DEVON ENERGY CORP/DE, 10-Q filed on 5/3/2022
Quarterly Report
v3.22.1
Document And Entity Information - shares
shares in Millions
3 Months Ended
Mar. 31, 2022
Apr. 20, 2022
Cover [Abstract]    
Document Type 10-Q  
Document Period End Date Mar. 31, 2022  
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 2022  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Document Fiscal Period Focus Q1  
Entity Common Stock, Shares Outstanding   660.0
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity File Number 001-32318  
Entity Tax Identification Number 73-1567067  
Entity Address, Address Line One 333 West Sheridan Avenue  
Entity Address, City or Town Oklahoma City  
Entity Address, State or Province OK  
Entity Address, Postal Zip Code 73102-5015  
City Area Code 405  
Local Phone Number 235-3611  
Entity Interactive Data Current Yes  
Title of 12(b) Security Common Stock, par value $0.10 per share  
Security Exchange Name NYSE  
Entity Incorporation, State or Country Code DE  
Document Quarterly Report true  
Document Transition Report false  
v3.22.1
Consolidated Statements of Comprehensive Earnings - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Revenues from contracts with customers $ 4,495 $ 2,578
Oil, gas and NGL derivatives (683) (528)
Total revenues 3,812 2,050
Production expenses 618 458
Exploration expenses 2 3
Depreciation, depletion and amortization 489 467
Asset dispositions (1) (32)
General and administrative expenses 94 107
Financing costs, net 85 77
Restructuring and transaction costs 0 189
Other, net (61) (29)
Total expenses 2,550 2,082
Earnings (loss) before income taxes 1,262 (32)
Income tax expense (benefit) 267 (248)
Net earnings (loss) 995 216
Net earnings attributable to noncontrolling interests 6 3
Net earnings (loss) attributable to Devon $ 989 $ 213
Net earnings per share:    
Basic net earnings per share: $ 1.48 $ 0.33
Diluted net earnings per share: $ 1.48 $ 0.32
Comprehensive earnings:    
Net earnings $ 995 $ 216
Other comprehensive earnings, net of tax:    
Pension and postretirement plans 1 23
Other comprehensive earnings, net of tax 1 23
Comprehensive earnings: 996 239
Comprehensive earnings attributable to noncontrolling interests 6 3
Comprehensive earnings attributable to Devon 990 236
Oil, Gas and NGL Sales [Member]    
Revenues from contracts with customers 3,175 1,757
Marketing and Midstream Revenues [Member]    
Revenues from contracts with customers 1,320 821
Marketing and Midstream Expenses [Member]    
Expenses $ 1,324 $ 842
v3.22.1
Consolidated Statements Of Cash Flows - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Cash flows from operating activities:    
Net earnings $ 995 $ 216
Adjustments to reconcile net earnings (loss) to net cash from operating activities:    
Depreciation, depletion and amortization 489 467
Leasehold impairments 1 1
Amortization of liabilities (6) (7)
Total losses on commodity derivatives 683 528
Cash settlements on commodity derivatives (344) (232)
Gains on asset dispositions (1) (32)
Deferred income tax expense (benefit) 164 (243)
Share-based compensation 20 41
Early retirement of debt (20)
Other (21) 0
Changes in assets and liabilities, net (143) (127)
Net cash from operating activities 1,837 592
Cash flows from investing activities:    
Capital expenditures (537) (499)
Acquisitions of property and equipment (1) 0
Divestitures of property and equipment 26 15
WPX acquired cash 344
Distributions from equity method investments 8 10
Contributions to equity method investments (22) 0
Net cash from investing activities (526) (130)
Cash flows from financing activities:    
Repayments of long-term debt (533)
Early retirement of debt (27)
Repurchases of common stock (211) 0
Dividends paid on common stock (667) (203)
Distributions to noncontrolling interests (8) (4)
Acquisition of noncontrolling interests 0 (24)
Shares exchanged for tax withholdings and other (73) (33)
Net cash from financing activities (959) (824)
Effect of Exchange Rate on Cash, Continuing Operations 2 3
Net change in cash, cash equivalents and restricted cash 354 (359)
Cash, cash equivalents and restricted cash at beginning of period 2,271 2,237
Cash, cash equivalents and restricted cash at end of period 2,625 1,878
Reconciliation of cash, cash equivalents and restricted cash:    
Cash and cash equivalents 2,459 1,683
Restricted cash 166 195
Total cash, cash equivalents and restricted cash $ 2,625 $ 1,878
v3.22.1
Consolidated Balance Sheets - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
ASSETS    
Cash, cash equivalents and restricted cash $ 2,625 $ 2,271
Accounts receivable 2,002 1,543
Other current assets 346 435
Total current assets 4,973 4,249
Oil and gas property and equipment, based on successful efforts accounting, net 13,566 13,536
Other property and equipment, net ($119 million and $111 million related to CDM in 2022 and 2021, respectively) [1] 1,508 1,472
Total property and equipment, net 15,074 15,008
Goodwill 753 753
Right-of-use assets 229 235
Investments 416 402
Other long-term assets 333 378
Total assets 21,778 21,025
LIABILITIES AND EQUITY    
Accounts payable 576 500
Revenues and royalties payable 1,672 1,456
Other current liabilities 1,506 1,131
Total current liabilities 3,754 3,087
Long-term debt 6,471 6,482
Lease liabilities 251 252
Asset retirement obligations 443 468
Other long-term liabilities 974 1,050
Deferred income taxes 450 287
Stockholders' equity:    
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 661 million and 663 million shares in 2022 and 2021, respectively 66 66
Additional paid-in capital 7,371 7,636
Retained earnings 2,013 1,692
Accumulated other comprehensive loss (131) (132)
Treasury stock value 19 0
Total stockholders’ equity attributable to Devon 9,300 9,262
Noncontrolling interests 135 137
Total equity 9,435 9,399
Total liabilities and equity $ 21,778 $ 21,025
[1]
(1)
$119 million and $111 million related to CDM in 2022 and 2021, respectively.
v3.22.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Other property and equipment, net [1] $ 1,508 $ 1,472
Common stock, par value (in dollars per share) $ 0.10 $ 0.10
Common stock, shares authorized (in shares) 1,000,000,000.0 1,000,000,000.0
Common stock, shares issued (in shares) 661,000,000 663,000,000
Treasury Stock, Shares 300,000  
CDM [Member]    
Other property and equipment, net $ 119 $ 111
[1]
(1)
$119 million and $111 million related to CDM in 2022 and 2021, respectively.
v3.22.1
Consolidated Statements Of Equity - USD ($)
$ in Millions
Total
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Other Comprehensive Earnings (Loss) [Member]
Treasury Stock [Member]
Noncontrolling Interests [Member]
Balance at Dec. 31, 2020 $ 3,019 $ 38 $ 2,766 $ 208 $ (127)   $ 134
Balance, shares at Dec. 31, 2020   382,000,000          
Net earnings 216     213     3
Other comprehensive earnings (loss), net of tax 23       23    
Restricted stock grants, net of cancellations, shares   4,000,000          
Common stock repurchased (38)         $ (38)  
Common stock retired     38     (38)  
Common stock retired, shares   (2,000,000)          
Common stock dividends (203)     (203)      
Common stock issued 5,432 $ 29 5,403        
Common stock issued, Shares   290,000,000          
Share-based compensation 41   41        
Share-based compensation, shares   1          
Distributions to noncontrolling interests (4)           (4)
Balance at Mar. 31, 2021 8,486 $ 67 8,172 218 (104)   133
Balance, shares at Mar. 31, 2021   675,000,000          
Balance at Dec. 31, 2021 9,399 $ 66 7,636 1,692 (132)   137
Balance, shares at Dec. 31, 2021   663,000,000          
Net earnings 995     989     6
Other comprehensive earnings (loss), net of tax 1       1    
Restricted stock grants, net of cancellations, value 1   1        
Restricted stock grants, net of cancellations, shares   2,000,000          
Common stock repurchased (305)         (305)  
Common stock retired     (286)     286  
Common stock retired, shares   (5,000,000)          
Common stock dividends (668)     (668)      
Share-based compensation 20   20        
Share-based compensation, shares   1,000,000          
Distributions to noncontrolling interests (8)           (8)
Balance at Mar. 31, 2022 $ 9,435 $ 66 $ 7,371 $ 2,013 $ (131) $ (19) $ 135
Balance, shares at Mar. 31, 2022   661,000,000          
v3.22.1
Summary Of Significant Accounting Policies
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Summary Of Significant Accounting Policies

DEVON ENERGY CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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 2021 Annual Report on Form 10-K. The accompanying unaudited interim financial statements 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 periods ended March 31, 2022 and 2021 and Devon’s financial position as of March 31, 2022.

Devon and WPX completed an all-stock merger of equals on January 7, 2021. On the closing date of the Merger, each share of WPX common stock was automatically converted into the right to receive 0.5165 of a share of Devon common stock. The transaction has been accounted for using the acquisition method of accounting, with Devon being treated as the accounting acquirer. See Note 2 for further discussion.

Restricted Cash

As of March 31, 2022, Devon classified approximately $150 million of cash as restricted cash on the consolidated balance sheets for obligations retained related to the Barnett Shale assets and the Canadian business. Cash payments for these charges related to the Barnett assets and Canada business total approximately $10 million per quarter.

 

Variable Interest Entity

Cotton Draw Midstream, L.L.C. (“CDM”) is a joint venture entity formed by Devon and an affiliate of QL Capital Partners, LP. CDM provides gathering, compression and dehydration services for natural gas production in the Cotton Draw area of the Delaware Basin. Devon holds a controlling interest in CDM and the portions of CDM’s net earnings and equity not attributable to Devon’s controlling interest are shown separately as noncontrolling interests in the accompanying consolidated statements of comprehensive earnings and consolidated balance sheets. CDM is considered a VIE to Devon. The assets of CDM cannot be used by Devon for general corporate purposes and are included in, and disclosed parenthetically, on Devon's consolidated balance sheets. The carrying amount of liabilities related to CDM for which the creditors do not have recourse to Devon's assets are also included in, and disclosed parenthetically, if material, on Devon's consolidated balance sheets.

 

Investments

In conjunction with the Merger, Devon acquired an interest in Catalyst, which is a joint venture established among WPX, an affiliate of Howard Energy Partners, LLC (“HEP”) and certain other investors, to develop oil gathering and natural gas processing infrastructure in the Stateline area of the Delaware Basin. Under the terms of the arrangement, Devon and a holding company owned by the other joint venture investors each have a 50% voting interest in the joint venture legal entity, and HEP serves as the operator. Through 2038, Devon’s production from 50,000 net acres in the Stateline area of the Delaware Basin has been dedicated to Catalyst subject to fixed-fee oil gathering and natural gas processing agreements. The agreements do not include any minimum volume commitments. Devon accounts for the investment in Catalyst as an equity method investment.

Devon's investment in Catalyst is shown within investments on the consolidated balance sheets and Devon's share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

 

 

 

 

 

Carrying Amount

 

Investments

 

% Interest

 

March 31, 2022

 

 

December 31, 2021

 

Catalyst

 

50%

 

$

361

 

 

$

368

 

Other

 

Various

 

 

55

 

 

 

34

 

      Total

 

 

 

$

416

 

 

$

402

 

 

 

Disaggregation of Revenue

The following table presents revenue from contracts with customers that are disaggregated based on the type of good or service.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Oil

 

$

2,406

 

 

$

1,331

 

Gas

 

 

307

 

 

 

202

 

NGL

 

 

462

 

 

 

224

 

Oil, gas and NGL sales

 

 

3,175

 

 

 

1,757

 

 

 

 

 

 

 

 

Oil

 

 

776

 

 

 

499

 

Gas

 

 

209

 

 

 

147

 

NGL

 

 

335

 

 

 

175

 

Marketing and midstream revenues

 

 

1,320

 

 

 

821

 

Total revenues from contracts with customers

 

$

4,495

 

 

$

2,578

 

v3.22.1
Acquisition and Divestitures
3 Months Ended
Mar. 31, 2022
Business Combinations [Abstract]  
Acquisition and Divestitures

2. Acquisitions and Divestitures

WPX Merger

On January 7, 2021, Devon and WPX completed an all-stock merger of equals. WPX was an oil and gas exploration and production company with assets in the Delaware Basin in Texas and New Mexico and the Williston Basin in North Dakota. On the closing date of the Merger, each share of WPX common stock was automatically converted into the right to receive 0.5165 of a share of Devon common stock. No fractional shares of Devon’s common stock were issued in the Merger, and holders of WPX common stock instead received cash in lieu of fractional shares of Devon common stock, if any. Based on the closing price of Devon’s common stock on January 7, 2021, the total value of Devon common stock issued to holders of WPX common stock as part of this transaction was approximately $5.4 billion. The Merger was structured as a tax-free reorganization for United States federal income tax purposes. The final allocation of the total purchase price of WPX to the identifiable assets acquired and the liabilities assumed was finalized at December 31, 2021.

