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Barclays CEO Energy Power Conference – Devon Energy Corp

Devon Energy Corp · Sep 6, 2012 · 60 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 1
    Barclays CEO Conference September 6, 2012
  2. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 2
    Devon Today Horn River Oil Proved reserves: 3.0 billion BOE Liquids-Rich Jackfish Dry Gas (42% liquids) Deep Basin Pike Ferrier Corridor Q2 2012 production: 679 MBOED Production mix: 22% oil 15% NGLs Powder River Michigan…
  3. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 3
    Progress Report 2nd Quarter 2012 Results Highlights Oil production increased 26% YOY (149 MBOD) Closed Sinopec joint venture Signed joint venture agreement with Sumitomo Increased Mississippian position to 545,000 net acres…
  4. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 4
    Devons Strengths Disciplined focus on per share results Deep inventory of development opportunities Strong, highly-visible oil growth Significant positions in emerging oil plays Superior financial strength and…
  5. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 5
    Financial Strength & Flexibility Cash and short-term investments: 7.0 billion (As of 8/1/12) Net debt-to-cap ratio: 14% Strong investment grade ratings Fitch: BBB+ Moodys: Baa1 S&P: BBB+ Provides flexibility to invest in…
  6. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 6
    Capital Allocation Criteria E&P capital projects Balancing resource capture and development (Exploration & leasehold capital: 20% of E&P capital since 2009) Debt reduction Reduced net debt by 3 billion since 2003 Share…
  7. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 7
    Track Record of Success North American Onshore Historical Performance Production Growth LOE per BOE (MMBOE) 240 (/BOE) 220 223 207 8.06 7.71 7.32 6.87 7.32 6.54 182 168 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009…
  8. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 8
    Devons Recycle Ratio North America Onshore Full-Year 2011 Results Per BOE Revenue (excluding hedges) 36.90 Cash costs(1) (12.78) Midstream capital (1.39) Cash margin per BOE 22.73 3-yr drilling F&D (includes performance…
  9. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 9
    Recycle Ratio Excluding Hedges Full-Year 2011 Results 180% 177% 176% 162% 151% 129% 124% 65% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Note: Peer group includes APA, APC, CHK, ECA, EOG, NBL and NFX. Source:…
  10. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 10
    Devons Risked Resource Base High-Quality and Balanced 16.2 BBOE Risked Resource (31.8 BBOE Unrisked) Risked Resource By Product (BBOE) 19% Oil (29%) 4.7 NGLs (19%) 3.1 Gas (52%) 8.4 81% Total 16.2 Proved Reserves…
  11. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 11
    Growing the Resource Base New Ventures Exploration Sinopec Joint Venture 2.5 billion transaction (900 million cash and 1.6 billion drilling carry) Sinopec receives 33% of Devons interest Net acreage in joint venture: 1.5…
  12. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 12
    Joint Venture Rationale Objective: Utilize partnerships in new ventures exploration Improves capital efficiency Accelerates de-risking and commercialization Mitigates exploration risk Flexibility to generate new…
  13. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 13
    2012 E&P Capital Allocation 100% of capital allocated towards oil and liquids-rich projects Leasehold capture Other Canada 17% Exploration activity 8% Development activity 75% Jackfish 6.1 6.5 Billion NYSE: DVN…
  14. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 14
    Significant Oil Production Growth North American Onshore Production Data in MBOPD 148.6 122.5 105.9 100.9 89.7 74.9 65.7 2006 2007 2008 2009 2010 2011 Q2-2012 NYSE: DVN www.devonenergy.com Slide 15
  15. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 15
    2012 Capital Program Delivering Strong Oil & Liquids Growth 2012e Exit Rate Oil production Annual growth rate: 22% - 24% Driven by Jackfish and Permian Oil 25% of total company volumes 24% NGLs production Annual growth rate:…
