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IPAA Oil and Gas Investment Symposium – Devon Energy Corp

Devon Energy Corp · Apr 13, 2011 · 41 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. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 1
    IPAA Oil and Gas Investment Symposium April 13, 2011
  2. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 2
    NYSE: DVN www.devonenergy.com Slide 3 Devon Today Proved reserves: ? 2.9 billion BOE (12/31/10) Current production: ? 619 MBOED (Q4 2010) Sales revenue mix: 55% liquids 45% gas (Q4 2010) Significant midstream business 2011e…
  3. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 3
    NYSE: DVN www.devonenergy.com Slide 4 Devon?s Strengths Per share focus Emphasis on capital discipline Superior financial strength Strong full-cycle margins Deep inventory of oil and liquids-rich growth plays Significant exposure…
  4. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 4
    NYSE: DVN www.devonenergy.com Slide 5 Organizational focus on per share results Capital Allocation Criteria Optimize per share returns on a debt-adjusted basis through: ? E&P capital projects ? Debt reduction ? Share repurchases
  5. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 5
    NYSE: DVN www.devonenergy.com Slide 6 Share Repurchase Plan Announced May 2010 Plan: Repurchase $3.5 billion of outstanding shares Expected completion: 2011 Progress to date: 23.5 million shares for $1.6 billion (Through 2/16/11)…
  6. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 6
    NYSE: DVN www.devonenergy.com Slide 7 Share Repurchase History 2010 ? Feb 2011 2007 - 2008 2004 ? 2006 Time Period 10.6 million shares 2% 23.5 million shares 5% 56.1 million shares 12% % of Outstanding Shares Repurchased Shares
  7. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 7
    NYSE: DVN www.devonenergy.com Slide 8 Financial Strength & Flexibility Reduced debt balances by 30% since 2007 Net debt to cap ratio: 10% Cash and cash equivalents: $3.4 billion Senior unsecured ratings: ? Fitch: BBB+ ? Moody?s:…
  8. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 8
    NYSE: DVN www.devonenergy.com Slide 9 Devon?s Recycle Ratio North America Onshore Unit cash margin / F&D 167% 3-yr drilling F&D (includes performance revisions) $ 11.57 Cash margin per BOE $ 19.37 Midstream capital ( 1.02) Cash…
  9. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 9
    NYSE: DVN www.devonenergy.com Slide 10 52% 102% 113% 127% 138% 167% 177% Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Recycle Ratio Excluding Hedges Note: Peer group includes APA, APC, CHK, ECA, EOG, and NBL Source: SEC filings…
  10. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 10
    NYSE: DVN www.devonenergy.com Slide 11 2011 E&P Capital Allocation Jackfish Other Canada $4.5 ? $4.9 Billion 14% 86% Development activity Exploration activity > 90% of capital allocated towards oil and liquids-rich projects
  11. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 11
    NYSE: DVN www.devonenergy.com Slide 12 2011 Capital Objectives Development of existing inventory Top-line production growth: 6% - 8% Oil and natural gas liquids growth: 16% - 18% Growth per debt-adjusted share: mid-teens Evaluation…
  12. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 12
    NYSE: DVN www.devonenergy.com Slide 13 Devon?s Thermal Oil Position SAGD Development Jackfish Acreage Pike Acreage Access Pipeline Risked locations: 1,000 Net risked resource: 1.4 BBO Jackfish 2 Jackfish 3 Jackfish Field…
  13. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 13
    NYSE: DVN www.devonenergy.com Slide 14 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 Foster Creek MacKay River Firebag Christina Lake Jackfish…
  14. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 14
    NYSE: DVN www.devonenergy.com Slide 15 9 8 7 6 5 4 3 2 1 0 10 1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 Jackfish Performance Steam Oil Ratio (SOR) Cumulative SOR SAGD Project Comparison (Cumulative…
