Devon Energy Corp.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 17 February 2026: press release. Guidance figures: 1 raised, 4 new, 1 kept. The quarter’s numbers.

Key takeaways

Production above top of guidance: Fourth-quarter production averaged 851,000 Boe per day, above the top end of guidance. The company attributed this to better-than-expected well performance, primarily in the Delaware Basin. Source
Operating and free cash flow: Operating cash flow was $1.5 billion and free cash flow $702 million in the fourth quarter. The third quarter had $1.7 billion and $820 million respectively. Source
All-stock merger with Coterra: On Feb. 2, 2026, Devon agreed to combine with Coterra Energy in an all-stock merger. The combined company is to be named Devon Energy. Source
Targeted $1.0 billion synergies: Management expects the combination to improve margins, raise free cash flow and accelerate cash returns through $1.0 billion of sustainable annual pre-tax synergies. Source
Business optimization 85 percent achieved: Devon achieved 85 percent of its $1 billion business optimization target in 2025. Management said it is on track to fully achieve the target by year-end 2026. Source
Repurchases suspended until closing: Share repurchasing was suspended after the merger announcement. Devon expects the suspension to extend through closing of the merger. Source
Dividend rising after close: The quarterly dividend is planned to rise 31 percent to $0.315 per share after the merger closes, subject to board approval. Source

“Devon’s disciplined execution and operational excellence defined 2025, culminating in outstanding results that exceeded fourth-quarter expectations across all major value drivers,”
Clay Gaspar, president and CEO

Guidance

Area	Period	Figure	Against last quarter
Production Source	first quarter of 2026	823,000 to 843,000 Boe per day, adjusted for downtime	New
Capital spending Source	first quarter of 2026	approximately $900 million	New
Quarterly dividend Source	following merger close	$0.315 per share	Raised from $0.24 per share
Share repurchase authorization Source	following merger close	in excess of $5 billion	New
Synergies Source	annual, sustainable, after merger	$1.0 billion sustainable annual pre-tax synergies	New
Business optimization Source	by year-end 2026	fully achieve $1 billion target	Kept

What changed from last quarter

New: Devon announced an all-stock merger with Coterra Energy on Feb. 2, 2026. This was not in the prior quarter's release. Source
Guidance raised: The planned quarterly dividend rate after merger close is $0.315 per share, up from the $0.24 per share paid in the prior quarter. Source
New: A new share repurchase authorization above $5 billion is expected after the merger closes. Source
Ended: Share repurchasing was suspended after the merger announcement and is expected to stay suspended through closing. Source

Fourth-quarter results and growth

Production above top of guidance: Fourth-quarter production averaged 851,000 Boe per day, above the top end of guidance. The company attributed this to better-than-expected well performance, primarily in the Delaware Basin. Source
Net and core earnings reported: Net earnings were $562 million, or $0.90 per diluted share. Core earnings, adjusted for items analysts typically exclude, were $510 million, or $0.82 per diluted share. Source
Operating and free cash flow: Operating cash flow was $1.5 billion and free cash flow $702 million in the fourth quarter. The third quarter had $1.7 billion and $820 million respectively. Source
Oil share above guidance: Oil production averaged 390,000 barrels per day, 46 percent of total volume, and was above the top end of guidance. Source

Coterra merger and strategy

All-stock merger with Coterra: On Feb. 2, 2026, Devon agreed to combine with Coterra Energy in an all-stock merger. The combined company is to be named Devon Energy. Source
Targeted $1.0 billion synergies: Management expects the combination to improve margins, raise free cash flow and accelerate cash returns through $1.0 billion of sustainable annual pre-tax synergies. Source
Ownership split after combination: Devon shareholders are to own about 54 percent of the combined company and Coterra shareholders about 46 percent, on a fully diluted basis. Source
Combined company anchored in Delaware: The combined company is described as having an asset base anchored by a premier position in the economic core of the Delaware Basin. Source

“This powerful combination brings together two industry-leading companies with complementary assets and proven track records of value creation, establishing a premier independent shale operator.”
Clay Gaspar, president and CEO

Costs, margins and optimization

Production costs down 4 percent: Production costs including taxes were $10.99 per Boe, down 4 percent from the third quarter. Lease operating expense and gathering, processing and transportation totaled $8.60 per Boe. Source
Operating costs down 8 percent: Operating costs were reduced 8 percent against the first quarter of 2025. Per-unit rates ran 3 percent below guidance on cost management and less well workovers. Source
Business optimization 85 percent achieved: Devon achieved 85 percent of its $1 billion business optimization target in 2025. Management said it is on track to fully achieve the target by year-end 2026. Source
Margin and efficiency actions: Management said the business optimization actions are strengthening margins and maximizing capital efficiency across the asset base. Source

