Devon Energy Corporation · NYSE:DVN

Devon Energy — Q3 2021 Earnings Presentation

22 slides from Devon Energy's earnings presentation, Nov 2, 2021

1. Slide 1: Q3 2021 Earnings Presentation

   Q3 2021 Earnings Presentation November 2, 2021 NYSE: DVN devonenergy.com

2. Slide 2: Key Takeaways From Our Presentation

   Key Takeaways From Our Presentation FIXED + VARIABLE DIVIDEND INCREASES 71% #1 LEADING THE INDUSTRY WITH Total dividend of $0.84 per share announced with Q3 results DISCIPLINE & CASH RETURNS FREE CASH FLOW GENERATION ACCELERATES #2 ~8x improvement in free cash flow to $1.1 billion (vs. Q4 2020) $1 B

3. Slide 3: Our Cash-Return Business Model

   Our Cash-Return Business Model “Our CASH-RETURN business model is DISCIPLINED  MODERATING OIL GROWTH targets: up to 5% annually designed to moderate growth, emphasize GROWTH STRATEGY  Growing margins through operational & corporate cost reductions capital efficiencies, maximize returns and priorit

4. Slide 4: Strategy Underpinned by High-Quality Portfolio

   Strategy Underpinned by High-Quality Portfolio Portfolio provides diversified commodity exposure Production by product in Q3 2021 WILLISTON BASIN 58 MBOED POWDER RIVER BASIN GAS OIL 20 MBOED VOLUMES VOLUMES 26% 50% COMMODITY OUR SUSTAINABLE PLATFORM EXPOSURE % OF TOTAL MULTI-DECADE PRODUCTION RESOUR

5. Slide 5: Q3 2021 – Executing on Our Disciplined Plan

   Q3 2021 – Executing on Our Disciplined Plan Outstanding Q3 execution Expanding free cash flow Increasing dividend payout Key quarterly highlights Free cash flow ($ in millions) Fixed-plus-variable payout ($/share) $0.84 ~8X 71% $1,124 PRODUCTION 5% VOLUMES (MBOED) ABOVE GUIDANCE IMPROVEMENT IMPROVEM

6. Slide 6: Outlook Continues to Strengthen in 2022

   Outlook Continues to Strengthen in 2022 Prioritizing free cash flow over volume growth Positioned for an attractive free cash flow yield in 2022 Preliminary 2022e guidance 2022e free cash flow sensitivities TOTAL 570-600 21% PRODUCTION FREE CASH FLOW YIELD MBOED (50% oil) 18% $6.0 20% FREE CASH FLOW

7. Slide 7: Accelerating Cash Returns to Shareholders

   Accelerating Cash Returns to Shareholders A history of returning cash to shareholders >90% (1) (Dividends per share) GROWTH vs. 2021 EXPANDING DIVIDEND PAYOUT 29 CONSECUTIVE YEARS OF DIVIDEND PAYMENTS  Q3 2021 dividend payout expands 71% to $0.84 per share  Dividend payout positioned for strong gr

8. Slide 8: A Market Leading Dividend Yield

   A Market Leading Dividend Yield (1) >9% 10% OUR MARKET-LEADING YIELD  >7 TIMES HIGHER than the S&P 500 yield 8% 2022e Annualized Dividend Yield  ADVANTAGED YIELD vs. other market sectors  COMFORTABLY FUNDED within free cash flow 6% 4% 2% 0% Energy Utilities Consumer Real Estate Financials Materia

9. Slide 9: Announcing $1 Billion Share-Repurchase Program

   Announcing $1 Billion Share-Repurchase Program NEXT STEP IN OUR CASH-RETURN STRATEGY LEADING THE INDUSTRY WITH DISCIPLINE & CASH RETURNS Board authorized $1 billion repurchase program Represents ~4% of current market capitalization Authorization through year-end 2022 Dividend remains top-funding pri

