AMENDED AND RESTATED SEVERANCE AGREEMENT

Exhibit 10.27

AMENDED AND RESTATED SEVERANCE AGREEMENT

          This Amended and Restated Severance Agreement (this “ Agreement ”) is effective December 15, 2008 (the “ Effective Date ”) by and between Devon Energy Corporation (the “ Company ”) and Danny Heatly (the “ Employee ”).

          WHEREAS, the Employee is employed by the Company and is party to a Severance Agreement by and between the Company and the Employee dated as of September 14, 2004;

          WHEREAS, the parties desire to enter into this Agreement to amend, supersede, and fully restate and replace the Severance Agreement.

          NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Term of Agreement . This Agreement shall not have any specific duration and shall continue in full force and effect unless and until (a) the Employee’s employment is terminated by either party in accordance with Section 3, and (b) all obligations and liabilities of the parties arising in connection with such termination or otherwise accruing under this Agreement have been fully satisfied. Notwithstanding any contrary provision in this Agreement, nothing in this Agreement constitutes a guarantee of continued employment but instead provides for certain rights and benefits during the Employee’s employment with the Company and if such employment terminates.

2. Rights and Benefits . Beginning on a Change in Control and continuing at all times thereafter, the Company shall not modify the requirements for eligibility for coverage or the benefits under the Retiree Medical Benefit Plan to adversely affect the Employee’s right to coverage or benefits for the Employee and the Employee’s dependents, if applicable.

3. Termination of Employment; Suspensions; Change in Control .

     (a)  Termination Upon Death . The Employee’s employment with the Company shall terminate immediately upon the Employee’s death.

     (b)  Reassignment of Duties and Termination Due to the Employee Becoming Disabled .

          (i) Reassignment . Whether or not the Employee is Disabled, the Company may reassign his or her duties during any time he or she has become physically or mentally incapable of performing his or her essential job functions with or without reasonable accommodation or job protection as required by law and no such reassignment shall be deemed Good Reason for the Employee to terminate his or her employment under Section 3(d).

          (ii) Termination . If the Employee becomes Disabled, then the Company may give the Employee written notice of its intent to terminate his or her employment, in which case such employment shall terminate effective on the thirtieth (30th) day after receipt of such notice as long as the Employee has not been medically released and returned to full-time duty before such thirtieth (30th) day.

     (c)  Termination by the Company; Cause . The Company may terminate the Employee’s employment with the Company at any time whether with or without Cause.

     (d)  Termination by the Employee; Good Reason . The Employee may terminate his or her employment with the Company at any time whether with or without Good Reason. If the Employee believes Good Reason exists for terminating his or her employment, then he or she shall give the

Company written notice of the acts or omissions constituting Good Reason within thirty (30) days after learning of such acts or omissions constituting Good Reason (the “ Good Reason Notice ”). No termination of employment for Good Reason shall be effective unless (i) within thirty (30) days after receiving the Good Reason Notice, the Company fails to either cure such acts or omissions or notify the Employee of the intended method of cure, and (ii) the Employee delivers a Notice of Termination to the Company and subsequently resigns within thirty (30) days after the Company’s deadline in Section 3(d)(i) expires. Notwithstanding the previous sentence and at the Company’s request, the Employee shall provide services consistent with his or her then-current authority, duties, and responsibilities for up to ninety (90) days after having provided the Good Reason Notice to the Company.

     (e)  Paid Suspensions . Notwithstanding any contrary provision in this Agreement, the Company may suspend the Employee with pay for up to thirty (30) days pending an investigation authorized by the Company or the Board, or pursued by, or at the request of, a governmental authority to determine whether the Employee has engaged in acts or omissions constituting Cause. Any such paid suspension shall not constitute Good Reason for the Employee to terminate his or her employment under Section 3(d). The Employee shall cooperate with the Company in connection with any such investigation. If the Employee’s employment is subsequently terminated for Cause in connection with such investigation, then the Employee shall repay any amounts paid by the Company to the Employee during such paid suspension.

     (f)  Effect of a Change in Control on Timing of Termination Date . If the Company terminates the Employee’s employment other than for Cause or the Employee becoming Disabled and a Change in Control occurs following the Termination Date, then such Change in Control shall be deemed to have occurred immediately prior to the Termination Date if either (i) the Termination Date occurs following the execution of an agreement that provides for a transaction or transactions that, if consummated, constitutes such Change in Control, or (ii) the Employee reasonably demonstrates that such termination was either (A) requested by a third party who had indicated an intention or taken steps reasonably calculated to effect the Change in Control or who effectuates such Change in Control, or (B) was otherwise in connection with, or in anticipation of, such Change in Control.

