Document And Entity Information - USD ($) shares in Millions, $ in Billions	12 Months Ended
	Dec. 31, 2020	Feb. 03, 2021	Jun. 30, 2020
Cover [Abstract]
Document Type	10-K
Document Period End Date	Dec. 31, 2020
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	2020
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			$ 4.3
Entity Common Stock, Shares Outstanding		673.1
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 2020 annual meeting of stockholders have been incorporated by reference in Part III of this Annual Report on Form 10-K.

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

12 Months Ended

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2018

Revenues

$ 4,673

$ 6,674

$ 8,439

Oil, gas and NGL derivatives

155

(454)

457

Total revenues

4,828

6,220

8,896

Production expenses

1,123

1,197

1,153

Exploration expenses

167

58

128

Depreciation, depletion and amortization

1,300

1,497

1,228

Asset impairments

2,693

156

Asset dispositions

(1)

(48)

(278)

General and administrative expenses

338

475

574

Financing costs, net

270

250

580

Restructuring and transaction costs

49

84

97

Other, net

(34)

4

(7)

Total expenses

7,918

6,329

7,952

Earnings (loss) from continuing operations before income taxes

(3,090)

(109)

944

Income tax expense (benefit)

(547)

(30)

230

Net earnings (loss) from continuing operations

(2,543)

(79)

714

Net earnings (loss) from discontinued operations, net of income taxes

(128)

(274)

2,510

Net earnings (loss)

(2,671)

(353)

3,224

Net earnings attributable to noncontrolling interests

9

2

160

Net earnings (loss) attributable to Devon

$ (2,680)

$ (355)

$ 3,064

Basic net earnings (loss) per share:

Basic earnings (loss) from continuing operations per share

$ (6.78)

$ (0.21)

$ 1.43

Basic earnings (loss) from discontinued operations per share

(0.34)

(0.68)

4.71

Basic net earnings (loss) per share

(7.12)

(0.89)

6.14

Diluted net earnings (loss) per share:

Diluted earnings (loss) from continuing operations per share

(6.78)

(0.21)

1.42

Diluted earnings (loss) from discontinued operations per share

(0.34)

(0.68)

4.68

Diluted net earnings (loss) per share

$ (7.12)

$ (0.89)

$ 6.10

Comprehensive earnings (loss):

Net earnings (loss)

$ (2,671)

$ (353)

$ 3,224

Other comprehensive earnings (loss), net of tax:

Foreign currency translation, discontinued operations

78

(152)

Release of Canadian cumulative translation adjustment, discontinued operations

^[1]

(1,237)

Pension and postretirement plans

(8)

13

44

Other comprehensive loss, net of tax

(8)

(1,146)

(108)

Comprehensive earnings (loss):

(2,679)

(1,499)

3,116

Comprehensive earnings attributable to noncontrolling interests

9

2

160

Comprehensive earnings (loss) attributable to Devon

(2,688)

(1,501)

2,956

Oil, Gas and NGL Sales [Member]

Revenues

2,695

3,809

4,085

Marketing and Midstream Revenues [Member]

Revenues

1,978

2,865

4,354

Marketing and Midstream Expenses [Member]

Expenses

$ 2,013

$ 2,812

$ 4,321

[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, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net earnings (loss)	$ (2,671)	$ (353)	$ 3,224
Adjustments to reconcile net earnings (loss) to net cash from operating activities:
Net (earnings) loss from discontinued operations, net of income taxes	128	274	(2,510)
Depreciation, depletion and amortization	1,300	1,497	1,228
Asset impairments	2,693		156
Leasehold impairments	152	18	94
Accretion on discounted liabilities	32	33	27
Total (gains) losses on commodity derivatives	(155)	454	(457)
Cash settlements on commodity derivatives	316	166	(420)
Gains on asset dispositions	(1)	(48)	(278)
Deferred income tax expense (benefit)	(328)	(25)	247
Share-based compensation	88	115	137
Early retirement of debt			312
Other	5	(6)	(19)
Changes in assets and liabilities, net	(95)	(82)	(158)
Net cash from operating activities - continuing operations	1,464	2,043	1,583
Cash flows from investing activities:
Capital expenditures	(1,153)	(1,910)	(2,116)
Acquisitions of property and equipment	(8)	(31)	(55)
Divestitures of property and equipment	34	390	500
Net cash from investing activities - continuing operations	(1,127)	(1,551)	(1,671)
Cash flows from financing activities:
Repayments of long-term debt		(162)	(922)
Early retirement of debt			(304)
Repurchases of common stock	(38)	(1,849)	(2,956)
Dividends paid on common stock	(257)	(140)	(149)
Contributions from noncontrolling interests	21	116
Distributions to noncontrolling interests	(14)
Shares exchanged for tax withholdings	(18)	(25)	(39)
Other		(1)	(7)
Net cash from financing activities - continuing operations	(306)	(2,061)	(4,377)
Net change in cash, cash equivalents and restricted cash of continuing operations	31	(1,569)	(4,465)
Cash flows from discontinued operations:
Operating activities	(110)	28	1,121
Investing activities	481	2,472	2,726
Financing activities	0	(1,578)	174
Effect of exchange rate changes on cash	(9)	45	206
Net change in cash, cash equivalents and restricted cash of discontinued operations	362	967	4,227
Net change in cash, cash equivalents and restricted cash	393	(602)	(238)
Cash, cash equivalents and restricted cash at beginning of period	1,844	2,446	2,684
Cash, cash equivalents and restricted cash at end of period	2,237	1,844	2,446
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	2,047	1,464	2,414
Restricted cash	190	380	32
Cash, cash equivalents and restricted cash at end of period	$ 2,237	$ 1,844	$ 2,446

Consolidated Balance Sheets - USD ($)
$ in Millions

Dec. 31, 2020

Dec. 31, 2019

ASSETS

Cash, cash equivalents and restricted cash

$ 2,237

$ 1,844

Accounts receivable

601

832

Current assets associated with discontinued operations

896

Income taxes receivable

174

47

Other current assets

248

232

Total current assets

3,260

3,851

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

4,436

7,558

Other property and equipment, net ($102 million and $80 million related to CDM in 2020 and 2019, respectively)

^[1]

957

1,035

Total property and equipment, net

5,393

8,593

Goodwill

753

Right-of-use assets

223

243

Other long-term assets

283

196

Long-term assets associated with discontinued operations

81

Total assets

9,912

13,717

LIABILITIES AND EQUITY

Accounts payable

242

428

Revenues and royalties payable

662

730

Current liabilities associated with discontinued operations

459

Other current liabilities

536

310

Total current liabilities

1,440

1,927

Long-term debt

4,298

4,294

Lease liabilities

246

244

Asset retirement obligations

358

380

Other long-term liabilities

551

426

Long-term liabilities associated with discontinued operations

185

Deferred income taxes

341

Stockholders' equity:

Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 382 million and 382 million shares in 2020 and 2019, respectively

38

Additional paid-in capital

2,766

2,735

Retained earnings

208

3,148

Accumulated other comprehensive loss

(127)

(119)

Total stockholders’ equity attributable to Devon

2,885

5,802

Noncontrolling interests

134

118

Total equity

3,019

5,920

Total liabilities and equity

$ 9,912

$ 13,717

[1]	$102 million and $80 million related to CDM in 2020 and 2019, respectively

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

Dec. 31, 2020

Dec. 31, 2019

Other property and equipment, net

^[1]

$ 957

$ 1,035

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)

382,000,000

CDM [Member]

Other property and equipment, net

$ 102

$ 80

[1]	$102 million and $80 million related to CDM in 2020 and 2019, 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, 2017	$ 14,104		$ 53	$ 7,333	$ 702		$ 1,166		$ 4,850
Balance, shares at Dec. 31, 2017			525
Net earnings (loss)	3,224				3,064				160
Other comprehensive earnings (loss), net of tax	(108)						(108)
Restricted stock grants, net of cancellations, shares			3
Common stock repurchased	(3,017)							$ (3,017)
Common stock retired			$ (8)	(2,987)				2,995
Common stock retired, shares			(79)
Common stock dividends	(149)				(149)
Share-based compensation	140			140
Share-based compensation, shares			1
Divestment of subsidiary equity investment	(4,861)						2		(4,863)
Subsidiary equity transactions	72								72
Distributions to noncontrolling interests	(219)								(219)
Other					33		(33)
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

Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

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.

