DVN: Mechanical Guide, Constructive Strategic Signals

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DVN: Mechanical Guide, Constructive Strategic Signals

Equity Research

Flash Comment — June 9, 2026

Exploration & Production

Devon Energy Corporation

Mechanical Guide, Constructive Strategic Signals Overweight

Price Target: $68.00

Ticker DVN

Our Call Upside/(Downside) to Target 54.3%

DVN’s initial pro forma guidance appears largely mechanical at first glance, but embeds a Price (06/09/2026) $44.07

clear shift toward Permian concentration, disciplined capital allocation, and portfolio high- 52 Week Range $31.45 - 52.71

grading—supporting the re-rating framework. Market Cap (MM) $27,235

Source: Company Data, Wells Fargo Securities estimates, and Factset.

Initial Thoughts NA = Not Available, NC = No Change, NE = No Estimate

Pro Forma Guidance Largely In Line with Expectations. DVN’s initial pro forma guidance Hanwen Chang, CFA

is broadly in line with expectations, with FY26 oil/total production of 500 mbbl/d and Equity Analyst | Wells Fargo Securities, LLC

Hanwen.Chang@wellsfargo.com | 212-214-8017

~1.38 mmboe/d (vs. WFSe 499 kb/d and 1.37 mmboe/d), though FY26 capex guidance

of ~$4.90bn is modestly below our estimate of ~$4.98bn. 2Q26 guidance also appears

broadly consistent with WFS estimates, while the implied 2H26 run-rate of ~1.67

mmboe/d (incl. ~557 mbbl/d oil) is similarly in line.

Permian Concentration Continues to Strengthen. The clearest incremental takeaway is

mgmt’s growing emphasis on the Permian, with the basin expected to represent an even

larger share of capital into 2027. The FY26 plan already allocates >60% of capital to the

region, reflecting superior capital efficiency, inventory depth, and returns. In our view, this

signals continued migration toward higher-return Delaware inventory, reinforcing a more

focused and capital-efficient portfolio.