 

Divestitures

In the first quarter of 2021, Devon completed the sale of non-core assets in the Rockies for proceeds of $9 million, net of purchase price adjustments, and recognized a $35 million gain related to the sale. Devon received $4 million in contingent earnout payments related to this transaction in the first quarter of 2022 with the potential for up to an additional $4 million in the future. The total estimated proved reserves associated with these divested assets was approximately 3 MMBoe.

 

Contingent Earnout Payments

Devon is entitled to contingent earnout payments associated with the sale of its Barnett Shale assets in 2020 with upside participation beginning at a $2.75 Henry Hub natural gas price or a $50 WTI oil price. The contingent payment period commenced on January 1, 2021 and has a term of four years. Devon received $65 million in contingent earnout payments related to this transaction in the first quarter of 2022 and could receive up to an additional $195 million in contingent earnout payments for the remaining performance periods depending on future commodity prices. The valuation of the future contingent earnout payments included within other current assets and other long-term assets in the March 31, 2022 consolidated balance sheet was approximately $51 million and $60 million, respectively. The value was derived utilizing a Monte Carlo valuation model and qualifies as a level 3 fair value measurement.

v3.22.1
Derivative Financial Instruments
3 Months Ended
Mar. 31, 2022
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments
3.
Derivative Financial Instruments

Objectives and Strategies

Devon enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production to hedge future prices received. Additionally, Devon periodically enters into derivative financial instruments with respect to a portion of its 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. As of March 31, 2022, Devon did not have any open interest rate swap 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.

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 March 31, 2022, Devon neither held cash collateral of its counterparties nor posted cash collateral to its counterparties. Given Devon's current credit ratings and the terms of the underlying contracts, Devon is not currently required to post collateral to its counterparties with respect to its open derivative positions, and we would not be required to post any such collateral as a result of any change to the amount of Devon's net liability for such positions.

Commodity Derivatives

As of March 31, 2022, 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

 

 

Period

 

Volume
(Bbls/d)

 

 

Weighted
Average
Price ($/Bbl)

 

 

Volume
(Bbls/d)

 

 

Weighted
Average Floor
Price ($/Bbl)

 

 

Weighted
Average
Ceiling Price
($/Bbl)

 

 

Q2-Q4 2022

 

 

35,258

 

 

$

44.50

 

 

 

37,658

 

 

$

55.56

 

 

$

74.84

 

 

Q1-Q4 2023

 

 

 

 

$

 

 

 

6,193

 

 

$

61.32

 

 

$

97.65

 

 

 

 

 

Oil Basis Swaps

 

Period

 

Index

 

Volume
(Bbls/d)

 

 

Weighted Average
Differential to WTI
($/Bbl)

 

Q2-Q4 2022

 

BRENT

 

 

1,000

 

 

$

(7.75

)

Q2-Q4 2022

 

NYMEX Roll

 

 

29,000

 

 

$

0.45

 

Q1-Q4 2023

 

Midland Sweet

 

 

3,000

 

 

$

0.73

 

As of March 31, 2022, 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 and the end of month NYMEX index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.

 

 

 

Price Swaps (1)

 

 

Price Collars (2)

 

Period

 

Volume (MMBtu/d)

 

 

Weighted Average Price ($/MMBtu)

 

 

Volume (MMBtu/d)

 

 

Weighted Average Floor Price ($/MMBtu)

 

 

Weighted Average
Ceiling Price ($/MMBtu)

 

Q2-Q4 2022

 

 

110,000

 

 

$

2.79

 

 

 

209,509

 

 

$

2.98

 

 

$

4.30

 

Q1-Q4 2023

 

 

4,959

 

 

$

3.65

 

 

 

58,901

 

 

$

3.38

 

 

$

5.64

 

 

(1)
Related to the 2022 open positions, 10,000 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $3.65 and 100,000 MMBtu/d settle against the end of month NYMEX index at an average price of $2.70. All 2023 open positions settle against the Inside FERC first of month Henry Hub index.
(2)
Price collars settle against the Inside FERC first of month Henry Hub Index.

 

 

 

Natural Gas Basis Swaps

 

Period

 

Index

 

Volume
(MMBtu/d)

 

 

Weighted Average
Differential to
Henry Hub
($/MMBtu)

 

Q2-Q4 2022

 

El Paso Natural Gas

 

 

40,000

 

 

$

(0.82

)

Q2-Q4 2022

 

Houston Ship Channel

 

 

10,000

 

 

$

(0.17

)

Q2-Q4 2022

 

WAHA

 

 

70,000

 

 

$

(0.57

)

Q1-Q4 2023

 

El Paso Natural Gas

 

 

60,000

 

 

$

(1.50

)

Q1-Q4 2023

 

WAHA

 

 

70,000

 

 

$

(0.51

)

Q1-Q4 2024

 

WAHA

 

 

40,000

 

 

$

(0.51

)

 

As of March 31, 2022, Devon did not have any open NGL positions.

Financial Statement Presentation

All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the consolidated balance sheets. Amounts related to contracts allowed to be netted upon payment subject to a master netting arrangement with the same counterparty are reported on a net basis in the consolidated balance sheets. The tables below present a summary of these positions as of March 31, 2022 and December 31, 2021.

 

March 31, 2022

 

 

December 31, 2021

 

 

 

 

Gross Fair Value

 

 

Amounts Netted

 

 

Net Fair Value

 

 

Gross Fair Value

 

 

Amounts Netted

 

 

Net Fair Value

 

 

Balance Sheet Classification

Commodity derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term derivative asset

$

15

 

 

$

(14

)

 

$

1

 

 

$

6

 

 

$

(4

)

 

$

2

 

 

Other current assets

Long-term derivative asset

 

31

 

 

 

 

 

 

31

 

 

 

6

 

 

 

 

 

 

6

 

 

Other long-term assets

Short-term derivative liability

 

(953

)

 

 

14

 

 

 

(939

)

 

 

(579

)

 

 

4

 

 

 

(575

)

 

Other current liabilities

Long-term derivative liability

 

(1

)

 

 

 

 

 

(1

)

 

 

(2

)

 

 

 

 

 

(2

)

 

Other long-term liabilities

Total derivative liability

$

(908

)

 

$

 

 

$

(908

)

 

$

(569

)

 

$

 

 

$

(569

)

 

 

v3.22.1
Share-Based Compensation
3 Months Ended
Mar. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Share-Based Compensation
4.
Share-Based Compensation

The table below presents the share-based compensation expense included in Devon’s accompanying consolidated statements of comprehensive earnings. The vesting for certain share-based awards was accelerated in 2021 in conjunction with the reduction of workforce described in Note 5 and is included in restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

G&A

 

$

20

 

 

$

20

 

Restructuring and transaction costs

 

 

 

 

 

21

 

Total

 

$

20

 

 

$

41

 

Related income tax benefit

 

$

17

 

 

$

 

 

 

 

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

 

 

 

Restricted Stock Awards & Units

 

 

Performance Share Units

 

 

 

Awards/Units

 

 

Weighted
Average
Grant-Date
Fair Value

 

 

Units

 

 

Weighted
Average
Grant-Date
Fair Value

 

 

 

(Thousands, except fair value data)

 

Unvested at 12/31/21

 

 

7,656

 

 

$

22.15

 

 

 

2,076

 

 

$

24.12

 

Granted

 

 

1,249

 

 

$

52.23

 

 

 

964

 

 

$

44.05

 

Vested

 

 

(2,476

)

 

$

23.02

 

 

 

(1,194

)

 

$

28.91

 

Forfeited

 

 

(8

)

 

$

29.42

 

 

 

 

 

$

 

Unvested at 3/31/22

 

 

6,421

 

 

$

27.66

 

 

 

1,846

 

(1)

$

31.43

 

 

(1)
A maximum of 3.7 million common shares could be awarded based upon Devon’s final TSR ranking.

The following table presents the assumptions related to the performance share units granted in 2022, as indicated in the previous summary table.

 

 

 

2022

 

Grant-date fair value

 

$

68.68

 

Risk-free interest rate

 

 

1.81

%

Volatility factor

 

 

70.1

%

Contractual term (years)

 

 

2.89

 

 

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 March 31, 2022.

 

 

 

Restricted Stock

 

 

Performance

 

 

 

Awards/Units

 

 

Share Units

 

Unrecognized compensation cost

 

$

122

 

 

$

32

 

Weighted average period for recognition (years)

 

 

3.0

 

 

 

2.1

 

v3.22.1
Restructuring and Transaction Costs
3 Months Ended
Mar. 31, 2022
Restructuring And Related Activities [Abstract]  
Restructuring and Transaction Costs . Restructuring and Transaction Costs

The following table summarizes Devon’s restructuring and transaction costs.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Restructuring costs

 

$

 

 

$

143

 

Transaction costs

 

 

 

 

 

46

 

Total costs

 

$

 

 

$

189

 

 

In conjunction with the Merger closing, Devon recognized $143 million of restructuring expenses during the first quarter of 2021 related to employee severance and termination benefits, settlements and curtailments from defined retirement benefits and contract terminations. Of these expenses, $37 million and $21 million resulted from settlements and curtailments of defined retirement benefits and accelerated vesting of share-based grants, respectively, which were non-cash charges. Additionally, in conjunction with the Merger closing, Devon recognized $46 million of transaction costs primarily comprised of bank, legal and accounting fees.

The following table summarizes Devon’s restructuring liabilities.

 

 

 

Other

 

 

Other

 

 

 

 

 

 

Current

 

 

Long-term

 

 

 

 

 

 

Liabilities

 

 

Liabilities

 

 

Total

 

Balance as of December 31, 2021

 

$

38

 

 

$

111

 

 

$

149

 

Changes related to prior years' restructurings

 

 

(4

)

 

 

(6

)

 

 

(10

)

Balance as of March 31, 2022

 

$

34

 

 

$

105

 

 

$

139

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2020

 

$

35

 

 

$

137

 

 

$

172

 

Changes related to prior years' restructurings

 

 

59

 

 

 

(7

)

 

 

52

 

Balance as of March 31, 2021

 

$

94

 

 

$

130

 

 

$

224

 

v3.22.1
Other, Net
3 Months Ended
Mar. 31, 2022
Other Expenses [Abstract]  
Other, Net

6. Other, Net

The following table summarizes Devon's other expenses (income) presented in the accompanying consolidated comprehensive statement of earnings.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Estimated future obligation under a performance guarantee

 

$

(96

)

 

$

 

Ukraine charitable pledge

 

 

20

 

 

 

 

Asset retirement obligation accretion

 

 

7

 

 

 

7

 

Severance and other non-income tax refunds

 

 

(3

)

 

 

(36

)

Other

 

 

11

 

 

 

 

Total

 

$

(61

)

 

$

(29

)

 

The first quarter of 2022 includes a $96 million benefit related to the revision of a future obligation under a performance guarantee liability for previously divested assets. Due to improved commodity prices and market conditions, the purchaser of these assets was able to fully satisfy the $35 million obligation due in the first quarter of 2022. Further, as of March 31, 2022, Devon also reduced the estimated future exposure of the performance guarantee by $61 million based on probability-weighted cash flows for the remainder of the contract term of four years.

 

The first quarter of 2022 also includes a $20 million pledge for humanitarian relief for the Ukrainian people and surrounding countries supporting refugees.

