Devon Energy Corporation · NYSE:DVN

Devon Energy — Q1 2020 Earnings Presentation

22 slides from Devon Energy's earnings presentation, May 6, 2020

1. Slide 1: Q1 2020 Earnings Presentation

   Q1 2020 Earnings Presentation May 5, 2020 NYSE: DVN devonenergy.com

2. Slide 2: Defining Devon

   Defining Devon  Premier multi-basin oil portfolio — Delivering INDUSTRY-LEADING well productivity KEY DEVON ATTRIBUTES — Achieving capital efficiencies across portfolio (pg. 8) OIL WEIGHTED: 82% of revenue (Q1 2020) — Deep inventory of repeatable opportunities LOW LEVERAGE: 1.1x net debt-to-EBITDAX

3. Slide 3: Significant Financial Strength & Liquidity

   Significant Financial Strength & Liquidity Significant liquidity with no near-term debt maturities Balance sheet strength provides competitive advantage Outstanding debt maturities ($MM) Cumulative % of debt maturing as a % of total debt (2020-2023) $4,700 70% SIGNIFICANT ADVANTAGED FINANCIAL NO DEB

4. Slide 4: Hedging Program Protects Cash Flow

   Hedging Program Protects Cash Flow ATTRACTIVE HEDGE POSITION PROTECTS CASH FLOW  Disciplined hedging strategy protects cash flow — Combination of swaps & costless collars Q2-Q4 2020 1H 2021 (% of oil volumes hedged) (% of oil volumes hedged) — NO PRICING DOWNSIDE from 3-way collars — Mark-to-market

5. Slide 5: Strategic Asset Sales Enhance Financial Strength

   Strategic Asset Sales Enhance Financial Strength CANADIAN HEAVY OIL  Strategic transactions ENHANCE competitive position (COMPLETED EXIT FROM CANADA) Proceeds: CAD $3.8 billion Closed: Q2 2019  Barnett Shale sold for up to $830 million of proceeds — Received an INCREASED DEPOSIT of $170 million —

6. Slide 6: Our Approach to the Current Environment

   Our Approach to the Current Environment TOP PRIORITIES IN CURRENT MARKET  Preserve liquidity and financial flexibility — Revenue PROTECTED by hedging program (pg. 4) 1 1 Protect financial strength — Positioned to generate net cash inflows (pg. 12) — Continue to fund the dividend 2  Dynamically ada

7. Slide 7: Tailoring Capital Activity to Current Environment

   Tailoring Capital Activity to Current Environment Recalibrating capital activity to protect liquidity REVISED 2020 CAPITAL PLAN 2020e E&P capital ($B) E&P CAPITAL NEW WELLS ONLINE ESTIMATED DUCs $1.8 Billion ($MM) (Operated) (At YE 2020) 45% Delaware Basin $750 105-115 50-60 2020 CAPITAL Powder Rive

8. Slide 8: Efficiencies Drive Maintenance Capital Improvements

   Efficiencies Drive Maintenance Capital Improvements  Targeting a >20% IMPROVEMENT in maintenance capital requirements by 2021 KEY  Maintenance capital target driven by Delaware Basin efficiencies & supply chain pricing TAKEAWAYS  Year-end exit rates and DUC backlog position Devon for RESILIENT PR

9. Slide 9: Managing Production to Market Conditions

   Managing Production to Market Conditions  Adjusting activity in Q2 due to market conditions — Reducing to 8 operated rigs by mid-year DYNAMICALLY — Plan to exit Q2 with 65% less frac crews (vs. Q1 avg.) MANAGING — RESTRICTING flowback on new well activity PRODUCTION  Variable cost analysis drives

10. Slide 10: Marketing Agreements Provide Flow Assurance

    Marketing Agreements Provide Flow Assurance  Plan to flow barrels if pricing is above VARIABLE COSTS KEY  Arrangements provide strong flow assurance KEY MARKETING TERMS & AGREEMENTS MESSAGES  Majority of oil sold backstopped by “firm” contracts 95% of oil sold on firm contracts DELAWARE   NO EX

11. Slide 11: Cost Structure Continues to Improve

    Cost Structure Continues to Improve KEY METRICS Q1 2020 RESULTS Reducing 2020 cash cost expectations Cash costs ($ in billions) LEASE OPERATING & GP&T EXPENSES $8.07 -9% VS Q1 19 $1.90 2020 SAVINGS $250 TARGET MILLION PRODUCTION & 7.67% $1.65 PROPERTY TAXES -3% BELOW GUIDE GENERAL & $102 MM ADMINSTR

