Barclays CEO Energy-Power Conference September 7, 2017 NYSE: DVN - - PowerPoint PPT Presentation

NYSE: DVN devonenergy.com

Barclays CEO Energy-Power Conference

September 7, 2017

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Investor Contacts & Notices

Investor Relations Contacts

Scott Coody, Vice President, Investor Relations (405) 552-4735 / scott.coody@dvn.com Chris Carr, Supervisor, Investor Relations (405) 228-2496 / chris.carr@dvn.com

Forward-Looking Statements This presentation includes "forward-looking statements" as defined by the Securities and Exchange Commission (the “SEC”). Such statements are subject to a variety of risks and uncertainties that could cause actual results or developments to differ materially from those projected in the forward-looking statements. Please refer to the slide entitled “Forward-Looking Statements” included in this presentation for other important information regarding such statements. Use of Non-GAAP Information This presentation may include non-GAAP financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non- GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. For additional disclosure regarding such non-GAAP measures, including reconciliations to their most directly comparable GAAP measure, please refer to Devon’s most recent earnings release at www.devonenergy.com. Cautionary Note to Investors The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. This presentation may contain certain terms, such as resource potential, risked or unrisked resource, potential locations, risked or unrisked locations, exploration target size and other similar terms. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 10-K, available at www.devonenergy.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov.

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A Leading North American E&P

STACK & DELAWARE POTENTIAL LOCATIONS

>30,000

Multi-decade growth platform

STACK & Delaware focused Best-in-class well productivity Rapid cash flow expansion Financial capacity to execute

4

Devon’s 2020 Vision

• Advance STACK & Delaware activity
• Monetize less competitive assets
• Multi-billion dollar divestiture potential

Further high-grade asset portfolio Expand per-unit margins

• Shift production to higher value products
• Maximize margins by lowering cost structure

Improve balance sheet strength

• Divestiture proceeds to reduce debt
• Net debt to EBITDA target: 1.0x – 1.5x

Focus on financial returns

• Deliver top-tier returns on invested capital
• Return cash to shareholders

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2017 Capital Program

• Disciplined focus on value and returns
• Ramping to ~20 rigs by year-end
• Efficiencies YTD drive improved 2017 outlook
• Visible funding for multi-year capital plan

U.S. Rig Activity

STACK & DELAWARE

90%

10%

OTHER ASSETS

2017e E&P CAPITAL $100 MILLION

FROM PREVIOUS GUIDANCE

$1.9 - 2.2 Billion

For additional information see our Q2 operations report.

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Rapidly Expanding High-Margin Production

• Building operational momentum in 2017
• Positioned for higher growth in 2018
• Strong growth driven by STACK & Delaware

105 120 Q4 2016 1H 2017 2017e Exit Rate

+18- 23%

U.S. Oil Production

MBOD For additional information see our Q2 operations report.

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Peer-Leading Cash Flow Expansion

Cost savings boost margins Delivering peer-leading cash flow expansion

2016 2017e $ Billions

$0.9(2) >$2.5(1) Liquids % of Total Product Mix Operating Costs and G&A ($ Billions)

Shifting to higher-value production

INCREASE

>175%

>30%

IMPROVEMENT

~55% PRODUCT SHIFT

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Financial Capacity T

• Execute
• Investment-grade credit ratings
• Disciplined hedging program
• Significant investment in EnLink Midstream
• $1 billion divestiture program underway
• Additional multi-billion dollar divestiture potential

INVESTMENT- GRADE credit ratings

Excellent Liquidity

EnLink Investment

Disciplined Hedging

PROTECTING OUR ABILITY TO EXECUTE

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Operational Excellence

Maximize base production

• Minimize controllable downtime
• Enhance well productivity
• Leverage midstream operations
• Control operating costs

Optimize capital program

• Disciplined project execution
• Perform premier technical work
• Focus on development drilling
• Increase capital efficiency

Capture FULL VALUE Improve RETURNS

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Best-In-Class Well Productivity

