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, 2023

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 No.)	

333 W. SHERIDAN AVE.,
OKLAHOMA CITY, OKLAHOMA	 		 	73102-5015	
(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:
 
☐	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))	
Securities registered pursuant to Section 12(b) of the Act:

Title of each class	 	Trading
Symbol(s)	 	Name of each exchange
on which registered	
Common Stock, par value $0.10 per share	 	DVN	 	The New York Stock Exchange	
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.	
On February 14, 2023, Devon Energy Corporation (the “Company”) announced its financial and operational results for the year and quarter ended December 31, 2022. In connection with this announcement, the Company provided an earnings release and certain supplemental financial information (including guidance and hedging information). Copies of these documents are furnished as Exhibits 99.1 and 99.2, respectively, to this report and, along with certain other materials, will be available on the Company’s website at www.devonenergy.com.
The information contained in this report and the exhibits hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
 
Item 9.01	Financial Statements and Exhibits.	
(d)    Exhibits

Exhibit
No.	  		Description of Exhibits	
			
99.1	  	Earnings release, dated February 14, 2023.		
			
99.2	  	Supplemental financial information (including guidance and hedging information).		
			
 104	  	Cover Page Interactive Data File (embedded within the Inline XBRL document).		

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 hereunto duly authorized.

DEVON ENERGY CORPORATION	
		
By:	 	/s/ Jeffrey L. Ritenour	
	 	Jeffrey L. Ritenour	
	 	Executive Vice President and Chief Financial Officer	
Date: February 14, 2023

Exhibit 99.1

	 	Devon Energy Corporation
333 West Sheridan Avenue
Oklahoma City, OK 73102-5015	
Devon Energy Reports Fourth-Quarter and Full-Year 2022 Results; Declares Quarterly Dividend and Raises Fixed Dividend by 11 Percent in 2023
OKLAHOMA CITY – Feb. 14, 2023 – Devon Energy Corp. (NYSE: DVN) today reported financial and operational results for the fourth-quarter and full year 2022. Supplemental financial tables and forward-looking guidance are available on the company’s website at www.devonenergy.com.
KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS
 
 	•	 	Operating cash flow increased 74 percent in 2022 and free cash flow reached highest level in Devon history	
 
 	•	 	Fixed-plus-variable dividend payout more than doubled in 2022 to $5.17 per share	
 
 	•	 	Board approved an 11 percent increase to the fixed quarterly dividend in 2023	
 
 	•	 	Share-repurchase program on track to decrease share count by 5 percent	
 
 	•	 	Oil production reached all-time high of 316,000 barrels per day in the fourth quarter	
 
 	•	 	Proved reserves increased 12 percent to 1.8 billion Boe at year-end 2022	
CEO PERSPECTIVE
“2022 was another year of outstanding accomplishment for Devon that resulted in record-setting operating results and the best financial performance in our company’s prestigious 52-year history,” said Rick Muncrief, president and CEO.
“With our powerful suite of assets and financially driven strategy, our oil production reached a new all-time high, our streamlined cost structure captured the full benefit of rising commodity prices, and our disciplined reinvestment rates allowed us to generate a record-setting amount of free cash flow during the year.
“This free cash flow generation allowed us to reward shareholders by more than doubling our dividend payout and we expanded our share-repurchase program twice during the year to further compound per-share growth. We also deployed a portion of our excess cash towards strengthening our asset portfolio by closing on two highly accretive bolt-on acquisitions.
“As I look to 2023, there will be no change to our disciplined approach to the business,” Muncrief commented. “We have designed a capital program to efficiently sustain production, deliver high returns on capital employed and generate significant free cash flow that can once again be harvested for shareholders.”
FINANCIAL RESULTS
Devon reported net earnings of $1.2 billion, or $1.83 per diluted share, in the fourth quarter of 2022. Adjusting for items analysts typically exclude from estimates, the company’s core earnings were $1.1 billion, or $1.66 per diluted share.
Operating cash flow totaled $1.9 billion in the fourth quarter, an 18 percent increase versus the year-ago period. This level of cash flow funded all capital requirements and resulted in $1.1 billion of free cash flow for the quarter. For the full-year 2022, operating cash flow totaled $8.5 billion, a 74 percent increase versus 2021. Devon’s free cash flow reached $6.0 billion in the year, representing the highest amount in the company’s 52-year history.
The company’s investment-grade financial position continued to strengthen in the fourth quarter with cash balances increasing by $144 million to a total of $1.5 billion. Devon exited the quarter with an outstanding debt balance of $6.4 billion and a net debt-to-EBITDAX ratio of 0.5 times.
 
