Slide 1: Devon Energy Acquires Mitchell Energy
CeVOW eNenay Acquires Xs Mitchell Energy
Slide 2: Risk Factors
OcvoH enenay Risk Factors Information provided in this presentation includes “forward- looking statements” as defined by the SEC. Forward-looking statements are identified as “forecasts, projections, estimates, plans, expectations, etc.” and are subject to a variety of risk factors. For representati
Slide 3: For Immediate Release
OCVO ewenay For Immediate Release August 14, 20017 -- Devon Energy purchases Mitchell Energy and Development Corp., creating the second largest independent natural gas producer in the U.S.
Slide 4: Transaction Summary
OcvoH enenay Transaction Summary Purchase of Mitchell by Devon Consideration: $31.00 and .585 Devon share per Mitchell share ($60.40 per Mitchell share) Board approved/Mitchell commitment Expected close: Q4 2001
Slide 5: Why Devon?
OcvoH enenay Why Devon? 32% premium to Mitchell shareholders Improved shareholder liquidity Diversified exploitation and exploration portfolio Participation in Devon’s growth
Slide 6: Strategic Rationale
OCVOH ewency Strategic Rationale Per share accretion Expands North American gas assets Rapid North Texas production growth Focused midstream operation Corporate G&A synergies Complementary technology
Slide 7: Reserves Per Common Share
OCVOH ewency Reserves Per Common Share Proved Reserves (BOE @ 6:1) cack 3.76 256 261 282 319 296 ‘87 88 ‘89 90 ‘91 92 93 "94 95 ‘96 ‘97 ‘98 99 ‘OO ‘OTT Il Represents Pro Forma Devon as of 6/30/01 Note: 1987-1997 represents historical Devon as reported prior to the 1998 Northstar merger. 1998-1999 re
Slide 8: North American Operations
Oto enenay North American Operations DVN Pro Forma Permian/MC___ 28% 45%. Rockies 24%, 17%. Gulf. 11% 11% Canada 12% 9% Total N.A. 75% 82% Permian Mid-Coyg @ ow reserves © Pro Forma MMBoe @ 6:1 \ Gulf CoastiGulf of Mexico
Slide 9: Mitchell Production Growth
OcVOH enenay Mitchell Production Growth (MMCF/D) 437 | : 1Q00 2Q'00 3Q'00 4Q'00 1001 2Q'01
Slide 10: Mitchell Operations
OCVOH ewency Mitchell Operations E & P Operations: — Barnett shale proved reserves PLA WCE — Other Texas proved reserves 0.4 TCFE Total proved 2.5 TCFE — Prospective acreage 283,800 net acres Midstream Operations: — @PV 10 $800 MM - $1 B
Slide 11: Barnett Shale
OcVo enenay Barnett Shale * 2.1 TCFE proved reserves (8% of gas in place) + Long-lived development © Strategic market access -* 230,000 net acres | = WI>90% @ Barnett Tests __Infil Pilots
Slide 12: Light Sand Fracturing Technology
OCVO ewenay Light Sand Fracturing Technology Mitchell - Barnett Shale Normalized Production Total Wells Drilled (576) 1,000 900 800 700 600 500 400 300 200 100 ~~ Pre 1999 Conventional Frac (406) — Post 1999-2000 LSF Wells (170) McFDMWell ° 12 24 Months on Production
Slide 13: Barnett Shale Upside
Ocvonl enenay Barnett Shale Upside . Multi-TCF potential Expanding field limits Infill drilling Refracturing opportunities
Slide 14: Midstream Strategy
OCVOH ewency Midstream Strategy + Develop infrastructure to support E&P activities * Avoid monopolistic 3rd party transportation * Own reserves to support midstream economics
Slide 15: Mitchell Midstream Operations
OCVOH ewency Mitchell Midstream Operations 100% Texas 6 plants 9,000 miles of pipe Own 50% of current throughput + Access to multiple markets
Slide 16: Combined Company
OCVOH ewency Combined Company Proved Reserves: 1,555 MMBOE Reserve profile: 82% North America 18% International Production Mix: 67% gas / 33% oil R/P Ratio: 9.2 years
Slide 17: Financial Strength
OCVO ewenay Financial Strength Pro Forma Six Months Ended June 30, 2001 EBITDA ($MM) $1,756 Total Net Debt $ 3,368 EBITDA/Interest 22.0x Net Debt/Annualized EBITDA 1.0x Net Debt/Total Cap 39% Note: Debt and total cap exclude the market value of Chevron common stock $642 MM.
