Devon Energy (DVN) Economic Moat Analysis25

Evidence

Production Expenses Q2 2026 Q1 2026 Change LOE $ 626 $ 486 29 % Gathering, processing & transportation 391 191 105 % Production taxes 357 205 74 % Property taxes 19 12 58 % Total $ 1,393 $ 894 56 % Per Boe: LOE $ 5.06 $ 6.48 -22 % Gathering, processing & transportation $ 3.16 $ 2.54 24 % Percent of oil, gas and NGL sales: Production taxes 7.0 % 6.9 % 1 % Production expenses increased primarily due to the Merger closing on May 7, 2026.

Production Expenses: second-quarter versus first-quarter 2026 unit costs and merger effects · Filed 05/08/2026

Revisions Other Than Price 2025 – Total revisions other than price (150 MMBoe) are the result of upward revisions due to well performance exceeding previous estimates on proved developed reserves (163 MMBoe) and downward revisions to proved undeveloped reserves (-13 MMBoe) as noted below.

Reserves: 2025 revisions other than price · Filed 18/02/2026

2024 – Total revisions other than price (75 MMBoe) are the result of upward revisions due to well performance exceeding previous estimates on proved developed reserves (81 MMBoe) and downward revisions to proved undeveloped reserves (-6 MMBoe) as noted below.

Reserves: 2024 revisions other than price · Filed 18/02/2026

This industry-leading, high-margin position will generate more than half of our total production and cash flow, and it’s backed by more than a decade’s worth of top-tier drilling inventory.

Stockholder letter: management's Delaware Basin production, cash flow and drilling inventory claims · Filed 28/05/2026

• On track to deliver $1.0 billion of annual pre-tax merger synergies by year-end 2027.

Second-quarter performance highlights: prospective merger synergy target · Filed 05/08/2026

Competition for Assets, Materials, People and Capital Can Be Significant Strong competition exists in all sectors of the oil and gas industry.

Risk Factors: competition throughout the oil and gas industry · Filed 18/02/2026

Competition is also prevalent in the marketing of oil, gas and NGLs.

Risk Factors: competition in marketing oil, gas and NGLs · Filed 18/02/2026

Certain of our competitors have resources substantially greater than ours and may have established superior strategic long-term positions and relationships.

Risk Factors: competitors with greater resources and potentially superior positions · Filed 18/02/2026

Production Expenses 2025 2024 Change LOE $ 1,922 $ 1,574 22 % Gathering, processing & transportation 831 790 5 % Production taxes 748 748 0 % Property taxes 66 71 -7 % Total $ 3,567 $ 3,183 12 % Per Boe: LOE $ 6.27 $ 5.83 8 % Gathering, processing & transportation $ 2.71 $ 2.93 -8 % Percent of oil, gas and NGL sales: Production taxes 6.7 % 6.7 % 0 % Production expenses increased in 2025 primarily due to increased activity in the Rockies related to the Grayson Mill acquisition in addition to new well activity in the Delaware Basin.

Production Expenses: 2025 versus 2024 unit costs · Filed 18/02/2026

Unhedged oil and NGL prices increased primarily due to higher WTI and Mont Belvieu index prices, while unhedged gas prices decreased primarily due to lower Henry Hub index prices and expanded regional gas price differentials in the Permian, including negative spot pricing at the Waha hub in the second quarter of 2026.

Realized Prices: index movements, regional gas differentials and negative Waha spot pricing · Filed 05/08/2026

Realized Prices Q2 2026 Realization Q1 2026 Change Oil (per Bbl) WTI index $ 92.47 $ 72.10 28 % Realized price, unhedged $ 95.10 103% $ 69.66 37 % Cash settlements $ (7.01 ) $ (1.72 ) Realized price, with hedges $ 88.09 95% $ 67.94 30 % Q2 2026 Realization Q1 2026 Change Gas (per Mcf) Henry Hub index $ 2.90 $ 5.05 -43 % Realized price, unhedged $ 0.35 12% $ 1.66 -79 % Cash settlements $ 0.70 $ 0.02 Realized price, with hedges $ 1.05 36% $ 1.68 -38 % Q2 2026 Realization Q1 2026 Change NGLs (per Bbl) WTI index $ 92.47 $ 72.10 28 % Realized price, unhedged $ 22.70 25% $ 17.80 28 % Cash settlements $ — $ — Realized price, with hedges $ 22.70 25% $ 17.80 28 % Q2 2026 Q1 2026 Change Combined (per Boe) Realized price, unhedged $ 41.30 $ 39.70 4 % Cash settlements $ (0.94 ) $ (0.76 ) Realized price, with hedges $ 40.36 $ 38.94 4 % From the first quarter of 2026 to the second quarter of 2026, realized prices contributed to a $918 million increase in earnings.