1

RETURN OF CAPITAL
Based on the fourth-quarter financial performance, Devon declared a fixed-plus-variable dividend of $0.89 per share. The dividend is payable on March 31, 2023, to shareholders of record at the close of business on March 15, 2023. For the full-year 2022, the company’s dividend payout more than doubled compared to 2021 to a record high of $5.17 per share.
As part of the fourth-quarter dividend announcement, the board approved an increase in the fixed dividend of 11 percent, or $0.02 per share. After the fixed dividend is funded, up to 50 percent of the excess free cash flow each quarter will be distributed to shareholders through the variable dividend.
Devon also returned capital to shareholders through the ongoing execution of its $2.0 billion share-repurchase authorization. To date, the company has repurchased 26 million shares since the commencement of the program, at a total cost of $1.3 billion. With this repurchase program, Devon is on track to decrease its outstanding share count by 5 percent.
OPERATING RESULTS
Production averaged 636,000 oil-equivalent barrels (Boe) per day in the fourth quarter, with oil volumes reaching a record high of 316,000 barrels per day. The company’s production in the quarter was reduced by 2 percent due to the impact of severe winter weather across its portfolio.
Devon’s upstream program for the fourth quarter averaged 25 operated drilling rigs and 114 gross operated wells were placed online. Total upstream capital spending was $874 million in the fourth quarter. Midstream, environmental, and other capital totaled $61 million in the quarter.
Production costs declined 6 percent compared to the previous quarter averaging $12.22 per Boe. The improved cost structure was driven by lower production taxes, resulting in field-level cash margins of $41.44 per Boe in the fourth quarter.
The company’s general and administrative expenses for the full-year 2022 increased 1 percent year over year. The increase was driven by higher personnel costs incurred in the fourth quarter.
ASSET-LEVEL HIGHLIGHTS
Delaware Basin: Production averaged 407,000 Boe per day (50 percent oil) in the quarter, with volumes growing 11 percent in 2022 compared to the prior year. Devon exited the year operating 16 rigs and 3 completion crews, resulting in 55 gross wells placed online in the fourth quarter across the company’s 400,000 net acres in the basin.
A top highlight was the co-development of multiple intervals within the Upper Wolfcamp at the company’s Todd area. The 14-well project, targeting three intervals in the Upper Wolfcamp flow unit, achieved initial production rates as high as 4,200 Boe per day. These highly commercial results further validate Devon’s stacked-pay resource potential in this portion of the field.
In 2023, the Delaware Basin will be the top funded asset in the company’s portfolio, representing 60 percent of total companywide capital spending. Of the 200-plus new wells planned for the upcoming year, roughly two-thirds of the activity will be directed toward development opportunities in New Mexico, with the remaining investment allocated to high-return projects across the company’s acreage in Texas.
First-quarter production in the Delaware will be impacted by infrastructure downtime resulting from an outage at a compressor station in the Stateline area along with minor third-party midstream downtime across the basin. The company estimates these temporary outages will curtail first-quarter volumes by approximately 10,000 Boe per day and expects to resume normal operations by the end of the first quarter.
Eagle Ford: Production averaged 68,000 Boe per day (62 percent oil), a 75 percent increase compared to the previous quarter. This volume growth was driven by integration of the Validus bolt-on acquisition and the commencement of 28 gross wells to production. In 2023, Devon plans to run 3 rigs and expects to bring online nearly 90 wells across its 82,000 net acre position.
 
