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): February 14, 2017

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

 
					
DELAWARE	 	001-32318	 	73-1567067	
(State or Other Jurisdiction of
Incorporation or Organization)	 	(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

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:
 
 	☐	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))	

 

Item 2.02	Results of Operations and Financial Condition	
Devon Energy Corporation hereby furnishes the information set forth in its news release dated February 14, 2017 announcing fourth quarter and full year 2016 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 February 14, 2017.	
 
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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/ Thomas L. Mitchell	
	 	Thomas L. Mitchell	
	 	Executive Vice President and	
	 	Chief Financial Officer	
Date: February 14, 2017
 
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Exhibit 99.1

	 	 	 	 	 	Devon Energy Corporation	
	 		 		 	333 West Sheridan Avenue	
	 		 		 	Oklahoma City, OK 73102-5015	
NEWS RELEASE
Devon Energy Reports Fourth-Quarter and Full-Year 2016 Results; Provides Updated Capital and Production Outlook
OKLAHOMA CITY – Feb. 14, 2017 – Devon Energy Corp. (NYSE: DVN) today reported operational and financial results for the fourth quarter and full-year 2016. Also included within the release is the company’s guidance outlook for the first quarter and full-year 2017.
Highlights
 
 	•	 	Exceeded fourth-quarter production expectations	
 
 	•	 	Achieved record-setting well productivity in 2016	
 
 	•	 	Reduced operating expenses in U.S. by 42 percent from peak rates	
 
 	•	 	Attained $1.3 billion in annual cost savings	
 
 	•	 	Delivered proved reserves growth at attractive finding costs	
 
 	•	 	Improved growth outlook driven by accelerated capital investment	
“For Devon, 2016 was a transformational year,” said Dave Hager, president and CEO. “We successfully reshaped our asset portfolio to focus on our top two franchise assets, the STACK and Delaware Basin, providing us a sustainable, multi-decade growth platform. With these world-class assets, we delivered outstanding operational performance throughout the year. Our drilling programs generated the best well productivity in Devon’s 45-year history and we maximized the value of every barrel produced with cost-reduction efforts that reached $1.3 billion of annual savings.”
“We also took important steps during the year to strengthen our investment-grade financial position with the timely completion of our $3.2 billion asset divestiture program,” Hager said. “These accretive transactions provided us with the financial capacity to further accelerate investment across our best-in-class U.S. resource plays in 2017 and beyond. This increased drilling activity will continue to rapidly shift our production mix to higher-margin products, positioning us to deliver peer-leading cash flow expansion at today’s market prices.”
Fourth-Quarter Production Exceeds Midpoint Guidance
Devon’s reported oil production averaged 244,000 barrels per day in the fourth quarter of 2016. With the shift to higher-margin production, oil accounted for the largest component of the company’s product mix at 45 percent of total volumes.
Total companywide production in the fourth quarter reached 537,000 oil-equivalent barrels (Boe) per day, exceeding the midpoint of guidance by 2,000 Boe per day. In an effort to maximize profitability, Devon chose to reject approximately 12,000 barrels per day of ethane in the fourth quarter.
Record-Setting Well Productivity in U.S. Resource Plays
The majority of the company’s production was attributable to its U.S. resource plays, which averaged 396,000 Boe per day during the fourth quarter. Production within the U.S. during 2016 benefited from drilling activity that achieved the best new well productivity in Devon’s 45-year history. Led by results from the STACK, Delaware Basin and Eagle Ford assets, the company’s initial 90-day production rates in the U.S. increased for the fourth consecutive year, advancing more than 300 percent from 2012.
 
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The substantial improvement in well productivity was driven by activity focused in top resource plays, improved subsurface reservoir characterization, leading-edge completion designs and improvements in lateral placement.
In Canada, Devon’s heavy-oil operations also delivered impressive results with net oil production averaging 139,000 barrels per day in the fourth quarter. Driven by the industry-leading performance of the Jackfish complex, Canadian oil production increased 14 percent compared to the fourth quarter of 2015.
Reserve Report Highlights Operational Excellence
Devon’s estimated proved reserves were 2.1 billion Boe on Dec. 31, 2016, a 3 percent increase compared to the company’s retained asset portfolio in 2015. Proved developed reserves accounted for 80 percent of the total. At year-end, higher-margin, liquids reserves totaled 1.1 billion Boe, or approximately 55 percent of total reserves.
The most significant reserve growth came from the company’s U.S. operations where proved reserves increased 7 percent to 1.6 billion Boe. Devon’s capital programs within the U.S. added 275 million Boe of reserves (extensions, discoveries and performance revisions) during 2016. This represents a replacement rate of approximately 175 percent (on a retained asset basis). Excluding property acquisition costs, these reserves were added at a finding cost of only $5 per Boe added during the year. These attractive reserve results in the U.S. were driven by new-well activity that achieved record-setting productivity, a materially improved operating cost structure and successful base production initiatives.
In Canada, the company’s heavy oil reserves amounted to 504 million Boe at year end. Beyond proved reserves, tremendous upside exists with Devon’s top-tier Canadian assets, with more than 1.4 billion Boe of risked resource.
Lease Operating Costs Improve by 42 Percent in U.S. Resource Plays
Devon continued to make progress lowering operating costs in the fourth quarter. Lease operating expenses (LOE) totaled $367 million for the quarter and were 4 percent below the midpoint of guidance. The $1.1 billion sale of Access Pipeline in Canada added $28 million of incremental LOE during the quarter. The strong fourth-quarter result was driven by the company’s U.S. asset portfolio, where LOE costs improved by 42 percent from peak rates in early 2015. The decrease in LOE was primarily driven by improved power and water-handling infrastructure, reduced labor expense and lower supply chain costs.
The company also maintained its significantly improved general and administrative (G&A) cost structure in the fourth quarter. Including capitalized costs, G&A expenses totaled $224 million, a nearly 40 percent improvement compared to peak costs in late 2014. The significantly lower overhead costs were driven by lower personnel expenses.
Cost Savings Reach $1.3 Billion in 2016
In aggregate, Devon’s cost-savings initiatives achieved $1.3 billion of operating and G&A expense reductions in 2016 compared to peak levels in 2014.
The company expects these cost savings to be sustainable in 2017 due to structural improvements and efficiency gains within its field operations and corporate support groups.
EnLink Positioned to Deliver Double-Digit Growth in 2017
Devon’s midstream business generated $212 million of operating profit in the fourth quarter, driven entirely by the company’s strategic investment in EnLink Midstream. For the full-year 2016, EnLink-related operating profit expanded to $879 million, a 6 percent improvement compared to 2015.
 