Realized Prices: second-quarter and first-quarter 2026 prices, benchmark realizations and hedge effects · Filed 05/08/2026

Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Oil $ 4,354 $ 2,174 $ 6,777 $ 4,588 Gas 104 178 309 487 NGL 648 358 997 761 Oil, gas and NGL sales 5,106 2,710 8,083 5,836 Oil 1,411 859 2,412 1,777 Gas 156 246 410 517 NGL 330 233 606 468 Marketing and midstream revenues 1,897 1,338 3,428 2,762 Total revenues from contracts with customers $ 7,003 $ 4,048 $ 11,511 $ 8,598 Transaction Price Allocated to Remaining Performance Obligations As of June 30, 2026, Devon had $5.3 billion of unsatisfied performance obligations related to natural gas sales that have a fixed pricing component and a contract term greater than one year.

Revenue recognition: customer revenues and long-term natural gas performance obligations · Filed 05/08/2026

These obligations were assumed by Devon in connection with the Merger and are expected to be recognized ratably over the next 13 years.

Revenue recognition: merger-assumed obligations and expected 13-year recognition period · Filed 05/08/2026

2025 $ per BOE 2024 $ per BOE Field-level cash margin (Non-GAAP) Delaware Basin $ 4,636 $ 25.74 $ 5,197 $ 30.56 Rockies 1,652 $ 23.20 1,122 $ 28.61 Eagle Ford 853 $ 35.96 1,150 $ 39.72 Anadarko Basin 468 $ 15.54 464 $ 15.50 Other 47 N/M 60 N/M Total $ 7,656 $ 24.97 $ 7,993 $ 29.63 DD&A and Asset Impairments 2025 2024 Change Oil and gas per Boe $ 11.35 $ 11.70 -3 % Oil and gas $ 3,479 $ 3,156 10 % Other property and equipment 116 99 17 % Total DD&A $ 3,595 $ 3,255 10 % Asset impairments $ 254 $ — N/M DD&A increased in 2025 primarily due to higher volumes driven by the Grayson Mill acquisition and new well activity in the Delaware Basin.

Field-Level Cash Margin: 2025 and 2024 asset-level results · Filed 18/02/2026

To the extent that we engage in price risk management activities to protect ourselves from commodity price declines, we will be prevented from fully realizing the benefits of commodity price increases above the prices established by our hedging contracts.

Risk Factors: hedging contracts constrain participation in commodity price increases · Filed 18/02/2026

