AddedRisk Factors
We May Fail to Realize the Anticipated Benefits of the Merger, and Any Failure to Successfully Integrate the Businesses and Operations of Devon and Coterra May Adversely Affect Our Future Results
DVNDevon Energy
- Headquarters
- Houston, TX
- CEO
- Clay M. Gaspar
- Next results
- around Feb 16, 2027
10-K 0001193125-26-056485 (2026-02-18) vs 10-K 0000950170-25-022844 (2025-02-19)
| Section | Compared text | Words now | Changed |
|---|---|---|---|
| Risk Factors | Item 1A | 8,662 | 14.7% |
| MD&A | Item 7 | 7,349 | 23.2% |
| Legal Proceedings | Item 3 | 377 | 28.4% |
| Accounting Policies | Item 8, Note 1 – Summary of Significant Accounting Policies | 4,880 | 8.3% |
The redline: what was cut and what was added
In each section, the paragraph that changed most, marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
MD&A 151 words changed in this paragraph; it is 33% similar to last year's version.
In 2024, 2025, Devon marked its 53rd 54th anniversary in the oil and gas business and its 36th 37th year as a public company. We generated $6.6 $6.7 billion of operating cash flow in 2024 as a result of the strength of 2025, demonstrating resilience despite lower oil prices through higher production volumes and lower taxes. In April 2025, we announced our portfolio of assets and our operational execution. Our portfolio benefited from the acquisition of Grayson Mill that allowed us to efficiently expand our oil production and operating scale while capturing a meaningful runway of highly economic drilling inventory. The transaction created immediate value within our financial framework by delivering sustainable accretion to earnings and business optimization plan targeting $1.0 billion in annual pre-tax free cash flow. Operating cash flow in 2024 remained consistent improvements by the end of 2026 through enhanced capital efficiency, production optimization, commercial improvements and corporate cost reductions. We achieved approximately 85% of these improvements through 2025, with 2023, despite a decline in commodity prices, due the remainder to operational outperformance, capital efficiency gains and the positive contributions from our Grayson Mill acquisition. be realized by year-end 2026.
Source: Item 7, 10-K 0001193125-26-056485 vs Item 7, 10-K 0000950170-25-022844
Risk Factors 140 words changed in this paragraph; it is 61% similar to last year's version.
Policy makers have also advocated for expanding existing, or creating new, reporting and disclosure requirements regarding GHG emissions and other climate-related matters. For example, the EPA adopted amendments in May 2024 to its GHG Reporting Program, which, among other things, added well blowouts and other abnormal events as new categories of sources for GHG emissions reporting. In addition, the SEC finalized rules in March 2024 that require would have required public companies to include extensive climate-related disclosures in their SEC filings, such as new disclosures on (i) material Scope 1 and 2 GHG emissions, including an independent assurance report, and (ii) financial statement information regarding the effects of severe weather events and other natural conditions. filings. In April 2024, the SEC stayed the effectiveness of these rules pending the completion of a judicial review of certain legal challenges. challenges, and the current U.S. administration has declined to defend the rules in the legal challenges, which has resulted in a stay of the challenges that will remain in effect until the rules are withdrawn or the government resumes its defense of the rules. Similarly, California enacted legislation in October 2023 requiring extensive climate-related disclosures for companies deemed to be doing business in California, and other states are considering similar laws. The European Union has also recently adopted a set of policy initiatives, including the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, which impose expansive sustainability reporting and due diligence requirements for both European Union and certain
Source: Item 1A, 10-K 0001193125-26-056485 vs Item 1A, 10-K 0000950170-25-022844
Accounting Policies 73 words changed in this paragraph; it is 54% similar to last year's version.
Source: Item 8, Note 1 – Summary of Significant Accounting Policies, 10-K 0001193125-26-056485 vs Item 8, Note 1 – Summary of Significant Accounting Policies, 10-K 0000950170-25-022844
Legal Proceedings 41 words changed in this paragraph; it is 92% similar to last year's version.
