Slide 1: Q2 2023 Earnings Presentation
Q2 2023 Earnings Presentation August 1, 2023 NYSE: DVN devonenergy.com
Slide 2: Key Takeaways From Our Presentation
Key Takeaways From Our Presentation OIL PRODUCTION SETS NEW ALL-TIME HIGH #1 Q2 volumes exceeded guidance reaching 323,000 barrels per day WOLFCAMP B SUCCESS IN DELAWARE BASIN #2 Appraisal success derisks ~100 locations in Cotton Draw area CASH RETURNS REACHED $690 MILLION IN Q2 #3 Balanced between
Slide 3: Our Disciplined Business Model
Our Disciplined Business Model DISCIPLINED MODERATED OIL GROWTH targets: up to 5% annually GROWTH STRATEGY Focused on delivering per-share financial growth STRATEGY ANCHORED BY HIGH-QUALITY CONSISTENT Returns-driven strategy prioritizes FREE CASH FLOW generation ASSET PORTFOLIO (PG. 5) REINVES
Slide 4: Strategy Creating Significant Value for Shareholders
Strategy Creating Significant Value for Shareholders Delivering on our promise to shareholders Cumulative uses of cash since WPX merger ($ in billions) ~$12BILLION SINCE LATE 2020 (2-TIMES MERGER VALUATION) Industry-first cash-return framework unveiled in 2020 Provides the flexibility to create
Slide 5: Portfolio Built to Deliver Sustainable Performance
Portfolio Built to Deliver Sustainable Performance PREMIER MULTI-BASIN PORTFOLIO WILLISTON BASIN 56 MBOED Acreage resides in top U.S. resource plays Underpinned by world-class Delaware Basin position POWDER RIVER BASIN $ DIVERSIFIED COMMODITY MIX 19 MBOED Balanced exposure to oil & natural gas
Slide 6: A Track Record of Operational Excellence
A Track Record of Operational Excellence DELIVERING TOP-TIER WELL PRODUCTIVITY DRILLING EFFICIENCIES DRILLED FEET PER DAY (ALL FORMATIONS) 25 1,209 SUPERIOR WELL >30% 1,107 24% 1,061 RESULTS (VS. PEER AVG.) 12-MONTH CUMULATIVE OIL VOLUMES 977 20 IMPROVEMENT PEER AVERAGE 2020 2021 2022 2023 YTD (MBO
Slide 7: Q2 2023 – Another Quarter of Solid Execution
Q2 2023 – Another Quarter of Solid Execution OIL VOLUMES BUILDING OPERATIONAL & FINANCIAL HIGHLIGHTS MOMENTUM INTO Q3 Oil Production (MBOD) 322-330 Oil production growth: +8% year over year 323 RECORD-SETTING oil production (+1% vs. guidance) 320 316 12th consecutive quarter of free cash flow genera
Slide 8: Delaware Basin – Our Franchise Asset
Delaware Basin – Our Franchise Asset LEADING DELAWARE ~ 65% WORLD-CLASS ACREAGE POSITION Lea Q2 2023 Projects (76 Wells Online) 400K OF DEVON OIL OPPORTUNITY NET ACRES Q2 2023 PRODUCTION PRODUCTION DELAWARE OTHER ASSETS WOLFCAMP B SUCCESS Eddy (Mule Appraisal: 11-well project) MULTI-DECADE Avg. IP
Slide 9: Delaware Basin – Continuously Improving Our Business
Delaware Basin – Continuously Improving Our Business RESOURCE QUALITY CAPITAL EFFICIENCY MARKETING & MIDSTREAM Q2 wells that attained peak rates Wolfcamp drilling productivity Pin Oak investment provides oil delivered avg. IP30: ~3,000 BOED improved ~10% vs. 2022 average export capabilities (u
Slide 10: Eagle Ford – Meaningful Runway of Opportunities
Eagle Ford – Meaningful Runway of Opportunities HIGHLY-ECONOMIC REFRACS (30 Refracs Executed To Date) Capital activity during the quarter drove 9% Reserves increased >50% Several hundred candidates production growth (vs. Q1 2023) 2023 activity: 10 refracs Wilson Gonzales Program focused on opt