12. Slide 12: Positioned to Generate Net Cash Inflows in 2020

    Positioned to Generate Net Cash Inflows in 2020 2020 operating plan positioned to generate net cash inflows at ultra-low pricing ($ in billions) $3.2 B $1.0 B GENERATING  Cash flow enhanced by Barnett divestiture (pg. 5) DIVEST (2) PROCEEDS EXCESS CASH  Efficiencies and activity cuts drive capital

13. Slide 13: ESG Performance Remains a Top Priority

    ESG Performance Remains a Top Priority ENVIRONMENT SOCIAL & SAFETY GOVERANCE  On track to meet our methane intensity  Provided STEM resources across our  ESG metrics incorporated in target of 0.28% or lower by 2025 communities, impacting 17,000 students COMPENSATION STRUCTURE  U.S. recycled wate

14. Slide 14: Q1 2020 – Operating Highlights

    Q1 2020 – Operating Highlights OIL VOLUMES EXCEED GUIDANCE (Q1 2020 +3 MBOD vs. midpoint guidance) CAPITAL SPENDING BELOW EXPECTATIONS (12% below midpoint guidance) WOLFCAMP DRIVES DELAWARE RESULTS (Q1 activity highlighted by strong Tomb Raider wells) SUCCESSFUL EAGLE FORD SPACING TEST (Redevelopmen

15. Slide 15: Q1 2020 – Asset-Level Modeling Stats

    Q1 2020 – Asset-Level Modeling Stats Q1 2020 - ASSET DETAIL DEVON DELAWARE POWDER RIVER EAGLE FORD ANADARKO OTHER PRODUCTION Oil (MBbl/d) 163 84 21 26 24 8 NGL (MBbl/d) 80 37 3 9 30 1 Gas (MMcf/d) 634 244 29 86 272 3 Total (MBoe/d) 348 162 29 50 98 9 ASSET MARGIN (per Boe) Realized price $25.43 $26.

16. Slide 16: Delaware Basin – Q1 2020 Operating Results

    Delaware Basin – Q1 2020 Operating Results  Q1 production averaged 162 MBOED WOLFCAMP PROGRAM HEADLINES Q1 RESULTS THISTLE/GAUCHO — 32 new wells brought online 2ND BONE SPRING SUCCESSFUL INFILL — Average IP30: 2,500 BOED SWEET SPOT IN TODD WOLFCAMP DEVELOPMENT Maldives (15,100’ laterals) Tomb Raide

17. Slide 17: Delaware Basin – Efficiencies Continue to Accelerate

    Delaware Basin – Efficiencies Continue to Accelerate Delaware Basin capital efficiencies accelerate Wolfcamp on track to achieve significant cost savings Drilled and completed feet per day (Wolfcamp formation) Drilling and completion costs ($MM) (2-mile Wolfcamp well) 42% >35% 1,500 $11.3 D&C $11.0

18. Slide 18: Delaware Basin – Revised 2020 Outlook

    Delaware Basin – Revised 2020 Outlook Diversified capital program across five core areas  Revised 2020 capital spending outlook 2020e Delaware Basin revised capital activity — Program designed to maintain OPERATIONAL CONTINUITY — Activity remains diversified across 5 core areas TODD POTATO BASIN 24

19. Slide 19: Powder River Basin – Advancing Niobrara Appraisal

    Powder River Basin – Advancing Niobrara Appraisal  Q1 production averaged 29 MBOED (74% oil) POWDER RIVER BASIN ACTIVITY — Delivered HIGHEST MARGINS in portfolio (+30% vs. DVN avg.) REVISED CAPITAL — 14 new wells online in quarter (Avg. IP30: 1,200 BOED) $150 MILLION IN 2020e 3-WELL NIOBRARA SPACIN

20. Slide 20: Eagle Ford – Expanding Resource Opportunity

    Eagle Ford – Expanding Resource Opportunity  Q1 production averaged 50 MBOED (53% oil) EAGLE FORD ACTIVITY — Net production increased 11% vs. prior quarter SUCCESSFUL EAGLE FORD — Capital investment: $70 million (as of 3/31/20) DEVELOPMENT PROJECT 2ND REDEVELOPMENT — Production costs DECLINE 16% (v

21. Slide 21: Anadarko Basin – Optimizing Base Production Results

    Anadarko Basin – Optimizing Base Production Results  Base production efforts improve decline profile ANADARKO BASIN ACTIVITY — Q1 net production: 98 MBOED (54% liquids) REDUCING CAPITAL INFILL DEVELOPMENT 95% (ACTIVITY NOT RELATED TO DOW) VERSUS 2019 — OUTPERFORMED PLAN 7% year-to-date ACTIVITY LEV

22. Slide 22: Investor Contacts & Notices

    Investor Contacts & Notices differ materially from the forward-looking statements in this presentation due to the COVID-19 pandemic and related impacts, including, by, among other Investor Relations Contacts things: contributing to a sustained or further deterioration in commodity prices; causing ta

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