On April 7, 2020, WPX Energy, Inc., a wholly-owned subsidiary of the Company, received a notice of violation (“NOV”) from the EPA relating to specific historical air emission events occurring on the Fort Berthold Indian Reservation in North Dakota. On July 22, 2022, we received an updated NOV from the EPA relating to the same underlying events. On June 4, 2021, we received a NOV from the EPA relating to alleged air permit violations by WPX Energy Permian, LLC, a wholly-owned subsidiary of the Company, during 2020 in western Texas. On February 1, 2023, we received a notice of violation NOV from the EPA relating to alleged air permit violations by WPX Energy Permian, LLC during 2020 in New Mexico. On June 1, 2023, we received a NOV from the EPA relating to alleged air permit violations by Devon Energy Production Company, L.P., a wholly-owned subsidiary of the Company, during 2020 and 2022 in New Mexico. On August 28, 2025, we received a NOV from the EPA relating to alleged air permit violations by Devon Energy Production Company, L.P. and WPX Energy Permian, LLC during 2024 in New Mexico and western Texas. The Company has been engaging with the EPA to resolve each of these matters, which remain ongoing, and management cannot predict their ultimate outcome; however, resolution of each of these matters may result in a fine or penalty in excess of $300,000. $1 million. For more information on the North Dakota NOV matter with the EPA, see Note 18 in “Item 8. Financial Statements and Supplementary Data” of this report.
Source: Item 3, 10-K 0001193125-26-056485 vs Item 3, 10-K 0000950170-25-022844
Every change, by type
Sentences and paragraphs of DVN's Risk Factors and MD&A, 10-K 2026-02-18 against 10-K 2025-02-19. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier
(may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, would
AddedRisk Factors
The success of the Merger will depend on, among other things, the combined company’s ability to realize anticipated synergies and benefits. If the combined company is not able to successfully achieve these synergies, or the cost to achieve these synergies is greater than expected, then the anticipated benefits of the Merger may not be realized fully or at all or may take longer to realize than expected. Moreover, if we do not realize such benefits or for any other reason, the board of directors of the combined company may not approve, or delay the approval of, the anticipated increases in our dividends and share repurchase authorization following the Merger, which could negatively impact our stock price.
AddedRisk Factors
We and Coterra have operated and, until the completion of the Merger, will continue to operate independently. There can be no assurances that our businesses can be integrated successfully. It is possible that the integration process could result in the loss of key Devon employees or key Coterra employees, the loss of customers, the disruption of our or Coterra’s ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. Devon and Coterra and certain of their respective subsidiaries also have contracts with various business partners, which contracts may grant the counterparties certain rights in connection with the Merger or which may require Devon or Coterra, as applicable, to obtain consents from these counterparties. If such rights are triggered or such consents cannot be obtained, the counterparties to these contracts may have the ability to terminate, reduce the scope of or otherwise seek to vary the terms of their relationships or the terms of such contracts with either or both parties, and the combined company may suffer a loss of potential future revenue, incur costs and lose rights that may be material to the business of the combined company. Furthermore, the combined company’s board of directors and management team will consist of directors and employees from each of Devon and Coterra, as applicable. Combining the boards of directors and management teams of each company into a single board and a single management team could require the reconciliation of differing priorities and strategic philosophies, which may not be successful or take longer than anticipated.
AddedRisk Factors
We Are Subject to Certain Restrictions in the Merger Agreement That May Hinder Operations Pending the Consummation of the Merger, and We May Be the Target of Securities Class Action and Derivative Lawsuits as a Result of the Merger
AddedRisk Factors
Whether or not the Merger is completed, the pending Merger may disrupt our current plans and operations, which could adversely impact our business operations and financial results. During the pendency of the Merger, the Merger Agreement restricts us from engaging in specified types of actions, including, among other things, acquisition, divestiture and financing activities and unbudgeted capital expenditures, in each case subject to certain exceptions. These restrictions could be in place for an extended period of time if the consummation of the Merger is delayed, which may delay or prevent us from undertaking business opportunities that, absent the Merger Agreement, we might have pursued, or from effectively responding to competitive pressures or industry developments.
