- Company name
- Devon Energy
- Sector
- Oil & gas exploration & production
- About
- Devon Energy is a US oil and gas producer based in Houston. On May 7, 2026, it completed an all-stock merger with Coterra Energy, in which each Coterra share became 0.70 Devon shares. Former Devon shareholders own about 54% of the combined company. Its main asset is a large position in the Delaware Basin in Texas and New Mexico. It also produces in the Anadarko Basin, the Marcellus Shale, the Powder River and Williston basins and the Eagle Ford, which it agreed to sell in October 2026. Oil production averaged 503,000 barrels per day in Q2 2026. Devon pays a fixed quarterly dividend of $0.32 per share and buys back shares.
- Thesis
- The market prices Devon for lower oil prices and for the risks of its large merger with Coterra. Devon's earnings and cash flow move with oil and gas prices, which it cannot control. The merger closed only in May 2026, and the company changed its senior team in August 2026. It also runs a review of all its assets. For the gap to close, three things must be true. Devon must capture the $1.0 billion of annual pre-tax synergies that it targets by the end of 2027, with about $600 million in 2027. The sale of its Eagle Ford assets to Crescent Energy for $4.2 billion must close around the end of 2026, and Devon must use the money for buybacks and lower debt, as it plans. Production and capital spending must stay on plan, so that adjusted free cash flow stays near the $1.7 billion of Q2 2026. The Q3 2026 report on November 5, 2026, with the effect of the Eagle Ford sale on the outlook, gives the next test. The deal close and the 2027 plan in early 2027 are the main tests. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is a fall in oil prices, which lowers cash flow for all producers.
- Risks
- Results depend on oil and natural gas prices, which Devon cannot control. A fall in prices lowers cash flow, buybacks and the value of its reserves.
The Coterra merger is large and recent. If Devon does not capture the $1.0 billion of targeted synergies by the end of 2027, or if the change of senior team disturbs operations, results can be lower than planned.
The Eagle Ford sale needs antitrust clearance and other conditions. A delay or a lower price after adjustments would reduce the money for buybacks and debt reduction.
- Balance sheet
- Cash: $1.0B
Debt: $11.4B
Net debt: $10.4B
Undrawn credit line: $3.0B
Devon funds its operations with senior notes and had a term loan after the merger. At June 30, 2026, debt was $11.4 billion and cash was $1.0 billion. The $3.0 billion credit facility was undrawn. During Q2 2026, Devon repaid $250 million of senior notes and $250 million of the term loan, and it paid for the $2.6 billion federal lease purchase with cash on hand. In July 2026, it repaid the remaining $750 million of the term loan. The company says that it has no debt maturities until Q2 2027. It plans to use part of the after-tax proceeds of the $4.2 billion Eagle Ford sale to reduce debt.
As of 2026-06-30.
- Checkpoints
- Nov 5, 2026: Q3 2026 earnings: synergies and outlook. Pending. Watch: Production and capital spending on plan, progress toward the $1.0 billion synergy target and a clear plan for the Eagle Ford proceeds pass; lower production guidance or higher costs fail.
Q1 2027 (estimate): Eagle Ford sale closes. Pending. Watch: The sale closes around the end of 2026 or early 2027 near the $4.2 billion price, with the proceeds used for buybacks and debt reduction, passes; a failed deal or a large price cut fails.
- Recent events
- 2026-10-08: Devon agreed to sell its Eagle Ford assets, about 90,000 net acres in South Texas and about 4% of its production, to Crescent Energy for $4.2 billion in cash. Devon expects to close around the end of 2026 and plans to use the money for share buybacks and debt reduction.
2026-08-20: Devon changed its senior team. Tom Hellman and Trey Lowe became Executive Vice Presidents for Exploration & Production, and Kevin Smith became Chief Technology Officer. Two former Executive Vice Presidents, John Raines and Michael DeShazer, left the company on September 1, 2026.
2026-08-04: Devon reported Q2 2026 results. Oil production was 503,000 barrels per day, at the top of guidance. Net earnings were $1.9 billion, or $2.03 per share, and core earnings were $1.57 per share. Adjusted free cash flow was $1.7 billion. Devon bought 16,300 net acres in the Delaware Basin at a New Mexico federal lease sale for $2.6 billion.
2026-06-25: Devon completed offers to exchange Coterra's notes for new Devon notes and cash.
2026-05-07: Devon completed its all-stock merger with Coterra Energy, 94 days after the announcement. The board raised the quarterly dividend by 33% to $0.32 per share.