DEVON ENERGY CORP/DE (DVN) Company Report

Devon and Coterra merger targets $1 billion in annual pre-tax run-rate synergies by year-end 2027, enhancing scale and operational efficiency.
Delivered $700 million of free cash flow in Q4 2025 and $3.1 billion for full year 2025, driven by production optimization, cost reductions, and capital efficiencies.
Achieved 193% reserve replacement of production at an F&D cost of just over $6/BOE in 2025, underscoring portfolio quality.
Increased quarterly dividend 9% to $0.24 per share in 2025; pending merger close and board approval, plans to raise the dividend 31% and seek > $5 billion share repurchase authorization.
Maintained 2026 outlook with Q1 production guidance of ~830,000 BOE/d (including ~10,000 BOE/d weather downtime) and full-year guidance unchanged.

Feb 18, 2026, 4:00 PM

Transcript

Devon Energy reports Q4 2025 results and merger progress

DVN

Earnings

M&A

Dividends

Announced a merger with Coterra Energy creating a combined company expected to deliver $1 billion in annual pre-tax synergies by year-end 2027 and enhance free cash flow for higher dividends and a new share repurchase authorization.
Generated $700 million of free cash flow in Q4 2025, driven by production beating guidance, improved operating costs, and capital spending 4% below plan.
Delivered $3.1 billion of free cash flow in 2025, returned $2.2 billion to shareholders via dividends, buybacks, and debt repayments, raised the quarterly dividend by 9% to $0.24/share, and ended the year with $1.4 billion cash and net debt/EBITDA <1×.
Captured 85% of the standalone $1 billion annual business optimization target in under a year through 100+ workstreams and expects to achieve the remainder during 2026.
Invested to acquire approximately 15% ownership in geothermal innovator Fervo Energy, leveraging Devon’s geoscience and drilling expertise to enter the power-generation sector.

Feb 18, 2026, 4:00 PM

Transcript

Devon Energy reports Q4 and full-year 2025 results

DVN

Earnings

M&A

Dividends

Announced merger with Coterra Energy to create a combined platform, targeting $1 billion of annual pre-tax synergies by year-end 2027.
Generated $700 million of free cash flow in Q4 and $3.1 billion for full-year 2025, returning $2.2 billion to shareholders via dividends and buybacks.
Increased 2025 dividend by 9% to $0.24 per share and reduced net debt to EBITDA to <1× as of year-end 2025.
Achieved 193% reserve replacement at an F&D cost of $6/BOE and guided Q1 2026 production at 830,000 BOE/d (including ~10,000 BOE/d of weather-related downtime).

Feb 18, 2026, 4:00 PM

Transcript

Devon Energy announces Q4 2025 results and Coterra merger

DVN

Earnings

M&A

Dividends

Announced transformational merger with Coterra Energy, creating a premier shale operator with ~$60 billion pro forma enterprise value and targeting $1.0 billion of pre-tax synergies by year-end 2027.
Delivered 390 MBOD of oil production, spent $883 million of capital (4% below midpoint guidance), and generated $702 million of free cash flow in Q4 2025.
Achieved an 8% reduction in LOE & GP&T costs year-to-date and captured 85% of the $1 billion business optimization target by year-end 2025.
Returned ~$400 million to shareholders in dividends and plans to raise the quarterly dividend to $0.315 per share, alongside a >$5 billion share repurchase authorization post-merger.

Feb 18, 2026, 4:00 PM

Presentation

Devon Energy reports Q4 2025 results and announces Coterra merger

DVN

Earnings

M&A

Dividends

Devon Energy entered into an all-stock merger agreement with Coterra Energy, expected to close in Q2 2026, creating a premier independent shale operator.
Q4 2025 oil production averaged 390,000 Bbls/d, exceeding guidance, with net earnings of $562 million (or $0.90 per diluted share).
Operations generated $1.5 billion of operating cash flow and $702 million of free cash flow in the fourth quarter.
Declared a quarterly fixed dividend of $0.24 per share payable on March 31, 2026.

