raymond james institutional investors conference

NYSE: DVNdevonenergy.com

Raymond James InstitutionalInvestors ConferenceMarch 2, 2015

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]

Shea Snyder, Director, Investor Communications(405) 552‐4782 / [email protected]

Safe HarborSome of the information provided in this presentation includes “forward‐looking statements” as defined by the Securities and Exchange Commission. Words such as “forecasts," "projections," "estimates," "plans," "expectations," "targets," and other comparable terminology often identify forward‐looking statements. Such statements concerning future performance are subject to a variety of risks and uncertainties that could cause Devon’s actual results to differ materially from the forward‐looking statements contained herein, including as a result of the items described under "Risk Factors" in our most recent Form 10‐K; and the items described under "Information Regarding Forward‐Looking Estimates" in our Form 8‐K furnished February 17, 2015.

Cautionary Note to Investors The United States Securities and Exchange Commission 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 and exploration target size. 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 from us at Devon Energy Corporation, Attn. Investor Relations, 333 West Sheridan, Oklahoma City, OK 73102‐5015. 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.

2

Devon TodaySuperior Execution Delivering Shareholder Value

3

A leading North American E&P

Building operational momentum

Disciplined capital allocation

Oil driving production growth

Financial strength and flexibility

Significant midstream business

A Leading North American E&P

4

Heavy Oil

Rockies Oil

Barnett Shale

Eagle Ford

Permian Basin

Focused and balanced asset portfolio

— Proved reserves: 2.8 billion BOE— Net production: 664 MBOED— Upstream revenue: 60% oil

Deep inventory of opportunities

— Prolific Eagle Ford assets— High‐quality Permian Basin position— World‐class heavy oil projects— Top‐tier liquids‐rich gas plays

Positioned to deliver visible, low‐riskproduction growth

Note: All figures represent Devon’s retained asset portfolio.

Anadarko Basin

Oil Assets

Liquids‐Rich Gas Assets

A Leading North American E&P

Premier and sustainable asset portfolio

— High‐returning projects— Positioned in top‐tier basins— Balanced between oil and gas— Deep inventory of opportunities

Focused on superior execution

— Technical and operational excellence— Production optimization

Strategic midstream business

Maintain financial strength and flexibility

Strategy For Long‐Term Success

5

6

Building Operational MomentumQ4 & Full‐Year 2014 Highlights

Delivered U.S. oil production growth of 82%

— Prolific Eagle Ford development results

― Excellent results in Delaware Basin

Q4 top‐line production 20% higher

Liquids approach 60% of production mix

Proved oil reserves increase to all‐time high

Record midstream operating profit36%

21%

43%

Oil

NGL

Gas

80

146

Q4 2013 Q4 2014

82%Growth

U.S. Oil Production GrowthMBOD

Q4 2014 Production Mix664 MBOED


Disciplined Capital Allocation2015 Capital Outlook

7

2015 E&P Capital Budget$4.1 ‐ $4.4 Billion

Balances capital with cash inflows

Reduced 20% from 2014

Focused on best developmentopportunities

Minimal exploration activity

Dynamically allocate capital throughout 2015

Oil Driving Production Growth2015 Production Outlook

8

2014 2015e

209

≈20‐25%Expected Growth

250 ‐ 260

Total Oil ProductionMBOD


Oil production growth: ≈20% ‐ 25%

— Driven by Eagle Ford, Permian & Jackfish 3

Top‐line BOE growth: ≈5%

Capital efficient growth achievable with 20% less spend than 2014

Oil Driving Production GrowthSignificant Oil Producer in North America

9

0

50

100

150

200

250

300

350

EOG CLR CHK WLL PXD CXO MEG ECA NFX XEC OAS SD LPI FANG RRC

Q3 2014 Oil Production Devon vs. N.A. Onshore Peers

MBO

D


10

Financial Strength & Flexibility

Strong investment‐grade ratings

— Cash balances: $1.5 billion

— Net debt(1): $7.8 billion (excluding EnLink)

Cash flow protected by hedges

— >50% of 2015 oil protected at $91 per barrel

— ≈40% of 2015 gas protected at $4.17 per Mcf

— Fair market value of hedges: ≈$2 billion (12/31/14)

Significant EnLink optionality

— Equity ownership interest valued at >$7 billion

— Cash distributions from EnLink to reach ≈$300 million in 2015

— Midstream asset dropdown potential

(1) Net debt is a Non‐GAAP measure defined as total debt less cash and cash equivalents and debt attributable to the consolidationof EnLink Midstream.

