SECURITIES AND EXCHANGE COMMISSION

                      Washington, D.C.  20549


                             FORM 10-Q

  (Mark One)
    X     Quarterly Report Pursuant to Section 13 or 15(d)
               of the Securities Exchange Act of 1934

                                 OR

         Transition Report Pursuant to Section 13 or 15(d)
               of the Securities Exchange Act of 1934

                For Quarter Ended September 30, 1997
                    Commission File No. 1-10067


                      DEVON ENERGY CORPORATION
       (Exact Name of Registrant as Specified in its Charter)



            Oklahoma                                73-1474008
     (State or Other Jurisdiction of             (I.R.S. Employer
     Incorporation or Organization)           Identification Number)
    20 North Broadway, Suite 1500
       Oklahoma City, Oklahoma                          73102 
  (Address of Principal Executive Offices)            (Zip Code)

Registrant's telephone number, including area code:   (405) 235-3611


                           Not applicable
                                                  
   Former name, former address and former fiscal year, if changed
  from last report.

       Indicate  by check  mark whether  the  registrant (1)  has
  filed all reports required  to be filed by Section  13 or 15(d)
  of the Securities Exchange  Act of 1934 during the preceding 12
  months (or  for such  shorter period  that  the registrant  was
  required  to file  such reports), and  (2) has  been subject to
  such filing requirements for the past 90 days.  Yes X  No    .

       The number of  shares outstanding  of Registrant's  common
  stock, par value $.10, as of October 14, 1997, was 32,318,895.


                        1 of 31 total pages
                (Exhibit Index is found at page 28)
<PAGE>


                      DEVON ENERGY CORPORATION



                Index to Form 10-Q Quarterly Report
             to the Securities and Exchange Commission



                                                                        Page No.

     Part I.   Financial Information


          Item 1.    Consolidated Financial Statements

               Consolidated  Balance  Sheets, September  30, 1997
               (Unaudited), and December 31, 1996                           4

               Consolidated Statements of Operations (Unaudited),
               For the Three Months and the Nine Months Ended
               September 30, 1997 and 1996                                  5

               Consolidated Statements of Cash Flows (Unaudited),
               For the  Nine Months Ended September  30, 1997 and
               1996                                                         6

               Notes to Consolidated Financial Statements.                  7

          Item 2.    Management's  Discussion   and  Analysis  of
                     Financial Condition and Results of Operations.         9

     Part II.   Other Information

          Item 6.    Exhibits and Reports on Form 8-K                       22






                                 2 
<PAGE>




                      DEVON ENERGY CORPORATION















                   Part I.  Financial Information
             Item 1.  Consolidated Financial Statements
                    September 30, 1997 and 1996















           (Forming a part of Form 10-Q Quarterly Report
             to the Securities and Exchange Commission)








                                 3
<PAGE>

<TABLE>
                    DEVON ENERGY CORPORATION AND SUBSIDIARIES
                           Consolidated Balance Sheets

<CAPTION>
                                                              September 30, December 31,
                                                                   1997         1996
                                                               (Unaudited)
   Assets
   Current assets:
               <S>                                          <C>              <C>
               Cash and cash equivalents                    $   37,947,666   9,401,350
               Accounts receivable                              42,234,131  29,580,306
               Inventories                                       2,166,662   2,103,486
               Prepaid expenses                                  1,257,203     688,752
               Deferred income taxes                             1,600,000   1,600,000

                 Total current assets                           85,205,662  43,373,894

   Property and equipment, at cost, based on the
     full cost method of accounting for oil and
     gas properties                                          1,062,816,198 974,805,756
               Less: Accumulated depreciation, depletion
                 and amortization                              341,619,932 281,959,410

                                                               721,196,266 692,846,346
   Other assets                                                 14,262,410  10,030,560

                 Total assets                               $  820,664,338 746,250,800

   Liabilities and Stockholders' Equity
   Current liabilities:
               Accounts payable:
                 Trade                                          12,433,487   4,861,428
                 Revenues and royalties due to others           10,731,609  10,569,960
               Income taxes payable                                      -   4,705,447
               Accrued expenses                                  2,505,694   3,503,420

                 Total current liabilities                      25,670,790  23,640,255

   Revenues and royalties due to others                          1,044,654   1,053,270
   Other liabilities                                            13,279,281  10,325,999
   Long-term debt                                                        -   8,000,000
   Deferred revenue                                                 18,163     205,859
   Deferred income taxes                                       104,544,000  81,121,000

   Company-obligated mandatorily redeemable
               convertible preferred securities of
               Devon Financing Trust holding solely
               6.5% convertible junior subordinated
               debentures of Devon Energy Corporation          149,500,000 149,500,000

   Stockholders' equity:
               Preferred stock of $1.00 par value.
                 Authorized 3,000,000 shares; none issued                -           -
               Common stock of $.10 par value.
                 Authorized 120,000,000 shares; issued
                 32,293,695 in 1997 and 32,141,295 in 1996       3,229,370   3,214,130
               Additional paid-in capital                      391,190,915 388,090,930
               Retained earnings                               132,632,144  81,099,357
               Cumulative currency translation adjustment         (444,979)          -

                 Total stockholders' equity                    526,607,450 472,404,417

                 Total liabilities and stockholders' equity $  820,664,338 746,250,800

   See accompanying notes to consolidated financial statements.
</TABLE>
                                                 4
<PAGE>
<TABLE>
                    DEVON ENERGY CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)

<CAPTION>
                                                 Three Months                     Nine Months
                                              Ended September 30,             Ended September 30,
                                                 1997      1996                1997         1996

   Revenues
              <S>                            <C>         <C>                <C>          <C>
              Oil sales                      $31,267,250 20,342,307         100,857,256  55,994,559
              Gas sales                       34,044,149 15,289,596         107,458,126  44,123,924
              Natural gas liquids sales        5,206,135  3,375,507          16,534,020   9,366,377
              Other                            2,342,969    466,270           5,562,529   1,335,493

Total revenues                                72,860,503 39,473,680         230,411,931 110,820,353

   Costs and expenses
              Lease operating expenses        15,814,690  7,622,554          46,155,611  22,795,807
              Production taxes                 4,109,654  2,587,664          13,165,045   7,075,577
              Depreciation, depletion and
                 amortization                 20,246,574 11,046,617          60,388,870  31,634,780
              General and administrative
                 expenses                      2,992,104  2,139,647           9,228,599   6,664,597
              Interest expense                    90,146    230,775             249,184   5,172,855
              Distributions on preferred securities
                 of subsidiary trust           2,429,375  2,323,750           7,288,126   2,323,750

                    Total costs and expenses  45,682,543 25,951,007         136,475,435  75,667,366

   Earnings before income taxes               27,177,960 13,522,673          93,936,496  35,152,987

   Income tax expense
              Current                          5,546,000  1,758,000          14,091,000   4,570,000
              Deferred                         5,326,000  4,057,000          23,484,000  10,546,000

                 Total income tax expense     10,872,000  5,815,000          37,575,000  15,116,000

   Net earnings                              $16,305,960  7,707,673          56,361,496  20,036,987

   Net earnings per average common share
              outstanding (Note 2):
                 Assuming no dilution              $0.51       0.35                1.75        0.91
                 Assuming full dilution            $0.47       0.35                1.62        0.91

   Weighted average common shares outstanding 32,235,002 22,130,896          32,181,077  22,121,757




   See accompanying notes to consolidated financial statements.
</TABLE>

                                        5  
<PAGE>
<TABLE>

                    DEVON ENERGY CORPORATION AND SUBSIDIARIES
                      Consolidated Statements of Cash Flows
                                   (Unaudited)

<CAPTION>
                                                                                 Nine Months
                                                                              Ended September 30,
                                                                               1997        1996
   Cash flows from operating activities
               <S>                                                        <C>           <C>
               Net earnings                                               $ 56,361,496   20,036,987
               Adjustments to reconcile net earnings to net
                 cash provided by operating activities:
                   Depreciation, depletion and amortization                 60,388,870   31,634,780
                   (Gain) loss on sale of assets                              (155,040)      26,191
                   Deferred income taxes                                    23,484,000   10,546,000
                   Changes in assets and liabilities:
                        (Increase) decrease in:
                          Accounts receivable                              (12,138,238)  (4,304,455)
                          Inventories                                          (73,883)    (195,490)
                          Prepaid expenses                                    (568,739)    (622,671)
                          Other assets                                        (767,123)     609,654
                        Increase (decrease) in:
                          Accounts payable                                   8,444,761   (4,730,276)
                          Income taxes payable                              (4,705,447)   1,865,773
                          Accrued expenses                                  (1,173,599)     421,752
                          Revenues and royalties due to others                  (8,616)     235,051
                          Deferred revenue                                    (187,696)     240,942
                          Long-term other liabilities                           49,298      376,242

                          Net cash provided by operating activities        128,950,044   56,140,480

   Cash flows from investing activities
               Proceeds from sale of property and equipment                  1,436,610    1,824,009
               Capital expenditures                                        (91,418,731) (65,765,581)
               Increase in other assets                                     (2,700,941)           -