  15. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 15
    NYSE: DVN www.devonenergy.com Slide 16 Thermal Oil Production Growth Outlook Net Barrels Per Day 25,000 2010 2020 150,000 175,000 19% CAGR 21% CAGR Net risked resource: ? 1.4 BBO
  16. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 16
    NYSE: DVN www.devonenergy.com Slide 17 Iron River Manatokan End Lake Lloydminster Lloydminster Oil Development Net acreage: 2.5 million Low-risk development Strong operating margins Q4 ?10 net production: ? 40 MBOED 2011 plans:…
  17. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 17
    NYSE: DVN www.devonenergy.com Slide 18 Barnett Shale Liquids-Rich Gas Development Parker Palo Pinto Hood Tarrant Johnson Erath Hill Jack Wise Denton Ft. Worth Denton Low average acreage cost: ? $2,800/acre Low average…
  18. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 18
    NYSE: DVN www.devonenergy.com Slide 19 Barnett Drilling Density Johnson County Johnson county net acreage: 119,000 Drilled ? 700 horizontal wells to date Devon Acreage Devon Well Cities Lakes Industry Well Cleburne Alvarado…
  19. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 19
    NYSE: DVN www.devonenergy.com Slide 20 Cana Woodford Shale Liquids-Rich Gas Development Risked locations: > 5,000 Net risked resource: ? 11 TCFE Net acreage: 243,000 Low cost of entry: ? $2,200/acre Low average royalty burden: 21%…
  20. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 20
    NYSE: DVN www.devonenergy.com Slide 21 Granite Wash Oil & Liquids-Rich Development Net acreage: 62,000 Legacy land position held by production Low average royalty burden: 18% Q4 ?10 net production: ? 13,000 BOED Liquids drive…
  21. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 21
    NYSE: DVN www.devonenergy.com Slide 22 Permian Basin Overview Midland Basin Wolfcamp Conventional Wolfberry Delaware Conventional Bone Spring (1st & 2nd) Bone Spring (3rd) Avalon Northwestern Shelf Delaware Basin NM TX…
  22. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 22
    NYSE: DVN www.devonenergy.com Slide 23 Permian Basin Oil & Liquids-Rich Opportunities OKLAHOMA TEXAS NEW MEXICO Permian Basin Culberson Avalon Shale Eddy Lea Loving Ward Winkler Ector Gaines Andrews Terry Lynn Dawson…
  23. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 23
    NYSE: DVN www.devonenergy.com Slide 24 Canadian Exploration Oil & Liquids-Rich Opportunities Deep Basin - Cardium (light oil) - Lower Cretaceous zones (liquids-rich gas) Ferrier Area - Cardium (light oil) Kindersly Area - Viking…
  24. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 24
    NYSE: DVN www.devonenergy.com Slide 25 Rockies Exploration Oil Opportunities Montana Wyoming Natrona Converse Johnson Sheridan Campbell POWDER RIVER BASIN PRB Oil Opportunities WY UT CO Powder River Testing oil potential…
  25. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 25
    NYSE: DVN www.devonenergy.com Slide 26 Undisclosed New Plays Oil & Liquids-Rich Opportunities Prospective net acreage: ? 750,000 2011 capital: ? $200 million 2011 plans: Add to positions, acquire seismic and test concepts
  26. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 26
    NYSE: DVN www.devonenergy.com Slide 27 Why Own Devon? Per share focus Emphasis on capital discipline Superior financial strength Strong full-cycle margins Deep inventory of oil and liquids-rich growth plays Significant exposure to…
  27. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 27
    NYSE: DVN www.devonenergy.com Slide 30 2011 Hedged Position Full-Year 2011 730 MMCFD with an average protected price of $5.49 ? ? 30% of gas production 150 MMCFD of regional basis hedges in Midcontinent region 45,000 BOD collared:…
  28. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 28
