Document And Entity Information - USD ($) shares in Millions, $ in Billions	12 Months Ended
	Dec. 31, 2021	Feb. 02, 2022	Jun. 30, 2021
Cover [Abstract]
Document Type	10-K
Document Period End Date	Dec. 31, 2021
Amendment Flag	false
Trading Symbol	DVN
Entity Registrant Name	DEVON ENERGY CORP/DE
Entity Central Index Key	0001090012
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Document Fiscal Period Focus	FY
Entity Public Float			$ 19.6
Entity Common Stock, Shares Outstanding		664.2
ICFR Auditor Attestation Flag	true
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 Annual Report	true
Document Transition Report	false
Documents Incorporated by Reference	Portions of Registrant’s definitive Proxy Statement relating to Registrant’s 2022 annual meeting of stockholders have been incorporated by reference in Part III of this Annual Report on Form 10-K.
Auditor Name	KPMG LLP
Auditor Location	Oklahoma City, Oklahoma
Auditor Firm ID	185

Consolidated Statements of Comprehensive Earnings - USD ($)
$ in Millions

12 Months Ended

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Revenues from contracts with customers

$ 13,750

$ 4,673

$ 6,674

Oil, gas and NGL derivatives

(1,544)

155

(454)

Total revenues

12,206

4,828

6,220

Production expenses

2,131

1,123

1,197

Exploration expenses

14

167

58

Depreciation, depletion and amortization

2,158

1,300

1,497

Asset impairments

2,693

Asset dispositions

(168)

(1)

(48)

General and administrative expenses

391

338

475

Financing costs, net

329

270

250

Restructuring and transaction costs

258

49

84

Other, net

(43)

(34)

4

Total expenses

9,308

7,918

6,329

Earnings (loss) from continuing operations before income taxes

2,898

(3,090)

(109)

Income tax expense (benefit)

65

(547)

(30)

Net earnings (loss) from continuing operations

2,833

(2,543)

(79)

Net loss from discontinued operations, net of income taxes

(128)

(274)

Net earnings (loss)

2,833

(2,671)

(353)

Net earnings attributable to noncontrolling interests

20

9

2

Net earnings (loss) attributable to Devon

$ 2,813

$ (2,680)

$ (355)

Basic net earnings (loss) per share:

Basic earnings (loss) from continuing operations per share

$ 4.20

$ (6.78)

$ (0.21)

Basic loss from discontinued operations per share

(0.34)

(0.68)

Basic net earnings (loss) per share

4.20

(7.12)

(0.89)

Diluted net earnings (loss) per share:

Diluted earnings (loss) from continuing operations per share

4.19

(6.78)

(0.21)

Diluted loss from discontinued operations per share

(0.34)

(0.68)

Diluted net earnings (loss) per share

$ 4.19

$ (7.12)

$ (0.89)

Comprehensive earnings (loss):

Net earnings (loss)

$ 2,833

$ (2,671)

$ (353)

Other comprehensive earnings (loss), net of tax:

Foreign currency translation, discontinued operations

78

Release of Canadian cumulative translation adjustment, discontinued operations

^[1]

(1,237)

Pension and postretirement plans

(5)

(8)

13

Other comprehensive loss, net of tax

(5)

(8)

(1,146)

Comprehensive earnings (loss):

2,828

(2,679)

(1,499)

Comprehensive earnings attributable to noncontrolling interests

20

9

2

Comprehensive earnings (loss) attributable to Devon

2,808

(2,688)

(1,501)

Oil, Gas and NGL Sales [Member]

Revenues from contracts with customers

9,531

2,695

3,809

Marketing and Midstream Revenues [Member]

Revenues from contracts with customers

4,219

1,978

2,865

Marketing and Midstream Expenses [Member]

Expenses

$ 4,238

$ 2,013

$ 2,812

[1]	In conjunction with the sale of substantially all of its oil and gas assets and operations in Canada, Devon released the cumulative translation adjustment as part of its gain on the disposition of its Canadian business. See Note 19 for additional details.

Consolidated Statements Of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net earnings (loss)	$ 2,833	$ (2,671)	$ (353)
Adjustments to reconcile net earnings (loss) to net cash from operating activities:
Net loss from discontinued operations, net of income taxes		128	274
Depreciation, depletion and amortization	2,158	1,300	1,497
Asset impairments		2,693
Leasehold impairments	4	152	18
(Amortization) accretion of liabilities	(27)	32	33
Total (gains) losses on commodity derivatives	1,544	(155)	454
Cash settlements on commodity derivatives	(1,462)	316	166
Gains on asset dispositions	(168)	(1)	(48)
Deferred income tax expense (benefit)	49	(328)	(25)
Share-based compensation	99	88	115
Early retirement of debt	(30)
Other	15	5	(6)
Changes in assets and liabilities, net	(116)	(95)	(82)
Net cash from operating activities - continuing operations	4,899	1,464	2,043
Cash flows from investing activities:
Capital expenditures	(1,989)	(1,153)	(1,910)
Acquisitions of property and equipment	(18)	(8)	(31)
Divestitures of property and equipment	79	34	390
WPX acquired cash	344
Distributions from equity method investments	35
Contributions to equity method investments	(25)
Net cash from investing activities - continuing operations	(1,574)	(1,127)	(1,551)
Cash flows from financing activities:
Repayments of long-term debt	(1,243)		(162)
Early retirement of debt	(59)
Repurchases of common stock	(589)	(38)	(1,849)
Dividends paid on common stock	(1,315)	(257)	(140)
Contributions from noncontrolling interests	4	21	116
Distributions to noncontrolling interests	(21)	(14)
Acquisition of noncontrolling interests	(24)
Shares exchanged for tax withholdings and other	(45)	(18)	(26)
Net cash from financing activities - continuing operations	(3,292)	(306)	(2,061)
Effect of exchange rate changes on cash - continuing operations	1
Net change in cash, cash equivalents and restricted cash of continuing operations	34	31	(1,569)
Cash flows from discontinued operations:
Operating activities		(110)	28
Investing activities		481	2,472
Financing activities		0	(1,578)
Effect of exchange rate changes on cash		(9)	45
Net change in cash, cash equivalents and restricted cash of discontinued operations		362	967
Net change in cash, cash equivalents and restricted cash	34	393	(602)
Cash, cash equivalents and restricted cash at beginning of period	2,237	1,844	2,446
Cash, cash equivalents and restricted cash at end of period	2,271	2,237	1,844
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	2,099	2,047	1,464
Restricted cash	172	190	380
Total cash, cash equivalents and restricted cash	$ 2,271	$ 2,237	$ 1,844

Consolidated Balance Sheets - USD ($)
$ in Millions

Dec. 31, 2021

Dec. 31, 2020

ASSETS

Cash, cash equivalents and restricted cash

$ 2,271

$ 2,237

Accounts receivable

1,543

601

Income taxes receivable

83

174

Other current assets

352

248

Total current assets

4,249

3,260

Oil and gas property and equipment, based on successful efforts accounting, net

13,536

4,436

Other property and equipment, net ($111 million and $102 million related to CDM in 2021 and 2020, respectively)

^[1]

1,472

957

Total property and equipment, net

15,008

5,393

Goodwill

753

Right-of-use assets

235

223

Investments

402

12

Other long-term assets

378

271

Total assets

21,025

9,912

LIABILITIES AND EQUITY

Accounts payable

500

242

Revenues and royalties payable

1,456

662

Other current liabilities

1,131

536

Total current liabilities

3,087

1,440

Long-term debt

6,482

4,298

Lease liabilities

252

246

Asset retirement obligations

468

358

Other long-term liabilities

1,050

551

Deferred income taxes

287

Stockholders' equity:

Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 663 million and 382 million shares in 2021 and 2020, respectively

66

38

Additional paid-in capital

7,636

2,766

Retained earnings

1,692

208

Accumulated other comprehensive loss

(132)

(127)

Total stockholders’ equity attributable to Devon

9,262

2,885

Noncontrolling interests

137

134

Total equity

9,399

3,019

Total liabilities and equity

$ 21,025

$ 9,912

[1]	$111 million and $102 million related to CDM in 2021 and 2020, respectively.

Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Millions

Dec. 31, 2021

Dec. 31, 2020

Other property and equipment, net

^[1]

$ 1,472

$ 957

Common stock, par value (in dollars per share)

$ 0.10

Common stock, shares authorized (in shares)

1,000,000,000.0

Common stock, shares issued (in shares)

663,000,000

382,000,000

CDM [Member]

Other property and equipment, net

$ 111

$ 102

[1]	$111 million and $102 million related to CDM in 2021 and 2020, respectively.

Consolidated Statements Of Equity - USD ($) shares in Millions, $ in Millions	Total	Effect of Adoption of Lease Accounting [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earning [Member]	Retained Earning [Member] Effect of Adoption of Lease Accounting [Member]	Other Comprehensive Earnings (Loss) [Member]	Treasury Stock [Member]	Noncontrolling Interests [Member]
Balance at Dec. 31, 2018	$ 9,186	$ (7)	$ 45	$ 4,486	$ 3,650	$ (7)	$ 1,027	$ (22)
Balance, shares at Dec. 31, 2018			450
Net earnings (loss)	(353)				(355)				$ 2
Other comprehensive earnings (loss), net of tax	(1,146)						(1,146)
Restricted stock grants, net of cancellations, shares			3
Common stock repurchased	(1,852)							(1,852)
Common stock retired			$ (7)	(1,867)				1,874
Common stock retired, shares			(71)
Common stock dividends	(140)				(140)
Share-based compensation	116			116
Contributions from noncontrolling interests	116								116
Balance at Dec. 31, 2019	5,920		$ 38	2,735	3,148		(119)		118
Balance, shares at Dec. 31, 2019			382
Net earnings (loss)	(2,671)				(2,680)				9
Other comprehensive earnings (loss), net of tax	(8)						(8)
Restricted stock grants, net of cancellations, shares			3
Common stock repurchased	(57)							(57)
Common stock retired				(57)				57
Common stock retired, shares			(3)
Common stock dividends	(260)				(260)
Share-based compensation	88			88
Contributions from noncontrolling interests	21								21
Distributions to noncontrolling interests	(14)								(14)
Balance at Dec. 31, 2020	3,019		$ 38	2,766	208		(127)		134
Balance, shares at Dec. 31, 2020			382
Net earnings (loss)	2,833				2,813				20
Other comprehensive earnings (loss), net of tax	(5)						(5)
Restricted stock grants, net of cancellations, shares			6
Common stock repurchased	(633)							(633)
Common stock retired			$ (1)	(632)				$ 633
Common stock retired, shares			(16)
Common stock dividends	(1,329)				(1,329)
Common stock issued	5,432		$ 29	5,403
Common stock issued, Shares			290
Share-based compensation	99			99
Share-based compensation, shares			1
Contributions from noncontrolling interests	3								3
Distributions to noncontrolling interests	(20)								(20)
Balance at Dec. 31, 2021	$ 9,399		$ 66	$ 7,636	$ 1,692		$ (132)		$ 137
Balance, shares at Dec. 31, 2021			663

Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

1.	Summary of Significant Accounting Policies

Devon is a leading independent energy company engaged primarily in the exploration, development and production of oil, natural gas and NGLs. Devon’s operations are concentrated in various onshore areas in the U.S.

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.

As further discussed in Note 19, Devon sold its Barnett Shale assets on October 1, 2020 and sold its Canadian operations on June 27, 2019. Prior to December 31, 2020, activity relating to Devon’s Barnett Shale assets and Canadian operations are classified as discontinued operations within Devon’s consolidated statements of comprehensive earnings and consolidated statements of cash flows.

Accounting policies used by Devon and its subsidiaries conform to accounting principles generally accepted in the U.S. and reflect industry practices. The more significant of such policies are discussed below.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Devon, entities in which it holds a controlling interest and VIEs for which Devon is the primary beneficiary. All intercompany transactions have been eliminated. Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Investments in non-controlled entities, over which Devon has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. In applying the equity method of accounting, the investments are initially recognized at cost and subsequently adjusted for Devon’s proportionate share of earnings, losses, contributions and distributions.

Variable Interest Entity

Devon entered into an agreement in 2019 to form CDM, a partnership in the Delaware Basin, with an affiliate of QL Capital Partners, LP (“QLCP”). 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.

Devon, through its controlling interest in CDM, has the power to direct the activities that significantly affect the economic performance of CDM and the obligation to absorb losses or the right to receive benefits that could be significant to CDM; therefore, Devon is considered the primary beneficiary and consolidates CDM. CDM maintains its own capital structure that is separate from Devon. During 2021, QLCP contributions to and distributions from CDM were approximately $3 million and $20 million, respectively. During 2020, QLCP contributions to and distributions from CDM were approximately $21 million and $14 million, respectively. During 2019, QLCP contributions to CDM were approximately $116 million, primarily associated with the CDM formation.

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 sheet and Devon’s share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

Investments	% Interest	Carrying Amount
Catalyst	50%	$	368
Other	Various		34
Total		$	402

As of December 31, 2021, Devon’s $368 million investment in Catalyst exceeded the underlying equity in net assets by approximately $125 million. The basis difference results primarily from intangible assets associated with Devon’s acreage dedication and is amortized over the remaining 17-year term of the associated oil gathering and natural gas processing agreements.

After the closing of the Merger, Catalyst has provided certain gathering, processing and marketing services to Devon in the ordinary course of business. The impact from these services on Devon’s consolidated statement of comprehensive earnings and consolidated balance sheet for the year ended and as of December 31, 2021, respectively, are summarized below.

	2021
Oil, gas and NGL sales	$	264
Production expenses	$	42
Accounts receivable	$	22

Segment Information

Subsequent to the sale of Devon’s Canadian business in 2019 discussed in Note 19, Devon’s oil and gas exploration and production activities are solely focused in the U.S. For financial reporting purposes, Devon aggregates its U.S. operating segments into one reporting segment due to the similar nature of these operations.

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the following:

•

proved reserves and related present value of future net revenues;

•

evaluation of suspended well costs;

•

the carrying and fair values of oil and gas properties, other property and equipment and product and equipment inventories;

•

derivative financial instruments;

•

the fair value of reporting units and related assessment of goodwill for impairment;

•

income taxes;

•

asset retirement obligations;

•

obligations related to employee pension and postretirement benefits;

•

purchase accounting estimates used for assets acquired and liabilities assumed;

•

legal and environmental risks and exposures; and

•

general credit risk associated with receivables and other assets.