Operations and Delaware activity

Drilling and completion activity: The company averaged 19 operated drilling rigs and 4 completion crews. 95 gross operated wells were placed online, with an average lateral length of 10,200 feet. Source
Delaware leasehold acquisitions: Devon completed $141 million of leasehold acquisitions across multiple assets, primarily in the Delaware Basin. Source
Capital below guidance: Capital investment excluding acquisitions was $883 million, 4 percent below guidance. Management attributed the variance to cost management and timing of facility spend. Source

“This advantaged platform will deliver higher free cash flow and enhanced shareholder returns, well beyond what either company could achieve on its own.”
Clay Gaspar, president and CEO

Reserves and capital spending

Proved reserves 2.4 billion Boe: Estimated proved reserves at year-end were 2.4 billion Boe. Proved undeveloped reserves were 24 percent of the total. Source
Reserve replacement 193 percent: Extensions, discoveries and positive performance revisions added 593 million Boe in 2025, a replacement rate of 193 percent of production. Source
Finding and development cost: Capital costs incurred, excluding property acquisition costs, were $3.6 billion, giving a finding and development cost of $6.14 per Boe. Source

Cash, debt and shareholder returns

Cash, debt and leverage: Cash was $1.4 billion and the undrawn credit facility $3 billion. Outstanding debt was $8.4 billion, with net debt-to-EBITDAX at 0.9 times. Source
Repurchase program to date: Since the program began, Devon has returned $4.4 billion to shareholders and retired about 14 percent of its outstanding shares. Source
Repurchases suspended until closing: Share repurchasing was suspended after the merger announcement. Devon expects the suspension to extend through closing of the merger. Source
Dividend rising after close: The quarterly dividend is planned to rise 31 percent to $0.315 per share after the merger closes, subject to board approval. Source
New buyback authorization after close: The company expects to establish a new repurchase authorization above $5 billion once the Coterra merger closes, subject to board approval. Source

Coming up, as management said on 17 February 2026

Merger close expected Q2 2026: Devon expects the Coterra merger to close in the second quarter of 2026. Source
Combined full-year guidance after close: Devon will provide updated full-year guidance for the combined company once the merger closes. Source
First-quarter dividend payable Mar. 31: The $0.24 per share first-quarter 2026 dividend is payable Mar. 31, 2026, to holders of record at the close of business on Mar. 13, 2026. Source

Figures management reported

Figure	Reported
Total production, Q4 2025 Source	851,000 Boe per day
Oil production, Q4 2025 Source	390,000 barrels per day
Realized price, Q3 2025	$36.46 per Boe
Proved reserves, year-end 2025 Source	2.4 billion Boe
Reserve replacement rate, 2025 Source	193 percent of production
Finding and development cost, 2025 Source	$6.14 per Boe
Capital investment, Q4 2025 Source	$883 million excluding acquisition capital
Production costs including taxes, Q4 2025 Source	$10.99 per Boe
Lease operating expense and GP&T, Q4 2025 Source	$8.60 per Boe
Share repurchases, Q4 2025 Source	7.1 million shares for $250 million

Risks management discussed

Operational: Severe winter weather is expected to reduce first-quarter 2026 production by about 10,000 Boe per day. Source

Earlier plans management reported on

On track: Management said it is on track to fully achieve the $1 billion target by year-end 2026, with 85 percent achieved in 2025. Source
Ahead: Fourth-quarter production exceeded the top end of the guidance range. Source
Ahead: Capital investment excluding acquisitions was 4 percent below guidance. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Devon Energy Corporation 333 West Sheridan Avenue Oklahoma City, OK 73102-5015

Devon Energy Reports Fourth-Quarter and Full-Year 2025 Results

and Declares Quarterly Fixed Dividend

OKLAHOMA CITY - Feb. 17, 2026 - Devon Energy Corp. (NYSE: DVN) today reports fourth-quarter and full-year 2025 results and declares a quarterly fixed dividend. Supplemental financial tables and forward-looking guidance are available on the company’s website at www.devonenergy.com.