Slide 18: U.S. Natural Gas Production
OcVOH enenay U.S. Natural Gas Production 1,651 (MMCF/D) 1,400 4 344 ll li ll Li iL Ais . = APC ucL PXD es Note: Data for quarter ended 6/20/01 adjusted far major acquisitions
Slide 19: Growth Portfolio
Ocvonl enenay Growth Portfolio Leading North American gas producer Portfolio of North American growth projects Long-term International growth projects High potential exploration prospects
Slide 20: Cherokee CBM
OcvoH enenay Cherokee CBM Kansas * 374,000 net acres * Geology: — Depths 800-3,000' — Pennsylvanian coals + Current Status: — 3 rigs drilling, acquiring a fourth — Anticipate drilling 100 wells in ‘01 and 400-500 wells in ‘02
Slide 21: Vermejo Park Ranch
Vermejo Park Ranch OcvoH enenay Raton Basin * WI=25%, NRI=42% + 280,000 gross acres (minerals) * 0.5-1.0 TCF net target Coal seam thickness (Ml >eoreer (> ooreer TM > soreer (o> 20rcer
Slide 22: Big George
OcVo enenay Big George Exploration Powder River Basin Dominant acreage position - Increasing volumes High operating margins > High working interest Bes
Slide 23: Coalbed Methane Production
OcvoH enenay Coalbed Methane Production RATE, MMCFE/L 100 2000 2001 2002 2003 2004 2005 San Juan BPRB GRaton @Arkhoma/Cherokee & RATE, MBOE/I 20 C) 2006
Slide 24: Hamburg - Slave Point
OcvoH enenay : Hamburg - Slave Point MATER RIT High-impact exploration Large strategic land position Multiple targets of 5-30 BCF Attractive liquids/gas ratios Moderate well cost Six recent 3D programs
Slide 25: Northern Foothills
‘WOLVERINE ‘OuAy ‘WEEJAY WEST OJAY HUGENOT Seale Sa ea Propo: Thirty Miles ue pa ‘Westcoast Pipeline evo ewenay Northern Foothills High impact exploration joint venture with BP Deep structural gas targets Six stacked play types Significant early success * Coalbed methane potential
Slide 26: Indonesia
OCVOH ewency Indonesia ‘Salawati Area DONESIA 5 Tuban Block a)
Slide 27: Pearl River Basin
OVO ewenay Pearl River Basin Sexo ‘CHINA u ek, Ursa Discovery a [Bootes Discovery |
Slide 28: Azerbaijan
Cevon ENERGY : Azerbaijan Azeri-Chirag Guneshii Unit 4909 Appraisal Wel) 4 salen Operator: BP Amoco 5.6% carried interest Current production: 115 MBO/D (gross) Gross proven reserves: 4+ BBO Ultimate gross potential: ee 6+ BBO we 10 Miles:
Slide 29: Exploration Upside
OCVOH ewency Exploration Upside ° . West Africa (Gabon, Congo, Ghana) South China Sea (Block 27-10) Argentina (El Mangrullo) Canadian Foothills Canadian Slavepoint (Wildmint, Ladyfern) Deepwater Gulf of Mexico
Slide 30: A Decade of Opportunities
Ocvonl enenay A Decade of Opportunities 2002 - Accelerate Barnett shale development 2002 - Canadian Foothills on stream 2002 - 1% significant production from Cherokee CBM 2003 - Initial gas sales to Singapore 2003 - 2004 - Powder River Basin peak production 2004 - Raton Basin peak production 2007 -
Slide 31: OcVo enenay
OcVo enenay Investors and secuity holders are advised to read the Joint proxy statement prospectus that willbe included in the Registration Statement on Form -6 to be filed withthe Securities and Exchange Cormmission in conection withthe proposed transaction because itwill contain important informat
Slide 32: Devon Energy Acquires Mitchell Energy
CeVOW eNenay Acquires Xs Mitchell Energy