Revenue Recognition

Upstream Revenues

Upstream revenues include the sale of oil, gas and NGL production. Oil, gas and NGL sales are recognized when production is sold to a purchaser at a fixed or determinable price, delivery has occurred, control has transferred and collectability of the revenue is probable. Devon’s performance obligations are satisfied at a point in time. This occurs when control is transferred to the purchaser upon delivery of contract specified production volumes at a specified point. The transaction price used to recognize revenue is a function of the contract billing terms. Revenue is invoiced, if required, by calendar month based on volumes at contractually based rates with payment typically received within 30 days of the end of the production month. Taxes assessed by governmental authorities on oil, gas and NGL sales are presented separately from such revenues in the accompanying consolidated statements of comprehensive earnings.

Devon acts as a principal in sales transactions when control of the product is retained prior to delivery to the ultimate third-party customer or acts as an agent when services are rendered on behalf of the principal in the transactions. A control-based assessment is performed to identify whether Devon is a principal or an agent in the transaction, which determines whether revenue and the related expenses are presented on a gross or net basis, respectively.

Oil sales

Devon’s oil sales contracts are generally structured in one of two ways. First, production is sold at the wellhead at an agreed-upon index price, net of pricing differentials. In this scenario, revenue is recognized when control transfers to the purchaser at the wellhead at the net price received. Alternatively, production is delivered to

the purchaser at a contractually agreed-upon delivery point where the purchaser takes custody, title and risk of loss of the product. Under this arrangement, a third party is paid to transport the product and Devon receives a specified index price from the purchaser with no transportation deduction. In this scenario, revenue is recognized when control transfers to the purchaser at the delivery point based on the price received from the purchaser. The third-party costs are recorded as gathering, processing and transportation expense as a component of production expenses in the consolidated statements of comprehensive earnings.

Natural gas and NGL sales

Under Devon’s natural gas processing contracts, natural gas is delivered to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity gathers and processes the natural gas and remits proceeds for the resulting sales of NGLs and residue gas. In these scenarios, Devon evaluates whether it is the principal or the agent in the transaction. Devon has concluded it is the principal under these contracts and the ultimate third-party is the customer. Revenue is recognized on a gross basis, with gathering, processing and transportation fees presented as a component of production expenses in the consolidated statements of comprehensive earnings.

In certain natural gas processing agreements, Devon may elect to take residue gas and/or NGLs in-kind at the tailgate of the midstream entity’s processing plant and subsequently market the product. Through the marketing process, the product is delivered to the ultimate third-party purchaser at a contractually agreed-upon delivery point, and Devon receives a specified index price from the purchaser. In this scenario, revenue is recognized when control transfers to the purchaser at the delivery point based on the index price received from the purchaser. The gathering, processing and compression fees attributable to the gas processing contract, as well as any transportation fees incurred to deliver the product to the purchaser, are presented as gathering, processing and transportation expense as a component of production expenses in the consolidated statements of comprehensive earnings.

Marketing Revenues

Marketing revenues are generated primarily as a result of Devon selling commodities purchased from third parties. Marketing revenues are recognized when performance obligations are satisfied. This occurs at the time contract-specified products are sold to third parties at a contractually fixed or determinable price, delivery occurs at a specified point or performance has occurred, control has transferred and collectability of the revenue is probable. The transaction price used to recognize revenue and invoice customers is based on a contractually stated fee or on a third party published index price plus or minus a known differential. Devon typically receives payment for invoiced amounts within 30 days. Marketing revenues and expenses attributable to oil, gas and NGL purchases are reported on a gross basis when Devon takes control of the products and has risks and rewards of ownership.

Midstream Revenues

Devon’s reported midstream activity primarily relates to its interest in CDM. CDM provides gathering, compression and dehydration services to Devon and other producers’ natural gas production. An evaluation is performed to determine whether CDM is a principal or agent in these transactions. Under the terms of these gathering, compression and dehydration contracts, CDM has concluded it is the agent as title to the gas production remains with the CDM affiliate producer or a third-party producer. Revenue is recognized on a net basis since CDM is strictly providing a service. Costs to maintain CDM’s assets are presented as marketing and midstream expenses in the consolidated statements of comprehensive earnings. Revenue is recognized for sales at the time the gathering, compression and dehydration service has been rendered or performed.

Satisfaction of Performance Obligations and Revenue Recognition

Because Devon has a right to consideration from its customers in amounts that correspond directly to the value that the customer receives from the performance completed on each contract, Devon recognizes revenue for sales at the time the crude oil, natural gas or NGLs are delivered at a fixed or determinable price.

Transaction Price Allocated to Remaining Performance Obligations

Most of Devon’s contracts are short-term in nature with a contract term of one year or less. Devon applies the practical expedient exempting the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For contracts with terms greater than one year, Devon applies the practical expedient exempting the disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under Devon’s contracts, each unit of product typically represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.

Contract Balances

Cash received relating to future performance obligations is deferred and recognized when all revenue recognition criteria are met. Contract liabilities generated from such deferred revenue are not considered material as of December 31, 2021. Devon’s product sales and marketing contracts do not give rise to contract assets.

Disaggregation of Revenue

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

	Year Ended December 31,
	2021		2020		2019
Oil	$	6,996	$	2,034	$	2,988
Gas		1,104		326		391
NGL		1,431		335		430
Oil, gas and NGL sales		9,531		2,695		3,809

Oil		2,451		936		1,534
Gas		718		488		645
NGL		1,050		554		686
Marketing and midstream revenues		4,219		1,978		2,865
Total revenues from contracts with customers	$	13,750	$	4,673	$	6,674

Customers

In both years ended December 31, 2021 and 2020, Devon had two customers that each amounted to 10% or more of our revenues for the respective year. Sales to those two customers accounted for approximately 19% and 12%, respectively, of Devon’s sales revenue in 2021, and approximately 13% and 10%, respectively of Devon’s sales revenue in 2020. During 2019, no purchaser accounted for more than 10% of Devon’s revenue.

If any one of Devon’s major customers were to stop purchasing our production, the Company believes there are a number of other purchasers to whom the company could sell Devon’s production. If multiple significant customers were to discontinue purchasing Devon’s production abruptly, the Company believes it would have the

resources needed to access alternative customers or markets and avoid or materially mitigate associated sales disruptions.

Derivative Financial Instruments

Devon is exposed to certain risks relating to its ongoing business operations, including risks related to commodity prices and interest rates. As discussed more fully below, Devon uses derivative instruments primarily to manage commodity price risk. Devon does not intend to issue or hold derivative financial instruments for speculative trading purposes.

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 instruments are used to manage the inherent uncertainty of future revenues resulting from commodity price volatility. Devon’s derivative financial instruments typically include financial price swaps, basis swaps and costless price collars. Under the terms of the price swaps, Devon receives a fixed price for its production and pays a variable market price to the contract counterparty. For the basis swaps, Devon receives a fixed differential between two regional index prices and pays a variable differential on the same two index prices to the contract counterparty. For price collars, Devon utilizes two-way price collars. The two-way price collars set a floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, Devon will cash-settle the difference with the counterparty.

Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility. As of December 31, 2021, Devon did not have any open interest rate swap contracts.

All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the balance sheet. 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 balance sheet. Changes in the fair value of these derivative financial instruments are recorded in earnings unless specific hedge accounting criteria are met. For derivative financial instruments held during the three-year period ended December 31, 2021, Devon chose not to meet the necessary criteria to qualify its derivative financial instruments for hedge accounting treatment. Cash settlements with counterparties on Devon’s derivative financial instruments are also recorded in earnings.

By using derivative financial instruments to hedge exposures to changes in commodity prices and interest rates, 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 require cash collateral to be posted if either its or the counterparty’s credit rating falls below certain credit rating levels. As of December 31, 2021, Devon held no cash collateral of its counterparties nor posted collateral to its counterparties.

General and Administrative Expenses

G&A is reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Devon.

Share-Based Compensation

Devon grants share-based awards to members of its Board of Directors, management and employees. All such awards are measured at fair value on the date of grant and are generally recognized as a component of G&A in the accompanying consolidated statements of comprehensive earnings over the applicable requisite service periods. As a result of Devon’s restructuring activity discussed in Note 6, certain share-based awards were accelerated and recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

Generally, Devon uses new shares from approved incentive programs to grant share-based awards and to issue shares upon stock option exercises. Shares repurchased under approved programs are generally available to be issued as part of Devon’s share-based awards. However, Devon has historically canceled these shares upon repurchase.

Income Taxes

Devon is subject to current income taxes assessed by the federal and various state jurisdictions in the U.S. and by other foreign jurisdictions. In addition, Devon accounts for deferred income taxes related to these jurisdictions using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred tax assets are also recognized for the future tax benefits attributable to the expected utilization of existing tax net operating loss carryforwards and other types of carryforwards. If the future utilization of some portion of the deferred tax assets is determined to be unlikely, a valuation allowance is provided to reduce the recorded tax benefits from such assets. Devon periodically weighs the positive and negative evidence to determine if it is more likely than not that some or all of the deferred tax assets will be realized. Forming a conclusion that a valuation allowance is not required is difficult when there is significant negative evidence, such as cumulative losses in recent years. See Note 8 for further discussion.

Devon recognizes the financial statement effects of tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with a taxing authority. Liabilities for unrecognized tax benefits related to such tax positions are included in other long-term liabilities unless the tax position is expected to be settled within the upcoming year, in which case the liabilities are included in other current liabilities. Interest and penalties related to unrecognized tax benefits are included in current income tax expense.

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

Net Earnings (Loss) Per Share Attributable to Devon

Devon’s basic earnings per share amounts have been computed based on the average number of shares of common stock outstanding for the period. Basic earnings per share includes the effect of participating securities, which primarily consist of Devon’s outstanding restricted stock awards, as well as performance-based restricted stock awards that have met the requisite performance targets. Diluted earnings per share is calculated using the

treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities. Such securities primarily consist of unvested performance share units.

Cash, Cash Equivalents and Restricted Cash

Devon considers all highly liquid investments with original contractual maturities of three months or less to be cash equivalents. Subsequent to the sale of its Canadian operations in 2019 and the sale of its Barnett Shale assets in 2020, management presented approximately $160 million and $190 million of Devon’s cash balance as of December 31, 2021 and 2020, respectively, as restricted to fund retained long-term obligations related to the disposed assets. These obligations primarily relate to abandoned Canadian firm transportation and office lease agreements. This cash is not legally restricted and can be used by Devon for other general corporate purposes.

Accounts Receivable

Devon’s accounts receivable balance primarily consists of oil and gas sales receivables, marketing and midstream revenue receivables and joint interest receivables for which Devon does not require collateral security.

Devon records an allowance for credit losses based on a forward-looking “expected loss” model. Credit risk is assessed by class of account type, which includes cash equivalents and oil and gas, marketing and midstream, joint interest and other accounts receivable. These classes are further evaluated using a probability-weighted scenario assessment based on historical losses and a probability of future default. This evaluation is supported by an assessment of risk factors such as the age of the receivable, current macro-economic conditions, credit rating of the counterparty and our historical loss rate.

Property and Equipment

Oil and Gas Property and Equipment

Devon follows the successful efforts method of accounting for its oil and gas properties. Exploration costs, such as exploratory geological and geophysical costs, and costs associated with nonproductive exploratory wells, delay rentals and exploration overhead are charged against earnings as incurred. Costs of drilling successful exploratory wells along with acquisition costs and the costs of drilling development wells, including those that are unsuccessful, are capitalized. Devon groups its oil and gas properties with a common geological structure or stratigraphic condition (“common operating field”) for purposes of computing DD&A, assessing proved property impairments and accounting for asset dispositions.

Exploratory drilling costs and exploratory-type stratigraphic test wells are initially capitalized, or suspended, pending the determination of proved reserves. If proved reserves are found, drilling costs remain capitalized as proved properties. Costs of unsuccessful wells are charged to exploration expense. For exploratory wells that find reserves that cannot be classified as proved when drilling is completed, costs continue to be capitalized as suspended exploratory well costs if there have been sufficient reserves found to justify completion as a producing well and sufficient progress is being made in assessing the reserves and the economic and operating viability of the project. If management determines that future appraisal drilling or development activities are unlikely to occur, associated suspended exploratory well costs are expensed. In some instances, this determination may take longer than one year. Devon reviews the status of all suspended exploratory drilling costs quarterly.

Capitalized costs of proved oil and gas properties are depleted by an equivalent unit-of-production method, converting gas to oil at the ratio of six Mcf of gas to one Bbl of oil. Proved leasehold acquisition costs, less accumulated amortization, are depleted over total proved reserves, which includes proved undeveloped reserves.

Capitalized costs of wells and related equipment and facilities, including estimated asset retirement costs, net of estimated salvage values and less accumulated amortization are depreciated over proved developed reserves associated with those capitalized costs. Depletion is calculated by applying the DD&A rate (amortizable base divided by beginning of period proved reserves) to current period production.

Costs associated with unproved properties are excluded from the depletion calculation until it is determined whether or not proved reserves can be assigned to such properties. Devon assesses its unproved properties for impairment annually, or more frequently if events or changes in circumstances dictate that the carrying value of those assets may not be recoverable. Significant unproved properties are assessed individually.

Proved properties are assessed for impairment when events or changes in circumstances dictate that the carrying value of those assets may not be recoverable. Individual assets are grouped for impairment purposes based on a common operating field. If there is an indication the carrying amount of an asset may not be recovered, the asset is assessed for potential impairment by management through an established process. If, upon review, the sum of the undiscounted pre-tax reserve cash flows is less than the carrying value of the asset, the carrying value is written down to estimated fair value. Because there is usually a lack of quoted market prices for long-lived assets, the fair value of impaired assets is typically determined based on the present values of expected future cash flows using discount rates believed to be consistent with those used by principal market participants or by comparable transactions. The expected future cash flows used for impairment reviews and related fair value calculations are typically based on judgmental assessments of future production volumes, commodity prices, operating costs, and capital investment plans, considering all available information at the date of review.

Gains or losses are recorded for sales or dispositions of oil and gas properties which constitute an entire common operating field or which result in a significant alteration of the common operating field’s DD&A rate. These gains and losses are classified as asset dispositions in the accompanying statements of comprehensive earnings. Partial common operating field sales or dispositions deemed not to significantly alter the DD&A rates are generally accounted for as adjustments to capitalized costs with no gain or loss recognized.

Devon capitalizes interest costs incurred that are attributable to material unproved oil and gas properties and major development projects of oil and gas properties.

Other Property and Equipment

Costs for midstream assets that are in use are depreciated over the assets’ estimated useful lives, using the straight-line method. Depreciation and amortization of other property and equipment, including corporate and leasehold improvements, are provided using the straight-line method based on estimated useful lives ranging from three to 60 years. Interest costs incurred and attributable to major corporate construction projects are also capitalized.