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In 2017, with strong growth expected from EnLink, Devon projects its midstream operating profits will advance to a range of $900 million to $950 million. Based on the midpoint of guidance, this estimate represents approximately a 10 percent increase compared to 2016. EnLink’s growth is derived from an asset base that is positioned in some of the most attractive markets in North America, including the STACK, Midland Basin, Delaware Basin and an NGL business that services end-user demand along the Gulf Coast.
Devon has a 64 percent ownership in EnLink’s general partner (NYSE: ENLC) and a 24 percent interest in the limited partner (NYSE: ENLK). In aggregate, the company’s ownership in EnLink has a market value of approximately $4 billion and is expected to generate cash distributions of around $270 million annually.
Fourth-Quarter 2016 Operations Report
For additional details on Devon’s E&P operations, please refer to the company’s fourth-quarter 2016 operations report at www.devonenergy.com . Highlights from the report include:
 
 	•	 	Meramec drilling inventory increases by 40 percent	
 
 	•	 	Leonard Shale and Delaware Sands resource potential expands	
 
 	•	 	Staggered spacing tests successful in Eagle Ford	
 
 	•	 	Jackfish complex delivers record production	
 
 	•	 	Barnett cash flow generation accelerates	
Divestitures and Hedging Position Enhance Strong Financial Position
On Oct. 6, 2016, the company closed on the sale of its 50 percent interest in the Access Pipeline for USD $1.1 billion. This accretive transaction officially completed Devon’s $3.2 billion non-core asset divestiture program.
The majority of divestiture proceeds were utilized to retire $2.5 billion of debt through tender offerings and repayments in the second half of 2016. As a result of the debt-reduction efforts, the company expects its recurring, go-forward financing costs to decline by around $120 million annually, with no significant debt maturities until mid-2021. Devon exited the fourth quarter with investment-grade credit ratings and significant liquidity, which consisted of $2 billion of cash on hand and an undrawn credit facility of $3 billion.
In addition to an investment-grade balance sheet, Devon’s financial position is bolstered by a significantly increased commodity hedging position in 2017. The company currently has approximately 50 percent of its estimated oil and gas production hedged in the upcoming year and will continue to build out its hedging position in the future.
Earnings Beat Wall Street Consensus by 20 Percent
Devon’s reported net earnings totaled $331 million or $0.63 per diluted share in the fourth quarter. Adjusting for items securities analysts typically exclude from their published estimates, the company’s core earnings were $131 million or $0.25 per diluted share in the fourth quarter. This strong earnings result exceeded analyst consensus estimates by 20 percent.
The company’s significantly improved profitability in the fourth quarter was attributable to higher commodity prices and an improved cost structure. These factors also strengthened Devon’s operating cash flow to $536 million in the fourth quarter. Combined with proceeds received from asset sales, the company’s total cash inflows for the quarter reached $1.8 billion.
 
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Devon Positioned to Deliver Peer-Leading Cash Flow Expansion
Detailed forward-looking guidance for the first quarter and full-year 2017 is provided later in the release. In 2017, Devon expects to further accelerate activity in its U.S. resource plays to as many as 20 operated rigs by year end. With this level of planned activity, the company expects to invest between $2.0 billion and $2.3 billion of E&P capital in 2017, with nearly 90 percent of the capital devoted to U.S. resource plays.
Devon’s upstream capital plans are expected to drive 13 to 17 percent oil production growth in the U.S. during 2017 compared to the fourth quarter of 2016, which marks the low point of Devon’s production profile. This resumption of growth in high-margin production will begin in the first quarter of 2017. The operational momentum created by accelerated drilling activity in the STACK and Delaware Basin in the upcoming year is expected to advance light-oil production in the U.S. by approximately 20 percent in 2018 compared to 2017. This rapid growth in high-margin production, combined with a significantly improved cost structure, positions Devon to deliver peer-leading cash flow expansion at today’s market prices.
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. Finding cost, 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 fourth-quarter conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Feb. 15, 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.
 
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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 .
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	  		
 
Page 5 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
PRODUCTION NET OF ROYALTIES

 	  	Quarter Ended	 	  	Year Ended	 	
 	  	December 31,	 	  	December 31,	 	
 	  	2016	 	  	2015	 	  	2016	 	  	2015	 	
Oil and bitumen (MBbls/d)	  				  				  				  				
U. S. - Core	  	 	105	  	  	 	139	  	  	 	119	  	  	 	142	  	
Heavy Oil	  	 	139	  	  	 	121	  	  	 	131	  	  	 	111	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	244	  	  	 	260	  	  	 	250	  	  	 	253	  	
Divested assets	  	 	—  	  	  	 	18	  	  	 	10	  	  	 	22	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	244	  	  	 	278	  	  	 	260	  	  	 	275	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				
U. S. - Core	  	 	90	  	  	 	115	  	  	 	103	  	  	 	110	  	
Divested assets	  	 	—  	  	  	 	24	  	  	 	13	  	  	 	26	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	90	  	  	 	139	  	  	 	116	  	  	 	136	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				  				  				
U. S. - Core	  	 	1,203	  	  	 	1,327	  	  	 	1,270	  	  	 	1,333	  	
Heavy Oil	  	 	18	  	  	 	24	  	  	 	20	  	  	 	22	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	1,221	  	  	 	1,351	  	  	 	1,290	  	  	 	1,355	  	
Divested assets	  	 	—  	  	  	 	232	  	  	 	123	  	  	 	255	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,221	  	  	 	1,583	  	  	 	1,413	  	  	 	1,610	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				
U. S. - Core	  	 	396	  	  	 	475	  	  	 	434	  	  	 	474	  	
Heavy Oil	  	 	141	  	  	 	126	  	  	 	134	  	  	 	115	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	537	  	  	 	601	  	  	 	568	  	  	 	589	  	
Divested assets	  	 	—  	  	  	 	80	  	  	 	43	  	  	 	91	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	537	  	  	 	681	  	  	 	611	  	  	 	680	  	

Page 6 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
KEY OPERATING STATISTICS BY REGION

 	  	Quarter Ended December 31, 2016	 	
 	  	Avg. Production
(MBoe/d)	 	  	Gross Wells
Drilled	 	  	Operated Rigs at
December 31,
2016	 	
STACK	  	 	88	  	  	 	55	  	  	 	6	  	
Delaware Basin	  	 	54	  	  	 	15	  	  	 	3	  	
Eagle Ford	  	 	60	  	  	 	29	  	  	 	—  	  	
Heavy Oil	  	 	141	  	  	 	12	  	  	 	3	  	
Barnett Shale	  	 	163	  	  	 	—  	  	  	 	—  	  	
Rockies Oil	  	 	15	  	  	 	11	  	  	 	1	  	
Other assets	  	 	16	  	  	 	11	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	537	  	  	 	133	  	  	 	13	  	

