Devon Energy Corporation · NYSE:DVN

Devon Energy — Barclays CEO Energy-Power Conference 2016

31 slides from Devon Energy's conference presentation, Sep 7, 2016

  1. Slide 1: Barclays CEO Energy-Power Conference

    Barclays CEO Energy-Power Conference September 7, 2016 NYSE: DVN devonenergy.com

  2. Slide 2: Investor Contacts & Notices

    Investor Contacts & Notices Investor Relations Contacts Howard J. Thill, Senior Vice President, Communications & Investor Relations (405) 552-3693 / howard.thill@dvn.com Scott Coody, Director, Investor Relations (405) 552-4735 / scott.coody@dvn.com Chris Carr, Supervisor, Investor Relations (405) 22

  3. Slide 3: Devon Today

    Devon Today A Leading North American E&P Heavy Oil Retained Asset Production Key Messages Forecasted 2016: 558 - 578 MBOED  Premier asset portfolio — Top-tier N.A. resource plays Gas — Deep inventory of opportunities 37% Oil Rockies Oil 44%  Significant financial strength NGL 19% STACK  Deliverin

  4. Slide 4: Approach To The Current Environment

    Approach To The Current Environment  Achieve additional operating cost savings  Further increase capital productivity  Focused on value and returns  Accelerate activity in STACK and Delaware Basin  Preserve continuity in other U.S. resource plays  Invest within cash flow  Divestitures to enha

  5. Slide 5: Successful Asset Divestiture Program

    Successful Asset Divestiture Program Enhancing Financial Strength  Divestiture program complete Access Pipeline $1.1 Billion  Total proceeds: $3.2 billion Expected close: Q3 2016 ― E&P asset sales: $2.1 billion ― Access pipeline sale: $1.1 billion Granite Wash $0.3 Billion  Minimal cash taxes exp

  6. Slide 6: Significant Financial Strength

    Significant Financial Strength  Investment-grade balance sheet ― Adjusted cash balance: $4.6 billion(1) ― Undrawn $3 billion credit facility BILLION PRO-FORMA LIQUIDITY  Net debt(2) reduced >45% from early 2016  Debt reduction program underway Net Debt(2) $ Billions ― $1.3 billion tendered to dat

  7. Slide 7: Advantaged Midstream Business

    Advantaged Midstream Business EnLink Overview  Devon’s equity ownership interest ― 24% of MLP (ENLK: 95 million units) ― 64% of GP (ENLC: 115 million units) BILLION  Eliminates midstream capital requirements DVN’S ENLINK OWNERSHIP MARKET VALUE ON AUGUST 30th  Improves midstream growth potential 

  8. Slide 8: Operating Strategy For Success

    Operating Strategy For Success  Maximize base production  Optimize capital program — Minimize controllable downtime — Disciplined project execution — Enhance well productivity — Perform premier technical work — Leverage midstream operations — Focus on development drilling — Reduce operating costs

  9. Slide 9: Delivering Best-In-Class Well Results

    Delivering Best-In-Class Well Results Devon’s Avg. 90-Day Wellhead IPs 2015 Avg. 90-Day Wellhead IPs BOED, 20:1 BOED, 20:1 600 600 450 450 300 300 150 ≈250% 150 INCREASE 0 0 2012 2013 2014 2015 Top U.S. Producers Source: IHS/Devon. Operators with more than 100 wells.  Devon delivered best well resu

  10. Slide 10: Achieving Significant Cost Savings

    Achieving Significant Cost Savings  Declining D&C costs across portfolio D&C Well Cost Declines Peak cost to Q2 2016 ― Up to 40% lower than peak rates UP TO ― Driven by efficiencies and supply chain costs ― More than offsetting larger completions SAVINGS  Delivering significant operating cost savi

  11. Slide 11: Disciplined Capital Allocation

    Disciplined Capital Allocation Yielding Strong Results  Capital program focused on top U.S. resource plays 2016 E&P Capital Budget $1.1 Billion - $1.3 Billion  Accelerating activity in STACK and Delaware Basin Other ― Adding up to 7 operated rigs by year-end 2016 10% ― Preparing for full-field dev

  12. Slide 12: Strong Returns At Lower Prices

    Strong Returns At Lower Prices Incremental Well Economics  Assets in best U.S. resource plays At $50 Oil & $2.50 Gas Delaware Basin  Inventory attractively positioned on cost curve STACK – Meramec 30%+ Eagle Ford 20%+ Rockies IRR – BTAX no G&A IRR – ATAX w/G&A  >10,000 risked locations in STACK a

  13. Slide 13: STACK: Best-In-Class Position

    STACK Best-In-Class Position  World-class development opportunity Atoka Penn. Morrow Meramec – Best Results - Strong flow rates — 430,000 net surface acres Springer - Oil-weighted production - Low well costs Kingfisher — Top targets: Meramec & Woodford Chester Dewey Mississippian Blaine — Q2 net pr

  14. Slide 14: STACK: A Multi-Decade Growth Opportunity

    STACK A Multi-Decade Growth Opportunity Largest leasehold position of any operator Strong production growth STACK Acreage STACK Production Net Acres MBOED 91 430,000 265,000 203,000 171,000 130,000 83,000 59 54% INCREASE Peers Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Source: Company reports. Advantag