                        Net cash used in investing activities              (92,683,062) (63,941,572)

   Cash flows from financing activities
               Proceeds from borrowings on revolving line of credit          1,847,750   21,000,000
               Principal payments on revolving line of credit               (9,843,750)(159,000,000)
               Issuance of common stock                                      3,115,223      159,125
               Issuance of preferred securities of subsidiary
                 trust, net of issuance costs                                        -  144,888,879
               Dividends paid on common stock                               (4,828,709)  (1,991,271)
               Increase in long-term other liabilities                       2,020,566      945,099

                        Net cash provided (used) by financing activities    (7,688,920)   6,001,832

   Effect of exchange rate changes on cash                                     (31,746)           -

   Net increase (decrease) in cash and cash equivalents                     28,546,316   (1,799,260)

   Cash and cash equivalents at beginning of period                          9,401,350    8,897,891

   Cash and cash equivalents at end of period                             $ 37,947,666    7,098,631

   See accompanying notes to consolidated financial statements.
</TABLE>


                                        6  
<PAGE>


             DEVON ENERGY CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements

  1.           Summary of Significant Accounting Policies

  Basis of Presentation

                The    accompanying     consolidated    financial
  statements and  notes thereto  have been  prepared pursuant  to
  the  rules  and  regulations  of  the  Securities  and Exchange
  Commission.      Accordingly,  certain   footnote   disclosures
  normally   included   in   financial  statements   prepared  in
  accordance with generally accepted  accounting principles  have
  been  omitted.     The   accompanying  consolidated   financial
  statements  and  notes thereto  should  be read  in conjunction
  with  the consolidated financial  statements and  notes thereto
  included in Devon's 1996 annual report on Form 10-K.

                In  the  opinion   of  Devon's  management,   all
  adjustments (all  of which are normal  and recurring) have been
  made  which are  necessary  to  fairly state  the  consolidated
  financial  position   of  Devon  and  its  subsidiaries  as  of
  September  30 1997,  and the  results of  their operations  and
  their  cash flows  for the three  month and  nine month periods
  ended September 30, 1997 and 1996.

  Foreign Currency Translation

               Prior  to   December  31,   1996,  Devon   had  no
  operations  outside the United States.   On  December 31, 1996,
  Devon acquired certain Canadian oil  and gas properties as part
  of  a transaction  in which  Devon acquired  all of  Kerr-McGee
  Corporation's North  American onshore  oil and  gas exploration
  and  production  properties   and  business  in  exchange   for
  9,954,000 shares of Devon  common stock.  The acquired Canadian
  properties are owned by a Canadian subsidiary  which is wholly-
  owned by Devon.

               For purposes of foreign currency  translation, the
  Canadian  dollar   is  the  functional   currency  for  Devon's
  Canadian operations.   Translation  adjustments resulting  from
  translating   the   Canadian  subsidiary's   foreign   currency
  financial statements into U.S. dollar  equivalents are reported
  separately   and  accumulated  in   a  separate   component  of
  stockholders' equity.

  2.           Earnings Per Share

               The periods  ended September 30,  1997, include  a
  dilutive effect on  earnings per share from Devon's  6.5% Trust
  Convertible  Preferred Securities  issued  in  July, 1996,  and
  from  employee stock options.   The  following table reconciles
  the net  earnings and  common shares  outstanding  used in  the
  calculations  of net earnings  per share  assuming no dilution,
  and assuming full dilution,  for the three month and nine month
  periods  ended  September 30,  1997.   (There  was no  dilutive
  effect on earnings per share in the comparable 1996 periods.)

  2.           Earnings Per Share (Continued)
<TABLE>
<CAPTION>
                                                                                                       Net
                                                                                           Common   Earnings
                                                                               Net         Shares      Per
                                                                             Earnings    Outstanding  Share

   Three Months Ended Sepetember 30, 1997:

                  <S>                                                      <C>           <C>          <C>
                  Net earnings per share, assuming no dilution             $16,305,960   32,235,020   0.51

                  Dilutive effect of:
                   Potential common shares issuable upon the conversion
                   of Trust Convertible Preferred securities (the 
                   increase in net earnings is net of income tax expense
                   of $963,000)                                              1,506,489    4,901,507

                   Potential common shares issuable upon the exercise
                   of employee stock options (calculated using the
                   treasury stock method)                                            -      526,725

                  Net earnings per share, assuming full dilution           $17,812,449   37,663,252   0.47


   Nine Months Ended September 30, 1997:

                  Net earnings per share, assuming no dilution              56,361,496   32,181,077   1.75

                  Dilutive effect of:
                   Potential common shares issuable upon the conversion
                   of Trust Convertible Preferred securities (the 
                   increase in net earnings is net of income tax expense
                   of $2,889,000)                                            4,519,466    4,901,507

                   Potential common shares issuable upon the exercise
                   of employee stock options (calculated using the
                   treasury stock method)                                            -      550,986

                  Net earnings per share, assuming full dilution            $60,880,962  37,633,570   1.62

</TABLE>


  Item 2.      Management's Discussion and  Analysis of Financial
               Condition and Results of Operations.

               The   following   discussion   addresses  material
  changes in results of operations  for the three month  and nine
  month  periods ended September 30,  1997, compared to the three
  month and nine month periods  ended September 30, 1996,  and in
  financial condition  since December 31, 1996.   It  is presumed
  that readers  have read or have  access to  Devon's 1996 annual
  report on Form 10-K.

  Overview

               On December 31, 1996, Devon acquired all  of Kerr-
  McGee  Corporation's  North   American  onshore  oil  and   gas
  exploration and production business  and properties (the  "KMG-
  NAOS Properties")  in exchange  for 9,954,000  shares of  Devon
  common stock.   This transaction added approximately 62 million
  barrels  of  oil equivalent  ("Boe")  to Devon's  year-end 1996
  proved reserves, as  well as  370,000 net undeveloped  acres of
  leasehold.   The  addition of  the  KMG-NAOS Properties  in the
  first quarter  of 1997 was the  primary reason  for the changes
  in Devon's operational results between the 1997  and 1996 third
  quarter and year-to-date periods.

               Production for the third  quarter of 1997  totaled
  5.1 million  Boe of oil, gas  and natural  gas liquids ("NGL").
  This  was an  increase of 92%  over the third  quarter of 1996.
  Revenues for the third quarter  of 1997 were $72.9  million, an
  increase  of 85%  over  the prior  year's  third quarter.   Net
  earnings for the 1997  quarter were $16.3 million, or $0.51 per
  share.  The 1997 net earnings  were 112% above the prior year's
  quarterly  results.   The 1997 per  share amount  was 46% above
  the comparable  1996 amount, with approximately 10 million more
<F1>
  shares  outstanding in the 1997  period.  The  cash margin 1 for
  the  third quarter  of  1997  also increased  significantly  to
  $41.9  million,  an  increase  of  84%  over  the   1996  third
  quarter's cash margin of $22.8 million.

               Year-to-date  production for the first nine months
  of  1997 totaled 15.1 million  Boe.  This  was 91% greater than
  the total for the first  nine months of 1996.  Revenues for the

<F1>
1  "Cash margin" equals Devon's total revenues  less cash expenses.  Cash
   expenses are all expenses other than  the non-cash  expenses  of
   depreciation,  depletion  and  amortization  and deferred  income  tax
   expense.   Cash margin  is an  indicator which  is commonly  used in the
   oil and  gas industry.   This margin measures  the net  cash which  is
   generated  by a  company's operations  during a  given period,
   without regard to the period such cash is actually  physically received
   or spent by the  company.  This margin  ignores the  non-operations effects
   on  a company's  activities as an  operator of oil  and gas wells.   Such
   activities produce  net  increases  or decreases  in temporary  cash funds
   held  by the operator which  have no  effect on  net earnings  of the 
   company.   Cash margin  should be  used as  a supplement  to,  and  not
   as  a  substitute  for, net  earnings  and  net cash  provided  by
   operating activities  determined  in  accordance  with  generally 
   accepted  accounting  principles  in analyzing Devon's results of
   operations and liquidity.
                 

  first nine months of 1997  were $230.4 million, an  increase of
  108%  over the comparable 1996 period's revenues.  Net earnings
  for the first  nine months of 1997 were $56.4 million, or $1.75
  per share.  The  1997 earnings were 181%  above the 1996  nine-
  month  total.   The 1997  per share  amount was  92% above  the
  comparable  1996 amount,  with  approximately 10  million  more
  shares  outstanding in  the 1997 period.   The  cash margin for
  the first nine months of  1997 was $140.2 million,  an increase
  of  125%  over  the  cash  margin  of  $62.2  million  for  the
  comparable 1996 period.

