, Devon announced a cash dividend in the amount of $1.55 per share payable in the third quarter of 2022. The dividend consists of an $0.18 per share fixed quarterly dividend and a $1.37 per share variable quarterly dividend and will total approximately $1.0 billion.

Noncontrolling Interests

The noncontrolling interests’ share of CDM’s net earnings and the contributions from and distributions to the noncontrolling interests are presented as components of equity.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

17.Commitments and Contingencies

Devon is party to various legal actions arising in connection with its business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to likely involve future amounts that would be material to Devon’s financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates.

Royalty Matters

Numerous oil and natural gas producers and related parties, including Devon, have been named in various lawsuits alleging royalty underpayments. Devon is currently named as a defendant in a number of such lawsuits, including some lawsuits in which the plaintiffs seek to certify classes of similarly situated plaintiffs. Among the allegations typically asserted in these suits are claims that Devon used below-market prices, made improper deductions, paid royalty proceeds in an untimely manner without including required interest, used improper measurement techniques and entered into gas purchase and processing arrangements with affiliates that resulted in underpayment of royalties in connection with oil, natural gas and NGLs produced and sold. Devon is also involved in governmental agency proceedings and royalty audits and is subject to related contracts and regulatory controls in the ordinary course of business, some that may lead to additional royalty claims. As of June 30, 2022, Devon has accrued approximately $25 million in other current liabilities pertaining to such royalty matters.

Environmental and Climate Change Matters

Devon’s business is subject to numerous federal, state, tribal and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal fines and penalties, as well as remediation costs. Although Devon believes that it is in substantial compliance with applicable environmental laws and regulations and that continued compliance with existing requirements will not have a material adverse impact on its business, there can be no assurance that this will continue in the future.

Beginning in 2013, various parishes in Louisiana filed suit against numerous oil and gas companies, including Devon, alleging that the companies’ operations and activities in certain fields violated the State and Local Coastal Resource Management Act of 1978, as amended, and caused substantial environmental contamination, subsidence and other environmental damages to land and water

bodies located in the coastal zone of Louisiana. The plaintiffs’ claims against Devon relate primarily to the operations of several of Devon’s corporate predecessors. The plaintiffs seek, among other things, payment of the costs necessary to clear, re-vegetate and otherwise restore the allegedly impacted areas. Although Devon cannot predict the ultimate outcome of these matters, Devon intends to vigorously defend against these claims.

The State of Delaware and various municipalities and other governmental and private parties in California have filed legal proceedings against numerous oil and gas companies, including Devon, seeking relief to abate alleged impacts of climate change. These proceedings include far-reaching claims for monetary damages and injunctive relief. Although Devon cannot predict the ultimate outcome of these matters, Devon intends to vigorously defend against the proceedings.

Other Indemnifications and Legacy Matters

Pursuant to various sale agreements relating to divested businesses and assets, Devon has indemnified various purchasers against liabilities that they may incur with respect to the businesses and assets acquired from Devon. Additionally, federal, state and other laws in areas of former operations may require previous operators (including corporate successors of previous operators) to perform or make payments in certain circumstances where the current operator may no longer be able to satisfy the applicable obligation. Such obligations may include plugging and abandoning wells, removing production facilities or performing requirements under surface agreements in existence at the time of disposition.

In November 2020, the Department of the Interior, Bureau of Safety and Environmental Enforcement, ordered several oil and gas operators, including Devon, to perform decommissioning and reclamation activities related to two California offshore oil and gas production platforms and related facilities. The current operator and owner of the platforms contends that it does not have the financial ability to perform these obligations and relinquished the related federal lease in October 2020. In response to the apparent insolvency of the current operator, the government has ordered the former operators and alleged former lease record title owners to decommission the platforms and related facilities. The government contends that an alleged corporate predecessor of Devon owned a partial interest in the subject lease and platforms. Although Devon cannot predict the ultimate outcome of this matter, Devon denies any obligation to decommission the subject platforms, has appealed the order, and believes any decommissioning obligation related to the subject platforms should be assumed by others.

XML

Fair Value Measurements

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

18.Fair Value Measurements

The following table provides carrying value and fair value measurement information for certain of Devon’s financial assets and liabilities. The carrying values of cash, accounts receivable, other current receivables, accounts payable, other current payables, accrued expenses and lease liabilities included in the accompanying consolidated balance sheets approximated fair value at June 30, 2022 and December 31, 2021, as applicable. Therefore, such financial assets and liabilities are not presented in the following table.

							Fair Value Measurements Using:
	Carrying			Total Fair			Level 1		Level 2			Level 3
	Amount			Value			Inputs		Inputs			Inputs
June 30, 2022 assets (liabilities):
Cash equivalents	$	3,063		$	3,063		$	3,063	$	—		$	—
Commodity derivatives	$	41		$	41		$	—	$	41		$	—
Commodity derivatives	$	(647	)	$	(647	)	$	—	$	(647	)	$	—
Debt	$	(6,461	)	$	(6,440	)	$	—	$	(6,440	)	$	—
Contingent earnout payments	$	129		$	129		$	—	$	—		$	129
December 31, 2021 assets (liabilities):
Cash equivalents	$	1,421		$	1,421		$	1,421	$	—		$	—
Commodity derivatives	$	8		$	8		$	—	$	8		$	—
Commodity derivatives	$	(577	)	$	(577	)	$	—	$	(577	)	$	—
Debt	$	(6,482	)	$	(7,644	)	$	—	$	(7,644	)	$	—
Contingent earnout payments	$	184		$	184		$	—	$	—		$	184

The following methods and assumptions were used to estimate the fair values in the table above.

Level 1 Fair Value Measurements

Cash equivalents – Amounts consist primarily of money market investments and the fair value approximates the carrying value.

Level 2 Fair Value Measurements

Commodity derivatives – The fair value of commodity derivatives is estimated using internal discounted cash flow calculations based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.

Debt – Devon’s debt instruments do not consistently trade actively in an established market. The fair values of its debt are estimated based on rates available for debt with similar terms and maturity when active trading is not available.

Level 3 Fair Value Measurements

Contingent Earnout Payments – Devon has the right to receive contingent consideration related to the Barnett and non-core Rockies asset divestitures based on future oil and gas prices. These values were derived using a Monte Carlo valuation model and qualify as a level 3 fair value measurement. For additional information, see Note 2.

XML

Summary Of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Restricted Cash

Restricted Cash

As of June 30, 2022, Devon classified approximately $140 million of cash as restricted cash on the consolidated balance sheets for obligations retained related to the Barnett Shale assets and the Canadian business. Cash payments for these charges related to the Barnett assets and Canada business total approximately $10 million per quarter.