Asset Retirement Obligations

Devon recognizes liabilities for retirement obligations associated with tangible long-lived assets, such as producing well sites when there is a legal obligation associated with the retirement of such assets and the amount can be reasonably estimated. The initial measurement of an asset retirement obligation is recorded as a liability at its fair value, with an offsetting asset retirement cost recorded as an increase to the associated property and equipment on the consolidated balance sheet. When the assumptions used to estimate a recorded asset retirement obligation change, a revision is recorded to both the asset retirement obligation and the asset retirement cost. Devon’s asset retirement obligations also include estimated environmental remediation costs which arise from normal operations and are associated with the retirement of such long-lived assets. The asset retirement cost is depreciated using a systematic and rational method similar to that used for the associated property and equipment.

Leases

Devon establishes right-of-use assets and lease liabilities on the balance sheet for all leases with a term longer than 12 months. 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. Certain of Devon’s lease agreements include variable payments based on usage or rental payments adjusted periodically for inflation. Devon’s lease agreements do not contain any material residual value guarantees or restrictive covenants.

Goodwill

Goodwill represents the excess of the purchase price of business combinations over the fair value of the net assets acquired and is tested for impairment annually, or more frequently if events or changes in circumstances dictate that the carrying value of goodwill may not be recoverable. Such test includes a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill, then a quantitative goodwill impairment test is performed. The quantitative goodwill impairment test requires the fair value of the reporting unit be compared to the carrying value of the reporting unit. If the fair value of the reporting unit is less than the carrying value, an impairment charge will be recognized for the amount by which the carrying amount exceeds the fair value. The fair value of the reporting unit is estimated based upon market capitalization, comparable transactions of similar companies and premiums paid.

Devon performed impairment tests of goodwill in the fourth quarters of 2021, 2020 and 2019. No impairment was required as a result of the annual tests in these time periods. Additionally, because the trading price of Devon’s common stock decreased 73% during the first quarter of 2020 in response to the COVID-19 pandemic, Devon performed a goodwill impairment test as of March 31, 2020. Devon concluded an impairment was not required as of March 31, 2020.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. Liabilities for environmental remediation or restoration claims resulting from allegations of improper operation of assets are recorded when it is probable that obligations have been incurred and the amounts can be reasonably estimated. Expenditures related to such environmental matters are expensed or capitalized in accordance with Devon’s accounting policy for property and equipment.

Fair Value Measurements

Certain of Devon’s assets and liabilities are measured at fair value at each reporting date. Fair value represents the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants. This price is commonly referred to as the “exit price.” Fair value measurements are classified according to a hierarchy that prioritizes the inputs underlying the valuation techniques. This hierarchy consists of three broad levels:

•

Level 1 – Inputs consist of unadjusted quoted prices in active markets for identical assets and liabilities and have the highest priority. When available, Devon measures fair value using Level 1 inputs because they generally provide the most reliable evidence of fair value.

•

Level 2 – Inputs consist of quoted prices that are generally observable for the asset or liability. Common examples of Level 2 inputs include quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets and liabilities in markets not considered to be active.

•

Level 3 – Inputs are not observable from objective sources and have the lowest priority. The most common Level 3 fair value measurement is an internally developed cash flow model.

Foreign Currency Translation Adjustments

The U.S. dollar is the functional currency for Devon’s consolidated operations. Devon’s divested Canadian operations used the Canadian dollar as the functional currency. Prior to completing the divestiture in 2019, assets and liabilities of the Canadian operations were translated to U.S. dollars using the applicable exchange rate as of the end of a reporting period. Revenues, expenses and cash flow were translated using an average exchange rate during the reporting period.

The disposition of substantially all of Devon’s Canadian oil and gas assets and operations in 2019 resulted in Devon releasing its historical cumulative foreign currency translation adjustment of $1.2 billion from accumulated other comprehensive earnings to be included within the gain computation.

Noncontrolling Interests

Noncontrolling interests represent third-party ownership in the net assets of Devon’s consolidated subsidiaries and are presented as a component of equity. Changes in Devon’s ownership interests in subsidiaries that do not result in deconsolidation are recognized in equity.

Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2021

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 U.S. federal income tax purposes.

Purchase Price Allocation

The transaction was accounted for using the acquisition method of accounting, with Devon being treated as the accounting acquirer. Under the acquisition method of accounting, the assets and liabilities of WPX and its subsidiaries were recorded at their respective fair values as of the date of completion of the Merger and added to Devon’s. Determining the fair value of the assets and liabilities of WPX requires judgment and certain assumptions to be made, the most significant of these being related to the valuation of WPX’s oil and gas properties. Significant judgments and assumptions include, among other things, estimates of reserve quantities, estimates of future commodity prices, expected development costs, lease operating costs, reserve risk adjustment factors and an estimate of an applicable market participant discount rate that reflects the risk of the underlying cash flow estimates. The inputs and assumptions related to the oil and gas properties were categorized as level 3 in the fair value hierarchy.

The following table represents the final allocation of the total purchase price of WPX to the identifiable assets acquired and the liabilities assumed based on the fair values as of the acquisition date.

	Final Purchase
	Price Allocation
Consideration:
WPX Common Stock outstanding		561.2
Exchange Ratio		0.5165
Devon common stock issued		289.9
Devon closing price on January 7, 2021	$	18.57
Total common equity consideration		5,383
Share-based replacement awards		49
Total consideration	$	5,432
Assets acquired:
Cash, cash equivalents and restricted cash	$	344
Accounts receivable		425
Other current assets		49
Right-of-use assets		38
Proved oil and gas property and equipment		7,017
Unproved and properties under development		2,362
Other property and equipment		485
Investments		400
Other long-term assets		43
Total assets acquired	$	11,163
Liabilities assumed:
Accounts payable	$	346
Revenue and royalties payable		223
Other current liabilities		454
Debt		3,562
Lease liabilities		38
Asset retirement obligations		94
Deferred income taxes		249
Other long-term liabilities		765
Total liabilities assumed		5,731
Net assets acquired	$	5,432

WPX Revenues and Earnings

The following table represents WPX’s revenues and earnings included in Devon’s consolidated statements of comprehensive earnings subsequent to the closing date of the Merger.

	Year Ended December 31,
	2021
Total revenues	$	5,734
Net earnings	$	1,382

Pro Forma Financial Information

Due to the Merger closing on January 7, 2021, all activity in 2021 except for the first six days of January is included in Devon’s consolidated statements of comprehensive earnings for the year ended December 31, 2021. The following unaudited pro forma financial information for the year ended December 31, 2020 is based on our historical consolidated financial statements adjusted to reflect as if the Merger had occurred on January 1, 2020. The information below reflects pro forma adjustments to conform WPX’s historical financial information to Devon’s financial statement presentation. The unaudited pro forma financial information is not necessarily indicative of what would have occurred if the Merger had been completed as of the beginning of the periods presented, nor is it indicative of future results.

	Year Ended December 31,
Continuing operations:	2020
Total revenues	$	7,261
Net loss	$	(3,438	)
Basic net loss per share	$	(5.16	)

Divestitures – Continuing Operations

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. As of December 31, 2020, the associated assets and liabilities were classified as assets held for sale and included in other current assets and other current liabilities, respectively.

In 2019, Devon received proceeds of approximately $390 million and recognized a $48 million net gain on asset dispositions, primarily from sales of non-core assets in the Permian Basin. In aggregate, the total estimated proved reserves associated with these divested assets were approximately 54 MMBoe.

Divestitures – Discontinued Operations

In the fourth quarter of 2020, Devon completed the sale of its Barnett Shale assets to BKV for proceeds, net of purchase price adjustments, of $490 million. The agreement with BKV provides for contingent earnout payments to Devon 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 December 31, 2021 consolidated balance sheet was $65 million and $111 million, respectively. During 2021, Devon recorded a $110 million increase to the fair value within asset dispositions on the consolidated statements of comprehensive earnings related to these payments. These values were derived utilizing a Monte Carlo valuation model and qualify as a level 3 fair value measurement. Additional information can be found in Note 19.

In the second quarter of 2019, Devon completed the sale of substantially all of its oil and gas assets and operations in Canada to Canadian Natural Resources Limited for proceeds, net of purchase price adjustments, of $2.6 billion ($3.4 billion Canadian dollars), and recognized a pre-tax gain of $223 million ($425 million, net of tax, primarily due to a significant deferred tax benefit) in 2019. Additional information can be found in Note 19.

Derivative Financial Instruments

12 Months Ended

Dec. 31, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

3.	Derivative Financial Instruments

Commodity Derivatives

As of December 31, 2021, 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 Swaptions				Price Collars
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q1-Q4 2022		26,112	$	43.75		10,000	$	46.67		28,160	$	51.44	$	61.78
Q1-Q4 2023		—	$	—		—	$	—		1,110	$	60.58	$	70.58

	Oil Basis Swaps
Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q1-Q4 2022	BRENT		1,000	$	(7.75	)
Q1-Q4 2022	NYMEX Roll		29,000	$	0.45

As of December 31, 2021, 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)
Q1-Q4 2022		110,986	$	2.77		164,342	$	2.78	$	3.55
Q1-Q4 2023		4,959	$	3.65		23,000	$	3.32	$	4.63

(1)

Related to the 2022 open positions, 10,986 MMBtu/d settle against the Inside FERC first of month Henry Hub index at an average price of $3.40 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.

	Natural Gas Basis Swaps
Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q1-Q4 2022	WAHA		70,000	$	(0.57	)
Q1-Q4 2023	WAHA		70,000	$	(0.51	)
Q1-Q4 2024	WAHA		40,000	$	(0.51	)

As of December 31, 2021, Devon did not have any open NGL derivative 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 table below presents a summary of these positions as of December 31, 2021 and 2020.

	December 31, 2021									December 31, 2020
	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	$	6		$	(4	)	$	2		$	23		$	(18	)	$	5		Other current assets
Long-term derivative asset		6			—			6			1			—			1		Other long-term assets
Short-term derivative liability		(579	)		4			(575	)		(161	)		18			(143	)	Other current liabilities
Long-term derivative liability		(2	)		—			(2	)		(5	)		—			(5	)	Other long-term liabilities
Total derivative liability	$	(569	)	$	—		$	(569	)	$	(142	)	$	—		$	(142	)

Share-Based Compensation

12 Months Ended

Dec. 31, 2021

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Compensation

4.	Share-Based Compensation

In 2017, Devon’s stockholders approved the 2017 Plan. Subject to the terms of the 2017 Plan, awards may be made for a total of 33.5 million shares of Devon common stock, plus the number of shares available for issuance under the 2015 Plan (including shares subject to outstanding awards that were transferred to the 2017 Plan in accordance with its terms). The 2017 Plan authorizes the Compensation Committee, which consists of independent, non-management members of Devon’s Board of Directors, to grant nonqualified and incentive stock options, restricted stock awards or units, performance units and stock appreciation rights to eligible employees. The 2017 Plan also authorizes the grant of nonqualified stock options, restricted stock awards or units and stock appreciation rights to non-employee directors. To calculate the number of shares that may be granted in awards under the 2017 Plan, options and stock appreciation rights represent one share and other awards represent 2.3 shares.

The vesting for certain share-based awards was accelerated in 2021, 2020 and 2019 in conjunction with the reduction of workforce activities described in Note 6 and is included in restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

The table below presents the share-based compensation expense included in Devon’s accompanying consolidated statements of comprehensive earnings.

	Year Ended December 31,
	2021		2020		2019
G&A	$	77	$	76	$	83
Exploration expenses		1		1		1
Restructuring and transaction costs		21		11		31
Total	$	99	$	88	$	115
Related income tax benefit	$	13	$	—	$	13

The following table presents a summary of Devon’s unvested restricted stock awards and units, performance-based restricted stock awards and performance share units granted under the plans.

								Performance-Based					Performance
	Restricted Stock Awards & Units							Restricted Stock Awards					Share Units
	Awards/Units					Weighted Average Grant-Date Fair Value		Awards			Weighted Average Grant-Date Fair Value		Units					Weighted Average Grant-Date Fair Value
	(Thousands, except fair value data)
Unvested at 12/31/20		5,316				$	25.82		44		$	44.70		1,994				$	31.89
Granted		7,727		⁽¹	⁾	$	19.74		—		$	—		861				$	18.08
Vested		(5,188	)			$	22.29		(44	)	$	44.70		(754	)			$	37.40
Forfeited		(199	)			$	22.70		—		$	—		(25	)			$	36.04
Unvested at 12/31/21		7,656				$	22.15		—		$	—		2,076		⁽²	⁾	$	24.12

(1)	Due to the closing 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. As a result, approximately 4.9 million awards related to the conversion of WPX equity awards to Devon equity awards.

(2)	A maximum of 4.2 million common shares could be awarded based upon Devon’s final TSR ranking.

The following table presents the aggregate fair value of awards and units that vested during the indicated period.

	2021		2020		2019
Restricted Stock Awards and Units	$	115	$	44	$	127
Performance-Based Restricted Stock Awards	$	1	$	2	$	4
Performance Share Units	$	15	$	10	$	4

The following table presents the unrecognized compensation cost and the related weighted average recognition period associated with unvested awards and units as of December 31, 2021.


	Restricted Stock		Performance
	Awards/Units		Share Units
Unrecognized compensation cost	$	82	$	13
Weighted average period for recognition (years)		2.4		1.7

Restricted Stock Awards and Units

Restricted stock awards and units are subject to the terms, conditions, restrictions and limitations, if any, that the Compensation Committee deems appropriate, including restrictions on continued employment. Generally, the service requirement for vesting ranges from one to four years. Dividends declared during the vesting period with respect to restricted stock awards and units will not be paid until the underlying award vests. Devon estimates the fair values of restricted stock awards and units as the closing price of Devon’s common stock on the grant date of the award, which is expensed over the applicable vesting period.

Performance Share Units

Performance share units are granted to certain members of Devon’s management and employees. Each unit that vests entitles the recipient to one share of Devon common stock. The vesting of these units is based on comparing Devon’s TSR to the TSR of a predetermined group of peer companies over the specified three-year performance period. Subject to certain limits, the vesting of units may be between zero and 200% of the units granted depending on Devon’s TSR as compared to the peer group on the vesting date.