As further discussed in Note 19, Devon sold its Barnett Shale assets on October 1, 2020, sold its Canadian operations on June 27, 2019 and sold its ownership interests in EnLink and the General Partner on July 18, 2018. Prior to December 31, 2020, activity relating to Devon’s Barnett Shale assets, inclusive of properties divested as partial sales of the Barnett Shale common operating field in previous reporting periods located primarily in Johnson and Wise counties, Texas, Canadian operations and EnLink and the General Partner are classified as discontinued operations within Devon’s consolidated statements of comprehensive earnings and consolidated statements of cash flows.

Additionally, prior to December 31, 2020, the associated assets and liabilities of Devon’s Barnett Shale assets and Canadian operations are presented as assets and liabilities associated with discontinued operations on the consolidated balance sheets. Under the terms of the Canadian and Barnett disposition agreements, Devon retained certain long-term obligations for firm transportation, office leases and potential income tax matters. Appropriate assets and liabilities related to these obligations have been recognized on Devon’s consolidated balance sheet. Because these amounts will be settled over a period extending as far as 13 years in the future, these assets and liabilities have been reclassified as part of Devon’s continuing operations as of December 31, 2020.

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. Investments accounted for using the equity method and cost method are reported as a component of other long-term assets.

Devon entered into an agreement in the fourth quarter of 2019 to form Cotton Draw Midstream, L.L.C. or, “CDM”, a partnership in the Delaware Basin with an affiliate of QL Capital Partners, LP (“QLCP”). As part of this transaction, Devon contributed gathering system and compression assets in the Cotton Draw area to CDM in exchange for a $100 million cash distribution funded by QLCP. Devon will continue to operate the assets pursuant to the management services agreement. QLCP also committed $40 million of expansion capital to CDM to fund the build out of the assets over the next several years. As of December 31, 2020, QLCP has funded approximately $37 million of the $40 million committed expansion capital to CDM. 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 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.

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 on Devon's consolidated balance sheets, if material.

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 its business.

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;

•

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.

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 midstream activity relates entirely 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 Recognitions

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, 2020. 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,
	2020		2019		2018
Oil	$	2,034	$	2,988	$	2,941
Gas		326		391		482
NGL		335		430		662
Oil, gas and NGL sales		2,695		3,809		4,085

Oil		936		1,534		2,745
Gas		488		645		738
NGL		554		686		871
Marketing and midstream revenues		1,978		2,865		4,354
Total revenues from contracts with customers	$	4,673	$	6,674	$	8,439

Customers

During 2020, Devon had two customers that accounted for approximately 13% and 10% of Devon’s consolidated sales revenue, respectively.

During 2019, no purchaser accounted for more than 10% of Devon’s consolidated sales revenue.

During 2018, Devon had one purchaser that accounted for approximately 11% of Devon’s consolidated sales revenue.

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. 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, 2020, 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, 2020, 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, 2020, 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 June 2019 and the sale of its Barnett Shale assets in October 2020, management presented approximately $190 million of Devon’s cash balance as of December

31, 2020, 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. Additionally, this restricted cash is included within continuing operations on the consolidated balance sheets at December 31, 2020.

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 consolidated statements of 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 adopted ASU No. 2016-02, Leases (Topic 842), as of January 1, 2019, using the modified retrospective transition approach. ASC 842 supersedes the previous lease accounting requirements in ASC 840 and requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. ASC 842 establishes a right-of-use model that requires a lessee to recognize a right-of-use asset and lease liability on the

balance sheet for all leases with a term longer than 12 months. At adoption, using the modified retrospective transition approach, Devon recorded right-of-use lease assets of $410 million and lease liabilities of $380 million. Additionally, Devon recorded a $8 million before tax, $7 million net of tax, cumulative-effect adjustment to reduce retained earnings.

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 2020, 2019 and 2018. No impairment was required as a result of the annual tests in these time periods. Additionally, because the trading price of our common stock decreased 73% during the first quarter of 2020 in response to the COVID-19 pandemic, we performed a goodwill impairment test as of March 31, 2020. While the cushion narrowed significantly since the 2019 impairment evaluation, we concluded an impairment was not required as of March 31, 2020. Due to substantial recovery in the price of Devon’s common stock subsequent to the first quarter of 2020, there was no risk associated with the impairment of goodwill as of December 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, 2020

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 is 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 transaction will be 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 will be recorded at their respective fair values as of the date of completion of the Merger and added to Devon’s. The preliminary purchase price assessment remains an ongoing process and is subject to change for up to one year subsequent to the closing date of the Merger. 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. The Merger is structured as a tax-free reorganization for United States federal income tax purposes.

In February 2021, Devon redeemed bonds issued by WPX with a maturity date of 2022 pursuant to a make whole provision in the related indenture. The total principal related to this redemption was approximately $43 million, with an additional $2 million cash premium paid to complete the make whole redemption.

Discontinued Operations

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, including a $170 million deposit previously received in April 2020. The agreement with BKV also 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 commences on January 1, 2021 and has a term of four years. Devon recognized a $748 million asset impairment related to these assets in the fourth quarter of 2019 and incremental asset impairments totaling $182 million during 2020. Additional information can be found in Note 19.

In June 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.

During 2018, Devon received proceeds of approximately $500 million and recognized a $26 million net gain on asset dispositions from the sales of non-core assets in the Barnett Shale, located primarily in Johnson and Wise counties, Texas. In conjunction with these divestitures, Devon settled certain gas processing contracts and recognized $40 million in settlement expense, which is included in asset dispositions within discontinued operations. For additional information, see Note 19.

During the third quarter of 2018, Devon completed the sale of its aggregate ownership interests in EnLink and the General Partner for $3.125 billion and recognized a gain of approximately $2.6 billion ($2.2 billion after-tax). The proceeds from the sale were utilized to increase Devon’s share repurchase activities, which are discussed further in Note 18. Additional information on these discontinued operations can be found in Note 19.

Continuing Operations

In the fourth quarter of 2020, Devon entered into an agreement to divest non-core assets in the Rockies for proceeds of approximately $12 million. The transaction includes contingent earnout payments of up to approximately $8 million and is expected to close in the first quarter of 2021. 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 the accompanying consolidated balance sheet. Estimated total proved reserves related to these assets were approximately 3 MMBoe as of December 31, 2020. The December 31, 2020 assets and liabilities held for sale primarily relate to oil and gas property and equipment and asset retirement obligations, respectively.

During the first quarter of 2020, Devon entered into a farmout agreement in which the third party to the agreement can participate in the development of certain Devon-owned, non-operated interests in the Delaware Basin. Under the agreement, Devon will periodically transfer working interests to the third party, who will then fund its share of operating and development costs. Once certain investment hurdles are met, a portion of the working interest held by the third party will revert to Devon. No material activity occurred during 2020.

During 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.

During 2018, Devon received proceeds totaling approximately $500 million, primarily from the sales of non-core assets in the Delaware Basin, and recognized a net gain on asset dispositions of $278 million. In aggregate, the total estimated proved reserves associated with these divested assets were approximately 24 MMBoe.

