Slide 1: Q1 2023 Earnings Presentation
Q1 2023 Earnings Presentation May 8, 2023 NYSE: DVN devonenergy.com
Slide 2: Key Takeaways From Our Presentation
Key Takeaways From Our Presentation REPURCHASED $692 MILLION OF SHARES YTD #1 Reduced outstanding share count by ~6% since program inception BUYBACK PROGRAM EXPANDED TO $3.0 BILLION #2 Represents a 50% increase to share repurchase authorization FIXED + VARIABLE DIVIDEND DECLARED #3 Total dividend of
Slide 3: Our Disciplined Business Model
Our Disciplined Business Model DISCIPLINED MODERATED OIL GROWTH targets: up to 5% annually GROWTH STRATEGY Focused on delivering per-share financial growth STRATEGY ANCHORED BY HIGH-QUALITY CONSISTENT Returns-driven strategy prioritizes FREE CASH FLOW generation ASSET PORTFOLIO (PG. 4) REINVES
Slide 4: Portfolio Built to Deliver Sustainable Performance
Portfolio Built to Deliver Sustainable Performance PREMIER MULTI-BASIN PORTFOLIO WILLISTON BASIN 53 MBOED Acreage resides in top U.S. resource plays Underpinned by world-class Delaware Basin position POWDER RIVER BASIN $ DIVERSIFIED COMMODITY MIX 19 MBOED Balanced exposure to oil & natural gas
Slide 5: Strategy Designed to Create Value Through the Cycle
Strategy Designed to Create Value Through the Cycle Durable financial model Cumulative uses of cash since merger ($ in billions) $9.7 Acquisitions (Funded with cash) No change to disciplined cash-return framework $8.6 Share Repurchases Returned >120% of merger valuation to shareholders (1) $7.7
Slide 6: Q1 2023 – Executing on Our Plan
Q1 2023 – Executing on Our Plan Q1 2023 RESULTS COMPARISON KEY MESSAGES OIL 320 +11% Achieved record-setting oil production in the first quarter PRODUCTION (MBOD) (vs. Q1 2022) Oil volumes exceeded midpoint guidance by 2,000 barrels per day TOTAL (1) Experiencing price stability & increased av
Slide 7: Delivering an Advantaged Cash-Return Yield
Delivering an Advantaged Cash-Return Yield ~12% TOTAL YIELD 12% HISTORY OF CASH RETURNS Superior yield versus other market opportunities Q1 2023 Annualized Cash-Return Yield 10% SHARE Paid quarterly dividend for 31 straight years BUYBACK 8% PROGRAM Differentiated fixed + variable dividend poli
Slide 8: Attractive Dividend Payouts Through the Cycle
Attractive Dividend Payouts Through the Cycle Providing an opportunity vs. broader market Dividend framework provides torque to higher oil prices Q1 2023 annualized dividend declared yield vs. broader market Dividend yield sensitivities based on Q1 2023 results (annualized Q1 dividend declared) 5.7%
Slide 9: Expanding Share-Repurchase Program
Expanding Share-Repurchase Program DELIVERING ON OUR INCREASING AUTHORIZATION TO $3.0 BILLION (1) COMMITMENT TO SHAREHOLDERS Repurchased $692 million of shares YTD $3.0 $1.0 Billion Remaining (1) Board approved 50% increase in buyback program BILLION Repurchased AUTHORIZATION To-Date Upsized authori
Slide 10: Improving Investment-Grade Financial Position
Improving Investment-Grade Financial Position TOTAL LIQUIDITY CASH BALANCE LOW LEVERAGE $3.9B $0.9B 0.6x INCLUDES CASH CASH POSITION NET DEBT-TO-EBITDAX & CREDIT FACILITY AS OF 3/31/2023 AS OF 3/31/2023 CREDIT RATINGS DEBT REDUCTION UPCOMING MATURITIES BBB/Baa2 >$1.2B ~ 60% INVESTMENT-GRADE AT SINCE
Slide 11: 2023 Outlook – No Change to Our Disciplined Plan
2023 Outlook – No Change to Our Disciplined Plan Financial & operating outlook for 2023 Devon’s attractive free cash flow yield (1) 2023e outlook 2023e free cash flow yield sensitivities based on midpoint guidance 12% 9% (1) PRODUCTION PER FREE CASH FLOW SHARE GROWTH 13% YIELD 10% 2023 vs. 2022 FREE