At the end of the vesting period, recipients receive dividend equivalents with respect to the number of units vested. The fair value of each performance share unit is estimated as of the date of grant using a Monte Carlo simulation with the following assumptions used for all grants made under the plan: (i) a risk-free interest rate based on U.S. Treasury rates as of the grant date; (ii) a volatility assumption based on the historical realized price volatility of Devon and the designated peer group; and (iii) an estimated ranking of Devon among the designated peer group. The fair value of the unit on the date of grant is expensed over the applicable vesting period. The following table presents the assumptions related to performance share units granted.

	2021		2020		2019
Grant-date fair value	$	18.08	$	27.89	$28.43 - $29.53
Risk-free interest rate	0.18%		1.36%		2.48%
Volatility factor	67.8%		38.4%		39.1%
Contractual term (years)	2.89		2.89		2.89

Asset Impairments

12 Months Ended

Dec. 31, 2021

Asset Impairment Charges [Abstract]

Asset Impairments

5.	Asset Impairments

The following table presents a summary of Devon’s asset impairments. Unproved impairments shown below are included in exploration expenses in the consolidated statements of comprehensive earnings.

	Year Ended December 31,
	2021		2020		2019
Proved oil and gas assets	$	—	$	2,664	$	—
Other assets		—		29		—
Total asset impairments	$	—	$	2,693	$	—

Unproved impairments	$	4	$	152	$	18

Proved Oil and Gas and Other Asset Impairments

Reduced demand from the COVID-19 pandemic caused an unprecedented downturn in the price of oil. As a result, Devon reduced 2020 planned capital spend by 45% in March 2020. With materially lower commodity prices and reduced near-term investment, Devon assessed all of its oil and gas common operating fields for impairment as of March 31, 2020. For impairment determination, Devon historically utilized NYMEX forward strip prices for the first five years and applied internally generated price forecasts for subsequent years. In response to the COVID-19 pandemic, the NYMEX forward market became highly illiquid as evidenced by materially reduced trading volumes for periods beyond 2021. Therefore, Devon supplemented the NYMEX forward strip prices with price forecasts published by reputable investment banks and reservoir engineering firms to estimate future revenues as of March 31, 2020. For WTI, the range of pricing utilized in the first ten years of impairment reserve cash flows was approximately $23 to $50, and the weighted average of WTI pricing was approximately $39. For Henry Hub pricing utilized in the first ten years of impairment reserve cash flows, the range was approximately $1.29 - $2.63, with a weighted average Henry Hub price of approximately $1.85. To measure the indicated impairment in the first quarter of 2020, Devon used a market-based weighted-average cost of capital of 9% to discount the future net cash flows. These inputs are categorized as level 3 in the fair value hierarchy.

Devon recognized approximately $2.7 billion of proved asset impairments during the first quarter of 2020. These impairments related to the Anadarko Basin and Rockies fields in which the cost basis included acquisitions completed in 2016 and 2015, respectively, when commodity prices were much higher. During 2020, Devon recognized approximately $29 million of non-oil and gas asset impairments.

Unproved Impairments

Due to the downturn in the commodity price environment and reduced near-term investment as discussed above, Devon recognized $152 million of unproved impairments in 2020, primarily in the Rockies field. In 2021 and 2019, Devon allowed certain non-core acreage to expire without plans for development resulting in unproved impairments.

Restructuring and Transaction Costs

12 Months Ended

Dec. 31, 2021

Restructuring And Related Activities [Abstract]

Restructuring and Transaction Costs

6.	Restructuring and Transaction Costs

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

	Year Ended December 31,
	2021		2020		2019
Restructuring costs	$	210	$	41	$	84
Transaction costs		48		8		—
Total costs	$	258	$	49	$	84

2021 Merger Integration

In conjunction with the Merger closing, Devon recognized $210 million of restructuring expense in 2021 related to employee severance and termination benefits, settlements and curtailments from defined retirement benefits and contract terminations. Of these expenses, $66 million related to non-cash charges which primarily consisted of settlements and curtailments of defined retirement benefits of $41 million and the accelerated vesting of share-based grants of $21 million. Additionally, in conjunction primarily with the Merger closing, Devon recognized $48 million of transaction costs primarily comprised of bank, legal and accounting fees.

Prior Years’ Restructurings

During 2020 and 2019, Devon sold assets, reduced its workforce and recognized restructuring expenses of $41 million and $84 million, respectively. Of these expenses recognized in 2020, $11 million and $9 million resulted from accelerated vesting of share-based grants and settlements and curtailments of defined retirement benefits, respectively. Of these expenses recognized in 2019, $31 million and $7 million resulted from accelerated vesting of share-based grants and settlements of defined retirement benefits, respectively.

The following table summarizes Devon’s restructuring liabilities.

	Other			Other
	Current			Long-term
	Liabilities			Liabilities			Total
Balance as of December 31, 2019	$	20		$	1		$	21
Changes related to prior years' restructurings		15			136			151
Balance as of December 31, 2020	$	35		$	137		$	172
Changes related to 2021 merger integration		11			—			11
Changes related to prior years' restructurings		(8	)		(26	)		(34	)
Balance as of December 31, 2021	$	38		$	111		$	149

Other, Net

12 Months Ended

Dec. 31, 2021

Other Expenses [Abstract]

Other, Net

7. Other, Net

The following table summarizes Devon’s other expenses presented in the accompanying consolidated comprehensive statement of earnings.

	Year Ended December 31,
	2021			2020			2019
Asset retirement obligation accretion	$	28		$	20		$	21
Severance and other non-income tax refunds		(39	)		(40	)		—
Other		(32	)		(14	)		(17	)
Total	$	(43	)	$	(34	)	$	4

During 2021 and 2020, Devon received severance and other non-income tax refunds of $39 million and $40 million, respectively, both of which related to prior periods.

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

8.	Income Taxes

Income Tax Expense (Benefit)

The following table presents Devon’s income tax components.

	Year Ended December 31,
	2021			2020			2019
Current income tax expense (benefit):
U.S. federal	$	10		$	(219	)	$	(3	)
Various states		9			—			(2	)
Canada		(3	)		—			—
Total current income tax expense (benefit)		16			(219	)		(5	)
Deferred income tax expense (benefit):
U.S. federal		18			(304	)		8
Various states		22			(24	)		(33	)
Canada		9			—			—
Total deferred income tax expense (benefit)		49			(328	)		(25	)
Total income tax expense (benefit)	$	65		$	(547	)	$	(30	)

Total income tax expense differed from the amounts computed by applying the U.S. federal income tax rate to earnings (loss) from continuing operations before income taxes as a result of the following:

	Year Ended December 31,
	2021			2020			2019
Earnings (loss) from continuing operations before income taxes	$	2,898		$	(3,090	)	$	(109	)

U.S. statutory income tax rate		21	%		21	%		21	%
Change in tax legislation		0	%		4	%		0	%
State income taxes		1	%		1	%		24	%
Change in unrecognized tax benefits		0	%		0	%		(13	%)
Audit settlements		0	%		0	%		15	%
Other		2	%		(1	%)		(19	%)
Deferred tax asset valuation allowance		(22	%)		(7	%)		0	%
Effective income tax rate		2	%		18	%		28	%

Devon and its subsidiaries are subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions. Devon’s tax reserves are related to tax years that may be subject to examinations by the relevant taxing authority. Devon is under audit in the U.S. and various foreign jurisdictions as part of its normal course of business.

Devon assesses the realizability of its deferred tax assets. If Devon concludes that it is more likely than not that some portion or all of the deferred tax assets will not be realized, the asset is reduced by a valuation allowance. Numerous judgments and assumptions are inherent in the determination of future taxable income, including factors such as future operating conditions (particularly as related to prevailing oil and gas prices) and changing tax laws.

2021

Prior to 2021, Devon maintained a valuation allowance against all U.S. federal deferred tax assets. Devon recognized $249 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.

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. As such, Devon removed its remaining $84 million U.S. federal valuation allowance.

2020

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) became law on March 27, 2020. The CARES Act allows net operating losses generated in taxable years beginning after December 31, 2017 and before January 1, 2021 to be carried back five years to offset taxable income and recoup previously paid taxes. As a result, Devon carried net operating losses generated in 2019 and 2020 back to 2014 and 2015, respectively, and recorded a $220 million current income tax benefit, partially offset by a $107 million deferred income tax expense. The net $113 million income tax benefit recorded in 2020 is the result of the higher U.S. federal income tax rate in the carry back periods.

Throughout 2019, Devon maintained a valuation allowance against certain deferred tax assets, including certain tax credits and state net operating losses. Reduced demand from the COVID-19 pandemic caused an unprecedented downturn in the commodity price environment in 2020. As a result, Devon recorded significant impairments during the first quarter of 2020. Devon reassessed its position and recorded a 100% valuation allowance against all U.S. federal and state net deferred tax assets and maintained a full valuation allowance position throughout 2020.

2019

On June 27, 2019, Devon completed the sale of substantially all of its oil and gas assets and operations in Canada. Devon’s foreign earnings have not been considered indefinitely reinvested since the announcement of the plan to separate the assets in the first quarter of 2019. As the separation took the form of an asset sale and Devon retained certain non-operating obligations to be settled over time, Devon did not record a deferred tax asset or corresponding valuation allowance related to its Canadian investment in 2019.

Devon recorded tax impacts related to the Barnett Shale and Canadian assets in discontinued operations.

During 2019, Devon recorded a tax expense of $14 million related to unrecognized tax benefits, due to a change in tax positions taken in prior periods.

In the fourth quarter of 2019, Devon entered into an audit agreement with the Canada Revenue Agency. The Canadian income tax expense resulting from this agreement is reflected in discontinued operations. However, the agreement also resulted in a $16 million tax benefit to Devon’s U.S. continuing operations.

The “other” effect is composed of permanent differences, including stock compensation, for which the dollar amounts do not increase or decrease in relation to the change in pre-tax earnings. Generally, permanent adjustments, as well as the state income tax, have an insignificant impact on Devon’s effective income tax rate. However, these items had a more noticeable impact to the rate in 2019 due to the low relative net loss in the period.

Deferred Tax Assets and Liabilities

The following table presents the tax effects of temporary differences that gave rise to Devon’s deferred tax assets and liabilities.

	December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforwards	$	1,075		$	238
Capital loss carryforwards		559			547
Accrued liabilities		262			125
Fair value of derivative financial instruments		129			33
Asset retirement obligation		109			94
Investment in subsidiary		—			441
Other, including tax credits		138			106
Total deferred tax assets before valuation allowance		2,272			1,584
Less: valuation allowance		(893	)		(1,355	)
Net deferred tax assets		1,379			229
Deferred tax liabilities:
Property and equipment		(1,630	)		(213	)
Other		(29	)		-
Total deferred tax liabilities		(1,659	)		(213	)
Net deferred tax asset (liability)	$	(280	)	$	16

At December 31, 2021, Devon has recognized $1.1 billion of deferred tax assets related to various net operating loss carryforwards available to offset future taxable income. Devon has $711 million of U.S. federal net operating loss carryforwards, of which $654 million expires between 2030 and 2037, and $57 million does not expire. Devon also has $364 million of state net operating loss carryforwards primarily expiring between 2022 and 2040, $303 million of which are covered by a valuation allowance.

Devon’s net operating losses acquired from WPX as a result of the Merger are subject to limitation pursuant to Section 382 of the Internal Revenue Code of 1986, which relates to limitations upon the 50% or greater change of ownership of an entity during any three-year period. The Company anticipates utilizing these net operating losses prior to their expiration.

Included in Devon’s capital loss carryforwards of $559 million are $552 million of Canadian capital losses fully covered by a valuation allowance. The remaining $7 million of Canadian deferred tax assets are included within other long-term assets in the December 31, 2021 consolidated balance sheet.

In the fourth quarter of 2020, Devon recorded a deferred tax asset representing the deductible outside basis difference in its investment in a consolidated subsidiary. In the second quarter of 2021, Devon realized this benefit, increasing its U.S. federal and state net operating loss deferred tax assets.

Unrecognized Tax Benefits

The following table presents changes in Devon’s unrecognized tax benefits.

	December 31,
	2021		2020
	(Millions)
Balance at beginning of year	$	23	$	65
Tax positions taken in prior periods		5		(42	)
Assumed WPX tax positions taken in prior periods		8		—
Balance at end of year	$	36	$	23

Devon recognized $1 million of net interest and no penalties in 2021 and its unrecognized tax benefit balance included $1 million interest. At December 31, 2021 and December 31, 2020, there were $36 million and $23 million, respectively, of unrecognized tax benefits that if recognized would affect the annual effective tax rate. Due to regulatory changes during 2020, $42 million of Devon’s current unrecognized tax benefits were reclassified as deferred unrecognized tax benefits. Deferred unrecognized tax benefits of $42 million and $50 million, at December 31, 2021 and December 31, 2020, respectively, are not included in the table above but are accounted for in Devon’s deferred tax disclosure above.

Pursuant to the tax sharing agreement with The Williams Companies ("Williams") assumed in the Merger, Devon remains responsible for the tax from audit adjustments related to the WPX business for periods prior to WPX’s spin-off from Williams on December 31, 2011. The 2011 consolidated tax filing by Williams is currently being audited by the Internal Revenue Service (“IRS”) and is the only pre spin-off period for which the Company continues to have exposure to audit adjustments as part of Williams. The IRS has proposed an adjustment related to the WPX business for which a payment to Williams could be required. Devon has evaluated the issue and is in the process of protesting the adjustment within the normal appeals process of the IRS. In addition, the alternative minimum tax (“AMT”) credit carryforward that was allocated to WPX by Williams at the time of the spin-off could change due to audit adjustments unrelated to company business. Any such adjustments to this allocated AMT credit carryforward will not be known until the IRS examination is completed but is not expected to result in a cash settlement with Williams. However, if the Company has to amend filed returns whereby refunds of AMT credit carryforwards have been received, the Company may have to remit cash to the IRS. Through December 31, 2021, the Company has received approximately $83 million related to these AMT credit carryforwards.

Included below is a summary of the tax years, by jurisdiction, that remain subject to examination by taxing authorities.