AddedRisk Factors
In addition, litigation is common in connection with mergers and acquisitions of public companies, regardless of any merits related to the claims. Defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages. Moreover, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, the injunction may delay or prevent the Merger from being completed, which may adversely affect our business, results of operations and financial condition.
AddedRisk Factors
The Merger is subject to a number of conditions that must be satisfied or waived (to the extent permissible) prior to the completion of the Merger. These conditions to the completion of the Merger, some of which are beyond our control, may not be satisfied or waived in a timely manner or at all, and, accordingly, the Merger may be delayed or not completed. The Merger Agreement also contains certain termination rights for both Devon and Coterra, including if the Merger is not consummated by August 1, 2026 (subject to certain extensions due to delay in antitrust approvals), and further provides that, upon termination of the Merger Agreement under certain circumstances, we may be required to pay Coterra a termination fee equal to $865 million.
AddedRisk Factors
If the Merger is not completed, our ongoing business may be adversely affected and, without realizing any of the benefits of having completed the Merger, we may experience certain negative effects. Among others: (i) we may experience negative reactions from the financial markets and business partners; (ii) we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting and other advisory fees and printing costs; and (iii) matters relating to the Merger (including integration planning) require substantial commitments of time and resources by our management, which may result in the distraction of our management from ongoing business operations and pursuing other opportunities that could have been beneficial to us.
AddedRisk Factors
We Face Risks Associated with Artificial Intelligence and Other Emerging Technologies
AddedRisk Factors
We increasingly use artificial intelligence (“AI”) and other emerging technologies to improve our business processes, including through the integration of various AI tools into certain of our information systems. However, we may not properly implement these technologies into our business, and there can be no assurance that we will realize the anticipated efficiency gains or other benefits from their adoption. Failure to effectively integrate AI and other emerging technologies into our operations could put us at a competitive disadvantage to other oil and gas companies who have more successfully implemented such technologies. In addition, the use of AI presents certain risks, including, among other things: (i) the generation of and reliance upon inaccurate, misleading or otherwise flawed content in our business processes, (ii) the unauthorized use or disclosure of confidential or proprietary information and (iii) potential exposure to new or enhanced governmental or regulatory scrutiny, all of which could negatively impact our business.
AddedRisk Factors
Activist Shareholders Could Cause Us to Incur Significant Expense, Hinder Execution of our Business Strategy and Impact Our Stock Price
RemovedRisk Factors
RewordedRisk Factors
In April 2024, the SEC stayed the effectiveness of these rules pending the completion of a judicial review of certain legal challenges. challenges, and the current U.S. administration has declined to defend the rules in the legal challenges, which has resulted in a stay of the challenges that will remain in effect until the rules are withdrawn or the government resumes its defense of the rules.
RewordedRisk Factors
The Trump Administration current U.S. administration re-withdrew the United States from the Paris Agreement in January 2025, and, in January 2026, the current U.S. administration announced that the United States was withdrawing from the United Nations Framework Convention on Climate Change and the United States’ participation in future United Nations various climate-related efforts is unclear. programs under this Framework.
RewordedRisk Factors
In addition, the SEC finalized rules in March 2024 that require would have required public companies to include extensive climate-related disclosures in their SEC filings, such as new disclosures on (i) material Scope 1 and 2 GHG emissions, including an independent assurance report, and (ii) financial statement information regarding the effects of severe weather events and other natural conditions. filings.
RewordedRisk Factors
Moreover, certain regulations require the plugging and abandonment of wells, removal of production facilities and other restorative actions by current and former operators, including corporate successors of former operators, which means that we are exposed to the risk that owners or operators of assets acquired from us (or our predecessors) become unable to satisfy plugging or abandonment and other restorative obligations that attach to those assets.
RewordedRisk Factors
Relatedly, the IRA imposed a new charge or fee with respect to excess methane emissions from certain petroleum and natural gas facilities starting in 2024 and annually increasing through 2026, and we cannot predict whether or how the Trump Administration may seek to revise or repeal these rules or the timing of any such actions. 2026.
