Devon Energy Corp New — Financial Results

Oil Production Rose 12% in 2025, but Lower Prices Offset the Gain

Devon produced meaningfully more oil in 2025, largely thanks to the Grayson Mill acquisition, but a 14% drop in the average oil price partially cancelled out that growth. The net result was slightly higher operating cash flow but lower net earnings year over year. This tension — growing volumes fighting a softer price environment — is the central story for Devon right now.

The Grayson Mill Acquisition Transformed the Rockies Business

The $5.0 billion purchase of Grayson Mill's Williston Basin assets, completed in late 2024, nearly doubled Rockies output and is the primary driver behind Devon's company-wide production growth. The Rockies is now Devon's second-largest producing region, contributing 23% of total volumes. The trade-off is that Devon took on significant debt to fund the deal, leaving $8.4 billion outstanding today.

A $1.0 Billion Cost-Cutting Plan Is 85% Complete

Devon launched a business optimization plan in April 2025, targeting $1.0 billion in annual pre-tax cash flow improvements by end of 2026. By the close of 2025, approximately $850 million of that target had been achieved, through efficiency gains in drilling, lower corporate costs, and production optimization. The remaining ~$150 million is expected by year-end 2026. General and administrative (G&A) expense per barrel fell 13% year over year, a concrete early sign this program is working.

Field-Level Profit Margins Compressed Across Every Region

Field-level cash margin — revenue from oil, gas, and NGLs minus direct production costs — declined in every operating region, driven primarily by lower oil prices. Total field-level cash margin fell from $7.99 billion to $7.66 billion. Higher production volumes softened the blow, but the per-barrel profitability of the business clearly moved in the wrong direction.

Devon Returned $1.7 Billion to Shareholders and Repurchased Stock at Scale

Devon paid $619 million in dividends and repurchased $1.05 billion of its own shares in 2025, totalling approximately $1.7 billion returned to shareholders. The company has now completed 88% of its authorized $5.0 billion buyback program, repurchasing roughly 100 million shares at an average price of $44.02. Note that share repurchases have been suspended following the announcement of the Coterra merger in February 2026.

A Merger with Coterra Could Reshape the Company Entirely

In February 2026, Devon agreed to an all-stock merger of equals with Coterra Energy, expected to close in the second quarter of 2026. The combined company is projected to capture $1.0 billion in annual synergies (cost savings and efficiency gains from combining operations), with plans for a quarterly dividend of $0.315 per share and a new share repurchase program exceeding $5 billion. This is a major pending development — the Devon that investors are evaluating today may look quite different within months.