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CAPP Investment Symposium – Devon Energy Corp

Devon Energy Corp · Dec 10, 2012 · 53 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. CAPP Investment Symposium – Devon Energy Corp – slide 1
    CAPP Investment Symposium Toronto, Ontario December 2012
  2. CAPP Investment Symposium – 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 Q3 2012 production: 678 MBOED Production mix: 21% oil 16% NGLs Powder River Michigan…
  3. CAPP Investment Symposium – Devon Energy Corp – slide 3
    Progress Report Highlights Oil production increased 22% year-to-date Jackfish oil production up 46% Permian Basin oil production up 30% Closed 4 billion of joint ventures in 2012 (Cash payments of 1.3 billion and drilling…
  4. CAPP Investment Symposium – 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. CAPP Investment Symposium – Devon Energy Corp – slide 5
    Financial Strength & Flexibility Cash and short-term investments: 7.5 billion (As of 11/7/12) Net debt-to-cap ratio: 15% Strong investment grade ratings Fitch: BBB+ Moodys: Baa1 S&P: BBB+ Provides flexibility to invest in…
  6. CAPP Investment Symposium – 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. CAPP Investment Symposium – 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. CAPP Investment Symposium – Devon Energy Corp – slide 8
    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…
  9. CAPP Investment Symposium – Devon Energy Corp – slide 9
    Developing the Resource Base E&P Game Plan Goal: Maximize return on investment Balance resource capture and resource development Current focus on high-margin oil opportunities Build inventory with early mover positions in…
  10. CAPP Investment Symposium – Devon Energy Corp – slide 10
    Joint Venture Rationale Objective: Utilize partners in new ventures exploration Improves capital efficiency Accelerates de-risking and commercialization Mitigates exploration risk Flexibility to generate new prospects…
  11. CAPP Investment Symposium – Devon Energy Corp – slide 11
    2012 E&P Capital Allocation 100% of capital allocated towards oil and liquids-rich projects Leasehold capture Other Canada 18% Exploration activity 9% Development activity 73% Jackfish 6.9 7.1 Billion NYSE: DVN…
  12. CAPP Investment Symposium – Devon Energy Corp – slide 12
    Significant Oil Production Growth North American Onshore Production Data in MBOPD 144.4 122.5 105.9 100.9 89.7 74.9 65.7 2006 2007 2008 2009 2010 2011 Q3 YTD- 2012 NYSE: DVN www.devonenergy.com Slide 13
  13. CAPP Investment Symposium – Devon Energy Corp – slide 13
    2012 Capital Program Delivering Strong Oil & Liquids Growth Q4 2012e Target Rates Oil production Annual growth rate: 18% - 20% Driven by Jackfish and Permian Oil NGLs production 22% Annual growth rate: 8% - 10% Driven by Cana…
  14. CAPP Investment Symposium – Devon Energy Corp – slide 14
    Attractively Hedged Oil Hedges Q4 2012: 134,000 BOPD with a protected price of 96 per barrel (90% of forecasted oil production) 2013: 76,000 BOPD with a protected price of 97 per barrel (Represents 50% of current oil production…
  15. CAPP Investment Symposium – Devon Energy Corp – slide 15
    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: 1.3 million basin-wide Midland Shelf Shelf…
  16. CAPP Investment Symposium – Devon Energy Corp – slide 16
    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 14 operated rigs Eddy Bone Spring/Delaware…
  17. CAPP Investment Symposium – Devon Energy Corp – slide 17
    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 6 operated rigs Howard…
  18. CAPP Investment Symposium – Devon Energy Corp – slide 18
    Mississippian Light-Oil Exploration Net risked resource: 800 MMBOE Kingman Sedgwick Risked locations: 3,000 Barber Sumner Cowley Net acreage: 545,000 Harper (400,000 net acres outside of Sinopec JV) Kansas Oklahoma Kay…
  19. CAPP Investment Symposium – Devon Energy Corp – slide 19
    Devons Thermal Oil Position SAGD Development Field characteristics Jackfish 2 Jackfish Low F&D Flat production profile Long reserve life 20 years Jackfish 3 Jackfish Top-tier operating performance Scheduled plant maintenance…
  20. CAPP Investment Symposium – Devon Energy Corp – slide 20
    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…
  21. CAPP Investment Symposium – Devon Energy Corp – slide 21
    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…
  22. CAPP Investment Symposium – Devon Energy Corp – slide 22
    Long-Term Production Outlook Thermal Oil Net Barrels Per Day 175,000 Net Risked Resource: 1.4 BBO 150,000 44,300 Q3 2012 2020 NYSE: DVN www.devonenergy.com Slide 23
  23. CAPP Investment Symposium – Devon Energy Corp – slide 23
    Cana Woodford Shale Liquids-Rich Gas Development Net risked resource: 11.4 TCFE OKLAHOMA Dewey Blaine Risked locations: 5,400 TEXAS Net acreage: 255,000 Low average royalty burden: 21% Custer Q3 2012 net production: 283…
  24. CAPP Investment Symposium – Devon Energy Corp – slide 24
    Barnett Shale Liquids-Rich Gas Development Net risked resource: 14.8 TCFE Jack Wise Denton Risked locations: 5,000 Denton Bridgeport Plant Net acreage: 620,000 Low average royalty burden: 18% Palo Pinto Parker DRY GAS 180,000…
  25. CAPP Investment Symposium – Devon Energy Corp – slide 25
    Why Own Devon Disciplined focus on per share results Deep inventory of development opportunities World-class SAGD position Strong Permian Basin position Dominant positions in Barnett & Cana Shale plays Strong, highly-visible…
  26. CAPP Investment Symposium – Devon Energy Corp – slide 26
    Thank You.