RewordedRisk Factors
RewordedRisk Factors
While we are still assessing the applicability of the European Union directives and California legislation and are awaiting resolution of the review of the SEC climate change rules, directives, we would expect to incur substantial additional compliance costs to the extent these or similar disclosure requirements apply to us.
RewordedRisk Factors
RewordedRisk Factors
These actions may be prompted or exacerbated by unfavorable recommendations or ratings from proxy advisory firms or other third parties, including with respect to our performance (or the perception of our performance) under ESG metrics. parties.
RewordedRisk Factors
Similarly, California enacted legislation in October 2023 requiring extensive climate-related disclosures for companies deemed to be doing business in California, and other states are considering similar laws.
RewordedRisk Factors
If our ESG sustainability initiatives do not meet our investors’ or other stakeholders’ evolving expectations and standards, standards (including those in support of or in opposition to ESG principles), investment in us may be viewed as less attractive and our reputation and business may be adversely impacted.
RewordedRisk Factors
A wide variety of individuals or groups may perpetuate cyberattacks, ranging from highly sophisticated criminal organizations and state-sponsored actors to disgruntled employees, and the nature of, and methods used in, cyberattacks are similarly diverse and constantly evolving, with examples including phishing attempts, distributed denial of service attacks or ransomware. ransomware, which could be enhanced or facilitated by artificial intelligence.
Quiet changesRisk Factors
We rely heavily on information systems, operational technologies and other digital technologies to conduct our business, and we anticipate are expanding the use of and reliance on these systems and technologies, including through artificial intelligence, process automation and data analytics.
AddedMD&A
•Completed acquisition of outstanding noncontrolling interests in Cotton Draw Midstream for $260 million.
AddedMD&A
•Received $545 million of cash proceeds from the sale of property and investments, including $409 million related to the sale of our investment in Matterhorn.
AddedMD&A
•Through 2025, achieved approximately 85% of our $1.0 billion business optimization plan.
AddedMD&A
To emphasize our commitment to maximizing free cash flow and creating value for shareholders, we have implemented a business optimization plan which is anticipated to improve our annual pre-tax cash flow by $1.0 billion. The plan includes actions to achieve more efficient field-level operations and improvements in drilling and completion costs while improving operating margins and corporate costs. These savings are on track to be achieved by the end of 2026 with approximately $850 million achieved through 2025.
AddedMD&A
In 2025, Devon marked its 54th anniversary in the oil and gas business and its 37th year as a public company. We generated $6.7 billion of operating cash flow in 2025, demonstrating resilience despite lower oil prices through higher production volumes and lower taxes. In April 2025, we announced our business optimization plan targeting $1.0 billion in annual pre-tax free cash flow improvements by the end of 2026 through enhanced capital efficiency, production optimization, commercial improvements and corporate cost reductions. We achieved approximately 85% of these improvements through 2025, with the remainder to be realized by year-end 2026.
AddedMD&A
Production volumes for the first quarter of 2026 are expected to decrease by approximately 1%, or 10 MBoe/d, as a result of severe winter weather conditions.
AddedMD&A
G&A per BOE decreased in 2025 due to the Grayson Mill acquisition efficiently expanding our operating scale and production.
AddedMD&A
2025 2024 Change in earnings Commodity hedge valuation changes (1) $ 170 $ (176) $ 346 Marketing and midstream operations (72) (49) (23) Exploration expenses 43 28 (15) Asset dispositions (343) 11 354 Net financing costs 455 363 (92) Other, net 24 96 72 $ 642
AddedMD&A
During 2025, Devon sold its investment in Matterhorn for $409 million and recognized a pre-tax gain of $342 million ($266 million, net of tax), which was recorded to asset dispositions. The monetization of this investment did not change the terms or conditions of Devon's secured capacity on the pipeline. For additional information, see Note 12 in “Item 8. Financial Statements and Supplementary Data” in this report.
