DEVON ENERGY CORP/DE, 10-Q filed on 11/2/2016
Quarterly Report
Document And Entity Information
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Oct. 19, 2016
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2016 
 
Amendment Flag
false 
 
Trading Symbol
DVN 
 
Entity Registrant Name
DEVON ENERGY CORP/DE 
 
Entity Central Index Key
0001090012 
 
Current Fiscal Year End Date
--12-31 
 
Document Fiscal Year Focus
2016 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Fiscal Period Focus
Q3 
 
Entity Common Stock, Shares Outstanding
 
523.6 
Consolidated Comprehensive Statements Of Earnings (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Statement [Abstract]
 
 
 
 
Oil, gas and NGL sales
$ 1,113 
$ 1,338 
$ 3,023 
$ 4,264 
Oil, gas and NGL derivatives
79 
414 
(30)
426 
Marketing and midstream revenues
1,690 
1,849 
4,503 
5,569 
Gains on asset sales
1,351 
 
1,351 
 
Total revenues and other
4,233 
3,601 
8,847 
10,259 
Lease operating expenses
355 
510 
1,215 
1,625 
Marketing and midstream operating expenses
1,480 
1,637 
3,884 
4,939 
General and administrative expenses
141 
198 
482 
661 
Production and property taxes
67 
91 
220 
315 
Depreciation, depletion and amortization
394 
744 
1,420 
2,488 
Asset impairments
319 
5,851 
4,851 
15,479 
Restructuring and transaction costs
(5)
 
266 
 
Other operating items
17 
14 
41 
54 
Total operating expenses
2,768 
9,045 
12,379 
25,561 
Operating income (loss)
1,465 
(5,444)
(3,532)
(15,302)
Net financing costs
243 
136 
570 
378 
Other nonoperating items
44 
43 
150 
46 
Earnings (loss) before income taxes
1,178 
(5,623)
(4,252)
(15,726)
Income tax expense (benefit)
171 
(1,714)
(228)
(5,435)
Net earnings (loss)
1,007 
(3,909)
(4,024)
(10,291)
Net earnings (loss) attributable to noncontrolling interests
14 
(402)
(391)
(369)
Net earnings (loss) attributable to Devon
993 
(3,507)
(3,633)
(9,922)
Net earnings (loss) per share attributable to Devon:
 
 
 
 
Basic
$ 1.90 
$ (8.64)
$ (7.22)
$ (24.45)
Diluted
$ 1.89 
$ (8.64)
$ (7.22)
$ (24.45)
Comprehensive earnings (loss):
 
 
 
 
Net earnings (loss)
1,007 
(3,909)
(4,024)
(10,291)
Other comprehensive earnings (loss), net of tax:
 
 
 
 
Foreign currency translation
(212)
28 
(470)
Pension and postretirement plans
11 
20 
12 
Other comprehensive earnings (loss), net of tax
13 
(207)
48 
(458)
Comprehensive earnings (loss)
1,020 
(4,116)
(3,976)
(10,749)
Comprehensive earnings (loss) attributable to noncontrolling interests
14 
(402)
(391)
(369)
Comprehensive earnings (loss) attributable to Devon
$ 1,006 
$ (3,714)
$ (3,585)
$ (10,380)
Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Cash flows from operating activities:
 
 
 
 
Net earnings (loss)
$ 1,007 
$ (3,909)
$ (4,024)
$ (10,291)
Adjustments to reconcile net earnings (loss) to net cash from operating activities:
 
 
 
 
Depreciation, depletion and amortization
394 
744 
1,420 
2,488 
Asset impairments
319 
5,851 
4,851 
15,479 
Gains on asset sales
(1,351)
 
(1,351)
 
Deferred income tax expense (benefit)
86 
(1,708)
(300)
(5,348)
Derivatives and other financial instruments
(58)
(481)
359 
(606)
Cash settlements on derivatives and financial instruments
15 
730 
(133)
1,913 
Other
169 
171 
190 
437 
Net change in working capital
136 
67 
181 
93 
Change in long-term other assets
(3)
52 
10 
211 
Change in long-term other liabilities
12 
36 
(74)
Net cash from operating activities
726 
1,553 
1,210 
4,302 
Cash flows from investing activities:
 
 
 
 
Capital expenditures
(421)
(1,080)
(1,659)
(4,229)
Acquisitions of property, equipment and businesses
(3)
(113)
(1,641)
(530)
Divestitures of property and equipment
1,680 
27 
1,889 
35 
Other
34 
(3)
(8)
Net cash from investing activities
1,290 
(1,169)
(1,404)
(4,732)
Cash flows from financing activities:
 
 
 
 
Borrowings of long-term debt, net of issuance costs
816 
277 
1,662 
3,328 
Repayments of long-term debt
(2,173)
(252)
(2,722)
(1,773)
Net short-term debt repayments
 
(169)
(626)
(932)
Early retirement of debt
(82)
 
(82)
 
Issuance of common stock
 
 
1,469 
 
Sale of subsidiary units
 
 
 
654 
Issuance of subsidiary units
59 
835 
13 
Dividends paid on common stock
(32)
(99)
(190)
(296)
Contributions from noncontrolling interests
146 
151 
12 
Distributions to noncontrolling interests
(77)
(68)
(224)
(186)
Other
(2)
(3)
(9)
(18)
Net cash from financing activities
(1,345)
(300)
264 
802 
Effect of exchange rate changes on cash
(9)
(22)
(65)
Net change in cash and cash equivalents
662 
62 
75 
307 
Cash and cash equivalents at beginning of period
1,723 
1,725 
2,310 
1,480 
Cash and cash equivalents at end of period
$ 2,385 
$ 1,787 
$ 2,385 
$ 1,787 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 2,385 
$ 2,310 
Accounts receivable
1,092 
1,105 
Assets held for sale
717 
 
Other current assets
257 
606 
Total current assets
4,451 
4,021 
Oil and gas, based on full cost accounting:
 
 
Subject to amortization
75,431 
78,190 
Not subject to amortization
3,637 
2,584 
Total oil and gas
79,068 
80,774 
Midstream and other
10,320 
10,380 
Total property and equipment, at cost
89,388 
91,154 
Less accumulated depreciation, depletion and amortization
(73,219)
(72,086)
Property and equipment, net
16,169 
19,068 
Goodwill
3,963 
5,032 
Other long-term assets
2,230 
1,330 
Total assets
26,813 
29,451 
Current liabilities:
 
 
Accounts payable
529 
906 
Revenues and royalties payable
860 
763 
Short-term debt
350 1
976 1
Liabilities held for sale
202 
 
Other current liabilities
910 
650 
Total current liabilities
2,851 
3,295 
Long-term debt
11,004 
12,056 
Asset retirement obligations
1,230 
1,370 
Other long-term liabilities
1,036 
853 
Deferred income taxes
631 
888 
Stockholders’ equity:
 
 
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 524 million and 418 million shares in 2016 and 2015, respectively
52 
42 
Additional paid-in capital
7,487 
4,996 
Retained earnings (accumulated deficit)
(1,977)
1,781 
Accumulated other comprehensive earnings
278 
230 
Total stockholders’ equity attributable to Devon
5,840 
7,049 
Noncontrolling interests
4,221 
3,940 
Total stockholders’ equity
10,061 
10,989 
Total liabilities and stockholders’ equity
$ 26,813 
$ 29,451 
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2016
Dec. 31, 2015
Statement Of Financial Position [Abstract]
 
 
Common stock, par value (in dollars per share)
$ 0.10 
$ 0.10 
Common stock, shares authorized (in shares)
1,000,000,000 
1,000,000,000 
Common stock, shares issued (in shares)
524,000,000 
418,000,000 
Consolidated Statements Of Stockholders' Equity (USD $)
In Millions
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings (Accumulated Deficit) [Member]
Accumulated Other Comprehensive Earnings [Member]
Treasury Stock [Member]
Noncontrolling Interests [Member]
Balance, at Dec. 31, 2014
$ 26,341 
$ 41 
$ 4,088 
$ 16,631 
$ 779 
 
$ 4,802 
Balance, shares, at Dec. 31, 2014
 
409 
 
 
 
 
 
Net loss
(10,291)
 
 
(9,922)
 
 
(369)
Other comprehensive earnings (loss), net of tax
(458)
 
 
 
(458)
 
 
Restricted stock grants, net of cancellations, shares
 
 
 
 
 
 
Common stock repurchased
(23)
 
 
 
 
(23)
 
Common stock retired
 
 
(23)
 
 
23 
 
Common stock dividends
(296)
 
 
(296)
 
 
 
Share-based compensation
129 
 
129 
 
 
 
 
Subsidiary equity transactions
704 
 
577 
 
 
 
127 
Distributions to noncontrolling interests
(186)
 
 
 
 
 
(186)
Other
 
 
 
 
 
Balance, at Sep. 30, 2015
15,922 
41 
4,773 
6,413 
321 
 
4,374 
Balance, shares, at Sep. 30, 2015
 
411 
 
 
 
 
 
Balance, at Dec. 31, 2015
10,989 
42 
4,996 
1,781 
230 
 
3,940 
Balance, shares, at Dec. 31, 2015
 
418 
 
 
 
 
 
Net loss
(4,024)
 
 
(3,633)
 
 
(391)
Other comprehensive earnings (loss), net of tax
48 
 
 
 
48 
 
 
Restricted stock grants, net of cancellations, shares
 
 
 
 
 
 
Common stock repurchased
(23)
 
 
 
 
(23)
 
Common stock retired
 
 
(23)
 
 
23 
 
Common stock dividends
(190)
 
(65)
(125)
 
 
 
Common stock issued
2,127 
10 
2,117 
 
 
 
 
Common stock issued, shares
 
103 
 
 
 
 
 
Share-based compensation
142 
 
142 
 
 
 
 
Subsidiary equity transactions
1,216 
 
320 
 
 
 
896 
Distributions to noncontrolling interests
(224)
 
 
 
 
 
(224)
Balance, at Sep. 30, 2016
$ 10,061 
$ 52 
$ 7,487 
$ (1,977)
$ 278 
 
$ 4,221 
Balance, shares, at Sep. 30, 2016
 
524 
 
 
 
 
 
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies

 

1.

Summary of Significant Accounting Policies

The accompanying unaudited interim financial statements and notes of Devon have been prepared pursuant to the rules and regulations of the SEC. Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted. The accompanying unaudited interim financial statements and notes should be read in conjunction with the financial statements and notes included in Devon’s 2015 Annual Report on Form 10-K.

The accompanying unaudited interim financial statements furnished in this report reflect all adjustments that are, in the opinion of management, necessary for a fair statement of Devon’s results of operations and cash flows for the three-month and nine-month periods ended September 30, 2016 and 2015 and Devon’s financial position as of September 30, 2016.

Recently Adopted Accounting Standards

In January 2016, Devon adopted ASU 2015-03, Interest – Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability rather than as an asset. As a result of the adoption, Devon reclassified unamortized debt issuance costs of $81 million as of December 31, 2015 from other long-term assets to a reduction of long-term debt on the consolidated balance sheets.

The FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Its objective is to clarify guidance and eliminate diversity in practice of classification on certain cash receipts and payments in the statement of cash flows. This ASU is effective for Devon beginning January 1, 2018, with early adoption permitted. Devon early adopted this ASU as of September 30, 2016 using a retrospective transition method. As a result of the adoption, Devon has classified $82 million of debt retirement payments as cash flows from financing activities on the accompanying 2016 consolidated statements of cash flows. No other periods presented in the consolidated statements of cash flows were impacted by the adoption of this standard.

Recently Issued Accounting Standards

The FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Its objective is to simplify several aspects of the accounting for share-based payments, including accounting for income taxes when awards vest or are settled, statutory withholding and accounting for forfeitures. Classification of these aspects on the statement of cash flows is also addressed. This ASU is effective for Devon beginning January 1, 2017. Devon does not expect that this ASU will have a material impact on its consolidated financial statements and related disclosures.

The FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition and industry-specific guidance in Subtopic 932-605, Extractive Activities – Oil and Gas – Revenue Recognition. This ASU provides guidance concerning the recognition and measurement of revenue from contracts with customers. Its objective is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. The effective date for ASU 2014-09 was delayed through the issuance of ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, to annual and interim periods beginning in 2018, with early adoption permitted in 2017. The ASU is required to be adopted using either the retrospective transition method, which requires restating previously reported results or the cumulative effect (modified retrospective) transition method, which utilizes a cumulative-effect adjustment to retained earnings in the period of adoption to account for prior period effects rather than restating previously reported results. Devon intends to use the cumulative effect transition method and is continuing to evaluate the impact this ASU will have on its consolidated financial statements and related disclosures. Devon does not plan on early adopting.

 

 

The FASB issued ASU 2016-02, Leases (Topic 842). This ASU will supersede the lease requirements in Topic 840, Leases. Its objective is to increase transparency and comparability among organizations. This ASU provides guidance requiring lessees to recognize most leases on their balance sheet. Lessor accounting does not significantly change from Topic 840, except for some changes made to align with Topic 606. This ASU is effective for Devon beginning January 1, 2019 and will be applied using a modified retrospective transition method, which requires applying the new guidance to leases that exist or are entered into after the beginning of the earliest period in the financial statements. Early adoption is permitted. Devon is continuing to evaluate the impact this ASU will have on its consolidated financial statements and related disclosures and does not plan on early adopting.

 

Acquisitions And Divestitures
Acquisitions And Divestitures

2.

Acquisitions and Divestitures

Devon Acquisitions

On January 7, 2016, Devon acquired approximately 80,000 net acres and assets in the STACK play for approximately $1.5 billion. Devon funded the acquisition with $849 million of cash and $659 million of common equity shares. The allocation of the purchase price at September 30, 2016 was approximately $1.3 billion to unproved properties and approximately $200 million to proved properties.

 

 

EnLink Acquisitions

On January 7, 2016, EnLink acquired Anadarko Basin gathering and processing midstream assets, along with dedicated acreage service rights and service contracts, for approximately $1.5 billion, subject to certain adjustments. EnLink funded the acquisition with approximately $215 million of General Partner common units and approximately $800 million of cash, primarily funded with the issuance of EnLink preferred units. The remaining $500 million of the purchase price is to be paid within one year with the option to defer $250 million of the final payment 24 months from the close date. The first $250 million of undiscounted future installment payment is reported in other current liabilities in the accompanying consolidated balance sheets with the remaining $250 million payment reported in other long-term liabilities. The accretion of the discount is reported within net financing costs in the accompanying consolidated comprehensive statement of earnings. A preliminary allocation of the purchase price at September 30, 2016 was $1.0 billion to intangible assets and approximately $400 million to property and equipment.

On August 1, 2016, EnLink formed a joint venture to operate and expand its midstream assets in the Delaware Basin. The joint venture is initially owned 50.1% by EnLink and 49.9% by the joint venture partner. As of September 30, 2016, EnLink contributed approximately $244 million of existing non-monetary assets to the joint venture and had committed an additional $262 million in capital to fund potential future development projects and potential acquisitions. The joint venture partner committed an aggregate of approximately $400 million of capital, including cash contributions of approximately $138 million, and granted EnLink call rights beginning in 2021 to acquire increasing portions of the joint venture partner’s interest.

Devon Asset Divestitures

In the first nine months of 2016, Devon divested certain non-core upstream assets in the U.S., and subsequent to quarter-end, completed the divestiture of its 50% interest in the Access Pipeline in Canada.

Upstream Asset Sales

In the second quarter of 2016, Devon divested its non-core Mississippian assets for approximately $200 million. Estimated proved reserves associated with these assets were approximately 11 MMBoe, or less than 1% of total U.S. proved reserves.

During the third quarter of 2016, in several separate transactions with different purchasers, Devon divested non-core upstream assets located in east Texas, the Anadarko Basin and the Midland Basin for approximately $1.7 billion. Estimated proved reserves associated with these assets were approximately 146 MMBoe, or approximately 9% of total U.S. proved reserves.

Proceeds from the transactions have been utilized primarily for debt repayment and to support future capital investment in Devon’s core resource plays.

Under full cost accounting rules, sales or other dispositions of oil and gas properties are generally accounted for as adjustments to capitalized costs, with no recognition of gain or loss. However, if not recognizing a gain or loss on the disposition would otherwise significantly alter the relationship between a cost center’s capitalized costs and proved reserves, then a gain or loss must be recognized. Absent gain recognition, the divestiture transactions that closed in the third quarter of 2016 would have significantly altered the costs and reserves relationship. Therefore, Devon recognized a $1.4 billion gain in the third quarter of 2016 associated with these divestitures. A summary of the gain computation follows.

 

 

Three Months Ended September 30, 2016

 

 

 

(Millions)

 

Proceeds received, net of purchase price adjustments and selling costs

 

$

1,653

 

Asset retirement obligation assumed by purchasers

 

 

250

 

   Total consideration received

 

 

1,903

 

 

 

 

 

 

Allocated oil and gas property basis sold

 

 

355

 

Allocated goodwill

 

 

197

 

   Total assets sold

 

 

552

 

 

 

 

 

 

Gains on asset sales

 

$

1,351

 

Access Pipeline Divestiture

As of September 30, 2016, the Access Pipeline assets and liabilities were classified as held for sale in the accompanying consolidated balance sheet.