 

The first quarter of 2021 includes a Texas severance tax refund of $36 million related to prior periods.
v3.22.1
Income Taxes
3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes . 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 March 31,

 

 

 

2022

 

 

2021

 

Earnings (loss) before income taxes

 

$

1,262

 

 

$

(32

)

 

 

 

 

 

 

 

Current income tax expense (benefit)

 

$

103

 

 

$

(5

)

Deferred income tax expense (benefit)

 

 

164

 

 

 

(243

)

Total income tax expense (benefit)

 

$

267

 

 

$

(248

)

 

U.S. statutory income tax rate

 

 

21

%

 

 

21

%

State income taxes

 

 

1

%

 

 

(1

%)

Deferred tax asset valuation allowance

 

 

0

%

 

 

791

%

Other

 

 

(1

%)

 

 

(48

%)

Effective income tax rate

 

 

21

%

 

 

763

%

 

Prior to December 31, 2021, Devon maintained a valuation allowance against all U.S. federal deferred tax assets. Devon recognized approximately $250 million of deferred tax liabilities to account for the Merger. The recognition of these deferred tax liabilities caused a decrease to Devon’s net deferred tax assets and a corresponding decrease to the valuation allowance Devon had recognized on its U.S. federal deferred tax assets in the first quarter of 2021.

Due to significant increases in commodity pricing and projections of future income, in the fourth quarter of 2021, Devon reassessed its evaluation of the realizability of deferred tax assets in future years and determined that a U.S. federal valuation allowance was no longer necessary at December 31, 2021.

In the table above, the "other" effect for 2021 is composed primarily of permanent differences related to costs incurred in connection with the Merger. Such items represent $15 million of income tax expense in the first quarter of 2021.

v3.22.1
Net Earnings Per Share
3 Months Ended
Mar. 31, 2022
Earnings Per Share [Abstract]  
Net Earnings Per Share
8.
Net Earnings Per Share

The following table reconciles net earnings and weighted-average common shares outstanding used in the calculations of basic and diluted net earnings per share.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Net earnings:

 

 

 

 

 

 

Net earnings

 

$

989

 

 

$

213

 

Attributable to participating securities

 

 

(16

)

 

 

(2

)

Basic and diluted earnings

 

$

973

 

 

$

211

 

Common shares:

 

 

 

 

 

 

Common shares outstanding - total

 

 

663

 

 

 

654

 

Attributable to participating securities

 

 

(7

)

 

 

(5

)

Common shares outstanding - basic

 

 

656

 

 

 

649

 

Dilutive effect of potential common shares issuable

 

 

2

 

 

 

2

 

Common shares outstanding - diluted

 

 

658

 

 

 

651

 

Net earnings per share:

 

 

 

 

 

 

Basic

 

$

1.48

 

 

$

0.33

 

Diluted

 

$

1.48

 

 

$

0.32

 

v3.22.1
Other Comprehensive Earnings (Loss)
3 Months Ended
Mar. 31, 2022
Other Comprehensive Income Loss Net Of Tax Period Increase Decrease [Abstract]  
Other Comprehensive Earnings (Loss) . Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) consist of the following:

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Pension and postretirement benefit plans:

 

 

 

 

 

 

Beginning accumulated pension and postretirement benefits

 

$

(132

)

 

$

(127

)

Recognition of net actuarial loss and prior service cost in earnings (1)

 

 

1

 

 

 

1

 

Settlement of pension benefits (2)

 

 

 

 

 

15

 

Other (3)

 

 

 

 

 

7

 

Accumulated other comprehensive loss, net of tax

 

$

(131

)

 

$

(104

)

 

(1)
Recognition of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost, which is a component of other, net in the accompanying consolidated statements of comprehensive earnings.
(2)
The Merger triggered settlement payments to certain plan participants, and the expense associated with this settlement is recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.
(3)
Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.
v3.22.1
Supplemental Information To Statements Of Cash Flows
3 Months Ended
Mar. 31, 2022
Supplemental Cash Flow Elements [Abstract]  
Supplemental Information To Statements Of Cash Flows
10.
Supplemental Information to Statements of Cash Flows

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Changes in assets and liabilities, net:

 

 

 

 

 

 

Accounts receivable

 

$

(457

)

 

$

(63

)

Other current assets

 

 

64

 

 

 

(10

)

Other long-term assets

 

 

66

 

 

 

(10

)

Accounts payable and revenues and royalties payable

 

 

247

 

 

 

16

 

Other current liabilities

 

 

8

 

 

 

(33

)

Other long-term liabilities

 

 

(71

)

 

 

(27

)

Total

 

$

(143

)

 

$

(127

)

Supplementary cash flow data:

 

 

 

 

 

 

Interest paid

 

$

100

 

 

$

114

 

Income taxes refunded

 

$

(23

)

 

$

(6

)

v3.22.1
Accounts Receivable
3 Months Ended
Mar. 31, 2022
Accounts Receivable Net [Abstract]  
Accounts Receivable
11.
Accounts Receivable

Components of accounts receivable include the following:

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Oil, gas and NGL sales

 

$

1,296

 

 

$

984

 

Joint interest billings

 

 

161

 

 

 

158

 

Marketing and midstream revenues

 

 

496

 

 

 

370

 

Other

 

 

56

 

 

 

38

 

Gross accounts receivable

 

 

2,009

 

 

 

1,550

 

Allowance for doubtful accounts

 

 

(7

)

 

 

(7

)

Net accounts receivable

 

$

2,002

 

 

$

1,543

 

v3.22.1
Property, Plant and Equipment
3 Months Ended
Mar. 31, 2022
Extractive Industries [Abstract]  
Property, Plant and Equipment

12. Property, Plant and Equipment

The following table presents the aggregate capitalized costs related to Devon’s oil and gas and non-oil and gas activities.

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Property and equipment:

 

 

 

 

 

 

Proved

 

$

38,524

 

 

$

38,051

 

Unproved and properties under development

 

 

1,101

 

 

 

1,081

 

Total oil and gas

 

 

39,625

 

 

 

39,132

 

Less accumulated DD&A

 

 

(26,059

)

 

 

(25,596

)

Oil and gas property and equipment, net

 

 

13,566

 

 

 

13,536

 

Other property and equipment

 

 

2,192

 

 

 

2,139

 

Less accumulated DD&A

 

 

(684

)

 

 

(667

)

Other property and equipment, net (1)

 

 

1,508

 

 

 

1,472

 

Property and equipment, net

 

$

15,074

 

 

$

15,008

 

 

(1)
$119 million and $111 million related to CDM in 2022 and 2021, respectively.
v3.22.1
Debt And Related Expenses
3 Months Ended
Mar. 31, 2022
Debt Disclosure [Abstract]  
Debt and Related Expenses
13.

See below for a summary of debt instruments and balances. The notes and debentures are senior, unsecured obligations of Devon.

 

 

 

March 31, 2022

 

 

December 31, 2021

 

8.25% due August 1, 2023

 

$

242

 

 

$

242

 

5.25% due September 15, 2024

 

 

472

 

 

 

472

 

5.85% due December 15, 2025

 

 

485

 

 

 

485

 

7.50% due September 15, 2027

 

 

73

 

 

 

73

 

5.25% due October 15, 2027

 

 

390

 

 

 

390

 

5.875% due June 15, 2028

 

 

325

 

 

 

325

 

4.50% due January 15, 2030

 

 

585

 

 

 

585

 

7.875% due September 30, 2031

 

 

675

 

 

 

675

 

7.95% due April 15, 2032

 

 

366

 

 

 

366

 

5.60% due July 15, 2041

 

 

1,250

 

 

 

1,250

 

4.75% due May 15, 2042

 

 

750

 

 

 

750

 

5.00% due June 15, 2045

 

 

750

 

 

 

750

 

Net premium (discount) on debentures and notes

 

 

137

 

 

 

149

 

Debt issuance costs

 

 

(29

)

 

 

(30

)

Total long-term debt

 

$

6,471

 

 

$

6,482

 

 

Retirement of Senior Notes

In the first quarter of 2021, Devon redeemed $43 million of the 6.00% senior notes due 2022, $175 million of the 5.875% senior notes due 2028 and $315 million of the 4.50% senior notes due 2030. In the first quarter of 2021, Devon recognized $20 million of gains on early retirement of debt, consisting of $47 million of non-cash premium accelerations, partially offset by $27 million of cash retirement costs. The gain on early retirement is included in net financing costs in the consolidated comprehensive statements of earnings.

 

Credit Lines

Devon has a $3.0 billion Senior Credit Facility. As of March 31, 2022, Devon had no outstanding borrowings under the Senior Credit Facility and had issued $2 million in outstanding letters of credit under this facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon’s ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65%. Under the terms of the credit agreement, total capitalization is adjusted to add back

non-cash financial write-downs such as impairments. As of March 31, 2022, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 24.7%.

Net Financing Costs

The following schedule includes the components of net financing costs.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Interest based on debt outstanding

 

$

92

 

 

$

105

 

Gain on early retirement of debt

 

 

 

 

 

(20

)

Interest income

 

 

(1

)

 

 

(1

)

Other

 

 

(6

)

 

 

(7

)

Total net financing costs

 

$

85

 

 

$

77

 

v3.22.1
Leases
3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
Leases

14. Leases

The following table presents Devon’s right-of-use assets and lease liabilities as of March 31, 2022 and December 31, 2021.

 

 

 

March 31, 2022

 

 

December 31, 2021

 

 

 

Finance

 

 

Operating

 

 

Total

 

 

Finance

 

 

Operating

 

 

Total

 

Right-of-use assets

 

$

209

 

 

$

20

 

 

$

229

 

 

$

211

 

 

$

24

 

 

$

235

 

Lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current lease liabilities (1)

 

$

8

 

 

$

15

 

 

$

23

 

 

$

8

 

 

$

18

 

 

$

26

 

Long-term lease liabilities

 

 

247

 

 

 

4

 

 

 

251

 

 

 

247

 

 

 

5

 

 

 

252

 

Total lease liabilities

 

$

255

 

 

$

19

 

 

$

274

 

 

$

255

 

 

$

23

 

 

$

278

 

 

(1) Current lease liabilities are included in other current liabilities on the consolidated balance sheets.

 

Devon’s right-of-use operating lease assets are for certain leases related to real estate, drilling rigs and other equipment related to the exploration, development and production of oil and gas. Devon’s right-of-use financing lease assets are related to real estate.

v3.22.1
Asset Retirement Obligations
3 Months Ended
Mar. 31, 2022
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations
15.
Asset Retirement Obligations

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

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Asset retirement obligations as of beginning of period

 

$

485

 

 

$

369

 

Assumed WPX obligations

 

 

 

 

 

98

 

Liabilities incurred

 

 

8

 

 

 

9

 

Liabilities settled and divested

 

 

(3

)

 

 

(17

)

Revision of estimated obligation

 

 

(35

)

 

 

11

 

Accretion expense on discounted obligation

 

 

7

 

 

 

7

 

Asset retirement obligations as of end of period

 

 

462

 

 

 

477

 

Less current portion

 

 

19

 

 

 

22

 

Asset retirement obligations, long-term

 

$

443

 

 

$

455

 

 

During the first quarter of 2022, Devon reduced its asset retirement obligations by $35 million primarily due to extended retirement dates for oil and gas assets, partially offset by inflation-driven increases to current settlement costs.

v3.22.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2022
Stockholders Equity Note [Abstract]  
Stockholders' Equity
16.
Stockholders’ Equity

Share Repurchases

In November 2021, Devon authorized a share repurchase program of $1.0 billion with a December 31, 2022 expiration date. In February 2022, the Board of Directors authorized an expansion of the share repurchase program to $1.6 billion, and in May 2022, authorized a further expansion to $2.0 billion and extended the expiration date to May 4, 2023. The table below provides information regarding purchases of Devon’s common stock under the $2.0 billion share repurchase program (shares in thousands).

 

 

 

Total Number of
Shares Purchased

 

 

Dollar Value of
Shares Purchased

 

 

Average Price Paid
per Share

 

2021:

 

 

 

 

 

 

 

 

 

Fourth quarter

 

 

13,983

 

 

$

589

 

 

$

42.15

 

2022:

 

 

 

 

 

 

 

 

 

First quarter

 

 

3,979

 

 

$

230

 

 

$

57.74

 

Total plan

 

 

17,962

 

 

$

819

 

 

$

45.61

 

 

Dividends

Upon completion of the Merger, Devon continued its commitment to pay a quarterly dividend at a fixed rate and instituted a variable quarterly dividend, which is dependent on quarterly cash flows, among other factors. Devon raised its fixed quarterly dividend by 45%, to $0.16 per share, beginning in the first quarter of 2022. The following table summarizes Devon’s fixed and variable dividends for the first quarter of 2022 and 2021, respectively.

