UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 1, 2017

DEVON ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)

 
					
DELAWARE	 	001-32318	 	73-1567067	
(State or Other Jurisdiction
of Incorporation)	 	(Commission
File Number)	 	(IRS Employer
Identification Number)	
		
333 W. SHERIDAN AVE., OKLAHOMA CITY, OK	 	73102	
(Address of Principal Executive Offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: (405) 235-3611
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A-2. Below):
 
 	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
 	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
 	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
 	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company  ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

Item 2.02	Results of Operations and Financial Condition	
Devon Energy Corporation hereby furnishes the information set forth in its news release dated August 1, 2017 announcing second quarter financial results, a copy of which is attached as Exhibit 99.1.
 
Item 9.01	Financial Statements and Exhibits	
(d) Exhibits

		
99.1	  	Devon Energy Corporation news release dated August 1, 2017.	
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.

DEVON ENERGY CORPORATION	
		
By:	 	/s/ Jeffrey L. Ritenour 	
	 	Jeffrey L. Ritenour	
	 	Executive Vice President and	
	 	Chief Financial Officer	
Date: August 1, 2017

Page 2 of 2

Exhibit 99.1

	 		 	Devon Energy Corporation
333 West Sheridan Avenue
Oklahoma City, OK 73102-5015
 	
NEWS RELEASE
Devon Energy Reports Second-Quarter 2017 Results
OKLAHOMA CITY – Aug. 1, 2017 – Devon Energy Corp. (NYSE: DVN) today reported operational and financial results for the second quarter of 2017. Also included within the release is the company’s guidance outlook for the third quarter and full-year 2017.
Highlights
 
 	•	 	Oil production from U.S. resource plays exceeds guidance	
 
 	•	 	Operational momentum builds with high-rate wells in STACK and Delaware Basin	
 
 	•	 	Efficiencies drive 2017 capital outlook $100 million lower	
 
 	•	 	Free cash flow generation increases cash balances to $2.4 billion	
 
 	•	 	Divestiture program advances with $340 million of asset sales	
“Devon achieved another high-quality operating performance in the second quarter, building operational momentum in our U.S. resource plays and accelerating efficiency gains across our portfolio,” said Dave Hager, president and CEO. “These successful efforts resulted in record-setting well results that drove our U.S. oil production above guidance expectations with a capital investment that was 17 percent below our budget year to date. As a result of this strong capital efficiency, we are lowering our full-year capital outlook by $100 million and, importantly, we have not made any changes to our planned activity levels in 2017.
“Given our advantaged asset base and ability to deliver best-in-class well results, we remain well positioned to deliver value and returns on our capital investments as we navigate industry conditions,” said Hager. “With our ability to deliver attractive returns in this environment, our top strategic priorities are to maintain operational momentum in our U.S. resource plays, organically fund our capital investment and further improve our investment-grade financial strength.”
STACK and Delaware Basin Drive U.S. Oil Production Beat
Devon’s net production averaged 536,000 oil-equivalent barrels (Boe) per day during the second quarter of 2017, exceeding midpoint guidance by 6,000 Boe per day. Of this total, oil production accounted for the largest component of the company’s product mix at 44 percent of total volumes.
The majority of Devon’s production was attributable to its U.S. resource plays, which averaged 412,000 Boe per day. This performance was highlighted by 8 percent production growth from the company’s STACK and Delaware Basin assets compared to the previous quarter, driving light-oil production in the U.S. above the top end of guidance to an average of 116,000 barrels per day.
Recent drilling activity from the company’s U.S. operations was highlighted by nine high-rate development wells in the STACK and Delaware Basin that achieved initial 30-day rates averaging nearly 2,000 Boe per day.
Best-In-Class Well Productivity
These high-rate development wells showcase Devon’s asset quality and outstanding execution that has generated best-in-class well productivity in North America. Based on publicly available data over the
 
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past year, Devon’s 90-day production rates from new wells have achieved the highest rates of any operator and the company’s well productivity has improved by more than 450 percent since 2012 (see page 6 of Q2 Operations Report for more detail).
Strong Exit Rates Build Momentum into 2018
Based on strong results year to date, Devon is firmly on track to achieve its full-year 2017 production targets. Importantly, based on accelerated activity levels in the second half of 2017, the company projects U.S. oil production to exit the year at a rate of 18 to 23 percent higher than the fourth quarter of 2016.
This strong production growth over the remainder of 2017 is driven by the company’s focused capital program in the STACK and Delaware Basin where 90 percent of its U.S. rig activity is allocated. Combined, these two franchise growth assets are expected to advance production by greater than 30 percent by the end of 2017 compared to the same period a year ago. With this strong growth in higher-margin production, liquids volumes are now projected to reach approximately 65 percent of Devon’s product mix by year-end.
In the third quarter, Devon expects total companywide oil production to range between 234,000 and 244,000 barrels per day. A maintenance event at Jackfish 2, completed over a three-week period in July, is expected to curtail production by approximately 15,000 barrels per day in the third quarter.
Lowering 2017 Capital Outlook by $100 Million
In the first half of 2017, the company’s E&P capital expenditures have been 17 percent below the midpoint of guidance, or 39 percent of the full-year budget. This strong performance has been driven by drilling and completion efficiency gains in the STACK and Delaware Basin combined with innovative supply chain initiatives that have completely offset industry inflation year to date.
Due to these positive operating trends, Devon now expects E&P capital investment to range from $1.9 billion to $2.2 billion in 2017, a $100 million decrease compared to previous guidance. With this updated outlook, the company has not made any changes to its planned activity levels in 2017 and is on track to increase to approximately 20 rigs by the end of 2017.
Second-Quarter 2017 Operations Report
For additional details regarding well results and other information about Devon’s E&P operations, please refer to the company’s second-quarter 2017 operations report at www.devonenergy.com . Highlights from the report include:
 
