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): October 31, 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 October 31, 2017 announcing third 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 October 31, 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: October 31, 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 Third-Quarter 2017 Results
OKLAHOMA CITY – Oct. 31, 2017 – Devon Energy Corp. (NYSE: DVN) today reported operational and financial results for the third quarter of 2017. Also included within the release is the company’s guidance outlook for the fourth quarter of 2017.
Highlights
 
 	•	 	Production exceeds midpoint of hurricane-adjusted guidance	
 
 	•	 	50 high-rate wells brought online with average rates exceeding 2,100 Boe per day	
 
 	•	 	Capital expenditures were 12 percent below guidance year to date	
 
 	•	 	Divestiture program reaches $420 million of asset sales	
 
 	•	 	Free cash flow increases cash balance to $2.8 billion	
“We continue to deliver outstanding well productivity from our U.S. resource plays as we execute on our development plans,” said Dave Hager, president and CEO. “During the quarter, we had some of the best drill-bit results in Devon’s history with 50 new wells averaging 30-day rates in excess of 2,100 Boe per day. Importantly, we delivered these prolific wells with a capital investment that was below the low end of our guidance range for the third consecutive quarter.”
“With these strong results, we remain on track to achieve our 2017 exit rate production targets, and we are positioned to deliver attractive, high rate-of-return growth in 2018,” said Hager. “A key driver of our operational momentum is the advancement of multi-zone development activity across our world-class STACK and Delaware Basin opportunities. With several projects underway, this cutting-edge development technique will optimize per-section recoveries, while improving capital efficiencies by 20 percent.”
Production Exceeds Midpoint of Hurricane-Adjusted Guidance
Devon’s net production in the third quarter averaged 527,000 oil-equivalent barrels (Boe) per day. This result exceeded the midpoint of the company’s Hurricane Harvey-adjusted 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 403,000 Boe per day during the third quarter. Storm-related curtailments reduced production in the U.S. by approximately 15,000 barrels per day (65 percent oil) in the quarter, with the most significant impact in the south Texas Eagle Ford play.
The strongest asset-level performance in the quarter was from the company’s STACK assets, where production advanced 26 percent compared to 2016 exit rates.
In Canada, net production was at the top-end of guidance averaging 124,000 Boe per day during the third quarter. A maintenance event at Jackfish 2, completed over a three-week period in July, curtailed production by approximately 15,000 barrels per day in the third quarter. Devon’s Jackfish complex has returned to pre-turnaround production levels and exited September at rates that are 24 percent above nameplate capacity.
 
1

50 High-Rate Wells Brought Online with Rates Exceeding 2,100 Boe per Day
Devon continued to advance its development programs across its U.S. resource plays and exited the third quarter with 19 development rigs running. With this increased activity, the company commenced production on 50 high-rate wells that averaged initial 30-day rates of more than 2,100 Boe per day (50 percent oil).
This strong drill-bit productivity was highlighted by 14 new Meramec wells brought online in the STACK play that achieved average 30-day rates of greater than 2,300 Boe per day (55 percent oil). The Delaware Basin also delivered several high-rate oil wells. This activity was headlined by four new Bone Spring wells around the state-line area of southeast New Mexico that averaged 30-day rates of 1,750 Boe per day (75 percent oil).
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 past year, Devon’s 90-day production rates from new wells have achieved the highest rates of any U.S. onshore operator.
Strong Exit Rates Build Momentum into 2018
With operations fully restored from storm-related impacts, Devon remains on track to achieve its full-year 2017 target for U.S. oil production. Importantly, based on higher activity levels for the remainder of the year, the company forecasts its U.S. oil production from retained assets to exit the year at levels approximately 20 percent higher than the fourth quarter of 2016.
This strong production growth over the remainder of 2017 is driven by the company’s STACK and Delaware Basin assets, where 90 percent of its U.S. development rig activity is allocated. Combined, these two franchise growth assets are expected to advance their 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 Canada, with maintenance at the Jackfish complex complete, the company expects to build strong momentum heading into 2018. For the fourth quarter of 2017, net production in Canada is forecasted to increase to a range of 137,000 to 143,000 Boe per day.
Capital Expenditures 12 Percent Below Guidance Year to Date
The company’s exploration and development capital expenditures in the third quarter totaled $548 million, which was below the low end of guidance for the third consecutive quarter. On a year-to-date basis, Devon’s capital investment has been 12 percent below the midpoint of guidance and amounted to 65 percent of the original capital budget provided in February.
This strong capital efficiency is driven by productivity gains in the STACK and Delaware Basin and the decoupling of historically bundled services. These efficiency improvements have largely offset industry inflationary pressures in 2017.
Due to these positive operating trends, Devon expects E&P capital spending to range from $2.0 billion to $2.1 billion in 2017. The company has not made any changes to its planned activity levels in 2017 and is on track to run approximately 20 development rigs across its U.S. resource plays by the end of 2017.
 
