Slide 1: Investor Presentation
Investor Presentation December 2019 NYSE: DVN devonenergy.com
Slide 2: Devon's Competitive Advantage
Devon’s Competitive Advantage World-class U.S. oil portfolio — Unrivaled acreage position in top basins New Devon Overview — Multi-decade growth inventory Production: 325 MBOED (Q3 2019) — Top-tier well productivity across all assets Revenue: 74% oil Oil growth rate: 20%-21% in 2019 Disciplined
Slide 3: Unleashing Potential of World-Class Oil Assets
Unleashing Potential of World-Class Oil Assets U.S. well productivity showcases asset quality High-return inventory diversified across top U.S. basins Source: IHS/Devon. All wells drilled from 2015 through 2019 YTD. Includes operators with more than 150 wells. Gross operated inventory locations (non
Slide 4: Executing on Our Strategic Objectives
Executing on Our Strategic Objectives Efficiencies delivering improved capital outlook U.S. oil production exceeds guidance New Devon 2019e E&P capital New Devon (MBOD) 148 U.S. OIL PRODUCTION 4,000 (Q3 Guide: 141-147) DELAWARE POWDER RIVER 50% E&P CAPITAL 20% 124 $1.83-$1.87 BARRELS PER DAY BILLION
Slide 5: Operational Success Driving Improved 2019 Outlook
Operational Success Driving Improved 2019 Outlook vs. Original Updated Guidance Key Messages Guidance RAISING OIL GROWTH outlook for 3rd time in 2019 U.S. oil growth 20% – 21% 550 (1) Basis Point (vs. 2018) Improvement Delaware, Eagle Ford and PRB to drive strong Q4 growth Scalable growth driv
Slide 6: Framework for the 2020 Planning Cycle
Framework for the 2020 Planning Cycle CAPITAL ALLOCATION PRIORITIES GREATER THAN Maintain capital DISCIPLINE 1 Maintain base production $50 Free cash flow accelerates Balance GROWTH & FREE CASH FLOW 2 Fund dividends $50 Fund dividends (Program funded @ $48 WTI) Improve financial strength 3
Slide 7: Preliminary 2020 Outlook
Preliminary 2020 Outlook $ OPTIMIZED FOR RETURNS OIL GROWTH SHARE REDUCTION E & P C A P I TA L P R O G R A M NEW DEVON ASSETS SHARE COUNT VS. 2019 $1.7-$1.9 Billion 7%-9% Growth 6%-8% Reduction D E S I G N E D F O R U LT R A - LO W D R I V E N BY LO W - R I S K ENHANCING PER-SHARE BREAKEVEN PRICING
Slide 8: Positioned for Attractive Free Cash Flow in 2020
Positioned for Attractive Free Cash Flow in 2020 FY2020 OUTLOOK $750 OIL GROWTH: 7%-9% $675 MILLION 10% BREAKEVEN: $48 WTI (Assumes $2.50 Henry Hub) 8% 2020e Free Cash Flow ($MM) 2020e Free Cash Flow Yield EXCLUDES BARNETT SHALE $400 $500 6% (before dividends) MILLION 4% $250 $125 MILLION 2% $- 0% $
Slide 9: 2019 & 2020 Outlook = Improved Capital Efficiency
2019 & 2020 Outlook = Improved Capital Efficiency Efficiencies driving lower capital requirements Oil production remains on track New Devon 2019-2020 cumulative upstream capital ($B) New Devon 2019-2020 cumulative oil production (MMBO) $4.2 120 Original Plan Current Plan Original Plan (2/19/19 Guide
Slide 10: Committed to Return of Capital to Shareholders
Committed to Return of Capital to Shareholders Dedicated to disciplined allocation of capital Repurchase program accelerates per-share growth Outstanding basic shares (MM) $11.0 Billion 527 521 ~70% 491 ~30% ALLOCATED TO SHARE COUNT SHAREHOLDER 459 REDUCTION RETURNS & DEBT 434 REDUCTION 415 Dividend
Slide 11: Building a Fortress Balance Sheet
Building a Fortress Balance Sheet Significant liquidity with no near-term debt maturities Aggressive debt reduction improves financial strength Debt maturities ($MM) Net debt(1) ($B) $4,700 $10.7 SIGNIFICANT FINANCIAL FLEXIBILITY Cash NO DEBT MATURITIES >75% UNTIL 2025 $2.6 Credit REDUCTION $1,250 F
Slide 12: Divestiture Program Accelerates Value Creation