Derivative Financial Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

3.	Derivative Financial Instruments

Commodity Derivatives

As of December 31, 2020, Devon had the following open oil derivative positions. The first table presents Devon’s oil derivatives that settle against the average of the prompt month NYMEX WTI futures price. The second table presents Devon’s oil derivatives that settle against the respective indices noted within the table.

	Price Swaps				Price Collars
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q1-Q4 2021		28,040	$	37.60		32,726	$	40.77	$	50.77
Q1-Q2 2022		1,249	$	45.16		9,856	$	38.24	$	48.24

Oil Basis Swaps

Period

Index

Volume

(Bbls/d)

Weighted Average

Differential to WTI

($/Bbl)

Q1-Q4 2021

Midland Sweet

7,000

$

1.27

As of December 31, 2020, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index. The second table presents Devon’s natural gas derivatives that settle against the respective indices noted within the table.

	Price Swaps				Price Collars
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q1-Q4 2021		32,699	$	2.76		179,055	$	2.45	$	2.95
Q1-Q4 2022		6,961	$	2.85		54,901	$	2.66	$	3.16

Natural Gas Basis Swaps

Period

Index

Volume

(MMBtu/d)

Weighted Average

Differential to

Henry Hub

($/MMBtu)

Q1-Q4 2021

El Paso Natural Gas

35,000

$

(0.92

)

As of December 31, 2020, Devon did not have any open NGL derivative positions.

Financial Statement Presentation

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

	Year Ended December 31,
	2020		2019			2018
Commodity derivatives:
Oil, gas and NGL derivatives	$	155	$	(454	)	$	457
Marketing and midstream revenues		—		1			(1	)
Interest rate derivatives:
Other expenses		—		—			65
Net gains (losses) recognized	$	155	$	(453	)	$	521

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

	December 31, 2020		December 31, 2019
Commodity derivative assets:
Other current assets	$	5	$	49
Other long-term assets		1		1
Total derivative assets	$	6	$	50
Commodity derivative liabilities:
Other current liabilities	$	143	$	30
Other long-term liabilities		5		1
Total derivative liabilities	$	148	$	31

Share-Based Compensation

12 Months Ended

Dec. 31, 2020

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 2020, 2019 and 2018 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,
	2020		2019		2018
G&A	$	76	$	83	$	104
Exploration expenses		1		1		2
Restructuring and transaction costs		11		31		31
Total	$	88	$	115	$	137
Related income tax benefit	$	—	$	13	$	17

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

						Performance-Based					Performance
	Restricted Stock Awards					Restricted Stock Awards					Share Units
	Awards			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 12/31/19		4,984		$	29.65		153		$	33.88		2,155				$	40.35
Granted		3,056		$	21.90		—		$	—		688				$	27.89
Vested		(2,388	)	$	28.96		(109	)	$	29.51		(455	)			$	52.56
Forfeited		(336	)	$	24.52		—		$	—		(394	)			$	47.30
Unvested at 12/31/20		5,316		$	25.82		44		$	44.70		1,994		⁽¹	⁾	$	31.89

(1)	A maximum of 3.2 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.

	2020		2019		2018
Restricted Stock Awards and Units	$	44	$	127	$	111
Performance-Based Restricted Stock Awards	$	2	$	4	$	10
Performance Share Units	$	10	$	4	$	20

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, 2020.

			Performance-Based
	Restricted Stock		Restricted Stock		Performance
	Awards		Awards		Share Units
Unrecognized compensation cost	$	70	$	—	$	10
Weighted average period for recognition (years)		2.4		0.4		1.7

Restricted Stock Awards

Restricted stock awards 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 will not be paid until the underlying award vests. Devon estimates the fair values of restricted stock awards 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-Based Restricted Stock Awards

Performance-based restricted stock awards were granted to certain members of Devon’s senior management. Vesting of the awards is dependent on Devon meeting certain internal performance targets and the recipient meeting certain service requirements. Generally, the service requirement for vesting ranges from one to four years. In order for awards to vest, the performance target must be met in the first year. If the performance target is met, the recipient is entitled to dividends under the same terms described above for nonperformance-based restricted stock. If the performance target and service period requirements are not met, the award does not vest. Devon estimates the fair values of the awards as the closing price of Devon’s common stock on the grant date of the award, which is expensed over the applicable vesting period. No performance-based restricted stock awards were granted in 2020, 2019 and 2018.

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. 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.

	2020			2019					2018
Grant-date fair value		$	27.89	$	28.43	—	$	29.53	$	36.23	—	$	37.88
Risk-free interest rate	1.36%			2.48%					2.28%
Volatility factor	38.4%			39.1%					45.8%
Contractual term (years)	2.89			2.89					2.89

Asset Impairments

12 Months Ended

Dec. 31, 2020

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,
	2020		2019		2018
Proved oil and gas assets	$	2,664	$	—	$	109
Other assets		29		—		47
Total asset impairments	$	2,693	$	—	$	156

Unproved impairments	$	152	$	18	$	95

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 than in 2020. During 2020, Devon recognized approximately $29 million of non-oil and gas asset impairments.

In 2018, Devon recognized $109 million of proved asset impairments relating to U.S. non-core assets no longer in its development plans and approximately $47 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. Of these unproved impairments, $116 million related primarily to the Rockies field and $36 million related to certain non-core acreage Devon no longer intends to pursue for exploration opportunities. In 2019 and 2018, 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, 2020

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,
	2020		2019		2018
Restructuring	$	41	$	84	$	97
Transaction costs		8		—		—
Total	$	49	$	84	$	97

Restructuring

2020 Workforce Reductions

In the third quarter of 2020, Devon announced a cost reduction plan designed to deliver sustainable cost savings by year-end 2020. As a result, Devon recognized $41 million of restructuring expenses during 2020. Of these expenses, $11 million and $9 million resulted from accelerated vesting of share-based grants and settlements and curtailments of defined retirement benefits, respectively, which are both noncash charges.

Prior Years’ Restructurings

During 2019 and 2018, Devon recognized restructuring expenses of $84 million and $97 million, 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. Of these expenses recognized in 2018, $31 million and $14 million resulted from accelerated vesting of share-based grants and settlements of defined retirement benefits, respectively.

The following table summarizes Devon’s restructuring liabilities presented in the accompanying consolidated balance sheets.

	Other			Other
	Current			Long-term
	Liabilities			Liabilities			Total
Balance as of December 31, 2018	$	39		$	3		$	42
Changes due to 2019 workforce reductions		18			—			18
Changes related to prior years' restructurings		(37	)		(2	)		(39	)
Balance as of December 31, 2019	$	20		$	1		$	21
Changes related to 2020 workforce reductions		3			—			3
Changes related to prior years' restructurings		(18	)		—			(18	)
Changes related to retained liabilities previously classified as discontinued operations		30			136			166
Balance as of December 31, 2020	$	35		$	137		$	172

As of December 31, 2020, approximately $30 million and $136 million of liabilities were reclassified from liabilities associated with discontinued operations to other current and long-term liabilities, respectively, on the consolidated balance sheets.

Transaction Costs

On September 26, 2020, Devon and WPX entered into the Merger Agreement, providing for an all-stock merger of equals which was completed on January 7, 2021. Devon incurred approximately $8 million in bank, legal

and accounting fees in the fourth quarter of 2020 related to the Merger. Devon expects to incur additional transaction costs in connection with the Merger closing in 2021.

Other, Net

12 Months Ended

Dec. 31, 2020

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,
	2020			2019			2018
Asset retirement obligation accretion	$	20		$	21		$	26
Severance tax refunds		(40	)		—			(5	)
Other		(14	)		(17	)		(28	)
Total	$	(34	)	$	4		$	(7	)

During 2020 and 2018, Devon received severance tax refunds related to prior periods of $40 million and $5 million, respectively.

