Bank of America Merrill Lynch Global Energy...

NYSE: DVNdevonenergy.com

November 16, 2017

Bank of America Merrill Lynch Global

Energy Conference

2| Investor Presentation

Investor Contacts & Notices

Investor Relations Contacts

Scott Coody, Vice President, Investor Relations

(405) 552-4735 / [email protected]

Chris Carr, Supervisor, Investor Relations

(405) 228-2496 / [email protected]

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.

http://www.devonenergy.com/

http://www.devonenergy.com/

http://www.sec.gov/


Devon’s Competitive Advantage

STACK & DELAWARE POTENTIAL LOCATIONS>30,000

Multi-decade growth platform

STACK & Delaware focused

Top-tier operating results

Innovative culture

Significant financial strength


Devon’s 2020 Vision

Advance STACK & Delaware activity

Monetize less competitive assets

Multi-billion dollar divestiture potential

Further high-grade asset portfolio

Expandper-unit margins

Shift production to higher-value products

Maximize margins by lowering cost structure

Improvebalance 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


2017 Capital Program

Disciplined focus on value and returns

Capital program funded within cash flow

Shifting to full-field development

Efficiencies driving capital costs lower

For additional information see our Q3 operations report.

2 0 1 7 e E & P C A P I T A L

$2.0-2.1 BillionU.S. Rig Activity(~20 development rigs in Q4)

STACK &

DELAWARE

90%

10%OTHER

ASSETS


Expanding High-Returning Oil Production

Rapidly growing highest-value product

Driven by STACK & Delaware Basin

Building operational momentum into 2018102(1)

Q4 2016 2017e Q4 2017e

+~15%(vs. Q4 16)

+~20%(vs. Q4 16)

U.S. Oil ProductionMBOD

For additional information see our Q3 operations report. (1) Adjusted for the sale of minor, non-core assets


Preliminary 2018 Outlook

STACK & DEL AWARE

>30% Increase$2.0-2.5 Billion

2 0 1 8 e E & P C A P I TA L

OPTIMIZED FOR RETURNS

F U N D E D W I T H I N

O P E R AT I N G C A S H F LO W

$1 Billion

TA R G E T I N G

(2017 VS 2018 )

OILGROWTH

DEBTREDUCTION

$


Significant Financial Strength

Investment-grade credit ratings

Disciplined hedging program

Significant investment in EnLink Midstream

$1 billion divestiture program underway

Additional multi-billion dollar divestiture potential

INVESTMENT-GRADECREDIT RATINGS

Excellent LiquidityCash: $2.8 billon

EnLink InvestmentMarket value: ~$3.5 billion

DisciplinedHedgingQ4 17:~65%

1H 18:~40%

PROTECTING OUR ABILITY TO EXECUTE


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

CaptureFULL VALUE

ImproveRETURNS


200

400

600

800

1,000

Top-Tier Operating Performance

Best-in-class well productivityAvg. 90-Day Wellhead IPs BOED, 20:1

Source: IHS/Devon. Top operators with more than 40 wells over the past year ending October 2017.

Peers

Across key U.S. plays since 2014 2% D&C IMPROVEMENTOperating expense & G&A since

2014 ($1.4B annual benefit)

34%COST REDUCTION

>40%

BOTTOM LINE IMPACT FROM OPERATIONAL EXCELLENCE INITIATIVES

To annual base production

($100 MM benefit annually)

PRODUCTION UPLIFT

DEVON WELL ACTIVITY(Since 2012)