  Results of Operations

               Total revenues increased by $33.4 million, or 85%,
  in  the third quarter of 1997 compared  to the third quarter of
  1996, and by $119.6 million, or 108%, in  the first nine months
  of 1997 compared to the  same period in 1996.  These  increases
  were primarily caused by  substantial gains in oil, gas and NGL
  revenues.  Combined oil,  gas and NGL revenues increased by 81%
  in the  third quarter  of 1997,  and 105%  in the  year-to-date
  period of 1997.   The relative contributions of production  and
  price  changes  are  shown  below.    (Note:  Unless  otherwise
  stated,  all  references  in  this  report  to  dollar  amounts
  regarding  Devon's Canadian  operations are  expressed in  U.S.
  dollars.)
<TABLE>
<CAPTION>
                                                                              
                                                                       Total 
                                                Three Months Ended                 Nine Months Ended
                                                    September 30,                     September 30,
                                              1997       1996   Change         1997         1996   Change
                 Production
                   <S>                     <C>          <C>       <C>       <C>          <C>        <C>
                   Oil (Bbls)              1,725,020    957,268   +80%      5,218,472    2,788,446  +87%
                   Gas (Mcf)              17,730,418  8,661,984  +105%     52,062,741   26,476,320  +97%
                   NGL (Bbls)                414,446    253,811   +63%      1,214,944      704,346  +72%
                   Oil, Gas and
<F1>
                     NGL (Boe)1            5,094,536  2,654,743   +92%     15,110,540    7,905,512  +91%

                 Revenues
                   Oil                   $31,267,250 20,342,307   +54%    100,857,256   55,994,559  +80%
                   Gas                    34,044,149 15,289,596  +123%    107,458,126   44,123,924 +144%
                   NGL                     5,206,135  3,375,507   +54%     16,534,020    9,366,377  +77%

                   Combined              $70,517,534 39,007,410   +81%    224,849,402  109,484,860 +105%

                 Average Prices
                   Oil (Per Bbl)              $18.13      21.25   -15%          19.33        20.08   -4%
                   Gas (Per Mcf)               $1.92       1.77    +8%           2.06         1.67  +23%
                   NGL (Per Bbl)              $12.56      13.30    -6%          13.61        13.30   +2%
                   Oil, Gas and NGL
<F1>
                     (Per Boe)1               $13.84      14.69    -6%          14.88        13.85   +7%

</TABLE>
<TABLE>
<CAPTION>
                                                                     Domestic
                                                 Three Months Ended               Nine Months Ended
                                                    September 30,                    September 30,
                                             1997         1996   Change        1997        1996    Change
                 Production
                   <S>                     <C>           <C>       <C>      <C>          <C>         <C>
                   Oil (Bbls)              1,503,734     957,268   +57%     4,520,756    2,788,446   +62%
                   Gas (Mcf)              15,662,465   8,661,984   +81%    45,761,290   26,476,320   +73%
                   NGL (Bbls)                372,322     253,811   +47%     1,091,316      704,346   +55%
                   Oil, Gas and
<F1>
                     NGL (Boe)1            4,486,467   2,654,743   +69%    13,238,954    7,905,512   +67%

                 Revenues
                   Oil                   $27,297,108  20,342,307   +34%    87,513,250   55,994,559   +56%
                   Gas                    31,524,367  15,289,596  +106%    98,843,718   44,123,924  +124%
                   NGL                     4,617,201   3,375,507   +37%    14,598,360    9,366,377   +56%

                   Combined              $63,438,676  39,007,410   +63%   200,955,328  109,484,860   +84%

                 Average Prices
                   Oil (Per Bbl)              $18.15       21.25   -15%         19.36        20.08    -4%
                   Gas (Per Mcf)               $2.01        1.77   +14%          2.16         1.67   +29%
                   NGL (Per Bbl)              $12.40       13.30    -7%         13.38        13.30    +1%
                   Oil, Gas and NGL
<F1>
                     (Per Boe)1               $14.14       14.69    -4%         15.18        13.85   +10%

</TABLE>
<TABLE>
<CAPTION>
                                                                      Canada
                                                Three Months Ended             Nine Months Ended
                                                    September 30,                 September 30,
                                              1997       1996   Change       1997      1996  Change

               Production
                   <S>                       <C>           <C>    <C>      <C>           <C>   <C>
                   Oil (Bbls)                221,286       -      NA       697,716       -     NA
                   Gas (Mcf)               2,067,953       -      NA     6,301,451       -     NA
                   NGL (Bbls)                 42,124       -      NA       123,628       -     NA
                   Oil, Gas and
<F1>
                     NGL (Boe)1              608,069       -      NA     1,871,586       -     NA

               Revenues
                   Oil                    $3,970,142       -      NA    13,344,006       -     NA
                   Gas                     2,519,782       -      NA     8,614,408       -     NA
                   NGL                       588,934       -      NA     1,935,660       -     NA

                   Combined               $7,078,858       -      NA    23,894,074       -     NA

               Average Prices
                   Oil (Per Bbl)              $17.94       -      NA         19.13       -     NA
                   Gas (Per Mcf)               $1.22       -      NA          1.37       -     NA
                   NGL (Per Bbl)              $13.98       -      NA         15.66       -     NA
                   Oil, Gas and NGL
<F1>
                     (Per Boe)1               $11.64       -      NA         12.77       -     NA
                           
<F1>
   1           Gas  is converted to barrels  of oil equivalent  ("Boe") at the
               rate of six  Mcf per barrel of oil, based  upon the approximate
               relative energy content of  natural gas and oil, which  rate is
               not necessarily indicative  of the relationship of oil, gas and
               NGL  prices.   The  respective  prices  of these  products  are
               affected  by market and  other factors in  addition to relative
               energy content.
</TABLE>

                  Oil  Revenues.   Oil revenues  increased  by $10.9
  million, or 54%, in the  third quarter of 1997 compared  to the
  same period of 1996.   Production gains of 768,000  barrels, or
  80%, added  $16.3 million of oil  revenues in  the 1997 period.
  This increase was partially offset by a  $5.4 million reduction
  in oil revenues  caused by a  $3.12 per barrel decrease  in the
  third quarter of 1997 s average oil price.

               The KMG-NAOS  Properties were  responsible for the
  increased oil  production.   These properties produced  780,000
  barrels  of oil  in the third  quarter of  1997.  Approximately
  559,000 of these barrels  were produced in the U.S. and another
  221,000  barrels  were  produced  in  Canada.    Devon s  other
  domestic  properties  produced  945,000 barrels  in  the  third
  quarter of  1997.  This  was a decrease  of 12,000  barrels, or
  1%,  compared to  the  957,000 barrels  produced in  the  third
  quarter of 1996.

               Oil revenues increased  by $44.9 million, or  80%,
  in the first  nine months of 1997  compared to the  same period
  in 1996.  Production  gains of 2,430,000 barrels, or 87%, added
  $48.8  million  of oil  revenues  in  the  1997  period.   This
  increase  was partially offset by  a $3.9  million reduction in
  oil  revenues caused  by  a $0.75  per  barrel decrease  in the
  year-to-date period of 1997.

               The   KMG-NAOS   Properties   were   the   primary
  contributors to the increased  oil production in the 1997 year-
  to-date period.   These properties  produced 2,282,000  barrels
  of  oil  in the  first  nine  months  of  1997.   Approximately
  1,584,000  of these  barrels were  produced in  the U.S., while
  698,000  barrels  were  produced  in  Canada.    Devon s  other
  domestic  properties produced  2,937,000 barrels  in the  first
  nine months of 1997.  This was an increase of  149,000 barrels,
  or 5%,  over the 2,788,000 barrels  produced in  the first nine
  months of 1996.

               Gas  Revenues.   Gas revenues  increased by  $18.8
  million, or 123%, in the third quarter of 1997  compared to the
  third quarter of  1996.  An  increase in gas production  of 9.1
  Bcf,  or 105%,  added $16.0 million  to the  1997 quarter s gas
  sales.   Also, an  increase in the  average gas  price of $0.15
  per Mcf, or 8%, added  the remaining $2.8 million  of increased
  gas revenues.

               The   KMG-NAOS   Properties   were   the   primary
  contributors  to the increased  production volumes  in the 1997
  quarter.    These properties  produced  7.8  Bcf in  the  third
  quarter of 1997.  The  KMG-NAOS Properties produced 5.7  Bcf in
  the  U.S.  and  2.1 Bcf  in  Canada.    Devon s coal  seam  gas
  properties produced  4.2 Bcf in the  third quarter  of 1997 and
  the third quarter  of 1996.  Devon's other  domestic properties
  produced 5.8 Bcf in the  1997 period compared to 4.5 Bcf in the
  third quarter of 1996.

               The  coal seam  gas properties  averaged $1.88 per
  Mcf in the  third quarter of 1997 compared  to $1.71 per Mcf in
  the third  quarter of 1996.   Devon s domestic conventional gas
  properties averaged $2.06  per Mcf in the 1997 quarter compared
  to $1.82  per Mcf in  the 1996 quarter.   Devon s Canadian  gas
  production averaged $1.22 per Mcf in the 1997 quarter.

               Gas revenues increased by $63.3 million, or  144%,
  in the first  nine months of 1997  compared to the  same period
  of 1996.   An increase in gas production  of 25.6 Bcf,  or 97%,
  added  $42.6 million  of gas  sales  in the  1997 period.    An
  increase  in the average price of  $0.39 per Mcf, or 23%, added
  the remaining $20.7 million of increased gas sales.