In October 2016, Devon divested Access Pipeline for $1.1 billion ($1.4 billion Canadian dollars) and recognized a gain of approximately $540 million on the transaction. In conjunction with the divestiture, Devon entered into a transportation agreement whereby Devon’s Canadian thermal-oil acreage is dedicated to Access Pipeline for an initial term of 25 years. Devon will be charged a market-based toll on its thermal-oil production over this term. In addition, Devon will receive an incremental payment of approximately $120 million upon the sanctioning and development of a new thermal-oil project on Devon’s Pike lease in Alberta.

Derivative Financial Instruments
Derivative Financial Instruments

3.

Derivative Financial Instruments

Objectives and Strategies

Devon periodically enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production to hedge future prices received. Additionally, Devon and EnLink periodically enter into derivative financial instruments with respect to a portion of their oil, gas and NGL marketing activities. These commodity derivative financial instruments include financial price swaps, basis swaps, costless price collars and call options. Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility and foreign exchange forward contracts to manage its exposure to fluctuations in the U.S. and Canadian dollar exchange rates. As of September 30, 2016, Devon did not have any open foreign exchange contracts.

Devon does not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment.

As of December 31, 2015, Devon’s other current assets in the accompanying consolidated balance sheet included $236 million of accrued settlements that it received in January 2016.

Counterparty Credit Risk

By using derivative financial instruments, Devon is exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, the hedging instruments are placed with a number of counterparties whom Devon believes are acceptable credit risks. It is Devon’s policy to enter into derivative contracts only with investment-grade rated counterparties deemed by management to be competent and competitive market makers. Additionally, Devon’s derivative contracts generally contain provisions that provide for collateral payments, if Devon’s or its counterparty’s credit rating falls below certain credit rating levels.

As of December 31, 2015, Devon held $75 million of cash collateral which represented the estimated fair value of certain derivative positions in excess of Devon’s credit guidelines. The collateral is reported in other current liabilities in the accompanying consolidated balance sheets.

Commodity Derivatives

As of September 30, 2016, Devon had the following open oil derivative positions. The first table presents Devon’s oil derivatives that settle against the average of the prompt month NYMEX WTI futures price. The second table presents Devon’s oil derivatives that settle against the respective indices noted within the table.

 

 

 

Price Swaps

 

 

Price Collars

 

 

Call Options Sold

 

Period

 

Volume

(Bbls/d)

 

 

Weighted

Average

Price ($/Bbl)

 

 

Volume

(Bbls/d)

 

 

Weighted

Average Floor

Price ($/Bbl)

 

 

Weighted

Average

Ceiling Price

($/Bbl)

 

 

Volume

(Bbls/d)

 

 

Weighted

Average Price

($/Bbl)

 

Q4 2016

 

 

40,848

 

 

$

49.00

 

 

 

20,000

 

 

$

40.85

 

 

$

50.85

 

 

 

18,500

 

 

$

55.00

 

Q1-Q4 2017

 

 

10,452

 

 

$

50.57

 

 

 

32,496

 

 

$

44.60

 

 

$

57.37

 

 

 

 

 

$

 

Q1-Q4 2018

 

 

616

 

 

$

50.61

 

 

 

1,726

 

 

$

45.51

 

 

$

55.51

 

 

 

 

 

$

 

 

 

 

Oil Basis Swaps

 

Period

 

Index

 

Volume (Bbls/d)

 

 

Weighted Average

Differential to WTI

($/Bbl)

 

Q4 2016

 

Western Canadian Select

 

 

33,000

 

 

$

(13.40

)

Q4 2016

 

West Texas Sour

 

 

5,000

 

 

$

(0.53

)

Q4 2016

 

Midland Sweet

 

 

13,000

 

 

$

0.25

 

 

As of September 30, 2016, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.

 

 

 

Price Swaps

 

 

Price Collars

 

 

Call Options Sold

 

Period

 

Volume (MMBtu/d)

 

 

Weighted Average Price ($/MMBtu)

 

 

Volume (MMBtu/d)

 

 

Weighted Average Floor Price ($/MMBtu)

 

 

Weighted Average

Ceiling Price ($/MMBtu)

 

 

Volume (MMBtu/d)

 

 

Weighted Average Price ($/MMBtu)

 

Q4 2016

 

 

155,000

 

 

$

2.83

 

 

 

385,000

 

 

$

2.74

 

 

$

2.97

 

 

 

400,000

 

 

$

2.80

 

Q1-Q4 2017

 

 

145,384

 

 

$

3.06

 

 

 

230,904

 

 

$

2.91

 

 

$

3.31

 

 

 

 

 

$

 

Q1-Q4 2018

 

 

8,630

 

 

$

3.30

 

 

 

8,630

 

 

$

3.18

 

 

$

3.48

 

 

 

 

 

$

 

 

 

 

Natural Gas Basis Swaps

 

Period

 

Index

 

Volume

(MMBtu/d)

 

 

Weighted Average

Differential to

Henry Hub

($/MMBtu)

 

Q4 2016

 

Panhandle Eastern Pipe Line

 

 

175,000

 

 

$

(0.34

)

Q4 2016

 

El Paso Natural Gas

 

 

125,000

 

 

$

(0.12

)

Q4 2016

 

Houston Ship Channel

 

 

30,000

 

 

$

0.11

 

Q4 2016

 

Transco Zone 4

 

 

70,000

 

 

$

0.01

 

Q1-Q4 2017

 

Panhandle Eastern Pipe Line

 

 

150,000

 

 

$

(0.34

)

Q1-Q4 2017

 

El Paso Natural Gas

 

 

80,000

 

 

$

(0.13

)

Q1-Q4 2017

 

Houston Ship Channel

 

 

35,000

 

 

$

0.06

 

Q1-Q4 2017

 

Transco Zone 4

 

 

205,000

 

 

$

0.03

 

 

As of September 30, 2016, Devon had the following open NGL derivative positions. Devon’s NGL positions settle against the average of the prompt month OPIS Mont Belvieu, Texas index.

 

 

 

 

 

Price Swaps

 

 

Price Collars

 

Period

 

Product

 

Volume (Bbls/d)

 

 

Weighted Average Price ($/Bbl)

 

 

Volume (Bbls/d)

 

 

Weighted Average Floor Price ($/Bbl)

 

 

Weighted Average Ceiling Price ($/Bbl)

 

Q4 2016

 

Ethane

 

 

6,000

 

 

$

9.71

 

 

 

10,000

 

 

$

8.34

 

 

$

9.60

 

Q4 2016

 

Propane

 

 

1,000

 

 

$

21.53

 

 

 

6,000

 

 

$

19.88

 

 

$

21.98

 

 

As of September 30, 2016, EnLink had the following open derivative positions associated with gas processing and fractionation. EnLink’s NGL derivative positions settle by purity product against the average of the prompt month OPIS Mont Belvieu, Texas index. EnLink’s natural gas derivatives settle against the Henry Hub Gas Daily index.

 

Period

 

Product

 

Volume (Total)

 

Weighted Average Price Paid

 

Weighted Average Price Received

Q4 2016

 

Ethane

 

 

170

 

MBbls

 

$0.28/gal

 

Index

Q4 2016-Q3 2017

 

Propane

 

 

405

 

MBbls

 

Index

 

$0.65/gal

Q4 2016-Q3 2017

 

Normal Butane

 

 

109

 

MBbls

 

Index

 

$0.60/gal

Q4 2016-Q3 2017

 

Natural Gasoline

 

 

113

 

MBbls

 

Index

 

$0.98/gal

Q4 2016-Q3 2017

 

Natural Gas

 

 

17,438

 

MMBtu/d

 

Index

 

$2.94/MMbtu

Q4 2016

 

Condensate

 

 

50

 

MBbls

 

Index

 

$40.20/bbl

 

Interest Rate Derivatives

As of September 30, 2016, Devon had the following open interest rate derivative positions:

 

Notional

 

 

Rate Received

 

 

Rate Paid

 

 

Expiration

(Millions)

 

 

 

 

 

 

 

 

 

 

 

$

100

 

 

Three Month LIBOR

 

 

 

0.92%

 

 

December 2016

$

750

 

 

Three Month LIBOR

 

 

 

2.98%

 

 

December 2048 (1)

$

100

 

 

 

1.76%

 

 

Three Month LIBOR

 

 

January 2019

 

(1)

Mandatory settlement in December 2018.

 

Financial Statement Presentation

The following table presents the net gains and losses by derivative financial instrument type followed by the corresponding individual consolidated comprehensive statements of earnings caption.

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Commodity derivatives:

 

(Millions)

 

Oil, gas and NGL derivatives

 

$

79

 

 

$

414

 

 

$

(30

)

 

$

426

 

Marketing and midstream revenues

 

 

(1

)

 

 

6

 

 

 

(7

)

 

 

8

 

Interest rate derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other nonoperating items

 

 

(20

)

 

 

(30

)

 

 

(163

)

 

 

(28

)

Foreign currency derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other nonoperating items

 

 

 

 

 

91

 

 

 

(159

)

 

 

200

 

Net gains (losses) recognized

 

$

58

 

 

$

481

 

 

$

(359

)

 

$

606

 

 

The following table presents the derivative fair values by derivative financial instrument type followed by the corresponding individual consolidated balance sheet caption.

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Commodity derivative assets:

 

 

 

 

 

 

 

 

Other current assets

 

$

12

 

 

$

34

 

Other long-term assets

 

 

1

 

 

 

1

 

Interest rate derivative assets:

 

 

 

 

 

 

 

 

Other current assets

 

 

1

 

 

 

1

 

Other long-term assets

 

 

1

 

 

 

1

 

Foreign currency derivative assets:

 

 

 

 

 

 

 

 

Other current assets

 

 

 

 

 

8

 

Total derivative assets

 

$

15

 

 

$

45

 

 

 

 

 

 

 

 

 

 

Commodity derivative liabilities:

 

 

 

 

 

 

 

 

Other current liabilities

 

$

40

 

 

$

14

 

Other long-term liabilities

 

 

6

 

 

 

4

 

Interest rate derivative liabilities:

 

 

 

 

 

 

 

 

Other long-term liabilities

 

 

185

 

 

 

22

 

Foreign currency derivative liabilities:

 

 

 

 

 

 

 

 

Other current liabilities

 

 

 

 

 

8

 

Total derivative liabilities

 

$

231

 

 

$

48

 

 

Share-Based Compensation
Share-Based Compensation

4.

Share-Based Compensation

The following table presents the effects of share-based compensation included in Devon’s accompanying consolidated comprehensive statements of earnings. Gross G&A expense for the first nine months of 2016 and 2015 includes $18 million and $25 million, respectively, of unit-based compensation related to grants made under EnLink’s long-term incentive plans.

The vesting for certain share-based awards was accelerated in 2016 in conjunction with the reduction of workforce described in Note 6. For the nine months ended September 30, 2016, approximately $60 million of associated expense for these accelerated awards is included in restructuring and transaction costs in the accompanying consolidated comprehensive statements of earnings.

 

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Gross G&A for share-based compensation

 

$

117

 

 

$

182

 

Share-based compensation expense capitalized pursuant to the full cost

   method of accounting for oil and gas properties

 

$

30

 

 

$

48

 

Related income tax benefit

 

$

3

 

 

$

37

 

 

 

 

 

 

 

 

 

 

Under its approved long-term incentive plan, Devon granted share-based awards to certain employees in the first nine months of 2016. The following table presents a summary of Devon’s unvested restricted stock awards and units, performance-based restricted stock awards and performance share units granted under the plan.

 

 

 

Restricted Stock

 

 

Performance-Based

 

 

Performance

 

 

 

Awards and Units

 

 

Restricted Stock Awards

 

 

Share Units

 

 

 

Awards and

Units

 

 

Weighted

Average

Grant-Date

Fair Value

 

 

Awards

 

 

Weighted

Average

Grant-Date

Fair Value

 

 

Units

 

 

 

 

Weighted

Average

Grant-Date

Fair Value

 

 

 

(Thousands, except fair value data)

 

Unvested at 12/31/15

 

 

4,738

 

 

$

62.49

 

 

 

434

 

 

$

60.48

 

 

 

1,859

 

 

 

 

$

76.17

 

Granted

 

 

4,375

 

 

$

19.83

 

 

 

330

 

 

$

19.22

 

 

 

1,388

 

 

 

 

$

10.41

 

Vested

 

 

(2,150

)

 

$

62.35

 

 

 

(132

)

 

$

61.39

 

 

 

(602

)

 

 

 

$

63.37

 

Forfeited

 

 

(185

)

 

$

46.67

 

 

 

 

 

$

 

 

 

(13

)

 

 

 

$

64.23

 

Unvested at 9/30/16

 

 

6,778

 

 

$

35.42

 

 

 

632

 

 

$

38.71

 

 

 

2,632

 

(1)

 

 

$

46.53

 

 

(1)

A maximum of 5.3 million common shares could be awarded based upon Devon’s final TSR ranking relative to Devon’s peer group established under applicable award agreements.

The following table presents the assumptions related to the performance share units granted in 2016, as indicated in the previous summary table.

 

 

 

2016

 

Grant-date fair value

 

$

9.24

 

 

 

 

 

$

10.61

 

Risk-free interest rate

 

 

 

 

 

 

 

 

 

 

0.94

%

Volatility factor

 

 

 

 

 

 

 

 

 

 

37.7

%

Contractual term (years)

 

 

 

 

 

 

 

 

 

 

2.83

 

 

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units as of September 30, 2016.

 

 

 

 

 

 

 

Performance-Based

 

 

 

 

 

 

 

Restricted Stock

 

 

Restricted Stock

 

 

Performance

 

 

 

Awards and Units

 

 

Awards

 

 

Share Units

 

Unrecognized compensation cost (millions)

 

$

153

 

 

$

6

 

 

$

28

 

Weighted average period for recognition (years)

 

 

2.5

 

 

 

2.4

 

 

 

1.7

 

 

EnLink Share-Based Awards

The following table presents a summary of the unrecognized compensation cost and the related weighted average recognition period associated with the General Partner’s and EnLink’s unvested restricted incentive units and performance units as of September 30, 2016.

 

 

 

General Partner

 

 

EnLink

 

 

 

Restricted

 

 

Performance

 

 

Restricted

 

 

Performance

 

 

 

Incentive Units

 

 

Units

 

 

Incentive Units

 

 

Units

 

Unrecognized compensation cost (millions)

 

$

15

 

 

$

4

 

 

$

16

 

 

$

4

 

Weighted average period for recognition (years)

 

1.6

 

 

 

1.8

 

 

1.6

 

 

 

1.8

 

 

Asset Impairments
Asset Impairments

5.

Asset Impairments

The following table presents the components of asset impairments.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

U.S. oil and gas assets

 

$

317

 

 

$

4,715

 

 

$

2,810

 

 

$

14,340

 

Canada oil and gas assets

 

 

 

 

 

336

 

 

 

1,166

 

 

 

336

 

EnLink goodwill

 

 

 

 

 

576

 

 

 

873

 

 

 

576

 

EnLink other intangible assets

 

 

 

 

 

223

 

 

 

 

 

 

223

 

Other assets

 

 

2

 

 

 

1

 

 

 

2

 

 

 

4

 

Total asset impairments

 

$

319

 

 

$

5,851

 

 

$

4,851

 

 

$

15,479

 

 

Oil and Gas Impairments

Under the full cost method of accounting, capitalized costs of oil and gas properties, net of accumulated DD&A and deferred income taxes, may not exceed the full cost “ceiling” at the end of each quarter. The ceiling is calculated separately for each country and is based on the present value of estimated future net cash flows from proved oil and gas reserves, discounted at 10% per annum, net of related tax effects. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months.

The oil and gas impairments resulted from declines in the U.S. and Canada full cost ceilings. The lower ceiling values resulted primarily from significant decreases in the 12-month average trailing prices for oil, bitumen, gas and NGLs, which significantly reduced proved reserves values and, to a lesser degree, proved reserves.

EnLink Goodwill Impairments and Other Intangible Assets Impairments

In the first quarter of 2016 and the third quarter of 2015, Devon recognized goodwill and other intangible assets impairments related to EnLink’s business. Additional information regarding the impairments is discussed in Note 12.

 

Restructuring And Transaction Costs
Restructuring And Transaction Costs

6.

Restructuring and Transaction Costs

The following table summarizes restructuring and transaction costs presented in the accompanying consolidated comprehensive statement of earnings.

 

 

 

September 30, 2016

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

(Millions)

 

2016 reduction in workforce:

 

 

 

 

 

 

 

 

Employee related costs

 

$

(7

)

 

$

229

 

Lease obligations

 

 

 

 

 

17

 

Asset impairments

 

 

 

 

 

3

 

Transaction costs

 

 

2

 

 

 

17

 

Restructuring and transaction costs

 

$

(5

)

 

$

266

 

 

The following table summarizes Devon’s restructuring liabilities.