 	•	 	STACK production advances 20 percent year to date	
 
 	•	 	Record Meramec well reaches 6,000 Boe per day	
 
 	•	 	High-rate oil wells jump-start growth in Delaware Basin	
 
 	•	 	Resource potential expands in Wolfcamp and Woodford plays	
 
 	•	 	Powder River Basin delivers strong appraisal wells	
Midstream Business Positioned to Achieve Double-Digit Growth in 2017
The company’s midstream business generated $224 million of operating profit in the second quarter, an 8 percent increase compared to the first quarter of 2017. This growth was driven entirely by Devon’s strategic investment in EnLink Midstream. Devon expects its midstream operating profits to advance to a range of $900 million to $950 million in 2017. Based on midpoint guidance, this estimate represents a 10 percent increase compared to 2016.
Devon has a 64 percent ownership in EnLink’s general partner (NYSE: ENLC) and a 23 percent interest in the limited partner (NYSE: ENLK). In aggregate, the company’s ownership in EnLink has a market value of approximately $3.6 billion and is expected to generate cash distributions of approximately $270 million annually.
 
2

Significant Operating Cost Improvement by Year-End
Devon’s cost-reduction initiatives are expected to achieve $1.4 billion of annualized operating and general and administrative expenses (G&A) savings in 2017. Lease operating expenses (LOE), the company’s largest field-level cost, totaled $399 million or $8.18 per Boe in the second quarter. Of this amount, $20 million was related to costs associated with maintenance work at Jackfish 3.
Looking ahead, the company projects its per-unit LOE to improve 5 to 10 percent by year-end compared to second-quarter results. This per-unit improvement is driven by the combination of higher production rates from the company’s resource plays and lower operating costs in Canada.
The company also is effectively managing its G&A cost structure. Overhead expenses declined to $164 million in the second quarter, a 9 percent improvement compared to the first quarter. This result was $21 million below the bottom end of the company’s guidance range. Savings were driven by lower employee-related costs.
Higher-Margin Production Expands Operating Cash Flow 135 Percent
Devon’s operating cash flow totaled $810 million in the second quarter compared to $345 million in the year-ago quarter. This 135 percent increase in operating cash flow year over year was attributable to higher commodity prices and an improved cost structure.
Devon’s reported net earnings totaled $425 million or $0.80 per diluted share in the second quarter. Adjusting for items that securities analysts typically exclude from their published estimates, the company’s core earnings totaled $177 million or $0.34 per diluted share.
Free Cash Flow Generation Increases Cash Balances to $2.4 Billion
In the second quarter, the company’s upstream operations fully funded its capital requirements and generated free cash flow, which helped increase Devon’s cash balances by $250 million to $2.4 billion at the end of June.
In addition to the company’s strong liquidity and investment-grade ratings, Devon’s financial position is further bolstered by its attractive hedge position. The company currently has approximately 55 percent of its estimated oil and gas production protected for the second half of 2017 at above-market prices and is in the process of accumulating additional hedges in 2018. This disciplined, risk-management program consists of systematic hedges added on a quarterly basis and discretionary hedges that take advantage of favorable market conditions.
Divestiture Program Achieves $340 Million of Asset Sales
The company’s financial strength will be further enhanced by proceeds from its previously announced $1 billion divestiture program. In aggregate, Devon’s divestiture program will include approximately 35,000 Boe per day (approximately 30 percent liquids) from select leasehold positions within the Barnett Shale and the Eagle Ford, along with other minor non-core properties across the U.S.
In July, Devon took an important step toward its divestiture goal by announcing the sale of its non-core Lavaca County assets in the Eagle Ford for $205 million, which is expected to close by the end of 2017. Combined with other minor asset sales, Devon now has sold $340 million of assets or roughly one-third of its divestiture target.
 
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Efforts to monetize Devon’s Johnson County properties in the Barnett Shale are also progressing. The Johnson County assets represent approximately 20 percent of the company’s net production and cash flow generated from its Barnett Shale position. Devon is actively marketing these assets and expects to complete its $1 billion non-core divestiture program over the next year.
Non-GAAP Reconciliations
Pursuant to regulatory disclosure requirements, Devon is required to reconcile non-GAAP (generally accepted accounting principles) financial measures to the related GAAP information. Core earnings and core earnings per share referenced within the commentary of this release are non-GAAP financial measures. Reconciliations of these and other non-GAAP measures are provided within the tables of this release.
Conference Call Webcast and Supplemental Earnings Materials
Please note that as soon as practicable today, Devon will post an operations report to its website at www.devonenergy.com . The company’s second-quarter conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Aug. 2, 2017, and will serve primarily as a forum for analyst and investor questions and answers.
Forward-Looking Statements
This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission (SEC). Such statements include those concerning strategic plans, expectations and objectives for future operations, and are often identified by use of the words “expects,” “believes,” “will,” “would,” “could,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding our business and operations are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to: the volatility of oil, gas and NGL prices; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved in exploration and development activities; risks related to our hedging activities; counterparty credit risks; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to environmental matters; risks relating to our indebtedness; our ability to successfully complete mergers, acquisitions and divestitures; the extent to which insurance covers any losses we may experience; our limited control over third parties who operate our oil and gas properties; midstream capacity constraints and potential interruptions in production; competition for leases, materials, people and capital; cyberattacks targeting our systems and infrastructure; and any of the other risks and uncertainties identified in our Form 10-K and our other filings with the SEC. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by Devon on its website or otherwise. Devon does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.
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 release may contain certain terms, such as resource potential, potential locations, risked and unrisked locations, estimated ultimate recovery (or EUR), 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 .
 
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About Devon Energy
Devon Energy is a leading independent energy company engaged in finding and producing oil and natural gas. Based in Oklahoma City and included in the S&P 500, Devon operates in several of the most prolific oil and natural gas plays in the U.S. and Canada with an emphasis on a balanced portfolio. The company is the second-largest oil producer among North American onshore independents. For more information, please visit www.devonenergy.com .

