Devon Energy Corporation · NYSE:DVN

Devon Energy — J.P. Morgan Inaugural Energy Equity Investor Conference 2016

23 slides from Devon Energy's conference presentation, Jun 29, 2016

  1. Slide 1: J.P. Morgan Inaugural Energy Equity Investor Conference

    J.P. Morgan Inaugural Energy Equity Investor Conference June 29, 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 / [email protected] Scott Coody, Director, Investor Relations (405) 552-4735 / [email protected] Chris Carr, Supervisor, Investor Relations (405) 22

  3. Slide 3: Devon Today

    Devon Today A Leading North American E&P Core Asset Production Q1 2016: 581 MBOED Key Messages Heavy Oil  Premier asset portfolio Gas 37% Oil 44% — Focused in top-tier resource plays NGL 19% — Deep inventory of opportunities Rockies Oil  Significant financial strength  Delivering best-in-class re

  4. Slide 4: Approach to Current Environment

    Approach to Current Environment  Protect balance sheet — Invest within cash flow — Enhance financial strength with asset sales  Drive efficiencies across the portfolio — Achieve additional cost savings — Further increase capital productivity  Position for the recovery — Maintain operational conti

  5. Slide 5: Non-Core Asset Sale

    Non-Core Asset Sale Enhancing Financial Strength  Upstream asset sale program completed ahead of schedule Access Pipeline Gross capacity: 340 MBOD ― $2.1 billion of divestitures (50% Interest) ― Minimal tax expected ― Proceeds to reduce debt  Access Pipeline sale anticipated within Granite Wash ne

  6. Slide 6: Significant Financial Strength

    Significant Financial Strength  Investment-grade balance sheet  >$6.5 billion of liquidity(1) (credit facility matures October 2019)  No significant near-term debt maturities Pro Forma Liquidity(1) Debt Maturities – Next 5 Years ($ Millions) (3/31/16, $ Millions) >$6,500 Credit Facility $750 Cash

  7. Slide 7: Operating Strategy for Success

    Operating Strategy for Success  Maximize base production — Minimize controllable downtime — Enhance well productivity Capture Full — Leverage midstream operations Value — Reduce operating costs  Optimize capital program — Disciplined project execution — Perform premier technical work Improve — Foc

  8. Slide 8: 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

  9. Slide 9: Achieving Significant Cost Savings

    Achieving Significant Cost Savings  D&C costs declining across all core plays D&C Well Cost Declines Peak cost to Q1 2016 ― Up to 40% lower than peak 2014 rates UP TO ― Improved drilling efficiencies and lower supply chain costs (≈50/50 split) SAVINGS ― More than offsetting larger completions  Ach

  10. Slide 10: Disciplined Capital Allocation

    Disciplined Capital Allocation Yielding Strong Results 2016 E&P Capital Budget  Capital program focused on top U.S. $1.1 Billion - $1.3 Billion resource plays Other  Recently raised 2016 capital program by 7% $200 million Heavy Oil 15% STACK ― Incremental activity focused in STACK 37% and Delaware

  11. Slide 11: Strong Returns At Lower Prices

    Strong Returns At Lower Prices  Assets in best North American Incremental Well Economics At $50 Oil & $2.50 Gas resource plays Delaware Basin STACK – Meramec 30%+ 20%+  Strong well economics at lower Eagle Ford Rockies IRR – BTAX no G&A IRR – ATAX w/G&A commodity prices 15% - 30% 10% - 20% STACK –

  12. Slide 12: STACK: Best-In-Class Position

    STACK Best-In-Class Position  World-class development play Atoka Penn. Meramec – Best Results — 430,000 net surface acres Morrow - Strong flow rates Springer - Oil-weighted production — Top targets: Meramec & Woodford - Low well costs Kingfisher (Prospective Meramec acres: ≈200k) Chester Mississipp

  13. Slide 13: STACK: Track Record of Growth

    STACK Track Record of Growth  Per-well productivity continues to increase  ≈40% increase in production year over year  Driven by higher-margin oil and liquids production STACK Production Growth 91 MBOED 65 ≈40% Increase Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 13

  14. Slide 14: STACK: Meramec Results Validate Core Position

    STACK Meramec Results Validate Core Position  Favorable characteristics Scheffler 1H-9X Cascade 2314-1H of core oil window: 30-Day IP: 2,040 BOED 30-Day IP: 1,650 BOED Dewey Blurton 1-7-6XH Maybel 1H-13X 1. Attractive reservoir 30-Day IP: 1,790 BOED 30-Day IP: 1,900 BOED properties (thickness, Comp

  15. Slide 15: STACK: Significant Resource Upside

    STACK Significant Resource Upside  Meramec inventory conservatively risked — Assumes 4 risked wells per section (potential for 5 producible intervals)  Downspacing and staggered tests to drive location count higher — Testing up to 8 wells per section across 1 interval in Meramec — Staggered latera

  16. Slide 16: Delaware Basin: A World-Class Oil Play

    Delaware Basin A World-Class Oil Play  Industry leader in basin — Net risked acres: 585,000 Lea — Q1 net production: 63 MBOED (≈60% oil) Eddy — Delivering top-quartile well results  Cost savings enhancing value — LOE 36% lower YoY — Driven by lower water and power costs  2016 outlook — Activity f

  17. Slide 17: Delaware Basin: Significant Resource Opportunity

    Delaware Basin Significant Resource Opportunity  Identified 5,200 risked, undrilled locations — Bone Spring ≈70% of risked inventory  Downspacing and appraisal work to drive risked location count higher — Evaluating tighter spacing in Bone Spring — Staggered spacing pilots expanding Leonard Shale

  18. Slide 18: Eagle Ford: Best-In-Class Results

    Eagle Ford Best-In-Class Results  Top-tier acreage position in DeWitt County  Expected to generate >$250 million of free cash flow in 2016  Consistently delivering best wells in world-class field (avg. 90 IP rate ≈1,200 BOED) Top-150 Eagle Ford Wells Based on 90-Day IP Rates, 20:1 81 28 16 8 6 5

  19. Slide 19: Canadian Heavy Oil: Top-Tier Thermal Position

    Canadian Heavy Oil Top-Tier Thermal Position  Located in best part of play — Top-tier operating results — Massive risked resource: 1.4 BBO  Significant cash flow at higher prices — Profitable at $35 WTI & above — ≈$500 MM annually at $50 WTI Jackfish Complex Unit LOE  Jackfish production up 31% Y

  20. Slide 20: Premier Asset Portfolio

    Premier Asset Portfolio Platform For Value Creation Asset Risked Opportunity Upside Potential Heavy Oil STACK 5,300 undrilled STACK spacing tests locations underway Delaware >5,000 undrilled Spacing tests and Basin locations appraisal work ongoing Eagle Ford 1,300 potential Upper EF delineation loca

  21. Slide 21: Devon Energy: A Leading North American E&P

    Devon Energy A Leading North American E&P  Premier asset portfolio  Significant financial strength  Track record of execution  Disciplined capital allocation 21

  22. Slide 22: Thank you.

    Thank you.

  23. Slide 23: Discussion of Risk Factors

    Discussion of Risk Factors Forward-Looking Statements: Information provided in this presentation includes “forward-looking statements” as defined by the Securities and Exchange Commission. Forward-looking statements are often identified by use of the words “forecasts”, “projections”, “estimates”, “p

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