Devon Energy (DVN) Q1 2026 Earnings Transcript

Motley Fool Transcribing, The Motley Fool Wed, May 6, 2026 at 11:51 PM GMT+7 42 min read DVN Image source: The Motley Fool. President and Chief Executive Officer — Clay Gaspar Executive Vice President and Chief Financial Officer — Jeffrey Ritenour Executive Vice President and Chief Operating Officer — Trey Lowe Executive Vice President, Exploration and Production — John Raines Senior Vice President, Investor Relations — Christopher Carr Need a quote from a Motley Fool analyst? Email pr@fool.com Clay Gaspar: Today, we will focus on Devon Energy Corporation s strong first quarter 2026 results, which once again demonstrate the operational excellence and financial discipline that define this organization. After walking through our Q1 results, I will turn to a quick update on our transformative merger with Cotera Energy. Now let us turn to slide three for a deeper look at our first quarter results, which reflect strong execution across the business. As you can see on the slide, beating on production and capital once again resulted in impressive free cash flow for the quarter. Our production optimization efforts drove oil to 387 thousand barrels per day, reaching the top end of our guidance range. Capital spending came in 6% below the midpoint of our guidance, as we continue to capture drilling and completion efficiencies through advanced technology and focused execution across the program. Combined, these efforts translated to $816 million of free cash flow in the quarter, demonstrating the capital efficiency of our program and positioning us to return substantial value to shareholders. I want to emphasize that these results are not isolated wins. That kind of consistency does not happen by accident. It is the direct outcome of the exceptional talent and commitment of our teams across every basin. Turning to slide four, what makes this story even more exciting is where we are headed. On a stand-alone basis, Devon Energy Corporation is entering the second quarter with significant upside torque to free cash flow. Production is expected to step up, our cost structure remains well controlled, and the commodity backdrop is meaningfully stronger than what anyone underwrote coming into this year. You can see the sensitivity of this business to commodity prices on the right side of the slide. This is a very compelling yield profile in any environment, and it reflects both the operational gains we have delivered and the natural leverage of a high-margin portfolio. We are running the program we laid out, capturing the operational gains we committed to, and letting free cash flow accrue to our shareholders. Turning to slide five, the key free cash flow strength I just walked through does not happen on its own. It is the direct output of the business optimization work we launched just over a year ago. I am pleased to report that we will achieve our $1 billion target well ahead of schedule. We will accomplish this major milestone with contributions from every part of the business, including capital efficiency, production optimization, commercial improvements, and corporate cost reductions. I want to thank the entire Devon Energy Corporation organization for making this happen. When you challenge this high-quality team with a clear mission, you might as well consider it done. Business optimization has transitioned from a one-off project to a new cultural mindset. The focus and accountability that we built will translate directly into our integration work with Cotera, and I am confident this foundation will allow us to attack the merger synergies with the same urgency and rigor. The engine behind that innovation is technology and AI. I want to spend an extra minute here because I think it is the most important insight about Devon Energy Corporation today that is not intuitive from just a cursory analysis of the financials. The AI revolution is real, and what is happening across this organization is incredibly exciting. Internally, we talk about the three waves of AI impact. Wave one is a much more immediate connection to Devon Energy Corporation s massive stores of data, transforming what was inefficient data-hunting time into data analysis and value-creation time. After years of cleaning and organizing our data, we have a fully firewalled internal tool called ChatDVN that has been up and running for three years and is today a standard part of our daily workflow. We are now deep into seeing the benefits of wave two, where the AI is doing the heavy lifting of complicated calculations and time-consuming work. Examples of this are leveraging AI to write code for new apps, and also translating the massive drilling, completion, and production data flow into actionable intel that our engineers can immediately act upon. Wave two value is showing up in cutting-edge drilling and completion time, directly translating into lower capital costs. We are also having very significant wins in production, leveraging AI-created tool

Devon Energy (DVN) Q1 2026 Earnings Transcript

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Devon Energy (DVN) Q1 2026 Earnings Transcript

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