Jurisdiction		Tax Years Open
U.S. Federal		2015-2021
Various U.S. states		2014-2021
Canada		2006-2021

Certain statute of limitation expirations are scheduled to occur in the next twelve months. However, Devon is currently in various stages of the administrative review process for certain open tax years. In addition, Devon is currently subject to various income tax audits that have not reached the administrative review process.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Net Earnings (Loss) Per Share from Continuing Operations

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net Earnings (Loss) Per Share from Continuing Operations

9.	Net Earnings (Loss) Per Share from Continuing Operations

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

	Year Ended December 31,
	2021			2020			2019
Net earnings (loss) from continuing operations:
Net earnings (loss) from continuing operations	$	2,813		$	(2,552	)	$	(81	)
Attributable to participating securities		(30	)		(4	)		(2	)
Basic and diluted earnings (loss) from continuing operations	$	2,783		$	(2,556	)	$	(83	)
Common shares:
Common shares outstanding - total		670			383			407
Attributable to participating securities		(7	)		(6	)		(6	)
Common shares outstanding - basic		663			377			401
Dilutive effect of potential common shares issuable		2			—			—
Common shares outstanding - diluted		665			377			401
Net earnings (loss) per share from continuing operations:
Basic	$	4.20		$	(6.78	)	$	(0.21	)
Diluted	$	4.19		$	(6.78	)	$	(0.21	)

Other Comprehensive Earnings (Loss)

12 Months Ended

Dec. 31, 2021

Other Comprehensive Income Loss Net Of Tax Period Increase Decrease [Abstract]

Other Comprehensive Earnings (Loss)

10.	Other Comprehensive Earnings (Loss)

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

	Year Ended December 31,
	2021			2020			2019
Foreign currency translation:
Beginning accumulated foreign currency translation and other	$	—		$	—		$	1,159
Change in cumulative translation adjustment		—			—			78
Release of Canadian cumulative translation adjustment ⁽¹⁾		—			—			(1,237	)
Ending accumulated foreign currency translation and other		—			—			—
Pension and postretirement benefit plans:
Beginning accumulated pension and postretirement benefits		(127	)		(119	)		(132	)
Net actuarial loss and prior service cost arising in current year		(35	)		(34	)		(10	)
Recognition of net actuarial loss and prior service cost in earnings ⁽²⁾		3			7			6
Curtailment and settlement of pension benefits ⁽³⁾		19			16			21
Other ⁽⁴⁾		7			—			—
Income tax benefit (expense)		1			3			(4	)
Accumulated other comprehensive loss, net of tax	$	(132	)	$	(127	)	$	(119	)

(1)	In conjunction with the sale of substantially all of its oil and gas assets and operations in Canada, Devon released the cumulative translation adjustment as part of its gain on the disposition of its Canadian business. See Note 19 for additional details.

(2)	These accumulated other comprehensive earnings components 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. See Note 17 for additional details.

(3)	In 2021, 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.

(4)	Other includes a remeasurement of the pension obligation due to the Merger, which was partially offset by a change in mortality assumption.

Supplemental Information To Statements Of Cash Flows

12 Months Ended

Dec. 31, 2021

Supplemental Cash Flow Elements [Abstract]

Supplemental Information To Statements Of Cash Flows

11.	Supplemental Information to Statements of Cash Flows

	Year Ended December 31,
	2021			2020			2019
Changes in assets and liabilities, net:
Accounts receivable	$	(526	)	$	231		$	(3	)
Income tax receivable		91			(127	)		(22	)
Other current assets		(61	)		30			15
Other long-term assets		12			(9	)		17
Accounts payable and revenues and royalties payable		539			(109	)		(46	)
Other current liabilities		(18	)		(68	)		(66	)
Other long-term liabilities		(153	)		(43	)		23
Total	$	(116	)	$	(95	)	$	(82	)
Supplementary cash flow data - total operations:
Interest paid	$	404		$	259		$	308
Income taxes paid (refunded)	$	(116	)	$	171		$	6

As of December 31, 2021, Devon had approximately $205 million of accrued capital expenditures included in total property and equipment, net and accounts payable on the consolidated balance sheets. As of December 31, 2020 (pre-merger), Devon had approximately $100 million of accrued capital expenditures in total property and equipment, net and accounts payable on the consolidated balance sheets. As of January 7, 2021 (date of Merger closing), Devon assumed approximately $150 million of accrued capital expenditures included in accounts payable.

Income taxes received during 2021 is primarily comprised of refunds related to the CARES Act. Devon’s remaining income taxes receivable as of December 31, 2021 includes an additional $59 million related to the CARES Act which will be applied to reduce future income taxes, and $24 million unrelated to the CARES Act which was received in the first quarter of 2022.

Accounts Receivable

12 Months Ended

Dec. 31, 2021

Accounts Receivable Net [Abstract]

Accounts Receivable

12.	Accounts Receivable

Components of accounts receivable include the following:

	December 31, 2021			December 31, 2020
Oil, gas and NGL sales	$	984		$	335
Joint interest billings		158			57
Marketing and midstream revenues		370			195
Other		38			25
Gross accounts receivable		1,550			612
Allowance for doubtful accounts		(7	)		(11	)
Net accounts receivable	$	1,543		$	601

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2021

Extractive Industries [Abstract]

Property, Plant and Equipment

13.Property, Plant and Equipment

Capitalized Costs

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

	December 31, 2021			December 31, 2020
Property and equipment:
Proved	$	38,051		$	27,589
Unproved and properties under development		1,081			392
Total oil and gas		39,132			27,981
Less accumulated DD&A		(25,596	)		(23,545	)
Oil and gas property and equipment, net		13,536			4,436
Other property and equipment		2,139			1,737
Less accumulated DD&A		(667	)		(780	)
Other property and equipment, net ⁽¹⁾		1,472			957
Property and equipment, net	$	15,008		$	5,393

(1)	$111 million and $102 million related to CDM in 2021 and 2020, respectively.

Suspended Exploratory Well Costs

The following summarizes the changes in suspended exploratory well costs for the three years ended December 31, 2021.

	Year Ended December 31,
	2021			2020			2019
Beginning balance	$	18		$	82		$	98
Acquired WPX costs		34			—			—
Additions pending determination of proved reserves		206			148			278
Charges to exploration expense		(2	)		(3	)		—
Reclassifications to proved properties		(190	)		(209	)		(294	)
Ending balance	$	66		$	18		$	82

Devon had no projects with suspended exploratory well costs capitalized for a period greater than one year since the completion of drilling as of December 31, 2021, 2020 and 2019.

Debt And Related Expenses

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt and Related Expenses

14.	Debt and Related Expenses

See below for a summary of debt instruments and balances. The notes and debentures are senior, unsecured obligations of Devon unless otherwise noted in the table below.

	December 31, 2021			December 31, 2020
8.25% due August 1, 2023 ⁽¹⁾	$	242		$	—
5.25% due September 15, 2024 ⁽¹⁾		472			—
5.85% due December 15, 2025		485			485
7.50% due September 15, 2027 ⁽²⁾		73			73
5.25% due October 15, 2027 ⁽¹⁾		390			—
5.875% due June 15, 2028 ⁽¹⁾		325			—
4.50% due January 15, 2030 ⁽¹⁾		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		149			(20	)
Debt issuance costs		(30	)		(31	)
Total long-term debt	$	6,482		$	4,298

(1)

These instruments were assumed by Devon in January 2021 in conjunction with the Merger. Subsequent to debt retirements and the obligor exchange transaction completed during 2021, approximately $51 million of these instruments remain the unsecured and unsubordinated obligation of WPX, a wholly-owned subsidiary of Devon.

(2)

This instrument was assumed by Devon in April 2003 in conjunction with the merger with Ocean Energy. The fair value and effective rate of this note at the time assumed was $169 million and 6.5%, respectively. This instrument is the unsecured and unsubordinated obligation of Devon OEI Operating, L.L.C. and is guaranteed by Devon Energy Production Company, L.P. Each of these entities is a wholly-owned subsidiary of Devon.

Debt maturities as of December 31, 2021, excluding debt issuance costs, premiums and discounts, are as follows:

	Total
2022	$	—
2023		242
2024		472
2025		485
2026		—
Thereafter		5,164
Total	$	6,363

The following schedule includes the summary of the WPX debt Devon assumed upon closing of the Merger on January 7, 2021.

	Face Value		Fair Value		Optional Redemption⁽¹⁾
6.00% due January 15, 2022	$	43	$	44
8.25% due August 1, 2023		242		281	June 1, 2023
5.25% due September 15, 2024		472		530	June 15, 2024
5.75% due June 1, 2026		500		529	June 1, 2021
5.25% due October 15, 2027		600		646	October 15, 2022
5.875% due June 15, 2028		500		554	June 15, 2023
4.50% due January 15, 2030		900		978	January 15, 2025
	$	3,257	$	3,562

(1)

At any time prior to these dates, Devon has or had the option to redeem (i) some or all of the notes at a specified "make whole" premium and (ii) a portion of certain of the notes at applicable redemption prices, in each case as described in the indenture documents governing the notes to be redeemed. On or after these dates, Devon has or had the option to redeem the notes, in whole or in part, at the applicable redemption prices set forth in the indenture documents, plus accrued and unpaid interest thereon to the redemption date as more fully described in such documents.

Retirement of Senior Notes

During 2021, Devon redeemed $43 million of the 6.00% senior notes due 2022, $175 million of the 5.875% senior notes due 2028, $315 million of the 4.50% senior notes due 2030, $210 million of the 5.25% senior notes due 2027 and $500 million of the 5.75% senior notes due 2026. In 2021, Devon recognized $30 million of gains on early retirement of debt, consisting of $89 million of non-cash premium accelerations, partially offset by $59 million of cash retirement costs. The gain on early retirement is included in financing costs, net in the consolidated statements of comprehensive earnings.

Credit Lines

Devon has a $3.0 billion Senior Credit Facility. As of December 31, 2021, Devon had $2 million in outstanding letters of credit under the Senior Credit Facility. There were no borrowings under the Senior Credit Facility as of December 31, 2021.

Devon entered into an amendment and extension agreement on December 13, 2019 to, among other things, (i) effect the extension of the maturity date of the Senior Credit Facility from October 5, 2023 to October 5, 2024 with respect to the consenting lenders and (ii) modify the maximum number of maturity extension requests during the term of the Senior Credit Facility from two to three. As a result of this amendment, Devon has the option to extend the October 5, 2024 maturity date by two additional one-year periods subject to lender consent, and the maximum borrowing capacity of the Senior Credit Facility becomes $2.8 billion after October 5, 2023. Amounts borrowed under the Senior Credit Facility may, at the election of Devon, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, Devon may elect to borrow at the prime rate. The Senior Credit Facility currently provides for an annual facility fee of $6 million.

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%. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the accompanying consolidated financial statements. For example, total capitalization is

adjusted to add back certain noncash financial write-downs, such as asset impairments. As of December 31, 2021, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 25%.

Commercial Paper

Devon’s Senior Credit Facility supports its $3.0 billion of short-term credit under its commercial paper program. Commercial paper debt generally has a maturity of between 1 and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. As of December 31, 2021, Devon had no outstanding commercial paper borrowings.

Net Financing Costs

The following schedule includes the components of net financing costs.

	Year Ended December 31,
	2021			2020			2019
Interest based on debt outstanding	$	388		$	259		$	260
Gain on early retirement of debt		(30	)		—			—
Interest income		(2	)		(12	)		(33	)
Other		(27	)		23			23
Total net financing costs	$	329		$	270		$	250

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

15.

Leases

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. Certain of Devon’s lease agreements include variable payments based on usage or rental payments adjusted periodically for inflation. Devon’s lease agreements do not contain any material residual value guarantees or restrictive covenants.

The following table presents Devon’s right-of-use assets and lease liabilities.

	December 31, 2021						December 31, 2020
	Finance		Operating		Total		Finance		Operating		Total
Right-of-use assets	$	211	$	24	$	235	$	220	$	3	$	223
Lease liabilities:
Current lease liabilities ⁽¹⁾	$	8	$	18	$	26	$	8	$	1	$	9
Long-term lease liabilities		247		5		252		244		2		246
Total lease liabilities	$	255	$	23	$	278	$	252	$	3	$	255

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

The following table presents Devon’s total lease cost.

		Year Ended December 31,
		2021			2020			2019
Operating lease cost	Property and equipment; LOE; G&A	$	25		$	10		$	40
Short-term lease cost ⁽¹⁾	Property and equipment; LOE; G&A		89			45			84
Financing lease cost:
Amortization of right-of-use assets	DD&A		8			8			8
Interest on lease liabilities	Net financing costs		11			11			10
Variable lease cost	G&A		(4	)		—			2
Lease income	G&A		(8	)		(8	)		(5	)
Net lease cost		$	121		$	66		$	139

(1)	Short-term lease cost excludes leases with terms of one month or less.

The following table presents Devon’s additional lease information.

	Year Ended December 31,
	2021						2020
	Finance			Operating			Finance			Operating
Cash outflows for lease liabilities:
Operating cash flows	$	7		$	15		$	7		$	2
Investing cash flows	$	—		$	9		$	—		$	8
Right-of-use assets obtained in exchange for new lease liabilities	$	—		$	7		$	—		$	—
Weighted average remaining lease term (years)		6.0			1.5			7.0			4.1
Weighted average discount rate		4.2	%		1.3	%		4.2	%		2.9	%

The following table presents Devon’s maturity analysis as of December 31, 2021 for leases expiring in each of the next 5 years and thereafter.

	Finance			Operating		Total
2022	$	8		$	17	$	25
2023		8			4		12
2024		8			1		9
2025		8			1		9
2026		8			—		8
Thereafter		281			—		281
Total lease payments		321			23		344
Less: interest		(66	)		—		(66	)
Present value of lease liabilities	$	255		$	23	$	278

Devon rents or subleases certain real estate to third parties. The following table presents Devon’s expected lease income as of December 31, 2021 for each of the next 5 years and thereafter.

	Operating
	Lease Income
2022	$	8
2023		9
2024		10
2025		10
2026		10
Thereafter		58
Total	$	105

Asset Retirement Obligations

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligation Disclosure [Abstract]

Asset Retirement Obligations

16.	Asset Retirement Obligations

The following table presents the changes in asset retirement obligations.

	Year Ended December 31,
	2021			2020
Asset retirement obligations as of beginning of period	$	369		$	398
Assumed WPX obligations		98			—
Liabilities incurred		36			18
Liabilities settled and divested		(57	)		(29	)
Liabilities reclassified as held for sale		—			(42	)
Revision of estimated obligation		11			4
Accretion expense on discounted obligation		28			20
Asset retirement obligations as of end of period		485			369
Less current portion		17			11
Asset retirement obligations, long-term	$	468		$	358

Retirement Plans

12 Months Ended

Dec. 31, 2021

Compensation And Retirement Disclosure [Abstract]

Retirement Plans

17.	Retirement Plans

Defined Contribution Plans

Devon sponsors defined contribution plans covering its employees. Such plans include its 401(k) plan and enhanced contribution plan. Devon makes matching contributions and additional retirement contributions, with the matching contributions being primarily based upon percentages of annual compensation and years of service. In addition, each plan is subject to regulatory limitations by the U.S. government. Devon contributed $33 million, $33 million and $34 million to these plans in 2021, 2020 and 2019, respectively.