​ (dollar amounts in millions) ​ ​ 2025 ​ ​ 2024 ​ ​ Cash Return on Capital Employed (CROCE) (Non-GAAP) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash flow from operating activities (GAAP) ​ ​ ​ $ 6,711 ​ ​ ​ ​ $ 6,600 ​ ​ ​ Changes in assets and liabilities, net ​ ​ ​ ​ (151) ​ ​ ​ ​ ​ 217 ​ ​ ​ Cash flow from operating activities before B/S changes (Non-GAAP) ​ ​ ​ ​ 6,560 ​ ​ ​ ​ ​ 6,817 ​ ​ ​ Net financing costs (GAAP) ​ ​ ​ ​ 455 ​ ​ ​ ​ ​ 363 ​ ​ ​ Noncash net premium and issuance cost amortization ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 20 ​ ​ ​ Adjusted net financing costs (Non-GAAP) ​ ​ ​ ​ 461 ​ ​ ​ ​ ​ 383 ​ ​ ​ Tax benefit imputed (based on 23% and 21%, respectively) ​ ​ ​ ​ (106) ​ ​ ​ ​ ​ (80) ​ ​ ​ After-tax net financing costs (Non-GAAP) ​ ​ ​ ​ 355 ​ ​ ​ ​ ​ 303 ​ ​ ​ Adjusted cash flow (Non-GAAP)1 – (a) ​ ​ ​ ​ 6,915 ​ ​ ​ ​ ​ 7,120 ​ ​ ​ Total capitalization – beginning balance: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Short and long-term debt (GAAP) ​ ​ ​ $ 8,883 ​ ​ ​ ​ $ 6,155 ​ ​ ​ Total stockholders’ equity attributable to Devon (GAAP) ​ ​ ​ ​ 14,496 ​ ​ ​ ​ ​ 12,061 ​ ​ ​ Cash, cash equivalents and restricted cash (GAAP) ​ ​ ​ ​ (846) ​ ​ ​ ​ ​ (875) ​ ​ ​ Total capitalization – beginning balance (Non-GAAP) ​ ​ ​ ​ 22,533 ​ ​ ​ ​ ​ 17,341 ​ ​ ​ Total capitalization – ending balance: ​ ​ ​ ​ ​ ​ ​ ​ ​ Short and long-term debt (GAAP) ​ ​ ​ ​ 8,389 ​ ​ ​ ​ ​ 8,883 ​ ​ ​ Total stockholders’ equity attributable to Devon (GAAP) ​ ​ ​ ​ 15,528 ​ ​ ​ ​ ​ 14,496 ​ ​ ​ Cash, cash equivalents, and restricted cash (GAAP) ​ ​ ​ ​ (1,434) ​ ​ ​ ​ ​ (846) ​ ​ ​ Total capitalization – ending balance (Non-GAAP) ​ ​ ​ ​ 22,483 ​ ​ ​ ​ ​ 22,533 ​ ​ ​ Average total capitalization (Non-GAAP)2 – (b) ​ ​ ​ $ 22,508 ​ ​ ​ ​ $ 19,937 ​ ​ ​ CROCE (Non-GAAP) – (a) / (b) ​ ​ ​ ​ 31% ​ ​ ​ ​ ​ 36% ​ ​ ​ ​ 1 Sum of cash flow from operating activities before balance sheet changes, and after-tax net financing costs.

Appendix: operating cash flow, debt, cash balances and cash return on capital employed · Filed 28/05/2026

• Retired $500 million of debt. • Announced a new $8.0 billion share repurchase program and have repurchased approximately 4.4 million of our common shares for approximately $202 million, or $45.48 per share, since inception of the plan after closing of the Merger.

Second-quarter performance highlights: completed debt retirement and share repurchases · Filed 05/08/2026

• Paid dividends of $366 million. • Acquired approximately 16,300 net acres for approximately $2.6 billion through a federal lease sale, expanding our premier position in the Permian Basin.

Second-quarter performance highlights: dividends and federal acreage acquisition spending · Filed 05/08/2026

Consequently, Devon issued approximately 532 million shares of Devon common stock to holders of Coterra common stock to effect the Merger on May 7, 2026.

Merger consideration: shares issued to Coterra stockholders · Filed 05/08/2026

Interest Rate Risk At June 30, 2026, we had total debt of $11.4 billion.

Market Risk: total debt at June 30, 2026 · Filed 05/08/2026

The Committee also determined that the pursuit of strategic Company goals and creation of stockholder value would again be promoted by linking 60% of the LTI awarded for the 2025 year to Company performance and 40% to long-term stock ownership, thereby strengthening the alignment between interests of executives and stockholders.

Executive Compensation: approved 2025 long-term incentive allocation · Filed 28/05/2026

Accordingly, the two types of LTI granted to NEOs were PSUs and time-based RSAs, respectively.

Executive Compensation: performance share units and time-based restricted stock actually granted · Filed 28/05/2026

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 12/31/24 4,107 $ 45.31 1,179 $ 67.38 Granted 2,679 $ 34.11 510 $ 45.92 Vested (1,897 ) $ 41.21 (272 ) $ 68.68 Forfeited (236 ) $ 40.22 (124 ) $ 65.47 Unvested at 12/31/25 4,653 $ 40.79 1,293 (1) $ 58.82 (1) A maximum of 2.6 million common shares could be awarded based upon Devon’s final TSR ranking.