Variable Interest Entity

Variable Interest Entity

Cotton Draw Midstream, L.L.C. (“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

Investments

In conjunction with the Merger, Devon acquired an interest in Catalyst, which is a joint venture established among WPX, an affiliate of Howard Energy Partners, LLC (“HEP”) and certain other investors, to develop oil gathering and natural gas processing infrastructure in the Stateline area of the Delaware Basin. Under the terms of the arrangement, Devon and a holding company owned by the other joint venture investors each have a 50% voting interest in the joint venture legal entity, and HEP serves as the operator. Through 2038, Devon’s production from 50,000 net acres in the Stateline area of the Delaware Basin has been dedicated to Catalyst subject to fixed-fee oil gathering and natural gas processing agreements. The agreements do not include any minimum volume commitments. Devon accounts for the investment in Catalyst as an equity method investment.

Devon's investment in Catalyst is shown within investments on the consolidated balance sheets and Devon's share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

		Carrying Amount
Investments	% Interest	June 30, 2022		December 31, 2021
Catalyst	50%	$	354	$	368
Other	Various		69		34
Total		$	423	$	402

Commitments And Contingencies

Devon is party to various legal actions arising in connection with its business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to likely involve future amounts that would be material to Devon’s financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates.

XML

Summary Of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2022

Accounting Policies [Abstract]

Schedule of Components of Investment

Devon's investment in Catalyst is shown within investments on the consolidated balance sheets and Devon's share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

		Carrying Amount
Investments	% Interest	June 30, 2022		December 31, 2021
Catalyst	50%	$	354	$	368
Other	Various		69		34
Total		$	423	$	402

Schedule of Revenue from Contracts with Customers

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,
	2022		2021		2022		2021
Oil	$	2,970	$	1,686	$	5,376	$	3,017
Gas		557		188		864		390
NGL		573		280		1,035		504
Oil, gas and NGL sales		4,100		2,154		7,275		3,911
Oil		952		610		1,728		1,109
Gas		322		134		531		281
NGL		422		222		757		397
Marketing and midstream revenues		1,696		966		3,016		1,787
Total revenues from contracts with customers	$	5,796	$	3,120	$	10,291	$	5,698

XML

Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule Of Open Derivative Positions

Commodity Derivatives

As of June 30, 2022, 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 (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q3-Q4 2022		35,000	$	44.61		36,500	$	57.96	$	78.08
Q1-Q4 2023		—	$	—		6,193	$	61.32	$	97.65

	Oil Basis Swaps
Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q3-Q4 2022	BRENT		1,000	$	(7.75	)
Q3-Q4 2022	NYMEX Roll		29,000	$	0.45
Q1-Q4 2023	Midland Sweet		12,296	$	0.52

As of June 30, 2022, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index and the end of month NYMEX index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.

	Price Swaps (1)				Price Collars (2)
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q3-Q4 2022		117,500	$	3.08		193,000	$	3.05	$	4.55
Q1-Q4 2023		8,658	$	5.24		96,436	$	3.55	$	7.63

(1)Related to the 2022 open positions, 17,500 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $5.25 and 100,000 MMBtu/d settle against the end of month NYMEX index at an average price of $2.70. All 2023 open positions settle against the Inside FERC first of month Henry Hub index.

(2)Price collars settle against the Inside FERC first of month Henry Hub Index.

	Natural Gas Basis Swaps
Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q3-Q4 2022	El Paso Natural Gas		50,000	$	(0.85	)
Q3-Q4 2022	Houston Ship Channel		40,000	$	(0.15	)
Q3-Q4 2022	WAHA		70,000	$	(0.57	)
Q1-Q4 2023	El Paso Natural Gas		125,000	$	(1.59	)
Q1-Q4 2023	Houston Ship Channel		50,000	$	(0.13	)
Q1-Q4 2023	WAHA		70,000	$	(0.51	)
Q1-Q4 2024	WAHA		40,000	$	(0.51	)

As of June 30, 2022, Devon did not have any open NGL positions.

Schedule Of Derivative Financial Instruments Included In The Consolidated Balance Sheets

Financial Statement Presentation

All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the consolidated balance sheets. Amounts related to contracts allowed to be netted upon payment subject to a master netting arrangement with the same counterparty are reported on a net basis in the consolidated balance sheets. The tables below present a summary of these positions as of June 30, 2022 and December 31, 2021.

	June 30, 2022									December 31, 2021
	Gross Fair Value			Amounts Netted			Net Fair Value			Gross Fair Value			Amounts Netted			Net Fair Value			Balance Sheet Classification
Commodity derivatives:
Short-term derivative asset	$	37		$	(26	)	$	11		$	6		$	(4	)	$	2		Other current assets
Long-term derivative asset		31			(1	)		30			6			—			6		Other long-term assets
Short-term derivative liability		(672	)		26			(646	)		(579	)		4			(575	)	Other current liabilities
Long-term derivative liability		(2	)		1			(1	)		(2	)		—			(2	)	Other long-term liabilities
Total derivative liability	$	(606	)	$	—		$	(606	)	$	(569	)	$	—		$	(569	)

XML

Share-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2022

Share-Based Payment Arrangement [Abstract]

Schedule Of Share-Based Compensation Expense Included In The Consolidated Statements Of Comprehensive Earnings

The vesting for certain share-based awards was accelerated in 2021 in conjunction with the reduction of workforce described in Note 5 and is included in restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

	Six Months Ended June 30,
	2022		2021
G&A	$	42	$	40
Exploration expenses		1		—
Restructuring and transaction costs		—		21
Total	$	43	$	61
Related income tax benefit	$	26	$	—

Summary Of Unvested Restricted Stock Awards, Performance-Based Restricted Stock Awards And Performance Share Units

Under its approved long-term incentive plan, Devon grants share-based awards to its employees. The following table presents a summary of Devon’s unvested restricted stock awards and units and performance share units granted under the plan.

	Restricted Stock Awards & Units					Performance Share Units
	Awards/Units			Weighted Average Grant-Date Fair Value		Units				Weighted Average Grant-Date Fair Value
	(Thousands, except fair value data)
Unvested at 12/31/21		7,656		$	22.15		2,076			$	24.12
Granted		1,296		$	52.98		964			$	44.05
Vested		(3,104	)	$	23.00		(1,194	)		$	28.91
Forfeited		(59	)	$	33.03		(5	)		$	68.68
Unvested at 6/30/22		5,789		$	28.49		1,841		(1)	$	31.33

(1)A maximum of 3.7 million common shares could be awarded based upon Devon’s final TSR ranking.

Summary Of Performance Share Units Grant-Date Fair Values And Their Related Assumptions

The following table presents the assumptions related to the performance share units granted in 2022, as indicated in the previous summary table. The grants in the previous summary table also include the impact of performance share units granted in a prior year that vested higher than 100% of target due to Devon's TSR performance compared to our peers.

	2022
Grant-date fair value	$	68.68
Risk-free interest rate		1.81	%
Volatility factor		70.1	%
Contractual term (years)		2.89

Summary of Unrecognized Compensation Cost And Weighted Average Period For Recognition

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units as of June 30, 2022.