Divestiture Program Accelerates Value Creation Resource depth allows for portfolio high-grading SALES PRICE: ACCRETIVE MULTIPLE: CAD $3.8 BILLION ~10x CASH FLOW CANADIAN Cotton Draw midstream partnership formed HEAVY OIL CLOSED: Q2 2019 — Contributing gathering & compression assets — Devon to re
Slide 13: Delaware Basin – Capital-Efficient Growth Engine
Delaware Basin – Capital-Efficient Growth Engine DELAWARE BASIN DEVELOPMENT ACTIVITY World-class oil resource opportunity Key 2019 Projects Eddy Lea — STACKED PAY position across >250,000 net acres Upcoming Projects THISTLE/GAUCHO Core Development Area — Acreage resides in economic core of play Ca
Slide 14: Delaware Basin – Step-Change in Operating Results
Delaware Basin – Step-Change in Operating Results Development focus driving best-in-class wells Drilling and completion efficiencies accelerate 90-day oil IPs, BOD vs. improvement in performance (2019 vs. 2018) Drilled and completed feet per day (Wolfcamp formation) 70% 1,360 DVN 65% 1,180 50% COMPL
Slide 15: Todd Area – A Significant Long-Term Growth Platform
Todd Area – A Significant Long-Term Growth Platform Delivering highly-economic results across MULTIPLE formations TODD DEVELOPMENT AREA — Charged reservoir with stacked-pay potential Tomb Raider (4,700’ lateral) Tomb Raider — Large, contiguous units with high working interest (>90%) IP30: 1,500 BO
Slide 16: Powder River Basin – Niobrara Success Continues
Powder River Basin – Niobrara Success Continues NIOBRARA POWDER RIVER BASIN NIOBRARA ACTIVITY TYPE LOG Top-tier emerging oil resource play Niobrara Appraisal Wells — Stacked pay position in oil fairway (>300k acres) Niobrara Spacing Tests Upcoming Niobrara Activity — Activity targeting multiple in
Slide 17: Free Cash Flow Generating Assets
Free Cash Flow Generating Assets EAGLE FORD ACTIVITY STACK DEVELOPMENT ACTIVITY $ 319 FREE CASH FLOW ($MM) FREE CASH FLOW ($MM) $ 313 Gonzales Blaine Kingfisher 2019 Meramec Focus Area LAST 12 MONTHS LAST 12 MONTHS Morning Thunder Lower Eagle Ford Wells (5 wells) (4 wells/DSU) Avg. IP30: 1,900 BOED/
Slide 18: Highly-Regarded ESG Performance
Highly-Regarded ESG Performance Devon recently named to the: For additional information see our 2019 Sustainability Report Devon is rated in the TOP-QUARTILE of its peers Key Messages (Highest rating achieved in governance) Note: Sustainalytics scores and rankings updated 10/21/2019. Peer group comp
Slide 19: Why Own Devon
Why Own Devon World-class U.S. oil portfolio — Unrivaled acreage position in top basins New Devon Overview — Multi-decade growth inventory Production: 325 MBOED (Q3 2019) — Top-tier well productivity across all assets Revenue: 74% oil Oil growth rate: 20%-21% in 2019 Disciplined returns-driven s
Slide 20: Investor Contacts & Notices
Investor Contacts & Notices reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved Investor Relations Contacts in oil and gas operations; regulatory restrictions, compliance costs and other risks relating to gover
Slide 21: Asset-Level Modeling Stats
Asset-Level Modeling Stats Q3 2019 - ASSET DETAIL NEW DEVON DELAWARE STACK POWDER RIVER EAGLE FORD(1) OTHER PRODUCTION Oil (MBbl/d) 148 70 32 18 22 6 NGL (MBbl/d) 79 28 37 2 11 1 Gas (MMcf/d) 588 167 317 28 75 1 Total (MBoe/d) 325 127 121 25 45 7 ASSET MARGIN (per Boe) Realized price $30.32 $33.48 $
Slide 22: ESG Modeling Stats
ESG Modeling Stats ENVIRONMENTAL METRICS 2016 2017 2018 HEALTH & SAFETY METRICS 2016 2017 2018 Direct GHG Emissions (million tonnes CO2e)(1) 5.20 5.37 5.65 Safety Performance - Total Recordable Incident Rate (TRIR) 0.41 0.60 0.50 Direct and Indirect GHG Emissions (million tonnes CO e)(1) 2 5.77 5.94