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IPAA OG Investment Symposium – Devon Energy Corp

Devon Energy Corp · Oct 8, 2008 · 48 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 OG Investment Symposium – Devon Energy Corp – slide 1
    IPAA Oil & Gas Investment Symposium San Francisco October 8, 2008
  2. IPAA OG Investment Symposium – Devon Energy Corp – slide 2
    NYSE: DVN www.devonenergy.com page 3 Devon Today Proved reserves (12/31/07): ? 2.5 Billion BOE Current production (Q2 2008): ? 643 MBOED Enterprise value: ? $43 Billion Largest U.S.-based independent oil and gas producer
  3. IPAA OG Investment Symposium – Devon Energy Corp – slide 3
    NYSE: DVN www.devonenergy.com page 4 North America Focus Production 5% 95% 643 MBOED 2.5 BBOE Reserves 6% 94% North America International North America International
  4. IPAA OG Investment Symposium – Devon Energy Corp – slide 4
    NYSE: DVN www.devonenergy.com page 5 Balanced Product Mix Production 60% 40% 643 MBOED 2.5 BBOE Reserves 34% 66% Liquids Gas Liquids Gas
  5. IPAA OG Investment Symposium – Devon Energy Corp – slide 5
    NYSE: DVN www.devonenergy.com page 6 Gas Gathering & Processing Profitable midstream enhances operational effectiveness Ownership in 12,500 miles of pipelines ? 5,300 Domestic ? 7,200 Canada Ownership in 60 plants ? 7 Domestic ?…
  6. IPAA OG Investment Symposium – Devon Energy Corp – slide 6
    NYSE: DVN www.devonenergy.com page 7 Free Cash Flow First Six Months 2008 E&P Capital Expenditures (3.4) Other Capital Expenditures (0.5) Free Cash Flow 1.2 Cash Flow From Continuing Operations $5.1 $3.1 1.9 Cash Available For…
  7. IPAA OG Investment Symposium – Devon Energy Corp – slide 7
    NYSE: DVN www.devonenergy.com page 8 Organizational focus on per share results Capital Allocation Criteria Optimize per share growth on a debt adjusted basis through: ? E&P capital projects ? Share repurchases ? Debt reduction ?…
  8. IPAA OG Investment Symposium – Devon Energy Corp – slide 8
    NYSE: DVN www.devonenergy.com page 9 2008 Debt Repayment Commercial Paper & Short-term Borrowings $2.4 $3.6 0.2 1.0 Total Debt Repayment Preferred Stock Exchangeable Debentures In Billions
  9. IPAA OG Investment Symposium – Devon Energy Corp – slide 9
    NYSE: DVN www.devonenergy.com page 10 Common Stock Repurchases 2008* 6,484 1% $102.56 Total 66,594 14% $55.43 2007 4,086 1% $79.80 2006 4,241 1% $59.61 2005 46,783 10% $48.28 2004 5,000 1% $37.78 Average Price Per Share Percent…
  10. IPAA OG Investment Symposium – Devon Energy Corp – slide 10
    NYSE: DVN www.devonenergy.com page 11 Production Growth Per Debt-Adjusted Share 2006 2007 2008e 2009e CAGR ? 11-13% 0.40 0.44 0.48 0.55 - 0.58 Note: Production per debt-adjusted share converts annual average net debt into common…
  11. IPAA OG Investment Symposium – Devon Energy Corp – slide 11
    NYSE: DVN www.devonenergy.com page 12 Unmatched Asset Quality ? Valuable legacy land positions ? Large concentrated assets ? Deep inventory of repeatable projects ? Significant exposure to emerging plays ? Visible long-term growth
  12. IPAA OG Investment Symposium – Devon Energy Corp – slide 12
    NYSE: DVN www.devonenergy.com page 13 Strong Reserve Growth MMBOE 2006 2007 Production Reserve Additions 487 200 437 224 450 - 480 237 - 238 2008e Note: Production from continuing operations.