									
 	  	Year Ended December 31, 2016	 	
 	  	Avg. Production
(MBoe/d)	 	  	Gross Wells
Drilled	 	
STACK	  	 	93	  	  	 	133	  	
Delaware Basin	  	 	60	  	  	 	58	  	
Eagle Ford	  	 	76	  	  	 	63	  	
Heavy Oil	  	 	134	  	  	 	25	  	
Barnett Shale	  	 	169	  	  	 	—  	  	
Rockies Oil	  	 	19	  	  	 	19	  	
Other assets	  	 	17	  	  	 	28	  	
	  	 	 	 	  	 	 	 	
Retained assets	  	 	568	  	  	 	326	  	
Divested assets	  	 	43	  	  	 	14	  	
	  	 	 	 	  	 	 	 	
Total	  	 	611	  	  	 	340	  	

Page 7 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
PRODUCTION TREND

 	  	2015	 	  	2016	 	
 	  	Quarter 4	 	  	Quarter 1	 	  	Quarter 2	 	  	Quarter 3	 	  	Quarter 4	 	
Oil and bitumen (MBbls/d)	  				  				  				  				  				
STACK	  	 	9	  	  	 	15	  	  	 	19	  	  	 	21	  	  	 	19	  	
Delaware Basin	  	 	42	  	  	 	38	  	  	 	36	  	  	 	31	  	  	 	29	  	
Eagle Ford	  	 	60	  	  	 	59	  	  	 	41	  	  	 	33	  	  	 	34	  	
Heavy Oil	  	 	121	  	  	 	126	  	  	 	121	  	  	 	137	  	  	 	139	  	
Barnett Shale	  	 	1	  	  	 	1	  	  	 	1	  	  	 	1	  	  	 	1	  	
Rockies Oil	  	 	15	  	  	 	17	  	  	 	15	  	  	 	11	  	  	 	11	  	
Other assets	  	 	12	  	  	 	12	  	  	 	11	  	  	 	11	  	  	 	11	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	260	  	  	 	268	  	  	 	244	  	  	 	245	  	  	 	244	  	
Divested assets	  	 	18	  	  	 	17	  	  	 	15	  	  	 	6	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	278	  	  	 	285	  	  	 	259	  	  	 	251	  	  	 	244	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				  				
STACK	  	 	24	  	  	 	30	  	  	 	30	  	  	 	23	  	  	 	21	  	
Delaware Basin	  	 	11	  	  	 	12	  	  	 	13	  	  	 	12	  	  	 	10	  	
Eagle Ford	  	 	27	  	  	 	24	  	  	 	17	  	  	 	13	  	  	 	11	  	
Barnett Shale	  	 	49	  	  	 	46	  	  	 	46	  	  	 	44	  	  	 	43	  	
Rockies Oil	  	 	1	  	  	 	1	  	  	 	1	  	  	 	1	  	  	 	1	  	
Other assets	  	 	3	  	  	 	2	  	  	 	3	  	  	 	3	  	  	 	4	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	115	  	  	 	115	  	  	 	110	  	  	 	96	  	  	 	90	  	
Divested assets	  	 	24	  	  	 	22	  	  	 	21	  	  	 	8	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	139	  	  	 	137	  	  	 	131	  	  	 	104	  	  	 	90	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				  				  				  				
STACK	  	 	253	  	  	 	306	  	  	 	289	  	  	 	292	  	  	 	284	  	
Delaware Basin	  	 	82	  	  	 	84	  	  	 	99	  	  	 	92	  	  	 	89	  	
Eagle Ford	  	 	152	  	  	 	144	  	  	 	103	  	  	 	85	  	  	 	90	  	
Heavy Oil	  	 	24	  	  	 	15	  	  	 	28	  	  	 	18	  	  	 	18	  	
Barnett Shale	  	 	786	  	  	 	768	  	  	 	757	  	  	 	730	  	  	 	710	  	
Rockies Oil	  	 	38	  	  	 	32	  	  	 	31	  	  	 	19	  	  	 	17	  	
Other assets	  	 	16	  	  	 	17	  	  	 	14	  	  	 	13	  	  	 	13	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	1,351	  	  	 	1,366	  	  	 	1,321	  	  	 	1,249	  	  	 	1,221	  	
Divested assets	  	 	232	  	  	 	215	  	  	 	206	  	  	 	75	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,583	  	  	 	1,581	  	  	 	1,527	  	  	 	1,324	  	  	 	1,221	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				  				
STACK	  	 	75	  	  	 	96	  	  	 	97	  	  	 	92	  	  	 	88	  	
Delaware Basin	  	 	66	  	  	 	63	  	  	 	65	  	  	 	59	  	  	 	54	  	
Eagle Ford	  	 	113	  	  	 	107	  	  	 	76	  	  	 	61	  	  	 	60	  	
Heavy Oil	  	 	126	  	  	 	129	  	  	 	126	  	  	 	140	  	  	 	141	  	
Barnett Shale	  	 	181	  	  	 	175	  	  	 	173	  	  	 	166	  	  	 	163	  	
Rockies Oil	  	 	23	  	  	 	23	  	  	 	21	  	  	 	16	  	  	 	15	  	
Other assets	  	 	17	  	  	 	18	  	  	 	16	  	  	 	16	  	  	 	16	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	601	  	  	 	611	  	  	 	574	  	  	 	550	  	  	 	537	  	
Divested assets	  	 	80	  	  	 	74	  	  	 	70	  	  	 	27	  	  	 	—  	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	681	  	  	 	685	  	  	 	644	  	  	 	577	  	  	 	537	  	

Page 8 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
BENCHMARK PRICES
(average prices)

 	  	Quarter 4	 	 	December YTD	 	
 	  	2016	 	 	2015	 	 	2016	 	 	2015	 	
Oil ($/Bbl) - West Texas Intermediate (Cushing)	  	$	49.21	  	 	$	42.15	  	 	$	43.36	  	 	$	48.87	  	
Natural Gas ($/Mcf) - Henry Hub	  	$	2.98	  	 	$	2.27	  	 	$	2.46	  	 	$	2.67	  	
		
