Devon Energy Corporation · NYSE:DVN

Devon Energy — Barclays Americas Select Franchise Conference 2016

23 slides from Devon Energy's conference presentation, May 18, 2016

  1. Slide 1: Barclays Americas Select Franchise Conference

    Barclays Americas Select Franchise Conference May 18, 2016 NYSE: DVN devonenergy.com

  2. 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 Chris Carr, Supervisor, Investor Relations (405) 22

  3. Slide 3: Devon Today

    Devon Today A Leading North American E&P Core Asset Production Q1 2016: 581 MBOED Key Messages Heavy Oil  Premier asset portfolio Gas 37% Oil 44% — Focused in top‐tier resource plays NGL 19% — Deep inventory of opportunities Rockies Oil  Significant financial strength  Delivering best‐in‐class re

  4. Slide 4: Approach to Current Environment

    Approach to Current Environment  Protect balance sheet — Invest within cash flow — Enhance financial strength with asset sales  Drive efficiencies across the portfolio — Achieve additional cost savings — Further increase capital productivity  Position for the recovery — Maintain operational conti

  5. Slide 5: Significant Financial Strength

    Significant Financial Strength  Investment‐grade balance sheet  $4.6 billion of liquidity (credit facility matures October 2019)  No significant near‐term debt maturities Liquidity Debt Maturities – Next 5 Years ($ Millions) (3/31/16, $ Millions) $4,600 Credit Facility $750 Cash $350 $700 $125 Li

  6. Slide 6: Enhancing Financial Strength

    Enhancing Financial Strength Active Portfolio Management  Non‐core asset divestiture program underway Access Pipeline Gross capacity: 340 MBOD ― Expected proceeds: $2 ‐ $3 billion (50% Interest) ― Sales expected throughout 2016 ― Proceeds to date: ≈$300 million  Access Pipeline sale expected 1H 20

  7. Slide 7: Operating Strategy for Success

    Operating Strategy for 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 — Perform premier technical work Improve — Foc

  8. Slide 8: Delivering Best-In-Class Well Results

    Delivering Best‐In‐Class Well Results Devon’s Avg. 90‐Day Wellhead IPs 2015 Avg. 90‐Day Wellhead IPs BOED, 20:1 BOED, 20:1 600 600 450 450 300 300 150 ≈250% 150 Increase 0 0 2012 2013 2014 2015 Top U.S. Producers Source: IHS/Devon. Operators with more than 100 wells.  Devon delivered best well resu

  9. Slide 9: Achieving Significant Cost Savings

    Achieving Significant Cost Savings  D&C costs declining across all core plays D&C Well Cost Declines Peak cost to Q1 2016 ― Up to 40% lower than peak 2014 rates UP TO ― Improved drilling efficiencies and lower supply chain costs (≈50/50 split) SAVINGS ― More than offsetting larger completions  Ach

  10. Slide 10: Disciplined Capital Allocation

    Disciplined Capital Allocation Yielding Strong Results 2016 E&P Capital Budget  Investing within cash flow $900 Million ‐ $1.1 Billion  Reducing E&P capital by ≈75% Other 9% Heavy Oil STACK 18% 33%  Focused on top U.S. resource plays Eagle Ford Delaware 20%  Raised 2016 production targets Basin

  11. Slide 11: Strong Returns At Lower Prices

    Strong Returns At Lower Prices  Assets in best North American Incremental Well Economics At $50 Oil & $2.50 Gas resource plays Delaware Basin STACK – Meramec 30%+ 20%+  Strong well economics at lower Eagle Ford Rockies IRR – BTAX no G&A IRR – ATAX w/G&A commodity prices 15% ‐ 30% 10% ‐ 20% STACK –

  12. Slide 12: STACK: Best-In-Class Position

    STACK Best‐In‐Class Position  World‐class development play Atoka Penn. Meramec – Best Results — 430,000 net surface acres Morrow ‐ Strong flow rates Springer ‐ Oil‐weighted production — Top targets: Meramec & Woodford ‐ Low well costs Kingfisher (Prospective Meramec acres: ≈200k) Chester Mississipp

  13. Slide 13: STACK: Track Record of Growth

    STACK Track Record of Growth  Per‐well productivity continues to increase  ≈40% increase in production year over year  Driven by higher‐margin oil and liquids production STACK Production Growth 91 MBOED 65 ≈40% Increase Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 13

  14. Slide 14: STACK: Meramec Results Validate Core Position

    STACK Meramec Results Validate Core Position  Favorable characteristics Scheffler 1H‐9X Cascade 2314‐1H of core oil window: 30‐Day IP: 2,040 BOED 30‐Day IP: 1,650 BOED Dewey Blurton 1‐7‐6XH Maybel 1H‐13X 1. Attractive reservoir 30‐Day IP: 1,790 BOED 30‐Day IP: 1,900 BOED properties (thickness, Comp

  15. Slide 15: STACK: Significant Resource Upside

    STACK Significant Resource Upside  Meramec inventory conservatively risked — Assumes 4 risked wells per section (potential for 5 producible intervals)  Downspacing and staggered tests to drive location count higher — Testing up to 8 wells per section across 1 interval in Meramec — Staggered latera

  16. Slide 16: Delaware Basin: A World-Class Oil Play

    Delaware Basin A World‐Class Oil Play  Industry leader in basin — Net risked acres: 585,000 Lea — Q1 net production: 63 MBOED (≈60% oil) Eddy — Delivering top‐quartile well results  Cost savings enhancing value — LOE 36% lower YoY — Driven by lower water and power costs  2016 outlook — Capital: ≈

  17. Slide 17: Delaware Basin: Significant Resource Opportunity

    Delaware Basin Significant Resource Opportunity  Identified 5,200 risked, undrilled locations — Bone Spring ≈70% of risked inventory  Downspacing and appraisal work to drive risked location count higher — Evaluating tighter spacing in Bone Spring — Staggered spacing pilots expanding Leonard Shale

  18. Slide 18: Eagle Ford: Best-In-Class Results

    Eagle Ford Best‐In‐Class Results  Top‐tier acreage position in DeWitt County  Expected to generate >$250 million of free cash flow in 2016  Consistently delivering best wells in world‐class field (avg. 90 IP rate ≈1,200 BOED) Top‐150 Eagle Ford Wells Based on 90‐Day IP Rates, 20:1 81 28 16 8 6 5

  19. Slide 19: Canadian Heavy Oil: Top-Tier Thermal Position

    Canadian Heavy Oil Top‐Tier Thermal Position  Located in best part of play — Top‐tier operating results — Massive risked resource: 1.4 BBO  Significant cash flow at higher prices — Profitable at $35 WTI & above — ≈$500 MM annually at $50 WTI Jackfish Complex Unit LOE  Jackfish production up 31% Y

  20. Slide 20: Premier Asset Portfolio

    Premier Asset Portfolio Platform For Value Creation Asset Risked Opportunity Upside Potential Heavy Oil STACK 5,300 undrilled STACK spacing tests locations underway Delaware >5,000 undrilled Spacing tests and Basin locations appraisal work ongoing Eagle Ford 1,300 potential Upper EF delineation loca

  21. Slide 21: Devon Energy: A Leading North American E&P

    Devon Energy A Leading North American E&P  Premier asset portfolio  Significant financial strength  Track record of execution  Disciplined capital allocation 21

  22. Slide 22: Thank you.

    Thank you.

  23. Slide 23: 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

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