Devon Energy Corporation · NYSE:DVN

Devon Energy — Raymond James Institutional Investors Conference 2015

33 slides from Devon Energy's conference presentation, Mar 2, 2015

  1. Slide 1: Raymond James Institutional Investors Conference

    Raymond James Institutional Investors Conference March 2, 2015 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 Shea Snyder, Director, Investor Communications (405

  3. Slide 3: Devon Today

    Devon Today Superior Execution Delivering Shareholder Value  A leading North American E&P  Building operational momentum  Disciplined capital allocation  Oil driving production growth  Financial strength and flexibility  Significant midstream business 3

  4. Slide 4: A Leading North American E&P

    A Leading North American E&P Heavy Oil  Focused and balanced asset portfolio — Proved reserves: 2.8 billion BOE — Net production: 664 MBOED — Upstream revenue: 60% oil  Deep inventory of opportunities Rockies Oil — Prolific Eagle Ford assets — High‐quality Permian Basin position — World‐class heav

  5. Slide 5: Strategy For Long-Term Success

    A Leading North American E&P Strategy For Long‐Term Success  Premier and sustainable asset portfolio — High‐returning projects — Positioned in top‐tier basins — Balanced between oil and gas — Deep inventory of opportunities  Focused on superior execution — Technical and operational excellence — Pr

  6. Slide 6: Building Operational Momentum

    Building Operational Momentum Q4 & Full‐Year 2014 Highlights U.S. Oil Production Growth  Delivered U.S. oil production growth of 82% MBOD 146 — Prolific Eagle Ford development results ― Excellent results in Delaware Basin 80 82%  Q4 top‐line production 20% higher Growth Q4 2013 Q4 2014  Liquids a

  7. Slide 7: Disciplined Capital Allocation

    Disciplined Capital Allocation 2015 Capital Outlook  Balances capital with cash inflows 2015 E&P Capital Budget $4.1 ‐ $4.4 Billion  Reduced 20% from 2014  Focused on best development opportunities  Minimal exploration activity  Dynamically allocate capital throughout 2015 7

  8. Slide 8: Oil Driving Production Growth

    Oil Driving Production Growth 2015 Production Outlook  Oil production growth: ≈20% ‐ 25% Total Oil Production MBOD — Driven by Eagle Ford, Permian & Jackfish 3 250 ‐ 260  Top‐line BOE growth: ≈5% 209  Capital efficient growth achievable ≈20‐25% Expected Growth with 20% less spend than 2014 2014 2

  9. Slide 9: Significant Oil Producer in North America

    Oil Driving Production Growth Significant Oil Producer in North America Q3 2014 Oil Production Devon vs. N.A. Onshore Peers 350 300 250 200 MBOD 150 100 50 0 EOG CLR CHK WLL PXD CXO MEG ECA NFX XEC OAS SD LPI FANG RRC Note: All figures represent Devon’s retained asset portfolio. 9

  10. Slide 10: Financial Strength & Flexibility

    Financial Strength & Flexibility  Strong investment‐grade ratings — Cash balances: $1.5 billion — Net debt(1): $7.8 billion (excluding EnLink)  Cash flow protected by hedges — >50% of 2015 oil protected at $91 per barrel — ≈40% of 2015 gas protected at $4.17 per Mcf — Fair market value of hedges:

  11. Slide 11: Strategic Midstream Business

    Strategic Midstream Business EnLink Overview  Devon’s equity ownership interest Market Value of EnLink Ownership — 49% of MLP (ENLK: 120 MM units) February 2015 — 70% of GP (ENLC: 115 MM shares)  Highly accretive transaction  Improves capital efficiency and growth trajectory of midstream business

  12. Slide 12: Asset Overview

    HEAVY OIL ROCKIES OIL Oil Assets Liquids‐Rich Gas Assets ANADARKO BASIN Asset Overview PERMIAN BASIN BARNETT SHALE Premier North American Portfolio EAGLE FORD 12

  13. Slide 13: Eagle Ford

    Eagle Ford Overview  Top‐tier acreage position — 82,000 net acres focused in DeWitt Co. — Q4 net production: 98 MBOED Gonzales Lavaca  Highest returning asset in portfolio — Delivering industry‐leading well results — ≈1,000 undrilled locations in inventory Karnes — 2014 cash margin >$50 per BOE De

  14. Slide 14: Eagle Ford: Prolific Production Results

    Eagle Ford Prolific Production Results  Production doubled since March 2014 acquisition 98  Q4 2014 production increased 26% over Q3  Light oil >60% of production mix 49 Eagle Ford Production Growth 100% MBOED Increase March Q2 Q3 Q4 14

  15. Slide 15: Eagle Ford: Prolific Development Results

    Eagle Ford Prolific Development Results Revised Eagle Ford Type Well  Prolific Q4 results in DeWitt County 30‐Day IP Rate, BOED 1,650 — 62 wells: 30‐day IP avg. 2,100 BOED 1,300 — Results >50% above type curve — IP’s for top 5 wells exceeded 3,000 BOED >25% Increase  Raising type curve expectation

  16. Slide 16: Permian Basin

    Permian Basin Overview  Industry leader in basin Permian Production Growth 2014 vs 2013 (MBOED) — 1.2 million net surface acres with stacked pay — Q4 net production: 98 MBOED — Production growth 23% higher in 2014 — Liquids 77% of production mix  Deep inventory of low‐risk projects — >5,000 locati