  13. IPAA OG Investment Symposium – Devon Energy Corp – slide 13
    NYSE: DVN www.devonenergy.com page 14 2007 Results & 2008 Targets Delivering competitive results Drill-bit reserve additions: 390 MMBOE 450 ? 480 MMBOE Drill-bit capital: $5.8 Billion $7.8 ? 8.1 Billion Capitalized G&A and interest:…
  14. IPAA OG Investment Symposium – Devon Energy Corp – slide 14
    NYSE: DVN www.devonenergy.com page 15 Barnett Shale Devon?s Superior, First-Mover Position 527,300 78,600 Parker Palo Pinto Hood Tarrant Johnson Erath Hill Jack Wise Denton Primary Emerging Speculative Ft. Worth Highly…
  15. IPAA OG Investment Symposium – Devon Energy Corp – slide 15
    NYSE: DVN www.devonenergy.com page 16 Barnett Shale First-Mover Position Yields Superior Economics $5.40 $7.10 $8.20 $2.00 $4.00 $6.00 $8.00 $10.00 81% NRI, $2.8 M/acre 75% NRI, $10 M/acre 70% NRI, $15 M/acre Realized Natural…
  16. IPAA OG Investment Symposium – Devon Energy Corp – slide 16
    NYSE: DVN www.devonenergy.com page 17 Devon Barnett Shale Net Production 0 100 200 300 400 500 600 700 800 900 1,000 1,100 MMCFED 2002 2003 2004 2005 2006 2007 2008 Vertical Development De-Risking Full Development…
  17. IPAA OG Investment Symposium – Devon Energy Corp – slide 17
    NYSE: DVN www.devonenergy.com page 18 Barnett Resources History of Growth 2.1 2002 1.8 8.3 5.7 4.3 Total: 3.9 TCFE 2008 Total: 18.3 TCFE Risked 4.7x 1.3 TCFE Produced Proved Probable & Possible Contingent
  18. IPAA OG Investment Symposium – Devon Energy Corp – slide 18
    NYSE: DVN www.devonenergy.com page 19 Barnett Production Outlook Another Decade of Growth > 7,500 risked undrilled locations ? 13 years of inventory Rate potential: 1.6 ? 2.0 BCFED
  19. IPAA OG Investment Symposium – Devon Energy Corp – slide 19
    NYSE: DVN www.devonenergy.com page 20 Carthage Field Waskom Bethany Angelina San Augustine Sabine Shelby Rusk Panola Gregg Harrison Marion Upshur Camp Cass Texas NET PRODUCTION 0 10 20 30 40 50 2003 2004 2005 2006…
  20. IPAA OG Investment Symposium – Devon Energy Corp – slide 20
    NYSE: DVN www.devonenergy.com page 21 Haynesville Shale OKLAHOMA TEXAS LOUISIANA ARKANSAS MISSISSIPPI ? Approximately 483,000 net acres under lease ? Royalty burden less than 20% ? Four wells currently on production and one well…
  21. IPAA OG Investment Symposium – Devon Energy Corp – slide 21
    NYSE: DVN www.devonenergy.com page 22 Canada Oil Sands Jackfish and Jackfish 2 Field characteristics: ? Low F&D ? Flat production profile ? Long reserve life > 20 years ? Working interest: 100% Each project: ? 300 MMBO EUR ? 35…
  22. IPAA OG Investment Symposium – Devon Energy Corp – slide 22
    NYSE: DVN www.devonenergy.com page 23 Iron River Manatokan End Lake Lloydminster Lloydminster Net acreage: 2.1 million Q2 ?08 net production: ? 42 MBOED Multi-year inventory ? 2,000 risked locations Low-risk development…
  23. IPAA OG Investment Symposium – Devon Energy Corp – slide 23
    NYSE: DVN www.devonenergy.com page 24 North America Onshore Position OK TX NM WY MT Largest U.S.-based independent producer Net acreage: ? 5,164,000 2008 plans: Drill ? 740 wells 2nd Largest independent gas producer Net…
  24. IPAA OG Investment Symposium – Devon Energy Corp – slide 24