REALIZED PRICES	  	 	 	
		
 	  	Quarter Ended December 31, 2016	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas
(Per Mcf)	 	 	Total
(Per Boe)	 	
United States	  	$	46.74	  	 	$	13.81	  	 	$	2.37	  	 	$	22.78	  	
Canada	  	$	25.90	  	 	 	N/M	  	 	 	N/M	  	 	$	25.39	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	34.90	  	 	$	13.81	  	 	$	2.34	  	 	$	23.47	  	
Cash settlements	  	$	—  	  	 	$	(0.31	) 	 	$	(0.11	) 	 	$	(0.30	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	34.90	  	 	$	13.50	  	 	$	2.23	  	 	$	23.17	  	

 	  	Quarter Ended December 31, 2015	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas (Per
Mcf)	 	 	Total
(Per Boe)	 	
United States	  	$	38.04	  	 	$	8.81	  	 	$	1.76	  	 	$	17.90	  	
Canada	  	$	18.03	  	 	 	N/M	  	 	 	N/M	  	 	$	17.62	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	29.31	  	 	$	8.81	  	 	$	1.75	  	 	$	17.85	  	
Cash settlements	  	$	24.36	  	 	$	—  	  	 	$	0.70	  	 	$	11.59	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	53.67	  	 	$	8.81	  	 	$	2.45	  	 	$	29.44	  	

 	  	Year Ended December 31, 2016	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas
(Per Mcf)	 	 	Total
(Per Boe)	 	
United States	  	$	38.92	  	 	$	9.81	  	 	$	1.84	  	 	$	18.34	  	
Canada	  	$	20.53	  	 	 	N/M	  	 	 	N/M	  	 	$	20.07	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	29.65	  	 	$	9.81	  	 	$	1.84	  	 	$	18.72	  	
Cash settlements	  	$	(0.43	) 	 	$	(0.11	) 	 	$	0.07	  	 	$	(0.05	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	29.22	  	 	$	9.70	  	 	$	1.91	  	 	$	18.67	  	

 	  	Year Ended December 31, 2015	 	
 	  	Oil /Bitumen
(Per Bbl)	 	 	NGL
(Per Bbl)	 	 	Gas
(Per Mcf)	 	 	Total
(Per Boe)	 	
United States	  	$	44.01	  	 	$	9.32	  	 	$	2.17	  	 	$	21.12	  	
Canada	  	$	25.14	  	 	 	N/M	  	 	 	N/M	  	 	$	24.46	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	36.39	  	 	$	9.32	  	 	$	2.14	  	 	$	21.68	  	
Cash settlements	  	$	20.72	  	 	$	—  	  	 	$	0.57	  	 	$	9.74	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	57.11	  	 	$	9.32	  	 	$	2.71	  	 	$	31.42	  	

Page 9 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share amounts)

 	  	Quarter Ended
December 31,	 	 	Year Ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2016	 	 	2015	 	
Oil, gas and NGL sales	  	$	1,159	  	 	$	1,118	  	 	$	4,182	  	 	$	5,382	  	
Oil, gas and NGL derivatives	  	 	(171	) 	 	 	77	  	 	 	(201	) 	 	 	503	  	
Marketing and midstream revenues	  	 	1,820	  	 	 	1,691	  	 	 	6,323	  	 	 	7,260	  	
Asset dispositions and other	  	 	542	  	 	 	—  	  	 	 	1,893	  	 	 	—  	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues and other	  	 	3,350	  	 	 	2,886	  	 	 	12,197	  	 	 	13,145	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lease operating expenses	  	 	367	  	 	 	479	  	 	 	1,582	  	 	 	2,104	  	
Marketing and midstream operating expenses	  	 	1,608	  	 	 	1,481	  	 	 	5,492	  	 	 	6,420	  	
General and administrative expenses	  	 	163	  	 	 	194	  	 	 	645	  	 	 	855	  	
Production and property taxes	  	 	55	  	 	 	73	  	 	 	275	  	 	 	388	  	
Depreciation, depletion and amortization	  	 	372	  	 	 	641	  	 	 	1,792	  	 	 	3,129	  	
Asset impairments	  	 	124	  	 	 	5,341	  	 	 	4,975	  	 	 	20,820	  	
Restructuring and transaction costs	  	 	1	  	 	 	78	  	 	 	267	  	 	 	78	  	
Other operating items	  	 	23	  	 	 	24	  	 	 	64	  	 	 	78	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	2,713	  	 	 	8,311	  	 	 	15,092	  	 	 	33,872	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	637	  	 	 	(5,425	) 	 	 	(2,895	) 	 	 	(20,727	) 	
Net financing costs	  	 	334	  	 	 	139	  	 	 	904	  	 	 	517	  	
Other nonoperating items	  	 	(72	) 	 	 	(22	) 	 	 	78	  	 	 	24	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) before income taxes	  	 	375	  	 	 	(5,542	) 	 	 	(3,877	) 	 	 	(21,268	) 	
Income tax expense (benefit)	  	 	55	  	 	 	(630	) 	 	 	(173	) 	 	 	(6,065	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss)	  	 	320	  	 	 	(4,912	) 	 	 	(3,704	) 	 	 	(15,203	) 	
Net earnings (loss) attributable to noncontrolling interests	  	 	(11	) 	 	 	(380	) 	 	 	(402	) 	 	 	(749	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) attributable to Devon	  	$	331	  	 	$	(4,532	) 	 	$	(3,302	) 	 	$	(14,454	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) per share attributable to Devon:	  				 				 				 				
Basic	  	$	0.63	  	 	$	(11.12	) 	 	$	(6.52	) 	 	$	(35.55	) 	
Diluted	  	$	0.63	  	 	$	(11.12	) 	 	$	(6.52	) 	 	$	(35.55	) 	
Weighted average common shares outstanding:	  				 				 				 				
Basic	  	 	524	  	 	 	413	  	 	 	513	  	 	 	412	  	
Diluted	  	 	527	  	 	 	413	  	 	 	513	  	 	 	412	  	
 
Page 10 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)