2

Anadarko Basin: Production averaged 77,000 Boe per day (51 percent gas). In the fourth quarter, Devon placed 23 new wells online supported by a $100 million drilling carry with Dow. In 2023, the company expects to operate a 4-rig program and bring online more than 40 wells across its 300,000 net acre position in the basin.
Williston Basin: Production averaged 57,000 Boe per day (65 percent oil). Fourth-quarter production was limited by severe winter weather conditions that temporarily resulted in well shut-ins, facility downtime and delays in completion activity. Devon has restored the affected production and plans to bring online approximately 40 gross wells in 2023 across its 123,000 net acres.
Powder River Basin: Production averaged 22,000 Boe per day (71 percent oil), a 15 percent year-over-year increase in volumes. This growth was driven by the company’s Niobrara-focused drilling program that resulted in 16 wells placed online during the year. For 2023, Devon will continue to appraise this emerging oil resource, with plans to drill approximately 20 new wells across its 300,000 net acre position.
PROVED RESERVES
Devon’s estimated proved reserves increased 12 percent to 1.8 billion Boe at year-end 2022, of which 71 percent was oil and natural gas liquids. Proved undeveloped reserves accounted for 22 percent of the total.
Extensions and discoveries from the company’s drilling program added 278 million Boe of reserves in 2022, equating to a replacement rate of 125 percent of production. The capital costs incurred to deliver these extensions and discoveries totaled $2.6 billion, resulting in a finding and development cost of $9.37 per Boe. Acquisitions also contributed 153 million Boe of proved reserves at year-end 2022, at a total cost of $2.6 billion.
2023 OUTLOOK
For the full-year 2023, Devon expects to sustain production in the range of 643,000 to 663,000 Boe per day. Total capital investment for the year is expected to range from $3.6 billion to $3.8 billion. These capital requirements in 2023 are estimated to be self-funded at pricing levels as low as a $40 WTI oil price.
The company’s capital program in 2023 is weighted towards the first half of the year due to completion timing in the Delaware Basin and is expected to drive production higher throughout 2023.
First-quarter production is expected to approximate 635,000 Boe per day. Volumes in the quarter are temporarily impacted by infrastructure outages in the Delaware Basin, timing of wells placed online and ethane rejection.
Additional details of Devon’s forward-looking guidance for the first quarter and full-year 2023 are available on the company’s website at www.devonenergy.com.
SUSTAINABILITY UPDATE
Devon recently released its 2022 sustainability report highlighting efforts to deliver industry-leading results while being a good neighbor, valued and effective community partner, responsible environmental steward, and supportive employer. This report also details the progress Devon has made toward achieving key environmental targets such as reducing Scope 1 & 2 GHG emissions intensity and includes enhanced disclosures on air emissions and water management practices. For more details, please refer to the sustainability report at www.devonenergy.com/sustainability.
CONFERENCE CALL WEBCAST AND SUPPLEMENTAL EARNINGS MATERIALS
Also provided with today’s release is the company’s detailed earnings presentation that is available on the company’s website at www.devonenergy.com. The company’s fourth-quarter conference call will be held at 10:00 a.m. Central (11:00 a.m. Eastern) on Wednesday, February 15, 2023, and will serve primarily as a forum for analyst and investor questions and answers.
 
3

ABOUT DEVON ENERGY
Devon Energy is a leading oil and gas producer in the U.S. with a premier multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devon’s disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations. For more information, please visit www.devonenergy.com.

Investor Contacts	  	Media Contact	
Scott Coody, 405-552-4735	  	Lisa Adams, 405-228-1732	
Chris Carr, 405-228-2496	  		
NON-GAAP DISCLOSURES
This press release includes non-GAAP (generally accepted accounting principles) financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of results as reported under GAAP. Reconciliations of these non-GAAP measures and other disclosures are provided within the supplemental financial tables that are available on the company’s website and in the related Form 10-K filed with the Securities and Exchange Commission (the “SEC”).
FORWARD LOOKING STATEMENTS
This press release includes “forward-looking statements” within the meaning of the federal securities laws. Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words and phrases “expects,” “believes,” “will,” “would,” “could,” “continue,” “may,” “aims,” “likely to be,” “intends,” “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 Devon 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 our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but 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 our operations; risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties; midstream capacity constraints and potential interruptions in production, including from limits to the build out of midstream infrastructure; competition for assets, materials, people and capital; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands, environmental matters and seismicity; risks related to regulatory, social and market efforts to address climate change; governmental interventions in energy markets; risks relating to the COVID-19 pandemic or other future pandemics; counterparty credit risks; risks relating to our indebtedness; cyberattack risks; the extent to which insurance covers any losses we may experience; risks related to stockholder activism; our ability to successfully complete mergers, acquisitions and divestitures; our ability to pay dividends and make share repurchases; and any of the other risks and uncertainties discussed in Devon’s 2022 Annual Report on Form 10-K (the “2022 Form 10-K”) or other filings with the SEC.
The forward-looking statements included in this press release speak only as of the date of this press release, represent management’s current reasonable expectations as of the date of this press release and are subject to the risks and uncertainties identified above as well as those described elsewhere in the 2022 Form 10-K and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in the 2022 Form 10-K and in other documents we file from time to time with the SEC. All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We do not undertake, and expressly disclaim, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.
 