  16. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 16
    Attractively Hedged Oil Hedges 2012: 128,000 BOPD with a protected price of 97 per barrel (85% of forecasted oil production) 2013: 76,000 BOPD with a protected price of 97 per barrel Natural Gas Hedges 2012: 1.7 BCFD with a…
  17. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 17
    Permian Basin Overview Oil Opportunities NEW MEXICO OKLAHOMA Net risked resource: 2.8 BBOE Risked locations: 8,000 New Mexico Texas TEXAS Eastern Northwestern Net acreage: 1.5 million basin-wide Midland Shelf Shelf…
  18. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 18
    Permian Basin Oil Development Projects Development Overview NW Shelf Low-risk, high-margin oil plays New Mexico Texas Gaines Dawson Multi-year drilling inventory Wolfberry Lea 16 operated rigs Eddy Bone Spring/Delaware…
  19. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 19
    Permian Basin Oil Exploration Projects Exploration Overview Potential, high-impact resource plays (Unrisked resource: 3 BBOE net to Devon) Gaines Dawson Borden Scurry Fisher 2012 plans: Drill 40 wells 4 operated rigs Andrews…
  20. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 20
    Mississippian Light-Oil Exploration Sedgwick Kingman Net acreage: 545,000 (400,000 net acres outside of Sinopec JV) Barber Sumner Cowley Harper Kansas High-margin, exploration play Oklahoma Kay Alfalfa Grant Early…
  21. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 21
    Devons Thermal Oil Position SAGD Development Jackfish Field characteristics Jackfish 2 Low F&D Flat production profile Jackfish 3 Long reserve life 20 years Jackfish Top-tier operating performance Q2 2012 net production: 33…
  22. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 22
    Jackfish Performance 1 Performance Comparison to Industry SAGD Projects 56 Months After Project Startup Cumulative Steam Oil Ratio (SOR) Production Per Well (BOPD) 3.56 985 2.69 460 Industry Industry Average…
  23. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 23
    Long-Term Production Outlook Thermal Oil Net Barrels Per Day 175,000 Net Risked Resource: 1.4 BBO 150,000 51,100 Q2 2012 2020 NYSE: DVN www.devonenergy.com Slide 24
  24. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 24
    Cana Woodford Shale Liquids-Rich Gas Development Net risked resource: 11.4 TCFE OKLAHOMA Dewey Blaine Risked locations: 5,400 TEXAS Net acreage: 244,000 Low average royalty burden: 21% Custer Q2 2012 net production: 280…
  25. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 25
    Barnett Shale Liquids-Rich Gas Development Net risked resource: 14.8 TCFE Jack Wise Denton Risked locations: 5,000 Denton Bridgeport Plant Net acreage: 624,000 Low average royalty burden: 18% Palo Pinto Parker DRY GAS Q2 2012…
  26. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 26
    Why Own Devon Disciplined focus on per share results Deep inventory of development opportunities Strong, highly-visible oil growth Significant positions in emerging oil plays Superior financial strength and flexibility…
  27. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 27
    Thank You.
  28. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 28
    Appendix
  29. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 29
    Resource By Asset Strong Foundation for Growth Data in BBOE Additional Unrisked Proved Total Risked Resource Reserves + Risked = Resources Potential Permian Basin 7.6 0.2 2.6 2.8 Barnett Shale 4.3 1.2 1.3 2.5 Cana Woodford…
  30. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 30
    Risked Resource Base History of Growth 16.2 BBOE 4.5 (28%) 10.8 BBOE Repositioning Divestitures 3.4 (2009 2011) (32%) 2.3 (21%) 11.7 (72%) 5.1 (47%) March 2008 April 2012 U.S. Onshore Canada Gulf &…
  31. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 31
    Proved Reserves History of Growth 3.0 BBOE 2.4 BBOE 0.7 Repositioning (24%) Divestitures 0.2 (10%) (2009 2011) 0.4 (17%) 1.8 2.3 (76%) (73%) December 31, 2008 December 31, 2011 U.S. Onshore Canada Gulf &…