Income Taxes

12 Months Ended

Dec. 31, 2020

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,
	2020			2019			2018
Current income tax benefit:
U.S. federal	$	(219	)	$	(3	)	$	(14	)
Various states		—			(2	)		(3	)
Total current income tax benefit		(219	)		(5	)		(17	)
Deferred income tax expense (benefit):
U.S. federal		(304	)		8			184
Various states		(24	)		(33	)		63
Total deferred income tax expense (benefit)		(328	)		(25	)		247
Total income tax expense (benefit)	$	(547	)	$	(30	)	$	230

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,
	2020			2019			2018
Earnings (loss) from continuing operations before income taxes	$	(3,090	)	$	(109	)	$	944

U.S. statutory income tax rate		21	%		21	%		21	%
Change in tax legislation		4	%		0	%		0	%
State income taxes		1	%		24	%		5	%
Change in unrecognized tax benefits		0	%		(13	%)		(2	%)
Audit settlements		0	%		15	%		(2	%)
Other		(1	%)		(19	%)		2	%
Deferred tax asset valuation allowance		(7	%)		0	%		0	%
Effective income tax rate		18	%		28	%		24	%

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.

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 intends to carry 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. Since then, reduced demand from the COVID-19 pandemic has caused an unprecedented downturn in the commodity price environment. As a result, Devon recorded significant impairments during the first quarter of 2020 and is now in a net deferred tax asset position. Devon reassessed its position and recorded a 100% valuation allowance against all U.S. federal and state net deferred tax assets and has 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.

2018

Through the first six months of 2018, Devon maintained a 100% valuation allowance against its deferred tax assets resulting from prior year cumulative financial losses, oil and gas impairments and significant net operating losses for U.S. federal and state income tax. However, upon closing the EnLink divestiture in the third quarter of 2018, Devon realized a pre-tax gain of $2.6 billion. Based on its net deferred tax liability position, current period projected net operating loss utilization, and projections of future taxable income, Devon reassessed its position and determined that it was no longer in a full valuation allowance position, maintaining only valuation allowances against certain deferred tax assets, including certain tax credits and state net operating losses. As part of its reassessment, Devon determined that apart from the sale of EnLink and the General Partner, Devon would have remained in a full valuation allowance position. Accordingly, the deferred tax benefit resulting from the release of the valuation allowance that was generated in the first two quarters was allocated to continuing operations, while the $259 million of the deferred tax benefit resulting from the release of the remainder of the full valuation allowance position was allocated entirely to discontinued operations.

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,
	2020			2019
Deferred tax assets:
Capital loss carryforwards	$	547		$	—
Investment in subsidiary		441			—
Net operating loss carryforwards		238			306
Accrued liabilities		125			35
Asset retirement obligation		94			123
Pension benefit obligation		43			39
Other		96			66
Total deferred tax assets before valuation allowance		1,584			569
Less: valuation allowance		(1,355	)		(106	)
Net deferred tax assets		229			463
Deferred tax liabilities:
Property and equipment		(213	)		(800	)
Other		—			(4	)
Total deferred tax liabilities		(213	)		(804	)
Net deferred tax asset (liability)	$	16		$	(341	)

The $16 million net Canadian deferred tax asset as of December 31, 2020, is expected to be realized by the end of 2022. Included in Devon’s Canadian net deferred tax asset balance are $593 million of deferred tax assets primarily related to capital loss carryforwards and a $577 million valuation allowance against Canadian deferred tax assets.

Devon has a deductible outside basis difference in its investment in its consolidated Canadian subsidiary. In the fourth quarter of 2020, it became apparent that this basis difference would reverse within the foreseeable future. As such, Devon recorded a $441 million deferred tax asset with a corresponding increase to its U.S. deferred tax asset valuation allowance. The tax benefit associated with recording this deferred tax asset and the offsetting tax expense associated with the corresponding change in valuation allowance are recorded in discontinued operations.

At December 31, 2020, Devon has recognized $238 million of deferred tax assets related to various net operating loss carryforwards available to offset future taxable income. Devon has $581 million of U.S. federal net operating loss carryforwards ($431 million expiring in 2037 with the remainder having an indefinite life) and $2.5 billion of U.S. state net operating loss carryforwards expiring between 2021 and 2040. In the current environment, Devon currently does not anticipate utilizing all of its U.S. federal or state net operating loss carryforwards, as indicated by the full valuation allowance against its U.S. deferred tax assets.

Unrecognized Tax Benefits

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

	December 31,
	2020			2019
	(Millions)
Balance at beginning of year	$	65		$	51
Tax positions taken in prior periods		(42	)		14
Balance at end of year	$	23		$	65

Devon recognized no net interest or penalties in 2020 and its unrecognized tax benefit balance included no interest and penalties at December 31, 2020. Devon recognized a net interest benefit of $5 million in 2019 and its unrecognized tax benefit balance included no interest and penalties at December 31, 2019. At December 31, 2020 and December 31, 2019, there were $23 million and $65 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. The deferred unrecognized tax benefits of $50 million and $7 million, respectively, at December 31, 2020 and December 31, 2019 are not included in the table above but are accounted for in Devon’s deferred tax disclosure above. 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		2017-2020
Various U.S. states		2016-2020
Canada		2004-2020

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 + Details

Net Earnings (Loss) Per Share from Continuing Operations

12 Months Ended

Dec. 31, 2020

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,
	2020			2019			2018
Net earnings (loss) from continuing operations:
Net earnings (loss) from continuing operations	$	(2,552	)	$	(81	)	$	714
Attributable to participating securities		(4	)		(2	)		(8	)
Basic and diluted earnings (loss) from continuing operations	$	(2,556	)	$	(83	)	$	706
Common shares:
Common shares outstanding - total		383			407			499
Attributable to participating securities		(6	)		(6	)		(5	)
Common shares outstanding - basic		377			401			494
Dilutive effect of potential common shares issuable		—			—			3
Common shares outstanding - diluted		377			401			497
Net earnings (loss) per share from continuing operations:
Basic	$	(6.78	)	$	(0.21	)	$	1.43
Diluted	$	(6.78	)	$	(0.21	)	$	1.42
Antidilutive options ⁽¹⁾		—			1			1

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

Other Comprehensive Earnings

12 Months Ended

Dec. 31, 2020

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

Other Comprehensive Earnings

10.	Other Comprehensive Earnings

Components of other comprehensive earnings consist of the following:

	Year Ended December 31,
	2020			2019			2018
Foreign currency translation:
Beginning accumulated foreign currency translation and other	$	—		$	1,159		$	1,309
Change in cumulative translation adjustment		—			78			(166	)
Release of Canadian cumulative translation adjustment ⁽¹⁾		—			(1,237	)		—
Income tax benefit		—			—			14
Other		—			—			2
Ending accumulated foreign currency translation and other		—			—			1,159
Pension and postretirement benefit plans:
Beginning accumulated pension and postretirement benefits		(119	)		(132	)		(143	)
Net actuarial gain and prior service cost arising in current year		(34	)		(10	)		(3	)
Recognition of net actuarial loss and prior service cost in earnings ⁽²⁾		7			6			12
Curtailment and settlement of pension benefits		16			21			47
Income tax expense		3			(4	)		(12	)
Other ⁽³⁾		—			—			(33	)
Ending accumulated pension and postretirement benefits		(127	)		(119	)		(132	)
Accumulated other comprehensive earnings (loss), net of tax	$	(127	)	$	(119	)	$	1,027

(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 expenses in the accompanying consolidated statements of comprehensive earnings. See Note 17 for additional details.

(3)	As a result of Devon’s early adoption of ASU 2018-02 in the fourth quarter of 2018, Devon reclassified $33 million from accumulated other comprehensive income to retained earnings in the December 31, 2018 consolidated balance sheet.