 	  	Quarter Ended
December 31,	 	 	Year Ended
December 31,	 	
 	  	2016	 	 	2015	 	 	2016	 	 	2015	 	
Cash flows from operating activities:	  				 				 				 				
Net earnings (loss)	  	$	320	  	 	$	(4,912	) 	 	$	(3,704	) 	 	$	(15,203	) 	
Adjustments to reconcile net earnings (loss) to net cash from operating activities:	  				 				 				 				
Depreciation, depletion and amortization	  	 	372	  	 	 	641	  	 	 	1,792	  	 	 	3,129	  	
Asset impairments	  	 	124	  	 	 	5,341	  	 	 	4,975	  	 	 	20,820	  	
Gains and losses on asset sales	  	 	(536	) 	 	 	—  	  	 	 	(1,887	) 	 	 	—  	  	
Deferred income tax expense (benefit)	  	 	27	  	 	 	(480	) 	 	 	(273	) 	 	 	(5,828	) 	
Derivatives and other financial instruments	  	 	27	  	 	 	(132	) 	 	 	386	  	 	 	(738	) 	
Cash settlements on derivatives and financial instruments	  	 	(9	) 	 	 	775	  	 	 	(142	) 	 	 	2,688	  	
Asset retirement obligation accretion	  	 	17	  	 	 	19	  	 	 	75	  	 	 	75	  	
Amortization of stock-based compensation	  	 	31	  	 	 	44	  	 	 	194	  	 	 	181	  	
Other	  	 	334	  	 	 	37	  	 	 	303	  	 	 	281	  	
Net change in working capital	  	 	(189	) 	 	 	(404	) 	 	 	(8	) 	 	 	(311	) 	
Change in long-term other assets	  	 	26	  	 	 	74	  	 	 	36	  	 	 	285	  	
Change in long-term other liabilities	  	 	(8	) 	 	 	68	  	 	 	(1	) 	 	 	(6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from operating activities	  	 	536	  	 	 	1,071	  	 	 	1,746	  	 	 	5,373	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				 				 				
Capital expenditures	  	 	(671	) 	 	 	(1,079	) 	 	 	(2,330	) 	 	 	(5,308	) 	
Acquisitions of property, equipment and businesses	  	 	—  	  	 	 	(577	) 	 	 	(1,641	) 	 	 	(1,107	) 	
Divestitures of property and equipment	  	 	1,229	  	 	 	72	  	 	 	3,118	  	 	 	107	  	
Other	  	 	(26	) 	 	 	(8	) 	 	 	(19	) 	 	 	(16	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from investing activities	  	 	532	  	 	 	(1,592	) 	 	 	(872	) 	 	 	(6,324	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				 				 				
Borrowings of long-term debt, net of issuance costs	  	 	483	  	 	 	1,444	  	 	 	2,145	  	 	 	4,772	  	
Repayments of long-term debt	  	 	(1,687	) 	 	 	(861	) 	 	 	(4,409	) 	 	 	(2,634	) 	
Net short-term debt repayments	  	 	—  	  	 	 	625	  	 	 	(626	) 	 	 	(307	) 	
Early retirement of debt	  	 	(183	) 	 	 	—  	  	 	 	(265	) 	 	 	—  	  	
Issuance of common stock	  	 	—  	  	 	 	—  	  	 	 	1,469	  	 	 	—  	  	
Sale of subsidiary units	  	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	654	  	
Issuance of subsidiary units	  	 	57	  	 	 	12	  	 	 	892	  	 	 	25	  	
Dividends paid on common stock	  	 	(31	) 	 	 	(100	) 	 	 	(221	) 	 	 	(396	) 	
Contributions from noncontrolling interests	  	 	17	  	 	 	4	  	 	 	168	  	 	 	16	  	
Distributions to noncontrolling interests	  	 	(80	) 	 	 	(68	) 	 	 	(304	) 	 	 	(254	) 	
Other	  	 	(4	) 	 	 	—  	  	 	 	(13	) 	 	 	(18	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from financing activities	  	 	(1,428	) 	 	 	1,056	  	 	 	(1,164	) 	 	 	1,858	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	  	 	(66	) 	 	 	(12	) 	 	 	(61	) 	 	 	(77	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net change in cash and cash equivalents	  	 	(426	) 	 	 	523	  	 	 	(351	) 	 	 	830	  	
Cash and cash equivalents at beginning of period	  	 	2,385	  	 	 	1,787	  	 	 	2,310	  	 	 	1,480	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	  	$	1,959	  	 	$	2,310	  	 	$	1,959	  	 	$	2,310	  	

Page 11 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
CONSOLIDATED BALANCE SHEETS
(in millions)

 	  	December 31,
2016	 	 	December 31,
2015	 	
Current assets:	  				 				
Cash and cash equivalents	  	$	1,959	  	 	$	2,310	  	
Accounts receivable	  	 	1,356	  	 	 	1,105	  	
Assets held for sale	  	 	193	  	 	 	—  	  	
Other current assets	  	 	264	  	 	 	606	  	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	3,772	  	 	 	4,021	  	
	  	 	 	 	 	 	 	 	
Property and equipment, at cost:	  				 				
Oil and gas, based on full cost accounting:	  				 				
Subject to amortization	  	 	75,648	  	 	 	78,190	  	
Not subject to amortization	  	 	3,437	  	 	 	2,584	  	
	  	 	 	 	 	 	 	 	
Total oil and gas	  	 	79,085	  	 	 	80,774	  	
Midstream and other	  	 	10,455	  	 	 	10,380	  	
	  	 	 	 	 	 	 	 	
Total property and equipment, at cost	  	 	89,540	  	 	 	91,154	  	
Less accumulated depreciation, depletion and amortization	  	 	(73,350	) 	 	 	(72,086	) 	
	  	 	 	 	 	 	 	 	
Property and equipment, net	  	 	16,190	  	 	 	19,068	  	
	  	 	 	 	 	 	 	 	
Goodwill	  	 	3,964	  	 	 	5,032	  	
Other long-term assets	  	 	1,987	  	 	 	1,330	  	
	  	 	 	 	 	 	 	 	
Total assets	  	$	25,913	  	 	$	29,451	  	
	  	 	 	 	 	 	 	 	
Current liabilities:	  				 				
Accounts payable	  	$	642	  	 	$	906	  	
Revenues and royalties payable	  	 	908	  	 	 	763	  	
Short-term debt	  	 	—  	  	 	 	976	  	
Other current liabilities	  	 	1,066	  	 	 	650	  	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	2,616	  	 	 	3,295	  	
	  	 	 	 	 	 	 	 	
Long-term debt	  	 	10,154	  	 	 	12,056	  	
Asset retirement obligations	  	 	1,226	  	 	 	1,370	  	
Other long-term liabilities	  	 	894	  	 	 	853	  	
Deferred income taxes	  	 	648	  	 	 	888	  	
Stockholders’ equity:	  				 				
Common stock	  	 	52	  	 	 	42	  	
Additional paid-in capital	  	 	7,237	  	 	 	4,996	  	
Retained earnings (accumulated deficit)	  	 	(1,646	) 	 	 	1,781	  	
Accumulated other comprehensive earnings	  	 	284	  	 	 	230	  	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity attributable to Devon	  	 	5,927	  	 	 	7,049	  	
Noncontrolling interests	  	 	4,448	  	 	 	3,940	  	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity	  	 	10,375	  	 	 	10,989	  	
	  	 	 	 	 	 	 	 	
