Slide 1: Investor Presentation
Investor Presentation September 2015 NYSE: DVN devonenergy.com
Slide 2: Investor Contacts & Notices
Investor Contacts & Notices Investor Relations Contacts Howard J. Thill, Senior Vice President, Communications & Investor Relations (405) 552‐3693 / howard.thill@dvn.com Scott Coody, Director, Investor Relations (405) 552‐4735 / scott.coody@dvn.com Shea Snyder, Director, Investor Communications (405
Slide 3: Devon Today
Devon Today A Leading North American E&P Premier asset portfolio Platform for sustainable growth Delivering superior execution Advantaged capital structure Disciplined capital allocation 3
Slide 4: Premier Asset Portfolio
Premier Asset Portfolio Heavy Oil Positioned in top‐tier basins — Leading Delaware Basin operator — Prolific Eagle Ford assets — High‐quality Anadarko Basin position — World‐class heavy oil projects Rockies Oil Significant operational momentum — Delivering top‐tier well productivity Anadarko Bas
Slide 5: Delaware Basin Overview
Delaware Basin Overview Industry leader in basin — Net risked acres: 585,000 Lea — Q2 net production: 64 MBOED (65% oil) Eddy — Delivering top‐tier well results Deep inventory of low‐risk projects — >5,000 risked locations — Significant upside from downspacing Most active asset in portfolio —
Slide 6: Delivering Prolific Production Growth
Delaware Basin Delivering Prolific Production Growth Per‐well productivity continues to increase Q2 net production increased 40% YoY 64 Bone Spring driving growth 46 Delaware Basin Production Growth MBOED 40% Growth Q2 2014 Q2 2015 Oil NGL Gas 6
Slide 7: Bone Spring Results Continue to Improve
Delaware Basin Bone Spring Results Continue to Improve Q2 Bone Spring Basin Wells Enhanced completion design drives 30‐Day IP Rate, BOED productivity gains 1,400 — ≈3x more sand than historic design 900 — 16 Bone Spring basin wells in Q2 >50% — Avg. 30‐day IP: 1,400 BOED Increase — Results >50% ab
Slide 8: Significant & Growing Resource Opportunity
Delaware Basin Significant & Growing Resource Opportunity Identified >5,000 risked, undrilled locations Downspacing pilots expected to grow inventory — Testing 8 wells per section in lower 2nd Bone Spring interval (traditional landing zone) — Appraising stand‐alone commerciality of upper portion
Slide 9: Eagle Ford Overview
Eagle Ford Overview Top‐tier acreage position — 75,000 net acres focused in DeWitt Co. — Q2 net production: 114 MBOED (≈60% oil) Gonzales Lavaca Highest returning asset in portfolio — Delivering best‐in‐class well results — Condensate exports boost realizations Karnes — Low cost asset: LOE $5 pe
Slide 10: Eagle Ford Best-In-Class Results
Eagle Ford Best‐In‐Class Results Acreage located in best part of Eagle Ford Consistently delivering world‐class development results 90‐Day IP rates 125% higher than industry average Eagle Ford 90‐Day Wellhead IPs BOED, 20:1 1,000 1,000 750 500 Industry Average: 440 BOED 250 0 Peers Source: IHS
Slide 11: DeWitt County Productivity Gains Enhance Results
Eagle Ford DeWitt County Productivity Gains Enhance Results Per‐well productivity up 74%... Driving prolific production growth... 30‐Day IP Rates Eagle Ford Production BOED 1,950 MBOED 114 1,120 74% 51 ≈125% Increase Growth March 2014 Q2 2015 March Q2 2015 2014 While achieving drilling efficiencies.