4

Exhibit 99.2
Devon Energy Fourth-Quarter 2022
Supplemental Tables

TABLE OF CONTENTS:	  	PAGE:	 	
		
Consolidated Statements of Earnings	  	 	2	 	
		
Supplemental Information for Consolidated Statements of Earnings	  	 	3	 	
		
Consolidated Statements of Cash Flows	  	 	4	 	
		
Consolidated Balance Sheets	  	 	5	 	
		
Production	  	 	6	 	
		
Capital Expenditures, Costs Incurred and Reserves Reconciliation	  	 	7	 	
		
Supplemental Information for Capital Expenditures	  	 	8	 	
		
Realized Pricing	  	 	9	 	
		
Asset Margins	  	 	10	 	
		
Core Earnings	  	 	11	 	
		
Return on Capital Employed and EBITDAX	  	 	12	 	
		
Net Debt, Net Debt-to-EBITDAX, Field-Level Cash Margin and Free Cash Flow	  	 	13	 	
		
Reinvestment Rate and Variable Dividend	  	 	14	 	
 
1

CONSOLIDATED STATEMENTS OF EARNINGS

																					
(in millions, except per share amounts)	  	2022	 	 	2021	 	
	  	Quarter 4	 	 	Quarter 3	 	 	Quarter 2	 	 	Quarter 1	 	 	Quarter 4	 	
Oil, gas and NGL sales	  	$	3,139	 	 	$	3,668	 	 	$	4,100	 	 	$	3,175	 	 	$	2,985	 	
Oil, gas and NGL derivatives (1)	  	 	(53	) 	 	 	248	 	 	 	(170	) 	 	 	(683	) 	 	 	22	 	
Marketing and midstream revenues	  	 	1,213	 	 	 	1,516	 	 	 	1,696	 	 	 	1,320	 	 	 	1,266	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	  	 	4,299	 	 	 	5,432	 	 	 	5,626	 	 	 	3,812	 	 	 	4,273	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Production expenses (2)	  	 	715	 	 	 	735	 	 	 	729	 	 	 	618	 	 	 	605	 	
Exploration expenses	  	 	13	 	 	 	4	 	 	 	10	 	 	 	2	 	 	 	5	 	
Marketing and midstream expenses	  	 	1,231	 	 	 	1,525	 	 	 	1,700	 	 	 	1,324	 	 	 	1,266	 	
Depreciation, depletion and amortization	  	 	625	 	 	 	581	 	 	 	528	 	 	 	489	 	 	 	577	 	
Asset dispositions	  	 	(29	) 	 	 	—  	 	 	 	(14	) 	 	 	(1	) 	 	 	(49	) 	
General and administrative expenses	  	 	122	 	 	 	95	 	 	 	84	 	 	 	94	 	 	 	95	 	
Financing costs, net (3)	  	 	73	 	 	 	67	 	 	 	84	 	 	 	85	 	 	 	86	 	
Restructuring and transaction costs	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	28	 	
Other, net	  	 	(4	) 	 	 	(40	) 	 	 	10	 	 	 	(61	) 	 	 	(2	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	  	 	2,746	 	 	 	2,967	 	 	 	3,131	 	 	 	2,550	 	 	 	2,611	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings before income taxes	  	 	1,553	 	 	 	2,465	 	 	 	2,495	 	 	 	1,262	 	 	 	1,662	 	
Income tax expense (4)	  	 	349	 	 	 	565	 	 	 	557	 	 	 	267	 	 	 	150	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings	  	 	1,204	 	 	 	1,900	 	 	 	1,938	 	 	 	995	 	 	 	1,512	 	
Net earnings attributable to noncontrolling interests	  	 	3	 	 	 	7	 	 	 	6	 	 	 	6	 	 	 	6	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings attributable to Devon	  	$	1,201	 	 	$	1,893	 	 	$	1,932	 	 	$	989	 	 	$	1,506	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net earnings per share:	  				 				 				 				 				
Basic net earnings per share	  	$	1.84	 	 	$	2.89	 	 	$	2.94	 	 	$	1.48	 	 	$	2.24	 	
Diluted net earnings per share	  	$	1.83	 	 	$	2.88	 	 	$	2.93	 	 	$	1.48	 	 	$	2.23	 	
Weighted average common shares outstanding:	  				 				 				 				 				
Basic	  	 	653	 	 	 	655	 	 	 	658	 	 	 	663	 	 	 	671	 	
Diluted	  	 	655	 	 	 	656	 	 	 	660	 	 	 	665	 	 	 	673	 	
 
