Devon Energy Corporation (NYSE: DVN) Q4 2025 Earnings Call dated Feb. 18, 2026
Corporate Participants:
Christopher Carr — Director of Investor Relations
Clay Gaspar — President and CEO
Jeff Ritenour — CFO
John Raines — SVP Asset Management
Analysts:
Neil Mehta — Analyst
Neal Dingmann — Analyst
Doug Leggett — Analyst
Kalei Akamai — Analyst
John Freeman — Analyst
Arun Jayaram — Analyst
Philip Jungwirth — Analyst
Charles Meade — Analyst
Paul Cheng — Analyst
Kevin MacCurdy — Analyst
Matthew Portillo — Analyst
Presentation:
operator
Welcome to Devon Energy’s fourth quarter 2025 conference call. this time all participants are in listen only mode. This call is being recorded. I’d now like to turn the call over to Mr. Chris Carr, Director of Investor Relations. You may begin.
Christopher Carr — Director of Investor Relations
Good morning and thank you for joining us on the call today. Last night we issued Devon’s fourth quarter and year end 2025 earnings release and presentation materials. Throughout the call today we will make references to these materials to support prepared remarks. The release and slides can be found in the Investors section of the Devon website. Joining me on the call today are Clay Gaspar, President and Chief Executive Officer Jeff Rittenhauer, Chief Financial Officer John Rains, SVP Asset Management Tom Hellman, SCP EMP Operations and Trey Lowe, SCP and Chief Technology Officer. As a reminder, this conference call will include forward looking statements as defined under U.S.
securities laws. These statements involve risks and uncertainties that may cause actual results to differ materially from our forecast. Please refer to the cautionary language and risk factors provided in our SEC filings and earnings materials. With that, I’ll turn the call over to Clay.
Clay Gaspar — President and CEO
Thank you Chris Good morning everyone and thanks for joining us. Today. We’ll focus Devon Devon’s strong fourth quarter and full year 2025 results. Before diving into those very impressive results, I also want to cover the highlights of our recently announced merger with Koterra Energy. I’m incredibly excited about this merger and what it means for our shareholders.
The combination of these two outstanding companies creates a clear path to superior value creation that neither company could achieve independently. The merger unites complementary portfolios with substantial and overlapping positions across the best US shale basins. the heart of this combined portfolio is a world class position in the Delaware Basin which will generate more than half of our total production and cash flow backed by a decade plus of top tier inventory. Beyond the Delaware, the geographic diversity and balanced commodity mix provides strength throughout the volatility of the commodity price cycle. The scale and operational overlap of our combined platform will unlock substantial value.
By implementing best practices, optimizing our cost structure and maximizing our infrastructure utilization, we will capture significant synergies. In total, we expect to deliver a billion dollars in annual pre tax run rate synergies by year end. 27 to be clear, these synergy targets are incremental to our business optimization program and reflect true operational and efficiency gains. And importantly, if there are any net reduction in activity levels, these capital savings will be incremental to our announced billion dollar target. I want to emphasize that we have a strong record of delivering on these business optimization wins. Our proven framework and experience will be leveraged to identify delivery and communicate these merger synergies.
Another critical benefit to this transaction is the enhanced free cash flow generation from the pro forma company. With this uplift, we plan to accelerate capital returns to shareholders through higher dividends and expect a significant new share repurchase authorization to deliver cash returns consistent with best in class peers. Bottom line, this transformative merger checks all the boxes and positions us to be an industry leader that delivers differentiated value to investors. With that strategic perspective, let’s now Turn back to Devon’s impressive impressive fourth quarter and full year 2025 results which demonstrate the strong operational and financial momentum that we’re bringing to this combination.
Let’s turn to slide four for a deeper look on how our disciplined execution delivered another quarter of exceptional results. As you can see displayed on the left, beating on production operating costs and capital results in an impressive free cash flow for Q4. Our production optimization efforts drove oil above the top end of the guide, fueled by strong new well performance and outstanding base production management. Operating costs significantly improved from the start of the year reflecting enhanced reliability and relentless operational efficiency. Capital spending finished 4% better than guidance as we continue to capture drilling and completion efficiencies through advanced technology and a culture of continuous improvement.