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Third-Quarter 2017 Operations Report
For additional details on well results and other information about Devon’s E&P operations, please refer to the company’s third-quarter 2017 operations report at www.devonenergy.com . Highlights from the report include:
 
 	•	 	STACK production advances 26 percent year to date	
 
 	•	 	Meramec pilot achieves average 30-day rates of 3,500 Boe per day	
 
 	•	 	STACK full-field development underway with spudding of Showboat project	
 
 	•	 	Initial Delaware Basin multi-zone project delivers cost savings of $1 million per well	
 
 	•	 	Jackfish complex exits quarter 24 percent above nameplate capacity	
 
 	•	 	Preliminary 2018 capital and production outlook	
Midstream Profit Advances 9 Percent Year to Date
Devon’s midstream business generated operating profits of $242 million in the third quarter, expanding by 9 percent on a year-to-date basis compared to 2016. This growth was driven entirely by Devon’s strategic investment in EnLink Midstream.
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 $3.4 billion and is expected to generate cash distributions of approximately $270 million annually.
Cost Structure Continues to Improve
In addition to the shift to higher-value production, Devon plans to further expand margins with cost-reduction initiatives that are expected to achieve $1.4 billion of annualized operating and general and administrative expense (G&A) savings in 2017. In the third quarter, the company’s largest field-level cost, lease operating expenses (LOE), totaled $391 million, or $8.05 per Boe. This represents nearly $10 million of savings compared to the second quarter of 2017, with cost reductions achieved in both the U.S. and Canada.
Importantly, the company’s operating costs are expected to further improve on a per-unit basis in the fourth quarter of 2017. This improvement is driven by the combination of higher production rates and relatively flat LOE costs due to efficiency gains within field operations.
The company also effectively managed its G&A cost structure in the third quarter. Overhead expenses totaled $153 million, a 15 percent improvement compared to peak rates in the first half of the year. Savings were driven by lower employee-related costs.
Higher-Margin Production Nearly Doubles Cash Flow
Devon’s operating cash flow totaled $776 million in the third quarter. On a year-to-date basis, operating cash flow has reached $2.4 billion, a 96 percent increase compared to the same period a year ago. The higher cash flow is primarily attributable to improvements in commodity prices and a lower cost structure.
Devon’s reported net earnings totaled $228 million or $0.43 per diluted share in the third quarter. Adjusting for items that securities analysts typically exclude from their published estimates, the company’s core earnings totaled $242 million or $0.46 per diluted share, exceeding analyst consensus estimates.
Free Cash Flow Increases Cash Balance to $2.8 Billion
In the third quarter, the company’s upstream operations fully funded its capital requirements and generated free cash flow, which helped increase cash balances by $400 million to $2.8 billion at the end of September. This represents the third consecutive quarter that Devon has increased its cash balance, representing a total cash build of approximately $800 million year to date.
 
3

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 65 percent of its estimated oil and gas production protected for the remainder of 2017 at attractive pricing points.
The company continues to accumulate hedges for 2018 and has protected the price of approximately 40 percent of estimated volumes for the first half of the year. Devon’s disciplined, risk-management program will continue to add hedges for the upcoming six quarters. This activity will consist of systematic hedges added on a quarterly basis and discretionary hedges that take advantage of favorable market conditions.
Asset Divestiture Program Reaches $420 Million of Asset Sales
The company’s financial strength will be further enhanced by proceeds from its ongoing divestiture program. In the third quarter, the divestiture program progressed with an additional $80 million of asset sales, increasing overall proceeds to $420 million to date.
The most significant asset remaining within this divestiture program is select leasehold within the Barnett Shale focused primarily in Johnson County. Data rooms for the Johnson County properties were opened at the end of September and initial bids are expected during the fourth quarter. Production associated with the assets in Johnson County is approximately 30,000 Boe per day.
Due to the closing of the Lavaca County assets at the end of the quarter and other minor asset sales, Devon’s fourth quarter production is expected to be reduced by 5,000 Boe per day (60 percent oil).
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 third-quarter conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Nov. 1, 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
 
4

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 .
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. 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
September 30,	 	  	Nine Months Ended
September 30,	 	
 	  	2017	 	  	2016	 	  	2017	 	  	2016	 	
Oil and bitumen (MBbls/d)	  				  				  				  				
U. S. - Core	  	 	112	 	  	 	108	 	  	 	117	 	  	 	124	 	
Heavy Oil	  	 	121	 	  	 	137	 	  	 	127	 	  	 	128	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	233	 	  	 	245	 	  	 	244	 	  	 	252	 	
Divested assets	  	 	—  	 	  	 	6	 	  	 	—  	 	  	 	13	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	233	 	  	 	251	 	  	 	244	 	  	 	265	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				
U. S. - Core	  	 	94	 	  	 	96	 	  	 	96	 	  	 	107	 	
Divested assets	  	 	—  	 	  	 	8	 	  	 	—  	 	  	 	17	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	94	 	  	 	104	 	  	 	96	 	  	 	124	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				  				  				
U. S. - Core	  	 	1,185	 	  	 	1,231	 	  	 	1,195	 	  	 	1,292	 	
Heavy Oil	  	 	16	 	  	 	18	 	  	 	17	 	  	 	20	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	1,201	 	  	 	1,249	 	  	 	1,212	 	  	 	1,312	 	
Divested assets	  	 	—  	 	  	 	75	 	  	 	—  	 	  	 	165	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,201	 	  	 	1,324	 	  	 	1,212	 	  	 	1,477	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				
U. S. - Core	  	 	403	 	  	 	410	 	  	 	412	 	  	 	446	 	
Heavy Oil	  	 	124	 	  	 	140	 	  	 	130	 	  	 	132	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	527	 	  	 	550	 	  	 	542	 	  	 	578	 	
Divested assets	  	 	—  	 	  	 	27	 	  	 	—  	 	  	 	57	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	527	 	  	 	577	 	  	 	542	 	  	 	635	 	