10. Slide 10: Our Fortress Balance Sheet

    Our Fortress Balance Sheet INVESTMENT-GRADE FINANCIAL STRENGTH PROTECTING OUR ABILITY  Strong liquidity: $2.3 billion of cash (as of 9/30/21) TO EXECUTE  Improved net debt by 16% in third quarter Excellent  Minimal near-term debt maturities provides flexibility Liquidity Cash & credit facility: L

11. Slide 11: Devon's Unique Investment Proposition

    Devon’s Unique Investment Proposition Robust operating cash flow growth… Returning cash to shareholders… And trading at an attractive valuation Operating cash flow ($ in billions) 2022e free cash flow yield Enterprise value / 2022e EBITDA > 40% 21.4x >$7.0 18% SHAREHOLDER TRADING AT GROWTH IN 2022 F

12. Slide 12: Asset Operations Overview Update

    AssetOperations Overview Update NYSE: DVN devonenergy.com

13. Slide 13: Prolific Well Results Drive Q3 Outperformance

    Prolific Well Results Drive Q3 Outperformance WORLD-CLASS OIL OPPORTUNITY Eddy Lea BOUNDARY RAIDER  Stacked pay position across 400,000 net acres ANOTHER HIGH-IMPACT RESULT THISTLE COBRA A PROLIFIC 3-MILE SUCCESS  Diversified acreage: 65% non-federal land  Wolfcamp development  Wolfcamp developm

14. Slide 14: Delaware Basin – High-Margin Growth & Efficiency Gains

    Delaware Basin – High-Margin Growth & Efficiency Gains Outstanding well productivity drives volumes higher Capital efficiencies continue to capture cost savings Total production (MBOED) Development D&C costs per foot (excludes facilities) 409 $940 $846 294 39% 41% $614 HIGH-MARGIN D&C COST/FT $554 G

15. Slide 15: Anadarko Basin – Dow Partnership Builds Momentum

    Anadarko Basin – Dow Partnership Builds Momentum Blaine Cash flow benefiting from liquids-rich production mix Kingfisher Anadarko production mix & field-level operating margin ($/BOE) >200% DOW DRILLING JV MILLER-MILLER $25.20 FOCUS AREA INITIAL DOW JV ACTIVITY 2021 Program Overview IMPROVEMENT $19.

16. Slide 16: Free Cash Flow Generating Assets

    Free Cash Flow Generating Assets  High-margin oil resource opportunity in economic core of the play WILLISTON “Our free cash flow generating assets  Projected to generate >$700 million of free cash flow in 2021 BASIN are critical to the continued success and  Expect to deploy comparable levels of

17. Slide 17: Inventory Underpins Sustainability of Business Model

    Inventory Underpins Sustainability of Business Model >2,500 >10 YEARS OF INVENTORY incremental (AT CURRENT ACTIVITY PACE) operated locations  Identified >10 years of LOW-RISK & HIGH-RETURN  Includes only operated activity development inventory (at current drilling pace)  Represents low-risk devel

18. Slide 18: Asset Appendix Overview

    AssetAppendix Overview NYSE: DVN devonenergy.com

19. Slide 19: Free Cash Flow Priorities

    Free Cash Flow Priorities Q3 VARIABLE DIVIDEND CALCULATION FIXED + VARAIABLE DIVIDEND #1  Fixed dividend is paid quarterly at $0.11 per share $1,544 MM – Adjusted Cash Flow (Non-GAAP)  Variable dividend is up to 50% of excess free cash flow − $481 MM – Capital Expenditures (Accrued) $1,063 MM – Ad

20. Slide 20: Our Investment-Grade Financial Strength

    Our Investment-Grade Financial Strength Substantial debt reduction completed year to date Outstanding debt maturities through 2030 ($MM) $5,300  Reduced outstanding debt by >$1.2 billion year to date EXECUTING ON OUR  Net debt-to-EBITDAX: <1.0x (as of 9/30/21) Cash FINANCIAL $2,300  Significant f

21. 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

22. Slide 22: Investor Contacts & Notices

    Investor Contacts & Notices restrictions, compliance costs and other risks relating to governmental regulation, including with respect to environmental matters; risks Investor Relations Contacts related to regulatory, social and market efforts to address climate change; risks related to our hedging

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