Combined, these efforts translated into $700 million of free cash flow, positioning us to return substantial value to shareholders. I want to emphasize that these results are not just one off isolated wins, they are direct outcomes of disciplined execution across our entire portfolio. This consistency is evident in our full year performance and reflects the effectiveness of of both our strategy and our team. I also want to quickly highlight our impressive reserve performance for 2025. Our capital program achieved a reserve replacement rate of 193% of production at an F and D cost of just over $6 per boe.
While a single year of reserves booking should never be viewed as a sole measure of success, this result provides compelling evidence that that the quality and sustainability of our Advantage Multi Basin portfolio. Turning to Slide 5, you can see how our focus on operational excellence and disciplined execution culminated in outstanding full year 2025 results. Our track record speaks for itself. Quarter after quarter we drove meaningful improvements to our outlook since our preliminary guidance. We delivered an incremental 9,000 barrels of oil per day while reducing capital spend by nearly $500 million. These results reflect a sustained commitment to margin enhancement, technology adoption and continuous improvement across our entire organization.
The impact is clear. Capital efficiency improved by more than 15% from our preliminary 2025 outlook, enabling us to extract more value from every dollar invested. Turning to Slide 6 as we’ve showed many times in the past, our capital efficiency results ranked consistently among the very best in the industry. On the left hand side of the slide, our well productivity stands more than 20% above peer average. On the right side, Devon’s capital efficiency outperforms industry by 13%. Together, leading well productivity and capital efficiency translate directly into the strong free cash flow generation that powers our cash return framework.
Turning to slide 7 another critical driver of Devon’s strong performance is our business optimization program. In less than a year we have captured 85% of our billion dollar target and we are firmly on track to achieve the remaining savings during 2026. As an aside, I think it’s important to remind you that this goal is focused on sustainable free cash flow. The progress of this goal will manifest in multiples of this dollar amount to our enterprise value. This outlook of continued progress is supported by several key catalysts. The planned term loan repayment in the third quarter will deliver $50 million in annual interest savings.
At the same time, we are accelerating the implementation of AI enabled artificial lift optimization and advanced analytics well beyond the pilot programs that we’ve mentioned on prior calls. Additional benefits will come from operating cost improvements through condition based maintenance and enhanced drilling and completion cycle times. Beyond these initiatives, we have more than 100 active work streams focused on driving sustained base production gains while reducing the capital required for our maintenance programs. Most importantly, this initiative has fundamentally transformed how we operate. Continuous improvement and the accountability are embedded into our culture, empowering our teams to deliver sustainable value well beyond the initial target.
Business Optimization is no longer a program with an end date. It has become core to how Devon operates every single day. Turning to slide 8 as we discussed last quarter, parallel to driving incremental value out of the day to day business, we are also regularly evaluating opportunities to rationalize our portfolio to enhance shareholder value. Throughout 2025, we executed on strategic transactions via midstream marketing and leasing that collectively delivered over a billion dollars of value uplift to our enterprise nav. To be clear, these gains are in addition to the improvements from our business Optimization initiative. New this quarter I wanted to highlight our continued investment in Fervo Energy.
We recently participated in their Series E funding realm, bringing our investment to approximately 15% in this innovative geothermal energy company. Fervo is pioneering next generation geothermal technology and we see compelling strategic and financial opportunities in this partnership. It leverages our core skills of geoscience expertise, land leasing, horizontal drilling, and completions and subsurface production and recovery skills while positioning Devon in a power generating sector with significant growth potential. With that, I’ll now hand the call over to Jeff.
Jeff Ritenour — CFO
Thanks clay. Turning to Slide 9, Devon delivered another year of strong financial results. In 2025, we generated $3.1 billion in free cash flow, demonstrating the strength of our asset base and the effectiveness of our operational execution. This robust free cash flow enabled US to return $2.2 billion to shareholders through dividends, share buybacks and debt retirement. We remain committed to growing our fixed dividend through the cycle. In 2025, we increased our quarterly dividend by 9% to 24 cents per share. Following the expected close of the Devon and Koterra merger and pending board approval, we plan to raise our fixed quarterly dividend by another 31%, reflecting our strong confidence in the combined company’s ability to to capture synergies and to deliver an enhanced cash return profile to shareholders.
We’re also focused on opportunistically reducing our share count and returning value through buybacks. Over the past year, we’ve reduced our shares outstanding by approximately 5% through disciplined repurchases. Following the merger close and with board approval, we anticipate a new share repurchase authorization of more than $5 billion, providing significant capacity to deliver strong per share growth over the next several years. In addition to dividends and buybacks, we also possess an investment grade balance sheet and excellent liquidity. We ended the year with $1.4 billion in cash and a net debt to EBITDA ratio of less than one turn.
