Devon Energy Corporation · NYSE:DVN

Devon Energy — J.P. Morgan Energy Equity Conference 2017

30 slides from Devon Energy's conference presentation, Jun 26, 2017

  1. Slide 1: J.P.Morgan Energy Equity Conference

    J.P.Morgan Energy Equity Conference June 26, 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 Energy: A Leading North American E&P

    Devon Energy A Leading North American E&P Premier Delivering asset portfolio top-tier execution Multi-decade Significant growth platform financial strength 3

  4. Slide 4: Premier Asset Portfolio

    Premier Asset Portfolio U.S. Rig Activity  STACK & Delaware focused 10% OTHER ASSETS STACK  Visible growth trajectory  625,000 net acres by formation  >10,000 potential locations  Organically funded growth Delaware Basin  >1 MM net effective acres  Significant resource upside  >20,000 potent

  5. Slide 5: STACK And Delaware Basin

    STACK And Delaware Basin Multi-Decade Growth Platform Massive Resource Opportunity  Best emerging development plays in N.A. >30,000 DRILLING INVENTORY  Industry-leading acreage positions  Sustainable, long-term growth platform POTENTIAL LOCATIONS (1/3 CURRENTLY DE-RISKED)  Appraisal work to furt

  6. Slide 6: STACK

    STACK Franchise Growth Asset Blaine Kingfisher  Transitioning to full-field development Dewey Showboat Project  25-30 wells  2 drilling units  Peak rates at Hobson Row in Q2 Hobson Row Jacobs Row Custer  39 wells (5-sections)  Up to 7 drilling units  IPs: 25% oil mix Meramec Core  Multi-zone

  7. Slide 7: STACK

    STACK Multi-Decade Growth Platform 400 drilling units Blaine Showboat Project Kingfisher Majority operated 70% long laterals Up to 4 intervals per unit Jacobs Row Hobson Row Future Drilling Unit Caddo Canadian 7

  8. Slide 8: Delaware Basin

    Delaware Basin Franchise Growth Asset  Acreage concentrated in core of play Potato Basin Todd Leonard Multi-Zone  10 wells (3 intervals) Eddy  Transitioning to full-field development Lea Cotton Draw Thistle/Gaucho Wolfcamp Multi-Zone  Accelerating Wolfcamp & Leonard activity  10 wells (4 interv

  9. Slide 9: Delaware Basin

    Delaware Basin Multi-Decade Growth Platform Basin Slope 1 Section 1 Section DELAWARE Madera SANDS >5,800 Lower Brushy A LEONARD B RISKED LOCATIONS >4,000’ C OF PAY 1st BONE SPRING 2nd >1 MM (Upper & Lower) 3rd X/Y NET EFFECTIVE ACRES WOLFCAMP A, B, C &D Risked Location Unrisked Location Note: Graphi

  10. Slide 10: Accelerating Capital Investment

    Accelerating Capital Investment Rig Activity – U.S. Resource Plays Operated Rigs  Capital allocation focused on returns 30 ~20RIGS 15 RIGS BY YEAR-END 2017 10 RIGS AT MARCH 31, 2017  Ramping to ~20 operated rigs by year-end 20 AT YEAR-END 2016 10  Further accelerate investment in 2018 0 12/31/16

  11. Slide 11: Rapidly Expanding High-Margin Production

    Rapidly Expanding High-Margin Production  Building operational momentum in 2017 U.S. Oil Production Growth MBOD +~20% (vs. 2017) +13 - 17%  Higher growth rates expected in 2018 (vs. Q4 2016) 105  Growth driven by STACK & Delaware Q4 2016 2017e 2018e 11

  12. Slide 12: Peer-Leading Cash Flow Expansion

    Peer-Leading Cash Flow Expansion Shifting to higher-value production Delivering peer-leading cash flow expansion Liquids % of Total Product Mix $ Billions ~65% ~$2.5(1) 61% 61% 52% 42% 2013 2014 2015 2016 Q4 2017e 175% $0.9(2) Cost savings boost margins Operating Costs and G&A ($ Billions) INCREASE

  13. Slide 13: Financial Capacity To Execute

    Financial Capacity To Execute  Investment-grade credit ratings PROTECTING OUR ABILITY TO EXECUTE Disciplined  No significant debt maturities until 2021 Hedging Excellent Liquidity (Cash: $2.1 billon)  Disciplined hedging program INVESTMENT- GRADE credit ratings  Significant investment in EnLink

  14. Slide 14: Active Portfolio Management

    Active Portfolio Management 1.0 $  $1 billion divestiture program ― Targeting select U.S. assets ― Timing: 12-18 months BILLION TARGETED DIVESTITURES  Driven by depth of U.S. resource  Potential for additional sales For additional information see our Q1 operations report. 14