6

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 
PRODUCTION TREND

 	  	2016	 	  	2017	 	
 	  	Quarter 3	 	  	Quarter 4	 	  	Quarter 1	 	  	Quarter 2	 	  	Quarter 3	 	
Oil and bitumen (MBbls/d)	  				  				  				  				  				
Barnett Shale	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	
Delaware Basin	  	 	31	 	  	 	29	 	  	 	30	 	  	 	30	 	  	 	31	 	
Eagle Ford	  	 	33	 	  	 	34	 	  	 	48	 	  	 	36	 	  	 	30	 	
Heavy Oil	  	 	137	 	  	 	139	 	  	 	138	 	  	 	122	 	  	 	121	 	
Rockies Oil	  	 	11	 	  	 	11	 	  	 	13	 	  	 	13	 	  	 	12	 	
STACK	  	 	21	 	  	 	19	 	  	 	21	 	  	 	25	 	  	 	27	 	
Other assets	  	 	11	 	  	 	11	 	  	 	10	 	  	 	11	 	  	 	11	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	245	 	  	 	244	 	  	 	261	 	  	 	238	 	  	 	233	 	
Divested assets	  	 	6	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	251	 	  	 	244	 	  	 	261	 	  	 	238	 	  	 	233	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				  				
Barnett Shale	  	 	44	 	  	 	43	 	  	 	43	 	  	 	42	 	  	 	36	 	
Delaware Basin	  	 	12	 	  	 	10	 	  	 	10	 	  	 	10	 	  	 	11	 	
Eagle Ford	  	 	13	 	  	 	11	 	  	 	15	 	  	 	11	 	  	 	12	 	
Rockies Oil	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	
STACK	  	 	23	 	  	 	21	 	  	 	26	 	  	 	31	 	  	 	32	 	
Other assets	  	 	3	 	  	 	4	 	  	 	3	 	  	 	2	 	  	 	2	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	96	 	  	 	90	 	  	 	98	 	  	 	97	 	  	 	94	 	
Divested assets	  	 	8	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	104	 	  	 	90	 	  	 	98	 	  	 	97	 	  	 	94	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				  				  				  				
Barnett Shale	  	 	730	 	  	 	710	 	  	 	683	 	  	 	675	 	  	 	672	 	
Delaware Basin	  	 	92	 	  	 	89	 	  	 	88	 	  	 	96	 	  	 	90	 	
Eagle Ford	  	 	85	 	  	 	90	 	  	 	119	 	  	 	96	 	  	 	88	 	
Heavy Oil	  	 	18	 	  	 	18	 	  	 	23	 	  	 	14	 	  	 	16	 	
Rockies Oil	  	 	19	 	  	 	17	 	  	 	15	 	  	 	17	 	  	 	11	 	
STACK	  	 	292	 	  	 	284	 	  	 	287	 	  	 	298	 	  	 	313	 	
Other assets	  	 	13	 	  	 	13	 	  	 	13	 	  	 	12	 	  	 	11	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	1,249	 	  	 	1,221	 	  	 	1,228	 	  	 	1,208	 	  	 	1,201	 	
Divested assets	  	 	75	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,324	 	  	 	1,221	 	  	 	1,228	 	  	 	1,208	 	  	 	1,201	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				  				  				  				
Barnett Shale	  	 	166	 	  	 	163	 	  	 	158	 	  	 	155	 	  	 	148	 	
Delaware Basin	  	 	59	 	  	 	54	 	  	 	54	 	  	 	56	 	  	 	57	 	
Eagle Ford	  	 	61	 	  	 	60	 	  	 	83	 	  	 	63	 	  	 	57	 	
Heavy Oil	  	 	140	 	  	 	141	 	  	 	141	 	  	 	124	 	  	 	124	 	
Rockies Oil	  	 	16	 	  	 	15	 	  	 	17	 	  	 	18	 	  	 	16	 	
STACK	  	 	92	 	  	 	88	 	  	 	95	 	  	 	105	 	  	 	111	 	
Other assets	  	 	16	 	  	 	16	 	  	 	15	 	  	 	15	 	  	 	14	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Retained assets	  	 	550	 	  	 	537	 	  	 	563	 	  	 	536	 	  	 	527	 	
Divested assets	  	 	27	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	577	 	  	 	537	 	  	 	563	 	  	 	536	 	  	 	527	 	