 

 

 

Other

 

 

Other

 

 

 

 

 

 

 

Current

 

 

Long-term

 

 

 

 

 

 

 

Liabilities

 

 

Liabilities

 

 

Total

 

 

 

(Millions)

 

Balance as of December 31, 2015

 

$

13

 

 

$

63

 

 

$

76

 

Changes due to 2016 workforce reductions

 

 

58

 

 

 

13

 

 

 

71

 

Changes related to prior years' restructurings

 

 

5

 

 

 

(8

)

 

 

(3

)

Balance as September 30, 2016

 

$

76

 

 

$

68

 

 

$

144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2014

 

$

13

 

 

$

7

 

 

$

20

 

Changes related to prior years' restructurings

 

 

(5

)

 

 

(2

)

 

 

(7

)

Balance as of September 30, 2015

 

$

8

 

 

$

5

 

 

$

13

 

 

Reduction in Workforce

In the first nine months of 2016, Devon recognized $229 million in employee-related costs associated with a reduction in workforce that was made in response to the depressed commodity price environment. Of these employee-related costs, approximately $60 million resulted from accelerated vesting of share-based grants, which are noncash charges. Additionally, approximately $30 million resulted from estimated defined benefit settlements. These cash and noncash charges included estimates for employees released from service during the first nine months of 2016, as well as amounts based on the number of employees expected to be impacted by certain of its non-core asset divestitures.

As a result of the reduction in workforce and asset divestitures, Devon ceased using certain office space that was subject to non-cancellable operating lease arrangements. Consequently, Devon recognized $17 million of restructuring costs that represent the present value of its future obligations under the leases. Additionally, Devon recognized $3 million of asset impairment charges for leasehold improvements and furniture associated with the office space it ceased using.

Transaction Costs

In the first nine months of 2016, Devon and EnLink recognized transaction costs primarily associated with the closing of the acquisitions discussed in Note 2.

Income Taxes
Income Taxes

7.

Income Taxes

The following table presents Devon’s total income tax expense (benefit) and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Current income tax expense (benefit)

 

$

85

 

 

$

(6

)

 

$

72

 

 

$

(87

)

Deferred income tax expense (benefit)

 

 

86

 

 

 

(1,708

)

 

 

(300

)

 

 

(5,348

)

Total income tax expense (benefit)

 

$

171

 

 

$

(1,714

)

 

$

(228

)

 

$

(5,435

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. statutory income tax rate

 

 

35

%

 

 

35

%

 

 

35

%

 

 

35

%

Deferred tax asset valuation allowance

 

 

(35

%)

 

 

0

%

 

 

(20

%)

 

 

0

%

Non-deductible goodwill and intangible impairment

 

 

6

%

 

 

(5

%)

 

 

(9

%)

 

 

(2

%)

Change in unrecognized tax benefits

 

 

7

%

 

 

0

%

 

 

(2

%)

 

 

0

%

Taxation on Canadian operations

 

 

0

%

 

 

0

%

 

 

(3

%)

 

 

(1

%)

State income taxes

 

 

2

%

 

 

1

%

 

 

1

%

 

 

2

%

Other

 

 

0

%

 

 

(1

%)

 

 

3

%

 

 

1

%

Effective income tax rate

 

 

15

%

 

 

30

%

 

 

5

%

 

 

35

%

 

Devon estimates its annual effective income tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur.

At December 31, 2015, Devon recorded a 100%, or $967 million, valuation allowance against the U.S. deferred tax assets that largely resulted from the full cost impairments recognized during 2015. In the first and second quarters of 2016, Devon provided an additional $808 and $467 million, respectively, deferred tax valuation allowance to reflect its continued financial losses incurred largely by the additional full cost impairments. In the third quarter of 2016, Devon’s U.S. segment reduced its deferred tax valuation allowance by $479 million primarily due to the gain from the sale of assets recorded during the quarter. Also during the third quarter of 2016, Devon’s Canadian segment recorded a $71 million partial valuation allowance due to its continued financial losses.

In the first quarter of 2016 and the third quarter of 2015, EnLink recorded goodwill and intangibles impairments totaling $873 million and $799 million, respectively. These impairments are not deductible for purposes of calculating income tax and therefore have an impact on the effective tax rate.

Devon is under audit in the U.S. and various foreign jurisdictions as part of its normal course of business. The timing of resolution of income tax examinations is uncertain as are the amounts and timing of tax payments that are part of any audit settlement process. Devon believes that within the next 12 months, it is reasonably possible that certain tax examinations will be resolved by settlement with the taxing authorities. During the third quarter of 2016, Devon recognized $85 million of unrecognized tax benefits, including $34 million of interest, associated with such tax examinations.

 

Net Earnings (Loss) Per Share Attributable to Devon
Net Earnings (Loss) Per Share Attributable to Devon

8.

Net Earnings (Loss) Per Share Attributable to Devon

The following table reconciles net earnings (loss) attributable to Devon and weighted-average common shares outstanding used in the calculations of basic and diluted net earnings (loss) per share.

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions, except per share amounts)

 

Net earnings (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Devon

 

$

993

 

 

$

(3,507

)

 

$

(3,633

)

 

$

(9,922

)

Attributable to participating securities

 

 

(11

)

 

 

(1

)

 

 

(1

)

 

 

(3

)

Basic and diluted earnings (loss)

 

$

982

 

 

$

(3,508

)

 

$

(3,634

)

 

$

(9,925

)

Common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding - total

 

 

524

 

 

 

411

 

 

 

509

 

 

 

411

 

Attributable to participating securities

 

 

(6

)

 

 

(5

)

 

 

(6

)

 

 

(5

)

Common shares outstanding - basic

 

 

518

 

 

 

406

 

 

 

503

 

 

 

406

 

Dilutive effect of potential common

   shares issuable

 

 

3

 

 

 

 

 

 

 

 

 

 

Common shares outstanding - diluted

 

 

521

 

 

 

406

 

 

 

503

 

 

 

406

 

Net earnings (loss) per share attributable to Devon:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.90

 

 

$

(8.64

)

 

$

(7.22

)

 

$

(24.45

)

Diluted

 

$

1.89

 

 

$

(8.64

)

 

$

(7.22

)

 

$

(24.45

)

Antidilutive options (1)

 

 

3

 

 

 

4

 

 

 

3

 

 

 

4

 

 

(1)

Amounts represent options to purchase shares of Devon’s common stock that are excluded from the diluted net loss per share calculations because the options are antidilutive.

Other Comprehensive Earnings
Other Comprehensive Earnings

9.

Other Comprehensive Earnings

Components of other comprehensive earnings consist of the following:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Foreign currency translation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated foreign currency translation

 

$

450

 

 

$

725

 

 

$

424

 

 

$

983

 

Change in cumulative translation adjustment

 

 

(1

)

 

 

(242

)

 

 

52

 

 

 

(519

)

Income tax benefit (expense)

 

 

3

 

 

 

30

 

 

 

(24

)

 

 

49

 

Ending accumulated foreign currency translation

 

 

452

 

 

 

513

 

 

 

452

 

 

 

513

 

Pension and postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated pension and postretirement

   benefits

 

 

(185

)

 

 

(197

)

 

 

(194

)

 

 

(204

)

Recognition of net actuarial loss and prior service

   cost in earnings (1)

 

 

7

 

 

 

6

 

 

 

20

 

 

 

17

 

Income tax benefit (expense)

 

 

4

 

 

 

(1

)

 

 

 

 

 

(5

)

Ending accumulated pension and postretirement

   benefits

 

 

(174

)

 

 

(192

)

 

 

(174

)

 

 

(192

)

Accumulated other comprehensive earnings, net of tax

 

$

278

 

 

$

321

 

 

$

278

 

 

$

321

 

 

(1)

These accumulated other comprehensive earnings components are included in the computation of net periodic benefit cost, which is a component of G&A on the accompanying consolidated comprehensive statements of earnings. See Note 16 for additional details.

Supplemental Information To Statements Of Cash Flows
Supplemental Information To Statements Of Cash Flows

10.

Supplemental Information to Statements of Cash Flows

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Net change in working capital accounts, net of assets and

   liabilities assumed:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

81

 

 

$

273

 

 

$

87

 

 

$

713

 

Income taxes receivable

 

 

6

 

 

 

98

 

 

 

107

 

 

 

514

 

Other current assets

 

 

98

 

 

 

(30

)

 

 

242

 

 

 

(36

)

Accounts payable

 

 

(34

)

 

 

(33

)

 

 

(185

)

 

 

(135

)

Revenues and royalties payable

 

 

40

 

 

 

(105

)

 

 

34

 

 

 

(288

)

Other current liabilities

 

 

(55

)

 

 

(136

)

 

 

(104

)

 

 

(675

)

Net change in working capital

 

$

136

 

 

$

67

 

 

$

181

 

 

$

93

 

Interest paid (net of capitalized interest)

 

$

113

 

 

$

113

 

 

$

402

 

 

$

343

 

Income taxes received

 

$

(7

)

 

$

(9

)

 

$

(130

)

 

$

(339

)

 

Devon’s acquisition of certain STACK assets during the first three months of 2016 included the noncash issuance of Devon common stock. See Note 2 for additional details.

EnLink’s acquisition of Anadarko Basin gathering and processing midstream assets during the first quarter of 2016 included noncash issuance of General Partner common units. Additionally, EnLink’s formation of a joint venture during the third quarter of 2016 included non-monetary asset contributions. See Note 2 for additional details. During the first nine months of 2015, EnLink’s acquisitions included $360 million of noncash equity issuance.

 

Accounts Receivable
Accounts Receivable

11.

Accounts Receivable

Components of accounts receivable include the following:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Oil, gas and NGL sales

 

$

404

 

 

$

362

 

Joint interest billings

 

 

75

 

 

 

211

 

Marketing and midstream revenues

 

 

562

 

 

 

520

 

Other

 

 

69

 

 

 

30

 

Gross accounts receivable

 

 

1,110

 

 

 

1,123

 

Allowance for doubtful accounts

 

 

(18

)

 

 

(18

)

Net accounts receivable

 

$

1,092

 

 

$

1,105

 

 

Goodwill And Other Intangible Assets
Goodwill And Other Intangible Assets

12.

Goodwill and Other Intangible Assets

Goodwill

Devon performs an annual impairment test of goodwill at October 31, or more frequently if events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable. Sustained weakness in the overall energy sector driven by low commodity prices, together with a decline in EnLink’s unit price, caused a change in circumstances warranting an interim impairment test of EnLink’s reporting units in the first quarter of 2016. Based on that test, EnLink recorded a noncash goodwill impairment of $873 million. This consisted of a full impairment charge of $93 million related to its Crude and Condensate reporting unit and partial impairment to its Texas and General Partner reporting units of $473 million and $307 million, respectively.

In the third quarter of 2015, EnLink recorded a noncash goodwill impairment of $576 million related to its Louisiana reporting unit as a result of an interim impairment test.

Asset Divestitures

During the third quarter of 2016, Devon derecognized $197 million of goodwill in conjunction with the upstream oil and gas asset divestitures discussed in Note 2.

Other Intangible Assets

The following table presents other intangible assets reported in other long-term assets in the accompanying consolidated balance sheets. See Note 2 for discussion of changes in other intangible assets resulting from EnLink acquisitions during the first nine months of 2016.

In the third quarter of 2015, Devon recorded a noncash intangible assets impairment of $223 million related to EnLink’s Crude and Condensate reporting unit resulting from an assessment of EnLink’s customer relationships. Level 3 fair value measurements were utilized for the impairment analysis of definite-lived intangible assets, which included discounted cash flow estimates, consistent with those utilized in the goodwill impairment assessment.

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Customer relationships

 

$

1,793

 

 

$

745

 

Accumulated amortization

 

 

(142

)

 

 

(55

)

Net intangibles

 

$

1,651

 

 

$

690

 

 

The weighted-average amortization period for other intangible assets is 14 years. Amortization expense for intangibles was approximately $29 million and $14 million for the three months ended September 30, 2016 and 2015, respectively, and $87 million and $44 million for the nine months ended September 30, 2016 and 2015, respectively. The remaining amortization expense is estimated to be $118 million for each of the next five years.

Other Current Liabilities
Other Current Liabilities

13.

Other Current Liabilities

Components of other current liabilities include the following:

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Installment payment - see Note 2

 

$

243

 

 

$

 

Accrued interest payable

 

 

171

 

 

 

149

 

Restructuring liabilities

 

 

76

 

 

 

13

 

Other

 

 

420

 

 

 

488

 

Other current liabilities

 

$

910

 

 

$

650

 

 

Asset Retirement Obligations
Asset Retirement Obligations

15.

Asset Retirement Obligations

The following table presents the changes in Devon’s asset retirement obligations.

 

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Asset retirement obligations as of beginning of period

 

$

1,414

 

 

$

1,399

 

Liabilities incurred and assumed through acquisitions

 

 

18

 

 

 

46

 

Liabilities settled and divested

 

 

(310

)

 

 

(48

)

Revision of estimated obligation

 

 

70

 

 

 

62

 

Accretion expense on discounted obligation

 

 

58

 

 

 

56

 

Foreign currency translation adjustment

 

 

26

 

 

 

(80

)

Asset retirement obligations as of end of period

 

 

1,276

 

 

 

1,435

 

Less current portion

 

 

46

 

 

 

58

 

Asset retirement obligations, long-term

 

$

1,230

 

 

$

1,377

 

 

During the first nine months of 2016, Devon reduced its asset retirement obligation by $285 million for those obligations that were assumed by the purchasers of certain upstream U.S. assets.

 

Retirement Plans
Retirement Plans

16.

Retirement Plans

The following table presents the components of net periodic benefit cost for Devon’s pension and postretirement benefit plans.

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Service cost

 

$

3

 

 

$

9

 

 

$

12

 

 

$

25

 

 

$

 

 

$

 

 

$

 

 

$

 

Interest cost

 

 

9

 

 

 

13

 

 

 

32

 

 

 

39

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected return on plan assets

 

 

(14

)

 

 

(14

)

 

 

(40

)

 

 

(44

)

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of prior service cost (1)

 

 

1

 

 

 

1

 

 

 

2

 

 

 

3

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Net actuarial loss (1)

 

 

6

 

 

 

5

 

 

 

19

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

Net periodic benefit cost (2)

 

$

5

 

 

$

14

 

 

$

25

 

 

$

38

 

 

$

 

 

$

 

 

$

(1

)

 

$

(1

)

 

(1)

These net periodic benefit costs were reclassified out of other comprehensive earnings in the current period.

(2)

Net periodic benefit cost is a component of G&A in the accompanying consolidated comprehensive statements of earnings.

 

Stockholders' Equity
Stockholders' Equity

17.

Stockholders’ Equity

Common Stock Issued

In January 2016, Devon issued approximately 23 million shares of common stock in conjunction with the STACK asset acquisition discussed in Note 2.

In February 2016, Devon issued 79 million shares of common stock to the public, inclusive of 10 million shares sold as part of the underwriters’ option. Net proceeds from the offering were $1.5 billion.

Dividends

The table below summarizes the dividends Devon paid on its common stock.

 

 

Amounts

 

 

Rate

 

 

(Millions)

 

 

(Per Share)

 

Quarter Ended 2016:

 

 

 

 

 

 

 

First quarter 2016

$

125

 

 

$

0.24

 

Second quarter 2016

 

33

 

 

$

0.06

 

Third quarter 2016

 

32

 

 

$

0.06

 

Total year-to-date

$

190

 

 

 

 

 

Quarter Ended 2015:

 

 

 

 

 

 

 

First quarter 2015

$

99

 

 

$

0.24

 

Second quarter 2015

 

98

 

 

$

0.24

 

Third quarter 2015

 

99

 

 

$

0.24

 

Total year-to-date

$

296

 

 

 

 

 

 

In response to the depressed commodity price environment, Devon reduced its quarterly dividend to $0.06 per share in the second quarter of 2016.

Noncontrolling Interests
Noncontrolling interests

18.

Noncontrolling Interests

Subsidiary Equity Transactions

During the first quarter of 2016, EnLink issued common units in conjunction with the acquisition discussed in Note 2. In addition, during the first nine months of 2016, EnLink issued approximately 7 million common units for net proceeds of $110 million. As a result of these transactions, Devon’s ownership interest in EnLink decreased from 28% at December 31, 2015 to 24% at September 30, 2016, excluding the interest held by the General Partner. Additionally, as a result of the transaction described in Note 2, Devon’s ownership in the General Partner decreased from 70% to 64% during the same time period. The net gains and losses and related income taxes resulting from these transactions have been recorded as an adjustment to equity, with the change in ownership reflected as an adjustment to noncontrolling interests.

Distributions to Noncontrolling Interests

EnLink and the General Partner distributed $224 million and $186 million to non-Devon unitholders during the first nine months of 2016 and 2015, respectively.

Commitments And Contingencies
Commitments And Contingencies

19.

Commitments and Contingencies

Devon is party to various legal actions arising in the normal course of business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to involve future amounts that would be material to Devon’s financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates.

Royalty Matters

Numerous oil and natural gas producers and related parties, including Devon, have been named in various lawsuits alleging royalty underpayments. The suits allege that the producers and related parties used below-market prices, made improper deductions, used improper measurement techniques and entered into gas purchase and processing arrangements with affiliates that resulted in underpayment of royalties in connection with oil, natural gas and NGLs produced and sold. Devon is also involved in governmental agency proceedings and is subject to related contracts and regulatory controls in the ordinary course of business, some that may lead to additional royalty claims. Devon does not currently believe that it is subject to material exposure with respect to such royalty matters.