Strategic Midstream BusinessEnLink Overview

11

Market Value of EnLink OwnershipFebruary 2015

Devon’s equity ownership interest

— 49% of MLP (ENLK: 120 MM units)— 70% of GP (ENLC: 115 MM shares)

Highly accretive transaction

Improves capital efficiency and growthtrajectory of midstream business

Distributions to reach ≈$300 MM in 2015

Midstream asset dropdown potential

— Victoria Express Pipeline in Eagle Ford— Access Heavy Oil Pipeline in Canada

Asset OverviewPremier North American Portfolio

Oil Assets

HEAVY OIL

ROCKIES OIL

ANADARKO BASIN

BARNETT SHALE

EAGLE FORD

PERMIANBASIN

Liquids‐Rich Gas Assets

12

Eagle FordOverview

13

Top‐tier acreage position

— 82,000 net acres focused in DeWitt Co.— Q4 net production: 98 MBOED

Highest returning asset in portfolio

— Delivering industry‐leading well results— ≈1,000 undrilled locations in inventory— 2014 cash margin >$50 per BOE

2015 Outlook: High activity in DeWitt

— 2015 capital: ≈$1.1 billion— Running 11 to 12 rigs in 2015

Dewitt

LavacaGonzales

Karnes

Devon AcreageOil Condensate & NGLsDry Gas

Eagle FordProlific Production Results

49

98

March Q2 Q3 Q4

Eagle Ford Production GrowthMBOED

Production doubled since March 2014 acquisition

Q4 2014 production increased 26% over Q3

Light oil >60% of production mix

100%Increase

14

Eagle FordProlific Development Results

15

Prolific Q4 results in DeWitt County

— 62 wells: 30‐day IP avg. 2,100 BOED— Results >50% above type curve — IP’s for top 5 wells exceeded 3,000 BOED

Raising type curve expectations

— Boosting 30‐day IP expectations by >25%— Driven by production optimization program— Potential for higher EURs

Expect 50%‐plus production growth in 2015

— Driven by DeWitt development program

1,3001,650

Previous Revised

>25%Increase

Revised Eagle Ford Type Well30‐Day IP Rate, BOED

65

>100

2014 2015e

>50%Expected Growth

2015 Eagle Ford Production GrowthMBOED

Permian Production Growth2014 vs 2013 (MBOED)

Permian BasinOverview

16

Industry leader in basin

— 1.2 million net surface acres with stacked pay— Q4 net production: 98 MBOED— Production growth 23% higher in 2014— Liquids 77% of production mix

Deep inventory of low‐risk projects

— >5,000 locations in Delaware Basin— Significant upside from downspacing

2015 Outlook: Most active asset

— 2015 capital: ≈$1.3 billion— Running 13 operated rigs in Delaware Basin

Permian BasinActivity Focused in Delaware Basin

17

Significant oil resource opportunity

Activity focused on Bone Spring play

Delivering prolific production growth

Bone Spring285,000 net acres

Delaware Sands80,000 net acres

Leonard Shale60,000 net acres

Wolfcamp>100,000 net acres

Eddy

Lea

Reeves

Loving Winkler

Ward

2009 2010 2011 2012 2013 2014

Delaware Basin Production GrowthMBOED

16

45

≈190%Growth(CAGR: 23%)

Oil NGL Gas

Delaware BasinNew Completion Design Enhances Results

18

Well performance exceeding expectations

— Results highlighted by 13 wells in Q4 — Targeting 2nd Bone Spring interval in NM— Applied ≈2x more sand than historic design— Initial 30‐day rates improved by >60%

Further design enhancements underway

— Testing up to 3,000 lbs. of sand per lateral ft.— Preliminary results positive

2015 activity will utilize larger completions

575

940

Old Design Q4 Results

>60%Increase

30‐Day IP RatesBOED

Old Design

Q4Results*

SandPounds Per Foot

600 1,600

Frac Stages 13 16

* Incremental capital for Q4 wells wasapproximately $700,000 per well.

