Devon Energy Corp

Equity Research 4 August 2026 | 6:49PM EDT

Devon Energy Corp. (DVN): First Take: 2Q26 EPS Beat vs GS and Consensus; Focus on Outlook Around Ongoing Portfolio Review

DVN reported 2Q26 EBITDAX of $3.48 bn, +6%/+3% vs GS/consensus estimates Neil Mehta | of $3.29/$3.36 bn. 2Q26 FCF of $1.66 bn before changes in working capital was Goldman Sachs & Co. LLC

above GS/consensus estimates of $1.44/$1.65 bn. 2Q26 adjusted EPS was $1.57/shr, Jack Cavanagh | +9%/+12% vs GS/consensus estimates of $1.44/$1.40. Oil production of 503 Mbo/d Goldman Sachs & Co. LLC was +2%/+1% vs GS/consensus estimates of 495/497 Mbo/d and total production of 1,359 Mboe/d was above GS/consensus estimates of 1,340/1,343 Mboe/d. Jerry Speicher | Goldman Sachs & Co. LLC 3Q26 Guidance. DVN guided to 1) oil production of 550-560 Mbo/d vs GS/consensus estimates at 561/561 Mbo/d, 2) total production of 1,660-1,690 Mboe/d vs GS/consensus estimates at 1,665/1,666 Mboe/d, and 3) total capital spending of $1.40-$1.50 bn vs GS/consensus estimates at $1.38/$1.41 bn.

FY 2026 Guidance. DVN guided to 1) tightened oil production of 495-505 Mbo/d vs 490-510 Mbo/d prior vs GS/consensus estimates at 502/503 Mbo/d, 2) tightened total production of 1,364-1,398 Mboe/d vs 1,355-1,405 Mboe/d prior vs GS/consensus estimates at 1,382/1,383 Mboe/d, and 3) maintained total capital spending of $4.80-$5.00 bn vs GS/consensus estimates at $4.91/$4.85 bn.

Other Items. DVN noted the reduction of $1.25 bn of debt since the merger close on May 7, 2026 and reported net debt of $10.38 bn at 2Q26 end.

What are key questions for the 11 AM ET conference call?

1. Which assets are core versus non-core in the pro forma portfolio?

2. What is DVN’s outlook for potential 2026+ activity growth across the key basins within the portfolio?

3. What is DVN’s updated outlook for cost reductions and synergy captures across the business?

4. How does the recent recovery in Waha pricing drive your preferred level of in-basin natural gas exposure?

5. How does the newly acquired Delaware Basin acreage from the federal lease sale fit into your 2027+ activity plans?

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Devon Energy Corp. (DVN)

Exhibit 1: 2Q 2026 Results vs GS vs Consensus $ mn unless noted Actual GS Actual vs. Consensus Actual vs. vs. GS Consensus

Earnings EBITDAX ($ mn) $3,478 $3,289 6% $3,364 3% Op. Cash Flow ($ mn)* $2,750 $2,820 -2% $2,928 -6% Cash flow per share $2.93 $3.19 -8% $3.14 -7% Capex ($ mn)** $1,269 $1,384 -8% $1,278 -1% FCF ($ mn)* $1,655 $1,437 15% $1,650 0% Net Debt ($ bil) $10.38 $11.48 -10% - NA

EPS (adjusted) $1.57 $1.44 9% $1.40 12%

Production Natural gas (MMcfe/d) 3,252 3,224 1% 3,196 2% Oil (Mb/d) 503 495 2% 497 1% NGLs (Mb/d) 314 308 2% 313 0% Total production (MBOE/d) 1,359 1,340 1% 1,343 1%

Realized Prices Natural Gas ($/Mcf) $1.05 $0.68 55% - NA Oil ($/bbl) $88.09 $89.17 -1% - NA NGL ($/bbl) $22.70 $21.74 4% - NA

Costs ($/boe) Production Costs $8.22 $8.42 -2% - NA Production Taxes $3.04 $2.95 3% - NA G&A $1.42 $1.35 5% - NA Total Cash Costs $12.68 $12.73 0% - NA Exploration Expense $0.13 $0.12 5% - NA DD&A $11.45 $11.91 -4% - NA All-in Costs $24.26 $24.76 -2% - NA * Before changes in working capital **Accrued, excludes acquisition spend

Source: Company data, Goldman Sachs Global Investment Research, FactSet

Price target methodology and risks

DVN. Our 12-month price target of $53 is based on a target FCF yield of 12.5% on 2027/28 estimates. As we apply an M&A rank of 2 for the stock, our valuation blends an 85% weight to a fundamental valuation of $52 and a 15% weight to an M&A theoretical valuation of $56. Key risks include costs, well results, commodity price volatility and government pronouncements.