7

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

 	  	 	 	 	 	 	 	 	 	 	 	 	
 	  	Quarter 3	 	 	September YTD	 	
 	  	2017	 	 	2016	 	 	2017	 	 	2016	 	
Oil ($/Bbl)—West Texas Intermediate (Cushing)	  	$	48.14	 	 	$	45.02	 	 	$	49.48	 	 	$	41.41	 	
Natural Gas ($/Mcf)—Henry Hub	  	$	2.99	 	 	$	2.81	 	 	$	3.17	 	 	$	2.28	 	
		
REALIZED PRICES	  	Quarter Ended September 30, 2017	 	
 	  	Oil /Bitumen	 	 	NGL	 	 	Gas	 	 	Total	 	
 	  	(Per Bbl)	 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Boe)	 	
United States	  	$	47.12	 	 	$	15.15	 	 	$	2.45	 	 	$	23.85	 	
Canada	  	$	32.25	 	 	 	N/M	 	 	 	N/M	 	 	$	31.59	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	39.36	 	 	$	15.15	 	 	$	2.45	 	 	$	25.67	 	
Cash settlements	  	$	0.54	 	 	$	(0.03	) 	 	$	0.12	 	 	$	0.52	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	39.90	 	 	$	15.12	 	 	$	2.57	 	 	$	26.19	 	

 	  	Quarter Ended September 30, 2016	 	
 	  	Oil /Bitumen	 	 	NGL	 	 	Gas	 	 	Total	 	
 	  	(Per Bbl)	 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Boe)	 	
United States	  	$	42.51	 	 	$	9.80	 	 	$	2.24	 	 	$	20.26	 	
Canada	  	$	23.71	 	 	 	N/M	 	 	 	N/M	 	 	$	23.23	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	32.27	 	 	$	9.80	 	 	$	2.24	 	 	$	20.98	 	
Cash settlements	  	$	0.84	 	 	$	0.10	 	 	$	(0.04	) 	 	$	0.32	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	33.11	 	 	$	9.90	 	 	$	2.20	 	 	$	21.30	 	

 	  	Nine Months Ended September 30, 2017	 	
 	  	Oil /Bitumen	 	 	NGL	 	 	Gas	 	 	Total	 	
 	  	(Per Bbl)	 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Boe)	 	
United States	  	$	47.84	 	 	$	14.62	 	 	$	2.54	 	 	$	24.44	 	
Canada	  	$	29.10	 	 	 	N/M	 	 	 	N/M	 	 	$	28.50	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	38.08	 	 	$	14.62	 	 	$	2.54	 	 	$	25.41	 	
Cash settlements	  	$	0.45	 	 	$	(0.02	) 	 	$	0.05	 	 	$	0.29	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	38.53	 	 	$	14.60	 	 	$	2.59	 	 	$	25.70	 	

 	  	Nine Months Ended September 30, 2016	 	
 	  	Oil /Bitumen	 	 	NGL	 	 	Gas	 	 	Total	 	
 	  	(Per Bbl)	 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Boe)	 	
United States	  	$	36.89	 	 	$	8.84	 	 	$	1.70	 	 	$	17.16	 	
Canada	  	$	18.58	 	 	 	N/M	 	 	 	N/M	 	 	$	18.15	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	$	28.03	 	 	$	8.84	 	 	$	1.70	 	 	$	17.37	 	
Cash settlements	  	$	(0.57	) 	 	$	(0.06	) 	 	$	0.12	 	 	$	0.02	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	27.46	 	 	$	8.78	 	 	$	1.82	 	 	$	17.39	 	

8

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

 	  	Quarter Ended	 	 	Nine Months Ended	 	
 	  	September 30,	 	 	September 30,	 	
 	  	2017	 	 	2016	 	 	2017	 	 	2016	 	
Oil, gas and NGL sales	  	$	1,245	 	 	$	1,113	 	 	$	3,760	 	 	$	3,023	 	
Oil, gas and NGL derivatives	  	 	(144	) 	 	 	79	 	 	 	214	 	 	 	(30	) 	
Marketing and midstream revenues	  	 	2,055	 	 	 	1,690	 	 	 	5,992	 	 	 	4,503	 	
Asset dispositions and other	  	 	—  	 	 	 	1,351	 	 	 	10	 	 	 	1,351	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues and other	  	 	3,156	 	 	 	4,233	 	 	 	9,976	 	 	 	8,847	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lease operating expenses	  	 	391	 	 	 	355	 	 	 	1,176	 	 	 	1,215	 	
Marketing and midstream operating expenses	  	 	1,813	 	 	 	1,480	 	 	 	5,319	 	 	 	3,884	 	
General and administrative expenses	  	 	153	 	 	 	141	 	 	 	498	 	 	 	482	 	
Production and property taxes	  	 	71	 	 	 	67	 	 	 	227	 	 	 	220	 	
Depreciation, depletion and amortization	  	 	400	 	 	 	394	 	 	 	1,162	 	 	 	1,420	 	
Asset impairments	  	 	2	 	 	 	319	 	 	 	9	 	 	 	4,851	 	
Restructuring and transaction costs	  	 	—  	 	 	 	(5	) 	 	 	—  	 	 	 	266	 	
Other operating items	  	 	—  	 	 	 	17	 	 	 	11	 	 	 	41	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	2,830	 	 	 	2,768	 	 	 	8,402	 	 	 	12,379	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income (loss)	  	 	326	 	 	 	1,465	 	 	 	1,574	 	 	 	(3,532	) 	
Net financing costs	  	 	127	 	 	 	243	 	 	 	370	 	 	 	570	 	
Other nonoperating items	  	 	(73	) 	 	 	44	 	 	 	(124	) 	 	 	150	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings (loss) before income taxes	  	 	272	 	 	 	1,178	 	 	 	1,328	 	 	 	(4,252	) 	
Income tax expense (benefit)	  	 	25	 	 	 	171	 	 	 	51	 	 	 	(228	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss)	  	 	247	 	 	 	1,007	 	 	 	1,277	 	 	 	(4,024	) 	
Net earnings (loss) attributable to noncontrolling interests	  	 	19	 	 	 	14	 	 	 	59	 	 	 	(391	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) attributable to Devon	  	$	228	 	 	$	993	 	 	$	1,218	 	 	$	(3,633	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) per share attributable to Devon:	  				 				 				 				
Basic	  	$	0.43	 	 	$	1.90	 	 	$	2.32	 	 	$	(7.22	) 	
Diluted	  	$	0.43	 	 	$	1.89	 	 	$	2.31	 	 	$	(7.22	) 	
Weighted average common shares outstanding:	  				 				 				 				
Basic	  	 	526	 	 	 	524	 	 	 	525	 	 	 	509	 	
Diluted	  	 	529	 	 	 	527	 	 	 	528	 	 	 	509	 	
 