     (g)  Notice of Termination . Any termination of the Employee’s employment by the Company or by the Employee shall be effective only when communicated by a Notice of Termination given to the other party in accordance with Section 15(d). In the event of a termination by the Employee for Good Reason, a Notice of Termination shall be effective only if given within the time limit established by Section 3(d).

     (h)  Effect of Termination and Duties Upon Termination . If, on the Termination Date, the Employee is a member of the board of directors (or any similar governing body) or an officer of the Company or any Affiliate, or holds any other position with the Company or an Affiliate, then the Employee shall resign and be deemed to have resigned from all such positions as of the Termination Date. Between the date a Notice of Termination is delivered and the Termination Date, the Employee shall continue to perform his or her regular job duties and such services for the Company as are necessary and appropriate for a smooth transition to the Employee’s replacement, if any. Notwithstanding the foregoing sentence, the Company may relieve the Employee from further duties after receiving a Notice of Termination; provided, however , that prior to the Termination Date, the Employee shall continue to be treated as a Company employee for other purposes and the Employee’s rights to compensation or benefits shall not be reduced by reason of the relief. Upon the Termination Date, the Employee shall return to the Company any keys, credit cards, passes, confidential documents or material, or other property belonging to the Company, and all writings, files, records, correspondence, notebooks, notes, and other documents and things (including any copies thereof) containing any Confidential Information.

4. Obligations of the Company Upon Termination .

     (a)  Accrued Obligations . Upon any termination of the Employee’s employment for any reason, the Company shall pay the Employee (i) his or her accrued Annual Base Salary and accrued, unused vacation through the Termination Date in a lump sum in cash within thirty (30) days after the Termination Date, and (ii) if the Employee is actively employed during the entire year upon which such Annual Bonus is based before the Termination Date, the Annual Bonus at the same time as such bonuses are paid to similarly situated employees of the Company but in no event later than two and one-half (2 ¹ / 2 ) months after the end of the taxable year in which any substantial risk of forfeiture with respect to such bonus lapses (the payments in (i) and (ii) shall be referred to as the “ Accrued Obligations ”).

     (b)  Good Reason; Other Than for Cause, Death, or Becoming Disabled . If (x) the Company terminates the Employee’s employment other than for Cause, the Employee’s death, or the Employee becoming Disabled, or (y) the Employee terminates his or her employment for Good Reason, then the Company shall, in addition to the payment of the Accrued Obligations, have the following obligations to the Employee:

          (i) the Company shall pay the Employee within thirty (30) days after the Termination Date

               (A) a lump sum in cash equal to two (2) times the sum of:

                    (1) the greater of (x) the Employee’s then-current Annual Base Salary, or (y) the Employee’s Annual Base Salary at any time during the two (2) years before the Termination Date; and

                    (2) the highest Annual Bonus received by the Employee within three (3) years before the Termination Date (or, if termination occurs during the CIC Period, the greater of (x) the highest Annual Bonus received by the Employee within three (3) years before the Termination Date, and (y) the highest Annual Bonus received by the Employee within three (3) years before the Change in Control); provided, however , if the Employee’s employment began in the same calendar year as the termination of such employment, then the Annual Bonus amount used for calculating the lump sum payment due shall be determined by the Compensation Committee in its discretion; and

               (B) any applicable Prorated Annual Bonus; and

          (ii) the Company shall pay, or reimburse the Employee, for a reasonable amount of outplacement services from a mutually agreeable service provider for twelve (12) months following the Termination Date. The amount of such outplacement services shall be commensurate with the Employee’s title and position with the Company and other employees similarly situated in other companies within the Company’s peer industry group. Any reimbursement of such expenses shall be made by December 31 of the Employee’s taxable year following the year the expenses were incurred; and

          (iii) if the Termination Date occurs during the CIC Period, then

               (A) the Employee shall be deemed, for purposes of the Retiree Medical Benefit Plan, (i) to have earned two (2) years of service in addition to the Employee’s actual service at the Termination Date, and (ii) to be two (2) years older than his or her actual age on the Termination Date; provided, however , that the additional deemed service and age shall not be construed to reduce the Employee’s right to benefits under the Retiree Medical Benefit Plan that may otherwise be reduced by reason of such additional service or age. This subparagraph (A) shall not limit the ability of the Company

or an Affiliate to modify the Retiree Medical Benefit Plan for all participants who are similarly situated as the Employee, subject to the restrictions imposed by the plan;