Supplemental Information To Statements Of Cash Flows

12 Months Ended

Dec. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Supplemental Information To Statements Of Cash Flows

11.	Supplemental Information to Statements of Cash Flows

	Year Ended December 31,
	2020			2019			2018
Changes in assets and liabilities, net:
Accounts receivable	$	231		$	(3	)	$	(69	)
Other current assets		(97	)		(7	)		(152	)
Other long-term assets		(9	)		17			(7	)
Accounts payable		(38	)		(54	)		(3	)
Revenues and royalties payable		(71	)		8			106
Other current liabilities		(68	)		(66	)		3
Other long-term liabilities		(43	)		23			(36	)
Total	$	(95	)	$	(82	)	$	(158	)
Supplementary cash flow data - total operations:
Interest paid	$	259		$	308		$	385
Income taxes paid	$	171		$	6		$	40

As of December 31, 2020 and 2019, Devon had approximately $100 million and $250 million, respectively, of accrued capital expenditures included in “Total property and equipment, net” and “Accounts payable” on the consolidated balance sheets.

Accounts Receivable

12 Months Ended

Dec. 31, 2020

Accounts Receivable Net [Abstract]

Accounts Receivable

12.	Accounts Receivable

Components of accounts receivable include the following:

	December 31, 2020			December 31, 2019
Oil, gas and NGL sales	$	335		$	452
Joint interest billings		57			168
Marketing and midstream revenues		195			207
Other		25			13
Gross accounts receivable		612			840
Allowance for doubtful accounts		(11	)		(8	)
Net accounts receivable	$	601		$	832

Property, Plant and Equipment

12 Months Ended

Dec. 31, 2020

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, 2020			December 31, 2019
Property and equipment:
Proved	$	27,589		$	27,668
Unproved and properties under development		392			583
Total oil and gas		27,981			28,251
Less accumulated DD&A		(23,545	)		(20,693	)
Oil and gas property and equipment, net		4,436			7,558
Other property and equipment		1,737			1,725
Less accumulated DD&A		(780	)		(690	)
Other property and equipment, net ⁽¹⁾		957			1,035
Property and equipment, net	$	5,393		$	8,593

(1)	$102 million and $80 million related to CDM in 2020 and 2019, respectively.

During 2020, Devon recognized asset impairments of $2.7 billion primarily related to proved oil and gas assets and $152 million of unproved impairments, which significantly reduced the carrying value of its property and equipment, net. See Note 5 for additional details.

Suspended Exploratory Well Costs

The following summarizes the changes in suspended exploratory well costs for the three years ended December 31, 2020.

	Year Ended December 31,
	2020			2019			2018
Beginning balance	$	82		$	98		$	100
Additions pending determination of proved reserves		148			278			658
Charges to exploration expense		(3	)		—			—
Reclassifications to proved properties		(209	)		(294	)		(660	)
Ending balance	$	18		$	82		$	98

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, 2020, 2019 and 2018, respectively.

Debt And Related Expenses

12 Months Ended

Dec. 31, 2020

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.

	December 31, 2020			December 31, 2019
5.85% due December 15, 2025	$	485		$	485
7.50% due September 15, 2027 ⁽¹⁾		73			73
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 discount on debentures and notes		(20	)		(20	)
Debt issuance costs		(31	)		(35	)
Total long-term debt	$	4,298		$	4,294

(1)

This instrument was assumed by Devon in April 2003 in conjunction with the merger with Ocean Energy. The fair value and effective rates of this note at the time assumed was $169 million and 6.5%. 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, 2020, excluding debt issuance costs, premiums and discounts, are as follows:

	Total
2021	$	—
2022		—
2023		—
2024		—
2025		485
Thereafter		3,864
Total	$	4,349

Credit Lines

Devon has a $3.0 billion Senior Credit Facility. As of December 31, 2020, 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, 2020.

In connection with the closing of the sale of its Canadian business, Devon reallocated and terminated all Canadian commitments under the Senior Credit Facility in accordance with the terms of the credit agreement governing the Senior Credit Facility. The termination of the Canadian subfacility was effective as of June 27, 2019, and such termination did not decrease the $3.0 billion in total revolving commitments under, or otherwise modify the terms of, the Senior Credit Facility. Subsequent to Devon’s divestment of substantially all of its oil and gas assets and operations in Canada, 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, (ii) modify the maximum number of maturity extension requests during the term of the Senior Credit Facility from two to three and (iii) eliminate various references to the terminated Canadian subfacility. 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 noncash financial write-downs such as asset impairments. As of December 31, 2020, 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. The interest rate is generally based on a standard index such as the Federal Funds Rate, LIBOR or the money market rate as found in the commercial paper market. As of December 31, 2020, Devon had no outstanding commercial paper borrowings.

Financing Costs, Net

The following schedule includes the components of net financing costs.

	Year Ended December 31,
	2020			2019			2018
Interest based on debt outstanding	$	259		$	260		$	287
Early retirement of debt		—			—			312
Interest income		(12	)		(33	)		(32	)
Other		23			23			13
Total net financing costs	$	270		$	250		$	580

During 2018, Devon recognized a $312 million charge on early retirement of debt, consisting of $304 million in cash retirement costs and $8 million of noncash charges. These costs, along with other charges associated with retiring the debt, are included in net financing costs in the consolidated statements of comprehensive earnings.

Leases

12 Months Ended

Dec. 31, 2020

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, 2020						December 31, 2019
	Finance		Operating		Total		Finance		Operating		Total
Right-of-use assets	$	220	$	3	$	223	$	229	$	14	$	243
Lease liabilities:
Current lease liabilities ⁽¹⁾	$	8	$	1	$	9	$	7	$	10	$	17
Long-term lease liabilities		244		2		246		240		4		244
Total lease liabilities	$	252	$	3	$	255	$	247	$	14	$	261

(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,
		2020			2019
Operating lease cost	Property, plant and equipment; G&A	$	10		$	40
Short-term lease cost ⁽¹⁾	Property, plant and equipment; G&A		45			84
Financing lease cost:
Amortization of right-of-use assets	DD&A		8			8
Interest on lease liabilities	Net financing costs		11			10
Variable lease cost	G&A		—			2
Lease income	G&A		(8	)		(5	)
Net lease cost		$	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,
	2020						2019
	Finance			Operating			Finance			Operating
Cash outflows for lease liabilities:
Operating cash flows	$	7		$	2		$	7		$	2
Investing cash flows	$	—		$	8		$	—		$	41
Right-of-use assets obtained in exchange for new lease liabilities	$	—		$	—		$	—		$	3
Weighted average remaining lease term (years)		7.0			4.1			8.0			2.2
Weighted average discount rate		4.2	%		2.9	%		4.2	%		3.2	%

The following table presents Devon’s maturity analysis as of December 31, 2020 for leases expiring in each of the next 5 years and thereafter.

	Finance			Operating		Total
2021	$	7		$	1	$	8
2022		8			1		9
2023		8			1		9
2024		8			—		8
2025		8			—		8
Thereafter		290			—		290
Total lease payments		329			3		332
Less: interest		(77	)		—		(77	)
Present value of lease liabilities	$	252		$	3	$	255

Devon rents or subleases certain real estate to third parties. The following table presents Devon’s expected lease income as of December 31, 2020 for each of the next 5 years and thereafter.

