- 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 553,000 barrels per day in Q3 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 $700 million on average in 2027. The sale of its Eagle Ford assets to Crescent Energy for $4.2 billion must close in early 2027, and Devon must use the expected $3.5 billion of net proceeds for buybacks and to cut debt to its $9 billion target, as it plans. Production and capital spending must stay on plan, with about 525,000 barrels of oil per day on about $5.3 billion of capital in 2027, so that adjusted free cash flow stays near the $2.0 billion of Q3 2026. The deal close and the full 2027 guidance in February 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: $413M
Debt: $10.6B
Net debt: $10.2B
Undrawn credit line: $3.0B, to March 2031
Debt due within 12 months: $822M
Devon funds its operations with senior notes. At September 30, 2026, total debt was $10.64 billion, of which $822 million was short-term debt, and cash, cash equivalents and restricted cash were $413 million. Net debt was $10.2 billion, or 0.9 times trailing 12-month EBITDAX, as Devon states it. The $3.0 billion credit facility, which runs to March 2031, was undrawn. In July 2026, Devon repaid the remaining $750 million of its term loan, so it retired $1.25 billion of debt since the merger. It has no debt maturities until Q2 2027. Devon plans to retire $1.5 billion more of long-term debt, to reach its gross debt target of $9 billion in early 2027, with free cash flow and the expected $3.5 billion of net proceeds from the Eagle Ford sale.
As of Sep 30, 2026.
- Checkpoints
- Nov 5, 2026: Q3 2026 earnings: synergies and outlook. Passed. 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. Outcome: Devon kept its 2026 production and capital guidance, raised its synergy outlook and plans to use the Eagle Ford proceeds for buybacks and debt reduction.
Feb 5, 2027 (estimate): Q4 2026 results and full 2027 guidance. Pending. Watch: 2027 guidance near 525,000 barrels of oil per day on about $5.3 billion of capital, with synergies on track, passes; lower production or higher capital fails.
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
- Nov 5, 2026: Devon reported Q3 2026 results. Oil production was 553,000 barrels per day, and total production of 1,668,000 barrels of oil equivalent per day was within guidance. Net earnings were $0.88 per share, and core earnings were $1.42 per share. Adjusted free cash flow was $2.0 billion. Devon raised its expected synergy run rate at the end of 2026 to about $350 million and its expected average synergies in 2027 to about $700 million. Its first 2027 outlook, after the Eagle Ford sale, is about 525,000 barrels of oil per day on about $5.3 billion of capital. It expects buybacks of more than $1 billion in Q4 2026 and now expects the Eagle Ford sale to close in early 2027.
Oct 8, 2026: 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.
Aug 20, 2026: 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.
Aug 4, 2026: 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.
Jun 25, 2026: Devon completed offers to exchange Coterra's notes for new Devon notes and cash.
May 7, 2026: 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.