Devon Energy Corporation · NYSE:DVN

Devon Energy — Investor Presentation (December 2017)

28 slides from Devon Energy's investor presentation, December 2017

  1. Slide 1: Investor Presentation

    Investor Presentation December 2017 NYSE: DVN devonenergy.com

  2. Slide 2: Investor Contacts & Notices

    Investor Contacts & Notices Investor Relations Contacts Scott Coody, Vice President, Investor Relations (405) 552-4735 / scott.coody@dvn.com Chris Carr, Supervisor, Investor Relations (405) 228-2496 / chris.carr@dvn.com Forward-Looking Statements This presentation includes "forward-looking statement

  3. Slide 3: Devon's Competitive Advantage

    Devon’s Competitive Advantage STACK & Delaware focused Top-tier operating results Multi-decade growth platform Innovative culture >30,000 STACK & DELAWARE POTENTIAL LOCATIONS Significant financial strength | Investor Presentation 3

  4. Slide 4: Devon's 2020 Vision

    Devon’s 2020 Vision Focus on  Deliver top-tier returns on invested capital financial returns  Return cash to shareholders  Advance STACK & Delaware activity Further high-grade  Monetize less competitive assets asset portfolio  Multi-billion dollar divestiture potential Expand  Shift production

  5. Slide 5: 2017 Capital Program

    2017 Capital Program 2 0 1 7 e E & P C A P I T A L  Disciplined focus on value and returns $2.0-2.1 Billion  Capital program funded within cash flow U.S. Rig Activity (~20 development rigs in Q4) 10%  Shifting to full-field development OTHER ASSETS  Efficiencies driving capital costs lower 90% S

  6. Slide 6: Expanding High-Returning Oil Production

    Expanding High-Returning Oil Production U.S. Oil Production  Rapidly growing highest-value product MBOD +~20% (vs. Q4 16) +~15%  Driven by STACK & Delaware Basin (vs. Q4 16) 102(1)  Building operational momentum into 2018 Q4 2016 2017e Q4 2017e For additional information see our Q3 operations rep

  7. Slide 7: Preliminary 2018 Outlook

    Preliminary 2018 Outlook $ OPTIMIZED FOR RETURNS OIL GROWTH DEBT REDUCTION 2 0 1 8 e E & P C A P I TA L S TAC K & D E L AWA R E TA R G E T I N G $2.0-2.5 Billion >30% Increase $1 Billion FUNDED WITHIN (2017 VS 2018) O P E R AT I N G C A S H F L O W | Investor Relations Presentation 7

  8. Slide 8: Significant Financial Strength

    Significant Financial Strength PROTECTING OUR ABILITY  Investment-grade credit ratings TO EXECUTE  Disciplined hedging program Disciplined Hedging Q4 17:~65% 1H 18:~40% Excellent  Significant investment in EnLink Midstream Liquidity Cash: $2.8 billon INVESTMENT-  $1 billion divestiture program u

  9. Slide 9: Operational Excellence

    Operational Excellence Capture Improve FULL VALUE RETURNS Maximize base production Optimize capital program  Minimize controllable downtime  Disciplined project execution  Enhance well productivity  Perform premier technical work  Leverage midstream operations  Focus on development drilling 

  10. Slide 10: Top-Tier Operating Performance

    Top-Tier Operating Performance Best-in-class well productivity DEVON WELL ACTIVITY Avg. 90-Day Wellhead IPs BOED, 20:1 (Since 2012) ~400% 1,000 800 I M P R O V E M E N T 600 400 200 Peers Source: IHS/Devon. Top operators with more than 40 wells over the past year ending October 2017. BOT TOM LINE IM

  11. Slide 11: The Next Frontier Of Efficiency Gains

    The Next Frontier Of Efficiency Gains  Multi-zone manufacturing strategy underway  Leading-edge development concept  Debundling supply chain drives costs lower  Massive technology upside remains ANACONDA MULTI-ZONE PROJECT $1 MILLION SAVINGS PER WELL For additional information see our Q3 operati

  12. Slide 12: Innovation Momentum - Technology Projects In Flight

    Innovation Momentum - Technology Projects In Flight DRILLING & PRODUCTION WAT E R SUBSURFACE COMPLETIONS O P E R AT I O N S MANAGEMENT C O R P O R AT E Improved 3D seismic Cyber-geosteering Predictive pump failures Water-treatment options Accounting process interpretation automation Flat, in-zone we

  13. Slide 13: STACK – Franchise Asset

    STACK – Franchise Asset Kingfisher Blaine Best-in-class acreage position Showboat Sonoyta Drilling Underway (24 wells) 670k net acres by formation Coyote Drilling Underway (7 wells) Sidney Privott Up to 4 target intervals per unit Smilodon Fleenor Bernhardt Accelerating development activity 2018 Spu

  14. Slide 14: STACK – Multi-Decade Growth Platform

    STACK – Multi-Decade Growth Platform Best-in-class well results High-returning production growth STACK Avg. 90-Day Wellhead IPs Per 1,000’ Lateral MBOED ~ 120 BOED, 20:1 111 160 105 120 >70% VS. PEER AVG. 95 >70% 88 80 >35% VS. Q4 2016 40 0 GROWTH DVN MRO NFX XEC GST CLR ALTMES Peers Q4 16 Q1 17 Q2