Environmental Matters

Devon is subject to certain environmental, health and safety laws and regulations, including environmental remediation activities associated with past operations, such as the Comprehensive Environmental Response, Compensation, and Liability Act and similar state statutes. In response to liabilities associated with these activities, loss accruals primarily consist of estimated uninsured remediation costs. Devon’s monetary exposure for environmental matters is not expected to be material.

Other Matters

Devon is involved in other various legal proceedings incidental to its business. However, to Devon’s knowledge, there were no other material pending legal proceedings to which Devon is a party or to which any of its property is subject.

Fair Value Measurements
Fair Value Measurements

20.

Fair Value Measurements

The following table provides carrying value and fair value measurement information for certain of Devon’s financial assets and liabilities. The carrying values of cash, accounts receivable, other current receivables, accounts payable, other current payables and accrued expenses included in the accompanying consolidated balance sheets approximated fair value at September 30, 2016 and December 31, 2015. Therefore, such financial assets and liabilities are not presented in the following table. Additionally, the fair values of oil and gas assets, goodwill and other intangible assets and related impairments are measured as of the impairment date using Level 3 inputs. More information on these items is provided in Note 5 and Note 12.  

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using:

 

 

 

Carrying

 

 

Total Fair

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Value

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

 

(Millions)

 

September 30, 2016 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,864

 

 

$

1,864

 

 

$

1,672

 

 

$

192

 

 

$

 

Commodity derivatives

 

$

13

 

 

$

13

 

 

$

 

 

$

13

 

 

$

 

Commodity derivatives

 

$

(46

)

 

$

(46

)

 

$

 

 

$

(46

)

 

$

 

Interest rate derivatives

 

$

2

 

 

$

2

 

 

$

 

 

$

2

 

 

$

 

Interest rate derivatives

 

$

(185

)

 

$

(185

)

 

$

 

 

$

(185

)

 

$

 

Debt

 

$

(11,354

)

 

$

(11,984

)

 

$

 

 

$

(11,984

)

 

$

 

Installment payment

 

$

(460

)

 

$

(465

)

 

$

 

 

$

(465

)

 

$

 

Capital lease obligations

 

$

(11

)

 

$

(10

)

 

$

 

 

$

(10

)

 

$

 

December 31, 2015 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,871

 

 

$

1,871

 

 

$

1,471

 

 

$

400

 

 

$

 

Commodity derivatives

 

$

35

 

 

$

35

 

 

$

 

 

$

35

 

 

$

 

Commodity derivatives

 

$

(18

)

 

$

(18

)

 

$

 

 

$

(18

)

 

$

 

Interest rate derivatives

 

$

2

 

 

$

2

 

 

$

 

 

$

2

 

 

$

 

Interest rate derivatives

 

$

(22

)

 

$

(22

)

 

$

 

 

$

(22

)

 

$

 

Foreign currency derivatives

 

$

8

 

 

$

8

 

 

$

 

 

$

8

 

 

$

 

Foreign currency derivatives

 

$

(8

)

 

$

(8

)

 

$

 

 

$

(8

)

 

$

 

Debt

 

$

(13,032

)

 

$

(11,927

)

 

$

 

 

$

(11,927

)

 

$

 

Capital lease obligations

 

$

(17

)

 

$

(16

)

 

$

 

 

$

(16

)

 

$

 

 

The following methods and assumptions were used to estimate the fair values in the table above.

Level 1 Fair Value Measurements

Cash equivalents – Amounts consist primarily of money market investments. The fair value approximates the carrying value.

Level 2 Fair Value Measurements

Cash equivalents – Amounts consist primarily of commercial paper and Canadian agency and provincial securities investments. The fair value approximates the carrying value.

Commodity, interest rate and foreign currency derivatives – The fair values of commodity, interest rate and foreign currency derivatives are estimated using internal discounted cash flow calculations based upon forward curves and data obtained from independent third parties for contracts with similar terms or data obtained from counterparties to the agreements.

Debt – Devon’s debt instruments do not actively trade in an established market. The fair values of its debt are estimated based on rates available for debt with similar terms and maturity. The fair values of commercial paper and credit facility balances are the carrying values.

Installment payment – The fair value of the EnLink installment payment as of September 30, 2016 was based on Level 2 inputs from third-party market quotations.

Capital lease obligations – The fair value was calculated using inputs from third-party banks.

Segment Information
Segment Information

21.

Segment Information

Devon manages its operations through distinct operating segments, which are defined primarily by geographic areas. For financial reporting purposes, Devon aggregates its U.S. operating segments into one reporting segment due to the similar nature of the businesses. However, Devon’s Canadian E&P operating segment is reported as a separate reporting segment primarily due to the significant differences between the U.S. and Canadian regulatory environments. Devon’s U.S. and Canadian segments are both primarily engaged in oil and gas E&P activities.

Devon considers EnLink, combined with the General Partner, to be an operating segment that is distinct from the U.S. and Canadian operating segments. EnLink’s operations consist of midstream assets and operations located across the U.S. Additionally, EnLink has a management team that is primarily responsible for capital and resource allocation decisions. Therefore, EnLink is presented as a separate reporting segment.

 

 

 

U.S.

 

 

Canada

 

 

EnLink

 

 

Eliminations

 

 

Total

 

 

 

(Millions)

 

Three Months Ended September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,653

 

 

$

305

 

 

$

924

 

 

$

 

 

$

2,882

 

Gains on asset sales

 

$

1,351

 

 

$

 

 

$

 

 

$

 

 

$

1,351

 

Intersegment revenues

 

$

 

 

$

 

 

$

180

 

 

$

(180

)

 

$

 

Depreciation, depletion and amortization

 

$

196

 

 

$

72

 

 

$

126

 

 

$

 

 

$

394

 

Interest expense

 

$

185

 

 

$

34

 

 

$

49

 

 

$

(23

)

 

$

245

 

Asset impairments

 

$

317

 

 

$

2

 

 

$

 

 

$

 

 

$

319

 

Restructuring and transaction costs

 

$

(10

)

 

$

5

 

 

$

 

 

$

 

 

$

(5

)

Earnings before income taxes

 

$

1,122

 

 

$

37

 

 

$

19

 

 

$

 

 

$

1,178

 

Income tax expense

 

$

5

 

 

$

159

 

 

$

7

 

 

$

 

 

$

171

 

Net earnings (loss)

 

$

1,117

 

 

$

(122

)

 

$

12

 

 

$

 

 

$

1,007

 

Net earnings attributable to noncontrolling interests

 

$

 

 

$

 

 

$

14

 

 

$

 

 

$

14

 

Net earnings (loss) attributable to Devon

 

$

1,117

 

 

$

(122

)

 

$

(2

)

 

$

 

 

$

993

 

Capital expenditures, including acquisitions

 

$

277

 

 

$

48

 

 

$

132

 

 

$

 

 

$

457

 

Three Months Ended September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

2,381

 

 

$

221

 

 

$

999

 

 

$

 

 

$

3,601

 

Intersegment revenues

 

$

 

 

$

 

 

$

172

 

 

$

(172

)

 

$

 

Depreciation, depletion and amortization

 

$

510

 

 

$

134

 

 

$

100

 

 

$

 

 

$

744

 

Interest expense

 

$

96

 

 

$

22

 

 

$

31

 

 

$

(11

)

 

$

138

 

Asset impairments

 

$

4,716

 

 

$

336

 

 

$

799

 

 

$

 

 

$

5,851

 

Loss before income taxes

 

$

(4,464

)

 

$

(401

)

 

$

(758

)

 

$

 

 

$

(5,623

)

Income tax expense (benefit)

 

$

(1,605

)

 

$

(116

)

 

$

7

 

 

$

 

 

$

(1,714

)

Net loss

 

$

(2,859

)

 

$

(285

)

 

$

(765

)

 

$

 

 

$

(3,909

)

Net loss attributable to noncontrolling interests

 

$

 

 

$

 

 

$

(402

)

 

$

 

 

$

(402

)

Net loss attributable to Devon

 

$

(2,859

)

 

$

(285

)

 

$

(363

)

 

$

 

 

$

(3,507

)

Capital expenditures, including acquisitions

 

$

974

 

 

$

108

 

 

$

105

 

 

$

 

 

$

1,187

 

Nine Months Ended September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

4,320

 

 

$

688

 

 

$

2,488

 

 

$

 

 

$

7,496

 

Gains on asset sales

 

$

1,351

 

 

$

 

 

$

 

 

$

 

 

$

1,351

 

Intersegment revenues

 

$

 

 

$

 

 

$

539

 

 

$

(539

)

 

$

 

Depreciation, depletion and amortization

 

$

763

 

 

$

284

 

 

$

373

 

 

$

 

 

$

1,420

 

Interest expense

 

$

400

 

 

$

101

 

 

$

140

 

 

$

(66

)

 

$

575

 

Asset impairments

 

$

2,810

 

 

$

1,168

 

 

$

873

 

 

$

 

 

$

4,851

 

Restructuring and transaction costs

 

$

245

 

 

$

15

 

 

$

6

 

 

$

 

 

$

266

 

Loss before income taxes

 

$

(2,040

)

 

$

(1,359

)

 

$

(853

)

 

$

 

 

$

(4,252

)

Income tax expense (benefit)

 

$

(6

)

 

$

(223

)

 

$

1

 

 

$

 

 

$

(228

)

Net loss

 

$

(2,034

)

 

$

(1,136

)

 

$

(854

)

 

$

 

 

$

(4,024

)

Net earnings (loss) attributable to noncontrolling interests

 

$

1

 

 

$

 

 

$

(392

)

 

$

 

 

$

(391

)

Net loss attributable to Devon

 

$

(2,035

)

 

$

(1,136

)

 

$

(462

)

 

$

 

 

$

(3,633

)

Property and equipment, net

 

$

7,196

 

 

$

2,778

 

 

$

6,195

 

 

$

 

 

$

16,169

 

Total assets

 

$

12,317

 

 

$

4,355

 

 

$

10,197

 

 

$

(56

)

 

$

26,813

 

Capital expenditures, including acquisitions

 

$

2,454

 

 

$

158

 

 

$

816

 

 

$

 

 

$

3,428

 

Nine Months Ended September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

6,570

 

 

$

802

 

 

$

2,887

 

 

$

 

 

$

10,259

 

Intersegment revenues

 

$

 

 

$

 

 

$

499

 

 

$

(499

)

 

$

 

Depreciation, depletion and amortization

 

$

1,817

 

 

$

382

 

 

$

289

 

 

$

 

 

$

2,488

 

Interest expense

 

$

271

 

 

$

70

 

 

$

76

 

 

$

(34

)

 

$

383

 

Asset impairments

 

$

14,344

 

 

$

336

 

 

$

799

 

 

$

 

 

$

15,479

 

Loss before income taxes

 

$

(14,450

)

 

$

(609

)

 

$

(667

)

 

$

 

 

$

(15,726

)

Income tax expense (benefit)

 

$

(5,334

)

 

$

(129

)

 

$

28

 

 

$

 

 

$

(5,435

)

Net loss

 

$

(9,116

)

 

$

(480

)

 

$

(695

)

 

$

 

 

$

(10,291

)

Net earnings (loss) attributable to noncontrolling interests

 

$

1

 

 

$

 

 

$

(370

)

 

$

 

 

$

(369

)

Net loss attributable to Devon

 

$

(9,117

)

 

$

(480

)

 

$

(325

)

 

$

 

 

$

(9,922

)

Property and equipment, net

 

$

11,586

 

 

$

5,623

 

 

$

5,566

 

 

$

 

 

$

22,775

 

Total assets

 

$

17,389

 

 

$

6,747

 

 

$

10,249

 

 

$

(113

)

 

$

34,272

 

Capital expenditures, including acquisitions

 

$

3,205

 

 

$

478

 

 

$

777

 

 

$

 

 

$

4,460

 

 

Summary Of Significant Accounting Policies (Policies)

 

Recently Adopted Accounting Standards

In January 2016, Devon adopted ASU 2015-03, Interest – Imputation of Interest (Topic 835): Simplifying the Presentation of Debt Issuance Costs. This ASU requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability rather than as an asset. As a result of the adoption, Devon reclassified unamortized debt issuance costs of $81 million as of December 31, 2015 from other long-term assets to a reduction of long-term debt on the consolidated balance sheets.

The FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. Its objective is to clarify guidance and eliminate diversity in practice of classification on certain cash receipts and payments in the statement of cash flows. This ASU is effective for Devon beginning January 1, 2018, with early adoption permitted. Devon early adopted this ASU as of September 30, 2016 using a retrospective transition method. As a result of the adoption, Devon has classified $82 million of debt retirement payments as cash flows from financing activities on the accompanying 2016 consolidated statements of cash flows. No other periods presented in the consolidated statements of cash flows were impacted by the adoption of this standard.

Recently Issued Accounting Standards

The FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Its objective is to simplify several aspects of the accounting for share-based payments, including accounting for income taxes when awards vest or are settled, statutory withholding and accounting for forfeitures. Classification of these aspects on the statement of cash flows is also addressed. This ASU is effective for Devon beginning January 1, 2017. Devon does not expect that this ASU will have a material impact on its consolidated financial statements and related disclosures.

The FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU will supersede the revenue recognition requirements in Topic 605, Revenue Recognition and industry-specific guidance in Subtopic 932-605, Extractive Activities – Oil and Gas – Revenue Recognition. This ASU provides guidance concerning the recognition and measurement of revenue from contracts with customers. Its objective is to increase the usefulness of information in the financial statements regarding the nature, timing and uncertainty of revenues. The effective date for ASU 2014-09 was delayed through the issuance of ASU 2015-14, Revenue from Contracts with Customers – Deferral of the Effective Date, to annual and interim periods beginning in 2018, with early adoption permitted in 2017. The ASU is required to be adopted using either the retrospective transition method, which requires restating previously reported results or the cumulative effect (modified retrospective) transition method, which utilizes a cumulative-effect adjustment to retained earnings in the period of adoption to account for prior period effects rather than restating previously reported results. Devon intends to use the cumulative effect transition method and is continuing to evaluate the impact this ASU will have on its consolidated financial statements and related disclosures. Devon does not plan on early adopting.

 

 

The FASB issued ASU 2016-02, Leases (Topic 842). This ASU will supersede the lease requirements in Topic 840, Leases. Its objective is to increase transparency and comparability among organizations. This ASU provides guidance requiring lessees to recognize most leases on their balance sheet. Lessor accounting does not significantly change from Topic 840, except for some changes made to align with Topic 606. This ASU is effective for Devon beginning January 1, 2019 and will be applied using a modified retrospective transition method, which requires applying the new guidance to leases that exist or are entered into after the beginning of the earliest period in the financial statements. Early adoption is permitted. Devon is continuing to evaluate the impact this ASU will have on its consolidated financial statements and related disclosures and does not plan on early adopting.

 

Devon is party to various legal actions arising in the normal course of business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to involve future amounts that would be material to Devon’s financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management’s estimates.

Acquisitions And Divestitures (Tables)
Summary of the Gain Computation

A summary of the gain computation follows.

 

 

Three Months Ended September 30, 2016

 

 

 

(Millions)

 

Proceeds received, net of purchase price adjustments and selling costs

 

$

1,653

 

Asset retirement obligation assumed by purchasers

 

 

250

 

   Total consideration received

 

 

1,903

 

 

 

 

 

 

Allocated oil and gas property basis sold

 

 

355

 

Allocated goodwill

 

 

197

 

   Total assets sold

 

 

552

 

 

 

 

 

 

Gains on asset sales

 

$

1,351

 

 

Derivative Financial Instruments (Tables)

The following table presents the net gains and losses by derivative financial instrument type followed by the corresponding individual consolidated comprehensive statements of earnings caption.

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Commodity derivatives:

 

(Millions)

 

Oil, gas and NGL derivatives

 

$

79

 

 

$

414

 

 

$

(30

)

 

$

426

 

Marketing and midstream revenues

 

 

(1

)

 

 

6

 

 

 

(7

)

 

 

8

 

Interest rate derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other nonoperating items

 

 

(20

)

 

 

(30

)

 

 

(163

)

 

 

(28

)

Foreign currency derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other nonoperating items

 

 

 

 

 

91

 

 

 

(159

)

 

 

200

 

Net gains (losses) recognized

 

$

58

 

 

$

481

 

 

$

(359

)

 

$

606

 

 

The following table presents the derivative fair values by derivative financial instrument type followed by the corresponding individual consolidated balance sheet caption.

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Commodity derivative assets:

 

 

 

 

 

 

 

 

Other current assets

 

$

12

 

 

$

34

 

Other long-term assets

 

 

1

 

 

 

1

 

Interest rate derivative assets:

 

 

 

 

 

 

 

 

Other current assets

 

 

1

 

 

 

1

 

Other long-term assets

 

 

1

 

 

 

1

 

Foreign currency derivative assets:

 

 

 

 

 

 

 

 

Other current assets

 

 

 

 

 

8

 

Total derivative assets

 

$

15

 

 

$

45

 

 

 

 

 

 

 

 

 

 

Commodity derivative liabilities:

 

 

 

 

 

 

 

 

Other current liabilities

 

$

40

 

 

$

14

 

Other long-term liabilities

 

 

6

 

 

 

4

 

Interest rate derivative liabilities:

 

 

 

 

 

 

 

 

Other long-term liabilities

 

 

185

 

 

 

22

 

Foreign currency derivative liabilities:

 

 

 

 

 

 

 

 

Other current liabilities

 

 

 

 

 

8

 

Total derivative liabilities

 

$

231

 

 

$

48

 

 

 

Notional

 

 

Rate Received

 

 

Rate Paid

 

 

Expiration

(Millions)

 

 

 

 

 

 

 

 

 

 

 

$

100

 

 

Three Month LIBOR

 

 

 

0.92%

 

 

December 2016

$

750

 

 

Three Month LIBOR

 

 

 

2.98%

 

 

December 2048 (1)

$

100

 

 

 

1.76%

 

 

Three Month LIBOR

 

 

January 2019

 

(1)

Mandatory settlement in December 2018.