	Operating
	Lease Income
2021	$	8
2022		8
2023		8
2024		9
2025		8
Thereafter		52
Total	$	93

Asset Retirement Obligations

12 Months Ended

Dec. 31, 2020

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,
	2020			2019
Asset retirement obligations as of beginning of period	$	398		$	484
Liabilities incurred		18			20
Liabilities settled and divested		(29	)		(66	)
Liabilities reclassified as held for sale		(42	)		—
Revision of estimated obligation		4			(61	)
Accretion expense on discounted obligation		20			21
Asset retirement obligations as of end of period		369			398
Less current portion		11			18
Asset retirement obligations, long-term	$	358		$	380

During 2019, Devon reduced its asset retirement obligations by $61 million, primarily due to changes in the future cost estimates and retirement dates for its oil and gas assets. During 2019, Devon also reduced its asset retirement obligations by $42 million as a result of Devon’s 2019 divestitures. For additional information, see Note 2.

Retirement Plans

12 Months Ended

Dec. 31, 2020

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. Contributions are 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, $34 million and $40 million to these plans in 2020, 2019 and 2018, 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; however, eligible employees have continued to accrue benefits based upon years of service and compensation. However, effective December 31, 2020, Devon’s benefits committee approved a freeze of all future benefit accruals under the Plan.

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 85% fixed income and 15% 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 $617 million and $240 million at December 31, 2020 and 2019, respectively. Also included in 2019 were commingled funds that primarily invest in long-term bonds and U.S. Treasury securities. These fixed income securities can be redeemed 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 $233 million at December 31, 2019.

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 $110 million and $112 million at December 31, 2020 and 2019, respectively.

Other – Devon’s other securities include short-term investment funds and a hedge fund 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 $18 million and $109 million at December 31, 2020 and 2019, 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, 2020 and 2019.

	Pension Benefits						Postretirement Benefits
	2020			2019			2020			2019
Change in benefit obligation:
Benefit obligation at beginning of year	$	924		$	916		$	14		$	17
Service cost		5			7			—			—
Interest cost		25			32			—			—
Actuarial loss (gain)		116			91			(1	)		(3	)
Plan amendments		2			3			—			—
Plan curtailments		(14	)		(3	)		1			1
Plan settlements		(28	)		(75	)		—			—
Participant contributions		—			—			2			2
Benefits paid		(49	)		(47	)		(3	)		(3	)
Benefit obligation at end of year		981			924			13			14
Change in plan assets:
Fair value of plan assets at beginning of year		694			685			—			—
Actual return on plan assets		114			118			—			—
Employer contributions		14			13			1			1
Participant contributions		—			—			2			2
Plan settlements		(28	)		(75	)		—			—
Benefits paid		(49	)		(47	)		(3	)		(3	)
Fair value of plan assets at end of year		745			694			—			—
Funded status at end of year	$	(236	)	$	(230	)	$	(13	)	$	(14	)
Amounts recognized in balance sheet:
Other long-term assets	$	10		$	—		$	—		$	—
Other current liabilities		(14	)		(13	)		(2	)		(2	)
Other long-term liabilities		(232	)		(217	)		(11	)		(12	)
Net amount	$	(236	)	$	(230	)	$	(13	)	$	(14	)
Amounts recognized in accumulated other comprehensive earnings:
Net actuarial loss (gain)	$	201		$	183		$	(12	)	$	(12	)
Prior service cost (credit)		—			5			—			(1	)
Total	$	201		$	188		$	(12	)	$	(13	)

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.

Certain of Devon’s pension plans have a combined projected benefit obligation or accumulated benefit obligation in excess of plan assets at December 31, 2020 and December 31, 2019, as presented in the table below.

	December 31,
	2020		2019
Projected benefit obligation	$	246	$	924
Accumulated benefit obligation ⁽¹⁾	$	246	$	223
Fair value of plan assets	$	—	$	694

(1)	The projected and accumulated benefit obligation for the qualified pension plan was not in excess of plan assets as of December 31, 2020. The 2019 qualified pension plan contained $690 million of accumulated benefit obligations which were not in excess of plan assets.

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

	Pension Benefits									Postretirement Benefits
	2020			2019			2018			2020			2019			2018
Net periodic benefit cost:
Service cost	$	5		$	7		$	9		$	—		$	—		$	—
Interest cost		25			32			38			—			—			—
Expected return on plan assets		(41	)		(38	)		(48	)		—			—			—
Recognition of net actuarial loss (gain) ⁽¹⁾		5			7			13			—			(1	)		(1	)
Recognition of prior service cost ⁽¹⁾		3			1			1			(1	)		(1	)		(1	)
Total net periodic benefit cost ⁽²⁾		(3	)		9			13			(1	)		(2	)		(2	)
Other comprehensive loss (earnings):
Actuarial loss (gain) arising in current year		27			7			5			(1	)		(2	)		(1	)
Prior service cost arising in current year		2			3			—			—			—			—
Recognition of net actuarial gain (loss), including settlement expense, in net periodic benefit cost ⁽³⁾		(9	)		(22	)		(59	)		1			1			1
Recognition of prior service cost, including curtailment, in net periodic benefit cost ⁽³⁾		(7	)		(2	)		(2	)		1			1			1
Total other comprehensive loss (earnings)		13			(14	)		(56	)		1			—			1
Total	$	10		$	(5	)	$	(43	)	$	—		$	(2	)	$	(1	)

(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 expenses in the accompanying consolidated statements of comprehensive earnings.

(3)	These amounts include restructuring costs that were reclassified out of other comprehensive earnings in 2020, 2019 and 2018. See Note 6 for further discussion.

Assumptions

	Pension Benefits			Postretirement Benefits
	2020	2019	2018	2020	2019	2018
Assumptions to determine benefit obligations:
Discount rate	2.38%	3.14%	4.09%	1.82%	2.81%	4.01%
Rate of compensation increase	2.50%	2.50%	2.50%	N/A	N/A	N/A
Assumptions to determine net periodic benefit cost:
Discount rate - service cost	3.47%	3.74%	3.77%	3.25%	3.99%	4.13%
Discount rate - interest cost	2.75%	3.36%	3.14%	2.31%	3.21%	2.67%
Rate of compensation increase	2.50%	2.50%	2.50%	N/A	N/A	N/A
Expected return on plan assets	6.00%	5.75%	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 2020 benefit obligation for the other postretirement medical plans, a 6.9% annual rate of increase in the per capita cost of covered health care benefits was assumed for 2021. 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 $57 million a year for the next five years and $264 million total for the five years thereafter. Of these payments to be paid in 2021, $17 million is expected to be funded from Devon’s available cash, cash equivalents and other assets.

- Definition

The entire disclosure for retirement benefits.

+ References

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+ Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

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

In 2018, Devon announced a share repurchase program totaling $4.0 billion. In February 2019, Devon announced a further expansion to $5.0 billion with a December 31, 2019 expiration date. In December 2019, Devon announced a new $1.0 billion share repurchase program with a December 31, 2020 expiration date.

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

	Total Number of Shares Purchased		Dollar Value of Shares Purchased		Average Price Paid per Share
$5.0 Billion Plan
2018		78,149	$	2,978	$	38.11
2019		68,625		1,827		26.62
Total inception-to-date		146,774	$	4,805	$	32.74

$1.0 Billion Plan
2020		2,243	$	38	$	16.85
Total inception-to-date		2,243	$	38	$	16.85

Dividends

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

	Amounts		Rate Per Share
Year Ended 2020:
First quarter	$	34	$	0.09
Second quarter		42	$	0.11
Third quarter		43	$	0.11
Fourth quarter		41	$	0.11
Fourth quarter (special dividend)		97	$	0.26
Total year-to-date	$	257
Year Ended 2019:
First quarter	$	34	$	0.08
Second quarter		37	$	0.09
Third quarter		35	$	0.09
Fourth quarter		34	$	0.09
Total year-to-date	$	140
Year Ended 2018:
First quarter	$	32	$	0.06
Second quarter		42	$	0.08
Third quarter		38	$	0.08
Fourth quarter		37	$	0.08
Total year-to-date	$	149

Devon raised its quarterly dividend by 22%, to $0.11 per share, beginning in the second quarter of 2020. Devon also increased its quarterly dividend rate in both the second quarter of 2019 from $0.08 to $0.09 and in 2018 from $0.06 to $0.08.