This financial strength provides flexibility to invest in high returning opportunities while consistently returning significant capital to our shareholders. Lastly, I want to touch on our outlook. Looking Specifically at the first quarter, we expect production to average around 830,000 boe per day. This guidance reflects approximately 10,000 boe per day of weather related downtime in January. Even with this temporary disruption, our previously provided full year 2026 guidance remains unchanged. Upon the close of the merger, we plan to provide updated guidance for the combined entity. Before we open the call to questions, I want to note that today we would like to focus the Q and A on Devon’s standalone results and outlook.
As you can appreciate, we are limited in what we can discuss regarding the pending merger at this time. We expect to file our S4 Registration Statement in the coming weeks which will provide additional details on the transaction. With that operator will take our first question. We kindly ask that each caller limit themselves to one question.
Questions and Answers:
operator
Thank you. If you would like to Ask a question today. Please do so now by pressing star followed by the number one on your telephone keypad. As a reminder to allow everyone a chance to ask a question today, we request that you please limit yourself to one question per person. Our first question comes from Neil Mehta with Goldman Sachs. Neil, please go ahead.
Neil Mehta
Yeah, morning, Clay. I’ll try to stay on the standalone business here and just your perspective on the business optimization and where you are relative to the $1 billion of the pretax target and what are the key milestones you’re focused on 1H20, 26 of the buckets, which is the one that you feel you’re most focused on as management team right now.
Clay Gaspar
Yeah, thanks for the question, Neil. We’re really excited about the progress. We launched this thing a year ago and I can tell you it was a bit aspirational as we thought about how do we come up with all of these numbers. We knew that there was so much more potential to unlock, but we didn’t have a line by line, you know, attribution to each individual piece. And I can tell you it’s been really exciting to see the organization just really unlock around this. As we’ve talked about before, it’s been a very heavy leaning on technology.
I think we’re just scratching the surface on some of that real potential. But as we mentioned in the prepared remarks, one year in, we’re now at 85%. We have clear line of sight to being able to achieve the full billion dollars. And I think importantly, as we think about the skill set and the culture around identification, tracking and communicating, I think that really translates into our next, our next challenge going forward, which we’re incredibly excited about. I might ask Trey just to give some additional thoughts since he’s a little closer to this on a day to day basis.
Jeff Ritenour
Appreciate the question, Neil. Clay mentioned this in our opening comments that we now are up over 100 work streams that we’re tracking related to business optimization. We have a ton of confidence in what we see coming forward. Over the last few quarters we’ve talked a lot about what we’re doing in the production space, specifically with trials around gas lift optimization and a few other topics. What I can confidently say and what we’re really excited about at the team level is a lot of the investments we’ve made in artificial intelligence and in the platforms that we’ve built over the last year are really coming to fruition in the production space.
We’ve seen those advantages already in the drilling results that we’ve had that. We’re going to start to see over first quarter and second quarter, a lot of the projects that we trialed in the second half of 2025 start to scale. And so as we scale these things, which all of these technologies are very scalable, we’ll do that across the entire organization. We’re going to see a lot of benefits flow through on the production side, ultimately resulting in kind of our ability to lower capital long term. And we’ll see improvements on the loe.
Neil Mehta
Thanks, Kate.
operator
Our next question comes from Neil Dingman with William Blair. Neil, please go ahead.
Neal Dingmann
Morning, Clay. Thanks for the time. My question’s on the Delaware position. I guess whether it’s standalone or core format. I’m just wondering, with a larger upcoming position, I’m just wondering is there plans to target even longer laterals and potentially up space the wells to boost results? And then I’m just wondering, will you continue to be as active on the ground game there as you’ve been in recent months?
Clay Gaspar
Yeah. Thanks for the question, Neil. The Delaware Basin is just an incredible piece of business, stack of rocks and a great place to work and so incredibly excited about our current position and the pro forma position as well. What I would tell you is, you know, the truism of the best place to find oil is where you found oil before continues to hold true. We think about additional landing zones, we think about innovative technology, we think about improving recovery, we think about flattening our base decline, lowering our downtime. All of these mechanisms that we are so excited about absolutely translate into this, this incredible position that we have in the Delaware Basin.
You know, as we go forward, you bet we’re going to be in a very strong financial position to be opportunistic as we have been. I think that that continues, you know, in a position of strength. You know, how we think about those opportunities. I think we’ll be in a great position to maximize those opportunities. So thanks for the question.