	Restricted Stock		Performance
	Awards/Units		Share Units
Unrecognized compensation cost	$	109	$	27
Weighted average period for recognition (years)		2.7		1.9

XML

Restructuring and Transaction Costs (Tables)

6 Months Ended

Jun. 30, 2022

Restructuring and Related Activities [Abstract]

Schedule Of Restructuring And Transaction Costs

The following table summarizes Devon’s restructuring and transaction costs.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Restructuring costs	$	—	$	23	$	—	$	166
Transaction costs		—		—		—		46
Total costs	$	—	$	23	$	—	$	212

Schedule Of The Activity And Balances Associated With Restructuring Liabilities

The following table summarizes Devon’s restructuring liabilities.

	Other			Other
	Current			Long-term
	Liabilities			Liabilities			Total
Balance as of December 31, 2021	$	38		$	111		$	149
Changes related to prior years' restructurings		(10	)		(12	)		(22	)
Balance as of June 30, 2022	$	28		$	99		$	127
Balance as of December 31, 2020	$	35		$	137		$	172
Changes related to prior years' restructurings		48			(15	)		33
Balance as of June 30, 2021	$	83		$	122		$	205

XML

Other, Net (Tables)

6 Months Ended

Jun. 30, 2022

Other Expenses [Abstract]

Schedule of Other Expenses (Income)

The following table summarizes Devon's other expenses (income) presented in the accompanying consolidated comprehensive statement of earnings.

	Three Months Ended June 30,					Six Months Ended June 30,
	2022		2021			2022			2021
Estimated future obligation under a performance guarantee	$	—	$	(18	)	$	(96	)	$	(18	)
Ukraine charitable pledge		—		—			20			—
Asset retirement obligation accretion		6		7			13			14
Severance and other non-income tax refunds		—		(3	)		(3	)		(39	)
Other		4		—			15			—
Total	$	10	$	(14	)	$	(51	)	$	(43	)

XML

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The following table presents Devon’s total income tax expense (benefit) and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Earnings before income taxes	$	2,495	$	304	$	3,757	$	272
Current income tax expense	$	252	$	19	$	355	$	14
Deferred income tax expense (benefit)		305		24		469		(219	)
Total income tax expense (benefit)	$	557	$	43	$	824	$	(205	)

Schedule of Effective Income Tax Rate Reconciliation

U.S. statutory income tax rate	21	%	21	%	21	%	21	%
State income taxes	1	%	0	%	1	%	1	%
Subsidiary reorganization	0	%	6	%	0	%	7	%
Deferred tax asset valuation allowance	0	%	(19	%)	0	%	(116	%)
Other	0	%	6	%	0	%	12	%
Effective income tax rate	22	%	14	%	22	%	(75	%)

XML

Net Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2022

Earnings Per Share [Abstract]

Net Earnings (Loss) Per Share Computations from Continuing Operations

The following table reconciles net earnings and weighted-average common shares outstanding used in the calculations of basic and diluted net earnings per share.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Net earnings:
Net earnings	$	1,932		$	256		$	2,921		$	469
Attributable to participating securities		(17	)		(3	)		(33	)		(5	)
Basic and diluted earnings	$	1,915		$	253		$	2,888		$	464
Common shares:
Common shares outstanding - total		658			677			661			666
Attributable to participating securities		(6	)		(6	)		(7	)		(6	)
Common shares outstanding - basic		652			671			654			660
Dilutive effect of potential common shares issuable		2			2			2			2
Common shares outstanding - diluted		654			673			656			662
Net earnings per share:
Basic	$	2.94		$	0.38		$	4.42		$	0.70
Diluted	$	2.93		$	0.38		$	4.40		$	0.70

XML

Other Comprehensive Earnings (Loss) (Tables)

6 Months Ended

Jun. 30, 2022

Other Comprehensive Income (Loss), Net of Tax [Abstract]

Components Of Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) consist of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Pension and postretirement benefit plans:
Beginning accumulated pension and postretirement benefits	$	(131	)	$	(104	)	$	(132	)	$	(127	)
Recognition of net actuarial loss and prior service cost in earnings (1)		2			—			3			1
Settlement of pension benefits (2)		—			3			—			18
Other (3)		—			—			—			7
Income tax expense		(1	)		—			(1	)		—
Accumulated other comprehensive loss, net of tax	$	(130	)	$	(101	)	$	(130	)	$	(101	)

(1)Recognition of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost, which is a component of other, net in the accompanying consolidated statements of comprehensive earnings.

(2)The Merger triggered settlement payments to certain plan participants, and the expense associated with this settlement is recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

(3)Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.

XML

Supplemental Information To Statements Of Cash Flows (Tables)

6 Months Ended

Jun. 30, 2022

Supplemental Cash Flow Elements [Abstract]

Schedule Of Supplemental Information To Statements Of Cash Flows

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Changes in assets and liabilities, net:
Accounts receivable	$	(346	)	$	(100	)	$	(803	)	$	(163	)
Other current assets		(85	)		88			(21	)		78
Other long-term assets		9			(14	)		75			(24	)
Accounts payable and revenues and royalties payable		540			72			787			88
Other current liabilities		93			52			101			19
Other long-term liabilities		(13	)		(81	)		(84	)		(108	)
Total	$	198		$	17		$	55		$	(110	)
Supplementary cash flow data:
Interest paid	$	85		$	105		$	185		$	219
Income taxes paid (refunded)	$	133		$	(106	)	$	110		$	(112	)

XML

Accounts Receivable (Tables)

6 Months Ended

Jun. 30, 2022

Accounts Receivable, after Allowance for Credit Loss [Abstract]

Schedule Of Components Of Accounts Receivable

Components of accounts receivable include the following:

	June 30, 2022			December 31, 2021
Oil, gas and NGL sales	$	1,520		$	984
Joint interest billings		192			158
Marketing and midstream revenues		602			370
Other		42			38
Gross accounts receivable		2,356			1,550
Allowance for doubtful accounts		(8	)		(7	)
Net accounts receivable	$	2,348		$	1,543

XML

Property, Plant and Equipment (Tables)

6 Months Ended

Jun. 30, 2022

Extractive Industries [Abstract]

Table of Property and Equipment, net

The following table presents the aggregate capitalized costs related to Devon’s oil and gas and non-oil and gas activities.

	June 30, 2022			December 31, 2021
Property and equipment:
Proved	$	39,216		$	38,051
Unproved and properties under development		937			1,081
Total oil and gas		40,153			39,132
Less accumulated DD&A		(26,565	)		(25,596	)
Oil and gas property and equipment, net		13,588			13,536
Other property and equipment		2,224			2,139
Less accumulated DD&A		(699	)		(667	)
Other property and equipment, net (1)		1,525			1,472
Property and equipment, net	$	15,113		$	15,008

(1)$122 million and $111 million related to CDM in 2022 and 2021, respectively.

XML

Debt And Related Expenses (Tables)

6 Months Ended

Jun. 30, 2022

Debt Instrument [Line Items]

Schedule Of Debt Instruments and Balances

See below for a summary of debt instruments and balances. The notes and debentures are senior, unsecured obligations of Devon.

