On May 7, 2026, Devon completed an all-stock merger of equals with Coterra, an oil and gas exploration and production company with assets in the Permian Basin in Texas and New Mexico, the Marcellus Shale in Pennsylvania and the Anadarko Basin in Oklahoma. On the closing date of the Merger, each share of Coterra common stock was converted into the right to receive 0.70 of a share of Devon common stock. No fractional shares of Devon’s common stock were issued in the Merger, and holders of shares of Coterra common stock instead received cash in lieu of fractional shares of Devon common stock. Based on the closing price of Devon’s common stock on May 6, 2026, the total value of Devon common stock issued to holders of Coterra common stock as part of this transaction was approximately $24.8 billion.

This transaction has been accounted for using the acquisition method of accounting, with Devon as the accounting acquirer. Under the acquisition method of accounting, the assets and liabilities of Coterra have been recorded at their respective fair values as of the date of completion of the Merger and added to Devon’s assets and liabilities. 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 acquisition. Determining the fair value of the assets and liabilities of Coterra requires judgment and certain assumptions to be made, the most significant of these being related to the valuation of Coterra’s oil and gas properties. The inputs and assumptions related to the oil and gas properties are categorized as level 3 in the fair value hierarchy.

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


	Preliminary Purchase
	Price Allocation
Consideration:
Coterra common stock outstanding		759.4
Exchange Ratio		0.70
Devon common stock issued		531.6
Devon closing price on May 6, 2026	$	46.60
Total common equity consideration	$	24,772
Share-based replacement awards		174
Total consideration	$	24,946
Assets acquired:
Cash, cash equivalents and restricted cash	$	581
Accounts receivable		1,110
Inventory		31
Other current assets		204
Proved oil and gas property and equipment		20,356
Unproved and properties under development		14,099
Other property and equipment, net		505
Right-of-use assets		131
Investments		100
Other long-term assets		133
Total assets acquired	$	37,250
Liabilities assumed:
Accounts payable		723
Revenues and royalties payable		478
Short-term debt		249
Income taxes payable		27
Other current liabilities		425
Long-term debt		3,256
Lease liabilities		100
Asset retirement obligations		164
Other long-term liabilities		192
Deferred income taxes		6,690
Total liabilities assumed		12,304
Net assets acquired	$	24,946

From the closing date of the Merger through June 30, 2026, revenues and net earnings included in Devon’s consolidated statements of comprehensive earnings associated with these assets totaled $1.3 billion and $230 million, respectively.

The following unaudited pro forma financial information is based on our historical consolidated financial statements adjusted to reflect as if the Coterra merger had occurred on January 1, 2025. The information below reflects pro forma adjustments to conform Coterra’s historical financial information to Devon’s financial statement presentation. The unaudited pro forma financial information is not necessarily indicative of what would have occurred if the acquisition had been completed as of the beginning of the periods presented, nor is it indicative of future results.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(Unaudited)
Total revenues	$	8,150	$	6,240	$	13,894	$	12,586
Net earnings	$	2,048	$	1,298	$	2,464	$	2,138
Net earnings per share:
Basic net earnings per share	$	1.79	$	1.11	$	2.15	$	1.83
Diluted net earnings per share	$	1.78	$	1.11	$	2.14	$	1.82

During the second quarter of 2026, Devon acquired approximately 16,300 net undeveloped acres in the core of the Permian Basin in Lea and Eddy Counties, New Mexico through the Bureau of Land Management (“BLM”) oil and gas lease sale for approximately $2.6 billion, which was funded with cash on hand.

On April 1, 2025, Devon and BPX Energy dissolved their partnership and divided their acreage in the Eagle Ford Blackhawk field located in Texas’ DeWitt County, resulting in increased operational flexibility for both parties. The assets exchanged were in close proximity and shared similar geological characteristics. The transaction was accounted for as an equal, non-monetary exchange, as it did not result in a significant change to the risks, expected future cash flows or the timing of those cash flows, and therefore was determined to lack commercial substance. As a result, the new acreage and underlying property costs were recorded at the historical cost of the assets exchanged.

During the second quarter of 2025, Devon sold its investment in Matterhorn for $372 million and recognized a pre-tax gain of $307 million ($239 million, net of tax), which was recorded to asset dispositions on the accompanying consolidated statements of comprehensive earnings.

Devon was entitled to contingent earnout payments associated with the sale of its Barnett Shale assets in 2020 with upside participation beginning at a $2.75 Henry Hub natural gas price or a $50 WTI oil price. The contingent payment period commenced on January 1, 2021, and had a term of four years. Devon received $20 million in contingent earnout payments related to this transaction in the first six months of 2025. As of June 30, 2026, Devon had no other open contingent earnout arrangements.