  27. CAPP Investment Symposium – Devon Energy Corp – slide 27
    Appendix
  28. CAPP Investment Symposium – Devon Energy Corp – slide 28
    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…
  29. CAPP Investment Symposium – Devon Energy Corp – slide 29
    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 &…
  30. CAPP Investment Symposium – Devon Energy Corp – slide 30
    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 &…
  31. CAPP Investment Symposium – Devon Energy Corp – slide 31
    Oil Hedges Oil Hedges Q4 2012 77,000 BOD collared: 90 floor and 122 ceiling 57,000 BOD swapped at 105 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 9,500 BOD…
  32. CAPP Investment Symposium – Devon Energy Corp – slide 32
    Natural Gas Hedges Natural Gas Hedges Q4 2012 1.3 BCFD collared: 3.50 floor and 4.17 ceiling 658 MMCFD swapped at 3.92 488 MMCFD of call options sold at 6.00 2013 449 MMCFD collared: 3.53 floor and 4.33 ceiling 518 MMCFD…
  33. CAPP Investment Symposium – Devon Energy Corp – slide 33
    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 -…
  34. CAPP Investment Symposium – Devon Energy Corp – slide 34
    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…
  35. CAPP Investment Symposium – Devon Energy Corp – slide 35
    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…
  36. CAPP Investment Symposium – Devon Energy Corp – slide 36
    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…
  37. CAPP Investment Symposium – Devon Energy Corp – slide 37
    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…
  38. CAPP Investment Symposium – Devon Energy Corp – slide 38
    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…
  39. CAPP Investment Symposium – Devon Energy Corp – slide 39
    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…
  40. CAPP Investment Symposium – Devon Energy Corp – slide 40
    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…
  41. CAPP Investment Symposium – Devon Energy Corp – slide 41
    Small-Scale SAGD Reusable SAGD facilities designed to exploit smaller accumulations of bitumen (4 prospects identified) Targeted resource: 35-70 MMBO per project Peak production rates up to 10 MBOPD per project Less upfront…
  42. CAPP Investment Symposium – Devon Energy Corp – slide 42
    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…
  43. CAPP Investment Symposium – Devon Energy Corp – slide 43
    Heavy Oil Demand Increased refinery capacity for heavier crudes 340 MBOPD of incremental demand by mid-2013 (Detroit & Whiting) Significant pipeline expansions Seaway: 250 MBOD by early 2013 (450 MBOPD by mid-2014) Flanagan…
  44. CAPP Investment Symposium – Devon Energy Corp – slide 44
    Lloydminster Oil Development Iron River Net risked resource: 120 MMBOE Risked locations: 1,000 Manatokan Net acreage: 600,000 Low-risk development End Lake Strong operating margins Lloydminster Q3 2012 net production: 37…
  45. CAPP Investment Symposium – Devon Energy Corp – slide 45
    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…
  46. CAPP Investment Symposium – Devon Energy Corp – slide 46
    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% Q3 2012 net…
  47. CAPP Investment Symposium – Devon Energy Corp – slide 47
    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 48
  48. CAPP Investment Symposium – Devon Energy Corp – slide 48
    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…
  49. CAPP Investment Symposium – Devon Energy Corp – slide 49
    Carthage Texas Camp Cass Net acreage: 194,000 Marion Upshur Waskom Gregg Harrison Working interest: 86% Bethany Carthage Field Panola Low average royalty burden: 9% Rusk Stockman Shelby Q3 2012 net production: 211…
  50. CAPP Investment Symposium – Devon Energy Corp – slide 50
    Groesbeck Nan-Su-Gail Texas Net acreage: 135,000 Freestone Personville Working interest: 72% Limestone Low average royalty burden: 14% Dew Oaks Leon Q3 2012 net production: 65 MMCFED Bald Prairie Robertson OK TX…
  51. CAPP Investment Symposium – Devon Energy Corp – slide 51
    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…
  52. CAPP Investment Symposium – Devon Energy Corp – slide 52
    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…
  53. CAPP Investment Symposium – Devon Energy Corp – slide 53
    Washakie Net acreage: 162,000 Working interest: 76% Q3 2012 net production: 123 MMCFED Low-risk, tight sand gas WY Washakie UT CO NYSE: DVN www.devonenergy.com Slide 54

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