Slide 1: Q4 2022 Earnings Presentation
Q4 2022 Earnings Presentation February 14, 2023 NYSE: DVN devonenergy.com
Slide 2: Key Takeaways From Our Presentation
Key Takeaways From Our Presentation #1 FREE CASH FLOW REACHES RECORD $6.0 BILLION IN 2022 Represents a 106% increase compared to 2021 #2 RAISING FIXED DIVIDEND BY 11% IN 2023 Total dividend of $0.89 per share announced with Q4 results #3 OIL PRODUCTION SETS NEW ALL-TIME HIGH Q4 production increases
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. 4) REINVES
Slide 4: Portfolio Built to Deliver Sustainable Performance
Portfolio Built to Deliver Sustainable Performance PREMIER MULTI-BASIN PORTFOLIO WILLISTON BASIN 57 MBOED Acreage resides in top U.S. resource plays Underpinned by world-class Delaware Basin position POWDER RIVER BASIN $ DIVERSIFIED COMMODITY MIX 22 MBOED Balanced exposure to oil & natural gas
Slide 5: Strategy Creating Significant Value for Shareholders
Strategy Creating Significant Value for Shareholders Delivering on our disciplined financial model Cumulative uses of cash since merger in 2020 ($ in billions) $8.6 Acquisitions (Funded with cash) Highest total return in large-cap peer group since 2020 $7.7 Share Repurchases Top-ranked equity pe
Slide 6: 2022 – Another Year of Outstanding Achievement
2022 – Another Year of Outstanding Achievement DELIVERING PER-SHARE GROWTH CAPTURING HIGHER MARGINS (PER UNIT FIELD-LEVEL MARGINS) DELIVERING ON OUR 10% +9% $50.65 PER-SHARE GROWTH COMMITMENT 8% $39.77 (VS. 2021) $30.48 6% TO SHAREHOLDERS ~300% 4% BUYBACKS $12.89 ACQUISITIONS 2% ORGANIC IMPROVEMENT
Slide 7: Delivering an Advantaged Cash-Return Yield
Delivering an Advantaged Cash-Return Yield ~10% TOTAL YIELD 10% OUR ADVANTAGED YIELD SHARE ~6 TIMES HIGHER than the S&P 500 yield BUYBACK PROGRAM 2022 Annualized Cash-Return Yield 8% SHARE BUYBACK enhances cash returns (pg. 9) DIVIDEND ORGANICALLY FUNDED within free cash flow 6% YIELD ~8% 4% 2
Slide 8: A History of Returning Cash to Shareholders
A History of Returning Cash to Shareholders Delivering dividend growth through the cycle Dividends paid out per share $5.17 30CONSECUTIVE YEARS OF DIVIDEND PAYMENTS $1.97 VARIABLE DIVIDEND FIXED DIVIDEND +11% $0.68 RAISING FIXED DIVIDEND $0.30 $0.35 (EFFECTIVE WITH Q1 2023 PAYOUT) 2018 2019 2020 202
Slide 9: Opportunistically Repurchasing Our Shares
Opportunistically Repurchasing Our Shares $2.0 BILLION BUYBACK PROGRAM UNDERWAY LEADING THE INDUSTRY WITH DISCIPLINE & CASH RETURNS Upsized authorization twice in 2022 Repurchased $1.3 billion of shares to date Retired at average price of $51 per share Program represents ~5% of outstanding shares |
Slide 10: Improving Investment-Grade Financial Position
Improving Investment-Grade Financial Position TOTAL LIQUIDITY CASH BALANCE LOW LEVERAGE $4.5B $1.5B 0.5x INCLUDES CASH CASH POSITION NET DEBT-TO-EBITDAX & CREDIT FACILITY AS OF 12/31/2022 AS OF 12/31/2022 CREDIT RATINGS DEBT REDUCTION UPCOMING MATURITIES BBB/Baa2 >$1.2B ~ 60% INVESTMENT-GRADE AT SIN
Slide 11: 2023 Outlook – No Change to Our Disciplined Plan
2023 Outlook – No Change to Our Disciplined Plan Financial & operating outlook for 2023 Providing an opportunity vs. broader market 2023e outlook 2023e free cash flow yield vs. broader market 8% PRODUCTION +9% ADVANTAGED YIELD (1) OPPORTUNITY FREE CASH FLOW PER SHARE GROWTH YIELD VS. 2022 UP TO 2x H
Slide 12: 2023 Outlook – Capital & Production Cadence
2023 Outlook – Capital & Production Cadence UPSTREAM CAPITAL SPENDING WELLS ONLINE TOTAL PRODUCTION ($ IN MILLIONS) (OPERATED ONLY) (MBOED) $900-$940 105 wells 650-670 Volume 90 wells Impact $810-$850 635 1H 2023e 2H 2023e Q1 2023e Q2-Q4 2023e Q1 2023e Q2-Q4 2023e (QUARTERLY AVERAGE) (QUARTERLY AVER
Slide 13: Asset Operations Overview Update
AssetOperations Overview Update NYSE: DVN devonenergy.com
Slide 14: 2022 – Executing on Our Disciplined Plan
2022 – Executing on Our Disciplined Plan RECORD-SETTING OIL PRODUCTION CONSISTENT DELAWARE WELL PRODUCTIVITY 316,000 (WOLFCAMP CUME. 180-DAY AVG., MBO) 200 5-YEAR DELIVERING TOP-TIER 300 BARRELS PER DAY AVG. (Q4 2022) 150 CAPITAL EFFICIENCY (PG. 15) 200 100 ANADARKO EAGLE FORD 100 50 WILLISTON & PRB
Slide 15: 2022 – Achieving Top-Tier Capital Efficiency
2022 – Achieving Top-Tier Capital Efficiency $50 SUPERIOR CAPITAL EFFICIENCY $40 +35% IN 2022 VS. INDUSTRY PEERS 2022 Capital Spend per BOE (20:1 gas ratio & 3:1 NGL ratio) $30 INDUSTRY AVERAGE $20 $10 TOP 30 U.S. PRODUCERS Note: Peer data sourced from FactSet. | Q4 2022 Earnings Presentation 15
Slide 16: Delaware Basin – Our Franchise Asset
Delaware Basin – Our Franchise Asset LEADING DELAWARE 2023 CAPITAL OBJECTIVES ACREAGE POSITION — 16-rig program focused on low-risk developments TOP-FUNDED AREA: SOUTHEAST NEW MEXICO 400K NET ACRES — Wolfcamp-weighted capital program (~60% of program) 2023 Program Overview Running 11 operated rigs
Slide 17: 2023 Outlook – Other Key Assets
2023 Outlook – Other Key Assets 3-rig program designed to sustain production & harvest cash flow EAGLE 70% of capital focused on recently acquired acreage in Karnes County 2023 UPSTREAM FORD Ability to redevelop units provides significant resource upside CAPITAL BY ASSET Capital efficiency e
Slide 18: 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 19: Aggressively Reducing Emissions
Aggressively Reducing Emissions GHG EMISSIONS SCOPE 1 & 2 2022 Sustainability Report NOW AVAILABLE NET ZERO GHG EMISSIONS FOR SCOPE 1 & 2 BY 2050 ENVIRONMENTAL TARGETS For more information, please refer GHG EMISSIONS INTENSITY SCOPE 1 & 2 to the Sustainability portion of Devon’s website 50% REDUCTIO
Slide 20: 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