Defined Benefit Plans

Devon has various non-contributory defined benefit pension plans, including qualified plans and nonqualified plans covering eligible employees and former employees meeting certain age and service requirements. Benefits under the defined benefit plans have been closed to new employees and effective, as of December 31, 2020, Devon’s benefits committee approved a freeze of all future benefit accruals under the Plans.

Benefits are primarily funded from assets held in the plans’ trusts.

Devon’s investment objective for its plans’ assets is to achieve stability of the funded status while providing long-term growth of invested capital and income to ensure benefit payments can be funded when required. Devon has established certain investment strategies, including target allocation percentages and permitted and prohibited investments, designed to mitigate risks inherent with investing. Devon’s target allocations for its plan assets are 90% fixed income and 10% equity. See the following discussion for Devon’s pension assets by asset class.

Fixed-income – Devon’s fixed-income securities consist of U.S. Treasury obligations, bonds issued by investment-grade companies from diverse industries and asset-backed securities. These fixed-income securities are actively traded securities that can be redeemed upon demand. The fair values of these Level 1 securities are based upon quoted market prices and were $590 million and $617 million at December 31, 2021 and 2020, respectively.

Equity – Devon’s equity securities include commingled global equity funds that invest in large, mid and small capitalization stocks across the world’s developed and emerging markets and international large cap equity securities. These equity securities can be sold on demand but are not actively traded. The fair values of these securities are based upon the net asset values provided by the investment managers and were $67 million and $110 million at December 31, 2021 and 2020, respectively.

Other – Devon’s other securities include short-term investment funds that invest both long and short term using a variety of investment strategies. The fair value of these securities is based upon the net asset values provided by investment managers and were $14 million and $18 million at December 31, 2021 and 2020, respectively.

Defined Postretirement Plans

Devon also has defined benefit postretirement plans that provide benefits for substantially all qualifying retirees. Benefit obligations for such plans are estimated based on Devon’s future cost-sharing intentions. Devon’s funding policy for the plans is to fund the benefits as they become payable with available cash and cash equivalents.

Benefit Obligations and Funded Status

The following table summarizes the benefit obligations, assets, funded status and balance sheet impacts associated with Devon’s defined pension and postretirement plans. Devon’s benefit obligations and plan assets are measured each year as of December 31. The accumulated benefit obligation for pension plans approximated the projected benefit obligation at December 31, 2021 and 2020.

	Pension Benefits						Postretirement Benefits
	2021			2020			2021			2020
Change in benefit obligation:
Benefit obligation at beginning of year	$	981		$	924		$	13		$	14
Service cost		—			5			—			—
Interest cost		18			25			—			—
Actuarial loss (gain)		(18	)		116			(1	)		(1	)
Plan amendments		—			2			1			—
Plan curtailments		22			(14	)		—			1
Plan settlements		(73	)		(28	)		—			—
Participant contributions		—			—			2			2
Benefits paid		(50	)		(49	)		(3	)		(3	)
Benefit obligation at end of year		880			981			12			13
Change in plan assets:
Fair value of plan assets at beginning of year		745			694			—			—
Actual return on plan assets		(11	)		114			—			—
Employer contributions		60			14			1			1
Participant contributions		—			—			2			2
Plan settlements		(73	)		(28	)		—			—
Benefits paid		(50	)		(49	)		(3	)		(3	)
Fair value of plan assets at end of year		671			745			—			—
Funded status at end of year	$	(209	)	$	(236	)	$	(12	)	$	(13	)
Amounts recognized in balance sheet:
Other long-term assets	$	6		$	10		$	—		$	—
Other current liabilities		(14	)		(14	)		(2	)		(2	)
Other long-term liabilities		(201	)		(232	)		(9	)		(11	)
Net amount	$	(209	)	$	(236	)	$	(11	)	$	(13	)
Amounts recognized in accumulated other comprehensive earnings:
Net actuarial loss (gain)	$	206		$	201		$	(12	)	$	(12	)
Prior service cost		—			—			1			—
Total	$	206		$	201		$	(11	)	$	(12	)

During 2021, non-qualified plans experienced curtailments due to the Merger and both qualified and non-qualified plans experienced a partial plan settlement due to continued lump sum payments. During 2020, Devon’s qualified plan experienced a partial plan settlement due to ongoing lump sum payments. Devon’s qualified and non-qualified plans experienced curtailments due to plan freezes and reductions in force in 2020.

Certain of Devon’s pension plans have a combined projected benefit obligation or accumulated benefit obligation in excess of plan assets at December 31, 2021 and December 31, 2020, as presented in the table below.

	December 31,
	2021		2020
Projected benefit obligation	$	215	$	246
Accumulated benefit obligation	$	215	$	246
Fair value of plan assets	$	—	$	—

The following table presents the components of net periodic benefit cost and other comprehensive earnings.

	Pension Benefits									Postretirement Benefits
	2021			2020			2019			2021			2020			2019
Net periodic benefit cost:
Service cost	$	—		$	5		$	7		$	—		$	—		$	—
Interest cost		18			25			32			—			—			—
Expected return on plan assets		(34	)		(41	)		(38	)		—			—			—
Recognition of net actuarial loss (gain) ⁽¹⁾		4			5			7			(1	)		—			(1	)
Recognition of prior service cost ⁽¹⁾		—			3			1			—			(1	)		(1	)
Total net periodic benefit cost ⁽²⁾		(12	)		(3	)		9			(1	)		(1	)		(2	)
Other comprehensive loss (earnings):
Actuarial loss (gain) arising in current year		28			27			7			(1	)		(1	)		(2	)
Prior service cost arising in current year		—			2			3			1			—			—
Recognition of net actuarial gain (loss), including settlement expense, in net periodic benefit cost ⁽³⁾		(23	)		(9	)		(22	)		1			1			1
Recognition of prior service cost, including curtailment, in net periodic benefit cost ⁽³⁾		—			(7	)		(2	)		—			1			1
Total other comprehensive loss (earnings)		5			13			(14	)		1			1			—
Total	$	(7	)	$	10		$	(5	)	$	—		$	—		$	(2	)

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

(2)	The service cost component of net periodic benefit cost is included in G&A expense and the remaining components of net periodic benefit costs are included in other, net in the accompanying consolidated statements of comprehensive earnings.

(3)	These amounts include restructuring costs that were reclassified out of other comprehensive earnings in 2021, 2020 and 2019. See Note 6 for further discussion.

Assumptions

	Pension Benefits			Postretirement Benefits
	2021	2020	2019	2021	2020	2019
Assumptions to determine benefit obligations:
Discount rate	2.71%	2.38%	3.14%	2.34%	1.82%	2.81%
Rate of compensation increase	N/A	2.50%	2.50%	N/A	N/A	N/A
Assumptions to determine net periodic benefit cost:
Discount rate - service cost	N/A	3.47%	3.74%	2.51%	3.25%	3.99%
Discount rate - interest cost	2.11%	2.75%	3.36%	1.01%	2.31%	3.21%
Rate of compensation increase	N/A	2.50%	2.50%	N/A	N/A	N/A
Expected return on plan assets	5.00%	6.00%	5.75%	N/A	N/A	N/A

Discount rate - Future pension and post-retirement obligations are discounted based on the rate at which obligations could be effectively settled, considering the timing of expected future cash flows related to the plans. This rate is based on high-quality bond yields, after allowing for call and default risk.

Expected return on plan assets – This was determined by evaluating input from external consultants and economists, as well as long-term inflation assumptions and consideration of target allocation of investment types.

Mortality rate – Devon utilized the Society of Actuaries produced mortality tables.

Other assumptions – For measurement of the 2021 benefit obligation for the other postretirement medical plans, a 6.8% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2022. The rate was assumed to decrease annually to an ultimate rate of 5% in the year 2029 and remain at that level thereafter.

Expected Cash Flows

Devon expects benefit plan payments to average approximately $54 million a year for the next five years and $254 million total for the five years thereafter. Of these payments to be paid in 2022, $16 million is expected to be funded from Devon’s available cash, cash equivalents and other assets.

- Definition

The entire disclosure for retirement benefits.

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+ Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Stockholders Equity Note [Abstract]

Stockholders' Equity

18.	Stockholders’ Equity

The authorized capital stock of Devon consists of 1.0 billion shares of common stock, par value $0.10 per share, and 4.5 million shares of preferred stock, par value $1.00 per share. The preferred stock may be issued in one or more series, and the terms and rights of such stock will be determined by the Board of Directors.

Share Repurchase Program

Devon announced a share repurchase program initially in 2018 that was later expanded to $5.0 billion with a December 31, 2019 expiration date. In December 2019, Devon announced a share repurchase program of $1.0 billion with a December 31, 2020 expiration date. In November 2021, Devon announced a new 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.

The table below provides information regarding purchases of Devon’s common stock that were made under the respective share repurchase programs (shares in thousands).

$5.0 Billion Plan (Closed)	Total Number of Shares Purchased		Dollar Value of Shares Purchased		Average Price Paid per Share
2018		78,149	$	2,978	$	38.11
2019		68,625		1,827		26.62
Total		146,774	$	4,805	$	32.74
$1.0 Billion Plan (Closed)
2020		2,243	$	38	$	16.85
Total		2,243	$	38	$	16.85
$1.6 Billion Plan (Open)
2021		13,983	$	589	$	42.15
Total		13,983	$	589	$	42.15

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. The following table summarizes the dividends Devon has paid on its common stock in 2021, 2020 and 2019, respectively.

	Fixed		Variable/Special		Total		Rate Per Share
2021:
First quarter	$	76	$	127	$	203	$	0.30
Second quarter		75		154		229	$	0.34
Third quarter		74		255		329	$	0.49
Fourth quarter		73		481		554	$	0.84
Total year-to-date	$	298	$	1,017	$	1,315
2020:
First quarter	$	34	$	—	$	34	$	0.09
Second quarter		42		—		42	$	0.11
Third quarter		43		—		43	$	0.11
Fourth quarter		41		97		138	$	0.37
Total year-to-date	$	160	$	97	$	257
2019:
First quarter	$	34	$	—	$	34	$	0.08
Second quarter		37		—		37	$	0.09
Third quarter		35		—		35	$	0.09
Fourth quarter		34		—		34	$	0.09
Total year-to-date	$	140	$	—	$	140

In February 2022, Devon announced a cash dividend in the amount of $1.00 per share payable in the first 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 $557 million (or $0.84 per share).

Devon raised its fixed quarterly dividend by 45%, to $0.16 per share, beginning in the first quarter of 2022. Devon also increased its fixed quarterly dividend rate in the second quarter of 2020 and 2019 from $0.09 to $0.11 and from $0.08 to $0.09, respectively.

In the fourth quarter of 2020, Devon paid a $97 million (or $0.26 per share) special dividend.

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.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 13
-Subparagraph (b)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Paragraph 14
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496171-112644

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=120397183&loc=d3e187085-122770

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 18
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496189-112644

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=123467817&loc=SL123496158-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Publisher FASB
-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Discontinued Operations

12 Months Ended

Dec. 31, 2021

Discontinued Operations And Disposal Groups [Abstract]

Discontinued Operations

19.	Discontinued Operations

Barnett Shale

On December 17, 2019, Devon announced that it had entered into an agreement to sell its Barnett Shale assets to BKV. Devon concluded that the transaction was a strategic shift and met the requirements of assets held for sale and discontinued operations upon the authorization to enter the agreement by Devon’s Board of Directors. As part of its assessment, Devon effectively exited its last natural gas focused asset and the transaction resulted in a material reduction to total assets, revenues, net earnings and total proved reserves. Estimated proved reserves associated with Devon’s Barnett Shale assets were approximately 45% of the total proved reserves. As a result, Devon classified the results of operations and cash flows related to its Barnett Shale assets as discontinued operations on its consolidated financial statements.

In conjunction with the divestiture agreement, which was amended in April 2020, Devon recognized a $182 million and $748 million asset impairment related to the Barnett Shale assets in 2020 and 2019, respectively, primarily due to the difference between the net carrying value and the purchase price, net of estimated customary purchase price adjustments, which qualifies as a level 2 fair value measurement. Approximately $88 million of the U.S. reporting unit goodwill was allocated to the Barnett Shale assets. Additionally, Devon ceased depreciation for all plant, property and equipment classified as assets held for sale on the date the sales agreement was approved by the Board of Directors.

On October 1, 2020, Devon completed the sale of its Barnett Shale assets to BKV for proceeds, net of purchase price adjustments, of $490 million. Additionally, the agreement provides for contingent earnout payments to Devon of up to $260 million based upon future commodity prices, 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 December 31, 2021 balance sheet was $65 million and $111 million, respectively. During 2021, Devon recorded a $110 million increase to the fair value within asset dispositions on the consolidated statements of comprehensive earnings related to these payments. These values were derived utilizing a Monte Carlo valuation model and qualifies as a level 3 fair value measurement.

Canada

In the second quarter of 2019, Devon completed the sale of its Canadian business for $2.6 billion ($3.4 billion Canadian dollars), net of purchase price adjustments, and recognized a pre-tax gain of $223 million ($425 million net of tax, primarily due to a significant deferred tax benefit) in 2019. Current (cash) income and withholding taxes

associated with the Canadian business were approximately $175 million and were paid in the first half of 2020. Devon concluded that the transaction was a strategic shift and met the requirements of assets held for sale and discontinued operations based upon the following: 1) Devon was exiting its entire heavy oil and Canadian operations; 2) Devon’s Canadian operations were a separate reportable segment and a component of Devon’s business; and 3) the transaction resulted in a material reduction in total assets, revenues, net earnings and total proved reserves. The disposition of substantially all of Devon’s Canadian oil and gas assets resulted in Devon releasing its historical cumulative foreign currency translation adjustment of $1.2 billion from accumulated other comprehensive earnings to be included within the gain computation. The historical cumulative foreign currency translation portion of the gain is not taxable.

During the third quarter of 2019, Devon utilized a portion of the sales proceeds to early retire $500 million of the 4.00% senior notes due July 15, 2021 and $1.0 billion of the 3.25% senior notes due May 15, 2022. Devon recognized a charge on the early retirement of these notes consisting of $52 million in cash retirement costs and $6 million of noncash charges.

The following table presents the amounts reported in the consolidated statements of comprehensive earnings as discontinued operations.