Total liabilities and stockholders’ equity	  	$	25,913	  	 	$	29,451	  	
	  	 	 	 	 	 	 	 	
Common shares outstanding	  	 	523	  	 	 	418	  	
 
Page 12 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions)

 	  	Quarter Ended December 31, 2016	 	
 	  	Devon U.S.
& Canada	 	 	EnLink	 	 	Eliminations	 	 	Total	 	
Oil, gas and NGL sales	  	$	1,159	  	 	$	—  	  	 	$	—  	  	 	$	1,159	  	
Oil, gas and NGL derivatives	  	 	(171	) 	 	 	—  	  	 	 	—  	  	 	 	(171	) 	
Marketing and midstream revenues	  	 	758	  	 	 	1,225	  	 	 	(163	) 	 	 	1,820	  	
Asset dispositions and other	  	 	558	  	 	 	(16	) 	 	 	—  	  	 	 	542	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues and other	  	 	2,304	  	 	 	1,209	  	 	 	(163	) 	 	 	3,350	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lease operating expenses	  	 	367	  	 	 	—  	  	 	 	—  	  	 	 	367	  	
Marketing and midstream operating expenses	  	 	769	  	 	 	1,002	  	 	 	(163	) 	 	 	1,608	  	
General and administrative expenses	  	 	133	  	 	 	30	  	 	 	—  	  	 	 	163	  	
Production and property taxes	  	 	48	  	 	 	7	  	 	 	—  	  	 	 	55	  	
Depreciation, depletion and amortization	  	 	241	  	 	 	131	  	 	 	—  	  	 	 	372	  	
Asset impairments	  	 	124	  	 	 	—  	  	 	 	—  	  	 	 	124	  	
Restructuring and transaction costs	  	 	1	  	 	 	—  	  	 	 	—  	  	 	 	1	  	
Other operating items	  	 	23	  	 	 	—  	  	 	 	—  	  	 	 	23	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	1,706	  	 	 	1,170	  	 	 	(163	) 	 	 	2,713	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	598	  	 	 	39	  	 	 	—  	  	 	 	637	  	
Net financing costs	  	 	284	  	 	 	50	  	 	 	—  	  	 	 	334	  	
Other nonoperating items	  	 	(92	) 	 	 	20	  	 	 	—  	  	 	 	(72	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) before income taxes	  	 	406	  	 	 	(31	) 	 	 	—  	  	 	 	375	  	
Income tax expense (benefit)	  	 	56	  	 	 	(1	) 	 	 	—  	  	 	 	55	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss)	  	 	350	  	 	 	(30	) 	 	 	—  	  	 	 	320	  	
Net loss attributable to noncontrolling interests	  	 	—  	  	 	 	(11	) 	 	 	—  	  	 	 	(11	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) attributable to Devon	  	$	350	  	 	$	(19	) 	 	$	—  	  	 	$	331	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
OTHER KEY STATISTICS
(in millions)

 	  	Quarter Ended December 31, 2016	 	
 	  	Devon U.S.
& Canada	 	 	EnLink	 	 	Eliminations	 	  	Total	 	
Cash flow statement related items:	  				 				 				  				
Operating cash flow	  	$	383	  	 	$	153	  	 	$	 —  	  	  	$	536	  	
Capital expenditures	  	$	(432	) 	 	$	(239	) 	 	$	—  	  	  	$	(671	) 	
Divestitures of property and equipment	  	$	1,141	  	 	$	88	  	 	$	—  	  	  	$	1,229	  	
Repayments of long-term debt	  	$	(1,254	) 	 	$	(433	) 	 	$	—  	  	  	$	(1,687	) 	
EnLink distributions received (paid)	  	$	66	  	 	$	(146	) 	 	$	—  	  	  	$	(80	) 	
Issuance of subsidiary units	  	$	—  	  	 	$	57	  	 	$	—  	  	  	$	57	  	
Balance sheet statement items:	  				 				 				  				
Net debt (1)	  	$	4,911	  	 	$	3,284	  	 	$	—  	  	  	$	8,195	  	
 
(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.	
 
Page 13 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
CAPITAL EXPENDITURES
(in millions)

 	  	Quarter Ended December 31, 2016	 	  	Year Ended December 31, 2016	 	
Exploration and development capital (1)	  	$	363	  	  	$	1,166	  	
Capitalized G&A and interest	  	 	78	  	  	 	308	  	
Acquisitions	  	 	36	  	  	 	1,595	  	
Other	  	 	20	  	  	 	40	  	
	  	 	 	 	  	 	 	 	
Devon capital expenditures (2)	  	$	497	  	  	$	3,109	  	

(1)	Exploration and development capital in this table is presented before capitalized G&A and interest. The full-year amount excludes a $95 million positive revision to future asset retirement obligations, which is included in costs incurred. The fourth quarter and full-year amounts include $8 million and $32 million for abandonment expenditures paid during each respective period, which are not included in costs incurred.	
(2)	Excludes $266 and $1,082 million attributable to EnLink for the fourth quarter and year end of 2016, respectively.	
 
Page 14 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
COSTS INCURRED
(in millions)

 	  	Total
Year Ended December 31,	 	
 	  	2016	 	  	2015	 	
Property acquisition costs:	  				  				
Proved properties	  	$	237	  	  	$	195	  	
Unproved properties	  	 	1,358	  	  	 	717	  	
Exploration costs	  	 	394	  	  	 	587	  	
Development costs	  	 	1,143	  	  	 	3,671	  	
	  	 	 	 	  	 	 	 	
Costs Incurred	  	$	3,132	  	  	$	5,170	  	

 	  	United States
Year Ended December 31,	 	
 	  	2016	 	  	2015	 	
Property acquisition costs:	  				  				
Proved properties	  	$	237	  	  	$	193	  	
Unproved properties	  	 	1,356	  	  	 	634	  	
Exploration costs	  	 	345	  	  	 	478	  	
Development costs	  	 	1,034	  	  	 	3,269	  	
	  	 	 	 	  	 	 	 	
Costs Incurred	  	$	2,972	  	  	$	4,574	  	

 	  	Canada
Year Ended December 31,	 	
 	  	2016	 	  	2015	 	
Property acquisition costs:	  				  				
Proved properties	  	$	—  	  	  	$	2	  	
Unproved properties	  	 	2	  	  	 	83	  	
Exploration costs	  	 	49	  	  	 	109	  	
Development costs	  	 	109	  	  	 	402	  	
	  	 	 	 	  	 	 	 	
Costs Incurred	  	$	160	  	  	$	596	  	

Page 15 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
RESERVES RECONCILIATION
																	
