Discontinued Operations

3 Months Ended

Mar. 31, 2021

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

18. Discontinued Operations

On October 1, 2020, Devon completed the sale of its Barnett Shale assets to BKV for proceeds, net of purchase price adjustments, of $490 million. Additionally, the agreement provides for contingent earnout payments to Devon of up to $260 million based upon future commodity prices, 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. The valuation of the future contingent earnout payments included within other current assets in the March 31, 2021 balance sheet was $66 million. The value was derived utilizing a Monte Carlo valuation model and qualifies as a level 3 fair value measurement.

The following table presents the amounts reported in the consolidated statements of comprehensive earnings as discontinued operations.

	Three Months Ended March 31, 2020
Oil, gas and NGL sales	$	92
Total revenues		92
Production expenses		74
Asset impairments (1)		179
General and administrative expenses		1
Financing costs, net		(2	)
Other, net		(3	)
Total expenses		249
Loss from discontinued operations before income taxes		(157	)
Income tax benefit		(32	)
Net loss from discontinued operations, net of tax	$	(125	)

(1) Devon recognized an $179 million asset impairment in the first quarter of 2020 related to the Barnett Shale assets primarily due to the difference between the net carrying value and the purchase price, net of estimated customary purchase price adjustments, which qualified as a level 2 fair value measurement.