Year ended December 31,	Barnett Shale			Canada			Total
2020
Oil, gas and NGL sales	$	263		$	—		$	263
Total revenues		263			—			263
Production expenses		214			—			214
Asset impairments		182			—			182
Asset dispositions		(4	)		5			1
General and administrative expenses		—			3			3
Financing costs, net		—			(3	)		(3	)
Restructuring and transaction costs		—			9			9
Other expenses		10			(1	)		9
Total expenses		402			13			415
Loss from discontinued operations before income taxes		(139	)		(13	)		(152	)
Income tax benefit		(11	)		(13	)		(24	)
Loss from discontinued operations, net of tax	$	(128	)	$	—		$	(128	)
2019
Oil, gas and NGL sales	$	486		$	741		$	1,227
Oil, gas and NGL derivatives		—			(113	)		(113	)
Marketing and midstream revenues		—			38			38
Total revenues		486			666			1,152
Production expenses		306			293			599
Exploration expenses		—			13			13
Marketing and midstream expenses		—			18			18
Depreciation, depletion and amortization		77			128			205
Asset impairments		748			37			785
Asset dispositions		1			(223	)		(222	)
General and administrative expenses		—			34			34
Financing costs, net		—			87			87
Restructuring and transaction costs		—			248			248
Other expenses		11			6			17
Total expenses		1,143			641			1,784
Earnings (loss) from discontinued operations before income taxes		(657	)		25			(632	)
Income tax benefit		(142	)		(216	)		(358	)
Net earnings (loss) from discontinued operations, net of tax	$	(515	)	$	241		$	(274	)

Commitments And Contingencies

12 Months Ended

Dec. 31, 2021

Commitments And Contingencies Disclosure [Abstract]

Commitments And Contingencies

20.	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, 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 December 31, 2021, Devon does not currently believe that it is subject to material exposure with respect 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.

Commitments

The following table presents Devon’s commitments that have initial or remaining noncancelable terms in excess of one year as of December 31, 2021.

Year Ending December 31,	Drilling and Facility Obligations		Operational Agreements		Office and Equipment Leases and Other
2022	$	182	$	474	$	51
2023		27		418		46
2024		19		395		28
2025		12		327		25
2026		12		279		22
Thereafter		27		678		363
Total	$	279	$	2,571	$	535

Devon has certain drilling and facility obligations under contractual agreements with third-party service providers to procure drilling rigs and other related services for developmental and exploratory drilling and facilities construction. The value of the drilling obligations reported is based on gross contractual value.

Devon has certain operational agreements whereby Devon has committed to transport or process certain volumes of oil, gas and NGLs for a fixed fee. Devon has entered into these agreements to aid the movement of its production to downstream markets.

Devon leases certain office space and equipment under financing and operating lease arrangements.

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

21.	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, restricted 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 December 31, 2021 and December 31, 2020, 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
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
December 31, 2020 assets (liabilities):
Cash equivalents	$	1,436		$	1,436		$	1,436	$	—		$	—
Commodity derivatives	$	6		$	6		$	—	$	6		$	—
Commodity derivatives	$	(148	)	$	(148	)	$	—	$	(148	)	$	—
Debt	$	(4,298	)	$	(5,365	)	$	—	$	(5,365	)	$	—
Contingent earnout payments	$	66		$	66		$	—	$	—		$	66

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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Supplemental Information on Oil and Gas Operations (Unaudited)

12 Months Ended

Dec. 31, 2021

Oil And Gas Exploration And Production Industries Disclosures [Abstract]

Supplemental Information on Oil and Gas Operations (Unaudited)

22.	Supplemental Information on Oil and Gas Operations (Unaudited)

Supplemental unaudited information regarding Devon’s oil and gas activities is presented in this note. All of Devon’s reserves are located within the U.S.

The supplemental information in the tables below excludes amounts for 2020 and 2019 related to Devon’s discontinued operations. For additional information on these discontinued operations, see Note 19.

Costs Incurred

The following tables reflect the costs incurred in oil and gas property acquisition, exploration and development activities.

	Year Ended December 31,
	2021		2020		2019
Property acquisition costs:
Proved properties	$	7,017	$	—	$	—
Unproved properties		2,381		8		35
Exploration costs		212		159		312
Development costs		1,643		820		1,499
Costs incurred	$	11,253	$	987	$	1,846

Acquisition costs for 2021 in the table above largely pertain to the Merger. Development costs in the tables above include additions and revisions to Devon’s asset retirement obligations.

Results of Operations

The following tables include revenues and expenses associated with Devon’s oil and gas producing activities. They do not include any allocation of Devon’s interest costs or general corporate overhead and, therefore, are not necessarily indicative of the contribution to net earnings of Devon’s oil and gas operations. Income tax expense has been calculated by applying statutory income tax rates to oil, gas and NGL sales after deducting costs, including DD&A, and after giving effect to permanent differences.

	Year Ended December 31,
	2021			2020			2019
Oil, gas and NGL sales	$	9,531		$	2,695		$	3,809
Production expenses		(2,131	)		(1,123	)		(1,197	)
Exploration expenses		(14	)		(167	)		(58	)
Depreciation, depletion and amortization		(2,050	)		(1,207	)		(1,398	)
Asset dispositions		170			—			37
Asset impairments		—			(2,664	)		—
Accretion of asset retirement obligations		(28	)		(20	)		(21	)
Income tax expense		(1,238	)		—			(270	)
Results of operations	$	4,240		$	(2,486	)	$	902
Depreciation, depletion and amortization per Boe	$	9.83		$	9.90		$	11.72

Proved Reserves

The following table presents Devon’s estimated proved reserves by product.


	Oil (MMBbls)			Gas (Bcf) ⁽¹⁾			NGL (MMBbls)			Combined (MMBoe)
Proved developed and undeveloped reserves:
December 31, 2018		296			1,802			227			823
Revisions due to prices		(7	)		(86	)		(6	)		(28	)
Revisions other than price		(13	)		(50	)		(9	)		(31	)
Extensions and discoveries		76			269			39			160
Purchase of reserves		3			7			1			6
Production		(55	)		(219	)		(28	)		(119	)
Sale of reserves		(24	)		(102	)		(13	)		(54	)
December 31, 2019		276			1,621			211			757
Revisions due to prices		(26	)		(209	)		(17	)		(78	)
Revisions other than price		18			119			17			55
Extensions and discoveries		71			188			33			135
Purchase of reserves		1			19			3			7
Production		(57	)		(221	)		(28	)		(122	)
Sale of reserves		(1	)		(5	)		(1	)		(2	)
December 31, 2020		282			1,512			218			752
Revisions due to prices		55			382			36			155
Revisions other than price		(23	)		11			64			43
Extensions and discoveries		112			348			58			228
Purchase of reserves		393			961			110			663
Production		(106	)		(325	)		(48	)		(209	)
Sale of reserves		(4	)		(11	)		(1	)		(7	)
December 31, 2021		709			2,878			437			1,625

Proved developed reserves:
December 31, 2018		196			1,427			166			600
December 31, 2019		198			1,344			167			589
December 31, 2020		194			1,244			173			574
December 31, 2021		544			2,361			348			1,285
Proved developed-producing reserves:
December 31, 2018		188			1,394			162			582
December 31, 2019		191			1,327			165			578
December 31, 2020		190			1,223			171			564
December 31, 2021		533			2,316			341			1,260
Proved undeveloped reserves:
December 31, 2018		100			375			61			223
December 31, 2019		78			277			44			168
December 31, 2020		88			268			45			178
December 31, 2021		165			517			89			340

(1)

Gas reserves are converted to Boe at the rate of six Mcf per Bbl of oil, based upon the approximate relative energy content of gas and oil. NGL reserves are converted to Boe on a one-to-one basis with oil. The conversion rates are not necessarily indicative of the relationship of oil, natural gas and NGL prices.

Price Revisions

Reserves increased 155 MMBoe in 2021 primarily due to price increases in the trailing 12 month averages for oil, gas and NGLs.

Reserves decreased 78 MMBoe in 2020 primarily due to price decreases in the trailing 12 month averages for oil, gas and NGLs.

Reserves decreased 28 MMBoe in 2019 primarily due to price decreases in the trailing 12 month averages for oil, gas and NGLs.

Revisions Other Than Price

2021 – Total revisions other than price (43 MMBoe) were primarily due to well performance exceeding previous estimates modestly across all areas of operation (53 MMBoe) and the removal of proved undeveloped locations as noted below (-10 MMBoe). The upward revisions were driven by the Delaware Basin (23 MMBoe), Williston Basin (12 MMBoe) and Anadarko Basin (12 MMBoe).

2020 – Total revisions other than price (55 MMBoe) were primarily due to well performance exceeding previous estimates (75 MMBoe) and the removal of proved undeveloped locations as noted below (-20 MMBoe). The most significant well performance revisions were attributable to the Delaware Basin (40 MMBoe) and the Anadarko Basin (22 MMBoe).

2019 – Total revisions other than price in 2019 were primarily due to changes in previously adopted development plans in the Anadarko Basin (-9 MMBoe) and in the Delaware Basin (-6 MMBoe). An additional downward revision of 5 MMBoe was the result of reduced recovery estimates attributable to continued evaluation of analogous offset well performance primarily in the Anadarko Basin.

Extensions and Discoveries

Each year, Devon’s proved reserves extensions and discoveries consist of adding proved undeveloped reserves to locations classified as undeveloped at year-end and adding proved developed reserves from successful development wells drilled on locations outside the areas classified as proved at the previous year-end. Therefore, it is not uncommon for Devon’s total proved extensions and discoveries to differ from the extensions and discoveries for Devon’s proved undeveloped reserves. Furthermore, because annual additions are classified according to reserve determinations made at the previous year-end and because Devon operates a multi-basin portfolio with assets at varying stages of maturity, extensions and discoveries for proved developed and proved undeveloped reserves can differ significantly in any particular year.

2021 – Of the 228 MMBoe of additions from extensions and discoveries, 209 MMBoe were in the Delaware Basin, 8 MMBoe were in the Anadarko Basin, 6 MMBoe were in the Williston Basin, 3 MMBoe were in Eagle Ford and 2 MMBoe were in the Powder River Basin.

2020 – Of the 135 MMBoe of additions from extensions and discoveries, 117 MMBoe were in the Delaware Basin, 8 MMBoe were in the Anadarko Basin, 5 MMBoe were in the Powder River Basin and 5 MMBoe were in Eagle Ford.

2019 – Of the 160 MMBoe of additions from extensions and discoveries, 77 MMBoe were in the Delaware Basin, 37 MMBoe were in the Anadarko Basin, 28 MMBoe were in the Powder River Basin and 18 MMBoe were in Eagle Ford. In 2019, there were no additions related to infill drilling activities.

Purchase of Reserves

During 2021, Devon had reserve additions due to the Merger of 538 MMBoe in the Delaware Basin and 125 MMBoe in the Williston Basin. For additional information on these asset additions, see Note 2.

Sale of Reserves

During 2021, 2020 and 2019, Devon had U.S. non-core asset divestitures. For additional information on these divestitures, see Note 2.

Proved Undeveloped Reserves

The following table presents the changes in Devon’s total proved undeveloped reserves during 2021 (MMBoe).

	Total
Proved undeveloped reserves as of December 31, 2020		178
Extensions and discoveries		160
Revisions due to prices		8
Revisions other than price		11
Purchase of reserves		90
Sale of reserves		—
Conversion to proved developed reserves		(107	)
Proved undeveloped reserves as of December 31, 2021		340

Total proved undeveloped reserves increased 91% from 2020 to 2021 with the year-end 2021 balance representing 21% of total proved reserves. Approximately 92% of the 160 MMBoe in extensions and discoveries were the result of Devon’s focus on drilling and development activities in the Delaware Basin. This continued development in the Delaware Basin also accounted for 85% of the 107 MMBoe of proved undeveloped reserves being converted to proved developed reserves in 2021. Costs incurred to develop and convert Devon’s proved undeveloped reserves were approximately $612 million for 2021. Additionally, 98% of the 90 MMBoe of purchased reserves relate to the complementary Delaware Basin assets acquired through the Merger. Purchase of reserves included in the table above reflect proved undeveloped reserves acquired in the Merger that remain undeveloped as of December 31, 2021. Proved undeveloped reserves revisions other than price were primarily due to well performance in the Delaware Basin (14 MMBoe) and Anadarko Basin (6 MMBoe) which was partially offset by changes in previously adopted development plans in the Anadarko Basin (-6 MMBoe) and Delaware Basin (-3 MMBoe).

Standardized Measure

The following tables reflect Devon’s standardized measure of discounted future net cash flows from its proved reserves.

	Year Ended December 31,
	2021			2020			2019
Future cash inflows	$	66,321		$	14,957		$	20,750
Future costs:
Development		(3,689	)		(1,747	)		(2,093	)
Production		(22,975	)		(7,964	)		(9,174	)
Future income tax expense		(6,423	)		—			(1,037	)
Future net cash flow		33,234			5,246			8,446
10% discount to reflect timing of cash flows		(13,933	)		(1,774	)		(3,048	)
Standardized measure of discounted future net cash flows	$	19,301		$	3,472		$	5,398

Future cash inflows, development costs and production costs were computed using the same assumptions for prices and costs that were used to estimate Devon’s proved oil and gas reserves at the end of each year. For 2021

estimates, Devon’s future realized prices were assumed to be $64.17 per Bbl of oil, $3.05 per Mcf of gas and $27.60 per Bbl of NGLs. Of the $3.7 billion of future development costs as of the end of 2021, $1.1 billion, $0.7 billion and $0.6 billion are estimated to be spent in 2022, 2023 and 2024, respectively.

Future development costs include not only development costs but also future asset retirement costs. Included as part of the $3.7 billion of future development costs are $0.5 billion of future asset retirement costs. The future income tax expenses have been computed using statutory tax rates, giving effect to allowable tax deductions and tax credits under current laws.

The principal changes in Devon’s standardized measure of discounted future net cash flows are as follows:

	Year Ended December 31,
	2021			2020			2019
Beginning balance	$	3,472		$	5,398		$	7,150
Net changes in prices and production costs		8,274			(3,277	)		(2,323	)
Oil, gas and NGL sales, net of production costs		(7,400	)		(1,572	)		(2,612	)
Changes in estimated future development costs		(414	)		402			303
Extensions and discoveries, net of future development costs		3,877			988			1,690
Purchase of reserves		12,460			23			43
Sales of reserves in place		(12	)		(7	)		(481	)
Revisions of quantity estimates		838			147			(359	)
Previously estimated development costs incurred during the period		663			537			857
Accretion of discount		1,218			285			506
Net change in income taxes and other		(3,675	)		548			624
Ending balance	$	19,301		$	3,472		$	5,398

Summary Of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Principles Of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Devon, entities in which it holds a controlling interest and VIEs for which Devon is the primary beneficiary. All intercompany transactions have been eliminated. Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis. Investments in non-controlled entities, over which Devon has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method. In applying the equity method of accounting, the investments are initially recognized at cost and subsequently adjusted for Devon’s proportionate share of earnings, losses, contributions and distributions.