               The KMG-NAOS Properties were  responsible for  the
  majority of  the increased  gas production.   These  properties
  produced  22.7   Bcf  in   the  first  nine   months  of  1997.
  Approximately 16.4  Bcf of  this  production was  in the  U.S.,
  while the  remaining 6.3 Bcf was  produced in  Canada.  Devon s
  coal seam  gas properties produced 12.8  Bcf in  the first nine
  months of  1997 compared  to 13.2  Bcf in  the comparable  1996
  period.   Devon s other  domestic properties  produced 16.7 Bcf
  in the first  nine months of 1997 compared  to 13.3 Bcf  in the
  first nine months of 1996.

               The coal  seam gas  properties averaged $2.00  per
  Mcf  in the first nine months of 1997 compared to $1.47 per Mcf
  in the comparable 1996  period.  Devon s  domestic conventional
  gas  properties averaged  $2.22  per  Mcf in  the  1997  period
  compared  to  $1.86  per  Mcf  in  the  1996  period.   Devon s
  Canadian  gas production  averaged $1.37  per Mcf  in the first
  nine months of 1997.

               NGL  Revenues.   NGL  revenues  increased by  $1.8
  million, or 54%,  in the third quarter of  1997 compared to the
  third quarter  of 1996.  An  increase in  production of 161,000
  barrels,  or 63%,  added $2.1  million  to  the 1997  quarter s
  revenues.    This  was  partially  offset  by  a  $0.3  million
  reduction in revenues caused  by a $0.74 per barrel decrease in
  the 1997 quarter s average price.

               The  KMG-NAOS  Properties  accounted  for  121,000
  barrels  of the  total increase  in production.   The  KMG-NAOS
  Properties  produced 79,000  barrels  in  the U.S.  and  42,000
  barrels in Canada.

               NGL revenues  increased by  $7.2 million, or  77%,
  in the first nine  months of 1997 compared  to the same  period
  of 1996.   An  increase in  production of  511,000 barrels,  or
  72%, added  $6.8 million  to the  1997 period s  revenues.   An
  increase  in the  average  price of  $0.31  per barrel  in 1997
  added the remaining $0.4 million of increased NGL revenues.

               The  KMG-NAOS Properties  produced 366,000 barrels
  in the  first nine months of  1997.   These properties produced
  242,000 barrels in the U.S. and 124,000 barrels in Canada.

               Other  Revenues.  Other revenues increased by $1.9
  million,  or 402%, in the third quarter  of 1997.  The addition
  of the KMG-NAOS  Properties added $0.8 million  of revenues  in
  the 1997 quarter from  processing third party natural gas.  The
  investment  of excess  cash on hand  in the  1997 quarter added
  $0.6 million of interest income.

               Other  revenues  increased  by  $4.2  million,  or
  317%, in the  first nine months of  1997.  Processing of  third
  party natural  gas related to the KMG-NAOS Properties accounted
  for $2.4 million of the increase.  Another $1.2 million  of the
  increase in  other revenues was attributable to interest income
  earned in the first nine months of 1997.

               Production and Operating  Expenses.  Components of
  production and  operating expenses  in the  second quarter  and
  first half of 1997 increased  or decreased compared to  1996 as
  shown in the tables below.
<TABLE>
<CAPTION>
                                                                           Total 
                                              Three Months Ended                           Nine Months Ended
                                                  September  30,                             September 30,
                                          1997            1996     Change             1997           1996     Change

    Expenses
      Recurring operations and
        <S>                           <C>              <C>          <C>            <C>           <C>           <C>
        maintenance expenses          $14,513,305      7,173,359    +102%          43,088,111    20,553,364    +110%
      Well workover expenses            1,301,385        449,195    +190%           3,067,500     2,242,443     +37%
      Production taxes                  4,109,654      2,587,664     +59%          13,165,045     7,075,577     +86%

         Total production and
           operating expenses         $19,924,344     10,210,218     +95%          59,320,656    29,871,384     +99%

    Expenses Per Boe
      Recurring operations and
        maintenance expenses                $2.85           2.70      +6%                2.85          2.60     +10%
      Well workover expenses                 0.25           0.17     +47%                0.21          0.28     -25%
      Production taxes                       0.81           0.98     -17%                0.87          0.90      -3%

         Total production and
           operating expenses               $3.91           3.85      +2%                3.93          3.78      +4%
</TABLE>
<TABLE>
<CAPTION>
                                                                        Domestic
                                             Three Months Ended                          Nine Months Ended
                                                September  30,                             September 30,
                                       1997            1996      Change             1997          1996      Change

  Expenses
    Recurring operations and
      <S>                           <C>              <C>           <C>           <C>           <C>            <C>
      maintenance expenses          $12,782,991      7,173,359     +78%          38,447,151    20,553,364     +87%
    Well workover expenses              849,830        449,195     +89%           2,410,520     2,242,443      +7%
    Production taxes                  4,043,208      2,587,664     +56%          12,961,285     7,075,577     +83%

       Total production and
         operating expenses         $17,676,029     10,210,218     +73%          53,818,956    29,871,384     +80%

  Expenses Per Boe
    Recurring operations and
      maintenance expenses                $2.85           2.70      +6%                2.91          2.60     +12%
    Well workover expenses                 0.19           0.17     +12%                0.18          0.28     -36%
    Production taxes                       0.90           0.98      -8%                0.98          0.90      +9%

       Total production and
         operating expenses               $3.94           3.85      +2%                4.07          3.78      +8%
</TABLE>
<TABLE>
<CAPTION>
                                                                          Canada
                                               Three  Months Ended                     Nine Months Ended
                                                   September  30,                         September 30,
                                         1997           1996       Change          1997          1996   Change

  Expenses
    Recurring operations and
      <S>                             <C>                     <C>     <C>       <C>                 <C>   <C>
      maintenance expenses            $1,730,314              -       NA        4,640,960           -     NA
    Well workover expenses               451,555              -       NA          656,980           -     NA
    Production taxes                      66,446              -       NA          203,760           -     NA

       Total production and
         operating expenses           $2,248,315              -       NA        5,501,700           -     NA

  Expenses Per Boe
    Recurring operations and
      maintenance expenses                 $2.85              -       NA              2.48          -     NA
    Well workover expenses                  0.74              -       NA              0.35          -     NA
    Production taxes                        0.11              -       NA              0.11          -     NA

       Total production and
         operating expenses                $3.70              -       NA              2.94          -     NA

</TABLE>


               Recurring  operations  and   maintenance  expenses
  increased  by $7.3  million, or 102%,  in the  third quarter of
  1997.   The addition of  the KMG-NAOS  Properties accounted for
  $5.5  million of  the increased  expenses.   Expenses  on wells
  drilled since  September 30,  1996, comprised  the majority  of
  the remaining $1.8 million increase.  

               Production  taxes increased  by $1.5  million,  or
  59%,  in  the  third  quarter  of  1997.    This  increase  was
  attributable to the 81% increase  in combined oil, gas  and NGL
  revenues in the 1997 period.

               Recurring  expenses per Boe  were up  by $0.15, or
  6%, in the third quarter  of 1997 compared to the  same quarter
  of  1996.   This increase was  caused by  the reduction  in the
  coal  seam gas  properties   share  of total  production.   The
  recurring operating  costs  per  Boe  for  the  coal  seam  gas
  properties  are extremely  low  ($0.40  per Boe  in  the  third
  quarter  of 1997  and $0.30  per  Boe in  the third  quarter of
  1996).  However, as  production from these  properties declined
  and production  from Devon s  conventional properties increased
  in  the 1997 quarter, the coal  seam gas properties  percentage
  of overall production dropped from  26% in the 1996  quarter to
  only 14%  in the  1997 quarter.   The  result is  that more  of
  Devon s production in  the 1997 period was  attributable to its
  conventional  gas  properties,  which have  a  higher operating
  cost per Boe than  the low-cost coal seam gas properties.   The
  recurring operating  costs  per  Boe for  Devon s  conventional
  properties actually  dropped  to  $3.24 per  Boe  in the  third
  quarter of 1997  from $3.56  per Boe  in the  third quarter  of
  1996.   Even though the coal seam costs per Boe rose only $0.10
  and  the conventional  properties   costs  per Boe  dropped  by
  $0.32 in the 1997 quarter,  the overall cost per  Boe increased
  because of the shift  in the  production percentage toward  the
  conventional properties.

               Recurring  operations  and   maintenance  expenses
  increased by $22.5 million, or  110%, in the first  nine months
  of 1997.  The  KMG-NAOS Properties accounted for  $17.3 million
  of the increased expenses.   Most of the remaining $5.2 million
  of  increased expenses  was  due to  wells which  were  drilled
  subsequent to September 30, 1996.

               Production  taxes increased  by $6.1  million,  or
  86%, in  the  first nine  months of  1997.   This increase  was
  attributable to the 105%  increase in combined oil, gas and NGL
  revenues in the 1997 period.