  15. Slide 15: Operating Strategy For Success

    Operating Strategy For Success 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

  16. Slide 16: Best-In-Class Well Productivity

    Best-In-Class Well Productivity Avg. 90-Day Wellhead IPs BOED, 20:1 DEVON WELL ACTIVITY >450% (Since 2012) 1,000 800 IMPROVEMEN T 600 400 200 Top 30 U.S. Producers Source: IHS/Devon. Top operators with more than 40 wells over the trailing 12-months. 16

  17. Slide 17: Efficiencies Offsetting Industry Inflation

    Efficiencies Offsetting Industry Inflation  Completely offset industry inflation YTD  Significant efficiency gains in STACK & Delaware  Innovative supply-chain initiatives — Unbundling historical, high-margin services 10% SAVINGS AT WOODFORD HOBSON ROW — Utilizing diversified vendor universe  In

  18. Slide 18: Multi-Zone Manufacturing

    Multi-Zone Manufacturing The Next Frontier Of Efficiency Gains  Shifting to development in STACK & Delaware Multi-Zone Development – Full Section  Benefits of multi-zone manufacturing — LOE and capital efficiencies — Simultaneous operations — Increase recoveries — Optimize surface facilities — Mai

  19. Slide 19: Devon's Technology Leadership

    Devon’s Technology Leadership  Technology revolution provides massive upside  Optimizing base production — 2% uplift achieved = $100 million annually  Enhancing drilling & completion operations — Delivering best-in-class well productivity  Cutting-edge petrophysical models Targeting hundreds of

  20. Slide 20: Devon Energy: A Leading North American E&P

    Devon Energy A Leading North American E&P Premier asset portfolio Multi-decade growth platform Delivering top-tier execution Significant financial strength 20

  21. Slide 21: Thank you.

    Thank you. For additional information see our Q1 Operations Report Thank you.

  22. Slide 22: 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,”

  23. Slide 23: Appendix

    Appendix NYSE: DVN devonenergy.com

  24. Slide 24: Cash-Flow Generating Assets

    Cash-Flow Generating Assets 2017e >$2.0 Billion of Cash Flow HEAVY OIL  Q1 production: 141 MBOED 3% 12% OTHER ENLINK BARNETT 35% HEAVY OIL  Q1 production: 158 MBOED  Net acres: 610,000 EAGLE FORD 30%  Q1 production: 83 MBOED 20% EAGLE FORD  Net acres: 65,000 BARNET T 24

  25. Slide 25: Rockies Oil

    Rockies Oil  Premier Powder River Basin position Powder River Focus Areas — 470,000 net surface acres Parkman Campbell Q1 Parkman Results Turner  4 extended-reach wells — Q1 net production: 17 MBOED (79% oil) Teapot  Avg. 30-Day IP: >1,800 BOED Weston Johnson  Prolific Q1 Parkman wells  2017 dr

  26. Slide 26: STACK Showboat Development

    STACK Showboat Development Showboat Development (First multi-zone STACK development) 1 Unit / Section UPPER MERAMEC LOWER WDFD 26

  27. Slide 27: STACK Resource Table

    STACK Resource Table Net Gross Risked Window Acres Locations Oil 10,000 100 Meramec Over-Pressured Oil 120,000 1,600 Liquids-Rich >120,000 TBD Oil 25,000 200 Woodford Liquids-Rich 180,000 2,200 Dry Gas 100,000 1,300 Exploration 70,000 TBD Total 625,000 5,400 27

  28. Slide 28: Delaware Basin Multi-Zone Developments

    Delaware Basin Multi-Zone Developments  Leonard multi-zone development  Wolfcamp multi-zone development — Testing up to 19 wells per section — Testing up to 18 wells per section — Initial production: 2H 2017 — Expected to spud in late 2017 28

  29. Slide 29: Delaware Basin Resource Table

    Delaware Basin Resource Table Net Risked Unrisked Effective Gross Gross Formation Acres Locations Locations Delaware Sands 170,000 700 2,000 Leonard Shale 160,000 950 3,100 Bone Spring 565,000 3,500 5,700 Wolfcamp 475,000 500 >9,000 Other (Yeso & Strawn) 190,000 200 200 Total >1,000,000 5,850 >20,00

  30. Slide 30: Barnett Shale

    Barnett Shale Johnson County Divestiture Package  Massive position in core of the Barnett — Net acres: 610,000 Wise Denton — Q1 net production: 158 MBOED (28% liquids) Denton  Evaluating strategic options for Johnson Tarrant County area Parker Ft. Worth — 20% of Devon’s Barnett position Evaluating

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