Leases

12 Months Ended

Dec. 31, 2021

15.

Leases

Devon’s right-of-use operating lease assets are for certain leases related to real estate, drilling rigs and other equipment related to the exploration, development and production of oil and gas. Devon’s right-of-use financing lease assets are related to real estate. Certain of Devon’s lease agreements include variable payments based on usage or rental payments adjusted periodically for inflation. Devon’s lease agreements do not contain any material residual value guarantees or restrictive covenants.

The following table presents Devon’s right-of-use assets and lease liabilities.

	December 31, 2021						December 31, 2020
	Finance		Operating		Total		Finance		Operating		Total
Right-of-use assets	$	211	$	24	$	235	$	220	$	3	$	223
Lease liabilities:
Current lease liabilities ⁽¹⁾	$	8	$	18	$	26	$	8	$	1	$	9
Long-term lease liabilities		247		5		252		244		2		246
Total lease liabilities	$	255	$	23	$	278	$	252	$	3	$	255

(1)	Current lease liabilities are included in other current liabilities on the consolidated balance sheets.

The following table presents Devon’s total lease cost.

		Year Ended December 31,
		2021			2020			2019
Operating lease cost	Property and equipment; LOE; G&A	$	25		$	10		$	40
Short-term lease cost ⁽¹⁾	Property and equipment; LOE; G&A		89			45			84
Financing lease cost:
Amortization of right-of-use assets	DD&A		8			8			8
Interest on lease liabilities	Net financing costs		11			11			10
Variable lease cost	G&A		(4	)		—			2
Lease income	G&A		(8	)		(8	)		(5	)
Net lease cost		$	121		$	66		$	139

(1)	Short-term lease cost excludes leases with terms of one month or less.

The following table presents Devon’s additional lease information.

	Year Ended December 31,
	2021						2020
	Finance			Operating			Finance			Operating
Cash outflows for lease liabilities:
Operating cash flows	$	7		$	15		$	7		$	2
Investing cash flows	$	—		$	9		$	—		$	8
Right-of-use assets obtained in exchange for new lease liabilities	$	—		$	7		$	—		$	—
Weighted average remaining lease term (years)		6.0			1.5			7.0			4.1
Weighted average discount rate		4.2	%		1.3	%		4.2	%		2.9	%

The following table presents Devon’s maturity analysis as of December 31, 2021 for leases expiring in each of the next 5 years and thereafter.

	Finance			Operating		Total
2022	$	8		$	17	$	25
2023		8			4		12
2024		8			1		9
2025		8			1		9
2026		8			—		8
Thereafter		281			—		281
Total lease payments		321			23		344
Less: interest		(66	)		—		(66	)
Present value of lease liabilities	$	255		$	23	$	278

Devon rents or subleases certain real estate to third parties. The following table presents Devon’s expected lease income as of December 31, 2021 for each of the next 5 years and thereafter.

	Operating
	Lease Income
2022	$	8
2023		9
2024		10
2025		10
2026		10
Thereafter		58
Total	$	105