  15. Slide 15: STACK - Development Activity

    STACK - Development Activity  Full-field development underway Coyote Kingfisher Drilling Underway (7 wells) Faith Marie Showboat  Activity focused on Coyote & Showboat 24-Hr IP: 5,100 BOED Drilling Underway (24 wells) 5 operated rigs (2 drilling units)  Projects offset by prolific well results Bl

  16. Slide 16: Delaware Basin – Franchise Asset

    Delaware Basin – Franchise Asset POTATO BASIN World-class oil opportunity TODD Medusa Q4 17 Spud (20 wells) Cobra Tomb Raider Multi-decade growth platform Spud Muffin Anaconda Flowing Back (10 wells) Boomslang Up to 15 target intervals Completing (11 wells) THISTLE/GAUCHO Eddy Lea Accelerating devel

  17. Slide 17: Anaconda: Initial Multi-Zone Delaware Project

    Anaconda: Initial Multi-Zone Delaware Project  Co-developing 3 Leonard shale intervals THISTLE/GAUCHO TODD  Achieved savings of $1 MM per well (~20%) Lea Anaconda  Early flow rates are positive Peak rates: Q4 17 — 2 wells with 30-day IPs: 1,600 BOED Anaconda Project  Peak production rates expect

  18. Slide 18: Delaware Basin – Multi-Decade Growth Platform

    Delaware Basin – Multi-Decade Growth Platform Basin Slope 1 Section 1 Section 6,500 DELAWARE Madera SANDS Lower Brushy A RISKED LOCATIONS LEONARD B >4,000’ C >1.3 MM OF PAY 1st BONE SPRING 2nd (Upper & Lower) NET EFFECTIVE ACRES 3rd X/Y WOLFCAMP Risked Location Unrisked Location A, B, C &D Note: Gra

  19. Slide 19: Devon's Competitive Advantage

    Devon’s Competitive Advantage STACK & Delaware focused Top-tier operating results Multi-decade growth platform Innovative culture >30,000 STACK & DELAWARE POTENTIAL LOCATIONS Significant financial strength | Investor Presentation 19

  20. Slide 20: Thank you.

    Thank you. For additional information see our Q3 Operations Report Thank you.

  21. Slide 21: Forward-Looking Statements

    Forward-Looking Statements This presentation includes "forward-looking statements" as defined by the SEC. Such statements include those concerning strategic plans, expectations and objectives for future operations, and are often identified by use of the words “expects,” “believes,” “will,” “would,”

  22. Slide 22: Appendix

    Appendix NYSE: DVN devonenergy.com

  23. Slide 23: Cash-Flow Generating Assets

    Cash-Flow Generating Assets HEAVY OIL 35% 15% ENLINK HEAVY OIL >$2.2B (1) CASH FLOW 2017e 30% 20% BARNET T EAGLE FORD BARNETT (1) Represents field-level cash flow before G&A and taxes EAGLE FORD | Investor Presentation 23

  24. Slide 24: Rockies – An Emerging Oil Growth Asset

    Rockies – An Emerging Oil Growth Asset  Premier Powder River Basin position POWDER RIVER BASIN ACTIVITY — Q3 net production: 16 MBOED (80% oil) — >400,000 net surface acres  Stacked pay: >10 prospective intervals  Initial “Super Mario” Turner results expected in Q4 | Investor Presentation 24

  25. Slide 25: STACK Resource

    STACK Resource STACK RESOURCE GROSS RISKED GROSS UNRISKED FORMATION WINDOW NET ACRES LOCATIONS LOCATIONS Over-Pressured Oil 130,000 1,700 3,000 Meramec Liquids-Rich Gas 150,000 TBD >1,000 280,000 1,700 >4,000 Condensate Corridor 135,000 2,000 3,800 Woodford Liquids-Rich & Dry Gas 170,000 2,000 3,000

  26. Slide 26: Delaware Basin Resource

    Delaware Basin Resource DELAWARE BASIN RESOURCE NET EFFECTIVE GROSS RISKED GROSS UNRISKED FORMATION ACRES LOCATIONS LOCATIONS Delaware Sands 160,000 600 1,500 Leonard Shale 160,000 1,000 3,500 Bone Spring 530,000 3,200 6,000 Wolfcamp 460,000 1,500 8,500 Other (Yeso & Strawn) 20,000 200 1,000 Total >

  27. Slide 27: Johnson County Divestiture Package

    Johnson County Divestiture Package  Massive position in core of the Barnett — Net acres: 610,000 Wise Denton — Q3 net production: 148 MBOED (25% liquids) Denton  Pursuing divestiture for Johnson County area Tarrant Parker — ~30 MBOED Ft. Worth — Data rooms open — Initial bids expected in Q4 2017 D

  28. Slide 28: Hedge Position – As of 10/27/17

    Hedge Position – As of 10/27/17 OIL DERIVATIVES SWAPS COLLARS COMBINED VOLUME WEIGHTED VOLUME WEIGHTED AVG. WEIGHTED AVG. PERIOD VOLUME PROTECTED PERIOD (MBPD) AVG. PRICE (MBPD) FLOOR PRICE CEILING PRICE (MBPD) PRICE ($/BBL) ($/BBL) ($/BBL) Q4 2017 83.2 $54 79.2 $46 $57 2017 162 $50 Q1-Q4 2018 35.5

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