v3.26.1
Debt And Related Expenses
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt and Related Expenses Debt and Related Expenses

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

 

 

June 30, 2026

 

 

December 31, 2025

 

3.90% due May 15, 2027 (1)

 

$

750

 

 

$

—

 

7.50% due September 15, 2027

 

 

73

 

 

 

73

 

5.25% due October 15, 2027

 

 

390

 

 

 

390

 

5.875% due June 15, 2028

 

 

325

 

 

 

325

 

4.375% due March 15, 2029 (1)

 

 

500

 

 

 

—

 

4.50% due January 15, 2030

 

 

585

 

 

 

585

 

7.875% due September 30, 2031

 

 

675

 

 

 

675

 

7.95% due April 15, 2032

 

 

366

 

 

 

366

 

5.60% due March 15, 2034 (1)

 

 

500

 

 

 

—

 

5.20% due September 15, 2034

 

 

1,250

 

 

 

1,250

 

5.40% due February 15, 2035 (1)

 

 

750

 

 

 

—

 

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

 

5.75% due September 15, 2054

 

 

1,000

 

 

 

1,000

 

5.90% due February 15, 2055 (1)

 

 

750

 

 

 

—

 

Term Loan due September 25, 2026

 

 

750

 

 

 

1,000

 

Net premium on debentures and notes

 

 

22

 

 

 

23

 

Debt issuance costs

 

 

(48

)

 

 

(48

)

Total debt

 

$

11,388

 

 

$

8,389

 

Less amount classified as short-term debt

 

 

1,497

 

 

 

998

 

Total long-term debt

 

$

9,891

 

 

$

7,391

 
(1)
These instruments were assumed by Devon in May 2026 in conjunction with the Merger. Approximately $277 million and $27 million of these instruments remain the unsecured and unsubordinated obligations of Coterra and Coterra Energy Operating Co., respectively, each of which is a subsidiary of Devon.

The following schedule includes the summary of the Coterra debt Devon assumed upon closing of the Merger on May 7, 2026.

 

 

Face Value

 

 

Fair Value

 

3.77% due September 18, 2026

 

$

250

 

 

$

249

 

3.90% due May 15, 2027

 

 

750

 

 

 

747

 

4.375% due March 15, 2029

 

 

500

 

 

 

499

 

5.60% due March 15, 2034

 

 

500

 

 

 

516

 

5.40% due February 15, 2035

 

 

750

 

 

 

762

 

5.90% due February 15, 2055

 

 

750

 

 

 

732

 

 

 

$

3,500

 

 

$

3,505

 

 

Exchange Offers

In connection with the completed Merger, Devon commenced private exchange offers (the “Exchange Offers”) in May 2026 to exchange any and all of certain outstanding notes previously issued by Coterra and Coterra Energy Operating Co. (collectively, the “Existing Coterra Notes”) for newly issued Devon notes (the “New Devon Notes”) with the same stated interest rates, interest payment dates, maturity dates and redemption provisions as the corresponding series of Existing Coterra Notes.

On June 25, 2026, Devon issued $2.95 billion aggregate principal amount of New Devon Notes in exchange for a like amount of Existing Coterra Notes validly tendered. The New Devon Notes are general unsecured obligations of Devon and rank equally with Devon’s other unsecured and unsubordinated indebtedness. Following settlement, approximately $277 million and $27 million aggregate principal amount of Existing Coterra Notes remained outstanding as obligations of Coterra and Coterra Energy Operating Co., respectively. The New Devon Notes were issued as unregistered securities subject to a registration rights agreement.

Credit Lines

Devon has a $3.0 billion revolving Senior Credit Facility. In the first quarter of 2026, Devon amended the credit agreement governing the Senior Credit Facility to, among other things, extend the maturity date from March 24, 2030 to March 24, 2031, with the option to extend the maturity date by three additional one-year periods, subject to lender consent. As of June 30, 2026, Devon had no outstanding borrowings under the Senior Credit Facility and had less than $1.0 million in outstanding letters of credit under this facility. The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon's ratio of total funded debt to total capitalization, as defined in the credit agreement, to be no greater than 65%. Under the terms of the credit agreement, total capitalization is adjusted to add back non-cash financial write-downs such as impairments. As of June 30, 2026, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 18.1%.

Commercial Paper

Devon’s Senior Credit Facility supports its $3.0 billion of short-term credit under its commercial paper program. Commercial paper debt generally has a maturity of between 1 and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. As of June 30, 2026, Devon had no outstanding commercial paper borrowings.

Term Loan Credit Agreement

In August 2024, Devon entered into a delayed draw term loan credit agreement (the “Term Loan Credit Agreement”), providing for delayed draw term loans in an aggregate principal amount not to exceed $2.0 billion, including a 364-day tranche of $500 million and a two-year tranche of $1.5 billion. On September 27, 2024, Devon borrowed $1.0 billion on the two-year tranche (the “Term Loan”) to partially fund the closing of the Grayson Mill acquisition. The Term Loan bears interest at a rate based on term SOFR plus a spread adjustment that varies based on Devon’s credit ratings. The interest rate on the Term Loan was 4.96% as of June 30, 2026. The Term Loan Credit Agreement contains substantially the same financial covenant as the Senior Credit Facility. As of June 30, 2026, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 18.1%.

In June 2026, Devon repaid $250 million of the outstanding principal on the Term Loan, reducing the outstanding balance to $750 million.

In July 2026, Devon repaid the remaining $750 million of outstanding principal, retiring the Term Loan in full.

Retirement of Senior Notes

In June 2026, Devon early redeemed the $250 million of 3.77% senior notes due in September 2026 pursuant to the “make-whole” provisions in the governing document.

Net Financing Costs

The following schedule includes the components of net financing costs.

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Net financing costs:

 

 

 

 

 

 

 

 

 

 

 

 

Interest based on debt outstanding

 

$

144

 

 

$

126

 

 

$

262

 

 

$

253

 

Interest income

 

 

(22

)

 

 

(14

)

 

 

(36

)

 

 

(24

)

Other

 

 

3

 

 

 

4

 

 

 

8

 

 

 

10

 

Total net financing costs

 

$

125

 

 

$

116

 

 

$

234

 

 

$

239