Slide 1: Q3 2022 Earnings Presentation
Q3 2022 Earnings Presentation November 1, 2022 NYSE: DVN devonenergy.com
Slide 2: Key Takeaways From Our Presentation
Key Takeaways From Our Presentation #1 DIVIDEND PAYOUT INCREASED 61% YEAR OVER YEAR Total dividend of $1.35 per share announced with Q3 results #2 FREE CASH FLOW EXPANDED TO $1.5 BILLION On track to deliver record free cash flow generation in 2022 #3 DELAWARE BASIN DRIVES Q3 CAPITAL EFFICIENCY Opera
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 CONSISTENT Returns-driven strategy prioritizes FREE CASH FLOW generation HIGH-QUALITY REINVESTMENT RATES Optimizing
Slide 4: Portfolio Built to Deliver Sustainable Performance
Portfolio Built to Deliver Sustainable Performance PREMIER MULTI-BASIN PORTFOLIO WILLISTON BASIN 55 MBOED Acreage resides in top U.S. resource plays Underpinned by world-class Delaware Basin position POWDER RIVER BASIN 18 MBOED $ DIVERSIFIED COMMODITY MIX Balanced exposure to oil & natural gas
Slide 5: Optimizing the Value of Our Production
Optimizing the Value of Our Production Record oil realizations: 101% of WTI index in Q3 ACCESS TO >50% 35% PREMIUM INTERNATIONAL MIDLAND Multiple low-cost transportation options in each basin & GULF COAST OIL MARKETS <15% OTHER Pin Oak investment provides oil export capabilities (90 MBOD) Delaware g
Slide 6: Q3 2022 – Another Impressive Financial Performance
Q3 2022 – Another Impressive Financial Performance Our strategy is building momentum Key financial metrics Q3 2022 Change (vs. Q3’21) Free cash flow ($ in billions) (1) ~$6.3 Core earnings (per share) $2.18 102% GENERATING RECORD Operating cash flow ($MM) $2,104 32% FREE CASH FLOW Free cash flow ($M
Slide 7: Accretive Acquisitions Enhance Fourth-Quarter Outlook
Accretive Acquisitions Enhance Fourth-Quarter Outlook Financial & operating outlook for Q4 2022 Positioned for an attractive free cash flow yield in Q4 2022 Q4 2022e outlook Annualized free cash flow sensitivities based on Q4 2022 midpoint guidance 13% PRODUCTION 640-660 FREE CASH FLOW YIELD VOLUMES
Slide 8: Free Cash Flow Priorities
Free Cash Flow Priorities FIXED + VARIABLE DIVIDEND Q3 VARIABLE DIVIDEND CALCULATION #1 Fixed dividend is paid quarterly at $0.18 per share Variable dividend is up to 50% of excess free cash flow $1,649 MM – Adjusted Free Cash Flow (Non-GAAP) − $117 MM – Fixed Quarterly Dividend $1,532 MM – Exce
Slide 9: Delivering a Market-Leading Dividend Yield
Delivering a Market-Leading Dividend Yield Providing an opportunity vs. broader market Delivering dividend growth through the cycle Q3 2022 annualized dividend yield vs. broader market Dividends per share 7.1% >$5.00 ADVANTAGED YIELD 30-YEAR HISTORY OPPORTUNITY OF DIVIDEND PAYMENTS VARIABLE $1.97 VA
Slide 10: Opportunistically Repurchasing Our Shares
Opportunistically Repurchasing Our Shares Repurchase program accelerates per-share growth Outstanding shares (MM) 677 (1) $2.0 BILLION BUYBACK PROGRAM Repurchased $1.3 billion of shares to date Retired at average price of $50 per share Program represents ~5% of outstanding shares 4% 654 SHARE
Slide 11: Improving Our Financial Strength
Improving Our Financial Strength Achieved balance sheet leverage target INVESTMENT-GRADE FINANCIAL POSITION Net debt to EBITDAX (Trailing 12-months) Strong liquidity: $1.3 billion of cash (as of 9/30/22) 1.4x Reduced debt by >$1.2 billion since merger close NET DEBT-TO-EBITDAX TARGET: 1.0x C
