Slide 1: Q2 2024 Earnings Presentation
Q2 2024 Earnings Presentation August 6, 2024 NYSE: DVN devonenergy.com
Slide 2: Key Takeaways From Our Presentation
Key Takeaways From Our Presentation 1 OIL PRODUCTION REACHES NEW ALL-TIME HIGH Q2 volumes exceeded guidance by 3% reaching 335,000 barrels per day 2 DELAWARE GROWTH DRIVES Q2 OUTPERFORMANCE Improved well productivity & efficiency gains deliver strong results 3 RAISING FULL-YEAR 2024 PRODUCTION OUTLO
Slide 3: Our Disciplined Business Model
Our Disciplined Business Model DISCIPLINED MODERATED OIL GROWTH targets: up to 5% annually GROWTH STRATEGY Focused on growing per-share value CONSISTENT Returns-driven strategy prioritizes FREE CASH FLOW generation REINVESTMENT RATES Optimizing results with steady activity levels through the
Slide 4: Strategy Creating Significant Value for Shareholders
Strategy Creating Significant Value for Shareholders Delivering on our promise to shareholders Cumulative uses of cash ($ in billions) Industry-first cash-return framework unveiled in 2020 > $14 BILLION Strategy designed for sustainable free cash flow generation SINCE 2020 $13.2 Flexibility to
Slide 5: Portfolio Built to Deliver Sustainable Performance
Portfolio Built to Deliver Sustainable Performance WILLISTON BASIN PREMIER MULTI-BASIN PORTFOLIO 61 MBOED (1) Acreage resides in top U.S. resource plays Underpinned by world-class Delaware Basin position POWDER RIVER BASIN $ DIVERSIFIED COMMODITY MIX WILLISTON 18 MBOED Balanced exposure to oil
Slide 6: Advantaged Operating Scale & Diversification
Advantaged Operating Scale & Diversification TOP U.S. ONSHORE PURE-PLAY PRODUCERS PRO FORMA TOTAL PRODUCTION (MBOED) (1) 1,000 Oil NGL 55% 25% 750 ~100 MBOED Gas 20% 500 Total Production (MBOED) Oil Production (MBOD) 250 0 TOP ONSHORE PRODUCERS (1) Sourced from FactSet & Devon. Pro forma production
Slide 7: Q2 2024 – Executing on Our Disciplined Plan
Q2 2024 – Executing on Our Disciplined Plan RECORD-SETTING OIL VOLUMES EFFICIENT CAPITAL SPENDING (MBOD) ($ IN MILLIONS) (2) +3% $1,018 ~ 13% 16TH STRAIGHT QUARTER 300 335 PRODUCTION BEAT CAPITAL REDUCTION (VS. Q2 MIDPOINT GUIDE) OF FREE CASH FLOW $890 200 ANADARKO EAGLE FORD 100 (1) ROCKIES DELAWAR
Slide 8: Delaware Basin – Our Franchise Asset
Delaware Basin – Our Franchise Asset PARKWAY Q2 2024 Projects 2024 Projects 400K New Mexico NET ACRES Texas POTATO BASIN TODD THISTLE/GAUCHO CAPITAL-EFFICIENT GROWTH TOTAL DELAWARE PRODUCTION (MBOED) +5% Eddy Lea VS. Q1 2024 461 COTTON DRAW RATTLESNAKE VOLUMES 437 STATELINE 427 New Mexico 414 Texas
Slide 9: Delaware Basin – Superior Well Productivity
Delaware Basin – Superior Well Productivity IMPROVING WELL PERFORMANCE IN 2024 TOP-TIER HISTORICAL WELL PERFORMANCE CUMULATIVE OIL VOLUMES, MBO (NORMALIZED FOR 10,000’ LATERALS) AVG. 12-MONTH CUMULATIVE OIL VOLUMES SINCE 2020 (MBO) 250 225 >10% ~20% MORE PRODUCTIVE vs. 4-YEAR INDUSTRY AVG. IMPROVEME
Slide 10: Delaware Basin – Operating Efficiencies Advance
Delaware Basin – Operating Efficiencies Advance STRONG TRACK RECORD OF DRILLED FEET PER DAY COMPLETED FEET PER DAY OPERATIONAL EXCELLENCE 12% 1,163 6% 2,282 IMPROVEMENT IMPROVEMENT (2024 YTD vs. 2023) (2024 YTD vs. 2023) 2,152 1,034 1,955 999 2022 2023 2024 YTD 2022 2023 2024 YTD | Q2 2024 Earnings
Slide 11: Inventory Depth Underpins Delaware Sustainability