Feb 17, 2026, 9:13 PM

8-K

Devon Energy and Coterra Energy announce merger

DVN

M&A

The all-stock merger combines Devon and Coterra into a premier E&P company with 1.6 million boe/d of production and leading Delaware Basin presence.
The transaction targets $1 billion in annual pre-tax synergies by end-2027, equivalent to ~20% of combined market cap.
The combined company holds ~750,000 net acres of stacked pay and produces >860,000 boe/d in the Delaware Basin, backed by 5,000 gross drilling locations and sub-$40 break-even inventory over a 10-year runway.
Pro forma liquidity of $4.4 billion, 0.9x net debt/EBITDAX, target <50% reinvestment rate, with a $0.315/share quarterly dividend and >$5 billion share buyback plan.

Feb 2, 2026, 1:30 PM

Transcript

Devon Energy and Coterra Energy announce merger

DVN

M&A

Devon Energy and Coterra Energy have agreed to an at-market all-stock merger creating a premier large-cap E&P company, with Clay Gaspar as President & CEO and Tom Jorden as Chairman.
The combined entity will leverage its Delaware Basin position—over half of pro forma production and cash flow—and a diversified Lower 48 portfolio enhanced by AI-driven operations.
Management targets $1 billion in annual pre-tax synergies by year-end 2027 (≈20% of pro forma market cap), split among $350 million in capital optimization, $350 million in operating margins, and $300 million in corporate cost savings.
Pro forma liquidity of $4.4 billion, net debt/EBITDAX of 0.9x, a base quarterly dividend of $0.315 per share, and a planned $5 billion+ share repurchase authorization underpin the combined company’s financial strategy.

Feb 2, 2026, 1:30 PM

Transcript

Devon and Coterra announce transformative merger

DVN

M&A

All-stock combination creates a premier shale operator with a pro forma enterprise value of $58 billion, an exchange ratio of 0.70 Devon share per Coterra share, and pro forma equity ownership of 54% Devon and 46% Coterra.
Expected to close in Q2 2026, subject to shareholder and regulatory approvals.
Targets $1.0 billion of pre-tax synergies by year-end 2027, with a pro forma net-debt-to-EBITDAX of 0.9x and $4.4 billion of liquidity.
Leadership roles include Clay Gaspar as President & CEO and Tom Jorden as Non-Executive Chairman, with a combined board of 6 Devon and 5 Coterra directors.
Plans to declare a quarterly dividend of $0.315 per share and seek share repurchase authorization in excess of $5 billion.

Feb 2, 2026, 1:30 PM

Presentation

Devon Energy and Coterra Energy announce merger

DVN

M&A

The all-stock merger of Devon Energy and Coterra will create one of the world’s largest shale producers with pro forma output of 1.6 MMboe/d, including 860,000 boe/d from the Delaware Basin.
The deal targets $1 billion in annual pre-tax synergies by year-end 2027 (≈ 20% of pro forma market cap) from capital optimization, operating margin enhancement, and corporate cost savings.
The combined company will start with $4.4 billion in liquidity, 0.9x net debt/EBITDAX, supports a $0.315/share quarterly dividend, and plans > $5 billion in share repurchases.
Headquarters will relocate to Houston, while maintaining a significant Oklahoma City presence.

Feb 2, 2026, 1:30 PM

Transcript

Devon Energy and Coterra unveil merger to create premier shale operator

DVN

M&A

Dividends

Share Buyback

The all-stock merger at a 0.70 exchange ratio implies a $58 billion enterprise value and yields 1.6 MMBOED pro forma 2026e production with a balanced oil (34%), gas (44%), and NGL (22%) mix.
The Delaware Basin franchise underpins 53% of pro forma volumes, with 746,000 net acres and 863,000 BOED of Q3 2025 production, offering >10 years of high-quality inventory.
Identified $1 billion in annual pre-tax synergies to be realised by year-end 2027 across capital optimisation, operating margin improvements, and corporate cost reductions.
Capital returns framework includes a planned $0.315 per share quarterly dividend and > $5 billion share repurchase program, alongside a pro forma 0.9x net debt/EBITDAX leverage ratio and $4.4 billion liquidity as of Q3 2025.