    NYSE: DVN www.devonenergy.com page 25 Texas Louisiana Deepwater Gulf of Mexico Exploration Trends Lower Tertiary Trend 196 Blocks Miocene Trend 160 Blocks Block Ownership: ? 2nd largest in trend ? 1st among independents Block…
  25. IPAA OG Investment Symposium – Devon Energy Corp – slide 25
    NYSE: DVN www.devonenergy.com page 26 Estimated Discovered Resource Net to Devon: 300 ? 900 MMBOE 2 3 2 2 Wells Drilled TBD TBD TBD 2010 1st Production Kaskida 26.7% ? 800? Jack 25.0% > 350? St. Malo 22.5% > 450? Cascade…
  26. IPAA OG Investment Symposium – Devon Energy Corp – slide 26
    NYSE: DVN www.devonenergy.com page 28 Texas Louisiana Upcoming Deepwater Gulf Exploration Activity Jack No. 3 Appraisal Q1 2008 Spud Currently Drilling Sturgis North Q1 2008 Spud Currently Drilling Cascade No. 3 Q4 2008 Spud…
  27. IPAA OG Investment Symposium – Devon Energy Corp – slide 27
    NYSE: DVN www.devonenergy.com page 28 Texas Louisiana Upcoming Deepwater Gulf Exploration Activity Jack No. 3 Appraisal Q1 2008 Spud Currently Drilling Sturgis North Q1 2008 Spud Currently Drilling Cascade No. 3 Q4 2008 Spud…
  28. IPAA OG Investment Symposium – Devon Energy Corp – slide 28
    NYSE: DVN www.devonenergy.com page 29 BM-BAR-3 100% WI BM-CAL-13 100% WI BM-C-30 25% WI BM-C-32 40% WI BM-C-8 60% WI BC-2 17.65% WI Exploring on 9 licensed blocks (4 blocks with Petrobras) 2 ? 4 BBOE of net unrisked…
  29. IPAA OG Investment Symposium – Devon Energy Corp – slide 29
    NYSE: DVN www.devonenergy.com page 30 Emerging Play Exposure North American Onshore Horn River Shale 153 Total 1,370 9,280 Haynesville Shale 483 Mid Continent Unconventional 110 Rocky Mountain Unconventional Gas #2 120 Unrisked…
  30. IPAA OG Investment Symposium – Devon Energy Corp – slide 30
    NYSE: DVN www.devonenergy.com page 31 B. C. Alberta Sask. 94-0-10 94-0-7 94-0-8 94-0-16 94-0-9 2008 Pilot Horn River Basin 153,000 net acres 3 well pilot on-stream since April Early stages of commercial development Potential…
  31. IPAA OG Investment Symposium – Devon Energy Corp – slide 31
    NYSE: DVN www.devonenergy.com page 32 Resource Potential Inventory Strong Foundation for Growth 14,550 100 180 250 2,250 860 780 1.920 790 950 1,150 2,270 3,050 Risked Total Resources (MMBOE) East Texas 4,480 3,370…
  32. IPAA OG Investment Symposium – Devon Energy Corp – slide 32
    NYSE: DVN www.devonenergy.com page 33 Why Own Devon ? Focus on per share results ? Unmatched asset quality ? Visible long-term growth ? >25,000 risked undrilled locations ? 14.6 BBOE risked potential
  33. IPAA OG Investment Symposium – Devon Energy Corp – slide 33
    NYSE: DVN www.devonenergy.com page 35 2008 E&P Capital Forecast By Area 7% 19% 57% 17% $7.3 ? 7.6 Billion U.S. Onshore Canada International Gulf
  34. IPAA OG Investment Symposium – Devon Energy Corp – slide 34
    NYSE: DVN www.devonenergy.com page 36 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Number of Wells N.A. Natural Gas Wells Drilled…
  35. IPAA OG Investment Symposium – Devon Energy Corp – slide 35
    NYSE: DVN www.devonenergy.com page 37 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Number of Wells 0 10 20 30 40 50 60 70 80…
  36. IPAA OG Investment Symposium – Devon Energy Corp – slide 36