 

 

 

Price Swaps

 

 

Price Collars

 

 

Call Options Sold

 

Period

 

Volume

(Bbls/d)

 

 

Weighted

Average

Price ($/Bbl)

 

 

Volume

(Bbls/d)

 

 

Weighted

Average Floor

Price ($/Bbl)

 

 

Weighted

Average

Ceiling Price

($/Bbl)

 

 

Volume

(Bbls/d)

 

 

Weighted

Average Price

($/Bbl)

 

Q4 2016

 

 

40,848

 

 

$

49.00

 

 

 

20,000

 

 

$

40.85

 

 

$

50.85

 

 

 

18,500

 

 

$

55.00

 

Q1-Q4 2017

 

 

10,452

 

 

$

50.57

 

 

 

32,496

 

 

$

44.60

 

 

$

57.37

 

 

 

 

 

$

 

Q1-Q4 2018

 

 

616

 

 

$

50.61

 

 

 

1,726

 

 

$

45.51

 

 

$

55.51

 

 

 

 

 

$

 

 

 

 

Oil Basis Swaps

 

Period

 

Index

 

Volume (Bbls/d)

 

 

Weighted Average

Differential to WTI

($/Bbl)

 

Q4 2016

 

Western Canadian Select

 

 

33,000

 

 

$

(13.40

)

Q4 2016

 

West Texas Sour

 

 

5,000

 

 

$

(0.53

)

Q4 2016

 

Midland Sweet

 

 

13,000

 

 

$

0.25

 

 

 

 

 

Price Swaps

 

 

Price Collars

 

 

Call Options Sold

 

Period

 

Volume (MMBtu/d)

 

 

Weighted Average Price ($/MMBtu)

 

 

Volume (MMBtu/d)

 

 

Weighted Average Floor Price ($/MMBtu)

 

 

Weighted Average

Ceiling Price ($/MMBtu)

 

 

Volume (MMBtu/d)

 

 

Weighted Average Price ($/MMBtu)

 

Q4 2016

 

 

155,000

 

 

$

2.83

 

 

 

385,000

 

 

$

2.74

 

 

$

2.97

 

 

 

400,000

 

 

$

2.80

 

Q1-Q4 2017

 

 

145,384

 

 

$

3.06

 

 

 

230,904

 

 

$

2.91

 

 

$

3.31

 

 

 

 

 

$

 

Q1-Q4 2018

 

 

8,630

 

 

$

3.30

 

 

 

8,630

 

 

$

3.18

 

 

$

3.48

 

 

 

 

 

$

 

 

 

 

Natural Gas Basis Swaps

 

Period

 

Index

 

Volume

(MMBtu/d)

 

 

Weighted Average

Differential to

Henry Hub

($/MMBtu)

 

Q4 2016

 

Panhandle Eastern Pipe Line

 

 

175,000

 

 

$

(0.34

)

Q4 2016

 

El Paso Natural Gas

 

 

125,000

 

 

$

(0.12

)

Q4 2016

 

Houston Ship Channel

 

 

30,000

 

 

$

0.11

 

Q4 2016

 

Transco Zone 4

 

 

70,000

 

 

$

0.01

 

Q1-Q4 2017

 

Panhandle Eastern Pipe Line

 

 

150,000

 

 

$

(0.34

)

Q1-Q4 2017

 

El Paso Natural Gas

 

 

80,000

 

 

$

(0.13

)

Q1-Q4 2017

 

Houston Ship Channel

 

 

35,000

 

 

$

0.06

 

Q1-Q4 2017

 

Transco Zone 4

 

 

205,000

 

 

$

0.03

 

 

 

 

 

 

 

Price Swaps

 

 

Price Collars

 

Period

 

Product

 

Volume (Bbls/d)

 

 

Weighted Average Price ($/Bbl)

 

 

Volume (Bbls/d)

 

 

Weighted Average Floor Price ($/Bbl)

 

 

Weighted Average Ceiling Price ($/Bbl)

 

Q4 2016

 

Ethane

 

 

6,000

 

 

$

9.71

 

 

 

10,000

 

 

$

8.34

 

 

$

9.60

 

Q4 2016

 

Propane

 

 

1,000

 

 

$

21.53

 

 

 

6,000

 

 

$

19.88

 

 

$

21.98

 

 

 

Period

 

Product

 

Volume (Total)

 

Weighted Average Price Paid

 

Weighted Average Price Received

Q4 2016

 

Ethane

 

 

170

 

MBbls

 

$0.28/gal

 

Index

Q4 2016-Q3 2017

 

Propane

 

 

405

 

MBbls

 

Index

 

$0.65/gal

Q4 2016-Q3 2017

 

Normal Butane

 

 

109

 

MBbls

 

Index

 

$0.60/gal

Q4 2016-Q3 2017

 

Natural Gasoline

 

 

113

 

MBbls

 

Index

 

$0.98/gal

Q4 2016-Q3 2017

 

Natural Gas

 

 

17,438

 

MMBtu/d

 

Index

 

$2.94/MMbtu

Q4 2016

 

Condensate

 

 

50

 

MBbls

 

Index

 

$40.20/bbl

 

Share-Based Compensation (Tables)

 

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Gross G&A for share-based compensation

 

$

117

 

 

$

182

 

Share-based compensation expense capitalized pursuant to the full cost

   method of accounting for oil and gas properties

 

$

30

 

 

$

48

 

Related income tax benefit

 

$

3

 

 

$

37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted Stock

 

 

Performance-Based

 

 

Performance

 

 

 

Awards and Units

 

 

Restricted Stock Awards

 

 

Share Units

 

 

 

Awards and

Units

 

 

Weighted

Average

Grant-Date

Fair Value

 

 

Awards

 

 

Weighted

Average

Grant-Date

Fair Value

 

 

Units

 

 

 

 

Weighted

Average

Grant-Date

Fair Value

 

 

 

(Thousands, except fair value data)

 

Unvested at 12/31/15

 

 

4,738

 

 

$

62.49

 

 

 

434

 

 

$

60.48

 

 

 

1,859

 

 

 

 

$

76.17

 

Granted

 

 

4,375

 

 

$

19.83

 

 

 

330

 

 

$

19.22

 

 

 

1,388

 

 

 

 

$

10.41

 

Vested

 

 

(2,150

)

 

$

62.35

 

 

 

(132

)

 

$

61.39

 

 

 

(602

)

 

 

 

$

63.37

 

Forfeited

 

 

(185

)

 

$

46.67

 

 

 

 

 

$

 

 

 

(13

)

 

 

 

$

64.23

 

Unvested at 9/30/16

 

 

6,778

 

 

$

35.42

 

 

 

632

 

 

$

38.71

 

 

 

2,632

 

(1)

 

 

$

46.53

 

 

(1)

A maximum of 5.3 million common shares could be awarded based upon Devon’s final TSR ranking relative to Devon’s peer group established under applicable award agreements.

 

 

 

2016

 

Grant-date fair value

 

$

9.24

 

 

 

 

 

$

10.61

 

Risk-free interest rate

 

 

 

 

 

 

 

 

 

 

0.94

%

Volatility factor

 

 

 

 

 

 

 

 

 

 

37.7

%

Contractual term (years)

 

 

 

 

 

 

 

 

 

 

2.83

 

 

 

 

 

 

 

 

 

Performance-Based

 

 

 

 

 

 

 

Restricted Stock

 

 

Restricted Stock

 

 

Performance

 

 

 

Awards and Units

 

 

Awards

 

 

Share Units

 

Unrecognized compensation cost (millions)

 

$

153

 

 

$

6

 

 

$

28

 

Weighted average period for recognition (years)

 

 

2.5

 

 

 

2.4

 

 

 

1.7

 

 

 

 

 

General Partner

 

 

EnLink

 

 

 

Restricted

 

 

Performance

 

 

Restricted

 

 

Performance

 

 

 

Incentive Units

 

 

Units

 

 

Incentive Units

 

 

Units

 

Unrecognized compensation cost (millions)

 

$

15

 

 

$

4

 

 

$

16

 

 

$

4

 

Weighted average period for recognition (years)

 

1.6

 

 

 

1.8

 

 

1.6

 

 

 

1.8

 

 

Asset Impairments (Tables)
Components of Asset Impairments

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

U.S. oil and gas assets

 

$

317

 

 

$

4,715

 

 

$

2,810

 

 

$

14,340

 

Canada oil and gas assets

 

 

 

 

 

336

 

 

 

1,166

 

 

 

336

 

EnLink goodwill

 

 

 

 

 

576

 

 

 

873

 

 

 

576

 

EnLink other intangible assets

 

 

 

 

 

223

 

 

 

 

 

 

223

 

Other assets

 

 

2

 

 

 

1

 

 

 

2

 

 

 

4

 

Total asset impairments

 

$

319

 

 

$

5,851

 

 

$

4,851

 

 

$

15,479

 

 

Restructuring And Transaction Costs (Tables)

 

 

 

September 30, 2016

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

(Millions)

 

2016 reduction in workforce:

 

 

 

 

 

 

 

 

Employee related costs

 

$

(7

)

 

$

229

 

Lease obligations

 

 

 

 

 

17

 

Asset impairments

 

 

 

 

 

3

 

Transaction costs

 

 

2

 

 

 

17

 

Restructuring and transaction costs

 

$

(5

)

 

$

266

 

 

 

 

 

Other

 

 

Other

 

 

 

 

 

 

 

Current

 

 

Long-term

 

 

 

 

 

 

 

Liabilities

 

 

Liabilities

 

 

Total

 

 

 

(Millions)

 

Balance as of December 31, 2015

 

$

13

 

 

$

63

 

 

$

76

 

Changes due to 2016 workforce reductions

 

 

58

 

 

 

13

 

 

 

71

 

Changes related to prior years' restructurings

 

 

5

 

 

 

(8

)

 

 

(3

)

Balance as September 30, 2016

 

$

76

 

 

$

68

 

 

$

144

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2014

 

$

13

 

 

$

7

 

 

$

20

 

Changes related to prior years' restructurings

 

 

(5

)

 

 

(2

)

 

 

(7

)

Balance as of September 30, 2015

 

$

8

 

 

$

5

 

 

$

13

 

 

Income Taxes (Tables)
Schedule Of Effective Income Tax Rate Reconciliation

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Current income tax expense (benefit)

 

$

85

 

 

$

(6

)

 

$

72

 

 

$

(87

)

Deferred income tax expense (benefit)

 

 

86

 

 

 

(1,708

)

 

 

(300

)

 

 

(5,348

)

Total income tax expense (benefit)

 

$

171

 

 

$

(1,714

)

 

$

(228

)

 

$

(5,435

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. statutory income tax rate

 

 

35

%

 

 

35

%

 

 

35

%

 

 

35

%

Deferred tax asset valuation allowance

 

 

(35

%)

 

 

0

%

 

 

(20

%)

 

 

0

%

Non-deductible goodwill and intangible impairment

 

 

6

%

 

 

(5

%)

 

 

(9

%)

 

 

(2

%)

Change in unrecognized tax benefits

 

 

7

%

 

 

0

%

 

 

(2

%)

 

 

0

%

Taxation on Canadian operations

 

 

0

%

 

 

0

%

 

 

(3

%)

 

 

(1

%)

State income taxes

 

 

2

%

 

 

1

%

 

 

1

%

 

 

2

%

Other

 

 

0

%

 

 

(1

%)

 

 

3

%

 

 

1

%

Effective income tax rate

 

 

15

%

 

 

30

%

 

 

5

%

 

 

35

%

 

Net Earnings (Loss) Per Share Attributable to Devon (Tables)
Net Earnings (Loss) Per Share Computations

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions, except per share amounts)

 

Net earnings (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings (loss) attributable to Devon

 

$

993

 

 

$

(3,507

)

 

$

(3,633

)

 

$

(9,922

)

Attributable to participating securities

 

 

(11

)

 

 

(1

)

 

 

(1

)

 

 

(3

)

Basic and diluted earnings (loss)

 

$

982

 

 

$

(3,508

)

 

$

(3,634

)

 

$

(9,925

)

Common shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares outstanding - total

 

 

524

 

 

 

411

 

 

 

509

 

 

 

411

 

Attributable to participating securities

 

 

(6

)

 

 

(5

)

 

 

(6

)

 

 

(5

)

Common shares outstanding - basic

 

 

518

 

 

 

406

 

 

 

503

 

 

 

406

 

Dilutive effect of potential common

   shares issuable

 

 

3

 

 

 

 

 

 

 

 

 

 

Common shares outstanding - diluted

 

 

521

 

 

 

406

 

 

 

503

 

 

 

406

 

Net earnings (loss) per share attributable to Devon:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.90

 

 

$

(8.64

)

 

$

(7.22

)

 

$

(24.45

)

Diluted

 

$

1.89

 

 

$

(8.64

)

 

$

(7.22

)

 

$

(24.45

)

Antidilutive options (1)

 

 

3

 

 

 

4

 

 

 

3

 

 

 

4

 

 

(1)

Amounts represent options to purchase shares of Devon’s common stock that are excluded from the diluted net loss per share calculations because the options are antidilutive.

Other Comprehensive Earnings (Tables)
Components Of Other Comprehensive Earnings

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Foreign currency translation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated foreign currency translation

 

$

450

 

 

$

725

 

 

$

424

 

 

$

983

 

Change in cumulative translation adjustment

 

 

(1

)

 

 

(242

)

 

 

52

 

 

 

(519

)

Income tax benefit (expense)

 

 

3

 

 

 

30

 

 

 

(24

)

 

 

49

 

Ending accumulated foreign currency translation

 

 

452

 

 

 

513

 

 

 

452

 

 

 

513

 

Pension and postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated pension and postretirement

   benefits

 

 

(185

)

 

 

(197

)

 

 

(194

)

 

 

(204

)

Recognition of net actuarial loss and prior service

   cost in earnings (1)

 

 

7

 

 

 

6

 

 

 

20

 

 

 

17

 

Income tax benefit (expense)

 

 

4

 

 

 

(1

)

 

 

 

 

 

(5

)

Ending accumulated pension and postretirement

   benefits

 

 

(174

)

 

 

(192

)

 

 

(174

)

 

 

(192

)

Accumulated other comprehensive earnings, net of tax

 

$

278

 

 

$

321

 

 

$

278

 

 

$

321

 

 

(1)

These accumulated other comprehensive earnings components are included in the computation of net periodic benefit cost, which is a component of G&A on the accompanying consolidated comprehensive statements of earnings. See Note 16 for additional details.