  15. Slide 15: Meramec Results Validate Core Position

    STACK Meramec Results Validate Core Position Kingfisher  Favorable characteristics of Scheffler 1H-9X 30-Day IP: 2,000 BOED Pony Express 27-1H 30-Day IP: 2,100 BOED Born Free Staggered Pilot core oil window: Dewey Blurton 1-7-6XH Blaine 30-Day IP: 2,200 BOED 30-Day IP: 1,800 BOED Maybel 1H-13X 1. A

  16. Slide 16: Meramec Resource

    Meramec Resource Best Emerging Development Play in North America  Meramec inventory conservatively risked (4 wells per surface section)  >10 spacing tests underway to drive risked location count higher ― First three Devon operated spacing pilots successful (Born Free, Alma and Pump House tests) ―

  17. Slide 17: Woodford Shale

    Woodford Shale A Top-Tier Liquids-Rich Development  Well productivity improved by >100% Blaine Dewey Kingfisher — Recent wells averaging up to 1,900 BOED Gordon Row Avg. 30-Day IP: 1,600 BOED — Results driven by enhanced completion design Haley Pad Avg. 30-Day IP: 1,900 BOED  5-section Hobson row

  18. Slide 18: Delaware Basin

    Delaware Basin A World-Class Oil Play  Industry leader in basin — Net risked acres by formation: 585,000 SLOPE Lea Eddy — Q2 net production: 65 MBOED  Delivering top-tier well results BASIN  Deep inventory of low-risk oil projects — >5,000 risked locations Bone Spring  Accelerating activity in 2

  19. Slide 19: Delaware Basin: Industry Leading Well Productivity

    Delaware Basin Industry Leading Well Productivity  Acreage position concentrated in basin of southeast New Mexico  Delivering the most productive wells in world-class field  90-day IP rates ≈20% higher than industry average Top 200 Delaware Basin Wells Based on 90-Day IP Rates, Number of Wells 68

  20. Slide 20: Delaware Basin: Achieving Significant Cost Savings

    Delaware Basin Achieving Significant Cost Savings Delaware Basin Unit LOE  Record-low LOE costs reduced by ≈50% $/BOE $16.87 $14.80  Majority of cost savings are sustainable $12.62 $12.00 — Improved electrical infrastructure ≈50% $10.76 $8.82 IMPROVEMENT — Enhanced water handling infrastructure Q1

  21. Slide 21: Delaware Basin: Significant Resource Opportunity

    Delaware Basin Significant Resource Opportunity Basin Slope 1 Section 1 Section DELAWARE  Identified 5,200 risked locations (>16,000 unrisked) Madera SANDS Lower — Bone Spring ≈65% of risked inventory Brushy A LEONARD — Wolfcamp has massive upside potential B C  Appraisal work evaluating resource

  22. Slide 22: Delaware Basin Master Development Plan

    Delaware Basin Master Development Plan Total Reservoir Access Concept (TRAC)  A disciplined development approach — Develop up to 9 intervals of stacked-pay — Utilizes integrated surface facilities — Leverages simultaneous operations — Flexibility to add/defer development zones  Efficiencies gains

  23. Slide 23: Premier Asset Portfolio

    Premier Asset Portfolio Platform For Value Creation Asset Risked Opportunity Upside Potential Heavy Oil STACK 5,300 undrilled >10 spacing tests locations underway Delaware >5,000 undrilled Spacing tests and Basin locations appraisal work ongoing Heavy Oil 1.4 billion barrels Technology to Rockies Oi

  24. Slide 24: Devon Energy

    Devon Energy A Leading North American E&P 24

  25. Slide 25: Thank you.

    Thank you. devon

  26. Slide 26: Forward-Looking Statements

    Forward-Looking Statements This presentation includes "forward-looking statements" as defined by the SEC. Such statements include those concerning strategic plans, expectations and objectives for future operations, and are often identified by use of the words “expects,” “believes,” “will,” “would,”

  27. Slide 27: Appendix

    Appendix NYSE: DVN devonenergy.com

  28. Slide 28: Canadian Heavy Oil

    Canadian Heavy Oil  Top-tier thermal oil position — High reservoir quality: <2.5 SOR(1) — Massive risked resource: 1.4 BBO  Significant leverage to higher prices — Profitable at ≈$35 WTI — $1 increase in WTI ≈$40 MM of annualized cash flow  Jackfish complex oil production up 36% YoY  65% decline

  29. Slide 29: Eagle Ford

    Eagle Ford  Top-tier acreage position — 66,000 net acres focused in DeWitt Co. — Q2 net production: 75 MBOED (77% liquids) MILLION  Expect ≈$300 million of free cash flow in 2016 2016e FREE CASH FLOW — Best-in-class well productivity — Low-cost asset: LOE $4 per BOE AUSTIN CHALK Staggered Lateral

  30. Slide 30: Rockies

    Rockies  Premier Powder River position — ≈470,000 net surface acres — Q2 net production: 21 MBOED (70% oil) Johnson Weston Campbell  Development programs delivering strong results — Targeting Parkman, Teapot and Turner formations Natrona Niobrara Converse 30

  31. Slide 31: Barnett Shale

    Barnett Shale  Significant gas optionality 2015/2016 Refrac Denton Wise — Net acres: 610,000 Future Focus Area Denton — Q2 net production: 167 MBOED (26% liquids)  Focused on optimizing base production Tarrant Parker — Concluded refrac appraisal program in 2016 Ft. Worth — Identified 1,000 horizon

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