  17. Slide 17: Permian Basin: Activity Focused in Delaware Basin

    Permian Basin Activity Focused in Delaware Basin  Significant oil resource opportunity Lea Bone Spring  Activity focused on Bone Spring play Eddy 285,000 net acres Delaware Sands 80,000 net acres  Delivering prolific production growth Leonard Shale 60,000 net acres Wolfcamp >100,000 net acres Del

  18. Slide 18: Delaware Basin: New Completion Design Enhances Results

    Delaware Basin New Completion Design Enhances Results 30‐Day IP Rates  Well performance exceeding expectations BOED 940 — Results highlighted by 13 wells in Q4 575 — Targeting 2nd Bone Spring interval in NM — Applied ≈2x more sand than historic design >60% — Initial 30‐day rates improved by >60% In

  19. Slide 19: Delaware Basin: Significant & Growing Resource Opportunity

    Delaware Basin Significant & Growing Resource Opportunity  Identified >5,000 risked, undrilled locations — Conservatively assumes 4 to 5 wells per risked, drillable section — ≈70% of inventory resides in the Bone Spring formation  Downspacing pilots underway — Testing 8 wells per section in lower

  20. Slide 20: Heavy Oil

    Heavy Oil Overview  Located in best part of oil sands 6 Miles — Low geologic risk Jackfish 1 T76 Jackfish 2 — Thick and continuous reservoir — Industry leading operating results Jackfish 3 T75 — Massive risked resource: 1.4 BBO Pike Project Area T74  Features of each Jackfish project: Access Pipel

  21. Slide 21: Jackfish Heavy Oil Developments

    Jackfish Heavy Oil Developments Delivering Visible Oil Growth Jackfish 1 Plant Utilization  Jackfish 1 delivering top‐tier results 90 Day Moving Avg. 110% % of Designed Capacity Utilized — Q4 gross production: 37 MBOD 100% — Exceeding facility nameplate capacity 90% — Steam‐to‐oil ratio declines to

  22. Slide 22: Anadarko Basin

    Anadarko Basin Cana‐Woodford Overview  Excellent Q4 results in Cana‐Woodford Blaine — Q4 net production: 76 MBOED Kingfisher — Production increased 35% YoY Mullen 1H Emma 1H — 1st operated STACK well brought online 24‐Hr IP: 1,500 BOED 10,000’ Lateral Q1 Completion  High‐rate development wells in

  23. Slide 23: Why Own Devon?

    Why Own Devon?  A leading North American E&P  Building operational momentum  Disciplined capital allocation  Oil driving production growth  Financial strength and flexibility  Significant midstream business 23

  24. Slide 24: Thank you.

    Thank you.

  25. Slide 25: Appendix

    Appendix

  26. Slide 26: Permian Basin

    Permian Basin Overview  Industry leader in basin Bone Spring, Delaware, Leonard & Wolfcamp — 1.2 million net surface acres with stacked pay Gaines Dawson Borden Wolfcamp — Q4 net production: 98 MBOED Eddy Lea Andrews Martin Howard Mitchell — Production growth 23% higher in 2014 — Liquids 77% of pro

  27. Slide 27: Barnett Shale

    Barnett Shale Liquids‐Rich Gas Development  Significant gas optionality — Net acres: 623,000 Wise Denton — Best position in play — Q4 net production: 201 MBOED — Liquids 27% of production mix Dry Gas Liquids‐Rich  Generated free cash flow of $1 billion Parker Tarrant in 2014 Ft. Worth  2015 Outlo

  28. Slide 28: Rockies Oil

    Rockies Oil Powder River Basin  Emerging light oil opportunity — Net acres: 150,000 — Stacked pay potential Campbell — 1,000 risked locations in inventory — Q4 net production: 19 MBOED Parkman  Notable Q4 development activity Focus Area — 4 wells: 30‐day IP avg. 800 BOED Johnson — Light oil 90% of

  29. Slide 29: Upper Eagle Ford Potential

    Upper Eagle Ford Potential DeWitt and Lavaca Counties  Pay thickest in DeWitt County  First 2 operated wells online Medina 2H Upper Eagle Ford Marl 30‐Day IP: 850 BOED Lavaca  Encouraging early results Gonzales Nancy 1H Upper Eagle Ford Marl 30‐Day IP: 800 BOED  2015 Outlook — Bring 4 wells onli

  30. Slide 30: Potential Drop Down Assets

    Potential Drop Down Assets Access & Victoria Express Pipelines Victoria Express Pipeline Access Pipeline JACKFISH & PIKE Colorado Gonzales Lavaca Wharton 16” Diluent Line (Edmonton to Jackfish) 24” Diluent Line DeWitt (Sturgeon to Jackfish) Jackson 42” Blend Line Karnes Matagorda Sturgeon (Jackfish

  31. Slide 31: Key Modeling Statistics

    Key Modeling Statistics Eagle Ford (DeWitt County) Bone Spring (Delaware Basin) Working interest / royalty: 48% / 22% Working interest / royalty: 67% / 21% 30‐day IP rate: 1,650 BOED 30‐day IP rate: 750+ BOED EUR: 900+ MBOE EUR: 450+ MBOE Oil / NGLs as % of production: 60% / 20% Oil / NGLs as % of p

  32. Slide 32: Key Modeling Statistics

    Key Modeling Statistics Cana‐Woodford Shale Rockies: Powder River Basin (Parkman) Working interest / royalty: 51% / 21% Working interest / royalty: 40% / 18% 30‐day IP rate: 1,200 BOED 30‐day IP rate: 525 BOED EUR: 1.7 MMBOE EUR: 300 MBOE Oil / NGLs as % of production: 5% / 40% Oil as % of productio

  33. Slide 33: 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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