KEY FINANCIAL & OPERATIONAL HIGHLIGHTS

Transformational Merger: Announced merger with Coterra Energy, creating a premier, large-cap shale operator
Production Outperformance: Averaged 390,000 barrels of oil production per day in the fourth quarter, exceeding the top-end of guidance
Disciplined Cost Management: Invested $883 million of capital in the fourth quarter, 4 percent below midpoint guidance, and reduced operating costs 8 percent compared to the first quarter of 2025
Business Optimization Success: Achieved 85 percent of the $1 billion business optimization target in 2025 and on track to fully achieve goal by year-end 2026
Robust Cash Generation: Operations generated $1.5 billion of operating cash flow and $702 million of free cash flow during fourth quarter
Accelerated Shareholder Returns: Expect to increase quarterly dividend rate to $0.315 per share and a new $5 billion-plus share repurchase program following merger close, subject to board approval

CEO COMMENTARY

“Devon’s disciplined execution and operational excellence defined 2025, culminating in outstanding results that exceeded fourth-quarter expectations across all major value drivers,” said Clay Gaspar, president and CEO. “The success we achieved this year was underpinned by the momentum generated through our focused business optimization efforts, resulting in significant free cash flow and meaningful cash returns to shareholders.”

“In addition to our banner year in 2025, we have taken bold, strategic steps to significantly strengthen our portfolio and position ourselves for sustained success through a transformative merger with Coterra Energy,” Gaspar added. “This powerful combination brings together two industry-leading companies with complementary assets and proven track records of value creation, establishing a premier independent shale operator. This advantaged platform will deliver higher free cash flow and enhanced shareholder returns, well beyond what either company could achieve on its own.”

STRATEGIC MERGER WITH COTERRA ENERGY

On Feb. 2, 2026, Devon announced that it had entered into an agreement to combine in an all-stock merger with Coterra Energy.

The combination will create one of the largest shale operators in the world with an asset base anchored by a premier position in the economic core of the Delaware Basin. The go-forward company, to be named Devon Energy, is expected to unlock substantial value for shareholders by leveraging enhanced scale to improve margins, increase free cash flow, and accelerate cash returns through the capture of $1.0 billion in sustainable annual pre-tax synergies.

The transaction is expected to close in the second quarter of 2026. Upon completion of the transaction, Devon shareholders will own approximately 54 percent of the combined company and Coterra shareholders will own approximately 46 percent of the combined company on a fully diluted basis.

FINANCIAL RESULTS

Devon reported net earnings of $562 million, or $0.90 per diluted share, in the fourth quarter of 2025. Adjusting for items analysts typically exclude from estimates, the company’s core earnings were $510 million, or $0.82 per diluted share.

Devon’s operating cash flow totaled $1.5 billion in the fourth quarter. The company funded its capital requirements and had $702 million of free cash flow for the quarter.

At the end of the fourth quarter, Devon had a cash balance of $1.4 billion and an undrawn credit facility of $3 billion. Outstanding debt totaled $8.4 billion and the company’s net debt-to-EBITDAX ratio was 0.9 times.

RETURN OF CAPITAL

Consistent with Devon’s strategic priority of delivering value to shareholders through a sustainable, annually growing fixed dividend, Devon plans to increase the quarterly dividend rate by 31 percent to $0.315 per share following merger close, subject to board approval. For the first quarter of 2026, a dividend of $0.24 per share is payable on Mar. 31, 2026, to shareholders of record at the close of business on Mar. 13, 2026.

The company also returned capital to shareholders through the ongoing execution of its $5.0 billion share repurchase program. During the fourth quarter, Devon repurchased 7.1 million of its shares for $250 million. Since inception of the program, the company has returned $4.4 billion to shareholders by retiring approximately 14 percent of its outstanding shares. In connection with the announcement of the merger with Coterra, the company suspended share repurchasing activity, which Devon expects to extend through closing.

Following the close of the merger with Coterra Energy and the associated free cash flow benefits in the upcoming years, the company expects to establish a new share repurchase authorization in excess of $5 billion, subject to Board approval.

OPERATING RESULTS

Devon’s capital activity in the fourth quarter averaged 19 operated drilling rigs and 4 completion crews across its asset portfolio. This level of activity resulted in 95 gross operated wells being placed online, with an average lateral length of 10,200 feet. Capital investment, excluding acquisition capital, was $883 million, or 4 percent below guidance. This positive variance was primarily attributable to effective cost management and timing of facility spend. The company also completed $141 million in leasehold acquisitions across multiple assets in its portfolio, primarily in the Delaware Basin.

Production averaged 851,000 Boe per day in the fourth quarter, exceeding the top-end of guidance. This positive result was driven by better-than-expected well performance, primarily in the Delaware Basin. Oil totaled 390,000 barrels per day in the quarter, which was 46 percent of total volume and above the top-end of the company’s guidance.