~400%I M P R O V E M E N T


The Next Frontier Of Efficiency Gains

Multi-zone manufacturing strategy underway

Leading-edge development concept

Debundling supply chain drives costs lower

Massive technology upside remains


$1 MILLION SAVINGSPER WELL

ANACONDAMULTI-ZONE PROJECT


Innovation Momentum - Technology Projects In Flight

Improved 3D seismic

interpretation

High-graded location selection

Optimized landing zones

Well productivity predictions

Depletion analysis

Geospatial optimization

Cyber-geosteering

Flat, in-zone wells

Fiber-optic sensing

Prolonged drill-bit life

Coiled-tubing drill-outs

Efficient flowbacks

Cutting-edge frac modeling

Accounting process

automation

World-class partnerships in

digital innovation platforms

Enterprise dashboards for

information

Accessible mobile

applications across all

aspects of the business

Water-treatment options

Frac fluid chemistry

Data acquisition and

management systems

Leak detection in piping

systems

Water transfer and storage

safety

Predictive pump failures

Field-issue prioritization

Optimized compressors

Production monitoring

Flood optimization

Inter-well communication

(data analytics)

Gas lift for EOR

Targeting hundreds of millions in value creation annually

S U B S U R F A C E

D R I L L I N G &

C O M P L E T I O N S

P R O D U C T I O N

O P E R A T I O N SW A T E R

M A N A G E M E N T C O R P O R A T E


STACK – Franchise Asset

Future Projects (Timing TBD)

Upcoming DevelopmentCanadian

KingfisherBlaine

Caddo

CoyoteDrilling Underway (7 wells)

ShowboatDrilling Underway (24 wells)

HorseflyQ4 2017 Spud (10 wells)

Fleenor

Sonoyta

Privott

Bernhardt2018 Spud (8 wells)

Smilodon

Sidney

Best-in-class acreage position

670k net acres by formation

Up to 4 target intervals per unit

Accelerating development activity


0

40

80

120

160

DV

N

MR

O

XEC CLR

NFX

ALT

MES

GST

$4.97

~$4.30

Q4 2016 Q4 2017e

STACK – Multi-Decade Growth Platform

Best-in-class well results

Advantaged cost structure

High-returning production growth

Tremendous resource potential

STACK Avg. 90-Day Wellhead IPs Per 1,000’ Lateral

BOED, 20:1

Peers

Note: IHS/Devon. Wells completed over the past year.

>70%GROWTH

88

95

105

111

~ 120

Q4 16 Q1 17 Q2 17 Q3 17 Q4 17e

Lease Operating Expense

$/BOE

>11,000 POTENTIAL LOCATIONS

STACK RISKED LOCATIONS

>70% VS. PEER AVG.

5,700

>35% VS. Q4 2016

IMPROVEMENT

~15%

MBOED


STACK - Development Activity

Showboat DevelopmentFirst multi-zone STACK development

MER

AM

EC

UP

PER

LO

WER

WDFD

Kingfisher Full-field development underway

Activity focused on Coyote & Showboat

Projects offset by prolific well results

1st production expected in 1H 2018


CoyoteDrilling Underway (7 wells)

Faith Marie24-Hr IP: 5,100 BOED

Blaine

ShowboatDrilling Underway (24 wells)

5 operated rigs (2 drilling units)

Privott 17-H24-Hr IP: 6,000 BOED


Delaware Basin – Franchise Asset

World-class oil opportunity


Up to 15 target intervals

Accelerating development activity

Future Projects (Timing TBD)

Upcoming Development

Core Development Area

POTATO BASIN

TODD

THISTLE/GAUCHO

COTTON DRAW

RATTLESNAKE

LusitanoQ4 17 Spud (6 wells)

BoomslangCompleting (11 wells)

SeawolfDrilling (12 wells)

MedusaQ4 17 Spud (20 wells)

AnacondaFlowing Back (10 wells)

Spud Muffin

Snapping

Fighting Okra

Mean Green

Cobra

Tomb Raider

Eddy

Loving

Lea


Anaconda: Initial Multi-Zone Delaware Project

Co-developing 3 Leonard shale intervals

Achieved savings of $1 MM per well (~20%)

Early flow rates are positive

— 2 wells with 30-day IPs: 1,600 BOED

Peak production rates expected in Q4

THISTLE/GAUCHO

Lea

Anaconda ProjectTesting 19 wells per section across 3 landing zones

LEO

NA

RD

A

B

C

Initial

Development(10-Well Program)

Future

Potential


TODD

AnacondaPeak rates: Q4 17


Delaware Basin – Multi-Decade Growth Platform

Note: Graphic for illustrative purposes only and not necessarily

representative across Devon’s entire acreage position.