On October 1, 2020, Devon paid a $0.26 per share special dividend to holders of record as of August 14, 2020.

In February 2021, Devon announced an approximately $128 million variable cash dividend in the amount of $0.19 per share payable in the first quarter of 2021.

Discontinued Operations

12 Months Ended

Dec. 31, 2020

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, inclusive of Barnett properties divested in previous reporting periods located primarily in Johnson and Wise counties, Texas, 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, including a $170 million deposit previously received in April 2020. 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 commences on January 1, 2021 and has a term of four years. The valuation of the future contingent earnout payments included within other current assets in the December 31, 2020 balance sheet was $66 million. The value was derived utilizing a Monte Carlo valuation model and qualifies as a level 3 fair value measurement.

As of December 31, 2020, Devon has classified approximately $20 million of cash as restricted cash on the consolidated balance sheets for obligations associated with the abandonment of certain gas processing contracts related to divestitures of other Barnett Shale assets that occurred in 2018. Cash payments for these charges total approximately $2 million per quarter.

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.

As of December 31, 2020, Devon has classified approximately $170 million of cash as restricted cash on the consolidated balance sheets for obligations retained related to the Canadian business. The remaining obligations consist of a firm transportation agreement and office leases. Cash payments for these charges total approximately $8 million per quarter.

EnLink

On June 6, 2018, Devon announced that it had entered into an agreement to sell its aggregate ownership interests in EnLink and the General Partner for $3.125 billion. Upon entering into the agreement to sell its ownership interest in June 2018, Devon concluded that the transaction was a strategic shift and met the requirements of assets held for sale and discontinued operations. As a result, Devon classified the results of operations and cash flows related to EnLink and the General Partner as discontinued operations on its consolidated financial statements.

On July 18, 2018, Devon completed the sale of its aggregate ownership interests in EnLink and the General Partner for $3.125 billion and recognized a gain of approximately $2.6 billion ($2.2 billion after-tax). Current (cash) income tax associated with the transaction was approximately $12 million. The vast majority of the tax effect relates to deferred tax expense offset by the valuation allowance adjustment.

As part of the sale agreement, Devon extended its fixed-fee gathering and processing contracts with respect to the Bridgeport and Cana plants with EnLink through 2029. Although the agreements were extended to 2029, the minimum volume commitments for the Bridgeport and Cana plants expired at the end of 2018. Devon had minimum volume commitments for gathering and processing of 77-128 MMcf/d with EnLink at the Chisholm plant which expired at the end of 2020.

Prior to the divestment of Devon’s aggregate ownership of EnLink and the General Partner, certain activity between Devon and EnLink were eliminated in consolidation. Subsequent to the divestment, all activity related to EnLink represent third-party transactions and are no longer eliminated in consolidation.

During 2020, 2019 and from the period of July 19, 2018 through December 31, 2018, Devon had net outflows of approximately $430 million, $560 million and $380 million with EnLink, respectively, which primarily related to gathering and processing expenses. These net outflows represent gross cash amounts and not net working interest amounts.

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

Year ended December 31,	Barnett Shale			Canada			EnLink			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
Earnings (loss) from discontinued operations before income taxes		(139	)		(13	)		—			(152	)
Income tax benefit		(11	)		(13	)		—			(24	)
Net earnings (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	)
2018
Oil, gas and NGL sales	$	777		$	814		$	—		$	1,592
Oil, gas and NGL derivatives		—			151			—			150
Marketing and midstream revenues		—			95			3,567			3,662
Total revenues		777			1,060			3,567			5,404
Production expenses		467			605			—			1,072
Exploration expenses		—			48			—			48
Marketing and midstream expenses		—			42			2,912			2,954
Depreciation, depletion and amortization		100			330			244			674
Asset dispositions		14			—			(2,607	)		(2,593	)
General and administrative expenses		—			76			65			141
Financing costs, net		—			14			98			112
Restructuring and transaction costs		—			17			—			17
Other expenses		(34	)		182			(8	)		140
Total expenses		547			1,314			704			2,565
Earnings (loss) from discontinued operations before income taxes		230			(254	)		2,863			2,839
Income tax expense (benefit)		50			(124	)		403			329
Net earnings (loss) from discontinued operations, net of tax		180			(130	)		2,460			2,510
Net earnings attributable to noncontrolling interests		—			—			160			160
Net earnings (loss) from discontinued operations, attributable to Devon	$	180		$	(130	)	$	2,300		$	2,350

Prior to December 31, 2020, activity on the consolidated statement of comprehensive earnings and assets and liabilities on the consolidated balance sheet related to Devon’s Barnett Shale and Canadian operations were classified as discontinued operations. Under the terms of the Canadian and Barnett disposition agreements, Devon retained certain long-term obligations for firm transportation, office leases and potential income tax matters. Appropriate assets and liabilities related to these obligations have been recognized on Devon's consolidated balance sheet. Because these amounts will be settled over a period extending as far as 13 years in the future, these assets and liabilities have been reclassified as part of Devon's continuing operations as of December 31, 2020.

The following table presents the carrying amounts of the assets and liabilities associated with discontinued operations on the consolidated balance sheet as of December 31, 2019.

	As of December 31, 2019
	Barnett Shale		Canada		Total
Accounts receivable	$	38	$	1	$	39
Other current assets		5		2		7
Oil and gas property and equipment, based on successful efforts accounting, net		751		—		751
Other property and equipment, net		11		—		11
Goodwill		88		—		88
Other long-term assets		—		81		81
Total assets associated with discontinued operations	$	893	$	84	$	977

Accounts payable	$	15	$	4	$	19
Revenues and royalties payable		44		3		47
Other current liabilities		19		233		252
Asset retirement obligations		141		—		141
Other long-term liabilities		16		169		185
Total liabilities associated with discontinued operations	$	235	$	409	$	644

Commitments And Contingencies

12 Months Ended

Dec. 31, 2020

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, 2020, Devon has accrued approximately $40 million in other current liabilities pertaining to such royalty matters.

Environmental and Other Matters

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

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 believes these claims to be baseless and intends to vigorously defend against the proceedings.

Various states, municipalities and other governmental and private parties 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 injunctions to address the alleged impacts of climate change. Although Devon cannot predict the ultimate outcome of these matters, Devon believes these claims to be baseless and intends to vigorously defend against the proceedings.

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. 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, 2020.

Year Ending December 31,	Drilling and Facility Obligations		Operational Agreements		Office and Equipment Leases
2021	$	84	$	241	$	54
2022		38		251		29
2023		36		212		28
2024		26		197		10
2025		7		162		9
Thereafter		—		483		289
Total	$	191	$	1,546	$	419

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, 2020

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, 2020 and December 31, 2019, 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
	Amount			Value			Inputs		Inputs
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	)
December 31, 2019 assets (liabilities):
Cash equivalents	$	702		$	702		$	702	$	—
Commodity derivatives	$	50		$	50		$	—	$	50
Commodity derivatives	$	(31	)	$	(31	)	$	—	$	(31	)
Debt	$	(4,294	)	$	(5,376	)	$	—	$	(5,376	)

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.