Investor Contacts	  	Media Contact	
Scott Coody, 405-552-4735	  	John Porretto, 405-228-7506	
Chris Carr, 405-228-2496	  		
 
5

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
PRODUCTION NET OF ROYALTIES

 	  	Quarter Ended	 	  	Six Months Ended	 	
 	  	June 30,	 	  	June 30,	 	
 	  	2017	 	  	2016	 	  	2017	 	  	2016	 	
Oil and bitumen (MBbls/d)	  				  				  				  				
U. S.	  	 	116	 	  	 	123	 	  	 	119	 	  	 	132	 	
Heavy Oil	  	 	122	 	  	 	121	 	  	 	130	 	  	 	124	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	238	 	  	 	244	 	  	 	249	 	  	 	256	 	
Divested assets	  	 	—  	 	  	 	15	 	  	 	—  	 	  	 	16	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	238	 	  	 	259	 	  	 	249	 	  	 	272	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				
U. S.	  	 	97	 	  	 	110	 	  	 	97	 	  	 	113	 	
Divested assets	  	 	—  	 	  	 	21	 	  	 	—  	 	  	 	21	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	97	 	  	 	131	 	  	 	97	 	  	 	134	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				  				  				
U. S.	  	 	1,194	 	  	 	1,293	 	  	 	1,200	 	  	 	1,322	 	
Heavy Oil	  	 	14	 	  	 	28	 	  	 	18	 	  	 	22	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	1,208	 	  	 	1,321	 	  	 	1,218	 	  	 	1,344	 	
Divested assets	  	 	—  	 	  	 	206	 	  	 	—  	 	  	 	210	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,208	 	  	 	1,527	 	  	 	1,218	 	  	 	1,554	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				
U. S.	  	 	412	 	  	 	448	 	  	 	417	 	  	 	465	 	
Heavy Oil	  	 	124	 	  	 	126	 	  	 	133	 	  	 	127	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	536	 	  	 	574	 	  	 	550	 	  	 	592	 	
Divested assets	  	 	—  	 	  	 	70	 	  	 	—  	 	  	 	73	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	536	 	  	 	644	 	  	 	550	 	  	 	665	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
KEY OPERATING STATISTICS BY REGION

 	  	Quarter Ended June 30, 2017	 	
 	  	Avg. Production	 	  	Gross Wells	 	  	Operated Rigs at	 	
 	  	(MBoe/d)	 	  	Drilled	 	  	June 30, 2017	 	
STACK	  	 	105	 	  	 	46	 	  	 	7	 	
Delaware Basin	  	 	56	 	  	 	29	 	  	 	6	 	
Eagle Ford (1)	  	 	63	 	  	 	1	 	  	 	2	 	
Heavy Oil	  	 	124	 	  	 	18	 	  	 	1	 	
Barnett Shale	  	 	155	 	  	 	—  	 	  	 	—  	 	
Rockies Oil	  	 	18	 	  	 	3	 	  	 	2	 	
Other assets	  	 	15	 	  	 	5	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	536	 	  	 	102	 	  	 	18	 	

(1)	Includes partner rig.	
 
6

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
PRODUCTION TREND

 	  	2016	 	  	2017	 	
 	  	Quarter 2	 	  	Quarter 3	 	  	Quarter 4	 	  	Quarter 1	 	  	Quarter 2	 	
Oil and bitumen (MBbls/d)	  				  				  				  				  				
STACK	  	 	19	 	  	 	21	 	  	 	19	 	  	 	21	 	  	 	25	 	
Delaware Basin	  	 	36	 	  	 	31	 	  	 	29	 	  	 	30	 	  	 	30	 	
Eagle Ford	  	 	41	 	  	 	33	 	  	 	34	 	  	 	48	 	  	 	36	 	
Heavy Oil	  	 	121	 	  	 	137	 	  	 	139	 	  	 	138	 	  	 	122	 	
Barnett Shale	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	
Rockies Oil	  	 	15	 	  	 	11	 	  	 	11	 	  	 	13	 	  	 	13	 	
Other assets	  	 	11	 	  	 	11	 	  	 	11	 	  	 	10	 	  	 	11	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	244	 	  	 	245	 	  	 	244	 	  	 	261	 	  	 	238	 	
Divested assets	  	 	15	 	  	 	6	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	259	 	  	 	251	 	  	 	244	 	  	 	261	 	  	 	238	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				  				
STACK	  	 	30	 	  	 	23	 	  	 	21	 	  	 	26	 	  	 	31	 	
Delaware Basin	  	 	13	 	  	 	12	 	  	 	10	 	  	 	10	 	  	 	10	 	
Eagle Ford	  	 	17	 	  	 	13	 	  	 	11	 	  	 	15	 	  	 	11	 	
Barnett Shale	  	 	46	 	  	 	44	 	  	 	43	 	  	 	43	 	  	 	42	 	
Rockies Oil	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	
Other assets	  	 	3	 	  	 	3	 	  	 	4	 	  	 	3	 	  	 	2	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	110	 	  	 	96	 	  	 	90	 	  	 	98	 	  	 	97	 	
Divested assets	  	 	21	 	  	 	8	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	131	 	  	 	104	 	  	 	90	 	  	 	98	 	  	 	97	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				  				  				  				
STACK	  	 	289	 	  	 	292	 	  	 	284	 	  	 	287	 	  	 	298	 	
Delaware Basin	  	 	99	 	  	 	92	 	  	 	89	 	  	 	88	 	  	 	96	 	
Eagle Ford	  	 	103	 	  	 	85	 	  	 	90	 	  	 	119	 	  	 	96	 	
Heavy Oil	  	 	28	 	  	 	18	 	  	 	18	 	  	 	23	 	  	 	14	 	
Barnett Shale	  	 	757	 	  	 	730	 	  	 	710	 	  	 	683	 	  	 	675	 	
Rockies Oil	  	 	31	 	  	 	19	 	  	 	17	 	  	 	15	 	  	 	17	 	
Other assets	  	 	14	 	  	 	13	 	  	 	13	 	  	 	13	 	  	 	12	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	1,321	 	  	 	1,249	 	  	 	1,221	 	  	 	1,228	 	  	 	1,208	 	
Divested assets	  	 	206	 	  	 	75	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,527	 	  	 	1,324	 	  	 	1,221	 	  	 	1,228	 	  	 	1,208	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				  				
STACK	  	 	97	 	  	 	92	 	  	 	88	 	  	 	95	 	  	 	105	 	
Delaware Basin	  	 	65	 	  	 	59	 	  	 	54	 	  	 	54	 	  	 	56	 	
Eagle Ford	  	 	76	 	  	 	61	 	  	 	60	 	  	 	83	 	  	 	63	 	
Heavy Oil	  	 	126	 	  	 	140	 	  	 	141	 	  	 	141	 	  	 	124	 	
Barnett Shale	  	 	173	 	  	 	166	 	  	 	163	 	  	 	158	 	  	 	155	 	
Rockies Oil	  	 	21	 	  	 	16	 	  	 	15	 	  	 	17	 	  	 	18	 	
Other assets	  	 	16	 	  	 	16	 	  	 	16	 	  	 	15	 	  	 	15	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	574	 	  	 	550	 	  	 	537	 	  	 	563	 	  	 	536	 	
Divested assets	  	 	70	 	  	 	27	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	644	 	  	 	577	 	  	 	537	 	  	 	563	 	  	 	536	 	