 

 

Fixed

 

 

Variable

 

 

Total

 

 

Rate Per Share

 

2022:

 

 

 

 

 

 

 

 

 

 

 

First quarter

$

109

 

 

$

558

 

 

$

667

 

 

$

1.00

 

2021:

 

 

 

 

 

 

 

 

 

 

 

First quarter

$

76

 

 

$

127

 

 

$

203

 

 

$

0.30

 

 

In May 2022, Devon announced a cash dividend in the amount of $1.27 per share payable in the second quarter of 2022. The dividend consists of a fixed quarterly dividend in the amount of approximately $106 million (or $0.16 per share) and a variable quarterly dividend in the amount of approximately $732 million (or $1.11 per share).

Noncontrolling Interests

The noncontrolling interests’ share of CDM’s net earnings and the contributions from and distributions to the noncontrolling interests are presented as components of equity.

v3.22.1
Commitments And Contingencies
3 Months Ended
Mar. 31, 2022
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies
17.
Commitments and Contingencies

Devon is party to various legal actions arising in connection with its 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 likely 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. Devon is currently named as a defendant in a number of such lawsuits, including some lawsuits in which the plaintiffs seek to certify classes of similarly situated plaintiffs. Among the allegations typically asserted in these suits are claims that Devon used below-market prices, made improper deductions, paid royalty proceeds in an untimely manner without including required interest, 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 royalty audits and is subject to related contracts and regulatory controls in the ordinary course of business, some that may lead to additional royalty claims. As of March 31, 2022, Devon has accrued approximately $30 million in other current liabilities pertaining to such royalty matters.

Environmental and Climate Change Matters

Devon’s business is subject to numerous federal, state, tribal and local laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Failure to comply with these laws and regulations may result in the assessment of administrative, civil and criminal fines and penalties, as well as remediation costs. Although Devon believes that it is in substantial compliance with applicable environmental laws and regulations and that continued compliance with existing requirements will not have a material adverse impact on its business, there can be no assurance that this will continue in the future.

Beginning in 2013, various parishes in Louisiana filed suit against numerous oil and gas companies, including Devon, alleging that the companies’ operations and activities in certain fields violated the State and Local Coastal Resource Management Act of 1978, as amended, and caused substantial environmental contamination, subsidence and other environmental damages to land and water bodies located in the coastal zone of Louisiana. The plaintiffs’ claims against Devon relate primarily to the operations of several of Devon’s corporate predecessors. The plaintiffs seek, among other things, payment of the costs necessary to clear, re-vegetate and otherwise restore the allegedly impacted areas. Although Devon cannot predict the ultimate outcome of these matters, Devon intends to vigorously defend against these claims.

The State of Delaware and various municipalities and other governmental and private parties in California have filed legal proceedings against numerous oil and gas companies, including Devon, seeking relief to abate alleged impacts of climate change. These proceedings include far-reaching claims for monetary damages and injunctive relief. Although Devon cannot predict the ultimate outcome of these matters, Devon intends to vigorously defend against the proceedings.

Other Indemnifications and Legacy Matters

Pursuant to various sale agreements relating to divested businesses and assets, Devon has indemnified various purchasers against liabilities that they may incur with respect to the businesses and assets acquired from Devon. Additionally, federal, state and other laws in areas of former operations may require previous operators (including corporate successors of previous operators) to perform or make payments in certain circumstances where the current operator may no longer be able to satisfy the applicable obligation. Such obligations may include plugging and abandoning wells, removing production facilities or performing requirements under surface agreements in existence at the time of disposition.

In November 2020, the Department of the Interior, Bureau of Safety and Environmental Enforcement, ordered several oil and gas operators, including Devon, to perform decommissioning and reclamation activities related to two California offshore oil and gas production platforms and related facilities. The current operator and owner of the platforms contends that it does not have the financial ability to perform these obligations and relinquished the related federal lease in October 2020. In response to the apparent insolvency of the current operator, the government has ordered the former operators and alleged former lease record title owners to decommission the platforms and related facilities. The government contends that an alleged corporate predecessor of Devon owned a partial interest in the subject lease and platforms. Although Devon cannot predict the ultimate outcome of this matter, Devon denies any obligation to decommission the subject platforms, has appealed the order, and believes any decommissioning obligation related to the subject platforms should be assumed by others.

v3.22.1
Fair Value Measurements
3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements
18.
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, accrued expenses and lease liabilities included in the accompanying consolidated balance sheets approximated fair value at March 31, 2022 and December 31, 2021, as applicable. Therefore, such financial assets and liabilities are not presented in the following table.

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using:

 

 

 

Carrying

 

 

Total Fair

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Value

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

March 31, 2022 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

2,196

 

 

$

2,196

 

 

$

2,196

 

 

$

 

 

$

 

Commodity derivatives

 

$

32

 

 

$

32

 

 

$

 

 

$

32

 

 

$

 

Commodity derivatives

 

$

(940

)

 

$

(940

)

 

$

 

 

$

(940

)

 

$

 

Debt

 

$

(6,471

)

 

$

(7,126

)

 

$

 

 

$

(7,126

)

 

$

 

Contingent earnout payments

 

$

115

 

 

$

115

 

 

$

 

 

$

 

 

$

115

 

December 31, 2021 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,421

 

 

$

1,421

 

 

$

1,421

 

 

$

 

 

$

 

Commodity derivatives

 

$

8

 

 

$

8

 

 

$

 

 

$

8

 

 

$

 

Commodity derivatives

 

$

(577

)

 

$

(577

)

 

$

 

 

$

(577

)

 

$

 

Debt

 

$

(6,482

)

 

$

(7,644

)

 

$

 

 

$

(7,644

)

 

$

 

Contingent earnout payments

 

$

184

 

 

$

184

 

 

$

 

 

$

 

 

$

184

 

 

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 and the fair value approximates the carrying value.

Level 2 Fair Value Measurements

Commodity derivatives – The fair value of commodity derivatives is 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 consistently trade actively in an established market. The fair values of its debt are estimated based on rates available for debt with similar terms and maturity when active trading is not available.

Level 3 Fair Value Measurements

Contingent Earnout Payments – Devon has the right to receive contingent consideration related to the Barnett and non-core Rockies asset divestitures based on future oil and gas prices. These values were derived using a Monte Carlo valuation model and qualify as a level 3 fair value measurement. For additional information, see Note 2.

v3.22.1
Summary Of Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Restricted Cash

Restricted Cash

As of March 31, 2022, Devon classified approximately $150 million of cash as restricted cash on the consolidated balance sheets for obligations retained related to the Barnett Shale assets and the Canadian business. Cash payments for these charges related to the Barnett assets and Canada business total approximately $10 million per quarter.

Variable Interest Entity

Variable Interest Entity

Cotton Draw Midstream, L.L.C. (“CDM”) is a joint venture entity formed by Devon and an affiliate of QL Capital Partners, LP. CDM provides gathering, compression and dehydration services for natural gas production in the Cotton Draw area of the Delaware Basin. Devon holds a controlling interest in CDM and the portions of CDM’s net earnings and equity not attributable to Devon’s controlling interest are shown separately as noncontrolling interests in the accompanying consolidated statements of comprehensive earnings and consolidated balance sheets. CDM is considered a VIE to Devon. The assets of CDM cannot be used by Devon for general corporate purposes and are included in, and disclosed parenthetically, on Devon's consolidated balance sheets. The carrying amount of liabilities related to CDM for which the creditors do not have recourse to Devon's assets are also included in, and disclosed parenthetically, if material, on Devon's consolidated balance sheets.

Investments

Investments

In conjunction with the Merger, Devon acquired an interest in Catalyst, which is a joint venture established among WPX, an affiliate of Howard Energy Partners, LLC (“HEP”) and certain other investors, to develop oil gathering and natural gas processing infrastructure in the Stateline area of the Delaware Basin. Under the terms of the arrangement, Devon and a holding company owned by the other joint venture investors each have a 50% voting interest in the joint venture legal entity, and HEP serves as the operator. Through 2038, Devon’s production from 50,000 net acres in the Stateline area of the Delaware Basin has been dedicated to Catalyst subject to fixed-fee oil gathering and natural gas processing agreements. The agreements do not include any minimum volume commitments. Devon accounts for the investment in Catalyst as an equity method investment.

Devon's investment in Catalyst is shown within investments on the consolidated balance sheets and Devon's share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

 

 

 

 

 

Carrying Amount

 

Investments

 

% Interest

 

March 31, 2022

 

 

December 31, 2021

 

Catalyst

 

50%

 

$

361

 

 

$

368

 

Other

 

Various

 

 

55

 

 

 

34

 

      Total

 

 

 

$

416

 

 

$

402

 

 

Disaggregation of Revenue

Disaggregation of Revenue

The following table presents revenue from contracts with customers that are disaggregated based on the type of good or service.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Oil

 

$

2,406

 

 

$

1,331

 

Gas

 

 

307

 

 

 

202

 

NGL

 

 

462

 

 

 

224

 

Oil, gas and NGL sales

 

 

3,175

 

 

 

1,757

 

 

 

 

 

 

 

 

Oil

 

 

776

 

 

 

499

 

Gas

 

 

209

 

 

 

147

 

NGL

 

 

335

 

 

 

175

 

Marketing and midstream revenues

 

 

1,320

 

 

 

821

 

Total revenues from contracts with customers

 

$

4,495

 

 

$

2,578

 

Commitments And Contingencies

Devon is party to various legal actions arising in connection with its 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 likely 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.

v3.22.1
Summary Of Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2022
Accounting Policies [Abstract]  
Schedule of Components of Investment

Devon's investment in Catalyst is shown within investments on the consolidated balance sheets and Devon's share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

 

 

 

 

 

Carrying Amount

 

Investments

 

% Interest

 

March 31, 2022

 

 

December 31, 2021

 

Catalyst

 

50%

 

$

361

 

 

$

368

 

Other

 

Various

 

 

55

 

 

 

34

 

      Total

 

 

 

$

416

 

 

$

402

 

 

Schedule of Revenue from Contracts with Customers

The following table presents revenue from contracts with customers that are disaggregated based on the type of good or service.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Oil

 

$

2,406

 

 

$

1,331

 

Gas

 

 

307

 

 

 

202

 

NGL

 

 

462

 

 

 

224

 

Oil, gas and NGL sales

 

 

3,175

 

 

 

1,757

 

 

 

 

 

 

 

 

Oil

 

 

776

 

 

 

499

 

Gas

 

 

209

 

 

 

147

 

NGL

 

 

335

 

 

 

175

 

Marketing and midstream revenues

 

 

1,320

 

 

 

821

 

Total revenues from contracts with customers

 

$

4,495

 

 

$

2,578

 

v3.22.1
Derivative Financial Instruments (Tables)
3 Months Ended
Mar. 31, 2022
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Schedule Of Open Derivative Positions

As of March 31, 2022, 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

 

 

Period

 

Volume
(Bbls/d)

 

 

Weighted
Average
Price ($/Bbl)

 

 

Volume
(Bbls/d)

 

 

Weighted
Average Floor
Price ($/Bbl)

 

 

Weighted
Average
Ceiling Price
($/Bbl)

 

 

Q2-Q4 2022

 

 

35,258

 

 

$

44.50

 

 

 

37,658

 

 

$

55.56

 

 

$

74.84

 

 

Q1-Q4 2023

 

 

 

 

$

 

 

 

6,193

 

 

$

61.32

 

 

$

97.65

 

 

 

 

 

Oil Basis Swaps

 

Period

 

Index

 

Volume
(Bbls/d)

 

 

Weighted Average
Differential to WTI
($/Bbl)

 

Q2-Q4 2022

 

BRENT

 

 

1,000

 

 

$

(7.75

)

Q2-Q4 2022

 

NYMEX Roll

 

 

29,000

 

 

$

0.45

 

Q1-Q4 2023

 

Midland Sweet

 

 

3,000

 

 

$

0.73

 

As of March 31, 2022, 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 and the end of month NYMEX index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.