	June 30, 2022			December 31, 2021
8.25% due August 1, 2023	$	242		$	242
5.25% due September 15, 2024		472			472
5.85% due December 15, 2025		485			485
7.50% due September 15, 2027		73			73
5.25% due October 15, 2027		390			390
5.875% due June 15, 2028		325			325
4.50% due January 15, 2030		585			585
7.875% due September 30, 2031		675			675
7.95% due April 15, 2032		366			366
5.60% due July 15, 2041		1,250			1,250
4.75% due May 15, 2042		750			750
5.00% due June 15, 2045		750			750
Net premium on debentures and notes		126			149
Debt issuance costs		(28	)		(30	)
Total long-term debt	$	6,461		$	6,482

Schedule Of Net Financing Cost Components

The following schedule includes the components of net financing costs.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
Interest based on debt outstanding	$	93		$	98		$	185		$	203
Gain on early retirement of debt		—			(10	)		—			(30	)
Interest income		(2	)		—			(3	)		(1	)
Other		(7	)		(8	)		(13	)		(15	)
Total net financing costs	$	84		$	80		$	169		$	157

XML

Leases (Tables)

6 Months Ended

Jun. 30, 2022

Leases [Abstract]

Schedule of Right-of-use Assets and Lease Liabilities

The following table presents Devon’s right-of-use assets and lease liabilities as of June 30, 2022 and December 31, 2021.

	June 30, 2022						December 31, 2021
	Finance		Operating		Total		Finance		Operating		Total
Right-of-use assets	$	207	$	29	$	236	$	211	$	24	$	235
Lease liabilities:
Current lease liabilities (1)	$	8	$	18	$	26	$	8	$	18	$	26
Long-term lease liabilities		248		11		259		247		5		252
Total lease liabilities	$	256	$	29	$	285	$	255	$	23	$	278

(1) Current lease liabilities are included in other current liabilities on the consolidated balance sheets.

XML

Asset Retirement Obligations (Tables)

6 Months Ended

Jun. 30, 2022

Asset Retirement Obligation Disclosure [Abstract]

Summary Of Changes In Asset Retirement Obligations

The following table presents the changes in Devon’s asset retirement obligations.

	Six Months Ended June 30,
	2022			2021
Asset retirement obligations as of beginning of period	$	485		$	369
Assumed WPX obligations		—			98
Liabilities incurred		15			20
Liabilities settled and divested		(9	)		(47	)
Revision of estimated obligation		(35	)		11
Accretion expense on discounted obligation		13			14
Asset retirement obligations as of end of period		469			465
Less current portion		17			15
Asset retirement obligations, long-term	$	452		$	450

XML

Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

Summary of Purchases of Common Stock

The table below provides information regarding purchases of Devon’s common stock under the $2.0 billion share repurchase program (shares in thousands).

	Total Number of Shares Purchased		Dollar Value of Shares Purchased		Average Price Paid per Share
2021:
Fourth quarter		13,983	$	589	$	42.15
2022:
First quarter		3,979	$	230	$	57.74
Second quarter		5,052		318	$	63.07
Total plan		23,014	$	1,137	$	49.44

Schedule of Dividends Payable

The following table summarizes Devon’s fixed and variable dividends for the first six months of 2022 and 2021, respectively.

	Fixed		Variable		Total		Rate Per Share
2022:
First quarter	$	109	$	558	$	667	$	1.00
Second quarter		105		725		830	$	1.27
Total year-to-date	$	214	$	1,283	$	1,497
2021:
First quarter	$	76	$	127	$	203	$	0.30
Second quarter		75		154		229	$	0.34
Total year-to-date	$	151	$	281	$	432

XML

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Disclosures [Abstract]

Schedule Of Carrying Value And Fair Value Measurement Information For Financial Assets And Liabilities

Therefore, such financial assets and liabilities are not presented in the following table.

							Fair Value Measurements Using:
	Carrying			Total Fair			Level 1		Level 2			Level 3
	Amount			Value			Inputs		Inputs			Inputs
June 30, 2022 assets (liabilities):
Cash equivalents	$	3,063		$	3,063		$	3,063	$	—		$	—
Commodity derivatives	$	41		$	41		$	—	$	41		$	—
Commodity derivatives	$	(647	)	$	(647	)	$	—	$	(647	)	$	—
Debt	$	(6,461	)	$	(6,440	)	$	—	$	(6,440	)	$	—
Contingent earnout payments	$	129		$	129		$	—	$	—		$	129
December 31, 2021 assets (liabilities):
Cash equivalents	$	1,421		$	1,421		$	1,421	$	—		$	—
Commodity derivatives	$	8		$	8		$	—	$	8		$	—
Commodity derivatives	$	(577	)	$	(577	)	$	—	$	(577	)	$	—
Debt	$	(6,482	)	$	(7,644	)	$	—	$	(7,644	)	$	—
Contingent earnout payments	$	184		$	184		$	—	$	—		$	184

XML

Summary Of Significant Accounting Policies (Narrative) (Details) $ in Millions		6 Months Ended
	Jan. 07, 2021	Jun. 30, 2022 USD ($) a	Jun. 30, 2021 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Restricted cash		$ 157	$ 191
Canada [Member] | Barnett Shale [Member]
Summary Of Significant Accounting Policies [Line Items]
Restricted cash		140
Cash payments for divestitures		$ 10
Devon and WPX Agreement [Member]
Summary Of Significant Accounting Policies [Line Items]
Date of agreement	Jan. 07, 2021	Jan. 07, 2021
Conversion of common stock into right to recieve per share	0.5165
WPX and Howard Energy Partners [Member]
Summary Of Significant Accounting Policies [Line Items]
Voting interest in the join venture legal entity		50.00%
Catalyst [Member]
Summary Of Significant Accounting Policies [Line Items]
Area of land | a		50,000

XML

summary Of Significant Accounting Policies - (Schedule of Components of Investments) (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Summary Of Significant Accounting Policies [Line Items]
Investments	$ 423	$ 402
Catalyst [Member]
Summary Of Significant Accounting Policies [Line Items]
Investments	$ 354	368
Percentage Of Interest In Investments	50.00%
Other Member
Summary Of Significant Accounting Policies [Line Items]
Investments	$ 69	$ 34

XML

Summary of Significant Accounting Policies (Schedule of Revenue from Contracts with Customers) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	$ 5,796	$ 3,120	$ 10,291	$ 5,698
Oil, Gas and NGL Sales [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	4,100	2,154	7,275	3,911
Oil, Gas and NGL Sales [Member] | Oil [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	2,970	1,686	5,376	3,017
Oil, Gas and NGL Sales [Member] | Gas [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	557	188	864	390
Oil, Gas and NGL Sales [Member] | NGL [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	573	280	1,035	504
Marketing and Midstream Revenues [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	1,696	966	3,016	1,787
Marketing and Midstream Revenues [Member] | Oil [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	952	610	1,728	1,109
Marketing and Midstream Revenues [Member] | Gas [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	322	134	531	281
Marketing and Midstream Revenues [Member] | NGL [Member]
Disaggregation Of Revenue [Line Items]
Total revenues from contracts with customers	$ 422	$ 222	$ 757	$ 397