AddedMD&A
Year Ended December 31, 2025 2024 Operating cash flow $ 6,711 $ 6,600 Grayson Mill acquired cash — 147 Capital expenditures (3,592) (3,645) Acquisitions of property and equipment (322) (3,808) Divestitures of property, equipment and investments 545 24 Investment activity, net (24) (50) Debt activity, net (485) 2,747 Repurchases of common stock (1,050) (1,057) Common stock dividends (619) (937) Noncontrolling interest activity, net (269) 1 Repayment of finance leases (282) — Other (25) (51) Net change in cash, cash equivalents and restricted cash $ 588 $ (29) Cash, cash equivalents and restricted cash at end of period $ 1,434 $ 846
AddedMD&A
During 2025, we completed acquisitions of property primarily related to state and federal land sales in the Delaware Basin.
AddedMD&A
During 2025, we generated additional cash flow of $545 million by monetizing our investment in Matterhorn for $409 million and divesting headquarters-related real estate assets for $134 million as part of our real estate rationalization initiatives. These proceeds will be used to further strengthen our investment-grade financial position. For additional information regarding these divestitures, see Note 12 and Note 5, respectively, in “Part II. Item 8. Financial Statements and Supplementary Data” in this report.
RemovedMD&A
RemovedMD&A
RemovedMD&A
RemovedMD&A
RemovedMD&A
RewordedMD&A
Year Ended December 31, 2025 2024 2023 2022 Net earnings (GAAP) $2,681 $2,942 $3,782 $6,037 Financing costs, net 455 363 308 309 Income tax expense 785 770 841 1,738 Exploration expenses 43 28 20 29 Depreciation, depletion and amortization 3,595 3,255 2,554 2,223 Asset impairments 254 — — Asset dispositions (343) 11 (30) (44) Share-based compensation 89 98 92 87 Derivative and financial instrument non-cash valuation changes (170) 176 (71) (698) Accretion on discounted liabilities and other 24 96 38 (95) EBITDAX (Non-GAAP) 7,413 7,739 7,534 9,586 Marketing and midstream revenues and expenses, net 72 49 60 35 Commodity derivative cash settlements (232) (197) (47) 1,356 General and administrative expenses, cash-based 403 402 316 308 Field-level cash margin (Non-GAAP) $7,656 $7,993 $7,863 $11,285
RewordedMD&A
In general, these provisions can remove the obligation of the banks to fund the credit line if any condition or event would reasonably be expected to have a material and adverse effect on the borrower’s financial condition, operations, properties or business considered as a whole, the borrower’s ability to make timely debt payments or the enforceability of material terms of the credit agreement.
RewordedMD&A
RewordedMD&A
Our 2025 2026 capital expenditure budget is expected to be approximately $3.8 $3.5 billion to $4.0 $3.7 billion, which is approximately 7% higher 4% lower than our 2024 2025 capital expenditures primarily due to the Grayson Mill acquisition. expenditures, driven by continued capital efficiency gains and operational improvements.
RewordedMD&A
RewordedMD&A
We remain committed to continuing our track record of industry leading return of industry-leading capital returns to our shareholders, underpinned supported by low capital reinvestment rates discipline and a disciplined, returns-driven strategy which is designed to be successful succeed through economic commodity cycles.
RewordedMD&A
Oil is prices are expected to remain volatile in 2025 2026 due to ongoing geopolitical risks to supply, supply risks, including developments in key producing regions, stronger forecasted stronger non-OPEC supply, production, and improving global demand growth expectations. demand.
RewordedMD&A
We repurchased 30.8 million shares of common stock for $1.1 billion in 2025 and 24.2 million shares of common stock for $1.1 billion in 2024 and 19.1 million shares of common stock for $979 million in 2023 under the share repurchase program authorized by our Board of Directors.
RewordedMD&A
RewordedMD&A
RewordedMD&A
Amounts excluded for 2023 and 2022 2025 relate to asset dispositions, noncash asset impairments (including unproved asset impairments), deferred change in tax asset valuation allowance and legislation, fair value changes in derivative financial instruments. instruments and restructuring and transaction costs.
RewordedMD&A
This decrease was due to lower partially offset by an increase in unhedged realized oil, gas and NGL prices which decreased was primarily due to lower WTI and higher Henry Hub index prices.
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