               (B) the Company shall provide the Employee (and his or her dependents, if applicable) for the period allowed under Section 4980B of the Code, with the same level of health and dental insurance benefits upon substantially similar terms and conditions (including contributions required by the Employee for such benefits) as existed immediately before the Termination Date (or, if more favorable to the Employee, as such benefits and terms and conditions existed immediately before the Change in Control, if applicable); provided, however , if the Employee is not eligible to continue participating in the Company plans providing such benefits (including the Retiree Medical Benefit Plan), then the Company shall otherwise provide such benefits on the same after-tax basis as if continued participation had been permitted. The Company’s obligations under this subparagraph (B) shall apply against its coverage obligations under COBRA. Notwithstanding the foregoing, if the Employee becomes eligible to receive health and dental insurance benefits through subsequent employment, then the Employee shall ensure that a coordination of benefits occurs so that the medical and dental plan of the Employee’s new employer shall be responsible for such medical and dental benefits that are available under the new employer’s plans before any medical and dental benefits are provided pursuant to this subparagraph (B). This subparagraph (B) shall not limit the ability of the Company or an Affiliate to modify the terms of the Retiree Medical Benefit Plan for all participants who are similarly situated as the Employee, subject to the restrictions imposed by the plan; and

               (C) the Company shall provide, for two (2) years following the Termination Date, the Employee with the same level of life insurance benefits upon substantially similar terms and conditions (including contributions required by the Employee for such benefits) as existed immediately before the Termination Date (or, if more favorable to the Employee, as such benefits and terms and conditions existed immediately before the Change in Control); provided, however , that, if the Employee is not eligible to continue participating in the Company plans providing such life insurance benefits, then the Company shall otherwise provide such benefits on the same after-tax death benefit basis as if continued participation had been permitted; and

               (D) the Company shall pay the Employee, within thirty (30) days after the Termination Date, an amount equal to six (6) times the monthly COBRA premium that applies to the Employee (and his or her dependents if such dependents are then covered by the Company’s medical plans on the Termination Date).

     (c)  Death or Disabled . If the Employee’s employment terminates due to death or because he or she is Disabled, then this Agreement shall terminate without further obligations to the Employee or his or her legal representatives, as applicable, under this Agreement, other than the obligation to pay, within thirty (30) days after the Termination Date, (i) the Accrued Obligations, and (ii) any applicable Prorated Annual Bonus.

     (d)  Cause; Other than for Good Reason . If the Employee’s employment is terminated for Cause or the Employee terminates his or her employment without Good Reason, then this Agreement shall terminate without further obligations to the Employee under this Agreement other than for payment of the Accrued Obligations.

     (e)  Application of Section 409A of the Code . Notwithstanding the above paragraphs of this Section 4, if the Company determines that (i) the Employee is a “specified employee” within the meaning of Section 409A of the Code (“Section 409A”) as of the date of his or her “separation from service” as defined by Section 409A (“Separation from Service”), and (ii) any amount of any payment to be made under this Section 4 is subject to Section 409A, then such amount shall not be paid to the Employee until

six (6) months after the date of his or her Separation from Service (or, if earlier, the date of his or her death). In such case, the portion of the payment so delayed shall be paid in a single lump sum in cash on the first (1st) day of the seventh (7th) month following the Employee’s Separation from Service (or, if earlier, upon his or her death).

     (f)  General Release. The Company’s obligation to make the payments described under Section 4(b) shall be conditioned on the Employee signing and not revoking the general form of release attached as Exhibit “B” or such other form acceptable to the Company within the time periods provided in such release. The Company shall not be required to make any payment under Section 4(b) until the period for the Employee to revoke the release has expired.

5. Non-Exclusivity of Rights . Except as specifically provided in Sections 4(b)(iii)(A) and (B), nothing in this Agreement shall prevent or limit the Employee’s right to participate in any plan, program, policy, or practice provided by the Company or any Affiliate and for which the Employee may qualify, nor shall anything in this Agreement limit or otherwise affect such rights as the Employee may have under any other contract or agreement with the Company or any Affiliate. Amounts that are vested benefits or that the Employee is otherwise entitled to receive under any plan, policy, practice, or program of, or any contract or agreement with, the Company or any Affiliate at or after the Termination Date shall be payable in accordance with such plan, policy, practice, program, contract, or agreement, except as explicitly modified by this Agreement; provided, however , that the Employee shall not be eligible for severance benefits under any other severance program, policy, practice, or plan of the Company or any Affiliate providing benefits upon involuntary termination of employment.