XML

Acquisition and Divestitures (Narrative) (Details) $ in Millions		1 Months Ended	3 Months Ended			6 Months Ended
	Jan. 07, 2021	Jul. 31, 2022 USD ($)	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)	Jun. 30, 2022 USD ($) MMBoe $ / MMBTU $ / bbl	Dec. 31, 2021 USD ($)
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Common Stock Shares Issued			$ 66			$ 66	$ 66
Other Current Assets [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Cash paid related to acquisition			87
Barnett Shale [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Contingent earnout payments						65
Additional contingent earnout payment						$ 195
Henry Hub gas price for contingent earnout payment upside | $ / MMBTU						2.75
WTI oil price for contingent earnout payment upside | $ / bbl						50
Contingent earnout payment period						The contingent payment period commenced on January 1, 2021 and has a term of four years.
Barnett Shale [Member] | Other Current Assets [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Contingent earnout payments						$ 65
Barnett Shale [Member] | Other Noncurrent Assets [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Contingent earnout payments						60
Producing properties and leasehold interests | Subsequent Event [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Cash consideration		$ 830
Non Core Assets [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Divestitures of property and equipment					$ 9
Gain on asset dispositions					$ 35
Contingent earnout payments				$ 4
Change in contingent earnout payments						$ 4
Total estimated proved reserves | MMBoe						3
Devon and WPX Agreement [Member]
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]
Date of agreement	Jan. 07, 2021					Jan. 07, 2021
Conversion of common stock into right to recieve per share	0.5165
Common Stock Shares Issued			$ 5,400			$ 5,400

XML

Derivative Financial Instruments (Narrative) (Details)	Jun. 30, 2022 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Cash collateral held	$ 0
Cash collateral posted	$ 0

XML

Derivative Financial Instruments (Schedule Of Open Oil Derivative Positions) (Details)	6 Months Ended
	Jun. 30, 2022 $ / bbl bbl
NYMEX West Texas Intermediate Price Swaps Oil Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	35,000
Weighted Average Price Swap	44.61
NYMEX West Texas Intermediate Price Collars Oil Q1-Q4 2023 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	6,193
Weighted Average Floor Price	61.32
Weighted Average Ceiling Price	97.65
NYMEX West Texas Intermediate Price Collars Oil Q3 Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	36,500
Weighted Average Floor Price	57.96
Weighted Average Ceiling Price	78.08
BRENT Basis Swaps Oil Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	1,000
Oil Basis Swaps	(7.75)
NYMEX Roll Basis Swaps Oil Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	29,000
Oil Basis Swaps	0.45
Midland Sweet Q1 Q4 2023 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	12,296
Oil Basis Swaps	0.52

XML

Derivative Financial Instruments (Schedule Of Open Natural Gas Derivative Positions) (Details)	6 Months Ended
	Jun. 30, 2022 MMBTU $ / MMBTU
FERC Henry Hub Price Swaps Natural Gas1 Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	117,500	[1]
Weighted Average Price Swap	3.08	[1]
FERC Henry Hub Price Swaps Natural Gas Q1-Q4 2023 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	8,658	[1]
Weighted Average Price Swap	5.24	[1]
FERC Henry Hub Price Collars Natural Gas Q1-Q4 2023 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	96,436	[2]
Weighted Average Floor Price	3.55	[2]
Weighted Average Ceiling Price	7.63	[2]
FERC Henry Hub Price Collars Natural Gas Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	193,000	[2]
Weighted Average Floor Price	3.05	[2]
Weighted Average Ceiling Price	4.55	[2]
El Paso Natural Gas Basis Swaps Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	50,000
Weighted Average Differential To Henry Hub	(0.85)
WAHA Natural Gas Basis Swaps Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	70,000
Weighted Average Differential To Henry Hub	(0.57)
El Paso Natural Gas Basis Swaps Q1-Q4 2023 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	125,000
Weighted Average Differential To Henry Hub	(1.59)
WAHA Natural Gas Basis Swaps Q1-Q4 2023 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	70,000
Weighted Average Differential To Henry Hub	(0.51)
WAHA Natural Gas Basis Swaps Q1-Q4 2024 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	40,000
Weighted Average Differential To Henry Hub	(0.51)
Houston Ship Channel Natural Gas Basis Swaps Q3-Q4 2022 [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	40,000
Weighted Average Differential To Henry Hub	(0.15)
Houston Ship Channel Natural Gas Basis Swaps Q1 Q4 2023 Member
Derivatives, Fair Value [Line Items]
Volume Per Day (MMBtu/d) | MMBTU	50,000
Weighted Average Differential To Henry Hub	(0.13)

[1] Related to the 2022 open positions, 17,500 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $5.25 and 100,000 MMBtu/d settle against the end of month NYMEX index at an average price of $2.70. All 2023 open positions settle against the Inside FERC first of month Henry Hub index.

[2] Price collars settle against the Inside FERC first of month Henry Hub Index.

XML

Derivative Financial Instruments (Schedule Of Open Natural Gas Derivative Positions) (Parenthetical) (Details)	6 Months Ended
	Jun. 30, 2022 $ / MMBTU bbl
FERC Henry Hub Natural Gas [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	17,500
Weighted Average Price Swap | $ / MMBTU	5.25
NYMEX West Texas Intermediate [Member]
Derivatives, Fair Value [Line Items]
Volume Per Day (Bbls/d) | bbl	100,000
Weighted Average Price Swap | $ / MMBTU	2.70

XML

Derivative Financial Instruments (Schedule Of Derivative Financial Instruments Included In The Consolidated Balance Sheets) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Derivatives Fair Value [Line Items]
Gross Fair Value	$ (606)	$ (569)
Net Fair Value	(606)	(569)
Short-term Derivative Asset [Member]
Derivatives Fair Value [Line Items]
Gross Fair Value	37	6
Amounts Netted	(26)	(4)
Net Fair Value	$ 11	2
Balance Sheet Classification	Other current assets
Long-term Derivative Asset [Member]
Derivatives Fair Value [Line Items]
Gross Fair Value	$ 31	6
Amounts Netted	(1)
Net Fair Value	$ 30	6
Balance Sheet Classification	Other long-term assets
Short-term Derivative Liability [Member]
Derivatives Fair Value [Line Items]
Gross Fair Value	$ (672)	(579)
Amounts Netted	26	4
Net Fair Value	$ (646)	(575)
Balance Sheet Classification	Other current liabilities
Long-term Derivative Liability [Member]
Derivatives Fair Value [Line Items]
Gross Fair Value	$ (2)	(2)
Amounts Netted	1
Net Fair Value	$ (1)	$ (2)
Balance Sheet Classification	Other long-term liabilities

XML

Share-Based Compensation (Additional Information) (Details)	6 Months Ended
	Jun. 30, 2022 shares
Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Sharebased Compensation Arrangement By Sharebased Payment Award Award Vesting Rights Percentage	100.00%
Two Thousand Twenty Two Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common Stock Shares	1.74
Number of shares used to calculate shares that may be granted under the Long-Term Incentive Plan, options and stock appreciation rights	1

