Investor Presentation March 2017 NYSE: DVN devonenergy.com - PowerPoint PPT Presentation

Investor Presentation March 2017 NYSE: DVN devonenergy.com

Investor Contacts & Notices Investor Relations Contacts Scott Coody, Vice President, Investor Relations (405) 552-4735 / scott.coody@dvn.com Chris Carr, Supervisor, Investor Relations (405) 228-2496 / chris.carr@dvn.com Forward-Looking Statements This presentation includes "forward- looking statements" as defined by the Securities and Exchange Commission (the “SEC”). Such statements are subject to a variety of risks and uncertainties that could cause actual results or developments to differ materially from those projected in the forward-looking statements. Please refer to the slide entitled “Forward - Looking Statements” included in this presentation for other important information regarding such statements . Use of Non-GAAP Information This presentation may include non-GAAP financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. For additional disclosure regarding such non-GAAP measures, including reconciliations to their most directly comparable GAAP measure, please refer to Devon’s most recent earnings release at www.devonenergy.com. Cautionary Note to Investors The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. This presentation may contain certain terms, such as resource potential, risked or unrisked resource, potential locations, risked or unrisked locations, exploration target size and other similar terms. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 10-K, available at www.devonenergy.com. You can also obtain this form from the SEC by calling 1-800-SEC- 0330 or from the SEC’s website at www.sec.gov. 2

Devon Today A Leading North American E&P Production Heavy Oil Key Messages 2017e: 539 - 561 MBOED  Premier asset portfolio Gas  Multi-decade growth platform 36% Oil Rockies Oil 46%  Focused in STACK and Delaware Basin NGL 18%  Delivering top-tier execution STACK Delaware Basin Barnett Shale  Significant financial strength Eagle Ford 3

Strategic Approach To 2017  Further increase capital productivity  Maintain improved cost structure  Focused on value and returns  Concentrate activity within STACK and Delaware  Harvest cash flow from other assets  Invest directionally within cash flow  Disciplined hedging program 4

Operating Strategy For Success  Maximize base production  Optimize capital program — Minimize controllable downtime — Disciplined project execution — Enhance well productivity — Perform premier technical work — Leverage midstream operations — Focus on development drilling — Control operating costs — Increase capital efficiency 5

Delivering Record-Setting Well Productivity  Best drilling results in Devon’s 45 -year history — Development drilling focused in top resource plays — Enhanced completion designs and improved well placement Avg. 90-Day Wellhead IPs 750 BOED, 20:1 600 450 300 150 IMPROVEMENT 0 2012 2013 2014 2015 2016 6

Efficiency Gains Create Tremendous Value  Achieved $1.3 billion of annual cost savings Operating Costs and G&A $ Billions ― LOE and G&A reduced ≈30 % from peak rates $4.1  Base production initiatives yielding excellent results ― Efforts achieving 2% production uplift $2.8 ― Creating ≈$100 million of value annually B  D&C costs reduced by up to 45% (1) COST SAVINGS ― Driven by efficiencies and supply chain costs 2014 2015 2016 ― More than offsetting larger completions G&A LOE Prod. Taxes (1) From peak levels in 2014. 7

Performance Transformation Continues In 2017  Drilling activity to shift to longer laterals — Improves capital efficiency & well productivity  Control supply chain to reduce costs — Unbundling historical, high-margin services — Utilizing more diversified vendor universe — Adding longer-term contracts to capture lower costs  “Big data” innovations to create substantial value — Leveraging advanced analytics to improve operations — Efficient data systems optimize overhead structure 8

Accelerating Capital Investment 2017 Capital Outlook Rig Activity – U.S. Resource Plays  Disciplined capital allocation focused on returns Operated Rigs 40 UP TO  2017 E&P capital: $2.0 to $2.3 billion RIGS BY YEAR END 2017 30 RIGS — 90% devoted to U.S. resource plays AT YEAR END 2016 20 — Concentrated in STACK & Delaware Basin 10 — Invest directionally within cash flow 0 2015 2016 2017 2015 2016 2017e  Ramping up to 20 operated rigs by year end — Steady rig additions throughout the year 2017e Billion — Generates momentum into 2018 E & P C A P I T A L 9