Supplemental Information To Statements Of Cash Flows (Tables)
Schedule Of Supplemental Information To Statements Of Cash Flows

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Net change in working capital accounts, net of assets and

   liabilities assumed:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

$

81

 

 

$

273

 

 

$

87

 

 

$

713

 

Income taxes receivable

 

 

6

 

 

 

98

 

 

 

107

 

 

 

514

 

Other current assets

 

 

98

 

 

 

(30

)

 

 

242

 

 

 

(36

)

Accounts payable

 

 

(34

)

 

 

(33

)

 

 

(185

)

 

 

(135

)

Revenues and royalties payable

 

 

40

 

 

 

(105

)

 

 

34

 

 

 

(288

)

Other current liabilities

 

 

(55

)

 

 

(136

)

 

 

(104

)

 

 

(675

)

Net change in working capital

 

$

136

 

 

$

67

 

 

$

181

 

 

$

93

 

Interest paid (net of capitalized interest)

 

$

113

 

 

$

113

 

 

$

402

 

 

$

343

 

Income taxes received

 

$

(7

)

 

$

(9

)

 

$

(130

)

 

$

(339

)

 

Accounts Receivable (Tables)
Schedule Of Components Of Accounts Receivable

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Oil, gas and NGL sales

 

$

404

 

 

$

362

 

Joint interest billings

 

 

75

 

 

 

211

 

Marketing and midstream revenues

 

 

562

 

 

 

520

 

Other

 

 

69

 

 

 

30

 

Gross accounts receivable

 

 

1,110

 

 

 

1,123

 

Allowance for doubtful accounts

 

 

(18

)

 

 

(18

)

Net accounts receivable

 

$

1,092

 

 

$

1,105

 

 

Goodwill And Other Intangible Assets (Tables)
Schedule Of Other Intangible Assets

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Customer relationships

 

$

1,793

 

 

$

745

 

Accumulated amortization

 

 

(142

)

 

 

(55

)

Net intangibles

 

$

1,651

 

 

$

690

 

 

Other Current Liabilities (Tables)
Schedule Of Other Current Liabilities

 

 

 

September 30, 2016

 

 

December 31, 2015

 

 

 

(Millions)

 

Installment payment - see Note 2

 

$

243

 

 

$

 

Accrued interest payable

 

 

171

 

 

 

149

 

Restructuring liabilities

 

 

76

 

 

 

13

 

Other

 

 

420

 

 

 

488

 

Other current liabilities

 

$

910

 

 

$

650

 

 

Asset Retirement Obligations (Tables)
Summary Of Changes In Asset Retirement Obligations

 

 

Nine Months Ended September 30,

 

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Asset retirement obligations as of beginning of period

 

$

1,414

 

 

$

1,399

 

Liabilities incurred and assumed through acquisitions

 

 

18

 

 

 

46

 

Liabilities settled and divested

 

 

(310

)

 

 

(48

)

Revision of estimated obligation

 

 

70

 

 

 

62

 

Accretion expense on discounted obligation

 

 

58

 

 

 

56

 

Foreign currency translation adjustment

 

 

26

 

 

 

(80

)

Asset retirement obligations as of end of period

 

 

1,276

 

 

 

1,435

 

Less current portion

 

 

46

 

 

 

58

 

Asset retirement obligations, long-term

 

$

1,230

 

 

$

1,377

 

 

Retirement Plans (Tables)
Schedule Of Net Periodic Benefit Cost For Pension And Postretirement Benefit Plans

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(Millions)

 

Service cost

 

$

3

 

 

$

9

 

 

$

12

 

 

$

25

 

 

$

 

 

$

 

 

$

 

 

$

 

Interest cost

 

 

9

 

 

 

13

 

 

 

32

 

 

 

39

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected return on plan assets

 

 

(14

)

 

 

(14

)

 

 

(40

)

 

 

(44

)

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of prior service cost (1)

 

 

1

 

 

 

1

 

 

 

2

 

 

 

3

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Net actuarial loss (1)

 

 

6

 

 

 

5

 

 

 

19

 

 

 

15

 

 

 

 

 

 

 

 

 

 

 

 

 

Net periodic benefit cost (2)

 

$

5

 

 

$

14

 

 

$

25

 

 

$

38

 

 

$

 

 

$

 

 

$

(1

)

 

$

(1

)

 

(1)

These net periodic benefit costs were reclassified out of other comprehensive earnings in the current period.

(2)

Net periodic benefit cost is a component of G&A in the accompanying consolidated comprehensive statements of earnings.

Stockholders' Equity (Tables)
Summary Of Dividends Paid On Common Stock

 

Amounts

 

 

Rate

 

 

(Millions)

 

 

(Per Share)

 

Quarter Ended 2016:

 

 

 

 

 

 

 

First quarter 2016

$

125

 

 

$

0.24

 

Second quarter 2016

 

33

 

 

$

0.06

 

Third quarter 2016

 

32

 

 

$

0.06

 

Total year-to-date

$

190

 

 

 

 

 

Quarter Ended 2015:

 

 

 

 

 

 

 

First quarter 2015

$

99

 

 

$

0.24

 

Second quarter 2015

 

98

 

 

$

0.24

 

Third quarter 2015

 

99

 

 

$

0.24

 

Total year-to-date

$

296

 

 

 

 

 

 

Fair Value Measurements (Tables)
Schedule Of Carrying Value And Fair Value Measurement Information For Financial Assets And Liabilities

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using:

 

 

 

Carrying

 

 

Total Fair

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Value

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

 

(Millions)

 

September 30, 2016 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,864

 

 

$

1,864

 

 

$

1,672

 

 

$

192

 

 

$

 

Commodity derivatives

 

$

13

 

 

$

13

 

 

$

 

 

$

13

 

 

$

 

Commodity derivatives

 

$

(46

)

 

$

(46

)

 

$

 

 

$

(46

)

 

$

 

Interest rate derivatives

 

$

2

 

 

$

2

 

 

$

 

 

$

2

 

 

$

 

Interest rate derivatives

 

$

(185

)

 

$

(185

)

 

$

 

 

$

(185

)

 

$

 

Debt

 

$

(11,354

)

 

$

(11,984

)

 

$

 

 

$

(11,984

)

 

$

 

Installment payment

 

$

(460

)

 

$

(465

)

 

$

 

 

$

(465

)

 

$

 

Capital lease obligations

 

$

(11

)

 

$

(10

)

 

$

 

 

$

(10

)

 

$

 

December 31, 2015 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,871

 

 

$

1,871

 

 

$

1,471

 

 

$

400

 

 

$

 

Commodity derivatives

 

$

35

 

 

$

35

 

 

$

 

 

$

35

 

 

$

 

Commodity derivatives

 

$

(18

)

 

$

(18

)

 

$

 

 

$

(18

)

 

$

 

Interest rate derivatives

 

$

2

 

 

$

2

 

 

$

 

 

$

2

 

 

$

 

Interest rate derivatives

 

$

(22

)

 

$

(22

)

 

$

 

 

$

(22

)

 

$

 

Foreign currency derivatives

 

$

8

 

 

$

8

 

 

$

 

 

$

8

 

 

$

 

Foreign currency derivatives

 

$

(8

)

 

$

(8

)

 

$

 

 

$

(8

)

 

$

 

Debt

 

$

(13,032

)

 

$

(11,927

)

 

$

 

 

$

(11,927

)

 

$

 

Capital lease obligations

 

$

(17

)

 

$

(16

)

 

$

 

 

$

(16

)

 

$

 

 

Segment Information (Tables)
Condensed Statements Of Comprehensive Earnings And Balance Sheets Of Reportable Segments

 

 

 

U.S.

 

 

Canada

 

 

EnLink

 

 

Eliminations

 

 

Total

 

 

 

(Millions)

 

Three Months Ended September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

1,653

 

 

$

305

 

 

$

924

 

 

$

 

 

$

2,882

 

Gains on asset sales

 

$

1,351

 

 

$

 

 

$

 

 

$

 

 

$

1,351

 

Intersegment revenues

 

$

 

 

$

 

 

$

180

 

 

$

(180

)

 

$

 

Depreciation, depletion and amortization

 

$

196

 

 

$

72

 

 

$

126

 

 

$

 

 

$

394

 

Interest expense

 

$

185

 

 

$

34

 

 

$

49

 

 

$

(23

)

 

$

245

 

Asset impairments

 

$

317

 

 

$

2

 

 

$

 

 

$

 

 

$

319

 

Restructuring and transaction costs

 

$

(10

)

 

$

5

 

 

$

 

 

$

 

 

$

(5

)

Earnings before income taxes

 

$

1,122

 

 

$

37

 

 

$

19

 

 

$

 

 

$

1,178

 

Income tax expense

 

$

5

 

 

$

159

 

 

$

7

 

 

$

 

 

$

171

 

Net earnings (loss)

 

$

1,117

 

 

$

(122

)

 

$

12

 

 

$

 

 

$

1,007

 

Net earnings attributable to noncontrolling interests

 

$

 

 

$

 

 

$

14

 

 

$

 

 

$

14

 

Net earnings (loss) attributable to Devon

 

$

1,117

 

 

$

(122

)

 

$

(2

)

 

$

 

 

$

993

 

Capital expenditures, including acquisitions

 

$

277

 

 

$

48

 

 

$

132

 

 

$

 

 

$

457

 

Three Months Ended September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

2,381

 

 

$

221

 

 

$

999

 

 

$

 

 

$

3,601

 

Intersegment revenues

 

$

 

 

$

 

 

$

172

 

 

$

(172

)

 

$

 

Depreciation, depletion and amortization

 

$

510

 

 

$

134

 

 

$

100

 

 

$

 

 

$

744

 

Interest expense

 

$

96

 

 

$

22

 

 

$

31

 

 

$

(11

)

 

$

138

 

Asset impairments

 

$

4,716

 

 

$

336

 

 

$

799

 

 

$

 

 

$

5,851

 

Loss before income taxes

 

$

(4,464

)

 

$

(401

)

 

$

(758

)

 

$

 

 

$

(5,623

)

Income tax expense (benefit)

 

$

(1,605

)

 

$

(116

)

 

$

7

 

 

$

 

 

$

(1,714

)

Net loss

 

$

(2,859

)

 

$

(285

)

 

$

(765

)

 

$

 

 

$

(3,909

)

Net loss attributable to noncontrolling interests

 

$

 

 

$

 

 

$

(402

)

 

$

 

 

$

(402

)

Net loss attributable to Devon

 

$

(2,859

)

 

$

(285

)

 

$

(363

)

 

$

 

 

$

(3,507

)

Capital expenditures, including acquisitions

 

$

974

 

 

$

108

 

 

$

105

 

 

$

 

 

$

1,187

 

Nine Months Ended September 30, 2016:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

4,320

 

 

$

688

 

 

$

2,488

 

 

$

 

 

$

7,496

 

Gains on asset sales

 

$

1,351

 

 

$

 

 

$

 

 

$

 

 

$

1,351

 

Intersegment revenues

 

$

 

 

$

 

 

$

539

 

 

$

(539

)

 

$

 

Depreciation, depletion and amortization

 

$

763

 

 

$

284

 

 

$

373

 

 

$

 

 

$

1,420

 

Interest expense

 

$

400

 

 

$

101

 

 

$

140

 

 

$

(66

)

 

$

575

 

Asset impairments

 

$

2,810

 

 

$

1,168

 

 

$

873

 

 

$

 

 

$

4,851

 

Restructuring and transaction costs

 

$

245

 

 

$

15

 

 

$

6

 

 

$

 

 

$

266

 

Loss before income taxes

 

$

(2,040

)

 

$

(1,359

)

 

$

(853

)

 

$

 

 

$

(4,252

)

Income tax expense (benefit)

 

$

(6

)

 

$

(223

)

 

$

1

 

 

$

 

 

$

(228

)

Net loss

 

$

(2,034

)

 

$

(1,136

)

 

$

(854

)

 

$

 

 

$

(4,024

)

Net earnings (loss) attributable to noncontrolling interests

 

$

1

 

 

$

 

 

$

(392

)

 

$

 

 

$

(391

)

Net loss attributable to Devon

 

$

(2,035

)

 

$

(1,136

)

 

$

(462

)

 

$

 

 

$

(3,633

)

Property and equipment, net

 

$

7,196

 

 

$

2,778

 

 

$

6,195

 

 

$

 

 

$

16,169

 

Total assets

 

$

12,317

 

 

$

4,355

 

 

$

10,197

 

 

$

(56

)

 

$

26,813

 

Capital expenditures, including acquisitions

 

$

2,454

 

 

$

158

 

 

$

816

 

 

$

 

 

$

3,428

 

Nine Months Ended September 30, 2015:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues from external customers

 

$

6,570

 

 

$

802

 

 

$

2,887

 

 

$

 

 

$

10,259

 

Intersegment revenues

 

$

 

 

$

 

 

$

499

 

 

$

(499

)

 

$

 

Depreciation, depletion and amortization

 

$

1,817

 

 

$

382

 

 

$

289

 

 

$

 

 

$

2,488

 

Interest expense

 

$

271

 

 

$

70

 

 

$

76

 

 

$

(34

)

 

$

383

 

Asset impairments

 

$

14,344

 

 

$

336

 

 

$

799

 

 

$

 

 

$

15,479

 

Loss before income taxes

 

$

(14,450

)

 

$

(609

)

 

$

(667

)

 

$

 

 

$

(15,726

)

Income tax expense (benefit)

 

$

(5,334

)

 

$

(129

)

 

$

28

 

 

$

 

 

$

(5,435

)

Net loss

 

$

(9,116

)

 

$

(480

)

 

$

(695

)

 

$

 

 

$

(10,291

)

Net earnings (loss) attributable to noncontrolling interests

 

$

1

 

 

$

 

 

$

(370

)

 

$

 

 

$

(369

)

Net loss attributable to Devon

 

$

(9,117

)

 

$

(480

)

 

$

(325

)

 

$

 

 

$

(9,922

)

Property and equipment, net

 

$

11,586

 

 

$

5,623

 

 

$

5,566

 

 

$

 

 

$

22,775

 

Total assets

 

$

17,389

 

 

$

6,747

 

 

$

10,249

 

 

$

(113

)

 

$

34,272

 

Capital expenditures, including acquisitions

 

$

3,205

 

 

$

478

 

 

$

777

 

 

$

 

 

$

4,460

 

 

Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2016
Dec. 31, 2015
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
 
 
 
Debt issuance costs
$ 49 
$ 49 
$ 57 
Debt retirement payments
82 
82 
 
Accounting Standards Update 2015-03 [Member]
 
 
 
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
 
 
 
Debt issuance costs
 
 
81 
Accounting Standards Update 2016-15 [Member]
 
 
 
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
 
 
 
Debt retirement payments
 
$ 82 
 
Acquisitions And Divestitures (Narrative) (Details)
3 Months Ended 9 Months Ended 1 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 9 Months Ended
Sep. 30, 2016
USD ($)
Sep. 30, 2015
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2015
USD ($)
Sep. 30, 2016
Access Pipeline [Member]
Oct. 31, 2016
Access Pipeline [Member]
Subsequent Event [Member]
USD ($)
Oct. 31, 2016
Access Pipeline [Member]
Subsequent Event [Member]
CAD ($)
Oct. 31, 2016
Access Pipeline [Member]
Subsequent Event [Member]
Scenario Plan [Member]
USD ($)
Jun. 30, 2016
Mississippian [Member]
USD ($)
MMBoe
Jun. 30, 2016
Mississippian [Member]
US [Member]
Maximum [Member]
Sep. 30, 2016
East Texas, Anadarko Basin and Midland Basin [Member]
USD ($)
MMBoe
Sep. 30, 2016
East Texas, Anadarko Basin and Midland Basin [Member]
US [Member]
Sep. 30, 2016
Oil and Gas Properties [Member]
USD ($)
Sep. 30, 2016
Installment Payable, Current [Member]
USD ($)
Sep. 30, 2016
EnLink [Member]
USD ($)
Aug. 1, 2016
EnLink [Member]
Sep. 30, 2015
Equity Issued in Business Combination [Member]
EnLink [Member]
USD ($)
Sep. 30, 2016
STACK [Member]
USD ($)
Jan. 7, 2016
STACK [Member]
USD ($)
acre
Jan. 7, 2016
STACK [Member]
Common Stock [Member]
Equity Issued in Business Combination [Member]
USD ($)
Sep. 30, 2016
Anadarko Basin [Member]
EnLink [Member]
USD ($)
Jan. 7, 2016
Anadarko Basin [Member]
EnLink [Member]
USD ($)
Jan. 7, 2016
Anadarko Basin [Member]
EnLink [Member]
Installment Payable, Noncurrent [Member]
USD ($)
Sep. 30, 2016
Anadarko Basin [Member]
EnLink [Member]
Installment Payable, Current [Member]
Undiscounted [Member]
USD ($)
Jan. 7, 2016
Anadarko Basin [Member]
Common Stock [Member]
Equity Issued in Business Combination [Member]
General Partner [Member]
USD ($)
Sep. 30, 2016
Joint Venture Partner [Member]
EnLink [Member]
USD ($)
Aug. 1, 2016
Joint Venture Partner [Member]
EnLink [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Close date of acquisition
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Jan. 07, 2016 
 
 
Jan. 07, 2016 
 
 
 
 
 
 
Number of net acres acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
80,000 
 
 
 
 
 
 
 
 
Aggregate purchase price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,500,000,000 
 
 
$ 1,500,000,000 
 
 
 
 
 
Cash payment to acquire interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
849,000,000 
 
 
800,000,000 
 
 
 
 
 
Equity units value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
360,000,000 
 
 
659,000,000 
 
 
 
 
215,000,000 
 
 
Unproved properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,300,000,000 
 
 
 
 
 
 
 
 
 
Proved properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
200,000,000 
 
 
 
 
 
 
 
 
 
Amount committed to pay
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000,000 
 
 
 
 
 
Commitment to pay cash due date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1 year 
24 months 
 
 
 
 
Installment payable, noncurrent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
250,000,000 
 
250,000,000 
 
 
 
 
Installment payment
 
 
 
 
 
 
 
 
 
 
 
 
 
243,000,000 
 
 
 
 
 
 
 
 
 
250,000,000 
 
 
 
Intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,000,000,000 
 
 
 
 
 
 
Property and equipment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
400,000,000 
 
 
 
 
 
 
Joint venture formation date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aug. 01, 2016 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership interest percentage acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.10% 
 
 
 
 
 
 
 
 
 
 
49.90% 
Contribution of non monetary assets to joint venture
 
 
 
 
 
 
 
 
 
 
 
 
 
 
244,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Additional capital to fund potential future development projects
 
 
 
 
 
 
 
 
 
 
 
 
 
 
262,000,000 
 
 
 
 
 
 
 
 
 
 
400,000,000 
 
Cash contribution
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
138,000,000 
 
Call rights to acquire increasing portions of joint venture partner's interest, start year
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2021 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership interest
 
 
 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Divestitures of property and equipment
1,680,000,000 
27,000,000 
1,889,000,000 
35,000,000 
 
1,100,000,000 
1,400,000,000 
120,000,000 
200,000,000 
 
1,700,000,000 
 
1,653,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Estimated proved reserves
 