Slide 12: Cana-Woodford Development Play
Anadarko Basin Cana‐Woodford Development Play Best position in Cana‐Woodford play — 280,000 net risked acres — Identified 3,600 risked locations Haley Pad — Q2 net production: 59 MBOED 8 Wells Avg. 30‐Day IP: 1,850 BOED Record‐setting pad brought online — 8‐well Haley section: 30‐day IP ≈1,850 B
Slide 13: Emerging Meramec Opportunity
Anadarko Basin Emerging Meramec Opportunity Appraisal activity yields high‐rate wells — Initial 14 wells: 30‐day IP ≈1,500 BOED — Delivering competitive returns — Upside with improving completions Meramec Appraisal 2 Wells (Q2 2015) Avg. 30‐Day IP: 1,500 BOED Growing resource opportunity — Net r
Slide 14: Powder River Basin
Rockies Oil Powder River Basin Devon Acreage Emerging asset with significant potential Recently Acquired 42,000 net acres — Recently added 42,000 acres — Total net surface acres: 225,000 Campbell — Risked locations: ≈800 across Parkman, Turner and Frontier formations Delivering substantial growt
Slide 15: Heavy Oil Overview
Heavy Oil Overview Located in best part of oil sands — Low geologic risk — Thick and continuous reservoir — Industry leading operating results — Massive risked resource: 1.4 BBO Features of each Jackfish project: — 300 MMBO gross EUR Production Per Well — Long reserve life >20 years (Bbls/d) — F
Slide 16: Delivering Visible Oil Growth
Heavy Oil Delivering Visible Oil Growth Heavy Oil Production Oil production up 27% over past year MBOD 98 77 Jackfish 3 Driven by world‐class Jackfish complex Jackfish 2 — Q2 gross production: 75 MBOD 27% Jackfish 1 Growth — Production increased 41% YoY Lloydminster — LOE declined by >30% YTD Q2
Slide 17: Platform For Sustainable Growth
Platform For Sustainable Growth Significant & Growing Resource Opportunity Asset Risked Opportunity Upside Potential Heavy Oil Delaware >5,000 undrilled Spacing pilots Basin locations underway Eagle Ford ≈400 MMBoe of Upper EF delineation risked resource and staggered lateral development of Lower EF
Slide 18: Operating Strategy For Long-Term Success
Delivering Superior Execution Operating Strategy For Long‐Term Success Maximize base production — Minimize controllable downtime — Enhance well productivity Capture Full — Leverage midstream operations Value — Reduce operating costs Optimize capital program — Disciplined project execution — Perf
Slide 19: Leveraging Technology To Enhance Performance
Delivering Superior Execution Leveraging Technology To Enhance Performance Decision support centers enhance performance — Minimize downtime — Reduce drilling times — Improve well placement and completion design — Optimize flow rates and NPV per well Benefits beyond well performance — Enhanced co
Slide 20: A Track Record Of Performance
Delivering Superior Execution A Track Record Of Performance Focused investment drives strong oil Driving 20% topline growth… growth… Oil Production Total Production 270 674 MBOD MBOED 563 176 54% 20% Growth Growth Q1 2014 Q2 2015 Q1 2014 Q2 2015 While shifting to higher margin product… And maintaini
Slide 21: Advantaged Capital Structure
Advantaged Capital Structure Excellent financial strength & flexibility Market Value of EnLink Ownership September 2015 — Strong investment‐grade credit ratings — Cash & credit facility availability: $4.5 billion — Low leverage: $7.6 billion of net debt(1) The EnLink Midstream advantage — Asset
Slide 22: Approach To Current Environment
Disciplined Capital Allocation Approach To Current Environment Protect the balance sheet — Match capital investment with cash inflows Prepared to dynamically allocate capital — Minimal service contracts >12 months — No long‐term project commitments — Leases held by production — Tailor activity t
Slide 23: Disciplined Capital Allocation: E&P Capital
Disciplined Capital Allocation E&P Capital E&P capital reduced by 25% vs. 2014 $ Billions — Targeting ≈20% cost reductions by year‐end $5.4 — Efficiency gains achieved across portfolio $4.0 25% Improved operating cost expectations Reduction Heavy Oil — Targeting savings of ≈$400 million in 2015
Slide 24: Why Own Devon?