2

SUPPLEMENTAL INFORMATION FOR CONSOLIDATED STATEMENTS OF EARNINGS
 
(1) OIL, GAS AND NGL DERIVATIVES

(in millions)	  	2022	 	 	2021	 	
	  	Quarter 4	 	 	Quarter 3	 	 	Quarter 2	 	 	Quarter 1	 	 	Quarter 4	 	
Derivative cash settlements	  	$	(177	) 	 	$	(363	) 	 	$	(472	) 	 	$	(344	) 	 	$	(493	) 	
Derivative valuation changes	  	 	124	 	 	 	611	 	 	 	302	 	 	 	(339	) 	 	 	515	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Oil, gas and NGL derivatives	  	$	(53	) 	 	$	248	 	 	$	(170	) 	 	$	(683	) 	 	$	22	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(2) PRODUCTION EXPENSES

(in millions)	  	2022	 	  	2021	 	
	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Lease operating expense	  	$	308	 	  	$	284	 	  	$	255	 	  	$	224	 	  	$	235	 	
Gathering, processing & transportation	  	 	178	 	  	 	177	 	  	 	177	 	  	 	161	 	  	 	173	 	
Production taxes	  	 	210	 	  	 	252	 	  	 	278	 	  	 	214	 	  	 	197	 	
Property taxes	  	 	19	 	  	 	22	 	  	 	19	 	  	 	19	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Production expenses	  	$	715	 	  	$	735	 	  	$	729	 	  	$	618	 	  	$	605	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
(3) FINANCING COSTS, NET

(in millions)	  	2022	 	 	2021	 	
	  	Quarter 4	 	 	Quarter 3	 	 	Quarter 2	 	 	Quarter 1	 	 	Quarter 4	 	
Interest based on outstanding debt	  	$	93	 	 	$	92	 	 	$	93	 	 	$	92	 	 	$	92	 	
Interest income	  	 	(16	) 	 	 	(19	) 	 	 	(2	) 	 	 	(1	) 	 	 	—  	 	
Other	  	 	(4	) 	 	 	(6	) 	 	 	(7	) 	 	 	(6	) 	 	 	(6	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Financing costs, net	  	$	73	 	 	$	67	 	 	$	84	 	 	$	85	 	 	$	86	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(4) INCOME TAX EXPENSE

(in millions)	  	2022	 	  	2021	 	
	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Current expense	  	$	84	 	  	$	120	 	  	$	252	 	  	$	103	 	  	$	1	 	
Deferred expense	  	 	265	 	  	 	445	 	  	 	305	 	  	 	164	 	  	 	149	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Income tax expense	  	$	349	 	  	$	565	 	  	$	557	 	  	$	267	 	  	$	150	 	