Production costs, including taxes, averaged $10.99 per Boe in the fourth quarter, a 4 percent reduction from the third quarter. The largest component of production costs is lease operating expense and gathering, processing and transportation costs, which totaled $8.60 per Boe in the quarter. Effective cost management efforts and less well workovers drove per-unit rates 3 percent below guidance expectations for the quarter.

Underpinning these results is the continued strong progress in advancing the company’s business optimization plan. To date, Devon has already achieved 85 percent of its $1 billion target, demonstrating the effectiveness and urgency of these initiatives. With strong momentum established, the company is on track to fully achieve its $1 billion target by year-end 2026. These actions are strengthening margins and maximizing capital efficiency across Devon’s assets.

Devon exited the year with estimated proved reserves of 2.4 billion Boe. Proved undeveloped reserves accounted for 24 percent of the total. Extensions and discoveries and positive performance revisions from the company’s drilling program added 593 million Boe of reserves in 2025, equating to a replacement rate of 193 percent of production. Capital costs incurred (excluding property acquisition costs) to deliver these additions totaled $3.6 billion, resulting in a finding and development cost of $6.14 per Boe.

Q1 2026 OUTLOOK

Production in the first quarter of 2026 is estimated to be reduced by 1 percent or 10,000 Boe per day (50 percent oil) due to the impact of severe winter weather. Adjusting for this downtime, the company expects production to average 823,000 to 843,000 Boe per day. Capital spending in the first quarter is expected to be approximately $900 million.

Looking beyond the first quarter, the company’s full-year 2026 guidance issued today reflects standalone Devon operations. Upon the expected closure of the Devon and Coterra merger in the second quarter of 2026, the company will provide updated full-year guidance for the combined entity.

Additional details of Devon’s forward-looking guidance are available on the company’s website at www.devonenergy.com.

CONFERENCE CALL WEBCAST AND SUPPLEMENTAL EARNINGS MATERIALS

Also provided with today’s release is the company’s earnings presentation that is available on the company’s website at www.devonenergy.com. The company’s fourth-quarter conference call will be held at 10:00 a.m. Central (11:00 a.m. Eastern) on Wednesday, February 18, 2026, and will serve primarily as a forum for analyst and investor questions and answers.

ABOUT DEVON ENERGY

Devon Energy is a leading oil and gas producer in the U.S. with a diversified multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devon’s disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations. For more information, please visit www.devonenergy.com.

NON-GAAP DISCLOSURES

This press release includes non-GAAP (generally accepted accounting principles) financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of results as reported under GAAP. Reconciliations of these non-GAAP measures and other disclosures are provided within the supplemental financial tables that are available on the company’s website and in the related Form 10-K filed with the Securities and Exchange Commission (the “SEC”).

FORWARD LOOKING STATEMENTS

Forward-looking statements notice

This press release includes “forward-looking statements” within the meaning of the federal securities laws. 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 press release 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, including from changes in trade relations and policies, such as the imposition of new or increased tariffs or other trade protection measures by the U.S., China or other countries; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved in our operations; risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties and investments; midstream capacity constraints and potential interruptions in production, including from limits to the build out of midstream infrastructure; competition for assets, materials, people and capital, which can be exacerbated by supply chain disruptions, including as a result of tariffs or other changes in trade policy; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands, environmental matters, water disposal and tax matters; climate change and risks related to regulatory, social and market efforts to address climate change; risks relating to our sustainability initiatives; claims, audits and other proceedings impacting our business, including with respect to historic and legacy operations; governmental interventions in energy markets; counterparty credit risks; risks relating to our indebtedness; cybersecurity risks; risks associated with artificial intelligence and other emerging technologies; the extent to which insurance covers any losses we may experience; risks related to shareholder activism; our ability to successfully complete mergers, acquisitions and divestitures; our ability to pay dividends and make share repurchases; risks related to the merger with Coterra, including restrictions on our operations during the pendency of the merger, litigation risk, the risk that the merger agreement may be terminated and the risk that we may not realize the anticipated benefits of the merger or successfully integrate the two companies; and any of the other risks and uncertainties discussed in Devon’s 2025 Annual Report on Form 10-K (the “2025 Form 10-K”) or other filings with the SEC.

The forward-looking statements included in this press release speak only as of the date of this press release, represent management’s current reasonable expectations as of the date of this press release and are subject to the risks and uncertainties identified above as well as those described elsewhere in the 2025 Form 10-K and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in the 2025 Form 10-K and in other documents we file from time to time 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 do not undertake, and expressly disclaim, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.

Contacts
investor.relations@dvn.com · 405-228-4450
Michelle Hindmarch · 405-552-7460