Identified >5,000 risked, undrilled locations

— Conservatively assumes 4 to 5 wells per risked, drillable section— ≈70% of inventory resides in the Bone Spring formation

Downspacing pilots underway

— Testing 8 wells per section in lower 2nd Bone Spring interval (traditional landing zone)— Appraising stand‐alone commerciality of upper portion of 2nd Bone Spring

Delaware BasinSignificant & Growing Resource Opportunity

Total 19

Net Prospective

Acres Risk FactorNet Risked

AcresRisked Wells Per Section

Gross Risked UndrilledLocations

160,000 50% 80,000 4 700

85,000 30% 60,000 5 700

440,000 35% 285,000 4‐5 3,500

>100,000 n/a >100,000 n/a Evaluating

40,000 50% 20,000 4 >200

Total >500,000 >5,000

Formation

Delaware Sands

Leonard Shale

Bone Spring

Wolfcamp

Other (Yeso & Strawn)

Heavy OilOverview

20

Located in best part of oil sands

— Low geologic risk— Thick and continuous reservoir— Industry leading operating results— Massive risked resource: 1.4 BBO

Features of each Jackfish project:

— 300 MMBO gross EUR— Long reserve life >20 years— Flat production profile

2015 Outlook: 20%‐plus growth

— 2015 capital: ≈$700 million— Delivering >20% production growth

Jackfish 1Jackfish 2

Jackfish 3

Access Pipeline

Pike Project Area

6 Miles

R6 R5 R4

T76

T75

T74

T73

Jackfish Acreage100% WI

Pike Acreage50% WI

Access Pipeline50% Ownership

Jackfish Heavy Oil DevelopmentsDelivering Visible Oil Growth

21

Jackfish 1 delivering top‐tier results

— Q4 gross production: 37 MBOD— Exceeding facility nameplate capacity— Steam‐to‐oil ratio declines to record

low of 2.5

Jackfish 2 production increases

— Q4 gross production: 26 MBOD— Production increased 10% YoY

Jackfish 3 ramp‐up ahead of schedule

— Q4 gross production: 11 MBOD— Expect 35 MBOD by end of 2015

60%

70%

80%

90%

100%

110%

2011 2012 2013 2014

% of D

esigne

d Ca

pacity Utilized

2011 2012 2013 2014

Facility Turnaround

Jackfish 1 Plant Utilization90 Day Moving Avg.

Jackfish 3 Production Ramp‐UpBOD

0

5,000

10,000

15,000

Aug‐14 Sep‐14 Oct‐14 Nov‐14 Dec‐14Gross Oil Prod

uctio

n (BOD)

ActualOriginal Plan

+5,500 BODvs. Original Plan

Anadarko BasinCana‐Woodford Overview

22

Excellent Q4 results in Cana‐Woodford

— Q4 net production: 76 MBOED— Production increased 35% YoY— 1st operated STACK well brought online

High‐rate development wells in Q4

— Cana results >20% above type curve— Driven by improved completion design

2015 Outlook: Accelerating Cana activity

— 2015 capital: $400 million— Running 8 rigs in 2015— Continue appraising STACK opportunity

Caddo

Canadian

Kingfisher

Blaine

Mullen 1H24‐Hr IP: 1,500 BOED Emma 1H

10,000’ LateralQ1 Completion

WoodfordMeramec

Chiles & Hancock Pads9 WellsAvg. 30‐Day IP: 1,460 BOED

Why Own Devon?

23

A leading North American E&P

Building operational momentum

Disciplined capital allocation

Oil driving production growth

Financial strength and flexibility

Significant midstream business

Thank you.