               Recurring  expenses per Boe  were up  by $0.25, or
  10%, in the first  nine months of 1997.  As explained  above in
  the  discussion of the quarterly  increase, the increase in the
  percentage  of  production  attributable  to  the  conventional
  properties is the cause of the  increase in the costs per  Boe.
  Expenses of  Devon s coal  seam gas properties  were $0.37  per
  Boe  in the first nine months of 1997 compared to $0.32 per Boe
  in  the  first  nine  months  of  1996.    Expenses  of Devon s
  conventional properties were $3.26  per Boe in the 1997  period
  compared to $3.48 per Boe in the 1996 period.   Even though the
  per  unit expenses  increased only $0.05  per Boe  for the coal
  seam  properties  and  decreased  by  $0.22  per  Boe  for  the
  conventional   properties,  Devon s   overall  cost   per   Boe
  increased.   This was  caused by the drop  in the percentage of
  Devon s overall production  attributable to the  extremely low-
  cost coal seam properties.   Such properties accounted for  28%
  of combined  production in the first  nine months  of 1996, but
  only accounted for 14% of the 1997 period s production.

               Depreciation, Depletion  and Amortization  Expense
  ( DD&A ).   Oil and gas  property related  DD&A increased  $8.9
  million,  or 85%,  from $10.6 million  in the  third quarter of
  1996 to  $19.5  million in  the third  quarter  of  1997.   The
  increase  in  combined  oil,  gas  and  NGL  production of  2.4
  million  Boe, or  92%, added  $9.7 million  of DD&A.   This was
  partially offset by a $0.8  million decrease in DD&A  caused by
  a reduction  in the 1997  quarter's DD&A  rate.  The  DD&A rate
  dropped to $3.83 per  Boe in the 1997 quarter compared to $3.98
  per Boe in the 1996 quarter due to 1997 upward reserve revisions.

               Oil and gas  property related DD&A increased $28.0
  million, or  92%, from $30.3 million  in the  first nine months
  of  1996 to $58.3  million in  the first  nine months  of 1997.
  The  increase in  combined oil, gas  and NGL  production of 7.2
  million  Boe,  or  91%, accounted  for  $27.6  million  of  the
  increased  DD&A.   The remaining $0.4  million of the increased
  expense was  caused by an increase in  the DD&A rate from $3.83
  per Boe  in the year-to-date  1996 period  to $3.86 per  Boe in
  the 1997 year-to-date period.

               General  and Administrative Expenses ( G&A ).  G&A
  increased $0.9 million, or 40%,  in the third quarter  of 1997.
  Employee  salaries   and  related  overhead  costs,   including
  insurance  and pension expense,  increased $1.2  million in the
  1997  quarter.   This  increase  was primarily  related to  the
  additional  permanent and temporary  personnel added at Devon s
  Oklahoma  City  and  Calgary   offices  as  a  result   of  the
  acquisition  of the  KMG-NAOS  Properties.   The  expansion  in
  personnel also  caused office-related costs such as rent, dues,
  travel, supplies,  telephone, etc., to increase by $0.5 million
  in the third quarter.

               The higher salary, overhead and office costs  were
  partially   offset   by  an   increase   in   Devon s  overhead
  reimbursements.   As the operator of a property, Devon receives
  these  reimbursements  from  the  property s  working  interest
  owners.    Devon records  the  reimbursements as  reductions to
  G&A.  Due to the  addition of the KMG-NAOS Properties, many  of
  which   Devon   operates,   Devon s   overhead   reimbursements
  increased by $0.8 million in the third quarter of 1997.

               The  amount  of  G&A capitalized  pursuant  to the
  full  cost  method of  accounting  for oil  and gas  properties
  increased  from $0.7  million in the  third quarter  of 1996 to
  $0.9 million in the third quarter of 1997.

               G&A increased $2.6 million,  or 38%, in  the first
  nine months  of 1997.   Employee salaries and related  overhead
  costs  increased  by  $3.9  million  due to  the  expansion  in
  personnel from  the  acquisition  of the  KMG-NAOS  Properties.
  This expansion  also caused office-related costs to increase by
  $1.4 million  in the first  nine months  of 1997.   The  higher
  salary,  overhead and  office costs were  partially offset by a
  $2.7 million increase in Devon s overhead reimbursements.

               Capitalized  G&A increased  from  $2.0  million in
  the first  nine months  of 1996  to  $2.7 million  in the  same
  period of 1997.

               Interest  Expense.    Interest  expense  decreased
  $0.1  million, or 61%, in  the third quarter  of 1997  due to a
  substantial reduction  in the  average debt  outstanding.   The
  average debt balance outstanding  dropped from $5.7  million in
  the  third quarter  of 1996  to zero  in the  third  quarter of
  1997.  Devon  issued $149.5 million of  6.5% Trust  Convertible
  Preferred Securities  ( TCP Securities )  in July,  1996.   The
  proceeds  from   this  issuance,  along  with  cash  flow  from
  operations,  were used  to substantially  retire  Devon s long-
  term bank  debt.   (The TCP  Securities  are discussed  further
  below.)

               Interest expense  decreased $4.9 million, or  95%,
  in  the first nine months  of 1997.   This reduction was caused
  by a drop in the  average debt balance outstanding  from $102.3
  million in  the first nine months of 1996  to only $1.0 million
  in the  first nine  months of  1997.  As  explained above,  the
  issuance of the TCP Securities  in July, 1996, was  the primary
  reason for the reduction in Devon s long-term bank debt.

               Distributions   on    Preferred   Securities    of
  Subsidiary  Trust.   As mentioned  in the  above discussions of
  interest expense,  Devon, through an  affiliate, issued  $149.5
  million of 6.5%  TCP Securities in July,  1996.   Distributions
  on  the  TCP  Securities  accrue  at  the  rate  of  1.625% per
  quarter.    Distributions  on  the  TCP  Securities  were  $2.4
  million  in the third quarter  of 1997 and $2.3  million in the
  third quarter  of 1996.   The  1996 amount  was slightly  lower
  because  the initial  distribution in  1996 did  not cover  the
  entire third quarter.  

               Income Taxes.  During interim periods,  income tax
  expense is  based on the estimated  effective tax  rate for the
  entire fiscal  year.  The estimated  effective tax  rate in the
  third quarter and first nine  months of 1997 was  40%, compared
  to 43%  estimated in the third quarter and first nine months of
  1996.  However, the  eventual actual tax rate for the year 1996
  was  reduced to  41%, which was  only slightly  higher than the
  current estimated rate for 1997.

               Statement  of  Financial Accounting  Standards No.
  109,  Accounting  for Income Taxes  ( Statement 109 ), requires
  that  the   tax  benefit  of  available  tax  carryforwards  be
  recorded as  an asset to  the extent  that management  assesses
  the utilization of  such carryforwards to be  more  likely than
  not .   When  the  future utilization  of  some portion  of the
  carryforwards is determined  not to be  more  likely than not ,
  Statement 109 requires that  a valuation allowance  be provided
  to reduce the recorded tax benefits from such assets.

               Included  as deferred tax assets  at September 30,
  1997,   were   approximately   $11  million   of   various  tax
  carryforwards.   Of  this  amount,  $5  million  were  for  net
  operating  loss  carryforwards  that  expire  between 1998  and
  2008.    The  remaining  $6  million  of  carryforward benefits
  relate to  depletion and minimum tax credit carryforwards which
  do not have expiration dates.

               To  assess   the  likelihood   of  realizing   tax
  benefits from  the future  utilization of these  carryforwards,
  management considered four primary  factors:  (1)  estimates of
  future  yearly  taxable  income  which  Devon  is  expected  to
  generate; (2) the  level of future taxable income  necessary to
  utilize  the carryforwards; (3)  the expiration  dates, if any,
  of  such carryforwards,  and  (4)  certain limitations  on  the
  annual  utilization  of  the  carryforwards  as  set  forth  by
  federal tax regulations.

               Based    upon   current    estimates   of   future
  production,  average  prices  and pre-tax  expenses, management
  believes  that taxable  income during  the carryforward periods
  will  be   sufficient  to  utilize  all  of  the  carryforwards
  currently  available.  Devon expects  the tax benefits from its
  net  operating loss carryforwards  to be  utilized between 1997
  and  1999.  This  is well  before the 2006  expiration date for
  the majority of such benefits.

               Management s assessment of the future  utilization
  of Devon s deferred  tax assets is based upon current estimates
  of  taxable  income  to  be   generated  in  1997  and  beyond.
  Significant  changes in such  estimates from  variables such as
  future  oil and gas prices  or capital expenditures could alter
  the timing of the eventual  utilization of such assets.   There
  can  be no  assurance that  Devon  will  generate any  specific
  level of continuing taxable earnings.

  Capital Expenditures, Capital Resources and Liquidity

               The following discussion of capital  expenditures,
  capital resources and liquidity  should be read  in conjunction
  with  the  consolidated statements  of  cash flows  included in
  Part 1, Item 1 elsewhere herein.

               Capital  Expenditures.    Cash  used  for  capital
  expenditures  increased  39% from  $65.8  million in  the first
  nine  months of 1996 to $91.4  million in the first nine months
  of  1997.   Approximately $87.7 million  was spent  in the 1997
  period  on  acquisition,  exploration  and  development  costs,
  compared to $65.1 million in the 1996 period.