 	  	Total	 	
 	  	Oil / Bitumen
(MMBbls)	 	  	Gas
(Bcf)	 	  	NGL
(MMBbls)	 	  	Total
(MMBoe)	 	
As of December 31, 2015:	  				  				  				  				
Proved developed	  	 	444	  	  	 	5,707	  	  	 	411	  	  	 	1,806	  	
Proved undeveloped	  	 	340	  	  	 	114	  	  	 	17	  	  	 	376	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	784	  	  	 	5,821	  	  	 	428	  	  	 	2,182	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Revisions due to prices	  	 	3	  	  	 	(103	) 	  	 	(13	) 	  	 	(27	) 	
Revisions other than price	  	 	(18	) 	  	 	638	  	  	 	48	  	  	 	137	  	
Extensions and discoveries	  	 	38	  	  	 	280	  	  	 	42	  	  	 	126	  	
Purchase of reserves	  	 	8	  	  	 	33	  	  	 	7	  	  	 	20	  	
Production	  	 	(95	) 	  	 	(517	) 	  	 	(42	) 	  	 	(223	) 	
Sale of reserves	  	 	(25	) 	  	 	(521	) 	  	 	(45	) 	  	 	(157	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2016:	  				  				  				  				
Proved developed	  	 	367	  	  	 	5,377	  	  	 	387	  	  	 	1,649	  	
Proved undeveloped	  	 	328	  	  	 	254	  	  	 	38	  	  	 	409	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	695	  	  	 	5,631	  	  	 	425	  	  	 	2,058	  	

 	  	United States	 	
 	  	Oil / Bitumen
(MMBbls)	 	  	Gas
(Bcf)	 	  	NGL
(MMBbls)	 	  	Total
(MMBoe)	 	
As of December 31, 2015:	  				  				  				  				
Proved developed	  	 	203	  	  	 	5,694	  	  	 	411	  	  	 	1,563	  	
Proved undeveloped	  	 	39	  	  	 	114	  	  	 	17	  	  	 	75	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	242	  	  	 	5,808	  	  	 	428	  	  	 	1,638	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Revisions due to prices	  	 	(18	) 	  	 	(103	) 	  	 	(13	) 	  	 	(48	) 	
Revisions other than price	  	 	(2	) 	  	 	628	  	  	 	48	  	  	 	151	  	
Extensions and discoveries	  	 	36	  	  	 	280	  	  	 	42	  	  	 	124	  	
Purchase of reserves	  	 	8	  	  	 	33	  	  	 	7	  	  	 	20	  	
Production	  	 	(47	) 	  	 	(510	) 	  	 	(42	) 	  	 	(174	) 	
Sale of reserves	  	 	(25	) 	  	 	(521	) 	  	 	(45	) 	  	 	(157	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2016:	  				  				  				  				
Proved developed	  	 	160	  	  	 	5,361	  	  	 	387	  	  	 	1,439	  	
Proved undeveloped	  	 	34	  	  	 	254	  	  	 	38	  	  	 	115	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	194	  	  	 	5,615	  	  	 	425	  	  	 	1,554	  	

 	  	Canada	 	
 	  	Oil / Bitumen
(MMBbls)	 	  	Gas
(Bcf)	 	  	NGL
(MMBbls)	 	  	Total
(MMBoe)	 	
As of December 31, 2015:	  				  				  				  				
Proved developed	  	 	241	  	  	 	13	  	  	 	—  	  	  	 	243	  	
Proved undeveloped	  	 	301	  	  	 	—  	  	  	 	—  	  	  	 	301	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	542	  	  	 	13	  	  	 	—  	  	  	 	544	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Revisions due to prices	  	 	21	  	  	 	—  	  	  	 	—  	  	  	 	21	  	
Revisions other than price	  	 	(16	) 	  	 	10	  	  	 	—  	  	  	 	(14	) 	
Extensions and discoveries	  	 	2	  	  	 	—  	  	  	 	—  	  	  	 	2	  	
Production	  	 	(48	) 	  	 	(7	) 	  	 	—  	  	  	 	(49	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2016:	  				  				  				  				
Proved developed	  	 	207	  	  	 	16	  	  	 	—  	  	  	 	210	  	
Proved undeveloped	  	 	294	  	  	 	—  	  	  	 	—  	  	  	 	294	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	501	  	  	 	16	  	  	 	—  	  	  	 	504	  	

Page 16 of 21

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 fourth-quarter 2016 earnings.

(in millions, except per share amounts)	  	Quarter Ended December 31, 2016	 	
 	  	Before-tax	 	 	After-tax	 	 	After
Noncontrolling
Interests	 	 	Per
Share	 	
Earnings attributable to Devon (GAAP)	  	$	375	  	 	$	320	  	 	$	331	  	 	$	0.63	  	
Adjustments:	  				 				 				 				
Gains and losses on asset sales	  	 	(539	) 	 	 	(455	) 	 	 	(462	) 	 	 	(0.87	) 	
Asset impairments	  	 	145	  	 	 	107	  	 	 	100	  	 	 	0.19	  	
Deferred tax asset valuation allowance	  	 	—  	  	 	 	(16	) 	 	 	(16	) 	 	 	(0.03	) 	
Restructuring and transaction costs	  	 	1	  	 	 	1	  	 	 	1	  	 	 	—  	  	
Fair value changes in financial instruments and foreign currency	  	 	69	  	 	 	62	  	 	 	59	  	 	 	0.11	  	
Early retirement of debt	  	 	185	  	 	 	118	  	 	 	118	  	 	 	0.22	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Core earnings attributable to Devon (Non-GAAP)	  	$	236	  	 	$	137	  	 	$	131	  	 	$	0.25	  	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
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)	  	December 31, 2016	 	
 	  	Devon U.S. & Canada	 	  	EnLink	 	  	Devon Consolidated	 	
Total debt (GAAP)	  	$	6,859	  	  	$	3,295	  	  	$	10,154	  	
Less cash and cash equivalents	  	 	(1,948	) 	  	 	(11	) 	  	 	(1,959	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net debt (Non-GAAP)	  	$	4,911	  	  	$	3,284	  	  	$	8,195	  	

Page 17 of 21

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
FINDING COST
Finding cost is defined as costs incurred less acquisitions costs. Devon believes finding cost is relevant because it provides additional insight into costs associated with current year exploration and development activities. Certain securities analysts also use this methodology to measure Devon’s performance. It should be noted that the actual costs of reserves added through Devon’s drilling program will differ, sometimes significantly, from the direct comparison of capital spent and reserves added in any given period due to the timing of capital expenditures and reserves bookings.