XML

Share-Based Compensation (Schedule Of Share-Based Compensation Expense Included In The Consolidated Statements Of Comprehensive Earnings) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	$ 43	$ 61
Related income tax benefit	26	0
G&A [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	42	40
Exploration Expenses [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	1	0
Restructuring and Transaction Costs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restructuring and transaction costs	$ 0	$ 21

XML

Share-Based Compensation (Summary Of Unvested Restricted Stock Awards, Performance-Based Restricted Stock Awards And Performance Share Units) (Details) shares in Thousands	6 Months Ended
	Jun. 30, 2022 $ / shares shares
Restricted Stock Awards [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested at December 31, 2021 | shares	7,656
Granted, awards and units | shares	1,296
Vested, awards and units | shares	(3,104)
Forfeited, awards and units | shares	(59)
Unvested at March 31, 2022 share | shares	5,789
Unvested weighted average grant-date fair value at December 31, 2021	$ 22.15
Granted, weighted average grant-date fair value	52.98
Vested, weighted average grant-date fair value	23.00
Forfeited, weighted average grant-date fair value	33.03
Unvested weighted average grant-date fair value at March 31, 2022	$ 28.49
Performance Share Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unvested at December 31, 2021 | shares	2,076
Granted, awards and units | shares	964
Vested, awards and units | shares	(1,194)
Forfeited, awards and units | shares	(5)
Unvested at March 31, 2022 share | shares	1,841	[1]
Unvested weighted average grant-date fair value at December 31, 2021	$ 24.12
Granted, weighted average grant-date fair value	44.05
Vested, weighted average grant-date fair value	28.91
Forfeited, weighted average grant-date fair value	68.68
Unvested weighted average grant-date fair value at March 31, 2022	31.33
Including Performance Factor Shares Granted [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Granted, weighted average grant-date fair value	$ 68.68

[1] A maximum of 3.7 million common shares could be awarded based upon Devon’s final TSR ranking.

XML

Share-Based Compensation (Summary Of Unvested Restricted Stock Awards, Performance-Based Restricted Stock Awards And Performance Share Units) (Parenthetical) (Details) shares in Millions	6 Months Ended
	Jun. 30, 2022 shares
Performance Share Units [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Maximum common shares that could be awarded based upon total shareholder return	3.7

XML

Share-Based Compensation (Summary Of Performance Share Units Grant-Date Fair Values And Their Related Assumptions) (Details)	6 Months Ended
	Jun. 30, 2022 $ / shares
Performance Share Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant-date fair value	$ 44.05
Risk-free interest rate	1.81%
Volatility factor	70.10%
Contractual term (years)	2 years 10 months 20 days
Including Performance Factor Shares Granted [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Grant-date fair value	$ 68.68

XML

Share-Based Compensation (Summary of Unrecognized Compensation Cost And Weighted Average Period For Recognition) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
Restricted Stock Awards [Member]
Unrecognized Compensation And Weighted Average Recognition [Line Items]
Unrecognized compensation cost	$ 109
Weighted average period for recognition (years)	2 years 8 months 12 days
Performance Share Units [Member]
Unrecognized Compensation And Weighted Average Recognition [Line Items]
Unrecognized compensation cost	$ 27
Weighted average period for recognition (years)	1 year 10 months 24 days

XML

Restructuring and Transaction Costs - (Schedule Of Restructuring And Transaction Costs) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Restructuring Cost And Reserve [Line Items]
Restructuring costs	$ 0	$ 23	$ 0	$ 212
Transaction Costs [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring costs	0	0	0	46
Other Restructuring [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring costs	$ 0	$ 23	$ 0	$ 166

XML

Restructuring and Transaction Costs (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Restructuring Cost And Reserve [Line Items]
Restructuring and transaction costs	$ 0	$ 23	$ 0	$ 212
Reduction of workforce [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring and transaction costs				40
Reduction Of Workforce [Member]
Restructuring Cost And Reserve [Line Items]
Noncash-Accelerated vesting				21
Transaction Costs [Member]
Restructuring Cost And Reserve [Line Items]
Transaction costs		$ 46		46
Merger Integration [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring and transaction costs				$ 166

XML

Restructuring and Transaction Costs (Schedule Of The Activity And Balances Associated With Restructuring Liabilities) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021
Restructuring Cost And Reserve [Line Items]
Beginning balance	$ 149	$ 172
Ending balance	127	205
Prior years' restructurings [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring reserve activity	(22)	33
Other Current Liabilities [Member]
Restructuring Cost And Reserve [Line Items]
Beginning balance	38	35
Ending balance	28	83
Other Current Liabilities [Member] | Prior years' restructurings [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring reserve activity	(10)	48
Other Long-Term Liabilities [Member]
Restructuring Cost And Reserve [Line Items]
Beginning balance	111	137
Ending balance	99	122
Other Long-Term Liabilities [Member] | Prior years' restructurings [Member]
Restructuring Cost And Reserve [Line Items]
Restructuring reserve activity	$ (12)	$ (15)

XML

Other, Net (Schedule of Other Expenses (Income)) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Other Expenses [Abstract]
Estimated future obligation under a performance guarantee	$ 0	$ (18)	$ (96)	$ (18)
Ukraine charitable pledge	0	0	20	0
Asset retirement obligation accretion	6	7	13	14
Severance and other non-income tax refunds	0	(3)	(3)	(39)
Other	4	0	15	0
Total	$ 10	$ (14)	$ (51)	$ (43)

XML

Other, Net (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Other Expenses [Abstract]
Estimated future obligation under a performance guarantee	$ 0		$ (18)	$ (96)	$ (18)
Satisfaction of future obligation under performance guarantee		$ 35
Reduction in estimated exposure of future obligation under performance guarantee		$ 61
Ukraine charitable pledge	0		0	20	0
Severance and other non-income tax refunds	$ 0		$ 3	$ 3	$ 39

XML

Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
Earnings before income taxes	$ 2,495	$ 304	$ 3,757	$ 272
Current income tax expense	252	19	355	14
Deferred income tax expense (benefit)	305	24	469	(219)
Total income tax expense (benefit)	$ 557	$ 43	$ 824	$ (205)

XML

Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Income Tax Disclosure [Abstract]
U.S. statutory income tax rate	21.00%	21.00%	21.00%	21.00%
State income taxes	1.00%	0.00%	1.00%	1.00%
Subsidiary reorganization	0.00%	6.00%	0.00%	7.00%
Deferred tax asset valuation allowance	0.00%	(19.00%)	0.00%	(116.00%)
Other	0.00%	6.00%	0.00%	12.00%
Effective income tax rate	22.00%	14.00%	22.00%	(75.00%)

XML

Income Taxes (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2021 USD ($)
Domestic Tax Authority [Member]
Income Tax [Line Items]
Operating Loss Carryforwards	$ 1,800
WPX Merger [Member]
Income Tax [Line Items]
Deferred income taxes	250
Merger [Member]
Income Tax [Line Items]
Other income tax expense benefit	$ 18