7

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
BENCHMARK PRICES
																	
(average prices)	  	Quarter 2	 	 	June YTD	 	
 	  	2017	 	 	2016	 	 	2017	 	  	2016	 	
Oil ($/Bbl) - West Texas Intermediate (Cushing)	  	$	48.32	 	 	$	45.54	 	 	$	50.16	 	  	$	39.60	 	
Natural Gas ($/Mcf) - Henry Hub	  	$	3.19	 	 	$	1.95	 	 	$	3.25	 	  	$	2.02	 	
		
REALIZED PRICES	  	Quarter Ended June 30, 2017	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas
(Per Mcf)	 	  	Total
(Per Boe)	 	
United States	  	$	46.65	 	 	$	13.26	 	 	$	2.50	 	  	$	23.58	 	
Canada	  	$	29.05	 	 	 	N/M	 	 	 	N/M	 	  	$	28.50	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price without hedges	  	$	37.63	 	 	$	13.26	 	 	$	2.50	 	  	$	24.72	 	
Cash settlements	  	$	0.29	 	 	$	(0.03	) 	 	$	0.04	 	  	$	0.22	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price, including cash settlements	  	$	37.92	 	 	$	13.23	 	 	$	2.54	 	  	$	24.94	 	

 	  	Quarter Ended June 30, 2016	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas
(Per Mcf)	 	  	Total
(Per Boe)	 	
United States	  	$	41.56	 	 	$	10.14	 	 	$	1.40	 	  	$	17.68	 	
Canada	  	$	22.53	 	 	 	N/M	 	 	 	N/M	 	  	$	21.85	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price without hedges	  	$	32.64	 	 	$	10.14	 	 	$	1.40	 	  	$	18.50	 	
Cash settlements	  	$	(2.57	) 	 	$	(0.25	) 	 	$	0.24	 	  	$	(0.53	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price, including cash settlements	  	$	30.07	 	 	$	9.89	 	 	$	1.64	 	  	$	17.97	 	

 	  	Year Ended June 30, 2017	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas
(Per Mcf)	 	  	Total
(Per Boe)	 	
United States	  	$	48.18	 	 	$	14.36	 	 	$	2.59	 	  	$	24.72	 	
Canada	  	$	27.60	 	 	 	N/M	 	 	 	N/M	 	  	$	27.03	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price without hedges	  	$	37.48	 	 	$	14.36	 	 	$	2.59	 	  	$	25.28	 	
Cash settlements	  	$	0.39	 	 	$	(0.02	) 	 	$	—  	 	  	$	0.19	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price, including cash settlements	  	$	37.87	 	 	$	14.34	 	 	$	2.59	 	  	$	25.47	 	

 	  	Year Ended June 30, 2016	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas
(Per Mcf)	 	  	Total
(Per Boe)	 	
United States	  	$	34.70	 	 	$	8.46	 	 	$	1.47	 	  	$	15.89	 	
Canada	  	$	15.71	 	 	 	N/M	 	 	 	N/M	 	  	$	15.33	 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price without hedges	  	$	26.05	 	 	$	8.46	 	 	$	1.47	 	  	$	15.78	 	
Cash settlements	  	$	(1.23	) 	 	$	(0.13	) 	 	$	0.18	 	  	$	(0.10	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	  	 	 	 	
Realized price, including cash settlements	  	$	24.82	 	 	$	8.33	 	 	$	1.65	 	  	$	15.68	 	