Slide 12: 2023 – Another Year of Advantaged Capital Efficiency
2023 – Another Year of Advantaged Capital Efficiency $90 BREAKEVEN FUNDING FOR 2023 CAPITAL PROGRAM DELIVERING TOP-QUARTILE CAPITAL EFFICIENCY Base Dividend Impact $75 Pre-Dividend Breakeven $60 INDUSTRY AVERAGE (1) WTI $45 $30 $15 TOP NORTH AMERICAN PRODUCERS Note: Sourced from JP Morgan, Jefferies
Slide 13: Inventory Underpins Long-Term Sustainability
Inventory Underpins Long-Term Sustainability High-quality & multi-decade inventory >20YEAR Gross operated inventory locations (Avg. lateral length is ~2 miles) UNRISKED INVENTORY (WITH APPRAISAL & TIGHTER SPACING) ~10,000 locations ~12YEAR RISKED INVENTORY (AT CURRENT ACTIVITY PACE) >4,500 locations
Slide 14: Asset Operations Overview Update
AssetOperations Overview Update NYSE: DVN devonenergy.com
Slide 15: Delaware Basin – Our Franchise Asset
Delaware Basin – Our Franchise Asset DELAWARE-FOCUSED DELIVERING HIGH-MARGIN VOLUME GROWTH CAPITAL PROGRAM 60% OF TOTAL COMPANY SUCCESSFUL 3-MILE WOLFCAMP DEVELOPMENT +5% 415 VOLUME GROWTH Exotic Cat Raider (15,200’ laterals) (MBOED) 6 Wolfcamp wells Top Well (IP30): 7,200 BOED 394 Q1 2023 PRODU
Slide 16: Delaware Basin – World-Class Well Productivity
Delaware Basin – World-Class Well Productivity Expect to maintain top-tier well productivity DELIVERING TOP-TIER WELL PRODUCTIVITY 2022 6-MONTH CUMULATIVE OIL VOLUMES (MBO PER 1,000’) in 2023 (>1.5 MMBOE average recovery per well) 15 Capital program focused on low-risk development 10 drilling in the
Slide 17: Eagle Ford – Meaningful Runway of Opportunities
Eagle Ford – Meaningful Runway of Opportunities ZGABAY PILOT PROGRAM 2023 activity focused on sustaining production DELINEATES RESOURCE UPSIDE Project funded by Dept. of Energy & harvesting cash flow Advances resource characterization Informs infill, refrac & EOR strategy Program focused on op
Slide 18: Strong Results Across Top U.S. Resource Plays
Strong Results Across Top U.S. Resource Plays Capital efficiency enhanced by $100 million drilling carry with Dow ANADARKO Q1 activity drove volumes 5% higher compared to Q4 2022 Q1 2023 BASIN Hornet development achieved IP30 rates as high as 4,000 BOED PRODUCTION PROFILE WILLISTON High-marg
Slide 19: Aggressively Reducing Emissions
Aggressively Reducing Emissions GHG EMISSIONS SCOPE 1 & 2 2022 Sustainability Report NET ZERO GHG EMISSIONS FOR SCOPE 1 & 2 BY 2050 For more information, please refer ENVIRONMENTAL TARGETS to the Sustainability portion of GHG EMISSIONS INTENSITY SCOPE 1 & 2 Devon’s website (2023 report to be release
Slide 20: Asset Appendix Overview
AssetAppendix Overview NYSE: DVN devonenergy.com
Slide 21: Free Cash Flow Priorities
Free Cash Flow Priorities FIXED DIVIDEND Q1 VARIABLE DIVIDEND CALCULATION #1 Paid quarterly at $0.20 per share Target payout: up to 10% of operating cash flow $664 MM – Adjusted Free Cash Flow (Non-GAAP) − $133 MM – Fixed Quarterly Dividend $531 MM – Excess Free Cash Flow VARIABLE DIVIDEND #2
Slide 22: Our Investment-Grade Financial Strength
Our Investment-Grade Financial Strength Strong liquidity with minimal near-term debt maturities Outstanding debt maturities through 2030 ($MM) $3,887 Reduced outstanding debt by >$1.2 billion since merger close EXECUTING ON OUR Net debt-to-EBITDAX: 0.6x (at 3/31/2023) Cash FINANCIAL $887 Signi
Slide 23: Investor Contacts & Notices
Investor Contacts & Notices Investor Relations Contacts risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties; midstream capacity constraints and potential interruptions in production, including from limits to the build out of