Why Own Devon? Premier asset portfolio Platform for sustainable growth Delivering superior execution Advantaged capital structure Disciplined capital allocation 24
Slide 25: Thank you.
Thank you.
Slide 26: Appendix
Appendix
Slide 27: Barnett Shale Liquids-Rich Gas Development
Barnett Shale Liquids‐Rich Gas Development Significant gas optionality — Net acres: 620,000 Wise Denton — Best position in play — Q2 net production: 185 MBOED — Liquids 27% of production mix Barnett Wells Focused on optimizing base production Parker 1,900 Fort Verticals Worth — Active vertical r
Slide 28: Potential Drop Down Asset: Access Pipeline
Potential Drop Down Asset Access Pipeline Three ≈180 mile pipelines from JACKFISH & PIKE Sturgeon Terminal to Devon’s thermal acreage 16” Diluent Line (Edmonton to Jackfish) 24” Diluent Line ≈30 miles of dual pipeline from (Sturgeon to Jackfish) 42” Blend Line Sturgeon Terminal to Edmonton Sturg
Slide 29: Potential Drop Down Asset: NGPL
Potential Drop Down Asset NGPL 92‐mile gas pipeline from North Texas to Central Oklahoma STACK NGPL Proposed CANA‐ Cana Plant WOODFORD EnLink Processing Facility Acquisition of NGPL nearing completion — Regulatory approval received SCOOP — Expect to close transaction early 2016 Red OKLAHOMA St
Slide 30: Bone Spring Spacing Pilots
Delaware Basin Bone Spring Spacing Pilots Pilot 1 Pilot 2 Pilot 3 Pilot 4 Pilot 5 660’ 660’ 280’ Upper 2nd BONE SPRING 660’ 880’ SPRING Lower BONE 1,320’ 3rd Planned Pilot Well Existing Producer Results will help optimize future development schemes and ultimately maximize resource value Pilots a
Slide 31: Meramec Spacing Pilots
Anadarko Basin Meramec Spacing Pilots Spacing Pilot Staggered Lateral Pilot 1,150’ 660’ Upper Planned MISSISSIPPIAN Pilot MERAMEC (5 wells/section) Well Lower Results will help determine the optimal future development schemes of both the Meramec and Woodford formations Pilot activity to begin in
Slide 32: Key Modeling Statistics
Key Modeling Statistics Bone Spring Basin (Delaware Basin) Bone Spring Slope (Delaware Basin) Working interest / royalty: 71% / 21% Working interest / royalty: 71% / 21% 30‐day IP rate: 900 BOED 30‐day IP rate: 500 BOED EUR: 600 MBOE EUR: 450 MBOE Oil / NGLs as % of production: 65% / 20% Oil / NGLs
Slide 33: Key Modeling Statistics
Key Modeling Statistics Eagle Ford (DeWitt County) Rockies: Powder River Basin (Parkman) Working interest / royalty: 54% / 22% Working interest / royalty: 58% / 18% 30‐day IP rate: 1,650 BOED 30‐day IP rate: 1,300 BOED EUR: 900 MBOE EUR: 425 MBOE Oil / NGLs as % of production: 60% / 20% Oil / Gas as
Slide 34: Key Modeling Statistics
Key Modeling Statistics Cana‐Woodford Shale Meramec Working interest / royalty: 51% / 21% Working interest / royalty: 34% / 18% 30‐day IP rate: 1,200 BOED 30‐day IP rate: 1,500 BOED EUR: 1,700 MBOE EUR: 1,400 MBOE Oil / NGLs as % of production: 5% / 40% Oil / NGLs as % of production: 9% / 42% Declin
Slide 35: Discussion of Risk Factors
Discussion of Risk Factors Forward‐Looking Statements: Information provided in this presentation includes “forward‐looking statements” as defined by the Securities and Exchange Commission. Forward‐looking statements are often identified by use of the words “forecasts”, “projections”, “estimates”, “p