 
 
 
 
 
 
 
11 
 
146 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage of Estimated proved reserves associated with divestiture assets
 
 
 
 
 
 
 
 
 
1.00% 
 
9.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains on asset sales
$ 1,351,000,000 
 
$ 1,351,000,000 
 
 
$ 540,000,000 
 
 
 
 
 
 
$ 1,351,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Divestiture agreement dedication initial term
 
 
 
 
 
25 years 
25 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisitions And Divestitures (Summary of Gain Computation) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Business Acquisition [Line Items]
 
 
 
 
Divestitures of property and equipment
$ 1,680 
$ 27 
$ 1,889 
$ 35 
Asset retirement obligation assumed by purchasers
 
 
310 
48 
Gains on asset sales
1,351 
 
1,351 
 
Oil and Gas Properties [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Divestitures of property and equipment
1,653 
 
 
 
Asset retirement obligation assumed by purchasers
250 
 
 
 
Total consideration received
1,903 
 
1,903 
 
Allocated oil and gas property basis sold
355 
 
355 
 
Allocated goodwill
197 
 
 
 
Total assets sold
552 
 
552 
 
Gains on asset sales
$ 1,351 
 
 
 
Derivative Financial Instruments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Derivative [Line Items]
 
 
Other receivables
$ 69 
$ 30 
Derivative collateral held
 
75 
Accrued Derivative Settlements [Member]
 
 
Derivative [Line Items]
 
 
Other receivables
 
$ 236 
Derivative Financial Instruments (Schedule Of Open Oil Derivative Positions) (Details)
9 Months Ended
Sep. 30, 2016
bbl
NYMEX West Texas Intermediate Price Swaps Oil Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
40,848 
Weighted Average Price Swap
49.00 
NYMEX West Texas Intermediate Price Swaps Oil Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
10,452 
Weighted Average Price Swap
50.57 
NYMEX West Texas Intermediate Price Swaps Oil Q1-Q4 2018 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
616 
Weighted Average Price Swap
50.61 
NYMEX West Texas Intermediate Price Collars Oil Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
20,000 
Weighted Average Floor Price
40.85 
Weighted Average Ceiling Price
50.85 
NYMEX West Texas Intermediate Price Collars Oil Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
32,496 
Weighted Average Floor Price
44.60 
Weighted Average Ceiling Price
57.37 
NYMEX West Texas Intermediate Price Collars Oil Q1-Q4 2018 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
1,726 
Weighted Average Floor Price
45.51 
Weighted Average Ceiling Price
55.51 
NYMEX West Texas Intermediate Call Options Sold Oil Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
18,500 
Weighted Average Call Option Sold Price
55.00 
Western Canadian Select Basis Swaps Oil Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
33,000 
Weighted Average Differential To WTI
(13.40)
West Texas Sour Basis Swaps Oil Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
5,000 
Weighted Average Differential To WTI
(0.53)
Midland Sweet Basis Swaps Oil Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
13,000 
Weighted Average Differential To WTI
0.25 
Derivative Financial Instruments (Schedule Of Open Natural Gas Derivative Positions) (Details)
9 Months Ended
Sep. 30, 2016
MMBTU
FERC Henry Hub Price Swaps Natural Gas Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
155,000 
Weighted Average Price Swap
2.83 
FERC Henry Hub Price Swaps Natural Gas Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
145,384 
Weighted Average Price Swap
3.06 
FERC Henry Hub Price Swaps Natural Gas Q1-Q4 2018 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
8,630 
Weighted Average Price Swap
3.30 
FERC Henry Hub Price Collars Natural Gas Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
385,000 
Weighted Average Floor Price
2.74 
Weighted Average Ceiling Price
2.97 
FERC Henry Hub Price Collars Natural Gas Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
230,904 
Weighted Average Floor Price
2.91 
Weighted Average Ceiling Price
3.31 
FERC Henry Hub Price Collars Natural Gas Q1-Q4 2018 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
8,630 
Weighted Average Floor Price
3.18 
Weighted Average Ceiling Price
3.48 
FERC Henry Hub Call Options Sold Natural Gas Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
400,000 
Weighted Average Call Option Sold Price
2.80 
PEPL Basis Swaps Natural Gas Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
175,000 
Weighted Average Differential To Henry Hub
(0.34)
PEPL Basis Swaps Natural Gas Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
150,000 
Weighted Average Differential To Henry Hub
(0.34)
El Paso Natural Gas Basis Swaps Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
125,000 
Weighted Average Differential To Henry Hub
(0.12)
El Paso Natural Gas Basis Swaps Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
80,000 
Weighted Average Differential To Henry Hub
(0.13)
Houston Ship Channel Natural Gas Basis Swaps Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
30,000 
Weighted Average Differential To Henry Hub
0.11 
Houston Ship Channel Natural Gas Basis Swaps Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
35,000 
Weighted Average Differential To Henry Hub
0.06 
Transco Zone 4 Natural Gas Basis Swaps Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
70,000 
Weighted Average Differential To Henry Hub
0.01 
Transco Zone 4 Natural Gas Basis Swaps Q1-Q4 2017 [Member]
 
Derivative [Line Items]
 
Volume Per Day (MMBtu/d)
205,000 
Weighted Average Differential To Henry Hub
0.03 
Derivative Financial Instruments (Schedule Of Open NGL Derivative Positions) (Details)
9 Months Ended
Sep. 30, 2016
bbl
OPIS Mont Belvieu Texas Ethane Price Swaps NGL Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
6,000 
Weighted Average Price Swap
9.71 
OPIS Mont Belvieu Texas Propane Price Swaps NGL Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
1,000 
Weighted Average Price Swap
21.53 
OPIS Mont Belvieu Texas Ethane Price Collars NGL Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
10,000 
Weighted Average Floor Price
8.34 
Weighted Average Ceiling Price
9.60 
OPIS Mont Belvieu Texas Propane Price Collars NGL Q4 2016 [Member]
 
Derivative [Line Items]
 
Volume Per Day (Bbls/d)
6,000 
Weighted Average Floor Price
19.88 
Weighted Average Ceiling Price
21.98 
Derivative Financial Instruments (Schedule Of Open Interest Rate Swap Derivative Positions) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Interest Rate Contract 0.92% Expiration December 2016 [Member]
 
Derivative [Line Items]
 
Notional
$ 100 
Rate Received
Three Month LIBOR 
Rate Paid, percent
0.92% 
Expiration
Dec. 31, 2016 
Interest Rate Contract 2.98% Expiration December 2048 [Member]
 
Derivative [Line Items]
 
Notional
750 
Rate Received
Three Month LIBOR 
Rate Paid, percent
2.98% 
Expiration
Dec. 31, 2018 
Reference period end date
Dec. 31, 2048 1
Interest Rate Contract 1.76% Expiration January 2019 [Member]
 
Derivative [Line Items]
 
Notional
$ 100 
Rate Received, percent
1.76% 
Rate Paid
Three Month LIBOR 
Expiration
Jan. 31, 2019 
Derivative Financial Instruments (Schedule Of Derivative Financial Instruments Included In The Consolidated Comprehensive Statements Of Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Derivatives Fair Value [Line Items]
 
 
 
 
Net gains (losses) recognized in consolidated comprehensive statements of earnings
$ 58 
$ 481 
$ (359)
$ 606 
Commodity Derivatives [Member] |
Oil, Gas And NGL Derivatives [Member]
 
 
 
 
Derivatives Fair Value [Line Items]
 
 
 
 
Net gains (losses) recognized in consolidated comprehensive statements of earnings
79 
414 
(30)
426 
Commodity Derivatives [Member] |
Marketing And Midstream Revenues [Member]
 
 
 
 
Derivatives Fair Value [Line Items]
 
 
 
 
Net gains (losses) recognized in consolidated comprehensive statements of earnings
(1)
(7)
Interest Rate Derivatives [Member] |
Other Nonoperating Items [Member]
 
 
 
 
Derivatives Fair Value [Line Items]
 
 
 
 
Net gains (losses) recognized in consolidated comprehensive statements of earnings
(20)
(30)
(163)
(28)
Foreign Currency Derivatives [Member] |
Other Nonoperating Items [Member]
 
 
 
 
Derivatives Fair Value [Line Items]
 
 
 
 
Net gains (losses) recognized in consolidated comprehensive statements of earnings
 
$ 91 
$ (159)
$ 200 
Derivative Financial Instruments (Schedule Of Derivative Financial Instruments Included In The Consolidated Balance Sheets) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative assets
$ 15 
$ 45 
Fair value of derivative liabilities
231 
48 
Commodity Derivatives [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative assets
12 
34 
Commodity Derivatives [Member] |
Other Long-Term Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative assets
Commodity Derivatives [Member] |
Other Current Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative liabilities
40 
14 
Commodity Derivatives [Member] |
Other Long-Term Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative liabilities
Interest Rate Derivatives [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative assets
Interest Rate Derivatives [Member] |
Other Long-Term Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative assets
Interest Rate Derivatives [Member] |
Other Long-Term Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative liabilities
185 
22 
Foreign Currency Derivatives [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative assets
 
Foreign Currency Derivatives [Member] |
Other Current Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Fair value of derivative liabilities
 
$ 8 
Share-Based Compensation (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Unit-based compensation
$ 117 
$ 182 
Reduction of workforce [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Expense associated with accelerated awards
60 
 
EnLink [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Unit-based compensation
$ 18 
$ 25 
Share-Based Compensation (Schedule Of The Effects Of Share Based Compensation Included In The Consolidated Comprehensive Statement Of Earnings) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Share Based Compensation [Abstract]
 
 
Gross G&A for share-based compensation
$ 117 
$ 182 
Share-based compensation expense capitalized pursuant to the full cost method of accounting for oil and gas properties
30 
48 
Related income tax benefit
$ 3 
$ 37 
Share-Based Compensation (Summary Of Unvested Restricted Stock Awards and Units, Performance-Based Restricted Stock Awards And Performance Share Units) (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Restricted Stock Awards And Units [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Unvested at December 31, 2015
4,738 
Granted, awards and units
4,375 
Vested, awards and units
(2,150)
Forfeited, awards and units
(185)
Unvested at September 30, 2016
6,778 
Unvested weighted average grant-date fair value at December 31, 2015
$ 62.49 
Granted, weighted average grant-date fair value
$ 19.83 
Vested, weighted average grant-date fair value
$ 62.35 
Forfeited, weighted average grant-date fair value
$ 46.67 
Unvested weighted average grant-date fair value at September 30, 2016
$ 35.42 
Performance-Based Restricted Stock Awards [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Unvested at December 31, 2015
434 
Granted, awards and units
330 
Vested, awards and units
(132)
Unvested at September 30, 2016
632 
Unvested weighted average grant-date fair value at December 31, 2015
$ 60.48 
Granted, weighted average grant-date fair value
$ 19.22 
Vested, weighted average grant-date fair value
$ 61.39 
Unvested weighted average grant-date fair value at September 30, 2016
$ 38.71 
Performance Share Units [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Unvested at December 31, 2015
1,859 
Granted, awards and units
1,388 
Vested, awards and units
(602)
Forfeited, awards and units
(13)
Unvested at September 30, 2016
2,632 1
Unvested weighted average grant-date fair value at December 31, 2015
$ 76.17 
Granted, weighted average grant-date fair value
$ 10.41 
Vested, weighted average grant-date fair value
$ 63.37 
Forfeited, weighted average grant-date fair value
$ 64.23 
Unvested weighted average grant-date fair value at September 30, 2016
$ 46.53 
Share-Based Compensation (Summary Of Unvested Restricted Stock Awards and Units, Performance-Based Restricted Stock Awards And Performance Share Units) (Parenthetical) (Details) (Performance Share Units [Member], Maximum [Member])
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Performance Share Units [Member] |
Maximum [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Maximum common shares that could be awarded based upon total shareholder return
5.3 
Share-Based Compensation (Summary of Unrecognized Compensation Cost And Weighted Average Period For Recognition) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Restricted Stock Awards And Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
$ 153 
Weighted average period for recognition (years)
2 years 6 months 
Performance-Based Restricted Stock Awards [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
Weighted average period for recognition (years)
2 years 4 months 24 days 
Performance Share Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
$ 28 
Weighted average period for recognition (years)
1 year 8 months 12 days 
Share-Based Compensation (Summary of Unrecognized Compensation Cost And Weighted Average Period For Recognition General Partner And EnLink) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Restricted Stock Awards And Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
$ 153 
Weighted average period for recognition (years)
2 years 6 months 
Performance Share Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
28 
Weighted average period for recognition (years)
1 year 8 months 12 days 
General Partner [Member] |
Restricted Stock Awards And Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
15 
Weighted average period for recognition (years)
1 year 7 months 6 days 
General Partner [Member] |
Performance Share Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
Weighted average period for recognition (years)
1 year 9 months 18 days 
EnLink [Member] |
Restricted Stock Awards And Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
16 
Weighted average period for recognition (years)
1 year 7 months 6 days 
EnLink [Member] |
Performance Share Units [Member]
 
Unrecognized Compensation And Weighted Average Recognition [Line Items]
 
Unrecognized compensation cost (millions)
$ 4 
Weighted average period for recognition (years)
1 year 9 months 18 days 
Asset Impairments (Components of Asset Impairments) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
U.S. Oil And Gas Assets [Member]
Sep. 30, 2015
U.S. Oil And Gas Assets [Member]
Sep. 30, 2016
U.S. Oil And Gas Assets [Member]
Sep. 30, 2015
U.S. Oil And Gas Assets [Member]
Sep. 30, 2015
Canada Oil And Gas Assets [Member]
Sep. 30, 2016
Canada Oil And Gas Assets [Member]
Sep. 30, 2015
Canada Oil And Gas Assets [Member]
Sep. 30, 2016
Other Assets [Member]
Sep. 30, 2015
Other Assets [Member]
Sep. 30, 2016
Other Assets [Member]
Sep. 30, 2015
Other Assets [Member]
Mar. 31, 2016
General Partner And EnLink [Member]
Sep. 30, 2015
General Partner And EnLink [Member]
Sep. 30, 2016
General Partner And EnLink [Member]
Sep. 30, 2015
General Partner And EnLink [Member]
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset impairment charges
$ 319 
$ 5,851 
$ 4,851 
$ 15,479 
$ 317 
$ 4,715 
$ 2,810 
$ 14,340 
$ 336 
$ 1,166 
$ 336 
$ 2 
$ 1 
$ 2 
$ 4 
 
 
 
 
Goodwill, impairment loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
873 
576 
873 
576 
Impairment of intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 223 
 
$ 223 
Restructuring And Transaction Costs (Schedule Of The Components Of Restructuring And Transaction Costs Included In The Comprehensive Consolidated Statements Of Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2016
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
$ (5)
$ 266 
Employee Related Costs [Member] |
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
(7)
229 
Lease Obligations [Member] |
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
 
17 
Asset Impairments [Member] |
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
 
Transaction Costs [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
$ 2 
$ 17 
Restructuring And Transaction Costs (Schedule Of The Activity And Balances Associated With Restructuring Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2016
Reduction of workforce [Member]
Sep. 30, 2016
Prior years' restructurings [Member]
Sep. 30, 2015
Prior years' restructurings [Member]
Sep. 30, 2016
Other Current Liabilities [Member]
Dec. 31, 2015
Other Current Liabilities [Member]
Sep. 30, 2015
Other Current Liabilities [Member]
Dec. 31, 2014
Other Current Liabilities [Member]
Sep. 30, 2016
Other Current Liabilities [Member]
Reduction of workforce [Member]
Sep. 30, 2016
Other Current Liabilities [Member]
Prior years' restructurings [Member]
Sep. 30, 2015
Other Current Liabilities [Member]
Prior years' restructurings [Member]
Sep. 30, 2016
Other Long-Term Liabilities [Member]
Dec. 31, 2015
Other Long-Term Liabilities [Member]
Sep. 30, 2015
Other Long-Term Liabilities [Member]
Dec. 31, 2014
Other Long-Term Liabilities [Member]
Sep. 30, 2016
Other Long-Term Liabilities [Member]
Reduction of workforce [Member]
Sep. 30, 2016
Other Long-Term Liabilities [Member]
Prior years' restructurings [Member]
Sep. 30, 2015
Other Long-Term Liabilities [Member]
Prior years' restructurings [Member]
Restructuring Cost And Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$ 144 
$ 76 
$ 13 
$ 20 
 
 
 
$ 76 
$ 13 
$ 8 
$ 13 
 
 
 
$ 68 
$ 63 
$ 5 
$ 7 
 
 
 
Restructuring reserve activity
 
 
 
 
71 
(3)
(7)
 
 
 
 
58 
(5)
 
 
 
 
13 
(8)
(2)
Ending balance
$ 144 
$ 76 
$ 13 
$ 20 
 
 
 
$ 76 
$ 13 
$ 8 
$ 13 
 
 
 
$ 68 
$ 63 
$ 5 
$ 7 
 
 
 
Restructuring and Transaction Costs (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2016
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
$ (5)
$ 266 
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Expense associated with accelerated awards
 
60 
Employee Related Costs [Member] |
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
(7)
229 
Estimated Defined Benefit Settlements [Member] |
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
 
30 
Lease Obligations [Member] |
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
 
17 
Asset Impairments [Member] |
Reduction of workforce [Member]
 
 
Restructuring Cost And Reserve [Line Items]
 