3

CONSOLIDATED STATEMENTS OF CASH FLOWS

																					
 	  	2022	 	 	2021	 	
(in millions)	  	Quarter 4	 	 	Quarter 3	 	 	Quarter 2	 	 	Quarter 1	 	 	Quarter 4	 	
Cash flows from operating activities:	  				 				 				 				 				
Net earnings	  	$	1,204	 	 	$	1,900	 	 	$	1,938	 	 	$	995	 	 	$	1,512	 	
Adjustments to reconcile net earnings to net cash from operating activities:	  				 				 				 				 				
Depreciation, depletion and amortization	  	 	625	 	 	 	581	 	 	 	528	 	 	 	489	 	 	 	577	 	
Leasehold impairments	  	 	2	 	 	 	2	 	 	 	7	 	 	 	1	 	 	 	1	 	
Amortization of liabilities	  	 	(8	) 	 	 	(8	) 	 	 	(9	) 	 	 	(6	) 	 	 	(6	) 	
Total (gains) losses on commodity derivatives	  	 	53	 	 	 	(248	) 	 	 	170	 	 	 	683	 	 	 	(22	) 	
Cash settlements on commodity derivatives	  	 	(177	) 	 	 	(363	) 	 	 	(472	) 	 	 	(344	) 	 	 	(493	) 	
Gains on asset dispositions	  	 	(29	) 	 	 	—  	 	 	 	(14	) 	 	 	(1	) 	 	 	(49	) 	
Deferred income tax expense	  	 	265	 	 	 	445	 	 	 	305	 	 	 	164	 	 	 	149	 	
Share-based compensation	  	 	23	 	 	 	22	 	 	 	23	 	 	 	20	 	 	 	19	 	
Other	  	 	(1	) 	 	 	8	 	 	 	4	 	 	 	(21	) 	 	 	2	 	
Changes in assets and liabilities, net	  	 	(46	) 	 	 	(235	) 	 	 	198	 	 	 	(143	) 	 	 	(74	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from operating activities	  	 	1,911	 	 	 	2,104	 	 	 	2,678	 	 	 	1,837	 	 	 	1,616	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from investing activities:	  				 				 				 				 				
Capital expenditures	  	 	(804	) 	 	 	(628	) 	 	 	(573	) 	 	 	(537	) 	 	 	(512	) 	
Acquisitions of property and equipment	  	 	(17	) 	 	 	(2,465	) 	 	 	(100	) 	 	 	(1	) 	 	 	(3	) 	
Divestitures of property and equipment	  	 	—  	 	 	 	4	 	 	 	9	 	 	 	26	 	 	 	14	 	
Distributions from investments	  	 	9	 	 	 	7	 	 	 	15	 	 	 	8	 	 	 	8	 	
Contributions to investments	  	 	(17	) 	 	 	(16	) 	 	 	(21	) 	 	 	(22	) 	 	 	(25	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from investing activities	  	 	(829	) 	 	 	(3,098	) 	 	 	(670	) 	 	 	(526	) 	 	 	(518	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash flows from financing activities:	  				 				 				 				 				
Repurchases of common stock	  	 	(57	) 	 	 	(126	) 	 	 	(324	) 	 	 	(211	) 	 	 	(589	) 	
Dividends paid on common stock	  	 	(875	) 	 	 	(1,007	) 	 	 	(830	) 	 	 	(667	) 	 	 	(554	) 	
Distributions to noncontrolling interests	  	 	(8	) 	 	 	(9	) 	 	 	(5	) 	 	 	(8	) 	 	 	(6	) 	
Shares exchanged for tax withholdings and other	  	 	—  	 	 	 	(1	) 	 	 	(12	) 	 	 	(73	) 	 	 	—  	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net cash from financing activities	  	 	(940	) 	 	 	(1,143	) 	 	 	(1,171	) 	 	 	(959	) 	 	 	(1,149	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Effect of exchange rate changes on cash	  	 	2	 	 	 	(10	) 	 	 	(5	) 	 	 	2	 	 	 	1	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net change in cash, cash equivalents and restricted cash	  	 	144	 	 	 	(2,147	) 	 	 	832	 	 	 	354	 	 	 	(50	) 	
Cash, cash equivalents and restricted cash at beginning of period	  	 	1,310	 	 	 	3,457	 	 	 	2,625	 	 	 	2,271	 	 	 	2,321	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Cash, cash equivalents and restricted cash at end of period	  	$	1,454	 	 	$	1,310	 	 	$	3,457	 	 	$	2,625	 	 	$	2,271	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Reconciliation of cash, cash equivalents and restricted cash:	  				 				 				 				 				
Cash and cash equivalents	  	$	1,314	 	 	$	1,166	 	 	$	3,300	 	 	$	2,459	 	 	$	2,099	 	
Restricted cash	  	 	140	 	 	 	144	 	 	 	157	 	 	 	166	 	 	 	172	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total cash, cash equivalents and restricted cash	  	$	1,454	 	 	$	1,310	 	 	$	3,457	 	 	$	2,625	 	 	$	2,271	 	

4

CONSOLIDATED BALANCE SHEETS

									
(in millions)	  	December 31,
2022	 	 	December 31,
2021	 	
Current assets:	  				 				
Cash, cash equivalents and restricted cash	  	$	1,454	 	 	$	2,271	 	
Accounts receivable	  	 	1,767	 	 	 	1,543	 	
Inventory	  	 	201	 	 	 	114	 	
Other current assets	  	 	469	 	 	 	321	 	
	  	 	 	 	 	 	 	 	
Total current assets	  	 	3,891	 	 	 	4,249	 	
Oil and gas property and equipment, based on successful efforts accounting, net	  	 	16,567	 	 	 	13,536	 	
Other property and equipment, net	  	 	1,539	 	 	 	1,472	 	
	  	 	 	 	 	 	 	 	