8

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF EARNINGS	 	
(in millions, except per share amounts)	  	Quarter Ended	 	 	Six Months Ended	 	
 	  	June 30,	 	 	June 30,	 	
 	  	2017	 	 	2016	 	 	2017	 	 	2016	 	
Oil, gas and NGL sales	  	$	1,206	 	 	$	1,085	 	 	$	2,515	 	 	$	1,910	 	
Oil, gas and NGL derivatives	  	 	126	 	 	 	(142	) 	 	 	358	 	 	 	(109	) 	
Marketing and midstream revenues	  	 	1,927	 	 	 	1,545	 	 	 	3,937	 	 	 	2,813	 	
Asset dispositions and other	  	 	14	 	 	 	—  	 	 	 	10	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues and other	  	 	3,273	 	 	 	2,488	 	 	 	6,820	 	 	 	4,614	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lease operating expenses	  	 	399	 	 	 	416	 	 	 	785	 	 	 	860	 	
Marketing and midstream operating expenses	  	 	1,703	 	 	 	1,338	 	 	 	3,506	 	 	 	2,404	 	
General and administrative expenses	  	 	164	 	 	 	147	 	 	 	345	 	 	 	341	 	
Production and property taxes	  	 	71	 	 	 	75	 	 	 	156	 	 	 	153	 	
Depreciation, depletion and amortization	  	 	381	 	 	 	484	 	 	 	762	 	 	 	1,026	 	
Asset impairments	  	 	—  	 	 	 	1,497	 	 	 	7	 	 	 	4,532	 	
Restructuring and transaction costs	  	 	—  	 	 	 	24	 	 	 	—  	 	 	 	271	 	
Other operating items	  	 	13	 	 	 	4	 	 	 	11	 	 	 	24	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	2,731	 	 	 	3,985	 	 	 	5,572	 	 	 	9,611	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	542	 	 	 	(1,497	) 	 	 	1,248	 	 	 	(4,997	) 	
Net financing costs	  	 	116	 	 	 	163	 	 	 	243	 	 	 	327	 	
Other nonoperating items	  	 	(32	) 	 	 	85	 	 	 	(51	) 	 	 	106	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) before income taxes	  	 	458	 	 	 	(1,745	) 	 	 	1,056	 	 	 	(5,430	) 	
Income tax expense (benefit)	  	 	7	 	 	 	(182	) 	 	 	26	 	 	 	(399	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss)	  	 	451	 	 	 	(1,563	) 	 	 	1,030	 	 	 	(5,031	) 	
Net earnings (loss) attributable to noncontrolling interests	  	 	26	 	 	 	7	 	 	 	40	 	 	 	(405	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) attributable to Devon	  	$	425	 	 	$	(1,570	) 	 	$	990	 	 	$	(4,626	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) per share attributable to Devon:	  				 				 				 				
Basic	  	$	0.81	 	 	$	(3.04	) 	 	$	1.88	 	 	$	(9.33	) 	
Diluted	  	$	0.80	 	 	$	(3.04	) 	 	$	1.87	 	 	$	(9.33	) 	
Weighted average common shares outstanding:	  				 				 				 				
Basic	  	 	526	 	 	 	524	 	 	 	525	 	 	 	502	 	
Diluted	  	 	529	 	 	 	524	 	 	 	528	 	 	 	502	 	
 
9

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS	 	
(in millions)	  	Quarter Ended	 	 	Six Months Ended	 	
 	  	June 30,	 	 	June 30,	 	
 	  	2017	 	 	2016	 	 	2017	 	 	2016	 	
Cash flows from operating activities:	  				 				 				 				
Net earnings (loss)	  	$	451	 	 	$	(1,563	) 	 	$	1,030	 	 	$	(5,031	) 	
Adjustments to reconcile net earnings (loss) to net cash from operating activities:	  				 				 				 				
Depreciation, depletion and amortization	  	 	381	 	 	 	484	 	 	 	762	 	 	 	1,026	 	
Asset impairments	  	 	—  	 	 	 	1,497	 	 	 	7	 	 	 	4,532	 	
Gains on asset sales	  	 	(11	) 	 	 	—  	 	 	 	(7	) 	 	 	—  	 	
Deferred income tax benefit	  	 	(5	) 	 	 	(179	) 	 	 	(6	) 	 	 	(386	) 	
Commodity derivatives	  	 	(126	) 	 	 	142	 	 	 	(358	) 	 	 	109	 	
Cash settlements on commodity derivatives	  	 	11	 	 	 	(16	) 	 	 	19	 	 	 	3	 	
Other derivatives and financial instruments	  	 	16	 	 	 	81	 	 	 	7	 	 	 	308	 	
Cash settlements on other derivatives and financial instruments	  	 	2	 	 	 	(28	) 	 	 	—  	 	 	 	(151	) 	
Asset retirement obligation accretion	  	 	14	 	 	 	20	 	 	 	31	 	 	 	39	 	
Share-based compensation	  	 	43	 	 	 	32	 	 	 	89	 	 	 	140	 	
Other	  	 	(49	) 	 	 	36	 	 	 	(49	) 	 	 	(158	) 	
Net change in working capital	  	 	72	 	 	 	(143	) 	 	 	87	 	 	 	71	 	
Change in long-term other assets	  	 	9	 	 	 	(40	) 	 	 	10	 	 	 	13	 	
Change in long-term other liabilities	  	 	2	 	 	 	22	 	 	 	22	 	 	 	(5	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from operating activities	  	 	810	 	 	 	345	 	 	 	1,644	 	 	 	510	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				 				 				
Capital expenditures	  	 	(721	) 	 	 	(489	) 	 	 	(1,468	) 	 	 	(1,238	) 	
Acquisitions of property, equipment and businesses	  	 	(13	) 	 	 	(11	) 	 	 	(33	) 	 	 	(1,638	) 	
Proceeds from sale of investment	  	 	—  	 	 	 	—  	 	 	 	190	 	 	 	—  	 	
Divestitures of property and equipment	  	 	76	 	 	 	191	 	 	 	114	 	 	 	209	 	
Other	  	 	(1	) 	 	 	(26	) 	 	 	(4	) 	 	 	(27	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from investing activities	  	 	(659	) 	 	 	(335	) 	 	 	(1,201	) 	 	 	(2,694	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				 				 				
Borrowings of long-term debt, net of issuance costs	  	 	982	 	 	 	450	 	 	 	1,795	 	 	 	846	 	
Repayments of long-term debt	  	 	(798	) 	 	 	(290	) 	 	 	(1,385	) 	 	 	(549	) 	
Payment of installment payable	  	 	—  	 	 	 	—  	 	 	 	(250	) 	 	 	—  	 	
Net short-term debt repayments	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(626	) 	
Issuance of common stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1,469	 	
Issuance of subsidiary units	  	 	17	 	 	 	49	 	 	 	72	 	 	 	776	 	
Dividends paid on common stock	  	 	(33	) 	 	 	(33	) 	 	 	(65	) 	 	 	(158	) 	
Contributions from noncontrolling interests	  	 	8	 	 	 	3	 	 	 	29	 	 	 	6	 	
Distributions to noncontrolling interests	  	 	(82	) 	 	 	(74	) 	 	 	(163	) 	 	 	(147	) 	
Shares traded for tax withholdings	  	 	(3	) 	 	 	(10	) 	 	 	(64	) 	 	 	(28	) 	
Other	  	 	—  	 	 	 	(5	) 	 	 	(2	) 	 	 	(6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from financing activities	  	 	91	 	 	 	90	 	 	 	(33	) 	 	 	1,583	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	  	 	8	 	 	 	(12	) 	 	 	—  	 	 	 	14	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net change in cash and cash equivalents	  	 	250	 	 	 	88	 	 	 	410	 	 	 	(587	) 	
Cash and cash equivalents at beginning of period	  	 	2,119	 	 	 	1,635	 	 	 	1,959	 	 	 	2,310	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	  	$	2,369	 	 	$	1,723	 	 	$	2,369	 	 	$	1,723	 	