Slide 12: Devon’s Unique Investment Proposition
Devon’s Unique Investment Proposition HIGH-QUALITY PORTFOLIO Underpinned by world-class Delaware Basin asset Margins & free cash flow expanding in 2022 MARKET-LEADING DIVIDEND MARKET-LEADING DIVIDEND Providing investors an annualized yield of 7% Dividend yield >4 times higher than the S&P 50
Slide 13: Asset Operations Overview Update
AssetOperations Overview Update NYSE: DVN devonenergy.com
Slide 14: Executing on our Delaware-Focused Operating Plan
Executing on our Delaware-Focused Operating Plan DELAWARE-FOCUSED PROGRAM DELIVERING HIGH-RETURN GROWTH >60% +11% 340-350 417 WORLD-CLASS POSITION OF TOTAL VOLUME GROWTH 400,000 NET ACRES ACTIVITY (MBOED) 374 OTHER ASSETS DELAWARE BASIN 2022e Total Wells Online 2021 2022 YTD CONTROLLING COSTS EXPAND
Slide 15: Delaware Basin – Operating Efficiencies Advance
Delaware Basin – Operating Efficiencies Advance Top result: 3-mile Wolfcamp B appraisal delivers 6,530 STRONG DEVELOPMENT RESULTS IN Q3 AVG. IP30 highest well productivity in Q3 (IP30: 6,530 BOED) BOED/WELL 4,000 3,760 Wolfcamp drilling productivity increased 13% 3,170 from the previous quarter (~1,
Slide 16: Strong Results Across Top U.S. Resource Plays
Strong Results Across Top U.S. Resource Plays 3.5 Capital efficiency enhanced by $100 million drilling carry with Dow ~$ ANADARKO Dow activity drives Q3 volumes 4% higher quarter over quarter BASIN Top result: 5-well Otto co-development success (avg. IP30: 2,700 BOED) RimRock acquisition dri
Slide 17: Bolt-On Acquisition Enhances Eagle Ford Position
Bolt-On Acquisition Enhances Eagle Ford Position OFFSETS EXISTING POSITION IN CORE OF THE PLAY Contiguous operated position of 42,000 net acres PURCHASE DETAILS Price: $1.8 billion (100% cash) Gonzales Secures 500 highly economic inventory opportunities Effective Date: 6/1/2022 Closed: 9
Slide 18: Inventory Underpins Long-Term Sustainability
Inventory Underpins Long-Term Sustainability High-quality & multi-decade inventory >20YEAR Gross operated inventory locations (Avg. lateral length is ~2 miles) UNRISKED INVENTORY (WITH APPRAISAL & TIGHTER SPACING) ~10,000 locations ~12YEAR RISKED INVENTORY (AT CURRENT ACTIVITY PACE) >4,500 locations
Slide 19: Asset Appendix Overview
AssetAppendix Overview NYSE: DVN devonenergy.com
Slide 20: Our Investment-Grade Financial Strength
Our Investment-Grade Financial Strength Strong liquidity with minimal near-term debt maturities Outstanding debt maturities through 2030 ($MM) $4,300 Reduced outstanding debt by >$1.2 billion since merger close EXECUTING ON OUR Net debt-to-EBITDAX: 0.5x (by year-end 2022e) FINANCIAL Cash Signi
Slide 21: Committed to Aggressive Emissions Reductions
Committed to Aggressive Emissions Reductions ENVIRONMENTAL PERFORMANCE TARGETS 0.5 GHG EMISSIONS GHG EMISSIONS INTENSITY METHANE EMISSIONS FLARING INTENSITY ROUTINE FLARING 50 65 % ENTIRELY SCOPE 1 & 2 SCOPE 1 & 2 INTENSITY NET ZERO GHG EMISSIONS FOR % % OR LOWER ELIMINATE OF GROSS NATURAL GAS AS DE
Slide 22: Investor Contacts & Notices
Investor Contacts & Notices the uncertainties, costs and risks involved in our operations, including as a result of employee misconduct; risks related to our hedging Investor Relations Contacts activities; counterparty credit risks; risks relating to our indebtedness; cyberattack risks; our limited