- 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, 2020

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 all periods presented related to Devon’s discontinued operations, which consist of Devon’s Canadian operations that were sold in 2019 and its Barnett Shale assets, inclusive of properties divested in previous reporting periods located primarily in Johnson and Wise counties, Texas, which were sold in October 2020. Amounts excluded for 2019 and 2018 consisted of 612 MMBoe and 1,104 MMBoe, respectively, of estimated proved reserves and $940 million and $3,042 million, respectively, of discounted future net cash flows, which related to both Devon’s Canadian operations and its Barnett Shale assets. 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,
	2020		2019		2018
Property acquisition costs:
Proved properties	$	—	$	—	$	2
Unproved properties		8		35		70
Exploration costs		159		312		679
Development costs		820		1,499		1,505
Costs incurred	$	987	$	1,846	$	2,256

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,
	2020			2019			2018
Oil, gas and NGL sales	$	2,695		$	3,809		$	4,085
Production expenses		(1,123	)		(1,197	)		(1,153	)
Exploration expenses		(167	)		(58	)		(128	)
Depreciation, depletion and amortization		(1,207	)		(1,398	)		(1,134	)
Asset dispositions		—			37			276
Asset impairments		(2,664	)		—			(109	)
Accretion of asset retirement obligations		(20	)		(21	)		(26	)
Income tax expense		—			(270	)		(416	)
Results of operations	$	(2,486	)	$	902		$	1,395
Depreciation, depletion and amortization per Boe	$	9.90		$	11.72		$	10.51

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, 2017		254			1,810			231			787
Revisions due to prices		12			7			2			15
Revisions other than price		(10	)		(102	)		(27	)		(53	)
Extensions and discoveries		93			358			54			206
Production		(47	)		(206	)		(26	)		(108	)
Sale of reserves		(6	)		(65	)		(7	)		(24	)
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

Proved developed reserves:
December 31, 2017		175			1,455			168			585
December 31, 2018		196			1,427			166			600
December 31, 2019		198			1,344			167			589
December 31, 2020		194			1,244			173			574
Proved developed-producing reserves:
December 31, 2017		163			1,384			160			554
December 31, 2018		188			1,394			162			582
December 31, 2019		191			1,327			165			578
December 31, 2020		190			1,223			171			564
Proved undeveloped reserves:
December 31, 2017		79			355			63			202
December 31, 2018		100			375			61			223
December 31, 2019		78			277			44			168
December 31, 2020		88			268			45			178

(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 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. Reserves increased 15 MMBoe in 2018 primarily due to price increases in the trailing 12 month averages for oil, gas and NGLs.

Revisions Other Than Price

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 STACK region of 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 STACK region of 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 STACK region of the Anadarko Basin.

2018 – Total revisions other than price primarily related to Devon’s development programs evaluation of certain oil and dry gas regions, with the largest revisions being made in the STACK region of 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.

2020 – Of the 135 MMBoe of additions from extensions and discoveries, 117 MMBoe were in the Delaware Basin, 8 MMBoe were in the STACK region of the Anadarko Basin, 5 MMBoe in the Powder River Basin and 5 MMBoe 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 STACK region of the Anadarko Basin, 28 MMBoe in the Powder River Basin and 18 MMBoe in Eagle Ford. In 2019, there were no additions related to infill drilling activities.

2018 – Approximately 85% of the additions were through focused efforts in the STACK region of the Anadarko Basin (87 MMBoe) and the Delaware Basin (88 MMBoe). The remaining extensions were added throughout the remainder of Devon’s portfolio.

The 2018 extensions and discoveries included 21 MMBoe related to additions from Devon’s infill drilling activities, primarily relating to the STACK region of the Anadarko Basin.

Sale of Reserves

During 2020, 2019 and 2018, 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 2020 (MMBoe).

	Total
Proved undeveloped reserves as of December 31, 2019		168
Extensions and discoveries		105
Revisions due to prices		(8	)
Revisions other than price		(20	)
Purchase of reserves		2
Sale of reserves		(1	)
Conversion to proved developed reserves		(68	)
Proved undeveloped reserves as of December 31, 2020		178

Total proved undeveloped reserves increased 6% from 2019 to 2020 with the year-end 2020 balance representing 24% of total proved reserves. Over 87% of the 105 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 led to the conversion of 68 MMBoe, or 40% of the 2019 proved undeveloped reserves. Costs incurred to develop and convert Devon’s proved undeveloped reserves were approximately $448 million for 2020. Proved undeveloped reserves revisions other than price were primarily due to changes in previously adopted development plans in the STACK region of the Anadarko Basin (-12 MMBoe) and the Delaware Basin (-8 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,
	2020			2019			2018
Future cash inflows	$	14,957		$	20,750		$	27,759
Future costs:
Development		(1,747	)		(2,093	)		(2,957	)
Production		(7,964	)		(9,174	)		(10,991	)
Future income tax expense		—			(1,037	)		(2,036	)
Future net cash flow		5,246			8,446			11,775
10% discount to reflect timing of cash flows		(1,774	)		(3,048	)		(4,625	)
Standardized measure of discounted future net cash flows	$	3,472		$	5,398		$	7,150

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 2020 estimates, Devon’s future realized prices were assumed to be $37.35 per Bbl of oil, $1.37 per Mcf of gas and $10.76 per Bbl of NGLs. Of the $1.7 billion of future development costs as of the end of 2020, $0.6 billion, $0.4 billion and $0.2 billion are estimated to be spent in 2021, 2022 and 2023, respectively.

Future development costs include not only development costs but also future asset retirement costs. Included as part of the $1.7 billion of future development costs are $0.3 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,
	2020			2019			2018
Beginning balance	$	5,398		$	7,150		$	5,954
Net changes in prices and production costs		(3,277	)		(2,323	)		1,533
Oil, gas and NGL sales, net of production costs		(1,572	)		(2,612	)		(2,932	)
Changes in estimated future development costs		402			303			(273	)
Extensions and discoveries, net of future development costs		988			1,690			2,944
Purchase of reserves		23			43			—
Sales of reserves in place		(7	)		(481	)		(120	)
Revisions of quantity estimates		147			(359	)		(152	)
Previously estimated development costs incurred during the period		537			857			787
Accretion of discount		285			506			648
Net change in income taxes and other		548			624			(1,239	)
Ending balance	$	3,472		$	5,398		$	7,150

Summary Of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2020

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. Investments accounted for using the equity method and cost method are reported as a component of other long-term assets.

Devon entered into an agreement in the fourth quarter of 2019 to form Cotton Draw Midstream, L.L.C. or, “CDM”, a partnership in the Delaware Basin with an affiliate of QL Capital Partners, LP (“QLCP”). As part of this transaction, Devon contributed gathering system and compression assets in the Cotton Draw area to CDM in exchange for a $100 million cash distribution funded by QLCP. Devon will continue to operate the assets pursuant to the management services agreement. QLCP also committed $40 million of expansion capital to CDM to fund the build out of the assets over the next several years. As of December 31, 2020, QLCP has funded approximately $37 million of the $40 million committed expansion capital to CDM. 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 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.

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 on Devon's consolidated balance sheets, if material.

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 its business.

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;

•

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.

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 midstream activity relates entirely 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 Recognitions

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, 2020. 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,
	2020		2019		2018
Oil	$	2,034	$	2,988	$	2,941
Gas		326		391		482
NGL		335		430		662
Oil, gas and NGL sales		2,695		3,809		4,085

Oil		936		1,534		2,745
Gas		488		645		738
NGL		554		686		871
Marketing and midstream revenues		1,978		2,865		4,354
Total revenues from contracts with customers	$	4,673	$	6,674	$	8,439

Customers

During 2020, Devon had two customers that accounted for approximately 13% and 10% of Devon’s consolidated sales revenue, respectively.

During 2019, no purchaser accounted for more than 10% of Devon’s consolidated sales revenue.

During 2018, Devon had one purchaser that accounted for approximately 11% of Devon’s consolidated sales revenue.

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. 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, 2020, 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, 2020, 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, 2020, 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 June 2019 and the sale of its Barnett Shale assets in October 2020, management presented approximately $190 million of Devon’s cash balance as of December

31, 2020, 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. Additionally, this restricted cash is included within continuing operations on the consolidated balance sheets at December 31, 2020.

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