               Capital  Resources   and  Liquidity.    Net   cash
  provided   by  operating  activities  ( operating  cash  flow )
  continued to be the  primary source of capital and liquidity in
  the first nine  months of  1997.   Operating cash  flow in  the
  1997 year-to-date period was  $129.0 million compared  to $56.1
  million in the comparable 1996 period.

               Because  of  the  amount  of operating  cash  flow
  generated  in the  first nine  months of  1997,  Devon s credit
  lines were not  used as a significant source of capital.  Long-
  term debt at the end of 1996 was $8 million.   During the first
  quarter of  1997, operating cash flow was utilized to eliminate
  this debt balance. 

               Devon s domestic long-term credit facilities  were
  amended  in March,  1997.   At  Devon s request,  the borrowing
  base of  the facilities was lowered  from $260  million to $208
  million.  This  will lower Devon s future  cost of  borrowings.
  If future capital needs arise, Devon believes  that its lenders
  would increase  its domestic credit lines to approximately $500
  million.   The amendments to the credit agreements also lowered
  the annual facilities fee from  0.25% of the borrowing  base to
  0.20%, and  extended the final  maturity date for $200  million
  of  the facilities to  August 31, 2003.   The maturity date for
  the  remaining $8  million of  credit facilities  is August 31,
  2000.   Also, the  amendments reduced  Devon s minimum tangible
  net worth required by the lenders.

               Impact  of  Recently Issued  Accounting  Standards
  Not Yet Adopted.   In February, 1997,  the Financial Accounting
  Standards  Board  issued  Statement  of   Financial  Accounting
  Standards  No. 128,   Earnings  Per Share.     SFAS No.  128 is
  effective  for financial statements  issued for  periods ending
  after  December  15,  1997,  and  restatement  of  prior-period
  earnings  per share  date is required.   The  new standard will
  not  apply  to Devon s  financial  statements until  the fourth
  quarter of 1997.   SFAS No. 128 revises the current calculation
  methods and  presentation of primary and fully diluted earnings
  per  share.   Devon has reviewed  the requirements  of SFAS No.
  128,  and  has concluded  that  they  will  not affect  Devon s
  historical primary earnings per share data.   However, SFAS No.
  128  will lower Devon s  historical fully  diluted earnings per
  share  amounts by  $0.01  per share  in  each of  the following
  periods: the  year 1994, the year  1995, the  second quarter of
  1996 and the third quarter of 1996.

  Revisions to 1997 Estimates

               The 1996 annual  report on Form  10-K, and  a Form
  8-K  filed  on  February  11, 1997,  contained  forward-looking
  information  for the  year 1997.   This information was revised
  to the  extent necessary in the  Quarterly Report  on Form 10-Q
  for  the quarter  ended June 30,  1997.   Where necessary, that
  information   has  been  further   revised  in   the  following
  discussion.   The revised  forward-looking statements  provided
  in this  discussion are  based on  management's examination  of
  historical  operating  trends,  the December  31,  1996 reserve
  reports  of independent petroleum consultants LaRoche Petroleum
  Consultants, Ltd. and AMH  Group Ltd.,  data in Devon's  files,
  other data  available from  third parties,  and actual  results
  for  the first half  of 1997.   Devon cautions  that its future
  oil, gas and NGL production, revenues and expenses  are subject
  to all of the  risks and uncertainties normally incident to the
  exploration for and  development and production of oil and gas.
  These  risks  include, but  are  not limited  to, environmental
  risks,  drilling  risks, regulatory  changes,  the  uncertainty
  inherent  in  estimating  future  oil  and  gas  production  or
  reserves, and  other risks  as outlined  below.   The scope  of
  Devon's operations  increased significantly  with the  KMG-NAOS
  transaction.   This increases the  margin of error inherent  in
  estimating  Devon's   1997  production   volumes,  prices   and
  expenses.     Also,  the  financial  results  for  Devon's  new
  Canadian  operations, obtained in the KMG-NAOS transaction, are
  subject to currency exchange rate risks.

               Assumptions  and  Risks  for Price  and Production
  Estimates.    Prices   for  oil,  natural  gas   and  NGLs  are
  determined primarily  by prevailing market  conditions.  Market
  conditions  for these products  are influenced  by regional and
  world-wide  economic growth,  weather  and  other substantially
  variable factors.   These  factors are  beyond Devon's  control
  and  are difficult  to predict.   Over 90%  of Devon's revenues
  are   attributable  to   sales  of   these  three  commodities.
  Consequently,  the company's  financial results  and  resources
  are highly influenced by this price volatility.

               Estimates for  Devon's future  production of  oil,
  natural gas  and NGLs are based  on the  assumption that market
  demand and prices for oil  and gas will continue at levels that
  allow  for profitable production  of these  products.  Although
  Devon's   management   believes   these   assumptions   to   be
  reasonable, there can be no assurance of such stability.

               Certain  of   Devon's  individual   oil  and   gas
  properties are sufficiently significant  as to have  a material
  impact  on  the  company's  overall  financial  results.   With
  respect  to oil production,  these properties  include the West
  Red  Lake  Field  and   the  Grayburg-Jackson  Unit,   both  in
  southeast  New Mexico.    The company's  interest in  coal seam
  natural gas in the Northeast  Blanco Unit and the 32-9 Unit can
  have a substantive effect on overall gas production.

               The  production,  transportation and  marketing of
  oil,  natural gas  and  NGLs  are complex  processes  which are
  subject  to  disruption due  to  transportation  and processing
  availability,  mechanical failure,  human error, meteorological
  events  and  numerous other  factors.   The  following forward-
  looking statements were prepared assuming  demand, curtailment,
  producibility and  general market  conditions for Devon's  oil,
  natural gas  and NGLs  for  the last  quarter of  1997 will  be
  substantially similar  to those  of the  first three  quarters,
  unless otherwise noted.

               Discussed below  are those  areas where  revisions
  have been  made to  the 1997  estimates originally  included in
  the aforementioned  Form 10-K and Form  8-K, and  first revised
  in the June 30, 1997 Form 10-Q.

               Relative  Prices  of  Oil   Production.    In  the
  revisions to  forward-looking information  which were  included
  in  the June  30, 1997, Form  10-Q, Devon  revised its expected
  1997  oil  price  upward to  between  $0.15  above  West  Texas
  Intermediate posted prices ("WTI") and $0.30 above WTI.   Since
  the time of that revision,  three factors have caused  Devon to
  raise  its  expected  oil  prices  again.    First,  the  price
  differential  between  higher-priced  sweet  crude  and  lower-
  priced  sour  crude  has  narrowed substantially.    Therefore,
  Devon's expected price for its  sour crude has increased  as it
  relates to WTI.   Second,  Devon's proportionate  mix of  sweet
  and  sour   crude  production  has  shifted  towards  a  larger
  percentage of the higher-priced sweet crude.   And third, since
  the June,  1997, price  revision, Devon has  been successful at
  replacing  expiring  crude contracts  with  new  contracts that
  have pricing  terms equal to  or better than  the terms  of the
  expiring  contracts.   These  factors  contributed  to  Devon's
  average  oil price  for  the first  nine  months of  1997 being
  $0.41 above WTI.  As a result of these  events, Devon has again
  revised  upward its estimate for  the year's  average oil price
  in 1997.   Devon now expects its average  oil price for 1997 to
  be between $0.30 above WTI and $0.50 above WTI.

               Relative  Prices  of  Gas  Production.     In  the
  original   forward-looking   information   included   in    the
  aforementioned Form  8-K and  Form 10-K,  Devon estimated  that
  its  average price  for coal seam  gas production would include
  an expected $0.55 per  Mcf from the San Juan Basin Transaction.
  (See Note 3 to  the consolidated financial  statements included
  in the 1996  Form 10-K  for a complete  description of the  San
  Juan  Basin Transaction.)   Recent upward  revisions to Devon's
  expected future San Juan Basin  prices, and the effect  of such
  revisions on certain provisions  of the agreement  covering the
  San Juan  Basin Transaction,  have caused  Devon  to lower  the
  expected price benefit from  such transaction.   Devon believes
  that the San Juan  Basin transaction will add between $0.40 per
  Mcf and $0.50  per Mcf to  Devon's 1997  coal seam gas  average
  price.

               Income Taxes.   In the June  30, 1997, Form  10-Q,
  Devon revised  upward its  estimate of  the current portion  of
  its 1997  income tax  expense to  between $11  million and  $15
  million.   The upward  revision was  necessitated by  an upward
  revision  to expected  pre-tax earnings  for the  year.   Since
  that  June   revision,  Devon  has  again  revised  upward  its
  estimate  of 1997's pre-tax  earnings.   Accordingly, Devon now
  expects its current portion  of 1997 income taxes to be between
  $16 million and $22  million.  The original estimate of Devon's
  total income  tax rate  of between  38%  and 42%  has not  been
  revised.
<PAGE>

             DEVON ENERGY CORPORATION AND SUBSIDIARIES
             Notes to Consolidated Financial Statements




  Part II.     Other Information

               Item 1.   Legal Proceedings

                    None

               Item 2.   Changes in Securities

                    None

               Item 3.   Defaults Upon Senior Securities

                    None

               Item 4.   Submission  of  Matters  to  a  Vote  of
                         Security Holders

                    None

               Item 5.   Other Information

                         None

               Item 6.   Exhibits and Reports on Form 8-K

               (a)       Exhibits   required   by  Item   601  of
                         Regulation S-K are as follows:

          Exhibit
            No.  