    NYSE: DVN www.devonenergy.com Slide 31 Expected Proceeds BP - Brazil $3.2 Pending BP ? Deepwater GOM $1.8 Q2 2010 Apache ? GOM Shelf $1.1 Q2 2010 CNOOC, CVX, BP ? China $0.6 Q2 & Q3 2010 Maersk - Deepwater GOM $1.3 Q1 2010 BP -…
  29. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 29
    NYSE: DVN www.devonenergy.com Slide 32 Strategic Repositioning Results & Allocation of Proceeds Share repurchases ($3.5) Resource capture (acreage acquisitions) ($1.2) $ in Billions Incremental E&P investment or share $1.3 - $1.9…
  30. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 30
    NYSE: DVN www.devonenergy.com Slide 33 Historical Performance North American Onshore 223 168 220 207 183 2006 2007 2008 2009 2010 233% 198% 269% 223% 175% 2006 2007 2008 2009 2010 $13.57 $13.30 $13.05 $15.74 $6.59 2006…
  31. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 31
    NYSE: DVN www.devonenergy.com Slide 34 Devon?s North American Shale Position Low cost of entry and low royalty rates Minimal term acreage expirations High liquids content Economics enhanced by midstream business Multi-year growth…
  32. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 32
    NYSE: DVN www.devonenergy.com Slide 35 U.S. Shale Gas Production Major U.S. Shale Plays (1) 0.0 2.0 4.0 6.0 8.0 10.0 12.0 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08…
  33. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 33
    NYSE: DVN www.devonenergy.com Slide 36 Devon?s 30-Day IP Trend Barnett Shale Horizontal Wells 0 500 1,000 1,500 2,000 2004 2005 2006 2007 2008 2009 2010e MCFED Spud Year Note: Average daily rate for the best month in the first…
  34. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 34
    NYSE: DVN www.devonenergy.com Slide 37 Barnett Shale Performance Reserve Revisions 2009 +288 2005 +378 2006 +24 2007 +234 2010 +260 2008 +132 2004 +186 Performance Reserve Year Revisions (BCFE)
  35. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 35
    NYSE: DVN www.devonenergy.com Slide 38 East Texas Unconventional Haynesville / Bossier Shale Significant portion of acreage held by production or fee Low average royalty burden: < 20% Low cost of entry Largely de-risked Carthage…
  36. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 36
    NYSE: DVN www.devonenergy.com Slide 39 Horn River Basin Net acreage: 170,000 Thickest section of the basin Minimal drilling required to hold acreage Early stages of de-risking Firm transportation secured 27% working interest in…
  37. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 37
    NYSE: DVN www.devonenergy.com Slide 40 Arkoma Woodford Shale Net acreage: 57,000 Low cost of entry: ? $400/acre Low average royalty burden: 19% Acreage held by production Q4 ?10 net production: ? 78 MMCFED Strategic midstream…
  38. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 38
    NYSE: DVN www.devonenergy.com Slide 41 Carthage Field Waskom Bethany Angelina San Augustine Sabine Shelby Rusk Panola Gregg Harrison Marion Upshur Camp Cass Texas Appleby Net acreage: 227,000 Working interest: 86% Q4…
  39. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 39
    NYSE: DVN www.devonenergy.com Slide 42 Groesbeck Net acreage: 126,000 Working interest: 72% Q4 ?10 net production: ? 95 MMCFED 2011 plans: ? 10 wells Nan-Su-Gail Dew Bald Prairie Personville Oaks Limestone Freestone Leon…
  40. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 40
    NYSE: DVN www.devonenergy.com Slide 43 Washakie Net acreage: 157,000 Working interest: 76% Q4 ?10 net production: ? 134 MMCFED Low-risk, tight sand gas 2011 plans: ? 40 wells WY UT CO Washakie
  41. IPAA Oil and Gas Investment Symposium – Devon Energy Corp – slide 41
    NYSE: DVN www.devonenergy.com Slide 44 Access Pipeline EDMONTON HARDISTY Enbridge P/L To Midwest Express P/L To U.S. Rockies Terasen P/L To Pacific NW ACCESS PIPELINE Athabasca Enbridge P/L IPF Cold Lake IPF Cold Lake…

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