  32. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 32
    2012 F&D Target E&P capital 6.1 6.5 billion Capitalized G&A and interest 0.4 billion Drill-bit capital 6.5 6.9 billion Drill-bit reserve additions(1) 360 - 390 MMBOE F&D(1) 16 - 19/BOE Reserve replacement(1) 150% (1)…
  33. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 33
    Oil Hedges Oil Hedges Q3-Q4 2012 74,000 BOD collared: 90 floor and 123 ceiling 54,000 BOD swapped at 106 19,500 BOD of call options sold at 95 2013 45,000 BOD collared: 91 floor and 116 ceiling 31,000 BOD swapped at 104 6,000…
  34. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 34
    Natural Gas Hedges Natural Gas Hedges Q3-Q4 2012 1.7 BCFD with an average protected price of 3.76 488 MMCFD of call options sold at 6.00 2013 150 MMCFD swapped at 4.50 2014 90 MMCFD swapped at 4.07 150 MMCFD of call options…
  35. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 35
    Repositioning Proceeds Billions Pre-Tax Proceeds Closing Maersk - Deepwater GOM 1.3 Q1 2010 BP Deepwater GOM 1.8 Q2 2010 Apache GOM Shelf 1.1 Q2 2010 CNOOC, CVX, BP China 0.6 Q2 & Q3 2010 BP - Azerbaijan 2.0 Q3 2010 BP -…
  36. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 36
    Sinopec Joint Venture Assets Five Oil and Liquids-Rich Plays Mississippian Rockies Oil Utica Ohio Tuscaloosa Michigan JV Acreage 230,000 320,000 235,000 310,000 395,000 (Net to DVN) (153,000 net) (213,000 net) (157,000 net) (208,000…
  37. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 37
    Canadian Oil Sands Industry Overview Fort Hills Kearl Horizon Lake Northern Lights Project Type Joslyn Creek Muskeg River In-Situ Projects Albian Syncrude Firebag Mining Projects Dover Jackpine Peace River MacKay River…
  38. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 38
    Devons SAGD Today Devons SAGD characteristics T76 Low F&D Jackfish 1 Jackfish 2 Low geologic risk T75 High reservoir quality Jackfish 3 Flat production profile T74 Long reserve life 25 years Pike Project Area Access…
  39. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 39
    Jackfish East Jackfish expansion phase Jackfish East 150 MMBO EUR (130 MMBO net) Jackfish 1 20-25 MBOPD of production (17-21 MBOPD net) Similar reservoir quality with minimal bottom water Jackfish 3 Delineation program to be…
  40. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 40
    Pike Project Overview Pike leasehold Jackfish Pike 1A, 1B & 1C 50% operated working interest Focus Area Similar reservoir characteristics to Jackfish Up to five 35 MBOPD SAGD development phases Pike Project Area Potential…
  41. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 41
    Pike Stratigraphic Drilling Confirms High-Quality Reservoir Pike Type Log Pike Jackfish Depth (Ft, TVD) 1,400 1,560 1,320 1,380 Wabiskaw Pay Thickness 49 - 144 49 164 (Ft) McMurray Porosity (%) 30 35 30 - 33 Sand McMurray B…
  42. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 42
    SAGD Development Timeline Timing Range of Expected Plant Start-Up Pike 2 (35 MBOD) Jackfish East (20 MBOD) Pike 1C (35 MBOD) Pike 1B (35 MBOD) Pike 1A (35 MBOD) Small-Scale SAGD Jackfish 3 (35 MBOD) Jackfish 2 (35…
  43. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 43
    Solvents Potential Benefits Increases production rates per well and plant production capacity Lower steam-oil ratios (15% - 50% decrease) Reduces plant emissions Risks Access to solvent Solvent recovery Devon Status 1st…
  44. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 44
    Small-Scale SAGD Reusable SAGD facilities designed to exploit smaller accumulations of bitumen (4 prospects indentified) Targeted resource: 35-70 MMBO per project Peak production rates up to 10 MBOPD per project Less upfront…
  45. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 45
    Heavy Oil Midstream Infrastructure Access Pipeline JACKFISH & PIKE 200 mile dual pipeline from Edmonton to Devons thermal acreage Devon ownership: 50% Capacity net to Devon Blended bitumen: 80,000 BOPD Condensate: 35,000 BPD…
  46. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 46