9

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

 	  	Quarter Ended	 	 	Nine Months Ended	 	
 	  	September 30,	 	 	September 30,	 	
 	  	2017	 	 	2016	 	 	2017	 	 	2016	 	
Cash flows from operating activities:	  				 				 				 				
Net earnings (loss)	  	$	247	 	 	$	1,007	 	 	$	1,277	 	 	$	(4,024	) 	
Adjustments to reconcile net earnings (loss) to net cash from operating activities:	  				 				 				 				
Depreciation, depletion and amortization	  	 	400	 	 	 	394	 	 	 	1,162	 	 	 	1,420	 	
Asset impairments	  	 	2	 	 	 	319	 	 	 	9	 	 	 	4,851	 	
Gains and losses on asset sales	  	 	1	 	 	 	(1,351	) 	 	 	(6	) 	 	 	(1,351	) 	
Deferred income tax expense (benefit)	  	 	(14	) 	 	 	86	 	 	 	(20	) 	 	 	(300	) 	
Commodity derivatives	  	 	144	 	 	 	(79	) 	 	 	(214	) 	 	 	30	 	
Cash settlements on commodity derivatives	  	 	24	 	 	 	12	 	 	 	43	 	 	 	15	 	
Other derivatives and financial instruments	  	 	9	 	 	 	21	 	 	 	16	 	 	 	329	 	
Cash settlements on other derivatives and
financial instruments	  	 	—  	 	 	 	3	 	 	 	—  	 	 	 	(148	) 	
Asset retirement obligation accretion	  	 	16	 	 	 	19	 	 	 	47	 	 	 	58	 	
Share-based compensation	  	 	33	 	 	 	23	 	 	 	122	 	 	 	163	 	
Other	  	 	(85	) 	 	 	127	 	 	 	(134	) 	 	 	(31	) 	
Net change in working capital	  	 	7	 	 	 	137	 	 	 	94	 	 	 	208	 	
Change in long-term other assets	  	 	2	 	 	 	(3	) 	 	 	12	 	 	 	10	 	
Change in long-term other liabilities	  	 	(10	) 	 	 	12	 	 	 	12	 	 	 	7	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from operating activities	  	 	776	 	 	 	727	 	 	 	2,420	 	 	 	1,237	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				 				 				
Capital expenditures	  	 	(735	) 	 	 	(421	) 	 	 	(2,203	) 	 	 	(1,659	) 	
Acquisitions of property, equipment and businesses	  	 	(6	) 	 	 	(3	) 	 	 	(39	) 	 	 	(1,641	) 	
Proceeds from sale of investment	  	 	—  	 	 	 	—  	 	 	 	190	 	 	 	—  	 	
Divestitures of property and equipment	  	 	209	 	 	 	1,680	 	 	 	323	 	 	 	1,889	 	
Other	  	 	(1	) 	 	 	34	 	 	 	(5	) 	 	 	7	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from investing activities	  	 	(533	) 	 	 	1,290	 	 	 	(1,734	) 	 	 	(1,404	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				 				 				
Borrowings of long-term debt, net of issuance costs	  	 	413	 	 	 	816	 	 	 	2,208	 	 	 	1,662	 	
Repayments of long-term debt	  	 	(571	) 	 	 	(2,173	) 	 	 	(1,950	) 	 	 	(2,722	) 	
Payment of installment payable	  	 	—  	 	 	 	—  	 	 	 	(250	) 	 	 	—  	 	
Net short-term debt repayments	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(626	) 	
Early retirement of debt	  	 	—  	 	 	 	(82	) 	 	 	(6	) 	 	 	(82	) 	
Issuance of common stock	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	1,469	 	
Issuance of subsidiary units	  	 	414	 	 	 	59	 	 	 	486	 	 	 	835	 	
Dividends paid on common stock	  	 	(30	) 	 	 	(32	) 	 	 	(95	) 	 	 	(190	) 	
Contributions from noncontrolling interests	  	 	18	 	 	 	146	 	 	 	47	 	 	 	152	 	
Distributions to noncontrolling interests	  	 	(84	) 	 	 	(77	) 	 	 	(247	) 	 	 	(224	) 	
Shares exchanged for tax withholdings	  	 	(3	) 	 	 	(2	) 	 	 	(67	) 	 	 	(30	) 	
Other	  	 	—  	 	 	 	(1	) 	 	 	(2	) 	 	 	(7	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from financing activities	  	 	157	 	 	 	(1,346	) 	 	 	124	 	 	 	237	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	  	 	12	 	 	 	(9	) 	 	 	12	 	 	 	5	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net change in cash and cash equivalents	  	 	412	 	 	 	662	 	 	 	822	 	 	 	75	 	
Cash and cash equivalents at beginning of period	  	 	2,369	 	 	 	1,723	 	 	 	1,959	 	 	 	2,310	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash and cash equivalents at end of period	  	$	2,781	 	 	$	2,385	 	 	$	2,781	 	 	$	2,385	 	