XML

Net Earnings Per Share (Net Earnings (Loss) Per Share Computations from Continuing Operations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Net earnings:
Net earnings	$ 1,932	$ 256	$ 2,921	$ 469
Attributable to participating securities	(17)	(3)	(33)	(5)
Basic and diluted earnings	$ 1,915	$ 253	$ 2,888	$ 464
Common shares:
Common shares outstanding - total	658	677	661	666
Attributable to participating securities	(6)	(6)	(7)	(6)
Common shares outstanding - basic	652	671	654	660
Dilutive effect of potential common shares issuable	2	2	2	2
Common shares outstanding - diluted	654	673	656	662
Net Earnings Per Share Basic And Diluted
Basic	$ 2.94	$ 0.38	$ 4.42	$ 0.70
Diluted	$ 2.93	$ 0.38	$ 4.40	$ 0.70

XML

Other Comprehensive Earnings (Loss) (Components Of Other Comprehensive Earnings (Loss)) (Details) - USD ($) $ in Millions		3 Months Ended			6 Months Ended
		Jun. 30, 2022	Jun. 30, 2021		Jun. 30, 2022	Jun. 30, 2021
Pension and postretirement benefit plans:
Beginning accumulated pension and postretirement benefits		$ (131)	$ (104)		$ (132)	$ (127)
Recognition of net actuarial loss and prior service cost in earnings	[1]	2	0		3	1
Settlement of pension benefits		0	3	[2]	0	18	[2]
Other		0	0		0	7	[3]
Income tax benefit (expense)		(1)	0		(1)	0
Accumulated other comprehensive loss, net of tax		$ (130)	$ (101)		$ (130)	$ (101)

[1] Recognition of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost, which is a component of other, net in the accompanying consolidated statements of comprehensive earnings.

[2] The Merger triggered settlement payments to certain plan participants, and the expense associated with this settlement is recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

[3] Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.

XML

Supplemental Information To Statements Of Cash Flows (Schedule Of Supplemental Information To Statements Of Cash Flows) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Changes in assets and liabilities, net:
Accounts receivable	$ (346)	$ (100)	$ 803	$ (163)
Other current assets	(85)	(88)	21	78
Other long-term assets	(9)	(14)	(75)	(24)
Accounts payable and revenues and royalties payable	540	72	787	88
Other current liabilities	93	52	101	19
Other long-term liabilities	13	(81)	(84)	(108)
Total	198	17	55	(110)
Supplementary cash flow data - total operations:
Interest paid	85	105	185	219
Income taxes paid (refunded)	$ (133)	$ (106)	$ (110)	$ (112)

XML

Accounts Receivable (Schedule Of Components Of Accounts Receivable) (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Joint interest billings	$ 192	$ 158
Other	42	38
Gross accounts receivable	2,356	1,550
Allowance for doubtful accounts	(8)	(7)
Net accounts receivable	2,348	1,543
Oil, Gas and NGL Sales [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross accounts receivable	1,520	984
Marketing and Midstream Revenues [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Gross accounts receivable	$ 602	$ 370

XML

Property, Plant and Equipment (Summary of Property and Equipment, net) (Details) - USD ($) $ in Millions		Jun. 30, 2022	Dec. 31, 2021
Property and equipment:
Proved		$ 39,216	$ 38,051
Unproved and properties under development		937	1,081
Total oil and gas		40,153	39,132
Less accumulated DD&A		(26,565)	(25,596)
Oil and gas property and equipment, net		13,588	13,536
Other property and equipment		2,224	2,139
Less accumulated DD&A		(699)	(667)
Other property and equipment, net	[1]	1,525	1,472
Total property and equipment, net		$ 15,113	$ 15,008

[1] $122 million and $111 million related to CDM in 2022 and 2021, respectively.

XML

Property, Plant and Equipment (Summary of Property and Equipment, net) (Parenthetical) (Details) - USD ($) $ in Millions		Jun. 30, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Other property and equipment, net	[1]	$ 1,525	$ 1,472
CDM [Member]
Property Plant And Equipment [Line Items]
Other property and equipment, net		$ 122	$ 111

[1] $122 million and $111 million related to CDM in 2022 and 2021, respectively.

XML

Debt And Related Expenses (Schedule Of Debt Instruments and Balances) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Net premium (discount) on debentures and notes	$ 126	$ (149)
Debt issuance costs	(28)	(30)
Long-term debt	6,461	6,482
8.25% due August 1, 2023 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 242	$ 242
Charge on early retirement of debt, cash retirement costs	8.25%	8.25%
Debt, maturity date	Aug. 01, 2023
5.25% due September 15, 2024 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 472	$ 472
Charge on early retirement of debt, cash retirement costs	5.25%	5.25%
Debt, maturity date	Sep. 15, 2024
5.85% due December 15, 2025 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 485	$ 485
Charge on early retirement of debt, cash retirement costs	5.85%	5.85%
Debt, maturity date	Dec. 15, 2025
7.50% due September 15, 2027 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 73	$ 73
Charge on early retirement of debt, cash retirement costs	7.50%	7.50%
Debt, maturity date	Sep. 15, 2027
5.25% due October 15, 2027 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 390	$ 390
Charge on early retirement of debt, cash retirement costs	5.25%	5.25%
Debt, maturity date	Oct. 15, 2027
5.875% due June 15, 2028 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 325	$ 325
Charge on early retirement of debt, cash retirement costs	5.875%	5.875%
Debt, maturity date	Jun. 15, 2028
4.50% due January 15, 2030 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 585	$ 585
Charge on early retirement of debt, cash retirement costs	4.50%	4.50%
Debt, maturity date	Jan. 15, 2030
7.875% due September 30, 2031 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 675	$ 675
Charge on early retirement of debt, cash retirement costs	7.875%	7.875%
Debt, maturity date	Sep. 30, 2031
7.95% due April 15, 2032 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 366	$ 366
Charge on early retirement of debt, cash retirement costs	7.95%	7.95%
Debt, maturity date	Apr. 15, 2032
5.60% due July 15, 2041 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 1,250	$ 1,250
Charge on early retirement of debt, cash retirement costs	5.60%	5.60%
Debt, maturity date	Jul. 15, 2041
4.75% due May 15, 2042 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 750	$ 750
Charge on early retirement of debt, cash retirement costs	4.75%	4.75%
Debt, maturity date	May 15, 2042
5.00% due June 15, 2045 [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 750	$ 750
Charge on early retirement of debt, cash retirement costs	5.00%	5.00%
Debt, maturity date	Jun. 15, 2045