            2.1  Agreement and  Plan of Merger among  Registrant,
                 Devon  Energy Corporation  (Nevada),  Kerr-McGee
                 Corporation, Kerr-McGee  North American  Onshore
                 Corporation and Kerr-McGee Canada Onshore  Ltd.,
                 dated   October   17,  1996   (incorporated   by
                 reference   to   Addendum  A   to   Registrant's
                 definitive   proxy   statement  for   a  special
                 meeting of  shareholders, filed  on November  6,
                 1996).

            3.1  Registrant's  Certificate of  Incorporation,  as
                 amended (incorporated by  reference to Exhibit B
                 to  Registrant's definitive  Proxy Statement for
                 its 1995  Annual Meeting  of Shareholders  filed
                 on April 21, 1995).

            3.2  Registrant's   Certificate   of   Amendment   of
                 Certificate  of Incorporation  (incorporated  by
                 reference to Exhibit 2  to Registrant's  Current
                 Report on Form 8-K dated December 31, 1996).

            3.3  Registrant's Bylaws  (incorporated by  reference
                 to  Exhibit  3.2  to  Registrant's  Registration
                 Statement on Form 8-B filed on June 7, 1995).

            4.1  Form  of Common  Stock Certificate (incorporated
                 by  reference  to  Exhibit  4.1 to  Registrant's
                 Registration Statement  on  Form  8-B  filed  on
                 June 7, 1995).

            4.2  Rights  Agreement  between  Registrant  and  The
                 First National  Bank of Boston (incorporated  by
                 reference   to   Exhibit  4.2   to  Registrant's
                 Registration Statement  on  Form  8-B  filed  on
                 June 7, 1995).

            4.3  First  Amendment  to  Rights  Agreement  between
                 Registrant  and  The  First  National   Bank  of
                 Boston dated  October 16,  1996 (incorporated by
                 reference  to  Exhibit  H-1  to  Addendum  A  to
                 Registrant's  definitive  proxy statement  for a
                 special   meeting  of   shareholders,  filed  on
                 November 6, 1996).

            4.4  Second  Amendment  to Rights  Agreement  between
                 Registrant  and  the   First  National  Bank  of
                 Boston,  dated  December 31,  1996 (incorporated
                 by  reference  to  Exhibit  4.2 to  Registrant's
                 Current  Report on  Form 8-K  dated December 31,
                 1996).

            4.5  Certificate of Designations of  Series A  Junior
                 Participating  Preferred  Stock   of  Registrant
                 (incorporated  by  reference  to Exhibit  3.3 to
                 Registrant's Registration Statement on Form  8-B
                 filed on June 7, 1995).

            4.6  Certificate of  Trust of  Devon Financing  Trust
                 [incorporated  by reference  to Exhibit  4.5  to
                 Amendment  No.  1 to  Registrant's  Registration
                 Statement on Form S-3 (No. 333-00815)].

            4.7  Amended  and  Restated  Declaration of  Trust of
                 Devon Financing  Trust dated as of July 3, 1996,
                 by J.  Larry Nichols,  H. Allen  Turner, William
                 T. Vaughn, The Bank  of New York  (Delaware) and
                 The  Bank  of  New  York  as  Trustees  and  the
                 Registrant   as    Sponsor   [incorporated    by
                 reference to Exhibit 4.6  to Amendment No.  1 to
                 Registrant's Registration Statement on Form  S-3
                 (No. 333-00815)].  

            4.8  Indenture dated  as of July 3, 1996, between the
                 Registrant   and   The   Bank   of    New   York
                 [incorporated  by reference  to  Exhibit  4.7 to
                 Amendment  No.  1 to  Registrant's  Registration
                 Statement on Form S-3 (No. 333-00815)].

            4.9  First Supplemental  Indenture dated  as of  July
                 3, 1996,  between the Registrant and The Bank of
                 New York [incorporated by  reference to  Exhibit
                 4.8   to  Amendment   No.  1   to   Registrant's
                 Registration  Statement  on  Form S-3  (No. 333-
                 00815)].

            4.10 Form  of 6 1/2% Preferred Convertible Securities
                 (included as Exhibit A-1 to Exhibit 4.5 above).

            4.11 Form of  6 1/2%  Convertible Junior Subordinated
                 Debentures (included in Exhibit 4.7 above).

            4.12 Preferred Securities  Guarantee Agreement  dated
                 July 3, 1996,  between Registrant, as Guarantor,
                 and  The   Bank  of   New  York,  as   Preferred
                 Guarantee Trustee [incorporated by reference  to
                 Exhibit 4.11 to Amendment No.  1 to Registrant's
                 Registration  Statement on  Form S-3  (No.  333-
                 00815)].

            4.13 Stock  Rights  and Restrictions  Agreement dated
                 as of December 31, 1996,  between Registrant and
                 Kerr-McGee    Corporation    (incorporated    by
                 reference   to   Exhibit  4.3   to  Registrant's
                 Current  Report on Form  8-K dated  December 31,
                 1996).

            4.14 Registration  Rights Agreement,  dated  December
                 31, 1996,  by and  between Registrant and  Kerr-
                 McGee Corporation (incorporated by reference  to
                 Exhibit 4.4  to Registrant's  Current Report  on
                 Form 8-K dated December 31, 1996).

            10.1 Credit Agreement  dated August  30, 1996,  among
                 Devon Energy Corporation (Nevada), as  Borrower,
                 the   Registrant  and   Devon  Energy  Operating
                 Corporation,  as   Guarantors,  NationsBank   of
                 Texas,  N.A.,  as   Agent,  and  NationsBank  of
                 Texas,  N.A., Bank  One,  Texas,  N.A., Bank  of
                 Montreal,  and  First  Union  National  Bank  of
                 North  Carolina,  as  Lenders  (incorporated  by
                 reference   to  Exhibit   10.1  to  Registrant s
                 Quarterly Report  on Form  10-Q for the  quarter
                 ended September 30, 1996).

            10.2 First   Amendment,  dated  March  15,  1997,  to
                 Credit Agreement among Devon Energy  Corporation
                 (Nevada),   as  Borrower,   the  Registrant,  as
                 Guarantor,   NationsBank  of   Texas,  N.A.,  as
                 Agent, and  NationsBank  of  Texas,  N.A.,  Bank
                 One,  Texas, N.A.,  Bank  of Montreal  and First
                 Union  National  Bank   of  North  Carolina,  as
                 Lenders  (incorporated  by reference  to Exhibit
                 10.2 to  Registrant's Quarterly  Report on  Form
                 10-Q for the quarter ended March 31, 1997).

            10.3 Devon  Energy Corporation 1988 Stock Option Plan
                 [incorporated by  reference to  Exhibit 10.4  to
                 Registrant's Registration Statement on Form  S-4
                 (No. 33-23564)].*

            10.4 Devon Energy Corporation 1993 Stock  Option Plan
                 (incorporated  by  reference  to  Exhibit  A  to
                 Registrant's   Proxy  Statement   for  the  1993
                 Annual Meeting of  Shareholders filed on  May 6,
                 1993).*

            10.5 Devon Energy Corporation 1997 Stock  Option Plan
                 (incorporated  by  reference  to  Exhibit  A  to
                 Registrant's   Proxy  Statement   for  the  1997
                 Annual Meeting  of Shareholders  filed on  April
                 3, 1997).*

            10.6 Severance   Agreement    among   Devon    Energy
                 Corporation  (Nevada),  Registrant  and  Mr.  J.
                 Larry   Nichols,   dated   December   3,    1992
                 (incorporated by  reference to Exhibit 10.10  to
                 Registrant's Amendment  No. 1  to Annual  Report
                 on Form  10-K for  the year  ended December  31,
                 1992).*

            10.7 Severance   Agreement    among   Devon    Energy
                 Corporation  (Nevada),  Registrant  and  Mr.  J.
                 Michael   Lacey,   dated   December   3,    1992
                 (incorporated by reference to  Exhibit 10.12  to
                 Registrant's Amendment  No. 1  to Annual  Report
                 on Form  10-K for  the year  ended December  31,
                 1992).*

            10.8 Severance   Agreement    among   Devon    Energy
                 Corporation  (Nevada),  Registrant  and  Mr.  H.
                 Allen    Turner,   dated    December   3,   1992
                 (incorporated by  reference to  Exhibit 10.13 to
                 Registrant's Amendment  No. 1  to Annual  Report
                 on Form  10-K for  the year  ended December  31,
                 1992).*

            10.9 Severance   Agreement    among   Devon    Energy
                 Corporation (Nevada), Registrant and Mr.  Darryl
                 G. Smette, dated  December 3, 1992 (incorporated
                 by reference  to Exhibit  10.14 to  Registrant's
                 Amendment  No. 1 to  Annual Report  on Form 10-K
                 for the year ended December 31, 1992).*