(in millions)	  	Year Ended December 31, 2016	 	
 	  	United States	 	
Costs Incurred (GAAP)	  	$	2,972	  	
Less:	  				
Acquisition costs	  	 	1,593	  	
	  	 	 	 	
Finding cost (Non-GAAP)	  	$	1,379	  	
	  	 	 	 	
Revisions other than price	  	 	151	  	
Extensions and discoveries	  	 	124	  	
	  	 	 	 	
Total	  	 	275	  	
	  	 	 	 	
Finding cost per BOE (Non-GAAP)	  	$	5.01	  	
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 millions)	  	Year Ended December 31, 2016	 	
Consolidated cash flow from operations (GAAP)	  	$	1,746	  	
Less: EnLink cash flow from operations	  	 	666	  	
	  	 	 	 	
Devon cash flow from operations	  	 	1,080	  	
Less: cash flow from divested assets	  	 	150	  	
Less: cash associated with debt repayments	  	 	265	  	
Add: EnLink distributions received	  	 	265	  	
	  	 	 	 	
Upstream cash flow (Non-GAAP)	  	$	930	  	

Page 18 of 21

DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
 
PRODUCTION GUIDANCE

 	  	Quarter 1	 	  	Full Year	 	
 	  	Low	 	  	High	 	  	Low	 	  	High	 	
Oil and bitumen (MBbls/d)	  				  				  				  				
U.S.	  	 	114	  	  	 	118	  	  	 	119	  	  	 	123	  	
Heavy Oil	  	 	133	  	  	 	138	  	  	 	130	  	  	 	135	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	247	  	  	 	256	  	  	 	249	  	  	 	258	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				
Total	  	 	88	  	  	 	93	  	  	 	95	  	  	 	100	  	
Gas (MMcf/d)	  				  				  				  				
U.S.	  	 	1,190	  	  	 	1,220	  	  	 	1,160	  	  	 	1,200	  	
Heavy Oil	  	 	14	  	  	 	18	  	  	 	14	  	  	 	16	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,204	  	  	 	1,238	  	  	 	1,174	  	  	 	1,216	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				
U.S.	  	 	400	  	  	 	414	  	  	 	407	  	  	 	423	  	
Heavy Oil	  	 	135	  	  	 	141	  	  	 	132	  	  	 	138	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	535	  	  	 	555	  	  	 	539	  	  	 	561	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
PRICE REALIZATIONS GUIDANCE

 	  	Quarter 1	 	 	Full Year	 	
 	  	Low	 	 	High	 	 	Low	 	 	High	 	
Oil and bitumen - % of WTI	  				 				 				 				
U.S.	  	 	88	% 	 	 	98	% 	 	 	88	% 	 	 	98	% 	
Canada	  	 	45	% 	 	 	55	% 	 	 	48	% 	 	 	58	% 	
NGL - realized price	  	$	12	  	 	$	15	  	 	$	12	  	 	$	15	  	
Natural gas - % of Henry Hub	  	 	78	% 	 	 	88	% 	 	 	78	% 	 	 	88	% 	
 
Page 19 of 21

DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
 
OTHER GUIDANCE ITEMS

 	  	Quarter 1	 	 	Full Year	 	
($ millions, except %)	  	Low	 	 	High	 	 	Low	 	 	High	 	
Marketing & midstream operating profit	  	$	200	  	 	$	220	  	 	$	900	  	 	$	950	  	
Lease operating expenses	  	$	350	  	 	$	400	  	 	$	1,500	  	 	$	1,600	  	
General & administrative expenses - Devon	  	$	130	  	 	$	150	  	 	$	500	  	 	$	550	  	
General & administrative expenses - EnLink	  	$	35	  	 	$	45	  	 	$	130	  	 	$	140	  	
Production and property taxes	  	$	75	  	 	$	85	  	 	$	275	  	 	$	325	  	
Depreciation, depletion and amortization	  	$	375	  	 	$	425	  	 	$	1,650	  	 	$	1,750	  	
Other operating items	  	$	15	  	 	$	25	  	 	$	70	  	 	$	80	  	
Net financing costs	  	$	125	  	 	$	135	  	 	$	485	  	 	$	535	  	
Current income tax rate	  	 	5.0	% 	 	 	15.0	% 	 	 	5.0	% 	 	 	15.0	% 	
Deferred income tax rate	  	 	20.0	% 	 	 	30.0	% 	 	 	20.0	% 	 	 	30.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total income tax rate	  	 	25.0	% 	 	 	45.0	% 	 	 	25.0	% 	 	 	45.0	% 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings attributable to noncontrolling interests	  	$	—  	  	 	$	5	  	 	$	50	  	 	$	100	  	
CAPITAL EXPENDITURES GUIDANCE

 	  	Quarter 1	 	  	Full Year	 	
(in millions)	  	Low	 	  	High	 	  	Low	 	  	High	 	
Exploration and development	  	$	450	  	  	$	500	  	  	$	2,000	  	  	$	2,300	  	
Capitalized G&A	  	 	55	  	  	 	65	  	  	 	200	  	  	 	250	  	
Capitalized interest	  	 	15	  	  	 	20	  	  	 	60	  	  	 	90	  	
Other	  	 	5	  	  	 	10	  	  	 	25	  	  	 	50	  	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Devon capital expenditures (1)	  	$	525	  	  	$	595	  	  	$	2,285	  	  	$	2,690	  	

(1)	Excludes capital expenditures related to EnLink.	
 
Page 20 of 21

DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
 
COMMODITY HEDGES

 	  	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)	 	
Q1-Q4 2017	  	 	73,760	  	  	$	54.33	  	  	 	56,259	  	  	$	45.45	  	  	$	58.11	  	
Q1-Q4 2018	  	 	4,096	  	  	$	54.31	  	  	 	7,685	  	  	$	47.77	  	  	$	57.77	  	

 	 	Oil Basis Swaps	 	
Period	 	Index	  	Volume (Bbls/d)	 	  	Weighted Average Differential to
WTI ($/Bbl)	 	
Q1-Q4 2017	 	Western Canadian Select	  	 	26,910	  	  	$	 (15.24	) 	
Q1-Q4 2017	 	Midland Sweet	  	 	17,534	  	  	$	 (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)	 	
Q1-Q4 2017	 	 	209,863	  	  	$	3.16	  	  	 	360,425	  	  	$	2.99	  	  	$	3.40	  	
Q1-Q4 2018	 	 	44,500	  	  	$	3.32	  	  	 	33,904	  	  	$	3.29	  	  	$	3.64	  	
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 February 7, 2017.
 
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