Appendix

Permian BasinOverview

26

Industry leader in basin

— 1.2 million net surface acres withstacked pay

— Q4 net production: 98 MBOED— Production growth 23% higher in 2014— Liquids 77% of production mix

Deep inventory of low‐risk projects

— >5,000 locations in Delaware Basin— Significant upside from downspacing

2015 Outlook: Most active asset

— 2015 capital: ≈$1.3 billion— Running 13 operated rigs in

Delaware Basin

Bone Spring, Delaware,

Wolfcamp

Conventional

Gaines Dawson Borden

Howard MitchellAndrews

EctorWinkler

Lea

Ward

Reeves

Loving

Eddy

Crane

Midland

Midland

Reagan

Wolfberry

Upton

Irion

Crockett

WolfcampShale

Glasscock

Sterling

Pecos

Martin

Leonard &Wolfcamp

Barnett ShaleLiquids‐Rich Gas Development

27

Significant gas optionality

— Net acres: 623,000— Best position in play— Q4 net production: 201 MBOED— Liquids 27% of production mix

Generated free cash flow of $1 billionin 2014

2015 Outlook

— 2015 capital: ≈$150 million— Focused on optimizing base production

Liquids‐Rich Dry Gas

Wise

Parker

Johnson

Hood

Tarrant

Denton

Ft. Worth

Rockies OilPowder River Basin

28

Emerging light oil opportunity

— Net acres: 150,000— Stacked pay potential— 1,000 risked locations in inventory— Q4 net production: 19 MBOED

Notable Q4 development activity

— 4 wells: 30‐day IP avg. 800 BOED— Light oil 90% of production mix

2015 Outlook

— 2015 capital: ≈$350 million— Running 2 operated rigs

Parkman Focus Area

Campbell

Converse

Johnson

Upper Eagle Ford PotentialDeWitt and Lavaca Counties

29

Pay thickest in DeWitt County

First 2 operated wells online

Encouraging early results

2015 Outlook

— Bring 4 wells online

Medina 2HUpper Eagle Ford Marl30‐Day IP: 850 BOED

Nancy 1HUpper Eagle Ford Marl30‐Day IP: 800 BOED

Dewitt

Lavaca

Gonzales

KarnesNet Pay (ft.)

05

10152025303540

Devon Operated

≈56 mile crude oil pipeline from Eagle Ford core to Port of Victoria terminal

≈300,000 barrels of storage available

Capacity:— 50 MBOPD operational capacity (expandable)

Devon ownership: 100%— ≈$70 MM invested to date

Victoria Express Pipeline

Potential Drop Down AssetsAccess & Victoria Express Pipelines

30

Access Pipeline

Three ≈180 mile pipelines from Sturgeon Terminal to Devon’s thermal acreage

≈30 miles of dual pipeline from Sturgeon Terminal to Edmonton

Capacity net to Devon:— Blended bitumen: 170 MBOPD

Devon ownership: 50% — ≈$1B invested to date

PORT OF VICTORIA

Karnes

Gonzales

DeWitt

Victoria

Jackson

Goliad

Wharton

Colorado

Calhoun

Refugio

Aransas

Matagorda

Gulf ofMexico

Lavaca

Devon AcreageExpress

To U.S. Rockies

JACKFISH & PIKE

SturgeonTerminal

EDMONTON

HARDISTY

16” Diluent Line(Edmonton to Jackfish)

Oil Pipelines

24” Diluent Line(Sturgeon to Jackfish)

42” Blend Line(Jackfish to Sturgeon)

30” Blend Line(Sturgeon to Edmonton)

Key Modeling Statistics

0%

15%

30%

45%

60%

75%

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5

Decline Rates(1st month to 13th month)

Bone Spring (Delaware Basin)

Working interest / royalty: 67% / 21%

30‐day IP rate: 750+ BOED

EUR: 450+ MBOE

Oil / NGLs as % of production: 65% / 20%

0%

15%

30%

45%

60%

75%



Eagle Ford (DeWitt County)


30‐day IP rate: 1,650 BOED

EUR: 900+ MBOE


31

Key Modeling Statistics

0%

15%

30%

45%

60%

75%



Cana‐Woodford Shale


30‐day IP rate: 1,200 BOED

EUR: 1.7 MMBOE


32

0%

15%

30%

45%

60%

75%

90%



Rockies: Powder River Basin (Parkman)