    NYSE: DVN www.devonenergy.com page 38 NET PRODUCTION 8 4 0 12 16 2001 2002 2003 2004 2005 2006 2007 2008e MBOED 0 24 48 72 96 MMCFED Groesbeck OK TX Net acreage: 170,000 Working interest: 72% Q2 ?08 net production: ? 90…
  37. IPAA OG Investment Symposium – Devon Energy Corp – slide 37
    NYSE: DVN www.devonenergy.com page 39 Net acreage: 54,000 Q2 ?08 net production: ? 38 MMCFD 6 operated rigs running Constructing gas processing plant ? Processing capacity: 200 MMCFD ? Completion expected: October 2008 2007…
  38. IPAA OG Investment Symposium – Devon Energy Corp – slide 38
    NYSE: DVN www.devonenergy.com page 40 Washakie Net acreage: 157,000 Working interest: 76% Q2 ?08 net production: ? 111 MMCFED Undrilled locations: > 300 Low-risk, tight sand gas Initiated drilling on 1st horizontal well (Q2 2008)…
  39. IPAA OG Investment Symposium – Devon Energy Corp – slide 39
    NYSE: DVN www.devonenergy.com page 41 Net acreage: 252,000 Working interest: 75% Q2 ?08 net production: ? 88 MMCFD 2007 activity: Drilled 193 wells 2008 plans: Drill > 110 wells WY UT CO NET PRODUCTION 5 0 10 15 20 2003 2004…
  40. IPAA OG Investment Symposium – Devon Energy Corp – slide 40
    NYSE: DVN www.devonenergy.com page 42 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…
  41. IPAA OG Investment Symposium – Devon Energy Corp – slide 41
    NYSE: DVN www.devonenergy.com page 43 Lower Tertiary Trend Tertiary Lower Trend Lower Tertiary Trend Tertiary Lower Trend Industry Discovery Industry Non-Commercial Results Unannounced ? 14 announced discoveries out of 23…
  42. IPAA OG Investment Symposium – Devon Energy Corp – slide 42
    NYSE: DVN www.devonenergy.com page 44 Lower Tertiary Trend Trend Devon?s Lower Tertiary Prospect Inventory ? 4 significant discoveries to date ? 25 additional prospects Devon Discovery Devon Prospect Cascade Jack Kaskida St.…
  43. IPAA OG Investment Symposium – Devon Energy Corp – slide 43
    NYSE: DVN www.devonenergy.com page 45 Texas Louisiana Devon?s Miocene Prospect Inventory Devon Miocene Prospect Devon Miocene Discovery Mission Deep Sturgis Impala Colorado Erie Tuscany W Sabre Winter Park Arbalest Shelby…
  44. IPAA OG Investment Symposium – Devon Energy Corp – slide 44
    NYSE: DVN www.devonenergy.com page 46 Phased Development Option Owned FPSO
  45. IPAA OG Investment Symposium – Devon Energy Corp – slide 45
    NYSE: DVN www.devonenergy.com page 46 Phased Development Option Owned FPSO
  46. IPAA OG Investment Symposium – Devon Energy Corp – slide 46
    NYSE: DVN www.devonenergy.com page 48 Field 1 Field 2 Field 3 FSO Multi-Field Development Option
  47. IPAA OG Investment Symposium – Devon Energy Corp – slide 47
    NYSE: DVN www.devonenergy.com page 49 Ocean Endeavor 5th generation moored semi-submersible owned by Diamond Offshore Drilling Inc. Contract secured through June 2011; $255,000 per day Rated to 35,000? drilling depth 8,000? water…
  48. IPAA OG Investment Symposium – Devon Energy Corp – slide 48
    NYSE: DVN www.devonenergy.com page 50 Exploring on 4 licensed blocks 1 ? 2 BBOE of net unrisked resource potential 2008 plans: ? 11/34: Drill in second half ?08 ? 42/05, 53/30 & 64/18: Acquire 2D & 3D seismic to accelerate…

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