• Avg. 90-Day Wellhead IPs

BOED, 20:1 200 400 600 800 1,000 Top 30 U.S. Producers

DEVON WELL ACTIVITY

(Since 2012)

>450%

I M P R O V E M E N T

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Efficiencies Offsetting Industry Inflation

• Completely offset industry inflation
• Significant efficiency gains in STACK & Delaware
• Innovative supply-chain initiatives

— Unbundling historical, high-margin services — Utilizing diversified vendor universe

• Supply chain savings reach 15% YTD

SUPPLY CHAIN SAVINGS ACHIEVED YTD

15%

For additional information see our Q2 operations report.

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Devon’s T echnology Leadership

• Culture of embracing technology
• Industry leader in deploying advanced analytics
• Contributing to best-in-class performance
• Technology revolution still in early stages

Billion dollar-plus annual prize Targeting hundreds of millions in value creation annually

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Devon’s T echnology Leadership

SUBSURFACE

• Improved 3D seismic

interpretation/integration

• High-graded location selection
• Optimized landing zones
• Well productivity predictions
• Depletion analysis
• Geospatial optimization
• Cutting-edge frac modeling

DRILLING & COMPLETIONS

• Cyber-geosteering
• ~99% time in zone
• Fiber-optic sensing
• Screen-out prediction
• Prolonged drill-bit life
• Coiled-tubing drill-outs
• Efficient flowbacks

PRODUCTION OPERATIONS

• Predictive pump failures
• Field issue prioritization
• Faster response times
• Optimized compressors
• 2% annual production uplift

>40%

IMPROVEMENT

>450%

INCREASE

2%

UPLIFT

BOTTOM LINE IMPACT FROM OPERATIONAL EXCELLENCE INITIATIVES

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Multi-Zone Manufacturing

Multi-Zone Development – Full Section

• Development concept in STACK & Delaware
• The next frontier of efficiency gains
• Benefits of multi-zone manufacturing

— LOE and capital efficiencies — Simultaneous operations — Increase recoveries — Optimize surface facilities — Short cycle times

>40%

NPV UPLIFT

MULTI-ZONE MANUFACTURING

For additional information see our Q2 operations report.

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STACK – Franchise Growth Asset

Drilling Unit

• World-class resour
• urce

ce oppo portun tunity ity

• 670K net acres

es by format rmation ion

• Up to 4 targe

get t intervals vals per unit

• Accelerating multi-zone

zone acti tivit vity

Canadian Kingfisher Blaine Caddo Upcoming Development Coyote

Showboat

B-Hardt

Jacobs

Horsefly

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STACK – Multi-Decade Growth Platform

Best-in-class well results Advantaged cost structure Strong production growth Tremendous resource potential

>70%

GROWTH

>11,000 POTENTIAL LOCATIONS

STACK RISKED LOCATIONS

>50% VS. PEER AVG. 25% IMPROVEMENT

5,700

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Delaware Basin – Franchise Growth Asset

• Massive acreage position in core of play
• Stacked pay: 15 prospective intervals
• Development activity building momentum
• Production growth accelerates in 2H 2017

Lusitano

Medusa

Boomslang

Anaconda

Seawolf

For additional information see our Q2 operations report.

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Delaware Basin – Multi-Decade Growth Platform

Basin Slope

DELAWARE SANDS Madera Lower Brushy LEONARD A B C BONE SPRING 1st 2nd

3rd WOLFCAMP X/Y A, B, C & D

Risked Location Unrisked Location

>4,000’

OF PAY

6,500

>1.3 MM

RISKED LOCATIONS NET EFFECTIVE ACRES

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STACK & Delaware: A Prolific Growth Engine

142 149 161 >185 Q4 2016 Q1 2017 Q2 2017 2017e Exit Rate

STACK & Delaware Basin Production

MBOED

>30% GROWTH

Year over year

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A Leading North American E&P

STACK & DELAWARE POTENTIAL LOCATIONS

>30,000

Multi-decade growth platform

STACK & Delaware focused Best-in-class well productivity Rapid cash flow expansion Financial capacity to execute

Thank you.