10

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS	 	
(in millions)	  	June 30,	 	 	December 31,	 	
 	  	2017	 	 	2016	 	
Current assets:	  				 				
Cash and cash equivalents	  	$	2,369	 	 	$	1,959	 	
Accounts receivable	  	 	1,248	 	 	 	1,356	 	
Assets held for sale	  	 	—  	 	 	 	193	 	
Other current assets	  	 	469	 	 	 	264	 	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	4,086	 	 	 	3,772	 	
	  	 	 	 	 	 	 	 	
Property and equipment, at cost:	  				 				
Oil and gas, based on full cost accounting:	  				 				
Subject to amortization	  	 	77,326	 	 	 	75,648	 	
Not subject to amortization	  	 	3,048	 	 	 	3,437	 	
	  	 	 	 	 	 	 	 	
Total oil and gas	  	 	80,374	 	 	 	79,085	 	
Midstream and other	  	 	10,908	 	 	 	10,455	 	
	  	 	 	 	 	 	 	 	
Total property and equipment, at cost	  	 	91,282	 	 	 	89,540	 	
Less accumulated depreciation, depletion and amortization	  	 	(74,460	) 	 	 	(73,350	) 	
	  	 	 	 	 	 	 	 	
Property and equipment, net	  	 	16,822	 	 	 	16,190	 	
	  	 	 	 	 	 	 	 	
Goodwill	  	 	3,964	 	 	 	3,964	 	
Other long-term assets	  	 	1,942	 	 	 	1,987	 	
	  	 	 	 	 	 	 	 	
Total assets	  	$	26,814	 	 	$	25,913	 	
	  	 	 	 	 	 	 	 	
Current liabilities:	  				 				
Accounts payable	  	$	692	 	 	$	642	 	
Revenues and royalties payable	  	 	949	 	 	 	908	 	
Other current liabilities	  	 	891	 	 	 	1,066	 	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	2,532	 	 	 	2,616	 	
	  	 	 	 	 	 	 	 	
Long-term debt	  	 	10,558	 	 	 	10,154	 	
Asset retirement obligations	  	 	1,078	 	 	 	1,226	 	
Other long-term liabilities	  	 	657	 	 	 	894	 	
Deferred income taxes	  	 	659	 	 	 	648	 	
Stockholders’ equity:	  				 				
Common stock	  	 	53	 	 	 	52	 	
Additional paid-in capital	  	 	7,211	 	 	 	7,237	 	
Accumulated deficit	  	 	(656	) 	 	 	(1,646	) 	
Accumulated other comprehensive earnings	  	 	291	 	 	 	284	 	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity attributable to Devon	  	 	6,899	 	 	 	5,927	 	
Noncontrolling interests	  	 	4,431	 	 	 	4,448	 	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity	  	 	11,330	 	 	 	10,375	 	
	  	 	 	 	 	 	 	 	
Total liabilities and stockholders’ equity	  	$	26,814	 	 	$	25,913	 	
	  	 	 	 	 	 	 	 	
Common shares outstanding	  	 	526	 	 	 	523	 	
 
11

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATING STATEMENTS OF OPERATIONS	 	
(in millions)	  	Quarter Ended June 30, 2017	 	
 	  	Devon U.S.
& Canada	 	 	EnLink	 	 	Eliminations	 	 	Total	 	
Oil, gas and NGL sales	  	$	1,206	 	 	$	—  	 	 	$	—  	 	 	$	1,206	 	
Oil, gas and NGL derivatives	  	 	126	 	 	 	—  	 	 	 	—  	 	 	 	126	 	
Marketing and midstream revenues	  	 	833	 	 	 	1,264	 	 	 	(170	) 	 	 	1,927	 	
Asset dispositions and other	  	 	9	 	 	 	5	 	 	 	—  	 	 	 	14	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues and other	  	 	2,174	 	 	 	1,269	 	 	 	(170	) 	 	 	3,273	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lease operating expenses	  	 	399	 	 	 	—  	 	 	 	—  	 	 	 	399	 	
Marketing and midstream operating expenses	  	 	849	 	 	 	1,024	 	 	 	(170	) 	 	 	1,703	 	
General and administrative expenses	  	 	133	 	 	 	31	 	 	 	—  	 	 	 	164	 	
Production and property taxes	  	 	59	 	 	 	12	 	 	 	—  	 	 	 	71	 	
Depreciation, depletion and amortization	  	 	244	 	 	 	137	 	 	 	—  	 	 	 	381	 	
Other operating items	  	 	22	 	 	 	(9	) 	 	 	—  	 	 	 	13	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	1,706	 	 	 	1,195	 	 	 	(170	) 	 	 	2,731	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	468	 	 	 	74	 	 	 	—  	 	 	 	542	 	
Net financing costs	  	 	77	 	 	 	39	 	 	 	—  	 	 	 	116	 	
Other nonoperating items	  	 	(30	) 	 	 	(2	) 	 	 	—  	 	 	 	(32	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before income taxes	  	 	421	 	 	 	37	 	 	 	—  	 	 	 	458	 	
Income tax expense	  	 	3	 	 	 	4	 	 	 	—  	 	 	 	7	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings	  	 	418	 	 	 	33	 	 	 	—  	 	 	 	451	 	
Net earnings attributable to noncontrolling interests	  	 	—  	 	 	 	26	 	 	 	—  	 	 	 	26	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings attributable to Devon	  	$	418	 	 	$	7	 	 	$	—  	 	 	$	425	 	