Slide 11: Strong Results Across Top U.S. Resource Plays
Strong Results Across Top U.S. Resource Plays >5% Base production performance drives oil growth vs. Q1 WILLISTON Completion & production modifications enhancing well productivity BASIN Multi-year infill & refrac inventory to sustain production Scalable oil resource with 300,000 net acres in
Slide 12: On Track to Achieve 2023 Capital Objectives
On Track to Achieve 2023 Capital Objectives Financial & operating outlook for 2023 Devon’s attractive free cash flow yield (1) 2023e outlook 2023e free cash flow yield sensitivities based on midpoint guidance 10% ~ 9% (1) PRODUCTION PER FREE CASH FLOW $4.0 SHARE GROWTH 9% YIELD 2023 vs. 2022 10% FRE
Slide 13: Preliminary Thoughts on 2024 Outlook
Preliminary Thoughts on 2024 Outlook Focused on delivering PER-SHARE growth LEADING THE INDUSTRY WITH DISCIPLINE & CONSISTENT & STEADY activity optimizes returns CASH RETURNS Cost deflation to improve CAPITAL EFFICIENCY COST SAVINGS to accrue to free cash flow | Q2 2023 Earnings Presentation 13
Slide 14: Attractive Dividend Payouts Through the Cycle
Attractive Dividend Payouts Through the Cycle Dividend framework provides torque to higher oil prices Dividend yield sensitivities based on 1H 2023 results (annualized 1H dividend declared) OUR CASH-RETURN STRATEGY 12% Raised fixed quarterly dividend by 11% to $0.20 per share in 2023 10.2% 9% 8.1%
Slide 15: Opportunistically Repurchasing Our Shares
Opportunistically Repurchasing Our Shares Repurchase program accelerates per-share growth Outstanding shares (MM) 677 (1) $3.0 BILLION BUYBACK PROGRAM Repurchased $2.1 billion of shares to date Upsized authorization 3-times since inception Program represents ~9% of outstanding shares 6% 641 SH
Slide 16: Improving Investment-Grade Financial Position
Improving Investment-Grade Financial Position TOTAL LIQUIDITY CASH BALANCE LOW LEVERAGE $3.5B $0.5B 0.7x INCLUDES CASH CASH POSITION NET DEBT-TO-EBITDAX & CREDIT FACILITY AS OF 6/30/2023 AS OF 6/30/2023 CREDIT RATINGS DEBT REDUCTION UPCOMING MATURITIES BBB/Baa2 ~$1.5B ~ 60% (1) INVESTMENT-GRADE AT S
Slide 17: Inventory Underpins Long-Term Sustainability
Inventory Underpins Long-Term Sustainability High-quality & multi-decade inventory >20YEAR Gross operated inventory locations (Avg. lateral length is ~2 miles) UNRISKED INVENTORY (WITH APPRAISAL & TIGHTER SPACING) ~10,000 locations ~12YEAR RISKED INVENTORY (AT CURRENT ACTIVITY PACE) >4,500 locations
Slide 18: Committed to Environmental Excellence
Committed to Environmental Excellence 2023 SUSTAINABILITY REPORT HIGHLIGHTS ENVIRONMENTAL TARGETS Flared volume intensity was reduced by 77% (1) GHG EMISSIONS SCOPE 1 & 2 Scope 1 & 2 GHG emissions intensity declined by 19% (1) NET ZERO GHG EMISSIONS FOR SCOPE 1 & 2 BY 2050 GHG EMISSIONS INTENSITY SC
Slide 19: Investor Contacts & Notices
Investor Contacts & Notices Investor Relations Contacts risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties; midstream capacity constraints and potential interruptions in production, including from limits to the build out of