DVN · 10-Q · 2026Q2 · Full report

Regulatory Risk

DEVON ENERGY CORP/DE · 2026-08-05 · Importance 44 · Surprise 60 · In source text

The Canada Revenue Agency proposed several material adjustments to prior tax years related to Devon’s legacy Canadian business and is making formal assessments based on recent communications. Devon disagrees with the proposed adjustments and intends to contest any assessments. Resolving the matters may require material cash deposits while the disputes are pending. Separately, the July 4, 2025 OBBB tax law reinstated 100% bonus depreciation, allowed expensing of domestic research costs beginning in 2025 and permitted intangible drilling-cost deductions in the CAMT calculation beginning in 2026; IRS Notice 2026-7 provided additional CAMT guidance on February 18, 2026.

Key facts

• The Canada Revenue Agency proposed several material adjustments to prior tax years relating to Devon's legacy Canadian business and Devon disagrees with the proposed adjustments and intends to vigorously contest any related assessments. source
• On July 4, 2025, OBBB was signed into law and includes permanent reinstatement of 100% bonus depreciation and expensing of domestic research costs beginning in 2025 and allows deduction of intangible drilling costs as part of CAMT beginning in 2026; IRS issued Notice 2026-7 on February 18, 2026 issuing additional interim CAMT guidance. source
• If Devon were to undergo an "ownership change" under Section 382, its ability to use net operating losses and tax credits generated prior to the ownership change may be limited; Devon does not believe an ownership change has occurred during second quarter 2026 for Devon but the Merger resulted in an ownership change for Coterra. source

Impact estimates