																	
OTHER KEY STATISTICS	 	
(in millions)	  	Quarter Ended June 30, 2017	 	
 	  	Devon U.S.
& Canada	 	 	EnLink	 	 	Eliminations	 	  	Total	 	
Cash flow statement related items:	  				 				 				  				
Operating cash flow	  	$	658	 	 	$	152	 	 	$	—  	 	  	$	810	 	
Divestitures of property and equipment	  	$	75	 	 	$	1	 	 	$	—  	 	  	$	76	 	
Capital expenditures	  	$	(505	) 	 	$	(216	) 	 	$	—  	 	  	$	(721	) 	
Debt activity, net	  	$	—  	 	 	$	184	 	 	$	—  	 	  	$	184	 	
EnLink distributions received (paid)	  	$	67	 	 	$	(149	) 	 	$	—  	 	  	$	(82	) 	
Issuance of subsidiary units	  	$	—  	 	 	$	17	 	 	$	—  	 	  	$	17	 	
Balance sheet statement items:	  				 				 				  				
Net debt (1)	  	$	4,503	 	 	$	3,686	 	 	$	—  	 	  	$	8,189	 	
 
(1)	Net debt is a non-GAAP measure. For a reconciliation of the comparable GAAP measure, see “Non-GAAP Financial Measures” later in this release.	

CAPITAL EXPENDITURES	 	
(in millions)	  				  				
 	  	Quarter Ended June 30, 2017	 	  	Six Months Ended June 30, 2017	 	
Exploration and development capital	  	$	430	 	  	$	853	 	
Land and other acquisitions	  	 	10	 	  	 	30	 	
	  	 	 	 	  	 	 	 	
Exploration and production (E&P) capital	  	 	440	 	  	 	883	 	
Capitalized G&A and interest	  	 	73	 	  	 	149	 	
Other	  	 	26	 	  	 	40	 	
	  	 	 	 	  	 	 	 	
Devon capital expenditures (1)	  	$	539	 	  	$	1,072	 	

(1)	Excludes $218 million and $466 million attributable to EnLink for the second quarter and first six months of 2017, respectively.	
 
12

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
NON-GAAP FINANCIAL MEASURES
This press release includes non-GAAP financial measures. These 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. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.
CORE EARNINGS
Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on second-quarter 2017 earnings.

(in millions, except per share amounts)	  	Quarter Ended June 30, 2017	 	
 	  	Before-tax	 	 	After-tax	 	 	After
Noncontrolling
Interests	 	 	Per Diluted
Share	 	
Earnings attributable to Devon (GAAP)	  	$	458	 	 	$	451	 	 	$	425	 	 	$	0.80	 	
Adjustments:	  				 				 				 				
Fair value changes in financial instruments and foreign currency	  	 	(148	) 	 	 	(109	) 	 	 	(109	) 	 	 	(0.21	) 	
Deferred tax asset valuation allowance	  	 	—  	 	 	 	(128	) 	 	 	(128	) 	 	 	(0.23	) 	
Gains and losses on asset sales	  	 	(11	) 	 	 	(9	) 	 	 	(7	) 	 	 	(0.01	) 	
Early retirement of debt	  	 	(9	) 	 	 	(7	) 	 	 	(4	) 	 	 	(0.01	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Core earnings attributable to Devon (Non-GAAP)	  	$	290	 	 	$	198	 	 	$	177	 	 	$	0.34	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NET DEBT
Devon defines net debt as debt less cash and cash equivalents and net debt attributable to the consolidation of EnLink Midstream as presented in the following table. Devon believes that netting these sources of cash against debt and adjusting for EnLink net debt provides a clearer picture of the future demands on cash from Devon to repay debt.

(in millions)	  	June 30, 2017	 	
 	  	Devon U.S. & Canada	 	  	EnLink	 	  	Devon Consolidated	 	
Total debt (GAAP)	  	$	6,861	 	  	$	3,697	 	  	$	10,558	 	
Less cash and cash equivalents	  	 	(2,358	) 	  	 	(11	) 	  	 	(2,369	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net debt (Non-GAAP)	  	$	4,503	 	  	$	3,686	 	  	$	8,189	 	
	  	 	 	 	  	 	 	 	  	 	 	 	
UPSTREAM CASH FLOW
Devon defines upstream cash flow as cash flow from operations less EnLink cash flow from operations, less cash flow from divested assets and debt repayments, plus distributions received from EnLink. Devon believes upstream cash flow is relevant because it provides a clearer picture of cash flow generation ability from Devon’s retained upstream assets and its investment in EnLink.