XML

Debt And Related Expenses (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Debt Instrument [Line Items]
Repayments of long-term debt	$ 0	$ 710,000,000	$ 0	$ 1,243,000,000
Early retirement of debt	0	(10,000,000)	0	(30,000,000)
Charge on early retirement of debt, noncash charges		$ 32,000,000		59,000,000
Senior Credit Facility [Member]
Debt Instrument [Line Items]
Credit Facility, borrowing capacity	3,000,000,000.0		3,000,000,000.0
Outstanding credit facility borrowings	$ 0		$ 0
Debt-to-capitalization ratio	0.239		0.239
Outstanding letters of credit	$ 2,000,000		$ 2,000,000
Senior Credit Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt-to-capitalization ratio	0.65		0.65
Senior Notes [Member]
Debt Instrument [Line Items]
Early retirement of debt				$ (30,000,000)
Charge on early retirement of debt, cash retirement costs			$ 89,000,000
Charge on early retirement of debt, noncash charges			59,000,000
6.00% Due 2022 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Repayments of long-term debt			$ 43,000,000
Debt interest rate, stated percentage	6.00%		6.00%
5.875% Due 2028 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Repayments of long-term debt			$ 175,000,000
Debt interest rate, stated percentage	5.875%		5.875%
4.5% Due 2030 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Repayments of long-term debt			$ 315,000,000
Debt interest rate, stated percentage	4.50%		4.50%
5.35% Due 2027 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Repayments of long-term debt			$ 210,000,000
Debt interest rate, stated percentage	5.35%		5.35%
5.75% due June 1, 2026 [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Repayments of long-term debt			$ 500,000,000
Debt interest rate, stated percentage	5.75%		5.75%

XML

Debt And Related Expenses (Schedule of Net Financing Cost Components) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021
Debt Disclosure [Abstract]
Interest based on debt outstanding	$ 93	$ 98	$ 185	$ 203
Early retirement of debt	0	(10)	0	(30)
Interest income	(2)		(3)	(1)
Other	(7)	(8)	(13)	15
Total net financing costs	$ 84	$ 80	$ 169	$ 157

XML

Leases (Schedule of Right-of-use Assets and Lease Liabilities) (Details) - USD ($) $ in Millions		Jun. 30, 2022	Dec. 31, 2021
Leases [Abstract]
Right-of-use assets, finance lease		$ 207	$ 211
Finance lease liabilities:
Current lease liabilities, finance lease	[1]	8	8
Long-term lease liabilities, finance lease		248	247
Total lease liabilities, finance lease		256	255
Right-of-use assets, operating lease		29	24
Operating lease liabilities:
Current lease liabilities, operating lease	[1]	18	18
Long-term lease liabilities, operating lease		11	5
Total lease liabilities, operating lease		29	23
Right-of-use assets		236	235
Lease liabilities:
Current lease liabilities	[1]	26	26
Long-term lease liabilities		259	252
Total lease liabilities		$ 285	$ 278

[1] Current lease liabilities are included in other current liabilities on the consolidated balance sheets.

XML

Asset Retirement Obligations (Summary Of Changes In Asset Retirement Obligations) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2022	Jun. 30, 2021	Jun. 30, 2022	Jun. 30, 2021	Dec. 31, 2021
Asset Retirement Obligation Disclosure [Abstract]
Asset retirement obligations as of beginning of period			$ 485	$ 369
Assumed WPX obligations			0	98
Liabilities incurred			15	20
Liabilities settled and divested			(9)	(47)
Revision of estimated obligation			(35)	11
Asset retirement obligation accretion	$ 6	$ 7	13	14
Asset retirement obligations as of end of period	469	465	469	465
Less current portion	17	15	17	15
Asset retirement obligations	$ 452	$ 450	$ 452	$ 450	$ 468

XML

Asset Retirement Obligations (Narrative) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2022 USD ($)
Asset Retirement Obligation Disclosure [Abstract]
Decrease in asset retirement obligations	$ 35

XML

Stockholders' Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Billions			1 Months Ended		3 Months Ended
	Feb. 28, 2022	Nov. 02, 2021	Aug. 31, 2022	May 31, 2022	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021
Stockholders Equity [Abstract]
Dividends rate per share						$ 1.27	$ 1.00	$ 0.34	$ 0.30
Fixed Dividend [Member]
Stockholders Equity [Abstract]
Percentage Increase In Quarterly Dividend							45.00%
Dividends rate per share							$ 0.16
Forecast [Member] | Fixed Dividend [Member]
Stockholders Equity [Abstract]
Percentage Increase In Quarterly Dividend					13.00%
Dividends rate per share					$ 0.18
Subsequent Event
Stockholders Equity [Abstract]
Dividend payable, per share			$ 1.55
Dividend payable amount			$ 1.0
Dividends payable, year			2022
Subsequent Event | Fixed Dividend [Member]
Stockholders Equity [Abstract]
Dividends rate per share			$ 0.18
Subsequent Event | Variable Dividend [Member]
Stockholders Equity [Abstract]
Dividend payable, per share			$ 1.37
Share Repurchase Program [Member]
Stockholders Equity [Abstract]
Repurchase of common stock	$ 1.6	$ 1.0		$ 2.0
Repurchase program expiration date	May 31, 2022	Dec. 31, 2022		May 04, 2023

XML

Stockholders' Equity (Summary of Purchases of Common Stock) (Details) - Share Repurchase Program Open [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended			8 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Dec. 31, 2021	Jun. 30, 2022
Stockholders Equity [Line Items]
Total Number of Shares Purchased	5,052	3,979	13,983	23,014
Dollar Value of Shares Purchased	$ 318	$ 230	$ 589	$ 1,137
Average Price Paid per Share	$ 63.07	$ 57.74	$ 42.15	$ 49.44

XML

Stockholders' Equity (Summary Of Dividends Paid On Common Stock) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2021	Mar. 31, 2021	Jun. 30, 2022	Jun. 30, 2021
Stockholders Equity [Line Items]
Dividends amount	$ 830	$ 667	$ 229	$ 203	$ 1,497	$ 432
Dividends rate per share	$ 1.27	$ 1.00	$ 0.34	$ 0.30
Fixed Dividend [Member]
Stockholders Equity [Line Items]
Dividends amount	$ 105	$ 109	$ 75	$ 76	214	151
Dividends rate per share		$ 0.16
Variable Dividend [Member]
Stockholders Equity [Line Items]
Dividends amount	$ 725	$ 558	$ 154	$ 127	$ 1,283	$ 281

XML

Commitments and Contingencies (Narrative) (Details) $ in Millions	Jun. 30, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Other accrued liabilities current	$ 25

XML

Fair Value Measurements (Schedule Of Carrying Value And Fair Value Measurement Information For Financial Assets And Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2022	Dec. 31, 2021
Carrying Amount [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	$ 3,063	$ 1,421
Debt	(6,461)	(6,482)
Contingent earnout payments	129	184
Carrying Amount [Member] | Commodity Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, assets	41	8
Derivatives, liabilities	(647)	(577)
Total Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	3,063	1,421
Debt	(6,440)	(7,644)
Contingent earnout payments	129	184
Total Fair Value [Member] | Commodity Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, assets	41	8
Derivatives, liabilities	(647)	(577)
Level 1 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	3,063	1,421
Level 2 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt	(6,440)	(7,644)
Level 2 Inputs [Member] | Commodity Derivatives [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivatives, assets	41	8
Derivatives, liabilities	(647)	(577)
Level 3 Inputs [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent earnout payments	$ 129	$ 184