 

 

 

Price Swaps (1)

 

 

Price Collars (2)

 

Period

 

Volume (MMBtu/d)

 

 

Weighted Average Price ($/MMBtu)

 

 

Volume (MMBtu/d)

 

 

Weighted Average Floor Price ($/MMBtu)

 

 

Weighted Average
Ceiling Price ($/MMBtu)

 

Q2-Q4 2022

 

 

110,000

 

 

$

2.79

 

 

 

209,509

 

 

$

2.98

 

 

$

4.30

 

Q1-Q4 2023

 

 

4,959

 

 

$

3.65

 

 

 

58,901

 

 

$

3.38

 

 

$

5.64

 

 

(1)
Related to the 2022 open positions, 10,000 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $3.65 and 100,000 MMBtu/d settle against the end of month NYMEX index at an average price of $2.70. All 2023 open positions settle against the Inside FERC first of month Henry Hub index.
(2)
Price collars settle against the Inside FERC first of month Henry Hub Index.

 

 

 

Natural Gas Basis Swaps

 

Period

 

Index

 

Volume
(MMBtu/d)

 

 

Weighted Average
Differential to
Henry Hub
($/MMBtu)

 

Q2-Q4 2022

 

El Paso Natural Gas

 

 

40,000

 

 

$

(0.82

)

Q2-Q4 2022

 

Houston Ship Channel

 

 

10,000

 

 

$

(0.17

)

Q2-Q4 2022

 

WAHA

 

 

70,000

 

 

$

(0.57

)

Q1-Q4 2023

 

El Paso Natural Gas

 

 

60,000

 

 

$

(1.50

)

Q1-Q4 2023

 

WAHA

 

 

70,000

 

 

$

(0.51

)

Q1-Q4 2024

 

WAHA

 

 

40,000

 

 

$

(0.51

)

 

As of March 31, 2022, Devon did not have any open NGL positions.

Schedule Of Derivative Financial Instruments Included In The Consolidated Balance Sheets

All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the consolidated balance sheets. Amounts related to contracts allowed to be netted upon payment subject to a master netting arrangement with the same counterparty are reported on a net basis in the consolidated balance sheets. The tables below present a summary of these positions as of March 31, 2022 and December 31, 2021.

 

March 31, 2022

 

 

December 31, 2021

 

 

 

 

Gross Fair Value

 

 

Amounts Netted

 

 

Net Fair Value

 

 

Gross Fair Value

 

 

Amounts Netted

 

 

Net Fair Value

 

 

Balance Sheet Classification

Commodity derivatives:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term derivative asset

$

15

 

 

$

(14

)

 

$

1

 

 

$

6

 

 

$

(4

)

 

$

2

 

 

Other current assets

Long-term derivative asset

 

31

 

 

 

 

 

 

31

 

 

 

6

 

 

 

 

 

 

6

 

 

Other long-term assets

Short-term derivative liability

 

(953

)

 

 

14

 

 

 

(939

)

 

 

(579

)

 

 

4

 

 

 

(575

)

 

Other current liabilities

Long-term derivative liability

 

(1

)

 

 

 

 

 

(1

)

 

 

(2

)

 

 

 

 

 

(2

)

 

Other long-term liabilities

Total derivative liability

$

(908

)

 

$

 

 

$

(908

)

 

$

(569

)

 

$

 

 

$

(569

)

 

 

v3.22.1
Share-Based Compensation (Tables)
3 Months Ended
Mar. 31, 2022
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Schedule Of Share-Based Compensation Expense Included In The Consolidated Statements Of Comprehensive Earnings The vesting for certain share-based awards was accelerated in 2021 in conjunction with the reduction of workforce described in Note 5 and is included in restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

G&A

 

$

20

 

 

$

20

 

Restructuring and transaction costs

 

 

 

 

 

21

 

Total

 

$

20

 

 

$

41

 

Related income tax benefit

 

$

17

 

 

$

 

 

Summary Of Unvested Restricted Stock Awards, Performance-Based Restricted Stock Awards And Performance Share Units

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

 

 

 

Restricted Stock Awards & Units

 

 

Performance Share Units

 

 

 

Awards/Units

 

 

Weighted
Average
Grant-Date
Fair Value

 

 

Units

 

 

Weighted
Average
Grant-Date
Fair Value

 

 

 

(Thousands, except fair value data)

 

Unvested at 12/31/21

 

 

7,656

 

 

$

22.15

 

 

 

2,076

 

 

$

24.12

 

Granted

 

 

1,249

 

 

$

52.23

 

 

 

964

 

 

$

44.05

 

Vested

 

 

(2,476

)

 

$

23.02

 

 

 

(1,194

)

 

$

28.91

 

Forfeited

 

 

(8

)

 

$

29.42

 

 

 

 

 

$

 

Unvested at 3/31/22

 

 

6,421

 

 

$

27.66

 

 

 

1,846

 

(1)

$

31.43

 

 

(1)
A maximum of 3.7 million common shares could be awarded based upon Devon’s final TSR ranking.
Summary Of Performance Share Units Grant-Date Fair Values And Their Related Assumptions

The following table presents the assumptions related to the performance share units granted in 2022, as indicated in the previous summary table.

 

 

 

2022

 

Grant-date fair value

 

$

68.68

 

Risk-free interest rate

 

 

1.81

%

Volatility factor

 

 

70.1

%

Contractual term (years)

 

 

2.89

 

Summary of Unrecognized Compensation Cost And Weighted Average Period For Recognition

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 March 31, 2022.

 

 

 

Restricted Stock

 

 

Performance

 

 

 

Awards/Units

 

 

Share Units

 

Unrecognized compensation cost

 

$

122

 

 

$

32

 

Weighted average period for recognition (years)

 

 

3.0

 

 

 

2.1

 

v3.22.1
Restructuring and Transaction Costs (Tables)
3 Months Ended
Mar. 31, 2022
Restructuring And Related Activities [Abstract]  
Schedule Of Restructuring And Transaction Costs

The following table summarizes Devon’s restructuring and transaction costs.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Restructuring costs

 

$

 

 

$

143

 

Transaction costs

 

 

 

 

 

46

 

Total costs

 

$

 

 

$

189

 

Schedule Of The Activity And Balances Associated With Restructuring Liabilities

The following table summarizes Devon’s restructuring liabilities.

 

 

 

Other

 

 

Other

 

 

 

 

 

 

Current

 

 

Long-term

 

 

 

 

 

 

Liabilities

 

 

Liabilities

 

 

Total

 

Balance as of December 31, 2021

 

$

38

 

 

$

111

 

 

$

149

 

Changes related to prior years' restructurings

 

 

(4

)

 

 

(6

)

 

 

(10

)

Balance as of March 31, 2022

 

$

34

 

 

$

105

 

 

$

139

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2020

 

$

35

 

 

$

137

 

 

$

172

 

Changes related to prior years' restructurings

 

 

59

 

 

 

(7

)

 

 

52

 

Balance as of March 31, 2021

 

$

94

 

 

$

130

 

 

$

224

 

v3.22.1
Other, Net (Tables)
3 Months Ended
Mar. 31, 2022
Other Expenses [Abstract]  
Schedule of Other Expenses (Income)

The following table summarizes Devon's other expenses (income) presented in the accompanying consolidated comprehensive statement of earnings.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Estimated future obligation under a performance guarantee

 

$

(96

)

 

$

 

Ukraine charitable pledge

 

 

20

 

 

 

 

Asset retirement obligation accretion

 

 

7

 

 

 

7

 

Severance and other non-income tax refunds

 

 

(3

)

 

 

(36

)

Other

 

 

11

 

 

 

 

Total

 

$

(61

)

 

$

(29

)

v3.22.1
Income Taxes (Tables)
3 Months Ended
Mar. 31, 2022
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)

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 March 31,

 

 

 

2022

 

 

2021

 

Earnings (loss) before income taxes

 

$

1,262

 

 

$

(32

)

 

 

 

 

 

 

 

Current income tax expense (benefit)

 

$

103

 

 

$

(5

)

Deferred income tax expense (benefit)

 

 

164

 

 

 

(243

)

Total income tax expense (benefit)

 

$

267

 

 

$

(248

)

Schedule Of Effective Income Tax Rate Reconciliation

U.S. statutory income tax rate

 

 

21

%

 

 

21

%

State income taxes

 

 

1

%

 

 

(1

%)

Deferred tax asset valuation allowance

 

 

0

%

 

 

791

%

Other

 

 

(1

%)

 

 

(48

%)

Effective income tax rate

 

 

21

%

 

 

763

%

v3.22.1
Net Earnings Per Share (Tables)
3 Months Ended
Mar. 31, 2022
Earnings Per Share [Abstract]  
Net Earnings (Loss) Per Share Computations from Continuing Operations

The following table reconciles net earnings and weighted-average common shares outstanding used in the calculations of basic and diluted net earnings per share.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Net earnings:

 

 

 

 

 

 

Net earnings

 

$

989

 

 

$

213

 

Attributable to participating securities

 

 

(16

)

 

 

(2

)

Basic and diluted earnings

 

$

973

 

 

$

211

 

Common shares:

 

 

 

 

 

 

Common shares outstanding - total

 

 

663

 

 

 

654

 

Attributable to participating securities

 

 

(7

)

 

 

(5

)

Common shares outstanding - basic

 

 

656

 

 

 

649

 

Dilutive effect of potential common shares issuable

 

 

2

 

 

 

2

 

Common shares outstanding - diluted

 

 

658

 

 

 

651

 

Net earnings per share:

 

 

 

 

 

 

Basic

 

$

1.48

 

 

$

0.33

 

Diluted

 

$

1.48

 

 

$

0.32

 

v3.22.1
Other Comprehensive Earnings (Loss) (Tables)
3 Months Ended
Mar. 31, 2022
Other Comprehensive Income Loss Net Of Tax Period Increase Decrease [Abstract]  
Components Of Other Comprehensive Earnings (Loss)

Components of other comprehensive earnings (loss) consist of the following:

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Pension and postretirement benefit plans:

 

 

 

 

 

 

Beginning accumulated pension and postretirement benefits

 

$

(132

)

 

$

(127

)

Recognition of net actuarial loss and prior service cost in earnings (1)

 

 

1

 

 

 

1

 

Settlement of pension benefits (2)

 

 

 

 

 

15

 

Other (3)

 

 

 

 

 

7

 

Accumulated other comprehensive loss, net of tax

 

$

(131

)

 

$

(104

)

 

(1)
Recognition of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost, which is a component of other, net in the accompanying consolidated statements of comprehensive earnings.
(2)
The Merger triggered settlement payments to certain plan participants, and the expense associated with this settlement is recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.
(3)
Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.
v3.22.1
Supplemental Information To Statements Of Cash Flows (Tables)
3 Months Ended
Mar. 31, 2022
Supplemental Cash Flow Elements [Abstract]  
Schedule Of Supplemental Information To Statements Of Cash Flows

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Changes in assets and liabilities, net:

 

 

 

 

 

 

Accounts receivable

 

$

(457

)

 

$

(63

)

Other current assets

 

 

64

 

 

 

(10

)

Other long-term assets

 

 

66

 

 

 

(10

)

Accounts payable and revenues and royalties payable

 

 

247

 

 

 

16

 

Other current liabilities

 

 

8

 

 

 

(33

)

Other long-term liabilities

 

 

(71

)

 

 

(27

)

Total

 

$

(143

)

 

$

(127

)

Supplementary cash flow data:

 

 

 

 

 

 

Interest paid

 

$

100

 

 

$

114

 

Income taxes refunded

 

$

(23

)

 

$

(6

)

v3.22.1
Accounts Receivable (Tables)
3 Months Ended
Mar. 31, 2022
Accounts Receivable Net [Abstract]  
Schedule Of Components Of Accounts Receivable

Components of accounts receivable include the following:

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Oil, gas and NGL sales

 

$

1,296

 

 

$

984

 

Joint interest billings

 

 

161

 

 

 

158

 

Marketing and midstream revenues

 

 

496

 

 

 

370

 

Other

 

 

56

 

 

 

38

 

Gross accounts receivable

 

 

2,009

 

 

 

1,550

 

Allowance for doubtful accounts

 

 

(7

)

 

 

(7

)

Net accounts receivable

 

$

2,002

 

 

$

1,543

 

v3.22.1
Property, Plant and Equipment (Tables)
3 Months Ended
Mar. 31, 2022
Extractive Industries [Abstract]  
Table of Property and Equipment, net

The following table presents the aggregate capitalized costs related to Devon’s oil and gas and non-oil and gas activities.

