J.P. Morgan Inaugural Energy Equity Investor Conference June 29, 2016 NYSE: DVN devonenergy.com
Devon Today A Leading North American E&P Core Asset Production Q1 2016: 581 MBOED Key Messages Heavy Oil Premier asset portfolio Gas 37% Oil 44% Focused in top-tier resource plays NGL 19% Deep inventory of opportunities…
Approach to Current Environment Protect balance sheet Invest within cash flow Enhance financial strength with asset sales Drive efficiencies across the portfolio Achieve additional cost savings Further increase capital…
Non-Core Asset Sale Enhancing Financial Strength Upstream asset sale program completed ahead of schedule Access Pipeline Gross capacity: 340 MBOD 2.1 billion of divestitures (50% Interest) Minimal tax expected Proceeds to…
Significant Financial Strength Investment-grade balance sheet 6.5 billion of liquidity(1) (credit facility matures October 2019) No significant near-term debt maturities Pro Forma Liquidity(1) Debt Maturities Next 5 Years (…
Operating Strategy for Success Maximize base production Minimize controllable downtime Enhance well productivity Capture Full Leverage midstream operations Value Reduce operating costs Optimize capital program…
Achieving Significant Cost Savings D&C costs declining across all core plays D&C Well Cost Declines Peak cost to Q1 2016 Up to 40% lower than peak 2014 rates UP TO Improved drilling efficiencies and lower supply chain costs (50/50…
Disciplined Capital Allocation Yielding Strong Results 2016 E&P Capital Budget Capital program focused on top U.S. 1.1 Billion - 1.3 Billion resource plays Other Recently raised 2016 capital program by 7% 200 million Heavy Oil…
Strong Returns At Lower Prices Assets in best North American Incremental Well Economics At 50 Oil & 2.50 Gas resource plays Delaware Basin STACK Meramec 30%+ 20%+ Strong well economics at lower Eagle Ford Rockies…
STACK Best-In-Class Position World-class development play Atoka Penn. Meramec Best Results 430,000 net surface acres Morrow - Strong flow rates Springer - Oil-weighted production Top targets: Meramec & Woodford - Low well…
STACK Track Record of Growth Per-well productivity continues to increase 40% increase in production year over year Driven by higher-margin oil and liquids production STACK Production Growth 91 MBOED 65 40% Increase Q1…
STACK Significant Resource Upside Meramec inventory conservatively risked Assumes 4 risked wells per section (potential for 5 producible intervals) Downspacing and staggered tests to drive location count higher Testing up to 8…
Delaware Basin A World-Class Oil Play Industry leader in basin Net risked acres: 585,000 Lea Q1 net production: 63 MBOED (60% oil) Eddy Delivering top-quartile well results Cost savings enhancing value LOE 36% lower YoY…
Delaware Basin Significant Resource Opportunity Identified 5,200 risked, undrilled locations Bone Spring 70% of risked inventory Downspacing and appraisal work to drive risked location count higher Evaluating tighter spacing in…
Eagle Ford Best-In-Class Results Top-tier acreage position in DeWitt County Expected to generate 250 million of free cash flow in 2016 Consistently delivering best wells in world-class field (avg. 90 IP rate 1,200 BOED) Top-150…
Canadian Heavy Oil Top-Tier Thermal Position Located in best part of play Top-tier operating results Massive risked resource: 1.4 BBO Significant cash flow at higher prices Profitable at 35 WTI & above 500 MM annually at 50…
Premier Asset Portfolio Platform For Value Creation Asset Risked Opportunity Upside Potential Heavy Oil STACK 5,300 undrilled STACK spacing tests locations underway Delaware 5,000 undrilled Spacing tests and Basin locations appraisal…
Devon Energy A Leading North American E&P Premier asset portfolio Significant financial strength Track record of execution Disciplined capital allocation 21
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