Rapid Expansion Of High-Margin Production 2017 & 2018 Outlook  Accelerated investment drives strong oil growth U.S. Oil Production Growth MBOD — U.S. oil growth: 13% - 17% (2017 vs. Q4 16) ≈ (vs. 2017) — Production growth resumes in Q1 2017 (vs. Q4 2016)  Higher growth rates expected in 2018 105 — U.S. oil production to advance by ≈20% — Driven by >30% growth in STACK & Delaware  Positioned to deliver peer-leading cash flow expansion Q4 2016 2017e 2018e 10

Expanding The Resource Base Drilling Schedule Catalyst Rich In 2017  Impactful appraisal work underway in STACK STACK and Delaware  Initial multi-zone Meramec — >1 million surface acres development program  — 30,000 potential locations (1/3 derisked) Ongoing Meramec infill tests to define future developments — Appraisal work to expand inventory  Substantial productivity gains with Barnett Shale Woodford row developments  Advances in horizontal  Efforts to define upside in other refrac design cash-flow generating assets Delaware Basin Eagle Ford  Initiatives refining view of total  Significant Leonard Shale and  Infill spacing tests to Wolfcamp drilling programs resource potential define upside High-Growth Assets Other Key Assets 11 11

STACK Best-In-Class Position  World-class development opportunity Meramec – Core Area Blaine Dewey — >600,000 net acres by formation (1) Kingfisher — Top targets: Meramec & Woodford — Q4 net production: 88 MBOED Custer  Largest leasehold position of any operator Woodford – Core Area Canadian — Deep inventory of low-risk projects  Most active asset in portfolio STACK RESOURCE OVERVIEW — 2017 capital: $750 million NET ACRES (1) k — Up to 10 operated rigs by year-end RISKED LOCATIONS (1) Represents Meramec and Woodford net acreage by formation. 12

STACK Positioned For Strong Production Growth  Production expected to increase >35% during 2017  Product mix shifting to higher-margin oil and liquids production >120 STACK Production Growth MBOED 88 GROWTH Q4 2016 Q1 2017e Q2 2017e Q3 2017e Q4 2017e 13 13

STACK Meramec Moving To Full-Field Development  Initial Meramec spacing pilots successful STACK PILOTS – OPERATED & NON-OPERATED — Tested multi-zone, staggered laterals Blaine Showboat Development  ≈15 wells (2H 2017) Born Free Staggered Pilot — Spacing up to 7 wells in a single interval  Parent well: 30-Day IP: 2,200 BOED 30-Day IP: 1,750 BOED Yr. 1 cum: 550 MBOE  First multi-zone development in 2H 2017 Kingfisher — Up to 15 wells in a single drilling unit Alma 5-Well Pilot — Across 3 different Meramec intervals Pump House 7-Well Pattern 30-Day IP: 1,400 BOED 30-Day IP: 2,100 BOED  Significant upside with future projects Operated — Potential for 20 to 30 wells per drilling unit Non-Operated Canadian — Evaluating co-development with Woodford 14

STACK Meramec Resource Continues To Expand  Appraisal & infill success increases inventory MERAMEC INVENTORY — Raised inventory 40% above previous estimates — Meramec inventory: 1,700 risked locations 1,700 RISKED LOCATIONS  Future development to leverage long laterals — Further enhances capital and well productivity Meramec Over-Pressured Oil - 10,000’ Lateral Type Well — Represents 60% of planned activity in 2017 1,900 - 2,300 IP 30-Day, BOED 1,600 - 2,000 EUR MBOE (40% - 50% Oil) $7.5 - 9.0 D&C $MM 15