 
Restructuring and transaction costs
 
$ 3 
Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Tax Disclosure [Abstract]
 
 
 
 
Current income tax expense (benefit)
$ 85 
$ (6)
$ 72 
$ (87)
Deferred income tax expense (benefit)
86 
(1,708)
(300)
(5,348)
Total income tax expense (benefit)
$ 171 
$ (1,714)
$ (228)
$ (5,435)
U.S. statutory income tax rate
35.00% 
35.00% 
35.00% 
35.00% 
Deferred tax asset valuation allowance
(35.00%)
0.00% 
(20.00%)
0.00% 
Non-deductible goodwill and intangible impairment
6.00% 
(5.00%)
(9.00%)
(2.00%)
Change in unrecognized tax benefits
7.00% 
0.00% 
(2.00%)
0.00% 
Taxation on Canadian operations
0.00% 
0.00% 
(3.00%)
(1.00%)
State income taxes
2.00% 
1.00% 
1.00% 
2.00% 
Other
0.00% 
(1.00%)
3.00% 
1.00% 
Effective income tax rate
15.00% 
30.00% 
5.00% 
35.00% 
Income Taxes (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Jun. 30, 2016
Mar. 31, 2016
Sep. 30, 2016
Scenario Plan [Member]
Mar. 31, 2016
General Partner And EnLink [Member]
Sep. 30, 2015
General Partner And EnLink [Member]
Sep. 30, 2016
General Partner And EnLink [Member]
Sep. 30, 2015
General Partner And EnLink [Member]
Sep. 30, 2016
United States [Member]
Sep. 30, 2016
Canada [Member]
Income Tax [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Valuation allowance against U.S. deferred tax assets, percent
 
100.00% 
 
 
 
 
 
 
 
 
 
Deferred tax assets, valuation allowance
 
$ 967 
$ 467 
$ 808 
 
 
 
 
 
 
 
Change in deferred tax valuation allowance
 
 
 
 
 
 
 
 
 
(479)
71 
Goodwill impairments
 
 
 
 
 
873 
576 
873 
576 
 
 
Goodwill and intangibles impairments
 
 
 
 
 
 
799 
 
 
 
 
Unrecognized tax benefits
 
 
 
 
85 
 
 
 
 
 
 
Interest associated with tax examinations
$ 34 
 
 
 
 
 
 
 
 
 
 
Net Earnings (Loss) Per Share Attributable to Devon (Earnings Per Share Computations) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Net earnings (loss):
 
 
 
 
Net earnings (loss) attributable to Devon
$ 993 
$ (3,507)
$ (3,633)
$ (9,922)
Attributable to participating securities
(11)
(1)
(1)
(3)
Basic and diluted earnings (loss)
$ 982 
$ (3,508)
$ (3,634)
$ (9,925)
Common shares:
 
 
 
 
Common shares outstanding - total
524 
411 
509 
411 
Attributable to participating securities
(6)
(5)
(6)
(5)
Common shares outstanding - basic
518 
406 
503 
406 
Dilutive effect of potential common shares issuable
 
 
 
Common shares outstanding - diluted
521 
406 
503 
406 
Net earnings (loss) per share attributable to Devon:
 
 
 
 
Basic
$ 1.90 
$ (8.64)
$ (7.22)
$ (24.45)
Diluted
$ 1.89 
$ (8.64)
$ (7.22)
$ (24.45)
Antidilutive options
1
1
1
1
Other Comprehensive Earnings (Components Of Other Comprehensive Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Foreign currency translation:
 
 
 
 
 
Beginning accumulated foreign currency translation
$ 450 
$ 725 
$ 424 
$ 983 
 
Change in cumulative translation adjustment
(1)
(242)
52 
(519)
 
Income tax benefit (expense)
30 
(24)
49 
 
Ending accumulated foreign currency translation
452 
513 
452 
513 
 
Pension and postretirement benefit plans:
 
 
 
 
 
Beginning accumulated pension and postretirement benefits
(185)
(197)
(194)
(204)
 
Recognition of net actuarial loss and prior service cost in earnings
1
1
20 1
17 1
 
Income tax benefit (expense)
(1)
 
(5)
 
Ending accumulated pension and postretirement benefits
(174)
(192)
(174)
(192)
 
Accumulated other comprehensive earnings, net of tax
$ 278 
$ 321 
$ 278 
$ 321 
$ 230 
Supplemental Information To Statements Of Cash Flows (Schedule Of Supplemental Information To Statements Of Cash Flows) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Net change in working capital accounts, net of assets and liabilities assumed:
 
 
 
 
Accounts receivable
$ 81 
$ 273 
$ 87 
$ 713 
Income taxes receivable
98 
107 
514 
Other current assets
98 
(30)
242 
(36)
Accounts payable
(34)
(33)
(185)
(135)
Revenues and royalties payable
40 
(105)
34 
(288)
Other current liabilities
(55)
(136)
(104)
(675)
Net change in working capital
136 
67 
181 
93 
Interest paid (net of capitalized interest)
113 
113 
402 
343 
Income taxes received
$ (7)
$ (9)
$ (130)
$ (339)
Accounts Receivable (Schedule Of Components Of Accounts Receivable) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Joint interest billings
$ 75 
$ 211 
Other
69 
30 
Gross accounts receivable
1,110 
1,123 
Allowance for doubtful accounts
(18)
(18)
Net accounts receivable
1,092 
1,105 
Oil, Gas And NGL Sales [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Gross accounts receivable
404 
362 
Marketing And Midstream Revenues [Member]
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
Gross accounts receivable
$ 562 
$ 520 
Goodwill And Other Intangible Assets (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Upstream Oil And Gas Assets [Member]
Mar. 31, 2016
General Partner And EnLink [Member]
Sep. 30, 2015
General Partner And EnLink [Member]
Sep. 30, 2016
General Partner And EnLink [Member]
Sep. 30, 2015
General Partner And EnLink [Member]
Mar. 31, 2016
Crude And Condensate [Member]
General Partner And EnLink [Member]
Sep. 30, 2015
Crude And Condensate [Member]
General Partner And EnLink [Member]
Mar. 31, 2016
Texas [Member]
General Partner And EnLink [Member]
Mar. 31, 2016
General Partner [Member]
General Partner And EnLink [Member]
Sep. 30, 2015
Louisiana Reporting Unit [Member]
EnLink [Member]
Goodwill [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Goodwill impairments
 
 
 
 
 
$ 873 
$ 576 
$ 873 
$ 576 
$ 93 
 
$ 473 
$ 307 
$ 576 
Allocated goodwill
 
 
 
 
197 
 
 
 
 
 
 
 
 
 
Impairment of intangible assets
 
 
 
 
 
 
223 
 
223 
 
223 
 
 
 
Weighted average amortization period, other intangible assets
 
 
14 years 
 
 
 
 
 
 
 
 
 
 
 
Amortization expense of intangible assets
29 
14 
87 
44 
 
 
 
 
 
 
 
 
 
 
Amortization Expense, Next Five Years
 
 
$ 118 
 
 
 
 
 
 
 
 
 
 
 
Goodwill And Other Intangible Assets (Schedule Of Other Intangible Assets) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
 
 
Customer relationships
$ 1,793 
$ 745 
Accumulated amortization
(142)
(55)
Net intangibles
$ 1,651 
$ 690 
Other Current Liabilities (Schedule Of Other Current Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Other Liabilities, Current [Abstract]
 
 
Accrued interest payable
$ 171 
$ 149 
Restructuring liabilities
76 
13 
Other
420 
488 
Other current liabilities
910 
650 
Installment Payable, Current [Member]
 
 
Other Liabilities, Current [Abstract]
 
 
Installment payment - see Note 2
$ 243 
 
Asset Retirement Obligations (Summary Of Changes In Asset Retirement Obligations) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Asset Retirement Obligation Disclosure [Abstract]
 
 
 
Asset retirement obligations as of beginning of period
$ 1,414 
$ 1,399 
 
Liabilities incurred and assumed through acquisitions
18 
46 
 
Liabilities settled and divested
(310)
(48)
 
Revision of estimated obligation
70 
62 
 
Accretion expense on discounted obligation
58 
56 
 
Foreign currency translation adjustment
26 
(80)
 
Asset retirement obligations as of end of period
1,276 
1,435 
 
Less current portion
46 
58 
 
Asset retirement obligations, long-term
$ 1,230 
$ 1,377 
$ 1,370 
Asset Retirement Obligations (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Asset Retirement Obligations [Line Items]
 
 
Liabilities settled and divested
$ (310)
$ (48)
Upstream U.S. Assets [Member]
 
 
Asset Retirement Obligations [Line Items]
 
 
Liabilities settled and divested
$ (285)
 
Retirement Plans (Schedule Of Net Periodic Benefit Cost For Pension And Postretirement Benefit Plans) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Pension Benefits [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
$ 3 
$ 9 
$ 12 
$ 25 
Interest cost
13 
32 
39 
Expected return on plan assets
(14)
(14)
(40)
(44)
Amortization of prior service cost
1
1
1
1
Net actuarial loss
1
1
19 1
15 1
Net periodic benefit cost
2
14 2
25 2
38 2
Postretirement Benefits [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Amortization of prior service cost
 
 
(1)1
(1)1
Net periodic benefit cost
 
 
$ (1)2
$ (1)2
Stockholders' Equity (Narrative) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended 1 Months Ended
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Sep. 30, 2015
Jun. 30, 2015
Mar. 31, 2015
Sep. 30, 2016
Sep. 30, 2016
Common Stock [Member]
Feb. 29, 2016
Common Stock Offering [Member]
Feb. 29, 2016
Common Stock Offering [Member]
Underwriters [Member]
Jan. 31, 2016
Equity Issued in Business Combination [Member]
Common Stock [Member]
STACK [Member]
Stockholders Equity [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Units issued for acquisition
 
 
 
 
 
 
 
 
 
 
23 
Common stock, shares issued
 
 
 
 
 
 
 
103 
79 
10 
 
Net proceeds from offering
 
 
 
 
 
 
$ 1,469 
 
$ 1,500 
 
 
Dividends paid per share
$ 0.06 
$ 0.06 
$ 0.24 
$ 0.24 
$ 0.24 
$ 0.24 
 
 
 
 
 
Noncontrolling Interests (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
EnLink [Member]
Dec. 31, 2015
EnLink [Member]
Sep. 30, 2016
General Partner [Member]
Dec. 31, 2015
General Partner [Member]
Sep. 30, 2016
General Partner And EnLink [Member]
Sep. 30, 2015
General Partner And EnLink [Member]
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
 
Common units issued by EnLink
 
 
 
 
 
 
 
 
 
Net proceeds from common units sold
$ 59 
$ 9 
$ 835 
$ 13 
$ 110 
 
 
 
 
 
Ownership interest by Devon
 
 
 
 
24.00% 
28.00% 
64.00% 
70.00% 
 
 
Distributions to unitholders other than Devon
$ 77 
$ 68 
$ 224 
$ 186 
 
 
 
 
$ 224 
$ 186 
Fair Value Measurements (Schedule Of Carrying Value And Fair Value Measurement Information For Financial Assets And Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
$ 15 
$ 45 
Derivatives, liabilities
(231)
(48)
Carrying Amount [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
1,864 
1,871 
Debt
(11,354)
(13,032)
Installment payment
(460)
 
Capital lease obligations
(11)
(17)
Total Fair Value [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
1,864 
1,871 
Debt
(11,984)
(11,927)
Installment payment
(465)
 
Capital lease obligations
(10)
(16)
Level 1 Inputs [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
1,672 
1,471 
Level 2 Inputs [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash equivalents
192 
400 
Debt
(11,984)
(11,927)
Installment payment
(465)
 
Capital lease obligations
(10)
(16)
Commodity Derivatives [Member] |
Carrying Amount [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
13 
35 
Derivatives, liabilities
(46)
(18)
Commodity Derivatives [Member] |
Total Fair Value [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
13 
35 
Derivatives, liabilities
(46)
(18)
Commodity Derivatives [Member] |
Level 2 Inputs [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
13 
35 
Derivatives, liabilities
(46)
(18)
Interest Rate Derivatives [Member] |
Carrying Amount [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
Derivatives, liabilities
(185)
(22)
Interest Rate Derivatives [Member] |
Total Fair Value [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
Derivatives, liabilities
(185)
(22)
Interest Rate Derivatives [Member] |
Level 2 Inputs [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
Derivatives, liabilities
(185)
(22)
Foreign Currency Derivatives [Member] |
Carrying Amount [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
 
Derivatives, liabilities
 
(8)
Foreign Currency Derivatives [Member] |
Total Fair Value [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
 
Derivatives, liabilities
 
(8)
Foreign Currency Derivatives [Member] |
Level 2 Inputs [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Derivatives, assets
 
Derivatives, liabilities
 
$ (8)
Segment information (Condensed Statements Of Comprehensive Earnings And Balance Sheets Of Reportable Segments) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues from external customers
$ 2,882 
$ 3,601 
$ 7,496 
$ 10,259 
 
Gains on asset sales
1,351 
 
1,351 
 
 
Depreciation, depletion and amortization
394 
744 
1,420 
2,488 
 
Interest expense
245 
138 
575 
383 
 
Asset impairments
319 
5,851 
4,851 
15,479 
 
Restructuring and transaction costs
(5)
 
266 
 
 
Earnings (loss) before income taxes
1,178 
(5,623)
(4,252)
(15,726)
 
Income tax expense (benefit)
171 
(1,714)
(228)
(5,435)
 
Net earnings (loss)
1,007 
(3,909)
(4,024)
(10,291)
 
Net earnings (loss) attributable to noncontrolling interests
14 
(402)
(391)
(369)
 
Net earnings (loss) attributable to Devon
993 
(3,507)
(3,633)
(9,922)
 
Property and equipment, net
16,169 
22,775 
16,169 
22,775 
19,068 
Total assets
26,813 
34,272 
26,813 
34,272 
29,451 
Capital expenditures, including acquisitions
457 
1,187 
3,428 
4,460 
 
Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Interest expense
(23)
(11)
(66)
(34)
 
Total assets
(56)
(113)
(56)
(113)
 
Eliminations [Member] |
Intersegment [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues from external customers
(180)
(172)
(539)
(499)
 
United States [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Number of reportable segments
 
 
 
 
United States [Member] |
Operating Segments [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues from external customers
1,653 
2,381 
4,320 
6,570 
 
Gains on asset sales
1,351 
 
1,351 
 
 
Depreciation, depletion and amortization
196 
510 
763 
1,817 
 
Interest expense
185 
96 
400 
271 
 
Asset impairments
317 
4,716 
2,810 
14,344 
 
Restructuring and transaction costs
(10)
 
245 
 
 
Earnings (loss) before income taxes
1,122 
(4,464)
(2,040)
(14,450)
 
Income tax expense (benefit)
(1,605)
(6)
(5,334)
 
Net earnings (loss)
1,117 
(2,859)
(2,034)
(9,116)
 
Net earnings (loss) attributable to noncontrolling interests
 
 
 
Net earnings (loss) attributable to Devon
1,117 
(2,859)
(2,035)
(9,117)
 
Property and equipment, net
7,196 
11,586 
7,196 
11,586 
 
Total assets
12,317 
17,389 
12,317 
17,389 
 
Capital expenditures, including acquisitions
277 
974 
2,454 
3,205 
 
Canada [Member] |
Operating Segments [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues from external customers
305 
221 
688 
802 
 
Depreciation, depletion and amortization
72 
134 
284 
382 
 
Interest expense
34 
22 
101 
70 
 
Asset impairments
336 
1,168 
336 
 
Restructuring and transaction costs
 
15 
 
 
Earnings (loss) before income taxes
37 
(401)
(1,359)
(609)
 
Income tax expense (benefit)
159 
(116)
(223)
(129)
 
Net earnings (loss)
(122)
(285)
(1,136)
(480)
 
Net earnings (loss) attributable to Devon
(122)
(285)
(1,136)
(480)
 
Property and equipment, net
2,778 
5,623 
2,778 
5,623 
 
Total assets
4,355 
6,747 
4,355 
6,747 
 
Capital expenditures, including acquisitions
48 
108 
158 
478 
 
General Partner And EnLink [Member] |
Operating Segments [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues from external customers
924 
999 
2,488 
2,887 
 
Depreciation, depletion and amortization
126 
100 
373 
289 
 
Interest expense
49 
31 
140 
76 
 
Asset impairments
 
799 
873 
799 
 
Restructuring and transaction costs
 
 
 
 
Earnings (loss) before income taxes
19 
(758)
(853)
(667)
 
Income tax expense (benefit)
28 
 
Net earnings (loss)
12 
(765)
(854)
(695)
 
Net earnings (loss) attributable to noncontrolling interests
14 
(402)
(392)
(370)
 
Net earnings (loss) attributable to Devon
(2)
(363)
(462)
(325)
 
Property and equipment, net
6,195 
5,566 
6,195 
5,566 
 
Total assets
10,197 
10,249 
10,197 
10,249 
 
Capital expenditures, including acquisitions
132 
105 
816 
777 
 
General Partner And EnLink [Member] |
Operating Segments [Member] |
Intersegment [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Revenues from external customers
$ 180 
$ 172 
$ 539 
$ 499