Inventory Depth Underpins Delaware Sustainability DELAWARE BASIN INVENTORY BY KEY OPERATOR SOURCE: ENVERUS INTELLIGENCE 10,000 New 8,000 Mexico Multi-decade resource opportunity PV-10 breakeven: ~$40 WTI oil price (1) Gross Operated Locations Texas ~60% of total company risked resource 6,000 4
Slide 12: Raising Production Outlook for Second Time in 2024
Raising Production Outlook for Second Time in 2024 UPDATED 2024 OUTLOOK RAISING OIL VOLUME GUIDANCE HIGH-GRADING CAPITAL 2024 OIL PRODUCTION (MBOD) TOTAL CAPITAL ($ IN BILLIONS) (1) 677-688 ~3% 10% TOTAL UP 324 $3.8 VOLUMES (+5% vs. ORIGINAL GUIDE) TO (MBOED) INCREASE REDUCTION $ TOTAL $3.3-$3.6 315
Slide 13: Positioned for Significant Free Cash Flow Generation
Positioned for Significant Free Cash Flow Generation Devon’s attractive free cash flow yield Providing an opportunity vs. broader market 2024e free cash flow yield sensitivities 2024e free cash flow yield vs. broader market 13% 11% ADVANTAGED YIELD 11% FREE CASH FLOW OPPORTUNITY YIELD FREE CASH FLOW
Slide 14: Acquisition Transforms Williston Basin Business
Acquisition Transforms Williston Basin Business Devon Secures a leading Williston Basin position of Williams 307,000 net acres Grayson Mill Adds oil-weighted production profile of ~100,000 BOED in 2025 (55% oil mix) Mountrail Provides up to 10-year inventory runway at current pace of activity
Slide 15: Disciplined Return of Capital to Shareholders
Disciplined Return of Capital to Shareholders DISCIPLINED SHARE REPURCHASES TARGET PAYOUT Increasing buyback authorization by 67% to $5 billion (% OF FREE CASH FLOW) Repurchased $2.7 billion of shares to date (as of 6/30/2024) BALANCE ATTRACTIVE DIVIDEND YIELD SHEET Dividend designed to delive
Slide 16: Focused on Environmental Excellence
Focused on Environmental Excellence 2024 SUSTAINABILITY REPORT HIGHLIGHTS ENVIRONMENTAL TARGETS GHG EMISSIONS SCOPE 1 & 2 Flared volume intensity was reduced by 82% (1) NET ZERO GHG EMISSIONS FOR SCOPE 1 & 2 BY 2050 Scope 1 & 2 GHG emissions intensity declined by 24% (1) GHG EMISSIONS INTENSITY SCOP
Slide 17: Compelling Valuation & Upside in Energy
Compelling Valuation & Upside in Energy Energy sector weighting as % of the S&P 500 index Iran Oil Embargo 29% 30% >10% VALUATIONS REMAIN AT OF S&P 500 HISTORICALLY LOW LEVELS S&P 500 (EBITDA TTM) 25% EARNINGS Energy Market Capitalization as % of S&P 500 (BY SECTOR) 20% Great Recession 16% Gulf War
Slide 18: Devon's Unique Investment Proposition
Devon’s Unique Investment Proposition DISCIPLINED STRATEGY Focused on growing per-share value Returns-driven strategy prioritizes free cash flow DISCIPLINED STRATEGY HIGH-QUALITY PORTFOLIO Acreage high-graded to the top U.S. resource plays Underpinned by world-class Delaware Basin asset
Slide 19: For more information Thank you.
For more Q2 Tables & Guidance Acquisition Presentation + information Thank you. visit our website
Slide 20: Asset Appendix
AssetAppendix Overview NYSE: DVN devonenergy.com
Slide 21: Q2 2024 – Cash Return Payout
Q2 2024 – Cash Return Payout Q2 CASH RETURN PAYOUT DETAILS + Million $256 Share Repurchases in Q2 2024 (Retired 5.2 million shares) + Million $138 Fixed Dividend Paid in Q2 2024 (Paid $0.22 per share on 6/28/2024) + Million $138 Variable Dividend Declared (Declared $0.22 per share; payable on 9/30/2
Slide 22: Investor Contacts & Notices
Investor Contacts & Notices risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties; midstream capacity Investor Relations Contacts constraints and potential interruptions in production, including from limits to the build out of