Devon Energy Raises 2026 Production Outlook to 1.38 Mbpd After Coterra Merger

Houston-based Devon Energy (DVN) expects its 2026 production to average 1.38 million barrels of oil equivalent per day, following the completion of its merger with Coterra Energy.

The company also raised its capital spending outlook to $4.9 billion for the whole of 2026, with more than 60% earmarked for the Permian Basin region, across 31 rigs and 10 completion crews, with an estimated 460 to 480 wells set to come online.

Prior to the $58 billion merger that closed in May, the company had expected output of 845,000 barrels of oil equivalent per day, with capital expenditures in the range of $3.5 billion to $3.7 billion for the year.

Devon is working to concentrate its portfolio around the Permian, aimed at maximizing shareholder gains. It expects to capture $600 million in synergies from the merger in 2027, and is on track for $1.0 billion in pre-tax synergies by end of 2027.

"Optimizing our portfolio remains a top priority, and a complete review of our strategic and financial criteria is well underway," Devon CEO Clay Gaspar said.

In addition to its growing capital expenditures, the company plans to return 70% of its free cash flow to investors in the form of a fixed quarterly dividend of $0.32 per share, alongside its $8 billion stock buyback program that was announced previously.

It also plans to pay back $1.25 billion in debt during the year, with its total outstanding debt currently at $8.7 billion, in a bid to bolster balance sheet strength.

US Natural Gas Update: Futures Edge Down on Cool Weather Forecasts

US natural gas futures softened further in after-hours trading on Tuesday as abundant supply and mild weather forecasts outweighed demand signals.The front-month Henry Hub contract and the continuous benchmark both eased 0.29% to $3.138 per million British thermal units."Price action remains largely rangebound, with weekly changes still limited to only a few cents across most of the curve," Pinebrook Energy Advisors said in a note.Weather expectations remain a key driver. Cooler-than-normal temperatures forecast for June 14-18 across the Midwest and eastern US are expected to curb air-conditioning demand and put pressure on prices, according to Barchart, citing Vaisala data.It also said Lower-48 natural gas demand rose to 73.2 billion cubic feet per day on Tuesday, up 0.8 Bcf/d from the previous session and 5.8% higher over the year.The US Energy Information Administration's outlook shows a split summer demand profile, with June notably weak before demand strengthens later in the season.For June, the EIA forecasts 240 cooling degree days, down 15% over the year and 9% below the 10-year average, signaling reduced air-conditioning demand at the start of summer.Conditions then tighten into the third quarter, with CDDs rising 8% from a year earlier as hotter weather boosts cooling demand. That late-summer strength is expected to offset the soft start in June.Overall, the EIA still projects 2026 cooling demand averaging 4% above 2025 and 4% above the 10-year average, indicating firmer underlying summer consumption despite the early weakness.Daily US dry gas production was reported at 110.1 Bcf/d on Tuesday, down 2 Bcf/d from the prior day but still up 2.2% over the year, BNEF data showed.The EIA expects US gas output to rise 3.3% in 2026 to 111.0 Bcf/d, with further growth in 2027 driven by Permian associated gas and Haynesville output.Despite steady demand growth, elevated production is expected to keep inventories above the five-year average and cap upside in Henry Hub prices. The EIA projects prices averaging $3.34/MMBtu in the second half of this year and $3.46/MMBtu in 2027, down sharply from prior forecasts.LNG feedgas flows to US export terminals also increased, reaching 17.9 Bcf/d, up 0.3 Bcf/d on the day and 8.7% higher over the week.

EPA Extends Waiver For Summertime National Sales of E15 Blended Gasoline

The Environmental Protection Agency and the US Department of Energy on Tuesday extended the summertime waiver for the sales of E15 blended gasoline through June 29.The waiver regarding the requirements in 40 CFR 1090.215 allows for the production and distribution of a single national gasoline pool with 9% to 15% ethanol content at a common Reid Vapor Pressure standard of 10 pounds per square inch, according to the EPA announcement.In the same waiver letter, EPA is reissuing a waiver for federal enforcement of state-level "boutique" fuel requirements for gasoline under 40 CFR 1090.215. Both waivers share a 20-day effective window from June 10, 2026, to June 29, 2026.The EPA noted that states that have adopted fuel standards under consumer protection and/or air quality statutes may need to waive those provisions in State code to enable implementation of the Federal waiver in the States.In May, the EPA extended a waiver allowing the nationwide summer sales of E15, effective until June 9.

Devon Energy Raises 2026 Production Outlook to 1.38 Mbpd After Coterra Merger

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