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Property and equipment:

 

 

 

 

 

 

Proved

 

$

38,524

 

 

$

38,051

 

Unproved and properties under development

 

 

1,101

 

 

 

1,081

 

Total oil and gas

 

 

39,625

 

 

 

39,132

 

Less accumulated DD&A

 

 

(26,059

)

 

 

(25,596

)

Oil and gas property and equipment, net

 

 

13,566

 

 

 

13,536

 

Other property and equipment

 

 

2,192

 

 

 

2,139

 

Less accumulated DD&A

 

 

(684

)

 

 

(667

)

Other property and equipment, net (1)

 

 

1,508

 

 

 

1,472

 

Property and equipment, net

 

$

15,074

 

 

$

15,008

 

 

(1)
$119 million and $111 million related to CDM in 2022 and 2021, respectively.
v3.22.1
Debt And Related Expenses (Tables)
3 Months Ended
Mar. 31, 2022
Debt Instrument [Line Items]  
Schedule Of Debt Instruments and Balances See below for a summary of debt instruments and balances. The notes and debentures are senior, unsecured obligations of Devon.

 

 

 

March 31, 2022

 

 

December 31, 2021

 

8.25% due August 1, 2023

 

$

242

 

 

$

242

 

5.25% due September 15, 2024

 

 

472

 

 

 

472

 

5.85% due December 15, 2025

 

 

485

 

 

 

485

 

7.50% due September 15, 2027

 

 

73

 

 

 

73

 

5.25% due October 15, 2027

 

 

390

 

 

 

390

 

5.875% due June 15, 2028

 

 

325

 

 

 

325

 

4.50% due January 15, 2030

 

 

585

 

 

 

585

 

7.875% due September 30, 2031

 

 

675

 

 

 

675

 

7.95% due April 15, 2032

 

 

366

 

 

 

366

 

5.60% due July 15, 2041

 

 

1,250

 

 

 

1,250

 

4.75% due May 15, 2042

 

 

750

 

 

 

750

 

5.00% due June 15, 2045

 

 

750

 

 

 

750

 

Net premium (discount) on debentures and notes

 

 

137

 

 

 

149

 

Debt issuance costs

 

 

(29

)

 

 

(30

)

Total long-term debt

 

$

6,471

 

 

$

6,482

 

Schedule Of Net Financing Cost Components

The following schedule includes the components of net financing costs.

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Interest based on debt outstanding

 

$

92

 

 

$

105

 

Gain on early retirement of debt

 

 

 

 

 

(20

)

Interest income

 

 

(1

)

 

 

(1

)

Other

 

 

(6

)

 

 

(7

)

Total net financing costs

 

$

85

 

 

$

77

 

v3.22.1
Leases (Tables)
3 Months Ended
Mar. 31, 2022
Leases [Abstract]  
Schedule of Right-of-use Assets and Lease Liabilities

The following table presents Devon’s right-of-use assets and lease liabilities as of March 31, 2022 and December 31, 2021.

 

 

 

March 31, 2022

 

 

December 31, 2021

 

 

 

Finance

 

 

Operating

 

 

Total

 

 

Finance

 

 

Operating

 

 

Total

 

Right-of-use assets

 

$

209

 

 

$

20

 

 

$

229

 

 

$

211

 

 

$

24

 

 

$

235

 

Lease liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current lease liabilities (1)

 

$

8

 

 

$

15

 

 

$

23

 

 

$

8

 

 

$

18

 

 

$

26

 

Long-term lease liabilities

 

 

247

 

 

 

4

 

 

 

251

 

 

 

247

 

 

 

5

 

 

 

252

 

Total lease liabilities

 

$

255

 

 

$

19

 

 

$

274

 

 

$

255

 

 

$

23

 

 

$

278

 

 

(1) Current lease liabilities are included in other current liabilities on the consolidated balance sheets.

v3.22.1
Asset Retirement Obligations (Tables)
3 Months Ended
Mar. 31, 2022
Asset Retirement Obligation Disclosure [Abstract]  
Summary Of Changes In Asset Retirement Obligations

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

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Asset retirement obligations as of beginning of period

 

$

485

 

 

$

369

 

Assumed WPX obligations

 

 

 

 

 

98

 

Liabilities incurred

 

 

8

 

 

 

9

 

Liabilities settled and divested

 

 

(3

)

 

 

(17

)

Revision of estimated obligation

 

 

(35

)

 

 

11

 

Accretion expense on discounted obligation

 

 

7

 

 

 

7

 

Asset retirement obligations as of end of period

 

 

462

 

 

 

477

 

Less current portion

 

 

19

 

 

 

22

 

Asset retirement obligations, long-term

 

$

443

 

 

$

455

 

v3.22.1
Stockholders' Equity (Tables)
3 Months Ended
Mar. 31, 2022
Stockholders Equity Note [Abstract]  
Summary of Purchases of Common Stock The table below provides information regarding purchases of Devon’s common stock under the $2.0 billion share repurchase program (shares in thousands).

 

 

 

Total Number of
Shares Purchased

 

 

Dollar Value of
Shares Purchased

 

 

Average Price Paid
per Share

 

2021:

 

 

 

 

 

 

 

 

 

Fourth quarter

 

 

13,983

 

 

$

589

 

 

$

42.15

 

2022:

 

 

 

 

 

 

 

 

 

First quarter

 

 

3,979

 

 

$

230

 

 

$

57.74

 

Total plan

 

 

17,962

 

 

$

819

 

 

$

45.61

 

Schedule of Dividends Payable The following table summarizes Devon’s fixed and variable dividends for the first quarter of 2022 and 2021, respectively.

 

 

Fixed

 

 

Variable

 

 

Total

 

 

Rate Per Share

 

2022:

 

 

 

 

 

 

 

 

 

 

 

First quarter

$

109

 

 

$

558

 

 

$

667

 

 

$

1.00

 

2021:

 

 

 

 

 

 

 

 

 

 

 

First quarter

$

76

 

 

$

127

 

 

$

203

 

 

$

0.30

 

v3.22.1
Fair Value Measurements (Tables)
3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Schedule Of Carrying Value And Fair Value Measurement Information For Financial Assets And Liabilities Therefore, such financial assets and liabilities are not presented in the following table.

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using:

 

 

 

Carrying

 

 

Total Fair

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

 

Amount

 

 

Value

 

 

Inputs

 

 

Inputs

 

 

Inputs

 

March 31, 2022 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

2,196

 

 

$

2,196

 

 

$

2,196

 

 

$

 

 

$

 

Commodity derivatives

 

$

32

 

 

$

32

 

 

$

 

 

$

32

 

 

$

 

Commodity derivatives

 

$

(940

)

 

$

(940

)

 

$

 

 

$

(940

)

 

$

 

Debt

 

$

(6,471

)

 

$

(7,126

)

 

$

 

 

$

(7,126

)

 

$

 

Contingent earnout payments

 

$

115

 

 

$

115

 

 

$

 

 

$

 

 

$

115

 

December 31, 2021 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

1,421

 

 

$

1,421

 

 

$

1,421

 

 

$

 

 

$

 

Commodity derivatives

 

$

8

 

 

$

8

 

 

$

 

 

$

8

 

 

$

 

Commodity derivatives

 

$

(577

)

 

$

(577

)

 

$

 

 

$

(577

)

 

$

 

Debt

 

$

(6,482

)

 

$

(7,644

)

 

$

 

 

$

(7,644

)

 

$

 

Contingent earnout payments

 

$

184

 

 

$

184

 

 

$

 

 

$

 

 

$

184

 

