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Strategic Update – Devon Energy Corp

Devon Energy Corp · Feb 19, 2019 · 14 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. Strategic Update – Devon Energy Corp – slide 1
    Strategic Update February 19, 2019 NYSE: DVN devonenergy.com
  2. Strategic Update – Devon Energy Corp – slide 2
    Completing Transformation to a U.S. Oil Growth Company Sharpens focus on world-class U.S. oil assets New Devon Overview Delaware, STACK, Eagle Ford and Powder River Production: 296 MBOED (Q4 2018) High-margins and low cost of supply…
  3. Strategic Update – Devon Energy Corp – slide 3
    A Track Record of Execution Conventional Canadian Heavy Oil(1) DIVESTITURE PROCEEDS 30Billion Assets Russia POWDER RIVER Rockies CO2 (marketing) Washakie Uinta Azerbaijan San Juan Mississippian China Granite Wash…
  4. Strategic Update – Devon Energy Corp – slide 4
    New Devons World-Class Oil Assets Visualized Portfolio positioned in top oil basins Well level breakeven (PV-10, WTI to HH 20:1) (/bbl) 4 90 80 DOMINANT TOP OIL 70 POSITION IN PLAYS Breakeven(/bbl20:1 WTI:HH) 60 Net…
  5. Strategic Update – Devon Energy Corp – slide 5
    Unleashing Potential of World-Class Oil Assets U.S. well productivity showcases asset quality +40% Source: IHS/Devon. All wells drilled since 2015 and includes operators with more than 100 wells. SUPERIOR 900 WELL Avg. 90-Day IPs…
  6. Strategic Update – Devon Energy Corp – slide 6
    Inventory Supports Sustainable Long-Term Growth High-Return Inventory Potential(1) Gross operated inventory locations 6,500 operated 20 YEAR INVENTORY (AT CURRENT ACTIVITY PACE) locations (Avg. lateral…
  7. Strategic Update – Devon Energy Corp – slide 7
    Next Steps to Optimize New Devon Cost Structure Aggressively pursuing improved cost structure Timing of annual cost savings New Devon expected cost savings by area vs. 2018 results (MM) Cumulative estimated annual cost savings (MM) 800…
  8. Strategic Update – Devon Energy Corp – slide 8
    Disciplined Returns-Focused Strategy KEY STRATEGIC OBJECTIVES APPROACH TO THE CURRENT ENVIRONMENT WTI PRICE(1) 1 Fund high-return projects Maintain financial strength and 40 operational continuity (New Devon FCF breakeven below 40…
  9. Strategic Update – Devon Energy Corp – slide 9
    New Devon: 3-Year Performance Targets RETURN ON CAPITAL TARGET: 15% (1) (At 50 WTI & 3 HH) CUMULATIVE FREE CAPITAL PROGRAM CASH FLOW OIL GROWTH COST SAVINGS DEBT TARGET Funded 1.6 (2) 12% 17% 780 MM 1.0x to 1.5x At 46 WTI BILLION…
  10. Strategic Update – Devon Energy Corp – slide 10
    New Devon: Free Cash Flow Yield to Investors (1) 2.3B 10% 2.4 3-YEAR CAPITAL PLAN Cumulative Free Cash Flow 2.0 OIL CAGR: 12%-17% 8% (1) BREAKEVEN: 46 WTI 1.6B Cumulative Free Cash Flow (B) Free Cash Yield (Annual Avg.)…
  11. Strategic Update – Devon Energy Corp – slide 11
    Attractive Entry Point for World-Class Oil Business Peer trading multiples New Devon: trading at significant discount 2019e EV/EBITDAX(1) in Billions 10.0x 24 Peer Multiple * New DVN EBITDAX Valuation 9.0x (6.8x * 2.5B) Gap 8.0x…
  12. Strategic Update – Devon Energy Corp – slide 12
    Why Own New Devon New Devon Overview World-class U.S. oil company Production: 296 MBOED (Q4 2018) Unrivaled acreage position in top basins Revenue: 84% oil & liquids Multi-decade inventory to drive sustainable growth Oil growth…
  13. Strategic Update – Devon Energy Corp – slide 13
    Q4 2018 - Key Modeling Stats Q4 2018 - ASSET DETAIL DELAWARE STACK PRB EAGLE FORD PRODUCTION Oil (MBbl/d) 45 31 13 30 NGL (MBbl/d) 18 37 2 15 Gas (MMcf/d) 127 343 20 95 Total (MBoe/d) 84(1) 126 18(1) 61 ASSET MARGIN (per Boe)…
  14. Strategic Update – Devon Energy Corp – slide 14
    New Devon: Pro Forma Financials KEY METRICS Q4 2018 FY 2018 FY 2019 (ASSUMES PRO FORMA COSTS) (WTI / HH) (58.80 / 3.65) (64.79 / 3.09) (50 / 3) Oil production (MBbls/d) 125 121 137 - 143 NGL production (MBbls/d) 73 69 70 - 74 Gas…

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