30‐day IP rate: 525 BOED

EUR: 300 MBOE

Oil as % of production: 95%

Discussion of Risk Factors

33

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”, “plans”, “expectations”, “targets”, “opportunities”, “potential”, “outlook”, and other similar terminology.” Such statements are subject to a variety of risk factors. A discussion of risk factors that could cause Devon’s actual results to differ materially from the forward‐looking statements contained herein are outlined below.The forward‐looking statements provided in this presentation are based on management’s examination of historical operating trends, the information which was used to prepare reserve reports and other data in Devon’s possession or available from third parties. Devon cautions that its future oil, natural gas and NGL production, revenues and expenses are subject to all of the risks and uncertainties normally incident to the exploration for and development, production and sale of oil, gas and NGL. These risks include, but are not limited to, price volatility, inflation or lack of availability of goods and services, environmental risks, drilling risks, political changes, changes in laws or regulations, the uncertainty inherent in estimating future oil and gas production or reserves, and other risks identified in our Form 10‐K and our other filings with the SEC.

Specific Assumptions and Risks Related to Price and Production Estimates: A significant and prolonged deterioration in market conditions and the other assumptions on which our estimates are based will impact many aspects of our business and our results. Substantially all of Devon’s revenues are attributable to sales, processing and transportation of three commodities: oil, natural gas and NGL. Prices for oil, natural gas and NGL are determined primarily by prevailing market conditions, which may be impacted by a variety of general and specific factors that are difficult to control or predict. Worldwide and regional economic conditions, weather and other local market conditions influence the supply of and demand for energy commodities. In particular, concerns about the level of global crude‐oil and natural‐gas inventories and the production trends of significant oil producers like OPEC, among other things, have led to a significant drop in prices. In addition to volatility from general market conditions, Devon’s oil, natural gas and NGL prices may vary considerably due to factors specific to Devon, such as pricing differentials among the various regional markets in which our products are sold, the value derivable from the quality of oil Devon produces (i.e., sweet crude versus heavy or sour crude),the Btu content of gas produced, the availability and capacity of transportation facilities we may utilize, and the costs and demand for the various products derived from oil, natural gas and NGL. Estimates for Devon’s future production of oil, natural gas and NGL are based on the assumption that market demand and prices for oil, natural gas and NGL will be at levels that allow for profitable production of these products. As illustrated by recent market trends, there can be no assurance of such stability. Much of Devon’s production in Canada is subject to government royalties that fluctuate with prices, which, therefore, will affect reported production. Estimates for Devon’s future processing and transportation of oil, natural gas and NGL are based on the assumption that market demand and prices for oil, natural gas and NGL will be at levels that allow for profitable processing and transport of these products. As with our production estimates, there can be no assurance of such stability. The production, transportation, processing and marketing of oil, natural gas and NGL are complex processes which are subject to disruption due to transportation and processing availability, mechanical failure, human error, meteorological events including, but not limited to, tornadoes, extreme temperatures, and numerous other factors.

Assumptions and Risks Related to Capital Expenditures Estimates: Devon’s capital expenditures budget is based on an expected range of future oil, natural gas and NGL prices as well as the expected costs of the capital additions. Should actual prices received differ materially from Devon’s price expectations for its future production, some projects may be accelerated or deferred and, consequently, may increase or decrease capital expenditures. In addition, if the actual material or labor costs of the budgeted items vary significantly from the anticipated amounts, actual capital expenditures could vary materially from Devon’s estimates.

Assumptions and Risks Related to Marketing and Midstream Estimates: Devon cautions that its future marketing and midstream revenues and expenses are subject to all of the risks and uncertainties normally incident to the marketing and midstream business. These risks include, but are not limited to, price volatility, environmental risks, mechanical failures, regulatory changes, the uncertainty inherent in estimating future processing volumes and pipeline throughput, cost of goods and services and other risks.

raymond james institutional investors conference

Documents