v3.22.1
Summary Of Significant Accounting Policies (Narrative) (Details)
$ in Millions
3 Months Ended
Jan. 07, 2021
Mar. 31, 2022
USD ($)
a
Mar. 31, 2021
USD ($)
Summary Of Significant Accounting Policies [Line Items]      
Restricted cash   $ 166 $ 195
Barnett Shale [Member]      
Summary Of Significant Accounting Policies [Line Items]      
Cash payments for divestitures   10  
Canada [Member] | Barnett Shale [Member]      
Summary Of Significant Accounting Policies [Line Items]      
Restricted cash   $ 150  
Devon and WPX Agreement [Member]      
Summary Of Significant Accounting Policies [Line Items]      
Date of agreement Jan. 07, 2021 Jan. 07, 2021  
Conversion of common stock into right to recieve per share 0.5165    
WPX and Howard Energy Partners [Member]      
Summary Of Significant Accounting Policies [Line Items]      
Voting interest in the join venture legal entity   50.00%  
Catalyst [Member]      
Summary Of Significant Accounting Policies [Line Items]      
Area of land | a   50,000  
v3.22.1
summary Of Significant Accounting Policies - (Schedule of Components of Investments) (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Summary Of Significant Accounting Policies [Line Items]    
Investments $ 416 $ 402
Catalyst [Member]    
Summary Of Significant Accounting Policies [Line Items]    
Investments $ 361 368
Percentage Of Interest In Investments 50.00%  
Other Member    
Summary Of Significant Accounting Policies [Line Items]    
Investments $ 55 $ 34
v3.22.1
Summary of Significant Accounting Policies (Schedule of Revenue from Contracts with Customers) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers $ 4,495 $ 2,578
Oil, Gas and NGL Sales [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers 3,175 1,757
Oil, Gas and NGL Sales [Member] | Oil [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers 2,406 1,331
Oil, Gas and NGL Sales [Member] | Gas [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers 307 202
Oil, Gas and NGL Sales [Member] | NGL [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers 462 224
Marketing and Midstream Revenues [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers 1,320 821
Marketing and Midstream Revenues [Member] | Oil [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers 776 499
Marketing and Midstream Revenues [Member] | Gas [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers 209 147
Marketing and Midstream Revenues [Member] | NGL [Member]    
Disaggregation Of Revenue [Line Items]    
Total revenues from contracts with customers $ 335 $ 175
v3.22.1
Acquisition and Divestitures (Narrative) (Details)
$ in Millions
3 Months Ended
Jan. 07, 2021
Mar. 31, 2022
USD ($)
$ / bbl
$ / MMBTU
Mar. 31, 2021
USD ($)
MMBoe
Dec. 31, 2021
USD ($)
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]        
Common Stock Shares Issued   $ 66   $ 66
Gain loss on disposition of assets   1 $ 32  
Barnett Shale [Member]        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]        
Contingent earnout payments   $ 65    
Henry Hub gas price for contingent earnout payment upside | $ / MMBTU   2.75    
WTI oil price for contingent earnout payment upside | $ / bbl   50    
Contingent earnout payment period   The contingent payment period commenced on January 1, 2021 and has a term of four years.    
Barnett Shale [Member] | Other Current Assets [Member]        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]        
Contingent earnout payments   $ 51    
Barnett Shale [Member] | Other Noncurrent Assets [Member]        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]        
Contingent earnout payments   60    
Non Core Assets [Member]        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]        
Divestitures of property and equipment     9  
Gain on asset dispositions     $ 35  
Contingent earnout payments   4    
Change in contingent earnout payments   $ 4    
Total estimated proved reserves | MMBoe     3  
Devon and WPX Agreement [Member]        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations And Disposition [Line Items]        
Date of agreement Jan. 07, 2021 Jan. 07, 2021    
Conversion of common stock into right to recieve per share 0.5165      
Common Stock Shares Issued   $ 5,400    
v3.22.1
Derivative Financial Instruments (Narrative) (Details) - USD ($)
Mar. 31, 2022
Sep. 30, 2021
Derivative Instruments And Hedging Activities Disclosure [Abstract]    
Cash collateral held   $ 0
Cash collateral posted $ 0  
v3.22.1
Derivative Financial Instruments (Schedule Of Open Oil Derivative Positions) (Details)
3 Months Ended
Mar. 31, 2022
$ / bbl
bbl
NYMEX West Texas Intermediate Price Swaps Oil Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 35,258
Weighted Average Price Swap 44.50
NYMEX West Texas Intermediate Price Collars Oil Q1-Q4 2023 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 6,193
Weighted Average Floor Price 61.32
Weighted Average Ceiling Price 97.65
NYMEX West Texas Intermediate Price Collars Oil Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 37,658
Weighted Average Floor Price 55.56
Weighted Average Ceiling Price 74.84
BRENT Basis Swaps Oil Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 1,000
Oil Basis Swaps (7.75)
NYMEX Roll Basis Swaps Oil Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 29,000
Oil Basis Swaps 0.45
Midland Sweet Q1 Q4 2023 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 3,000
Oil Basis Swaps 0.73
v3.22.1
Derivative Financial Instruments (Schedule Of Open Natural Gas Derivative Positions) (Details)
3 Months Ended
Mar. 31, 2022
MMBTU
$ / MMBTU
FERC Henry Hub Price Swaps Natural Gas1 Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 110,000 [1]
Weighted Average Price Swap 2.79 [1]
FERC Henry Hub Price Swaps Natural Gas Q1-Q4 2023 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 4,959 [1]
Weighted Average Price Swap 3.65 [1]
FERC Henry Hub Prices Collars Natural Gas Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 209,509 [2]
Weighted Average Floor Price 2.98 [2]
Weighted Average Ceiling Price 4.30 [2]
FERC Henry Hub Price Collars Natural Gas Q1-Q4 2023 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 58,901 [2]
Weighted Average Floor Price 3.38 [2]
Weighted Average Ceiling Price 5.64 [2]
El Paso Natural Gas Basis Swaps Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 40,000
Weighted Average Differential To Henry Hub (0.82)
WAHA Natural Gas Basis Swaps Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 70,000
Weighted Average Differential To Henry Hub (0.57)
El Paso Natural Gas Basis Swaps Q1-Q4 2023 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 60,000
Weighted Average Differential To Henry Hub (1.50)
WAHA Natural Gas Basis Swaps Q1-Q4 2023 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 70,000
Weighted Average Differential To Henry Hub (0.51)
WAHA Natural Gas Basis Swaps Q1-Q4 2024 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 40,000
Weighted Average Differential To Henry Hub (0.51)
Houston Ship Channel Natural Gas Basis Swaps Q2-Q4 2022 [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (MMBtu/d) | MMBTU 10,000
Weighted Average Differential To Henry Hub (0.17)
[1] Related to the 2022 open positions, 10,000 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $3.65 and 100,000 MMBtu/d settle against the end of month NYMEX index at an average price of $2.70. All 2023 open positions settle against the Inside FERC first of month Henry Hub index.
[2] Price collars settle against the Inside FERC first of month Henry Hub Index.
v3.22.1
Derivative Financial Instruments (Schedule Of Open Natural Gas Derivative Positions) (Parenthetical) (Details)
3 Months Ended
Mar. 31, 2022
$ / MMBTU
bbl
FERC Henry Hub Natural Gas [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 10,000
Weighted Average Price Swap | $ / MMBTU 3.65
NYMEX West Texas Intermediate [Member]  
Derivatives, Fair Value [Line Items]  
Volume Per Day (Bbls/d) | bbl 100,000
Weighted Average Price Swap | $ / MMBTU 2.70
v3.22.1
Derivative Financial Instruments (Schedule Of Derivative Financial Instruments Included In The Consolidated Balance Sheets) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Derivatives Fair Value [Line Items]    
Gross Fair Value $ (908) $ (569)
Net Fair Value (908) (569)
Short-term Derivative Asset [Member]    
Derivatives Fair Value [Line Items]    
Gross Fair Value 15 6
Amounts Netted (14) (4)
Net Fair Value $ 1 2
Balance Sheet Classification Other current assets  
Long-term Derivative Asset [Member]    
Derivatives Fair Value [Line Items]    
Gross Fair Value $ 31 6
Net Fair Value $ 31 6
Balance Sheet Classification Other long-term assets  
Short-term Derivative Liability [Member]    
Derivatives Fair Value [Line Items]    
Gross Fair Value $ (953) (579)
Amounts Netted 14 4
Net Fair Value $ (939) (575)
Balance Sheet Classification Other current liabilities  
Long-term Derivative Liability [Member]    
Derivatives Fair Value [Line Items]    
Gross Fair Value $ (1) (2)
Net Fair Value $ (1) $ (2)
Balance Sheet Classification Other long-term liabilities  
v3.22.1
Share-Based Compensation (Schedule Of Share-Based Compensation Expense Included In The Consolidated Statements Of Comprehensive Earnings) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense $ 20 $ 41
Related income tax benefit 17 0
G&A [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Share-based compensation expense 20 20
Restructuring and Transaction Costs [Member]    
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]    
Restructuring and transaction costs $ 0 $ 21
v3.22.1
Share-Based Compensation (Summary Of Unvested Restricted Stock Awards, Performance-Based Restricted Stock Awards And Performance Share Units) (Details)
shares in Thousands
3 Months Ended
Mar. 31, 2022
$ / shares
shares
Restricted Stock Awards [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Unvested at December 31, 2021 | shares 7,656
Granted, awards and units | shares 1,249
Vested, awards and units | shares (2,476)
Forfeited, awards and units | shares (8)
Unvested at March 31, 2022 share | shares 6,421
Unvested weighted average grant-date fair value at December 31, 2021 $ 22.15
Granted, weighted average grant-date fair value 52.23
Vested, weighted average grant-date fair value 23.02
Forfeited, weighted average grant-date fair value 29.42
Unvested weighted average grant-date fair value at March 31, 2022 $ 27.66
Performance Share Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Unvested at December 31, 2021 | shares 2,076
Granted, awards and units | shares 964
Vested, awards and units | shares (1,194)
Forfeited, awards and units | shares 0
Unvested at March 31, 2022 share | shares 1,846 [1]
Unvested weighted average grant-date fair value at December 31, 2021 $ 24.12
Granted, weighted average grant-date fair value 44.05
Vested, weighted average grant-date fair value 28.91
Forfeited, weighted average grant-date fair value 0
Unvested weighted average grant-date fair value at March 31, 2022 31.43
Including Performance Factor Shares Granted [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Granted, weighted average grant-date fair value $ 68.68
[1] A maximum of 3.7 million common shares could be awarded based upon Devon’s final TSR ranking.
v3.22.1
Share-Based Compensation (Summary Of Unvested Restricted Stock Awards, Performance-Based Restricted Stock Awards And Performance Share Units) (Parenthetical) (Details)
shares in Millions
3 Months Ended
Mar. 31, 2022
shares
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 3.7
v3.22.1
Share-Based Compensation (Summary Of Performance Share Units Grant-Date Fair Values And Their Related Assumptions) (Details)
3 Months Ended
Mar. 31, 2022
$ / shares
Performance Share Units [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Grant-date fair value $ 44.05
Risk-free interest rate 1.81%
Volatility factor 70.10%
Contractual term (years) 2 years 10 months 20 days
Including Performance Factor Shares Granted [Member]  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]  
Grant-date fair value $ 68.68
v3.22.1
Share-Based Compensation (Summary of Unrecognized Compensation Cost And Weighted Average Period For Recognition) (Details)
$ in Millions
3 Months Ended
Mar. 31, 2022
USD ($)
Restricted Stock Awards [Member]  
Unrecognized Compensation And Weighted Average Recognition [Line Items]  
Unrecognized compensation cost $ 122
Weighted average period for recognition (years) 3 years
Performance Share Units [Member]  
Unrecognized Compensation And Weighted Average Recognition [Line Items]  
Unrecognized compensation cost $ 32
Weighted average period for recognition (years) 2 years 1 month 6 days
v3.22.1
Asset Impairments (Summary of Asset Impairments) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Impaired Long Lived Assets Held And Used [Line Items]    
Unproved impairments $ 2 $ 3
v3.22.1
Asset Impairments (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Impaired Long Lived Assets Held And Used [Line Items]    
Exploration expenses $ 2 $ 3
v3.22.1
Restructuring and Transaction Costs - (Schedule Of Restructuring And Transaction Costs) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Restructuring Cost And Reserve [Line Items]    
Restructuring costs $ 0 $ 189
Transaction Costs [Member]    
Restructuring Cost And Reserve [Line Items]    
Restructuring costs 0 46
Other Restructuring [Member]    
Restructuring Cost And Reserve [Line Items]    
Restructuring costs $ 0 $ 143
v3.22.1
Restructuring and Transaction Costs (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Restructuring Cost And Reserve [Line Items]    
Restructuring and transaction costs $ 0 $ 189
Reduction Of Workforce [Member]    
Restructuring Cost And Reserve [Line Items]    
Restructuring and transaction costs   21
Noncash restructuring costs   37
Transaction Costs [Member]    
Restructuring Cost And Reserve [Line Items]    
Transaction costs   46
Merger Integration [Member]    
Restructuring Cost And Reserve [Line Items]    
Restructuring and transaction costs   $ 143
v3.22.1
Restructuring and Transaction Costs (Schedule Of The Activity And Balances Associated With Restructuring Liabilities) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Restructuring Cost And Reserve [Line Items]    
Beginning balance $ 149 $ 172
Ending balance 139 224
Prior years' restructurings [Member]    
Restructuring Cost And Reserve [Line Items]    
Restructuring reserve activity (10) 52
Other Current Liabilities [Member]    
Restructuring Cost And Reserve [Line Items]    
Beginning balance 38 35
Ending balance 34 94
Other Current Liabilities [Member] | Prior years' restructurings [Member]    
Restructuring Cost And Reserve [Line Items]    
Restructuring reserve activity (4) 59
Other Long-Term Liabilities [Member]    
Restructuring Cost And Reserve [Line Items]    
Beginning balance 111 137
Ending balance 105 130
Other Long-Term Liabilities [Member] | Prior years' restructurings [Member]    
Restructuring Cost And Reserve [Line Items]    
Restructuring reserve activity $ (6) $ (7)
v3.22.1
Other, Net (Schedule of Other Expenses (Income)) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Other Expenses [Abstract]    
Estimated future obligation under a performance guarantee $ 96 $ 0
Ukraine charitable pledge 20 0
Asset retirement obligation accretion 7 7