Basin Slope

DELA

WA

RE

SA

ND

S Madera

Lower

Brushy

LEO

NA

RD A

B

C

BO

NE

SP

RIN

G 1st

2nd

(Upper &

Lower)

3rd

WO

LFC

AM

P

X/Y

A, B, C

& DRisked Location Unrisked Location

1 Section 1 Section

>4

,00

0’

OF

PA

Y

6,500

>1.3 MM

RISKED LOCATIONS

NET EFFECTIVE ACRES


Devon’s Competitive Advantage

STACK & DELAWARE POTENTIAL LOCATIONS>30,000


STACK & Delaware focused

Top-tier operating results

Innovative culture

Significant financial strength

Thank you.

Thank you. For additional information see our

Q3 Operations Report


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: DVNdevonenergy.com

Appendix


Cash-Flow Generating Assets

30%EAGLE FORD

20%BARNETT

15%ENLINK

$2.2B>CASH FLOW

2017e

35%HEAVY OIL

(1) Represents field-level cash flow before G&A and taxes

(1)

HEAVY OIL

BARNETT

EAGLE FORD


Rockies – An Emerging Oil Growth Asset

Premier Powder River Basin position

— Q3 net production: 16 MBOED (80% oil)

— >400,000 net surface acres

Stacked pay: >10 prospective intervals

Initial “Super Mario” Turner results expected

in Q4

POWDER RIVER BASIN ACTIVITY


STACK Resource

STACK RESOURCE

FORMATION WINDOW NET ACRESGROSS RISKED

LOCATIONS

GROSS UNRISKED

LOCATIONS

MeramecOver-Pressured Oil 130,000 1,700 3,000

Liquids-Rich Gas 150,000 TBD >1,000

280,000 1,700 >4,000

WoodfordCondensate 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


Delaware Basin Resource

DELAWARE BASIN RESOURCE

FORMATIONNET 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


Johnson County Divestiture Package

Massive position in core of the Barnett

— Net acres: 610,000

— Q3 net production: 148 MBOED (25% liquids)

Pursuing divestiture for Johnson County area

— ~30 MBOED

— Data rooms open

— Initial bids expected in Q4 2017

Wise

Parker

Hood

Tarrant

Ft. Worth

Denton

Denton

Johnson

Divest Area


Hedge Position – As of 10/27/17

OIL DERIVATIVES

SWAPS COLLARS COMBINED

PERIODVOLUME

(MBPD)

WEIGHTED

AVG. PRICE

($/BBL)

VOLUME

(MBPD)

WEIGHTED AVG.

FLOOR PRICE

($/BBL)

WEIGHTED AVG.

CEILING PRICE

($/BBL)

PERIOD VOLUME

(MBPD)

PROTECTED

PRICE

Q4 2017 83.2 $54 79.2 $46 $57 2017 162 $50

Q1-Q4 2018 35.5 $52 45.9 $46 $56 2018 81 $49

NATURAL GAS DERIVATIVES

SWAPS COLLARS COMBINED

PERIODVOLUME

(MMBTU/D)

WEIGHTED

AVG. PRICE

($/MMBTU)

VOLUME

(MMBTU/D)

WEIGHTED AVG.

FLOOR PRICE

($/MMBTU)

WEIGHTED AVG.

CEILING PRICE

($/MMBTU)

PERIOD VOLUME

(MMBTU/D)

PROTECTED

PRICE

Q4 2017 357.7 $3.20 455.0 $3.03 $3.41 2017 813 $3.10

Q1-Q4 2018 339.4 $3.07 165.0 $2.98 $3.29 2018 504 $3.04

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