6. Full Settlement . The Company’s payment and other obligations under this Agreement shall not be affected by any set-off, counterclaim, recoupment, defense, or other claim, right, or action against the Employee or others. The Employee shall have no obligation to seek employment or otherwise mitigate his or her damages under this Agreement and amounts payable to the Employee under this Agreement shall not be reduced whether or not the Employee obtains other employment, except as provided in Section 4(b)(iii) of this Agreement.

7. Certain Additional Payments by the Company .

     (a)  Gross-Up Payment . Notwithstanding any contrary provision of this Agreement and except as provided below, if any payment, benefit, or distribution by the Company, any Affiliate, or trusts established by the Company or any Affiliate for the benefit of its employees, to or for the benefit of the Employee (whether pursuant to this Agreement or otherwise but determined without regard to any additional payments required under this Section 7) (each, a “ Payment ”) is determined to be subject to excise tax imposed by the Code, including Section 4999 of the Code, or any interest or penalties are incurred by the Employee with respect to such an excise tax (such excise tax and any such interest and penalties shall referred to as the “ Excise Tax ”), then the Employee shall be entitled to receive an additional payment (a “ Gross-Up Payment ”) in an amount such that, after payment by the Employee of all taxes (including any applicable interest or penalties) and Excise Tax imposed upon or related to the Gross-Up Payment, the Employee retains a Gross-Up Payment amount equal to the Excise Tax imposed upon the Payments.

     (b)  Determinations and Tax Notice . Subject to Section 7(c), all determinations required under this Section 7, including whether and when a Gross-Up Payment is required and its amount, shall be made by a nationally recognized certified public accounting firm designated and paid by the Company (the “ Accounting Firm ”), which shall provide its analysis and detailed supporting calculations to both the Company and the Employee within fifteen (15) business days after the Employee delivers to the Company any written notice of any claim by the Internal Revenue Service that may require the

Company’s Gross-Up Payment (the “ Tax Notice ”). The Company shall pay any Gross-Up Payment due under this Section 7 to the Employee within five (5) days after receiving the Accounting Firm’s determination but in no event later than December 31 of the year next following the taxable year in which the Employee received the Payment. If the Accounting Firm determines that no Excise Tax is payable by the Employee, then it shall furnish the Employee with an opinion supporting the determination not to report an Excise Tax on the Employee’s federal income tax return. Any determination by the Accounting Firm shall be binding upon the parties. Due to the uncertainty of the application of Section 4999 of the Code when the initial determination is made by the Accounting Firm, it is possible that Gross-Up Payments that will not have been made by the Company should have been made (“ Underpayment ”), consistent with the calculations required under this Section 7. If the Company exhausts its remedies pursuant to Section 7(c) and the Employee thereafter is required to pay any Excise Tax, then the Accounting Firm shall determine the amount of the Underpayment that has occurred, and any such Underpayment shall be promptly paid by the Company to or for the benefit of the Employee but in no event later than the December 31 of the year next following the taxable year in which the Employee received the Payment.

     (c)  Contests . The Tax Notice shall be given as soon as practicable but no later than ten (10) business days after the Employee receives written notice of such claim describing the nature of such claim and indicating the due date for such claim. The Employee shall not pay such claim until thirty (30) days after delivering the Tax Notice to the Company (or such shorter period imposed by the Internal Revenue Service). If the Company notifies the Employee in writing before the expiration of such period that it desires to contest such claim, then the Employee shall:

          (i) provide any information reasonably requested by the Company relating to such claim;

          (ii) contest such claim as the Company shall reasonably request in writing, including, without limitation, accepting legal representation reasonably selected by the Company;

          (iii) cooperate with the Company in good faith to effectively contest such claim; and

          (iv) permit the Company to participate in any proceedings relating to such claim.