Variable Interest Entity

Devon entered into an agreement in 2019 to form CDM, a partnership in the Delaware Basin, with an affiliate of QL Capital Partners, LP (“QLCP”). 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.

Devon, through its controlling interest in CDM, has the power to direct the activities that significantly affect the economic performance of CDM and the obligation to absorb losses or the right to receive benefits that could be significant to CDM; therefore, Devon is considered the primary beneficiary and consolidates CDM. CDM maintains its own capital structure that is separate from Devon. During 2021, QLCP contributions to and distributions from CDM were approximately $3 million and $20 million, respectively. During 2020, QLCP contributions to and distributions from CDM were approximately $21 million and $14 million, respectively. During 2019, QLCP contributions to CDM were approximately $116 million, primarily associated with the CDM formation.

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 sheet and Devon’s share of Catalyst earnings are reflected as a component of other, net in the accompanying consolidated statements of comprehensive earnings.

Investments	% Interest	Carrying Amount
Catalyst	50%	$	368
Other	Various		34
Total		$	402

As of December 31, 2021, Devon’s $368 million investment in Catalyst exceeded the underlying equity in net assets by approximately $125 million. The basis difference results primarily from intangible assets associated with Devon’s acreage dedication and is amortized over the remaining 17-year term of the associated oil gathering and natural gas processing agreements.

After the closing of the Merger, Catalyst has provided certain gathering, processing and marketing services to Devon in the ordinary course of business. The impact from these services on Devon’s consolidated statement of comprehensive earnings and consolidated balance sheet for the year ended and as of December 31, 2021, respectively, are summarized below.

	2021
Oil, gas and NGL sales	$	264
Production expenses	$	42
Accounts receivable	$	22

Segment Information

Subsequent to the sale of Devon’s Canadian business in 2019 discussed in Note 19, Devon’s oil and gas exploration and production activities are solely focused in the U.S. For financial reporting purposes, Devon aggregates its U.S. operating segments into one reporting segment due to the similar nature of these operations.

Use Of Estimates

Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual amounts could differ from these estimates, and changes in these estimates are recorded when known. Significant items subject to such estimates and assumptions include the following:

•

proved reserves and related present value of future net revenues;

•

evaluation of suspended well costs;

•

the carrying and fair values of oil and gas properties, other property and equipment and product and equipment inventories;

•

derivative financial instruments;

•

the fair value of reporting units and related assessment of goodwill for impairment;

•

income taxes;

•

asset retirement obligations;

•

obligations related to employee pension and postretirement benefits;

•

purchase accounting estimates used for assets acquired and liabilities assumed;

•

legal and environmental risks and exposures; and

•

general credit risk associated with receivables and other assets.

Revenue Recognition

Upstream Revenues

Upstream revenues include the sale of oil, gas and NGL production. Oil, gas and NGL sales are recognized when production is sold to a purchaser at a fixed or determinable price, delivery has occurred, control has transferred and collectability of the revenue is probable. Devon’s performance obligations are satisfied at a point in time. This occurs when control is transferred to the purchaser upon delivery of contract specified production volumes at a specified point. The transaction price used to recognize revenue is a function of the contract billing terms. Revenue is invoiced, if required, by calendar month based on volumes at contractually based rates with payment typically received within 30 days of the end of the production month. Taxes assessed by governmental authorities on oil, gas and NGL sales are presented separately from such revenues in the accompanying consolidated statements of comprehensive earnings.

Devon acts as a principal in sales transactions when control of the product is retained prior to delivery to the ultimate third-party customer or acts as an agent when services are rendered on behalf of the principal in the transactions. A control-based assessment is performed to identify whether Devon is a principal or an agent in the transaction, which determines whether revenue and the related expenses are presented on a gross or net basis, respectively.

Oil sales

Devon’s oil sales contracts are generally structured in one of two ways. First, production is sold at the wellhead at an agreed-upon index price, net of pricing differentials. In this scenario, revenue is recognized when control transfers to the purchaser at the wellhead at the net price received. Alternatively, production is delivered to

the purchaser at a contractually agreed-upon delivery point where the purchaser takes custody, title and risk of loss of the product. Under this arrangement, a third party is paid to transport the product and Devon receives a specified index price from the purchaser with no transportation deduction. In this scenario, revenue is recognized when control transfers to the purchaser at the delivery point based on the price received from the purchaser. The third-party costs are recorded as gathering, processing and transportation expense as a component of production expenses in the consolidated statements of comprehensive earnings.

Natural gas and NGL sales

Under Devon’s natural gas processing contracts, natural gas is delivered to a midstream processing entity at the wellhead or the inlet of the midstream processing entity’s system. The midstream processing entity gathers and processes the natural gas and remits proceeds for the resulting sales of NGLs and residue gas. In these scenarios, Devon evaluates whether it is the principal or the agent in the transaction. Devon has concluded it is the principal under these contracts and the ultimate third-party is the customer. Revenue is recognized on a gross basis, with gathering, processing and transportation fees presented as a component of production expenses in the consolidated statements of comprehensive earnings.

In certain natural gas processing agreements, Devon may elect to take residue gas and/or NGLs in-kind at the tailgate of the midstream entity’s processing plant and subsequently market the product. Through the marketing process, the product is delivered to the ultimate third-party purchaser at a contractually agreed-upon delivery point, and Devon receives a specified index price from the purchaser. In this scenario, revenue is recognized when control transfers to the purchaser at the delivery point based on the index price received from the purchaser. The gathering, processing and compression fees attributable to the gas processing contract, as well as any transportation fees incurred to deliver the product to the purchaser, are presented as gathering, processing and transportation expense as a component of production expenses in the consolidated statements of comprehensive earnings.

Marketing Revenues

Marketing revenues are generated primarily as a result of Devon selling commodities purchased from third parties. Marketing revenues are recognized when performance obligations are satisfied. This occurs at the time contract-specified products are sold to third parties at a contractually fixed or determinable price, delivery occurs at a specified point or performance has occurred, control has transferred and collectability of the revenue is probable. The transaction price used to recognize revenue and invoice customers is based on a contractually stated fee or on a third party published index price plus or minus a known differential. Devon typically receives payment for invoiced amounts within 30 days. Marketing revenues and expenses attributable to oil, gas and NGL purchases are reported on a gross basis when Devon takes control of the products and has risks and rewards of ownership.

Midstream Revenues

Devon’s reported midstream activity primarily relates to its interest in CDM. CDM provides gathering, compression and dehydration services to Devon and other producers’ natural gas production. An evaluation is performed to determine whether CDM is a principal or agent in these transactions. Under the terms of these gathering, compression and dehydration contracts, CDM has concluded it is the agent as title to the gas production remains with the CDM affiliate producer or a third-party producer. Revenue is recognized on a net basis since CDM is strictly providing a service. Costs to maintain CDM’s assets are presented as marketing and midstream expenses in the consolidated statements of comprehensive earnings. Revenue is recognized for sales at the time the gathering, compression and dehydration service has been rendered or performed.

Satisfaction of Performance Obligations and Revenue Recognition

Because Devon has a right to consideration from its customers in amounts that correspond directly to the value that the customer receives from the performance completed on each contract, Devon recognizes revenue for sales at the time the crude oil, natural gas or NGLs are delivered at a fixed or determinable price.

Transaction Price Allocated to Remaining Performance Obligations

Most of Devon’s contracts are short-term in nature with a contract term of one year or less. Devon applies the practical expedient exempting the disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less. For contracts with terms greater than one year, Devon applies the practical expedient exempting the disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under Devon’s contracts, each unit of product typically represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required.

Contract Balances

Cash received relating to future performance obligations is deferred and recognized when all revenue recognition criteria are met. Contract liabilities generated from such deferred revenue are not considered material as of December 31, 2021. Devon’s product sales and marketing contracts do not give rise to contract assets.

Disaggregation of Revenue

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

	Year Ended December 31,
	2021		2020		2019
Oil	$	6,996	$	2,034	$	2,988
Gas		1,104		326		391
NGL		1,431		335		430
Oil, gas and NGL sales		9,531		2,695		3,809

Oil		2,451		936		1,534
Gas		718		488		645
NGL		1,050		554		686
Marketing and midstream revenues		4,219		1,978		2,865
Total revenues from contracts with customers	$	13,750	$	4,673	$	6,674

Customers

In both years ended December 31, 2021 and 2020, Devon had two customers that each amounted to 10% or more of our revenues for the respective year. Sales to those two customers accounted for approximately 19% and 12%, respectively, of Devon’s sales revenue in 2021, and approximately 13% and 10%, respectively of Devon’s sales revenue in 2020. During 2019, no purchaser accounted for more than 10% of Devon’s revenue.

If any one of Devon’s major customers were to stop purchasing our production, the Company believes there are a number of other purchasers to whom the company could sell Devon’s production. If multiple significant customers were to discontinue purchasing Devon’s production abruptly, the Company believes it would have the

resources needed to access alternative customers or markets and avoid or materially mitigate associated sales disruptions.

Derivative Financial Instruments

Devon is exposed to certain risks relating to its ongoing business operations, including risks related to commodity prices and interest rates. As discussed more fully below, Devon uses derivative instruments primarily to manage commodity price risk. Devon does not intend to issue or hold derivative financial instruments for speculative trading purposes.

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 instruments are used to manage the inherent uncertainty of future revenues resulting from commodity price volatility. Devon’s derivative financial instruments typically include financial price swaps, basis swaps and costless price collars. Under the terms of the price swaps, Devon receives a fixed price for its production and pays a variable market price to the contract counterparty. For the basis swaps, Devon receives a fixed differential between two regional index prices and pays a variable differential on the same two index prices to the contract counterparty. For price collars, Devon utilizes two-way price collars. The two-way price collars set a floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, Devon will cash-settle the difference with the counterparty.

Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility. As of December 31, 2021, Devon did not have any open interest rate swap contracts.

All derivative financial instruments are recognized at their current fair value as either assets or liabilities in the balance sheet. 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 balance sheet. Changes in the fair value of these derivative financial instruments are recorded in earnings unless specific hedge accounting criteria are met. For derivative financial instruments held during the three-year period ended December 31, 2021, Devon chose not to meet the necessary criteria to qualify its derivative financial instruments for hedge accounting treatment. Cash settlements with counterparties on Devon’s derivative financial instruments are also recorded in earnings.

By using derivative financial instruments to hedge exposures to changes in commodity prices and interest rates, 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 require cash collateral to be posted if either its or the counterparty’s credit rating falls below certain credit rating levels. As of December 31, 2021, Devon held no cash collateral of its counterparties nor posted collateral to its counterparties.

General And Administrative Expenses

General and Administrative Expenses

G&A is reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Devon.

Share-Based Compensation

Devon grants share-based awards to members of its Board of Directors, management and employees. All such awards are measured at fair value on the date of grant and are generally recognized as a component of G&A in the accompanying consolidated statements of comprehensive earnings over the applicable requisite service periods. As a result of Devon’s restructuring activity discussed in Note 6, certain share-based awards were accelerated and recognized as a component of restructuring and transaction costs in the accompanying consolidated statements of comprehensive earnings.

Generally, Devon uses new shares from approved incentive programs to grant share-based awards and to issue shares upon stock option exercises. Shares repurchased under approved programs are generally available to be issued as part of Devon’s share-based awards. However, Devon has historically canceled these shares upon repurchase.

Income Taxes

Devon is subject to current income taxes assessed by the federal and various state jurisdictions in the U.S. and by other foreign jurisdictions. In addition, Devon accounts for deferred income taxes related to these jurisdictions using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences and carryforwards are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred tax assets are also recognized for the future tax benefits attributable to the expected utilization of existing tax net operating loss carryforwards and other types of carryforwards. If the future utilization of some portion of the deferred tax assets is determined to be unlikely, a valuation allowance is provided to reduce the recorded tax benefits from such assets. Devon periodically weighs the positive and negative evidence to determine if it is more likely than not that some or all of the deferred tax assets will be realized. Forming a conclusion that a valuation allowance is not required is difficult when there is significant negative evidence, such as cumulative losses in recent years. See Note 8 for further discussion.

Devon recognizes the financial statement effects of tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination by a taxing authority. Recognized tax positions are initially and subsequently measured as the largest amount of tax benefit that is more likely than not of being realized upon ultimate settlement with a taxing authority. Liabilities for unrecognized tax benefits related to such tax positions are included in other long-term liabilities unless the tax position is expected to be settled within the upcoming year, in which case the liabilities are included in other current liabilities. Interest and penalties related to unrecognized tax benefits are included in current income tax expense.

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

Net Earnings (Loss) Per Share Attributable To Devon

Net Earnings (Loss) Per Share Attributable to Devon

Devon’s basic earnings per share amounts have been computed based on the average number of shares of common stock outstanding for the period. Basic earnings per share includes the effect of participating securities, which primarily consist of Devon’s outstanding restricted stock awards, as well as performance-based restricted stock awards that have met the requisite performance targets. Diluted earnings per share is calculated using the

treasury stock method to reflect the assumed issuance of common shares for all potentially dilutive securities. Such securities primarily consist of unvested performance share units.

Cash, Cash Equivalents, and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

Devon considers all highly liquid investments with original contractual maturities of three months or less to be cash equivalents. Subsequent to the sale of its Canadian operations in 2019 and the sale of its Barnett Shale assets in 2020, management presented approximately $160 million and $190 million of Devon’s cash balance as of December 31, 2021 and 2020, respectively, as restricted to fund retained long-term obligations related to the disposed assets. These obligations primarily relate to abandoned Canadian firm transportation and office lease agreements. This cash is not legally restricted and can be used by Devon for other general corporate purposes.

Accounts Receivable

Devon’s accounts receivable balance primarily consists of oil and gas sales receivables, marketing and midstream revenue receivables and joint interest receivables for which Devon does not require collateral security.

Devon records an allowance for credit losses based on a forward-looking “expected loss” model. Credit risk is assessed by class of account type, which includes cash equivalents and oil and gas, marketing and midstream, joint interest and other accounts receivable. These classes are further evaluated using a probability-weighted scenario assessment based on historical losses and a probability of future default. This evaluation is supported by an assessment of risk factors such as the age of the receivable, current macro-economic conditions, credit rating of the counterparty and our historical loss rate.

Property And Equipment