10

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

 	  	September 30,	 	 	December 31,	 	
 	  	2017	 	 	2016	 	
Current assets:	  				 				
Cash and cash equivalents	  	$	2,781	 	 	$	1,959	 	
Accounts receivable	  	 	1,462	 	 	 	1,356	 	
Assets held for sale	  	 	—  	 	 	 	193	 	
Other current assets	  	 	379	 	 	 	264	 	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	4,622	 	 	 	3,772	 	
	  	 	 	 	 	 	 	 	
Property and equipment, at cost:	  				 				
Oil and gas, based on full cost accounting:	  				 				
Subject to amortization	  	 	78,470	 	 	 	75,648	 	
Not subject to amortization	  	 	2,853	 	 	 	3,437	 	
	  	 	 	 	 	 	 	 	
Total oil and gas	  	 	81,323	 	 	 	79,085	 	
Midstream and other	  	 	11,097	 	 	 	10,455	 	
	  	 	 	 	 	 	 	 	
Total property and equipment, at cost	  	 	92,420	 	 	 	89,540	 	
Less accumulated depreciation, depletion and amortization	  	 	(75,338	) 	 	 	(73,350	) 	
	  	 	 	 	 	 	 	 	
Property and equipment, net	  	 	17,082	 	 	 	16,190	 	
	  	 	 	 	 	 	 	 	
Goodwill	  	 	3,964	 	 	 	3,964	 	
Other long-term assets	  	 	1,891	 	 	 	1,987	 	
	  	 	 	 	 	 	 	 	
Total assets	  	$	27,559	 	 	$	25,913	 	
	  	 	 	 	 	 	 	 	
Current liabilities:	  				 				
Accounts payable	  	$	797	 	 	$	642	 	
Revenues and royalties payable	  	 	1,012	 	 	 	908	 	
Short-term debt	  	 	20	 	 	 	—  	 	
Other current liabilities	  	 	1,003	 	 	 	1,066	 	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	2,832	 	 	 	2,616	 	
	  	 	 	 	 	 	 	 	
Long-term debt	  	 	10,383	 	 	 	10,154	 	
Asset retirement obligations	  	 	1,100	 	 	 	1,226	 	
Other long-term liabilities	  	 	645	 	 	 	894	 	
Deferred income taxes	  	 	665	 	 	 	648	 	
Equity:	  				 				
Common stock	  	 	53	 	 	 	52	 	
Additional paid-in capital	  	 	7,207	 	 	 	7,237	 	
Accumulated deficit	  	 	(428	) 	 	 	(1,646	) 	
Accumulated other comprehensive earnings	  	 	297	 	 	 	284	 	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity attributable to Devon	  	 	7,129	 	 	 	5,927	 	
Noncontrolling interests	  	 	4,805	 	 	 	4,448	 	
	  	 	 	 	 	 	 	 	