Thank you.

For additional information see our

Q2 Operations Report

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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,” “could,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this presentation that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding our business and operations are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to: the volatility of oil, gas and NGL prices; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved in exploration and development activities; risks related to our hedging activities; counterparty credit risks; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to environmental matters; risks relating to our indebtedness; our ability to successfully complete mergers, acquisitions and divestitures; the extent to which insurance covers any losses we may experience; our limited control over third parties who operate our oil and gas properties; midstream capacity constraints and potential interruptions in production; competition for leases, materials, people and capital; cyberattacks targeting our systems and infrastructure; and any of the other risks and uncertainties identified in our Form 10-K and our other filings with the SEC. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward- looking statements in this presentation are made as of the date of this presentation, even if subsequently made available by Devon on its website or otherwise. Devon does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.

NYSE: DVN devonenergy.com

Appendix

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Cash-Flow Generating Assets

30%

EAGLE FORD

20%

BARNETT

15%

ENLINK

$2B

>

CASH FLOW 2017e

35%

HEAVY OIL

HEAVY OIL BARNETT EAGLE FORD

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Rockies – An Emerging Oil Growth Asset

• Premier Powder River Basin position

— Q2 net production: 18 MBOED (80% oil) — 470,000 net surface acres

• Stacked pay: >10 prospective intervals
• Running 2 operated rigs

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STACK Resource

STACK RESOURCE

FORMATION WINDOW NET ACRES GROSS RISKED LOCATIONS GROSS UNRISKED LOCATIONS Meramec Over-Pressured Oil 130,000 1,700 3,000 Liquids-Rich Gas 150,000 TBD >1,000 280,000 1,700 >4,000 Woodford Condensate Corridor 135,000 2,000 3,800 Liquids-Rich & Dry Gas 170,000 2,000 3,000 305,000 4,000 6,800 NW Exploration 85,000 TBD >1,000 Total 670,000 5,700 >11,000

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Delaware Basin Resource

DELAWARE BASIN RESOURCE

FORMATION NET EFFECTIVE ACRES GROSS RISKED LOCATIONS GROSS UNRISKED LOCATIONS Delaware Sands 160,000 600 1,500 Leonard Shale 160,000 1,000 3,500 Bone Spring 530,000 3,200 6,000 Wolfcamp 460,000 1,500 8,500 Other (Yeso & Strawn) 20,000 200 1,000 Total >1,300,000 6,500 >20,000

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Hedge Position – As of 7/27/17

OIL DERIVATIVES

SWAPS COLLARS COMBINED

• AVG. PRICE

Q3-Q4 2017 78.9 $54 69.8 $46 $58 2017 148.7 $50 Q1-Q4 2018 15.3 $51 22.4 $46 $56 2018 37.7 $48

NATURAL GAS DERIVATIVES

SWAPS COLLARS COMBINED

• AVG. PRICE

Q3-Q4 2017 237.5 $3.24 437.5 $3.03 $3.42 2017 675 $3.10 Q1-Q4 2018 120.1 $3.13 87.0 $3.09 $3.41 2018 207 $3.11

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Significant Financial Strength

• $5.4 billion of liquidity (credit facility matures in 2019)
• No significant near-term debt maturities

Liquidity

$ Millions 2017 2018 2019 2020 2021

$20 $95 $162 $500

$0 $200 $400 $600 $800 $1,000

Debt Maturities – Next 5 Years

6/30/17, $ Millions Liquidity Credit Facility Cash

$5,400

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Johnson County Divestiture Package

• Massive position in core of the Barnett

— Net acres: 610,000 — Q2 net production: 155 MBOED (27% liquids)

• Pursuing divestiture for Johnson County area

— 20% of Devon’s Barnett position — Data room: open in Q3 2017

• Ft. Worth

Denton

Divest Area