Slide 1: Q1 2024 Earnings Presentation
Q1 2024 Earnings Presentation May 1, 2024 NYSE: DVN devonenergy.com
Slide 2: Key Takeaways From Our Presentation
Key Takeaways From Our Presentation 1 Q1 PRODUCTION EXCEEDS GUIDANCE BY 4% Volumes beat top-end of guidance across all products 2 DELAWARE BASIN DRIVES Q1 OUTPERFORMANCE Improving well productivity & efficiency gains drive strong results 3 FREE CASH FLOW REACHES $844 MILLION IN Q1 15th consecutive q
Slide 3: Our Disciplined Business Model
Our Disciplined Business Model DISCIPLINED MODERATED OIL GROWTH targets: up to 5% annually GROWTH STRATEGY Focused on growing per-share value CONSISTENT Returns-driven strategy prioritizes FREE CASH FLOW generation REINVESTMENT RATES Optimizing results with steady activity levels through the
Slide 4: Strategy Creating Significant Value for Shareholders
Strategy Creating Significant Value for Shareholders Delivering on our promise to shareholders Cumulative uses of cash ($ in billions) ~ $14 BILLION $13.2 SINCE 2020 Industry-first cash-return framework unveiled in 2020 Strategy designed for sustainable free cash flow generation Flexibility to
Slide 5: Portfolio Built to Deliver Sustainable Performance
Portfolio Built to Deliver Sustainable Performance WILLISTON BASIN PREMIER MULTI-BASIN PORTFOLIO 61 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, NGLs & natur
Slide 6: Q1 2024 – Executing on Our Disciplined Plan
Q1 2024 – Executing on Our Disciplined Plan DELIVERING STRONG PRODUCTION EFFICIENT UPSTREAM CAPITAL SPENDING (MBOED) ($ IN MILLIONS) 700 664 +4% $933 $958 AVERAGE ADVANCING OUR PRODUCTION BEAT (VS. Q1 MIDPOINT GUIDE) $864 DISCIPLINED PLAN 525 $830 $842 350 GAS NGL 175 OIL 0 Q1 2024 Production Q1 23
Slide 7: Delaware Basin – Drives Q1 Outperformance
Delaware Basin – Drives Q1 Outperformance PARKWAY 2024 Projects Core Focus Areas 400K New Mexico NET ACRES Texas POTATO BASIN TODD THISTLE/GAUCHO EXPECT RECORD VOLUMES IN 2024 TOTAL DELAWARE PRODUCTION (MBOED) Eddy Lea COTTON DRAW RATTLESNAKE 437 STATELINE 427 New Mexico 414 Texas Winkler MONUMENT D
Slide 8: Delaware Basin – High-Impact Results in Q1
Delaware Basin – High-Impact Results in Q1 HIGH-IMPACT UPPER WOLFCAMP WELLS PROLIFIC 3-MILE WOLFCAMP RESULTS SUCCESSFUL WOLFCAMP B APPRAISAL 4,000 BOED 5,600 BOED 5,900 BOED AVG. IP30 RATES/WELL AVG. IP30 RATES/WELL AVG. IP30 RATE Thistle 186H (10,000’ lateral) Van Doo Dah (10,000’ laterals) CBR 15-
Slide 9: Delaware Basin – Operating Efficiencies Advance
Delaware Basin – Operating Efficiencies Advance WELL PRODUCTIVITY ON TRACK COMPLETION EFFICIENCIES CUMULATIVE OIL VOLUMES (NORMALIZED FOR 10,000’ LATERALS) COMPLETED FEET PER DAY (ALL FORMATIONS) 2,265 250 10% 2,152 UP 5% TO 1,955 1,911 IMPROVEMENT 200 (vs. 2023 PROGRAM) 1,713 IMPROVEMENT (Q1 2024 v
Slide 10: Delaware Infrastructure Buildout Supports 2024 Plan
Delaware Infrastructure Buildout Supports 2024 Plan GAS PROCESSING & DOWNSTREAM LOCALIZED INFRASTRUCTURE WATER HANDLING CAPABILITIES 2 BCFD of gas processing capacity Investing ~$100 million annually in WaterBridge JV provides water additions over past year field-level gathering & compression
Slide 11: Inventory Depth Underpins Delaware Sustainability
Inventory Depth Underpins Delaware Sustainability DELAWARE BASIN INVENTORY BY KEY OPERATOR SOURCE: ENVERUS INTELLIGENCE 10,000 New 8,000 Mexico Multi-decade resource opportunity PV-10 breakeven: ~$40 WTI oil price (1) Gross Operated Locations Texas ~60% of total company risked resource 6,000 4