            10.10     Severance  Agreement  among   Devon  Energy
                 Corporation   (Nevada),   Registrant   and   Mr.
                 William  T.  Vaughn,  dated  December   3,  1992
                 (incorporated by reference to  Exhibit 10.15  to
                 Registrant's Amendment  No. 1  to Annual  Report
                 on Form  10-K for  the year  ended December  31,
                 1992).*

            10.11     Severance  Agreement  among   Devon  Energy
                      Corporation (Nevada),  Registrant and  Duke
                      R.    Ligon    dated   March    26,    1997
                      (incorporated  by   reference  to   Exhibit
                      10.11  to Registrant's  Quarterly Report on
                      Form 10-Q  for the quarter  ended June  30,
                      1997).*

            10.12     Employment  Agreement  between   Registrant
                      and Duke  R. Ligon  dated February 7,  1997
                      (incorporated  by   reference  to   Exhibit
                      10.12 to Registrant's Quarterly Regport  on
                      Form 10-Q  for the quarter  ended June  30,
                      1997).*

            10.13     Supplemental  Retirement  Income  Agreement
                      among  Devon Energy  Corporation  (Nevada),
                      Registrant and John W. Nichols  dated March
                      26,  1997  (incorporated  by  reference  to
                      Exhibit  10.13  to  Registrant's  Quarterly
                      Report on  Form 10-Q for  the quarter ended
                      June 30, 1997).*

            10.14     Sale  and  Purchase Agreement  relating  to
                 Registrant's  San  Juan  Basin  gas   properties
                 (incorporated by reference to  Exhibit 10.15  to
                 Registrant's Quarterly  Report on Form 10-Q  for
                 the quarter ended September 30, 1995).

            10.15     Second  Restatement  of  and  Amendment  to
                 Sale   and   Purchase  Agreement   relating   to
                 Registrant's  San  Juan  Basin  gas   properties
                 (incorporated by  reference to Exhibit 10.16  to
                 Registrant's Quarterly  Report on  Form 10-Q for
                 the quarter ended September 30, 1995).

            10.16     Purchase  and Sale  Agreement between Union
                 Oil  Company  of  California  and  Devon  Energy
                 Corporation (Nevada) (incorporated  by reference
                 to  Exhibit 2 to  Registrant's Current Report on
                 Form 8-K dated December 18, 1995).

            10.17     Registration  Rights Agreement  dated  July
                 3, 1996,  by  and  among the  Registrant,  Devon
                 Financing  Trust   and  Morgan  Stanley  &   Co.
                 Incorporated  [incorporated   by  reference   to
                 Exhibit 10.1 to Amendment No. 1  to Registrant's
                 Registration  Statement on  Form S-3  (No.  333-
                 00815)].

            11   Computation of earnings per share

                 * Compensatory plans or arrangements.

       (b)  Reports  on Form  8-K - No  reports on  Form 8-K were
            filed  during the  three months  ended  September 30,
            1997.
<PAGE>

                             SIGNATURES





               Pursuant  to  the requirements  of  the Securities
  Exchange  Act of  1934, the  registrant  has  duly caused  this
  report to be signed  on its behalf by the undersigned thereunto
  duly authorized.


                                     DEVON  ENERGY  CORPORATION




  Date:      October 20, 1997        /s/William T. Vaughn                       
                                     William T. Vaughn
                                     Vice President -  Finance


<PAGE>

                         INDEX TO EXHIBITS

                                                                 
                                                                  Page

          2.1  Agreement  and  Plan of  Merger  among Registrant,   #
               Devon  Energy  Corporation   (Nevada),  Kerr-McGee
               Corporation,  Kerr-McGee  North  American  Onshore
               Corporation  and  Kerr-McGee Canada  Onshore Ltd.,
               dated October 17, 1996

          3.1  Registrant's  Certificate  of   Incorporation,  as   #
               amended

          3.2  Registrant's   Certificate    of   Amendment    of   #
               Certificate of Incorporation

          3.3  Registrant's Bylaws                                  #

          4.1  Form of Common Stock Certificate                     #

          4.2  Rights Agreement between Registrant  and The First   #
               National Bank of Boston

          4.3  First  Amendment  to   Rights  Agreement   between   #
               Registrant and  The First National Bank  of Boston
               dated October 16, 1996

          4.4  Second  Amendment  to  Rights   Agreement  between   #
               Registrant and the First National  Bank of Boston,
               dated December 31, 1996

          4.5  Certificate  of  Designations of  Series  A Junior   #
               Participating Preferred Stock of Registrant

          4.6  Certificate of Trust of Devon Financing Trust        #

          4.7  Amended  and  Restated  Declaration  of  Trust  of   #
               Devon  Financing Trust  dated as of  July 3, 1996,
               by J. Larry  Nichols, H. Allen Turner,  William T.
               Vaughn,  The Bank  of New York  (Delaware) and The
               Bank  of New  York as Trustees  and the Registrant
               as Sponsor

          4.8  Indenture  dated as  of July 3,  1996, between the   #
               Registrant and The Bank of New York

          4.9  First Supplemental  Indenture dated as  of July 3,   #
               1996, between the  Registrant and The Bank  of New
               York

          4.10 Form of  6 1/2%  Preferred Convertible  Securities   #
               (included as Exhibit A-1 to Exhibit 4.5 above)

          4.11 Form  of  6 1/2%  Convertible  Junior Subordinated   #
               Debentures (included in Exhibit 4.7 above)

          4.12 Preferred  Securities  Guarantee  Agreement  dated   #
               July 3,  1996, between  Registrant, as  Guarantor,
               and The Bank  of New York, as  Preferred Guarantee
               Trustee

          4.13 Stock  Rights and Restrictions  Agreement dated as   #
               of  December  31,  1996,  between  Registrant  and
               Kerr-McGee Corporation

          4.14 Registration Rights Agreement, dated  December 31,   #
               1996,  by and  between  Registrant and  Kerr-McGee
               Corporation

          10.1 Credit  Agreement  dated August  30,  1996,  among   #
               Devon  Energy  Corporation (Nevada),  as Borrower,
               the   Registrant   and   Devon  Energy   Operating
               Corporation, as Guarantors, NationsBank  of Texas,
               N.A., as  Agent, and NationsBank  of Texas,  N.A.,
               Bank  One,  Texas,  N.A., Bank  of  Montreal,  and
               First  Union National  Bank of North  Carolina, as
               Lenders

          10.2 First  Amendment, dated March  15, 1997, to Credit   #
               Agreement   among    Devon   Energy    Corporation
               (Nevada),   as   Borrower,   the  Registrant,   as
               Guarantor, NationsBank  of Texas, N.A.,  as Agent,
               and NationsBank of  Texas, N.A., Bank  One, Texas,
               N.A., Bank of  Montreal, and First Union  National
               Bank of North Carolina, as Lenders

          10.3 Devon Energy Corporation 1988 Stock Option Plan      #

          10.4 Devon Energy Corporation 1993 Stock Option Plan      #

          10.5 Devon Energy Corporation 1997 Stock Option Plan      #

          10.6 Severance    Agreement    among    Devon    Energy   #
               Corporation (Nevada), Registrant and  Mr. J. Larry
               Nichols, dated December 3, 1992

          10.7 Severance    Agreement    among    Devon    Energy   #
               Corporation  (Nevada),  Registrant   and  Mr.   J.
               Michael Lacey, dated December 3, 1992

          10.8 Severance    Agreement    among    Devon    Energy   #
               Corporation (Nevada),  Registrant and Mr. H. Allen
               Turner, dated December 3, 1992

          10.9 Severance    Agreement    among    Devon    Energy   #
               Corporation  (Nevada),  Registrant and  Mr. Darryl
               G. Smette, dated December 3, 1992

          10.10     Severance   Agreement  among   Devon   Energy   #
                    Corporation  (Nevada),  Registrant   and  Mr.
                    William T. Vaughn, dated December 3, 1992

          10.11     Severance   Agreement  among   Devon   Energy   #
                    Corporation (Nevada), Registrant and  Duke R.
                    Ligon dated March 26, 1997

          10.12     Employment Agreement  between Registrant  and   #
                    Duke R. Ligon dated February 7, 1997

          10.13     Supplement Retirement Income  Agreement among   #
                    Devon     Energy     Corporation    (Nevada),
                    Registrant and  John W.  Nichols dated  March
                    26, 1997

          10.14     Sale  and  Purchase  Agreement   relating  to   #
                    Registrant's San Juan Basin gas properties

          10.15     Second Restatement  of and Amendment  to Sale   #
                    and    Purchase   Agreement    relating    to
                    Registrant's San Juan Basin gas properties

          10.16     Purchase  and  Sale  Agreement between  Union   #
                    Oil Company  of California  and Devon  Energy
                    Corporation (Nevada)

          10.17     Registration  Rights Agreement  dated July 3,   #
                    1996,  by  and among  the  Registrant,  Devon
                    Financing  Trust  and  Morgan  Stanley &  Co.
                    Incorporated

          11   Computation of earnings per share                    31


______________________________________
#  Incorporated by reference.