Share-Based Compensation: grants, vesting, forfeitures and TSR-dependent potential awards · Filed 18/02/2026

Acquisitions and Divestitures Coterra Merger On May 7, 2026, Devon completed an all-stock merger of equals with Coterra, an oil and gas exploration and production company with assets in the Permian Basin in Texas and New Mexico, the Marcellus Shale in Pennsylvania and the Anadarko Basin in Oklahoma.

Acquisitions and Divestitures: completed Coterra merger on May 7, 2026 · Filed 05/08/2026

Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Restructuring $ 198 $ 9 $ 198 $ 27 Transaction costs 48 — 67 — Total $ 246 $ 9 $ 265 $ 27 In conjunction with the Merger closing, Devon recognized $198 million of restructuring expenses during the first six months of 2026 primarily related to employee severance, termination and relocation benefits and contract terminations.

Restructuring and Transaction Costs: recognized merger-related expenses · Filed 05/08/2026

​ ​ Highlights of Our Corporate Governance Framework ​ ​ ​ Principal Documents for Our Corporate Governance Standards ​ ​ ■ Annual election of Directors ​ ■ Majority voting in uncontested elections ​ ■ Independent Lead Director in the event the Chair of the Board is not independent ​ ■ Executive sessions of independent Directors ​ ■ Stockholder right to call a special meeting ​ ■ Proxy access right ​ ■ Board participation in succession planning ​ ​ ​ ​ ■ Corporate Governance Guidelines ​ ■ Charters for each of the Board’s Committees ​ ■ Code of Business Conduct and Ethics for all Directors, officers, and employees ​ ■ Code of Ethics for the Chief Executive Officer, Chief Financial Officer, and designated Principal Accounting Officer ​ ​ Board of Director Nominations The GEPP Committee is responsible for nominating qualified candidates to serve on the Board and reviewing their qualifications with the Board, taking into account the composition and skills of the entire Board and specifically ensuring a sufficient number of the members of the Board are financially literate.

Corporate Governance: election standards, independent director sessions and stockholder rights · Filed 28/05/2026

​ ​ Compensation Committee Interlocks and Insider Participation Throughout 2025, the Compensation Committee was solely comprised of independent Directors with no interlocking relationships as defined by applicable SEC rules.

Compensation Committee: actual 2025 independence and absence of interlocks · Filed 28/05/2026

​ ​ ​ ​ ​ FOR 2025, THE SOAR COMMITTEE: ​ ​ ​ ■ Approved DeGolyer & MacNaughton as the Company’s independent engineering consultant for the year ended December 31, 2025; ​ ■ Reviewed the qualifications and independence of the independent engineering consultant prior to their appointment and throughout their engagement; ​ ■ Reviewed with the independent engineering consultant the scope of the annual review of the Company’s reserves; ​ ■ Met with the independent engineering consultant, with and without management, to review and consider the evaluation of the reserves and any other relevant matters with respect to such evaluation; ​ ■ Reviewed and approved any statement of reserves data or similar reserves information and any report of the independent engineering consultants regarding such reserves to be filed with any securities regulatory authorities or to be disseminated to the public; and ​ ■ Reviewed the Company’s internal procedures relating to the disclosure of reserves.

SOAR Committee: completed 2025 independent reserves oversight activities · Filed 28/05/2026

The peers are APA Corporation, ConocoPhillips, Coterra Energy Inc., Diamondback Energy, Inc., EOG Resources, Inc., Expand Energy Corporation, Occidental Petroleum Corporation, Ovintiv Inc., Permian Resources Corporation, the S&P 500 Index, and the SPDR® S&P® Oil & Gas Exploration & Production ETF.

Executive Compensation: performance peer group, rather than established product-market competitor coverage · Filed 28/05/2026

Publication history

Sources

• filing-1 · Filed 18/02/2026
• filing-2 · Filed 05/08/2026
• filing-3 · Filed 28/05/2026