6. Enhancing Financial Strength
6
Non‐core asset divestiture program
underway
― Expected proceeds: $2 ‐ $3 billion
― Sales expected throughout 2016
― Proceeds to date: ≈$300 million
Access Pipeline sale expected 1H 2016
E&P divestiture process ongoing
― Data rooms open since March
― Bids expected by end of Q2 2016
Active Portfolio Management
Midland Basin
Q1 Production: 26 MBOED
East Texas
Q1 Production: 22 MBOED
San Juan Basin
SOLD
Mississippian
SOLD
Access Pipeline
Gross capacity: 340 MBOD
(50% Interest)
Granite Wash
Q1 Production: 14 MBOED
8. 8
Devon delivered best well results of any U.S. producer during 2015
Key drivers of success:
— Enhanced completion designs and improved well placement
— Development drilling focused in top N.A. resource plays
Delivering Best‐In‐Class Well Results
0
150
300
450
600
2015 Avg. 90‐Day Wellhead IPs
BOED, 20:1
Top U.S. Producers
0
150
300
450
600
2012 2013 2014 2015
Devon’s Avg. 90‐Day Wellhead IPs
BOED, 20:1
≈250%
Increase
Source: IHS/Devon. Operators with more than 100 wells.
9. Achieving Significant Cost Savings
9
D&C costs declining across all core plays
― Up to 40% lower than peak 2014 rates
― Improved drilling efficiencies and lower
supply chain costs (≈50/50 split)
― More than offsetting larger completions
Achieving significant operating cost savings
― LOE has declined 25% since 2014
― On track to reduce G&A costs by up to
$500 million annually
D&C Well Cost Declines
Peak cost to Q1 2016
$9.49
$8.48
$7.13
FY2014 FY2015 Q1 2016
25%
Improvement
Lease Operating Expense
$ Per BOE
SAVINGS
UP TO
14. 14
STACK
Meramec Results Validate Core Position
Favorable characteristics
of core oil window:
1. Attractive reservoir
properties (thickness,
permeability, porosity)
2. Strong flow rates due to
high pressure gradients
3. Returns enhanced by oil‐
weighted production
4. Low well costs
Over
Pressured
Oil
Liquids
Rich
Dry GasPlay Windows Normal
Pressured
Oil
Pressure Gradient (psi/ft.) >0.75 0.75 – 0.6 0.7 – 0.45 0.45 or less
Blurton 1‐7‐6XH
30‐Day IP: 1,790 BOED
Scheffler 1H‐9X
30‐Day IP: 2,040 BOED
Cascade 2314‐1H
30‐Day IP: 1,650 BOED
Born Free Pilot
30‐Day IP: 2,200 BOED
Wort 1‐21H
30‐Day IP: 2,430 BOED
Parker 1‐33H
30‐Day IP: 2,030 BOED Stiles 1407 2‐4MH
30‐Day IP: 1,860 BOED
Minnie Ha Ha 12‐4AH
30‐Day IP: 1,930 BOED
Compton 1‐2‐35XH
30‐Day IP: 2,250 BOED
Maybel 1H‐13X
30‐Day IP: 1,900 BOED
Cows Face 0805‐4AH
30‐Day IP: 2,150 BOED
Oil‐Weighted Production
30‐Day IPs: ≈60% oil
EURs: ≈40% oil
Custer
Dewey
Canadian
15. STACK
Significant Resource Upside
15
Formation Window Gross Risked Locations Gross Unrisked Locations
Meramec
Over‐Pressured Oil 1,600 3,800
Liquids‐Rich TBD TBD
Woodford
Oil & Liquids‐Rich 2,400 4,650
Dry Gas 1,300 2,300
Total 5,300 10,750
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 wells per section across 1 interval in Meramec
— Staggered lateral pilots underway could further expand potential in Meramec
— Evaluating joint development of Meramec and Woodford
16. Delaware Basin
A World‐Class Oil Play
16
Industry leader in basin
— Net risked acres: 585,000
— Q1 net production: 63 MBOED (≈60% oil)
— Delivering top‐quartile well results
Cost savings enhancing value
— LOE 36% lower YoY
— Driven by lower water and power costs
2016 outlook
— Capital: ≈$200 million
— Activity focused in Bone Spring play
Eddy
Lea
Delaware Sands
Leonard Shale
Bone Spring
Wolfcamp
17. Delaware Basin
Significant Resource Opportunity
17
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 Bone Spring
— Staggered spacing pilots expanding Leonard Shale potential
— Wolfcamp provides significant resource upside
Formation
Net Risked
Acres
Gross Risked
Locations
Gross Unrisked
Locations
Delaware Sands 80,000 700 1,500
Leonard Shale 60,000 800 3,100
Bone Spring 285,000 3,500 5,700
Wolfcamp 140,000 Appraising 5,800
Other 20,000 200 200
Total 585,000 5,200 16,300