Total equity	  	 	11,934	 	 	 	10,375	 	
	  	 	 	 	 	 	 	 	
Total liabilities and equity	  	$	27,559	 	 	$	25,913	 	
	  	 	 	 	 	 	 	 	
Common shares outstanding	  	 	525	 	 	 	523	 	
 
11

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

 	  	Quarter Ended September 30, 2017	 	
 	  	Devon U.S. &
Canada	 	 	EnLink	 	 	Eliminations	 	 	Total	 	
Oil, gas and NGL sales	  	$	1,245	 	 	$	—  	 	 	$	—  	 	 	$	1,245	 	
Oil, gas and NGL derivatives	  	 	(144	) 	 	 	—  	 	 	 	—  	 	 	 	(144	) 	
Marketing and midstream revenues	  	 	832	 	 	 	1,397	 	 	 	(174	) 	 	 	2,055	 	
Asset dispositions and other	  	 	1	 	 	 	(1	) 	 	 	—  	 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues and other	  	 	1,934	 	 	 	1,396	 	 	 	(174	) 	 	 	3,156	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Lease operating expenses	  	 	391	 	 	 	—  	 	 	 	—  	 	 	 	391	 	
Marketing and midstream operating expenses	  	 	843	 	 	 	1,144	 	 	 	(174	) 	 	 	1,813	 	
General and administrative expenses	  	 	122	 	 	 	31	 	 	 	—  	 	 	 	153	 	
Production and property taxes	  	 	60	 	 	 	11	 	 	 	—  	 	 	 	71	 	
Depreciation, depletion and amortization	  	 	258	 	 	 	142	 	 	 	—  	 	 	 	400	 	
Asset impairments	  	 	—  	 	 	 	2	 	 	 	—  	 	 	 	2	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total operating expenses	  	 	1,674	 	 	 	1,330	 	 	 	(174	) 	 	 	2,830	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating income	  	 	260	 	 	 	66	 	 	 	—  	 	 	 	326	 	
Net financing costs	  	 	77	 	 	 	50	 	 	 	—  	 	 	 	127	 	
Other nonoperating items	  	 	(69	) 	 	 	(4	) 	 	 	—  	 	 	 	(73	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before income taxes	  	 	252	 	 	 	20	 	 	 	—  	 	 	 	272	 	
Income tax expense	  	 	23	 	 	 	2	 	 	 	—  	 	 	 	25	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings	  	 	229	 	 	 	18	 	 	 	—  	 	 	 	247	 	
Net earnings attributable to noncontrolling interests	  	 	—  	 	 	 	19	 	 	 	—  	 	 	 	19	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings (loss) attributable to Devon	  	$	229	 	 	$	(1	) 	 	$	—  	 	 	$	228	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
OTHER KEY STATISTICS
(in millions)

 	  	Quarter Ended September 30, 2017	 	
 	  	Devon U.S. &
Canada	 	 	EnLink	 	 	Eliminations	 	  	Total	 	
Cash flow statement related items:	  				 				 				  				
Operating cash flow	  	$	577	 	 	$	199	 	 	$	—  	 	  	$	776	 	
Divestitures of property and equipment	  	$	208	 	 	$	1	 	 	$	—  	 	  	$	209	 	
Capital expenditures	  	$	(545	) 	 	$	(190	) 	 	$	—  	 	  	$	(735	) 	
Debt activity, net	  	$	—  	 	 	$	(158	) 	 	$	—  	 	  	$	(158	) 	
EnLink distributions received (paid)	  	$	66	 	 	$	(150	) 	 	$	—  	 	  	$	(84	) 	
Issuance of subsidiary units	  	$	—  	 	 	$	414	 	 	$	—  	 	  	$	414	 	
Balance sheet statement items:	  				 				 				  				
Net debt (1)	  	$	4,223	 	 	$	3,399	 	 	$	—  	 	  	$	7,622	 	
 
(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 September 30, 2017	 	  	Nine Months Ended September 30, 2017	 	
Exploration and development capital	  	$	548	 	  	$	1,401	 	
Land and other acquisitions	  	 	16	 	  	 	46	 	
	  	 	 	 	  	 	 	 	
Exploration and production (E&P) capital	  	 	564	 	  	 	1,447	 	
Capitalized G&A and interest	  	 	75	 	  	 	224	 	
Other	  	 	24	 	  	 	64	 	
	  	 	 	 	  	 	 	 	
Devon capital expenditures (1)	  	$	663	 	  	$	1,735	 	

(1)	Excludes $170 million and $636 million attributable to EnLink for the third quarter and first nine months of 2017, respectively.	
 
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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 third-quarter 2017 earnings.

(in millions, except per share amounts)	  	Quarter Ended September 30, 2017	 	
 	  	Before-tax	 	  	After-tax	 	  	After
Noncontrolling
Interests	 	  	Per
Diluted
Share	 	
Earnings attributable to Devon (GAAP)	  	$	272	 	  	$	247	 	  	$	228	 	  	$	0.43	 	
Adjustments:	  				  				  				  				
Fair value changes in financial instruments and foreign currency	  	 	106	 	  	 	40	 	  	 	39	 	  	 	0.08	 	
Gains and losses on asset sales	  	 	1	 	  	 	1	 	  	 	—  	 	  	 	—  	 	
Asset impairments	  	 	2	 	  	 	1	 	  	 	1	 	  	 	—  	 	
Deferred tax asset valuation allowance	  	 	—  	 	  	 	(26	) 	  	 	(26	) 	  	 	(0.05	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Core earnings attributable to Devon (Non-GAAP)	  	$	381	 	  	$	263	 	  	$	242	 	  	$	0.46	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
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)	  	September 30, 2017	 	
 	  	Devon U.S. & Canada	 	  	EnLink	 	  	Devon Consolidated	 	
Total debt (GAAP)	  	$	6,862	 	  	$	3,541	 	  	$	10,403	 	
Less cash and cash equivalents	  	 	(2,639	) 	  	 	(142	) 	  	 	(2,781	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	
Net debt (Non-GAAP)	  	$	4,223	 	  	$	3,399	 	  	$	7,622	 	