Neal Dingmann
Thanks, buddy.
operator
The next question comes from Doug Leggett with Wolff Research. Doug, please go ahead.
Doug Leggett
Thanks. Good morning, Clay. You’re making it hard for us. Now, we all want to ask questions about the merger and all that stuff, but we’ll try and behave ourselves and not do that that this morning. So,
Clay Gaspar
Doug, we wanted as well. I hear you.
Doug Leggett
Yeah. Well, I don’t want to waste my question on something you’re not going to answer, so I’m going to try something else. Exploration. Clay, you and I have talked about this before, about the perhaps the loss of collective capability on some of Your peers. We’re seeing speculation, or perhaps not so much speculation that you guys are now looking internationally. I wonder if you could just frame for us whether it’s conventional or unconventional, domestic or international, what is the role of exploration in Devon? And if I may ask you to opine, just on a broader issue, what does this say about the maturity of US shale, if indeed you are pursuing opportunities elsewhere?
Clay Gaspar
That’s a great question, Doug. I’m happy to talk about it. When I think about it, you know, internally we have some terminology we use around pillars. Pillar one is make Devon a better Devon. And that’s clearly, you know, the focus around this business optimization. You know, all of the work we’re doing with technology, leaning in efficiency, that just translates into everything else that we do and importantly buys us the creative, the credibility to be able to consider things above and beyond just making Devon a better Devon. The, the pillar too is a little bit more organic in nature.
And these are things that, you know, we mentioned fervo on this call. We think about what the potential is from there. We’ve talked about exploration. We’ve, we’ve clearly been interested in understanding the potential not just here in the U.S. but you know, around the globe. But I would tell you those are, those are long dated investments, long dated relationship builds, things that we need to evaluate over time. And as we know, the best time to evaluate those are when you’re in an incredible position of strength. And so I think about our portfolio today, the free cash flow that we just displayed in full year 25, as I look forward to our capabilities kind of going forward, this is exactly the right time for us to really think about leveraging not just our financial strength, but our operational strength.
And so when I think about the skills that we have and really exporting that or at least leveraging that into other opportunities, you know, these things can be multiple years in the making. What we want to make sure that we are in position is that one, we really objectively understand the skills that we currently have, how we evolve those over time, where business opportunities are in adjacent businesses or businesses that look slightly different than what we do today, and then really hunt for those opportunities where those kind of Venn diagram overlaps and be in a, in a ready position to be able to capture those opportunities, albeit most of those will evolve over time, but be ready to capture those and be positioned for that opportunity when those do come up.
What I would tell you is please don’t mistake any work that we’re doing for next decade opportunities to conflate anything of a lack of confidence in the near term. The confidence in the near term is exactly why we need to be doing things to think about the next decade for Devon and well beyond the positions that we’re in today. Again from an opportunity, a position of strength. That’s exactly what we’re doing. Continuing to refine the skills that we have. Think about things creative and beyond our current footprint then and be ready for when those stars do align that we can jump right on them.
Doug Leggett
Can you confirm the Kuwait interest, Clay?
Clay Gaspar
Yeah. What I would tell you is we have explored interest in a lot of places. That’s a long, long way from, you know, putting material dollars to work. What I would tell you is to really understand the potential that we have, you know, for example, the work that we’re doing in resource plays domestically, clearly there will be opportunities internationally for us to understand and evaluate where that potentially could fit in our long term horizons. We absolutely need to be engaged in those conversations, getting our name out there, participating in that so that we can understand the surface challenges, the kind of above ground risks and how do we quantify that and put it in context to other opportunities that we have.
So while I’ll avoid commenting on any one particular deal because I think it’s way too early for any of that, I can confirm that we are exploring a lot of different ideas and opportunities so that one, we have a better kind of relative positioning and an understanding of what will absolutely fit us best for our longer term horizons. Thanks for the question, Doug.
Doug Leggett
Terrific, thanks. Thank you.
operator
The next question comes from Kele Akerman with Bank of America. Please go ahead.
Kalei Akamai
Hey, good morning guys. My question is on cash opex. I’m noticing that Loe plus GP and T on the four year guide is lower than 1Q26. Can you kind of talk about the cadence of the lower cost there and whether it’s reflective of the GP&T optimization efforts on the NGL front?