Severance and other non-income tax refunds (3) (36)
Other 11 0
Total $ (61) $ (29)
v3.22.1
Other, Net (Narrative) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Other Expenses [Abstract]    
Estimated future obligation under a performance guarantee $ (96) $ 0
Satisfaction of future obligation under performance guarantee 35  
Reduction in estimated exposure of future obligation under performance guarantee 61  
Ukraine charitable pledge 20 0
Severance and other non-income tax refunds $ 3 $ 36
v3.22.1
Income Taxes (Schedule of Components of Income Tax Expense (Benefit)) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Income Tax Disclosure [Abstract]    
Earnings (loss) before income taxes $ 1,262 $ (32)
Current income tax expense (benefit) 103 (5)
Deferred income tax expense (benefit) 164 (243)
Total income tax expense (benefit) $ 267 $ (248)
v3.22.1
Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Income Tax Disclosure [Abstract]    
U.S. statutory income tax rate 21.00% 21.00%
State income taxes 1.00% (1.00%)
Deferred tax asset valuation allowance 0.00% 791.00%
Other (1.00%) (48.00%)
Effective income tax rate 21.00% 763.00%
v3.22.1
Income Taxes (Narrative) (Details)
$ in Millions
3 Months Ended
Mar. 31, 2021
USD ($)
WPX Merger [Member]  
Income Tax [Line Items]  
Deferred income taxes $ 250
Merger [Member]  
Income Tax [Line Items]  
Other income tax expense benefit $ 15
v3.22.1
Net Earnings Per Share (Net Earnings (Loss) Per Share Computations from Continuing Operations) (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Net earnings:    
Net earnings $ 989 $ 213
Attributable to participating securities 16 (2)
Basic and diluted earnings $ 973 $ 211
Common shares:    
Common shares outstanding - total 663,000,000 654,000,000
Attributable to participating securities (7,000,000) (5,000,000)
Common shares outstanding - basic 656,000,000 649,000,000
Dilutive effect of potential common shares issuable 2,000,000 2,000,000
Common shares outstanding - diluted 658,000,000 651,000,000
Net earnings per share:    
Basic $ 1.48 $ 0.33
Diluted $ 1.48 $ 0.32
v3.22.1
Other Comprehensive Earnings (Loss) (Components Of Other Comprehensive Earnings (Loss)) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Pension and postretirement benefit plans:    
Beginning accumulated pension and postretirement benefits $ (132) $ (127)
Recognition of net actuarial loss and prior service cost in earnings [1] 1 1
Settlement of pension benefits [2] 0 15
Other [3] 0 7
Accumulated other comprehensive loss, net of tax $ (131) $ (104)
[1] Recognition of net actuarial loss and prior service cost are included in the computation of net periodic benefit cost, which is a component of other, net in the accompanying consolidated statements of comprehensive earnings.
[2] The Merger triggered settlement payments to certain plan participants, and the expense associated with this settlement is recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.
[3] Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.
v3.22.1
Supplemental Information To Statements Of Cash Flows (Schedule Of Supplemental Information To Statements Of Cash Flows) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Changes in assets and liabilities, net:    
Accounts receivable $ (457) $ (63)
Other current assets 64 (10)
Other long-term assets 66 (10)
Accounts payable and revenues and royalties payable 247 16
Other current liabilities 8 (33)
Other long-term liabilities (71) (27)
Total (143) (127)
Supplementary cash flow data - total operations:    
Interest paid 100 114
Income taxes paid (refunded) $ (23) $ (6)
v3.22.1
Accounts Receivable (Schedule Of Components Of Accounts Receivable) (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Joint interest billings $ 161 $ 158
Other 56 38
Gross accounts receivable 2,009 1,550
Allowance for doubtful accounts (7) (7)
Net accounts receivable 2,002 1,543
Oil, Gas and NGL Sales [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross accounts receivable 1,296 984
Marketing and Midstream Revenues [Member]    
Accounts, Notes, Loans and Financing Receivable [Line Items]    
Gross accounts receivable $ 496 $ 370
v3.22.1
Property, Plant and Equipment (Summary of Property and Equipment, net) (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Property and equipment:    
Proved $ 38,524 $ 38,051
Unproved and properties under development 1,101 1,081
Total oil and gas 39,625 39,132
Less accumulated DD&A (26,059) (25,596)
Oil and gas property and equipment, net 13,566 13,536
Other property and equipment 2,192 2,139
Less accumulated DD&A (684) (667)
Other property and equipment, net [1] 1,508 1,472
Total property and equipment, net $ 15,074 $ 15,008
[1]
(1)
$119 million and $111 million related to CDM in 2022 and 2021, respectively.
v3.22.1
Property, Plant and Equipment (Summary of Property and Equipment, net) (Parenthetical) (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Property Plant And Equipment [Line Items]    
Other property and equipment, net [1] $ 1,508 $ 1,472
CDM [Member]    
Property Plant And Equipment [Line Items]    
Other property and equipment, net $ 119 $ 111
[1]
(1)
$119 million and $111 million related to CDM in 2022 and 2021, respectively.
v3.22.1
Debt And Related Expenses (Schedule Of Debt Instruments and Balances) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Debt Instrument [Line Items]    
Net premium (discount) on debentures and notes $ 137 $ (149)
Debt issuance costs (29) (30)
Long-term debt 6,471 6,482
8.25% due August 1, 2023 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 242 $ 242
Charge on early retirement of debt, cash retirement costs 8.25% 8.25%
Debt, maturity date Aug. 01, 2023  
5.25% due September 15, 2024 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 472 $ 472
Charge on early retirement of debt, cash retirement costs 5.25% 5.25%
Debt, maturity date Sep. 15, 2024  
5.85% due December 15, 2025 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 485 $ 485
Charge on early retirement of debt, cash retirement costs 5.85% 5.85%
Debt, maturity date Dec. 15, 2025  
7.50% due September 15, 2027 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 73 $ 73
Charge on early retirement of debt, cash retirement costs 7.50% 7.50%
Debt, maturity date Sep. 15, 2027  
5.25% due October 15, 2027 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 390 $ 390
Charge on early retirement of debt, cash retirement costs 5.25% 5.25%
Debt, maturity date Oct. 15, 2027  
5.875% due June 15, 2028 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 325 $ 325
Charge on early retirement of debt, cash retirement costs 5.875% 5.875%
Debt, maturity date Jun. 15, 2028  
4.50% due January 15, 2030 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 585 $ 585
Charge on early retirement of debt, cash retirement costs 4.50% 4.50%
Debt, maturity date Jan. 15, 2030  
7.875% due September 30, 2031 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 675 $ 675
Charge on early retirement of debt, cash retirement costs 7.875% 7.875%
Debt, maturity date Sep. 30, 2031  
7.95% due April 15, 2032 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 366 $ 366
Charge on early retirement of debt, cash retirement costs 7.95% 7.95%
Debt, maturity date Apr. 15, 2032  
5.60% due July 15, 2041 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 1,250 $ 1,250
Charge on early retirement of debt, cash retirement costs 5.60% 5.60%
Debt, maturity date Jul. 15, 2041  
4.75% due May 15, 2042 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 750 $ 750
Charge on early retirement of debt, cash retirement costs 4.75% 4.75%
Debt, maturity date May 15, 2042  
5.00% due June 15, 2045 [Member]    
Debt Instrument [Line Items]    
Long-term debt, gross $ 750 $ 750
Charge on early retirement of debt, cash retirement costs 5.00% 5.00%
Debt, maturity date Jun. 15, 2045  
v3.22.1
Debt And Related Expenses (Narrative) (Details) - USD ($)
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Debt Instrument [Line Items]    
Repayments of long-term debt $ 533,000,000
Early retirement of debt (20,000,000)
Charge on early retirement of debt, noncash charges 27,000,000
Senior Credit Facility [Member]    
Debt Instrument [Line Items]    
Credit Facility, borrowing capacity 3,000,000,000.0  
Outstanding credit facility borrowings $ 0  
Debt-to-capitalization ratio 0.65  
Outstanding letters of credit $ 2,000,000  
Senior Credit Facility [Member] | Maximum [Member]    
Debt Instrument [Line Items]    
Debt-to-capitalization ratio 0.247  
Senior Notes [Member]    
Debt Instrument [Line Items]    
Early retirement of debt   $ (20,000,000)
Charge on early retirement of debt, cash retirement costs $ 47,000,000  
Charge on early retirement of debt, noncash charges 27,000,000  
6.00% Due 2022 [Member] | Senior Notes [Member]    
Debt Instrument [Line Items]    
Repayments of long-term debt $ 43,000,000  
Debt interest rate, stated percentage 6.00%  
5.875% Due 2028 [Member] | Senior Notes [Member]    
Debt Instrument [Line Items]    
Repayments of long-term debt $ 175,000,000  
Debt interest rate, stated percentage 5.875%  
4.5% Due 2030 [Member] | Senior Notes [Member]    
Debt Instrument [Line Items]    
Repayments of long-term debt $ 315,000,000  
Debt interest rate, stated percentage 4.50%  
v3.22.1
Debt And Related Expenses (Schedule of Net Financing Cost Components) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Debt Disclosure [Abstract]    
Interest based on debt outstanding $ 92 $ 105
Early retirement of debt (20)
Interest income (1) (1)
Other (6) 7
Total net financing costs $ 85 $ 77
v3.22.1
Leases (Schedule of Right-of-use Assets and Lease Liabilities) (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Leases [Abstract]    
Right-of-use assets, finance lease $ 209 $ 211
Finance lease liabilities:    
Current lease liabilities, finance lease [1] 8 8
Long-term lease liabilities, finance lease 247 247
Total lease liabilities, finance lease 255 255
Right-of-use assets, operating lease 20 24
Operating lease liabilities:    
Current lease liabilities, operating lease [1] 15 18
Long-term lease liabilities, operating lease 4 5
Total lease liabilities, operating lease 19 23
Right-of-use assets 229 235
Lease liabilities:    
Current lease liabilities [1] 23 26
Long-term lease liabilities 251 252
Total lease liabilities $ 274 $ 278
[1] Current lease liabilities are included in other current liabilities on the consolidated balance sheets.
v3.22.1
Asset Retirement Obligations (Summary Of Changes In Asset Retirement Obligations) (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Dec. 31, 2021
Asset Retirement Obligation Disclosure [Abstract]      
Asset retirement obligations as of beginning of period $ 485 $ 369  
Assumed WPX obligations 0 98  
Liabilities incurred 8 9  
Liabilities settled and divested (3) (17)  
Revision of estimated obligation (35) 11  
Asset retirement obligation accretion 7 7  
Asset retirement obligations as of end of period 462 477  
Less current portion 19 22  
Asset retirement obligations $ 443 $ 455 $ 468
v3.22.1
Asset Retirement Obligations (Narrative) (Details)
$ in Millions
3 Months Ended
Mar. 31, 2022
USD ($)
Asset Retirement Obligation Disclosure [Abstract]  
Decrease in asset retirement obligations $ 35
v3.22.1
Stockholders' Equity (Narrative) (Details)
$ / shares in Units, shares in Millions, $ in Millions
1 Months Ended 3 Months Ended
Feb. 28, 2022
USD ($)
Nov. 02, 2021
USD ($)
Jan. 07, 2021
May 31, 2022
USD ($)
$ / shares
Mar. 31, 2022
$ / shares
shares
Mar. 31, 2021
$ / shares
Dec. 31, 2021
shares
Stockholders Equity [Abstract]              
Common stock, shares issued (in shares) | shares         661   663
Dividends rate per share         $ 1.00 $ 0.30  
Fixed Dividend [Member]              
Stockholders Equity [Abstract]              
Percentage Increase In Quarterly Dividend         45.00%    
Dividends rate per share         $ 0.16    
Subsequent Event              
Stockholders Equity [Abstract]              
Dividend payable, per share       $ 1.27      
Dividends payable, year       2022      
Subsequent Event | Fixed Dividend [Member]              
Stockholders Equity [Abstract]              
Dividend payable amount | $       $ 106      
Dividends rate per share       $ 0.16      
Subsequent Event | Variable Dividend [Member]              
Stockholders Equity [Abstract]              
Dividend payable, per share       $ 1.11      
Dividend payable amount | $       $ 732      
Devon and WPX Agreement [Member]              
Stockholders Equity [Abstract]              
Conversion of common stock into right to recieve per share     0.5165        
Share Repurchase Program [Member]              
Stockholders Equity [Abstract]              
Repurchase of common stock | $ $ 1,600 $ 1,000   $ 2,000      
Repurchase program expiration date May 31, 2022 Dec. 31, 2022   May 04, 2023      
v3.22.1
Stockholders' Equity (Summary of Purchases of Common Stock) (Details) - 1.6 Billion Dollar Share Repurchase Program Open [Member] - USD ($)
$ / shares in Units, shares in Thousands, $ in Millions
3 Months Ended 6 Months Ended
Mar. 31, 2022
Dec. 31, 2021
Mar. 31, 2022
Stockholders Equity [Line Items]      
Total Number of Shares Purchased 3,979 13,983 17,962
Dollar Value of Shares Purchased $ 230 $ 589 $ 819
Average Price Paid per Share $ 57.74 $ 42.15 $ 45.61
v3.22.1
Stockholders' Equity (Summary Of Dividends Paid On Common Stock) (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Mar. 31, 2022
Mar. 31, 2021
Stockholders Equity [Line Items]    
Dividends amount $ 667 $ 203
Dividends rate per share $ 1.00 $ 0.30
Fixed Dividend [Member]    
Stockholders Equity [Line Items]    
Dividends amount $ 109 $ 76
Dividends rate per share $ 0.16  
Variable Dividend [Member]    
Stockholders Equity [Line Items]    
Dividends amount $ 558 $ 127
v3.22.1
Commitments and Contingencies (Narrative) (Details)
$ in Millions
Mar. 31, 2022
USD ($)
Commitments And Contingencies Disclosure [Abstract]  
Other accrued liabilities current $ 30
v3.22.1
Fair Value Measurements (Schedule Of Carrying Value And Fair Value Measurement Information For Financial Assets And Liabilities) (Details) - USD ($)
$ in Millions
Mar. 31, 2022
Dec. 31, 2021
Carrying Amount [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents $ 2,196 $ 1,421
Debt (6,471) (6,482)
Contingent earnout payments 115 184
Carrying Amount [Member] | Commodity Derivatives [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivatives, assets 32 8
Derivatives, liabilities (940) (577)
Total Fair Value [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 2,196 1,421
Debt (7,126) (7,644)
Contingent earnout payments 115 184
Total Fair Value [Member] | Commodity Derivatives [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivatives, assets 32 8
Derivatives, liabilities (940) (577)
Level 1 Inputs [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Cash equivalents 2,196 1,421
Level 2 Inputs [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt (7,126) (7,644)
Level 2 Inputs [Member] | Commodity Derivatives [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivatives, assets 32 8
Derivatives, liabilities (940) (577)
Level 3 Inputs [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Contingent earnout payments $ 115 $ 184