The Company (x) shall pay all costs and expenses (including additional interest and penalties) related to such contest and shall indemnify and hold the Employee harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties) imposed as a result of such representation and payment of costs and expenses, (y) shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings, and conferences with the taxing authority in respect of such claim, and (z) may, at its sole option, either direct the Employee to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, in which case, the Employee shall administratively and judicially prosecute such contest to a determination as the Company shall determine; provided, however , that the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable under this Agreement and the Employee shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. If the Company directs the Employee to pay such claim and sue for a refund, then the Company shall, to the extent permitted by law, advance the amount of such payment to the Employee, on an interest-free basis, and shall indemnify and hold the Employee harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties) imposed with respect to such advance or with respect to any imputed income with respect to such advance. The Company shall make any payment in reimbursement of costs and expenses, Excise Tax, income tax, or other amounts due the Employee under this Section 7(c) no later than December 31 of the year following the year in which (x) the taxes that are the subject of the audit are remitted to the

taxing authority, or (y) there is a final and non-appealable settlement or other resolution of the litigation.

     (d)  Refunds . If, after receiving an advance from the Company pursuant to Section 7(c), the Employee becomes entitled to receive any refund with respect to such claim, the Employee shall promptly pay the Company the amount of such refund (together with any interest paid or credited after applicable taxes). If, after receiving an advance from the Company pursuant to Section 7(c), a determination is made that the Employee shall not be entitled to any refund with respect to such claim and the Company does not notify the Employee in writing of its intent to contest such denial of refund before the expiration of thirty (30) days after such determination, such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset the amount of the Gross-Up Payment required to be paid.

8. Confidential Information and Non-Solicitation .

     (a)  Confidential Information . Given his or her position and employment with the Company, the Employee acknowledges that he or she will be using, acquiring, and adding to Confidential Information of a special and unique nature and value to the Company and its strategic plan and financial operations. The Employee further acknowledges that all Confidential Information belongs exclusively to the Company, is material and proprietary, and is critical to the Company’s success. Accordingly, the Employee shall use Confidential Information only to the Company’s benefit and shall not at any time during or after his or her employment with the Company directly or indirectly disclose any Confidential Information to any person or use any Confidential Information for the Employee’s own benefit, for the benefit of others, or to the Company’s detriment.

     (b)  Legally Required Disclosure . If any court or agency requests the Employee to disclose Confidential Information, then the Employee shall promptly notify the Company and take reasonable steps to prevent such disclosure until the Company receives such notice and has an opportunity to respond to such court or agency. If the Employee obtains information that may be subject to the attorney-client privilege of the Company or any Affiliate, then the Employee shall take reasonable steps to maintain the confidentiality of such information and to preserve such privilege.

     (c)  Exceptions . Confidential Information shall not include knowledge that was acquired during the course of the Employee’s employment under this Agreement that is generally known to persons of the Employee’s experience in other companies in the same industry.

     (d)  Legal Proceedings . This Section 8 shall not unreasonably restrict the Employee’s ability to disclose Confidential Information in any legal proceeding involving any claim for breach or enforcement of this Agreement. If the parties dispute whether information may be disclosed in accordance with this Section 8(d), then the matter shall be considered an Employment Matter and decided in accordance with Section 10.

     (e)  Other Obligations . This Agreement supplements, rather than supplants, the Employee’s obligations under any Company policy relating to confidential information and any agreement of the Employee relating to confidentiality, inventions, copyrightable material, business and/or technical information, trade secrets, solicitation of employees, interference with business relationships, competition, and other similar matters that protect the business and operations of the Company or its Affiliates.

     (f)  Non-Solicitation . During his or her employment with the Company and for twenty four (24) months following the Termination Date, regardless of the reason for such termination, the Employee shall not directly or indirectly hire, employ, solicit for employment, attempt to solicit for employment, or

communicate with about changing employment, any person who was an employee of the Company or its Affiliate within six (6) months of such hiring, employing, soliciting, or communicating (the “ Non-Solicitation Obligation ”); provided, however , that the Non-Solicitation Obligation shall be modified as follows:

          (i) if the Termination Date occurs during the CIC Period, then the Non-Solicitation Obligation shall expire on the Termination Date; and

          (ii) if the Employee terminates his or her employment with the Company without Good Reason, then the Non-Solicitation Obligation shall expire twelve (12) months following the Termination Date.

     (g)  Remedies . The Employee acknowledges and agrees that the Company will have no adequate remedy at law and could be irreparably harmed if the Employee breaches or threatens to breach his or her obligations under this Section 8. The Company shall be entitled to equitable and/or injunctive relief to prevent any such breach or threatened breach and to specific performance in addition to any other available legal or equitable remedies. The Employee shall not, in any equity proceeding relating to the enforcement of this Section 8, rai