John Raines
Clay, this is John. You cut out a little bit, so jump in if I’m not answering your question. But just for the cadence on OPEX for the full year, you know, we’ve continued to make consistent improvements in our workflow, our workover optimization. We’ve consistently reduced our failure rates. That really contributed to a lot of the drop in LOE plus GPT for the full year. Going into Q4, we actually saw some tailwinds on some recurring items. Trey mentioned and Clay mentioned in his comments, the condition based maintenance approach. We’re very early innings in that we’re starting to scale that we started changing some of our maintenance approaches in the Delaware Basin and we’ve already seen some costs come out of the system and so that contributed to the Q4 number from a power standpoint.
We’ve also energized two micro grids in the Delaware Basin. With that we’re able to release a lot of site specific generation. So just good blocking and tackling on the LOE front. About the time you cut out, I think you were talking about Q1. We do see an uptick there on LOE +GP and T. Really what’s driving that is twofold. One, it’s a little bit of a soft spot in our volumes for the year. As Jeff mentioned, we had the weather downtime that hit us in Q1. But then very specifically we’ve got line of sight to just some higher workover activity in the Williston that was mainly weather driven and then some workover activity in the Eagle Ford that was driven or is driven by some, well, clean outs on the GPMT front.
You did see the drop off in Q4 and that is absolutely related to one of our new gathering and processing contracts going effective in the Delaware Basin. And so that’s at a much lower rate and you’re seeing that contribute as well.
Kalei Akamai
Sorry for dropping off, but you did answer the question, John. Thank you.
John Raines
Okay, thank you.
operator
The next question comes from John Freeman with Raymond James. Please go ahead.
John Freeman
Yeah, thank you. Just following up on the last question on the OPEX side. It sounded like Clay maybe that when you talked about sort of the expanding of the automation of the artificial lift optimization and I think you said it sort of above and beyond what y’ all had contemplated previously. I’m just trying to get a sense, does that mean that there’s potential that y’ all could ultimately exceed that kind of billion dollar target? Which is sort of whether it’s that or some of the other catalysts that y’ all sort of outlined on slide 7.
I’m just trying to get a sense of what’s left to be accomplished for the billion and if there’s potential upside based on some of this.
Clay Gaspar
Yeah, John, what I was really just trying to articulate and frame is that While we’ve achieved 85%, we have a great deal of confidence in being able to achieve the full billion yet more to come on that particular topic. But that’ll be, that’ll be something that on unfold in the coming quarters. Just again reiterating, you know, we haven’t changed the billion dollar target. I think what has changed is Just kind of our approach that, you know, this is kind of how we work going forward. And there’s so many, you know, smaller wins that just don’t make the headlines that I’m equally excited about.
I see this kind of contagion around the round the organization and all parts of the company, you know, really contributing and thinking differently about how do they get their share of the contribution to this sustained free cash flow win. And to me that’s, that’s just a winning culture. So really feel confident in the billion dollars and I feel equally confident that there’s more to come in regards to just the change in culture and innovativeness that we’re leaning towards.
John Freeman
Thanks, Clay. Well done.
Clay Gaspar
Thank you, John.
operator
The next question comes from Arun Jayaram with JP Morgan. Please go ahead.
Arun Jayaram
Yeah. Good morning gentlemen. Claes. Wonder if you could just maybe provide some insights around the 2026 program you’re spending or plan to spend about three and a half billion upstream. How should we think about kind of capital allocation between regions outside of the Delaware? Looks like, you know, today you’re operating about half of your rigs in the Delaware. But how should we think about capital allocation between the Midcon, Williston Basin, Eagle, Ford, prb?
Clay Gaspar
Yeah, Arun, I would say directionally think of it pretty similar to how we have been allocating. Clearly don’t want to get ahead of myself. Once we get the deal closed, that’ll be a first order of business. You know, as I mentioned on the last call, really thinking about those opportunities around capital allocation and stepping up the value creation there.
Arun Jayaram
Understood. And my follow up is just you guys have had some, you know, really good opportunities in terms of portfolio management. Thinking about Matterhorn and your investment in Waterbridge. Clay, I was wondering maybe you could elaborate on the ownership position in Fervo Energy. You know, I think Fervo, we saw them at Baker Hughes recent annual meeting. Have some really unique technology in Geotherm. But talk about the decision to invest in Fervo and value creation potential for Devon shareholders from that.