Slide 12: Raising Production Outlook in 2024
Raising Production Outlook in 2024 UPDATED 2024 OUTLOOK HIGH-GRADING CAPITAL FREE CASH FLOW GROWTH TOTAL CAPITAL ($ IN BILLIONS) (1) ($ IN BILLIONS) ~10% >15% TOTAL 655-675 $3.84 >$3.0 VOLUMES (+2% vs. PRIOR GUIDE) (MBOED) REDUCTION IMPROVEMENT $ TOTAL CAPITAL $3.3-$3.6 BILLION $3.45 $2.7 BREAKEVEN
Slide 13: Catalysts Underpinning 2024 Outlook
Catalysts Underpinning 2024 Outlook 1 IMPROVED DELAWARE WELL PRODUCTIVITY Higher allocation towards core of the play in New Mexico Infrastructure progressing to support optimized plan >60% $3.3-$3.6 CAPITAL ALLOCATED TO DELAWARE BASIN BILLION 2 HIGH-GRADED ACTIVITY IN WILLISTON BASIN Activit
Slide 14: Positioned for Significant Free Cash Flow Generation
Positioned for Significant Free Cash Flow Generation Devon’s attractive free cash flow yield Providing an opportunity vs. broader market 2024e free cash flow yield sensitivities 2024e free cash flow yield vs. broader market 11% 9% FREE CASH FLOW $4.0 ADVANTAGED YIELD YIELD OPPORTUNITY FREE CASH FLOW
Slide 15: Disciplined Return of Capital to Shareholders
Disciplined Return of Capital to Shareholders TARGET PAYOUT IN 2024 Targeting 70% CASH-RETURN payout to (% OF FREE CASH FLOW) shareholders in 2024 BALANCE SHEET Prioritizing SHARE BUYBACK program at 30% current valuation $3.0 BILLION share buyback authorization in place 70% CASH Dividend framework d
Slide 16: Significant Financial Strength & Liquidity
Significant Financial Strength & Liquidity TOTAL LIQUIDITY CASH BALANCE LOW LEVERAGE $4.1 B $1.1 B 0.7x CASH & UNDRAWN CASH POSITION NET DEBT-TO-EBITDAX CREDIT FACILITY AS OF 3/31/2024 AS OF 3/31/2024 CREDIT RATINGS DEBT REDUCTION TARGETED MATURITIES BBB/Baa2 ~$1.5 B $1.0 B INVESTMENT-GRADE AT SINCE
Slide 17: Committed to Environmental Excellence
Committed to Environmental Excellence 2023 SUSTAINABILITY REPORT HIGHLIGHTS ENVIRONMENTAL TARGETS Flared volume intensity was reduced by 77% (1) GHG EMISSIONS SCOPE 1 & 2 Scope 1 & 2 GHG emissions intensity declined by 19% (1) NET ZERO GHG EMISSIONS FOR SCOPE 1 & 2 BY 2050 GHG EMISSIONS INTENSITY SC
Slide 18: Compelling Valuation & Upside in Energy
Compelling Valuation & Upside in Energy Energy sector weighting as % of the S&P 500 index Iran Oil Embargo 29% 30% >10% VALUATIONS REMAIN AT OF S&P 500 HISTORICALLY LOW LEVELS S&P 500 (EBITDA TTM) 25% EARNINGS Energy Market Capitalization as % of S&P 500 (BY SECTOR) 20% Great Recession 16% Gulf War
Slide 19: Devon's Unique Investment Proposition
Devon’s Unique Investment Proposition DISCIPLINED STRATEGY Focused on growing per-share value Returns-driven strategy prioritizes free cash flow DISCIPLINED STRATEGY HIGH-QUALITY PORTFOLIO Acreage high-graded to the top U.S. resource plays Underpinned by world-class Delaware Basin asset
Slide 20: Asset Appendix
AssetAppendix Overview NYSE: DVN devonenergy.com
Slide 21: Q1 2024 – Cash Return Payout
Q1 2024 – Cash Return Payout Q1 CASH RETURN PAYOUT DETAILS + Million $205 Share Repurchases in Q1 24 (Retired 4.7 million shares) + Million $143 Fixed Dividend Paid in Q1 24 (Paid $0.22 per share on 3/28/2024) + Million $82 Variable Dividend Declared (Declared $0.13 per share; payable on June 28th)
Slide 22: Investor Contacts & Notices
Investor Contacts & Notices risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties; midstream capacity Investor Relations Contacts constraints and potential interruptions in production, including from limits to the build out of