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DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
 
PRODUCTION GUIDANCE

 	  	Quarter 4	 	
 	  	Low	 	  	High	 	
Oil and bitumen (MBbls/d)	  				  				
U.S. (1)	  	 	120	 	  	 	125	 	
Heavy Oil	  	 	135	 	  	 	140	 	
	  	 	 	 	  	 	 	 	
Total	  	 	255	 	  	 	265	 	
	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  	 	99	 	  	 	103	 	
	  	 	 	 	  	 	 	 	
Total (1)	  	 	99	 	  	 	103	 	
	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				
U.S. (1)	  	 	1,170	 	  	 	1,200	 	
Heavy Oil	  	 	14	 	  	 	16	 	
	  	 	 	 	  	 	 	 	
Total	  	 	1,184	 	  	 	1,216	 	
	  	 	 	 	  	 	 	 	
Oil equivalent (MBoe/d)	  				  				
U.S. (1)	  	 	414	 	  	 	428	 	
Heavy Oil	  	 	137	 	  	 	143	 	
	  	 	 	 	  	 	 	 	
Total	  	 	551	 	  	 	571	 	

(1)	Q4 U.S. production guidance is reduced by ~5,000 Boe per day (60 percent oil) associated with Lavaca County and other minor asset sales.	
PRICE REALIZATIONS GUIDANCE

 	  	Quarter 4	 	
 	  	Low	 	 	High	 	
Oil and bitumen - % of WTI	  				 				
U.S.	  	 	90	% 	 	 	100	% 	
Canada	  	 	53	% 	 	 	63	% 	
NGL - realized price	  	$	13	 	 	$	16	 	
Natural gas - % of Henry Hub	  	 	75	% 	 	 	85	% 	
 
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DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
 
OTHER GUIDANCE ITEMS

 	  	Quarter 4	 	
($ millions, except %)	  	Low	 	 	High	 	
Marketing & midstream operating profit	  	$	245	 	 	$	265	 	
Lease operating expenses	  	$	360	 	 	$	410	 	
General & administrative expenses	  	$	150	 	 	$	170	 	
Production and property taxes	  	$	65	 	 	$	75	 	
Depreciation, depletion and amortization	  	$	400	 	 	$	450	 	
Other operating items	  	$	10	 	 	$	20	 	
Net financing costs	  	$	120	 	 	$	130	 	
Current income tax rate	  	 	5.0	% 	 	 	15.0	% 	
Deferred income tax rate	  	 	20.0	% 	 	 	30.0	% 	
	  	 	 	 	 	 	 	 	
Total income tax rate	  	 	25.0	% 	 	 	45.0	% 	
	  	 	 	 	 	 	 	 	
Net earnings attributable to noncontrolling interests	  	$	30	 	 	$	40	 	
CAPITAL EXPENDITURES GUIDANCE

 	  	Quarter 4	 	
(in millions)	  	Low	 	  	High	 	
Exploration and production	  	$	650	 	  	$	700	 	
Capitalized G&A	  	 	55	 	  	 	65	 	
Capitalized interest	  	 	15	 	  	 	20	 	
Other	  	 	20	 	  	 	30	 	
	  	 	 	 	  	 	 	 	
Devon capital expenditures (1)	  	$	740	 	  	$	815	 	

(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)	 	
Q4 2017	  	 	83,178	 	  	$	53.83	 	  	 	79,200	 	  	$	45.51	 	  	$	57.41	 	
Q1-Q4 2018	  	 	35,532	 	  	$	51.65	 	  	 	45,860	 	  	$	45.88	 	  	$	55.88	 	
Q1-Q4 2019	  	 	2,844	 	  	$	50.87	 	  	 	4,079	 	  	$	44.95	 	  	$	54.95	 	
Oil Basis Swaps

Period	  	Index	  	Volume (Bbls/d)	 	  	Weighted Average Differential to
WTI ($/Bbl)	 	
Q4 2017	  	Midland Sweet	  	 	13,261	 	  	$	(0.41	) 	
Q4 2017	  	Western Canadian Select	  	 	92,696	 	  	$	(14.54	) 	
Q1-Q4 2018	  	Midland Sweet	  	 	23,000	 	  	$	(1.02	) 	
Q1-Q4 2018	  	Western Canadian Select	  	 	69,085	 	  	$	(14.79	) 	
Q1-Q4 2019	  	Midland Sweet	  	 	14,000	 	  	$	(0.66	) 	
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)	 	
Q4 2017	  	 	357,717	 	  	$	3.20	 	  	 	455,000	 	  	$	3.03	 	  	$	3.41	 	
Q1-Q4 2018	  	 	339,422	 	  	$	3.07	 	  	 	164,982	 	  	$	2.98	 	  	$	3.29	 	
Q1-Q4 2019	  	 	13,603	 	  	$	3.05	 	  	 	16,068	 	  	$	2.91	 	  	$	3.21	 	
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 October 27, 2017.
 
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