Jeff Ritenour
Thanks for the question. This is Trey. I’ve been a part of the kind of Fervo investment decision since we started at Devon and honestly we originally got introduced to the team there through some of our technical contacts on the engineering and geoscience side, Fervo is a pioneer in a space with enhanced geothermal systems. And that basically means they’re using horizontal drilling and multi stage hydraulic fracturing to build out geothermal systems. And it looks a lot like what we have led the way on with Subsurface interpretation and with how we’ve characterized as an example hydraulic fractures.
So we got to know them on the technical basis originally. Then we met the management team, got to know the founders really well and ultimately started to really see a lot of things that we liked about what Fervo was doing, wanted to support them and to better understand that geothermal business that’s led us over the last couple years to where we are today, where we’re now a 15% owner in the business and continue to be really enthusiastic about what they’re doing operationally. They’re having a lot of success, they continue to drive, well, costs down and we’ve been supporting them with technical support throughout that process to help help make their business better.
Arun Jayaram
Great, thanks.
operator
The next question comes from Philip Youngworth with bmi. Please go ahead.
Philip Jungwirth
Thanks. Hi, good morning. I’ll try not to ask this in relation to the merger, but Jeff will be heading up commercial, which has become an increasingly important role for large EMPs. So the question is more just how do you see the commercial opportunity for Devon standalone and where is the current focus now for the company?
Clay Gaspar
Well, I think that does kind of venture into an area we probably don’t want to spend too much time on. But I can reiterate what we said on the last call. Once we get the company combined, the management team, the new board, I think it’s going to be a really exciting platform to reevaluate. As I just mentioned, some, some things near term like capital allocation, but also thinking about asset rationalization, thinking about some of these long term opportunities. Remember, we’re going to have an incredible financial footprint, operational footprint portfolio and I think that just really opens up the door to a lot more possibilities.
So without getting too far ahead of ourselves, I would just say that the financial footwork, financial foundation is there and we feel really good about that positioning and really opening the doors to additional opportunities.
Philip Jungwirth
Thanks Hunt. Appreciate the answer.
operator
The next question comes from Charles Mead with Johnson Rice. Please go ahead.
Charles Meade
Good morning Clay to you and the. Whole Devon team there. I don’t intend to make this a post deal question, but I acknowledge it may be. But I wondered if you could talk about the dividend, how you chose that new level. It’s a big bump and what the thought process is there to arrive at 31 and a half is the right number.
Clay Gaspar
Yeah, I think the, it’s a big bump from our side, from the Kotera side. It’s basically on par with what they had been doing. And so I think that was kind of the foundation now obviously again this is all presupposing a little bit on what the new pro forma board will approve. But we’ve got it to is that 31 and a half cents, which again is a, is a nice bump on our side. And then you know, in combination we also project that the board will approve a very substantial share repurchase program. I think that gives us a lot of latitude in addition to being able to pay down some debt that’s coming due, I think just gives us a great framework of opportunities to return this very significant free cash flow directly back to shareholders.
Charles Meade
That’s great. Thanks, Clay.
Clay Gaspar
You bet, Charles.
operator
The next question comes from Paul Cheng with Scotiabank. Please go ahead.
Paul Cheng
Thank you. Good morning Tim. The fourth quarter bandwidth result is really very impressive. I mean you have lesser number of till and then production is actually higher than expected. Just want to see that how repeatable or that there’s some one off item that we should be aware such as the timing of when the well come on stream. Anything that you can share on that. And also that the outperformance, how much is really coming from the new well and how much is on the base operation doing better.
Clay Gaspar
Hey, thanks for the question Paul. Because we did have an outstanding fourth quarter that’s on the back of quarter after quarter performance. There is a kind of a overall downdraft in cost structure. That’s efficiency, that’s technology. There’s an also an updraft in productivity. And so thinking about how do we get more out of these precious resources that we have in the portfolio today and what you see in the fourth quarter is that really coming together? Well, quarter to quarter, it’s always going to vary just a little bit. I mean you bring on these big pads, just a shift in a couple of weeks from beginning to a little bit later in the quarter can manifest in different kind of near term ebbs and flows.
I would look at the overall quarter over quarter progress and I think that I feel very confident in extending well into 26 and beyond. I think that is what we’re most excited about. This business optimization was really code for. How do we all get really hungry and really creative on that incremental value opportunity. I might turn to John and ask him his thoughts on the balance of new wells versus the base, the incredible base work that we’re doing as well.
