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April 2019 Investor Presentation – Devon Energy Corp

Devon Energy Corp · Apr 1, 2019 · 27 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. April 2019 Investor Presentation – Devon Energy Corp – slide 1
    Investor Presentation April 2019 NYSE: DVN devonenergy.com
  2. April 2019 Investor Presentation – Devon Energy Corp – slide 2
    Devons Competitive Advantage World-class U.S. oil portfolio Disciplined returns-driven strategy Generating free cash flow Investment-grade financial position Investor Presentation 2
  3. April 2019 Investor Presentation – Devon Energy Corp – slide 3
    Completing Transformation to a U.S. Oil Growth Company New Devon Overview Sharpens focus on world-class U.S. oil assets Production: 296 MBOED (Q4 2018) U.S. oil business has achieved operating scale Revenue: 84% oil & liquids Oil…
  4. April 2019 Investor Presentation – Devon Energy Corp – slide 4
    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…
  5. April 2019 Investor Presentation – Devon Energy Corp – slide 5
    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…
  6. April 2019 Investor Presentation – Devon Energy Corp – slide 6
    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…
  7. April 2019 Investor Presentation – Devon Energy Corp – slide 7
    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…
  8. April 2019 Investor Presentation – Devon Energy Corp – slide 8
    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…
  9. April 2019 Investor Presentation – Devon Energy Corp – slide 9
    Disciplined Returns-Driven 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 in…
  10. April 2019 Investor Presentation – Devon Energy Corp – slide 10
    Committed to Return of Capital to Shareholders Repurchase program accelerates per-share growth Delivering sustainable dividend growth Outstanding shares (MM) Annual divided per share 527 521 30% 0.36 (1) 491 SHARE COUNT…
  11. April 2019 Investor Presentation – Devon Energy Corp – slide 11
    2019 Capital Objectives Focused on top-tier oil development opportunities Positioned for high-return growth in 2019 20% 2019e New Devon E&P capital New Devon U.S oil production (MBOD) (2019 exit rate vs. FY 2018) DELAWARE STACK 47%…
  12. April 2019 Investor Presentation – Devon Energy Corp – slide 12
    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 12% 17% 780 MM 1.0x to 1.5x At 46 WTI BILLION CAGR…
  13. April 2019 Investor Presentation – Devon Energy Corp – slide 13
    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.)…
  14. April 2019 Investor Presentation – Devon Energy Corp – slide 14
    Attractive Entry Point for World-Class Oil Business Peer trading multiples New Devon: trading at significant discount 2019e EV/EBITDAX(1) in Billions 9.0x 24 Peer Multiple * New DVN EBITDAX Valuation (7.0x * 2.5B) Gap 8.0x Peer…
  15. April 2019 Investor Presentation – Devon Energy Corp – slide 15
    Delaware Basin Capital-Efficient Growth Engine POTATO BASIN THISTLE/GAUCHO Eddy Lea World-class oil opportunity TODD Boundary Raider (2 Bone Spring wells) Tomb Raider (3 Wolfcamp wells) Avg. IP24 hr: 12 MBOED/well Avg. IP30: 3,500…
  16. April 2019 Investor Presentation – Devon Energy Corp – slide 16
    Step-Change in Delaware Basin Well Productivity Well productivity reaching record highs Significant growth platform at 50 WTI Average cumulative oil production per well (MBO) Gross operated inventory locations generating IRR 20%(1) 300…
  17. April 2019 Investor Presentation – Devon Energy Corp – slide 17
    Focusing on Wolfcamp & Bone Spring Projects in 2019 Wolfcamp program: 45% of 2019 drilling activity Development of Bone Spring in Todd area underway Six key projects underway in Rattlesnake area Cats activity offsetting prolific…
  18. April 2019 Investor Presentation – Devon Energy Corp – slide 18
    Delaware Basin Focused Development Plan in 2019 Top-funded asset in portfolio (900 million) Infrastructure drives sustainable savings and ESG benefits Low-risk development activity: 95% of program Operating costs to improve 60% vs.…
  19. April 2019 Investor Presentation – Devon Energy Corp – slide 19
    STACK Optimizing Infill Spacing Net production increases 11% vs. Q4 2017 STACK DEVELOPMENT ACTIVITY Oil production increased 9% (vs. Q3 2018) Developments Online Faith Marie (2 wells) Kingfisher Avg. IP30: 3,100 BOED Growth driven…
  20. April 2019 Investor Presentation – Devon Energy Corp – slide 20
    STACK 2019 Strategic Priorities Transitioning infill developments to 4-6 wells per unit Updated infill development type curve expectations Early results in line with type curve expectations (BOED) Investment concentrated in…
  21. April 2019 Investor Presentation – Devon Energy Corp – slide 21
    Eagle Ford Q4 production averaged 61 MBOED (50% oil) EAGLE FORD OVERVIEW Net production 11% higher vs. Q4 2017 FREE CASH FLOW 15 new wells: Avg. IP30 3,700 BOED 515 High-rates driven by larger completion design MILLION IN 2018…
  22. April 2019 Investor Presentation – Devon Energy Corp – slide 22
    Powder River Basin Net production increased 27% vs. Q4 2017 KEY POWDER RIVER BASIN ACTIVITY 8 wells online in late December (Avg. IP30: 1,500 BOED) PRB Activity 2019 Activity January 2019 production: 22 MBOED (+25% vs. Q4) 50 Spuds…
  23. April 2019 Investor Presentation – Devon Energy Corp – slide 23
    Why Own New Devon New Devon Overview World-class U.S. oil portfolio Production: 296 MBOED (Q4 2018) Unrivaled acreage position in top basins Revenue: 84% oil & liquids Multi-decade inventory to drive sustainable growth Oil growth…
  24. April 2019 Investor Presentation – Devon Energy Corp – slide 24
    Highly-Regarded ESG Performance OVERALL SCORE TOP-QUARTILE ENVIRONMENT SCORE ENVIRONMENT +43% VERSUS PEER AVG. DVNs SCORE: 2 PEER AVERAGE: 3.5 PERFORMANCE 58 85 Peer Group Avg. 54 SOCIAL +35% VERSUS PEER AVG. DVNs SCORE:…
  25. April 2019 Investor Presentation – Devon Energy Corp – slide 25
    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)…
  26. April 2019 Investor Presentation – Devon Energy Corp – slide 26
    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…
  27. April 2019 Investor Presentation – Devon Energy Corp – slide 27
    Barnett Shale Canada Dow JV efficiently maintaining base production Q4 impacted by curtailments & royalties Q4 production: 103 MBOED (30% NGLs) Reduced production due to market conditions (17 MBOD) Minimum volume commitments expired…

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