    Heavy Oil Blend Refinery Expansions In Service Capacity Operator Location Date Increase (BOPD) Conoco Phillips Wood River, Illinois 2012 130,000 Marathon Detroit, Michigan 2012 80,000 BP Whiting, Indiana 2013 260,000…
  47. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 47
    Heavy Oil Blend Pipeline Expansions Existing pipelines Edmonton Flanagan South: Chicago to USGC Hardisty Capacity: 585 MBOPD Vancouver Estimated in service by mid-2014 Enbridge Montreal Keystone XL: Hardisty to USGC Capacity:…
  48. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 48
    Incremental Heavy Oil Blend Supply/Demand Growth Summary Incremental Heavy Oil Blend Supply/Demand Market currently balanced 1.2 Excess capacity from 2013 2016 1.0 Refinery expansions complete MMBOPD 0.8 Enbridge Flanagan…
  49. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 49
    Rate of Return Matrix Jackfish 1 Capital Through Start-up: 620 Million WTI-NYMEX Price Natural Gas Price 60.00 80.00 100.00 120.00 2.00 23% 29% 35% 39% 4.00 22% 28% 34% 37% 6.00 20% 27% 33% 37% Assumptions: 1) Blended…
  50. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 50
    Rate of Return Matrix Jackfish 2 Capital Through Start-up: 1.0 Billion WTI-NYMEX Price Natural Gas Price 60.00 80.00 100.00 120.00 2.00 16% 22% 26% 29% 4.00 15% 21% 25% 28% 6.00 13% 20% 24% 28% Assumptions: 1) Blended…
  51. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 51
    Lloydminster Oil Development Iron River Net risked resource: 120 MMBOE Risked locations: 1,000 Manatokan Low-risk development Strong operating margins End Lake Q2 2012 net production: 39 MBOED Lloydminster 2012 plans: 150…
  52. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 52
    Canada Exploration Oil & Liquids Opportunities Net prospective acres: 4 million Net unrisked resource: 2.2 BBOE 2012 plans: Drill 90 wells Normandville Montney (light oil) Testing 10 new play types including: Deep Basin…
  53. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 53
    Granite Wash Oil & Liquids-Rich Development Net risked resource: 200 MMBOE Risked locations: 350 net wells Net acreage: 63,600 Legacy land position held by production Hemphill Low average royalty burden: 19% Q2 2012 net…
  54. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 54
    Performance Reserve Revisions Barnett Shale Performance Reserve Year Revisions (BCFE) 2004 +186 2005 +366 2006 +30 2007 +240 2008 +132 2009 +288 2010 +156 2011 +30 NYSE: DVN www.devonenergy.com Slide 55
  55. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 55
    East Texas Unconventional Haynesville / Bossier Shale Marion Net prospective acres: 110,000 Louisiana Texas Greater Carthage Harrison Bossier Significant portion of acreage held by Caddo production or fee Rusk Low…
  56. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 56
    Carthage Texas Camp Cass Net acreage: 198,000 Marion Upshur Waskom Gregg Harrison Working interest: 86% Bethany Carthage Field Panola Q2 2012 net production: 212 MMCFED Rusk Stockman Shelby Appleby San Augustine…
  57. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 57
    Groesbeck Nan-Su-Gail Texas Net acreage: 135,000 Freestone Personville Working interest: 72% Limestone Q2 2012 net production: 69 MMCFED Dew Oaks Leon Bald Prairie Robertson OK TX Groesbeck NYSE: DVN…
  58. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 58
    Horn River Basin EOG Net risked resource: 7 TCFE 94-O-15 94-O-16 Risked locations: 1,500 Quicksilver Stone Mtn. Net acreage: 175,000 Natural gas shale play 94-O-10 94-O-9 Thickest section of the basin EnCana/Apache Minimal…
  59. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 59
    Arkoma Woodford Shale Net risked resource: 2.4 TCFE Risked locations: 2,000 Hughes Pittsburg Net acreage: 39,000 Low cost of entry: 400/acre Low average royalty burden: 20% Acreage held by production OK Oklahoma City…
  60. Barclays CEO Energy Power Conference – Devon Energy Corp – slide 60
    Washakie Net acreage: 162,000 Working interest: 76% Q2 2012 net production: 127 MMCFED Low-risk, tight sand gas WY Washakie UT CO NYSE: DVN www.devonenergy.com Slide 61

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