John Raines
Yeah, thanks Clay. I mean really the story is twofold. I mean we did have some help from timing on the wedge. We had three incredible programs come on in the fourth quarter. The timing helped, but also the wells all outperformed, you know, our internal expectations there. You know, the well mix for us, it changes, you know, quarter to quarter. But we had a pretty balanced well mix. These three programs in particular had a good balance of Wolfcamp B, Kimon Spring, but also Wolfcamp A. So all of those things were contributing factors. But Clay’s right. We would be remiss not to talk about the base.
Throughout the course of 2025, we saw a lot of production optimization through various projects on the base. And all in all, for the full year, the base outperformed by about 5,000 barrels of oil a day. So when you think about that type of contribution on the base, it’s almost 2% of the base. That’s just a huge part of our business and an exceptional result and exceptional value to the company.
Paul Cheng
Hey John, what’s the underlying base decline rate and Delaware right now for you guys?
John Raines
Paul, if you were asking about decline rates right now. Yes, our base decline rates right now it’s right in the mid, mid 30%. It’s 30% range.
Paul Cheng
Is that changed from previously or that is still the same? Because I would imagine with your better base operation, your underlying decline rate should be lower or should be less.
John Raines
Yeah, I’d say we’ve had some tailwinds on the base. The decline rate itself hasn’t changed dramatically year over year. Now granted, we’re call it one year into a lot of these production optimization projects. What I would tell you is our downtime is significantly lower. Historically that was in the 7% range. As we go into this year, we’re looking at something inside of 5%. So that’s really where you’re seeing a lot of the baseline show up.
Paul Cheng
Thank you.
John Raines
Thank you.
operator
The next question comes from Kevin McCurdy with Pickering Energy Partners. Please go ahead. Kevin.
Kevin MacCurdy
Hey, good morning. I wanted to stick on the Delaware productivity as it was very impressive in 4Q. Is there anything you can comment on. The standalone 2026 program and how it compares to the 2025 program in terms of the zones you’re targeting, the geography and the forecasted productivity. Thank you.
John Raines
Yeah, great question. I’ll hit on that at a high level. So just top line, 2025. Well, productivity 2026 is going to look very similar to that. You know, we moved more wholesomely into the multi zone co development in 2025. We’re firmly into that development methodology. So you’ll see very consistent well productivity in 2026. You know, when I think about the mix, the one thing I would ask folks to consider is I’m going to talk about the full year, but these things can vary pretty significantly quarter to quarter. But as I think about the program, about 90% of our activity is going to be weighted to New Mexico.
When I break that down a little bit further, kind of by area. We’Ll. See a little bit of an uptick in Todd this year. In the Delaware it’s about 30% cotton draw is about 25%, state lines about 15%. And the balance of that activity is really spread out across the remainder of the Delaware basin. Zone mix is another thing. We’ve got a lot of diversity in the zones for 2026, just like we did in 2025. But just to break it down at a high level, we’re about 40% Wolfcamp, we’re about 45% Bone Spring and about 15% Avalon. So. So all those things very similar to 2025. And because of that we’re expecting pretty consistent year over year. Well productivity.
Kevin MacCurdy
Great detail. Thank you.
operator
Our final question today comes from Matthew Portillo with tph. Please go ahead.
Matthew Portillo
Good morning Clay and team. I actually had a question on the Bakken. Looking at the state data, you already have an impress mix of three mile laterals in the development program as you continue to shift more capital to the Grayson acreage. I was just curious how that mix shift might change for 3 and 4 mile lateral development moving forward and what that might mean for the break even of the asset base.
John Raines
Yeah, Matt, great question. I mean when you look back at 2025, admittedly our lateral lengths were a little bit probably shorter than what we wanted just given the layout of some of the units that we had last year. So we averaged closer to about a 2 mile lateral in the Williston. As you Fast forward into 2026, we’re going to average something closer to a three mile lateral. But when you look at the breakout, we are starting to introduce four mile laterals into the equation. We’re actually drilling our first four mile pad right now. So the teams have continued to optimize the program for longer lateral development and of course as you go longer, you’re enhancing the economics of those programs and the break evens are coming in pretty significantly.
Matthew Portillo
Thank you.
Clay Gaspar
It looks like we’ve kind of exhausted the question list. Thanks for your interest today and if you have further questions, please reach out to the Pressure relations team. Have a good day.
operator
Thank you everyone for joining us today. This concludes our call and you may now disconnect your lines.