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UBS Global Oil and Gas Conference – Devon Energy Corp

Devon Energy Corp · May 25, 2011 · 39 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. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 1
    UBS Global Oil and Gas Conference May 25, 2011
  2. UBS Global Oil and Gas Conference – 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: ? 629 MBOED (Q1 2011) Sales revenue mix: 56% liquids 44% gas (Q1 2011) Significant midstream business 2011e…
  3. UBS Global Oil and Gas Conference – 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. UBS Global Oil and Gas Conference – 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. UBS Global Oil and Gas Conference – 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: Year-end 2011 Progress to date: 28.3 million shares for $2.1 billion (Through…
  6. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 6
    NYSE: DVN www.devonenergy.com Slide 7 Share Repurchase History 2010 ? May 2011 2007 - 2008 2004 ? 2006 Time Period 10.6 million shares 2% 28.3 million shares 6% 56.1 million shares 12% % of Outstanding Shares Repurchased Shares
  7. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 7
    NYSE: DVN www.devonenergy.com Slide 8 Financial Strength & Flexibility Net debt to cap ratio: 15% Cash and short-term investments: $3.4 billion Senior unsecured ratings: ? Fitch: BBB+ ? Moody?s: Baa1 ? S&P: BBB+ Note: Includes a…
  8. UBS Global Oil and Gas Conference – 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. UBS Global Oil and Gas Conference – 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. UBS Global Oil and Gas Conference – 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. UBS Global Oil and Gas Conference – 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. UBS Global Oil and Gas Conference – 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. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 13
    NYSE: DVN www.devonenergy.com Slide 14 Note: Industry average includes: Bolney-Celtic, Christina Lake, Firebag, Foster Creek, Great Divide, Hangingstone, Hilda Lake, Long Lake, MacKay River, Senlac, Surmont, Tangleflags, and Tucker…
  14. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 14
    NYSE: DVN www.devonenergy.com Slide 15 Thermal Oil Production Growth Outlook Net Barrels Per Day 30,000 Q1-2011 2020 150,000 175,000 18% CAGR 20% CAGR Net risked resource: ? 1.4 BBO
  15. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 15
    NYSE: DVN www.devonenergy.com Slide 16 Iron River Manatokan End Lake Lloydminster Lloydminster Oil Development Net acreage: 2.5 million Low-risk development Strong operating margins Q1 ?11 net production: ? 39 MBOED 2011 plans:…
  16. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 16
    NYSE: DVN www.devonenergy.com Slide 17 Barnett Shale Liquids-Rich Gas Development Parker Palo Pinto Hood Tarrant Johnson Erath Hill Jack Wise Denton Ft. Worth Denton Net acreage: 622,000 Low average acreage cost: ?…
  17. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 17
    NYSE: DVN www.devonenergy.com Slide 18 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…
  18. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 18
    NYSE: DVN www.devonenergy.com Slide 19 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: 20%…
  19. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 19
    NYSE: DVN www.devonenergy.com Slide 20 Granite Wash Oil & Liquids-Rich Development Net acreage: 62,000 Legacy land position held by production Low average royalty burden: 19% Q1 ?11 net production: 13 MBOED Liquids drive superior…
  20. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 20
    NYSE: DVN www.devonenergy.com Slide 21 Permian Basin Overview Midland Basin Wolfcamp Conventional Wolfberry Delaware Conventional Bone Spring (1st & 2nd) Bone Spring (3rd) Avalon Northwestern Shelf Delaware Basin NM TX…
  21. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 21
    NYSE: DVN www.devonenergy.com Slide 22 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…
  22. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 22
    NYSE: DVN www.devonenergy.com Slide 23 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…
  23. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 23
    NYSE: DVN www.devonenergy.com Slide 24 Rockies Exploration Oil Opportunities WY UT CO Powder River Testing oil potential in Powder River Basin Prospective net acreage: 220,000 2011 capital: $50 million 2011 activity: Drill 15…
  24. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 24
    NYSE: DVN www.devonenergy.com Slide 25 New Ventures Oil & Liquids-Rich Opportunities Stratigraphically equivalent to Eagle Ford Shale Prospective net acreage: ? 250,000 Low average acreage cost: $180/acre 2011 activity: 2 horizontal…
  25. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 25
    NYSE: DVN www.devonenergy.com Slide 26 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…
  26. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 26
    NYSE: DVN www.devonenergy.com Slide 29 2011 & 2012 Hedged Position Q2-Q4 2011 45,000 BOD collared: $75 floor and $109 ceiling (? 35% of oil production) 19,500 BOD of call options sold at $95 Full-Year 2012 54,000 BOD collared: $86…
  27. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 27
    NYSE: DVN www.devonenergy.com Slide 30 Expected Proceeds BP - Brazil $3.2 Q2 2011 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 -…
  28. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 28
    NYSE: DVN www.devonenergy.com Slide 31 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…
  29. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 29
    NYSE: DVN www.devonenergy.com Slide 32 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…
  30. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 30
    NYSE: DVN www.devonenergy.com Slide 33 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…
  31. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 31
    NYSE: DVN www.devonenergy.com Slide 34 Devon?s 30-Day IP Trend Barnett Shale Horizontal Wells 0 500 1,000 1,500 2,000 2005 2006 2007 2008 2009 2010 MCFED Year of 1st Production Note: Average daily rate for the best month in the…
  32. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 32
    NYSE: DVN www.devonenergy.com Slide 35 Barnett Shale Performance Reserve Revisions 2009 +288 2005 +378 2006 +24 2007 +234 2010 +260 2008 +132 2004 +186 Performance Reserve Year Revisions (BCFE)
  33. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 33
    NYSE: DVN www.devonenergy.com Slide 36 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…
  34. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 34
    NYSE: DVN www.devonenergy.com Slide 37 Horn River Basin Net acreage: 174,000 Thickest section of the basin Minimal drilling required to hold acreage Early stages of de-risking Firm transportation secured 27% working interest in…
  35. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 35
    NYSE: DVN www.devonenergy.com Slide 38 Arkoma Woodford Shale Net acreage: 43,000 Low cost of entry: ? $400/acre Low average royalty burden: 19% Acreage held by production Q1 ?11 net production: ? 81 MMCFED Strategic midstream…
  36. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 36
    NYSE: DVN www.devonenergy.com Slide 39 Carthage Field Waskom Bethany Angelina San Augustine Sabine Shelby Rusk Panola Gregg Harrison Marion Upshur Camp Cass Texas Appleby Net acreage: 222,000 Working interest: 86% Q1…
  37. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 37
    NYSE: DVN www.devonenergy.com Slide 40 Groesbeck Net acreage: 146,000 Working interest: 72% Q1 ?11 net production: ? 88 MMCFED 2011 plans: ? 15 wells Nan-Su-Gail Dew Bald Prairie Personville Oaks Limestone Freestone Leon…
  38. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 38
    NYSE: DVN www.devonenergy.com Slide 41 Washakie Net acreage: 157,000 Working interest: 76% Q1 ?11 net production: ? 130 MMCFED Low-risk, tight sand gas 2011 plans: ? 60 wells WY UT CO Washakie
  39. UBS Global Oil and Gas Conference – Devon Energy Corp – slide 39
    NYSE: DVN www.devonenergy.com Slide 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…

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