(in billions)	  	 	 	
 	  	Year Ended December 31, 2016	 	
Consolidated cash flow from operations (GAAP)	  	$	1.8	 	
Less: EnLink cash flow from operations	  	 	0.7	 	
	  	 	 	 	
Devon cash flow from operations	  	 	1.1	 	
Less: cash flow from divested assets	  	 	0.2	 	
Less: cash flow associated with debt repayments	  	 	0.3	 	
Add: EnLink distributions received	  	 	0.3	 	
	  	 	 	 	
Upstream cash flow (Non-GAAP)	  	$	0.9	 	

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DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
PRODUCTION GUIDANCE

 	  	Quarter 3	 	  	Full Year	 	
 	  	Low	 	  	High	 	  	Low	 	  	High	 	
Oil and bitumen (MBbls/d)	  				  				  				  				
U.S.	  	 	117	 	  	 	122	 	  	 	119	 	  	 	123	 	
Heavy Oil	  	 	117	 	  	 	122	 	  	 	130	 	  	 	135	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	234	 	  	 	244	 	  	 	249	 	  	 	258	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				
Total	  	 	96	 	  	 	101	 	  	 	95	 	  	 	100	 	
Gas (MMcf/d)	  				  				  				  				
U.S.	  	 	1,160	 	  	 	1,190	 	  	 	1,160	 	  	 	1,200	 	
Heavy Oil	  	 	13	 	  	 	15	 	  	 	14	 	  	 	16	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,173	 	  	 	1,205	 	  	 	1,174	 	  	 	1,216	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				
U.S.	  	 	407	 	  	 	421	 	  	 	407	 	  	 	423	 	
Heavy Oil	  	 	119	 	  	 	125	 	  	 	132	 	  	 	138	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	526	 	  	 	546	 	  	 	539	 	  	 	561	 	

																	
PRICE REALIZATIONS GUIDANCE	  				 				 				 				
 	  	Quarter 3	 	 	Full Year	 	
 	  	Low	 	 	High	 	 	Low	 	 	High	 	
Oil and bitumen - % of WTI	  				 				 				 				
U.S.	  	 	88	% 	 	 	98	% 	 	 	88	% 	 	 	98	% 	
Canada	  	 	58	% 	 	 	68	% 	 	 	53	% 	 	 	63	% 	
NGL - realized price	  	$	12	 	 	$	15	 	 	$	13	 	 	$	16	 	
Natural gas - % of Henry Hub	  	 	75	% 	 	 	85	% 	 	 	76	% 	 	 	86	% 	
 
14

DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
OTHER GUIDANCE ITEMS

 	  	Quarter 3	 	 	Full Year	 	
($ millions, except %)	  	Low	 	 	High	 	 	Low	 	 	High	 	
Marketing & midstream operating profit	  	$	225	 	 	$	245	 	 	$	900	 	 	$	950	 	
Lease operating expenses	  	$	360	 	 	$	410	 	 	$	1,500	 	 	$	1,600	 	
General & administrative expenses	  	$	150	 	 	$	170	 	 	$	630	 	 	$	690	 	
Production and property taxes	  	$	65	 	 	$	75	 	 	$	275	 	 	$	325	 	
Depreciation, depletion and amortization	  	$	375	 	 	$	425	 	 	$	1,550	 	 	$	1,650	 	
Other operating items	  	$	10	 	 	$	20	 	 	$	40	 	 	$	50	 	
Net financing costs	  	$	125	 	 	$	135	 	 	$	485	 	 	$	535	 	
Current income tax rate	  	 	5.0	% 	 	 	15.0	% 	 	 	5.0	% 	 	 	10.0	% 	
Deferred income tax rate	  	 	20.0	% 	 	 	30.0	% 	 	 	20.0	% 	 	 	30.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total income tax rate	  	 	25.0	% 	 	 	45.0	% 	 	 	25.0	% 	 	 	40.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings attributable to noncontrolling interests	  	$	10	 	 	$	20	 	 	$	50	 	 	$	100	 	
CAPITAL EXPENDITURES GUIDANCE

 	  	Quarter 3	 	  	Full Year	 	
(in millions)	  	Low	 	  	High	 	  	Low	 	  	High	 	
Exploration and production	  	$	550	 	  	$	600	 	  	$	1,900	 	  	$	2,200	 	
Capitalized G&A	  	 	55	 	  	 	65	 	  	 	200	 	  	 	250	 	
Capitalized interest	  	 	15	 	  	 	20	 	  	 	60	 	  	 	90	 	
Other	  	 	10	 	  	 	20	 	  	 	25	 	  	 	50	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Devon capital expenditures (1)	  	$	630	 	  	$	705	 	  	$	2,185	 	  	$	2,590	 	

(1)	Excludes capital expenditures related to EnLink.	
 
15

DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
Oil Commodity Hedges

 	  	Price Swaps	 	  	Price Collars	 	
Period	  	Volume (Bbls/d)	  	Weighted
Average Price
($/Bbl)	 	  	Volume
(Bbls/d)	 	  	Weighted
Average Floor
Price ($/Bbl)	 	  	Weighted
Average Ceiling
Price ($/Bbl)	 	
Q3-Q4 2017	  	78,914	  	$	54.00	 	  	 	69,750	 	  	$	45.59	 	  	$	57.75	 	
Q1-Q4 2018	  	15,292	  	$	51.19	 	  	 	22,421	 	  	$	45.96	 	  	$	55.96	 	
Oil Basis Swaps

Period	  	Index	  	Volume (Bbls/d)	  	Weighted Average Differential to
WTI ($/Bbl)	 	
Q3-Q4 2017	  	Western Canadian Select	  	85,114	  	$	(14.46	) 	
Q1-Q4 2018	  	Western Canadian Select	  	48,036	  	$	(15.04	) 	
Q3-Q4 2017	  	Midland Sweet	  	20,000	  	$	(0.41	) 	
Natural Gas Commodity Hedges

 	  	Price Swaps	 	  	Price Collars	 	
Period	  	Volume
(MMBtu/d)	  	Weighted
Average Price
($/MMBtu)	 	  	Volume
(MMBtu/d)	  	Weighted
Average Floor
Price ($/MMBtu)	 	  	Weighted
Average Ceiling
Price ($/MMBtu)	 	
Q3-Q4 2017	  	237,500	  	$	3.24	 	  	437,500	  	$	3.03	 	  	$	3.42	 	
Q1-Q4 2018	  	120,107	  	$	3.13	 	  	87,070	  	$	3.09	 	  	$	3.41	 	
Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index. Commodity hedge positions are shown as of July 27, 2017.
 
16