Total property and equipment, net	  	 	18,106	 	 	 	15,008	 	
Goodwill	  	 	753	 	 	 	753	 	
Right-of-use assets	  	 	224	 	 	 	235	 	
Investments	  	 	440	 	 	 	402	 	
Other long-term assets	  	 	307	 	 	 	378	 	
	  	 	 	 	 	 	 	 	
Total assets	  	$	23,721	 	 	$	21,025	 	
	  	 	 	 	 	 	 	 	
Current liabilities:	  				 				
Accounts payable	  	$	859	 	 	$	500	 	
Revenues and royalties payable	  	 	1,506	 	 	 	1,456	 	
Short-term debt	  	 	251	 	 	 	—  	 	
Other current liabilities	  	 	489	 	 	 	1,131	 	
	  	 	 	 	 	 	 	 	
Total current liabilities	  	 	3,105	 	 	 	3,087	 	
Long-term debt	  	 	6,189	 	 	 	6,482	 	
Lease liabilities	  	 	257	 	 	 	252	 	
Asset retirement obligations	  	 	511	 	 	 	468	 	
Other long-term liabilities	  	 	900	 	 	 	1,050	 	
Deferred income taxes	  	 	1,463	 	 	 	287	 	
Stockholders’ equity:	  				 				
Common stock	  	 	65	 	 	 	66	 	
Additional paid-in capital	  	 	6,921	 	 	 	7,636	 	
Retained earnings	  	 	4,297	 	 	 	1,692	 	
Accumulated other comprehensive loss	  	 	(116	) 	 	 	(132	) 	
	  	 	 	 	 	 	 	 	
Total stockholders’ equity attributable to Devon	  	 	11,167	 	 	 	9,262	 	
Noncontrolling interests	  	 	129	 	 	 	137	 	
	  	 	 	 	 	 	 	 	
Total equity	  	 	11,296	 	 	 	9,399	 	
	  	 	 	 	 	 	 	 	
Total liabilities and equity	  	$	23,721	 	 	$	21,025	 	
	  	 	 	 	 	 	 	 	
Common shares outstanding	  	 	653	 	 	 	663	 	
 
5

PRODUCTION

																					
 	  	2022	 	  	2021	 	
 	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Oil (MBbls/d)	  				  				  				  				  				
Delaware Basin	  	 	201	 	  	 	210	 	  	 	222	 	  	 	209	 	  	 	213	 	
Anadarko Basin	  	 	15	 	  	 	13	 	  	 	14	 	  	 	14	 	  	 	14	 	
Williston Basin	  	 	37	 	  	 	35	 	  	 	27	 	  	 	32	 	  	 	36	 	
Eagle Ford	  	 	42	 	  	 	19	 	  	 	19	 	  	 	17	 	  	 	19	 	
Powder River Basin	  	 	16	 	  	 	13	 	  	 	14	 	  	 	12	 	  	 	14	 	
Other	  	 	5	 	  	 	4	 	  	 	4	 	  	 	4	 	  	 	4	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	316	 	  	 	294	 	  	 	300	 	  	 	288	 	  	 	300	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Natural gas liquids (MBbls/d)	  				  				  				  				  				
Delaware Basin	  	 	101	 	  	 	108	 	  	 	111	 	  	 	92	 	  	 	107	 	
Anadarko Basin	  	 	23	 	  	 	27	 	  	 	25	 	  	 	25	 	  	 	27	 	
Williston Basin	  	 	9	 	  	 	8	 	  	 	9	 	  	 	8	 	  	 	9	 	
Eagle Ford	  	 	12	 	  	 	9	 	  	 	9	 	  	 	9	 	  	 	9	 	
Powder River Basin	  	 	3	 	  	 	2	 	  	 	2	 	  	 	2	 	  	 	2	 	
Other	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	148	 	  	 	154	 	  	 	156	 	  	 	136	 	  	 	154	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Gas (MMcf/d)	  				  				  				  				  				
Delaware Basin	  	 	626	 	  	 	623	 	  	 	618	 	  	 	561	 	  	 	577	 	
Anadarko Basin	  	 	238	 	  	 	224	 	  	 	212	 	  	 	210	 	  	 	222	 	
Williston Basin	  	 	64	 	  	 	71	 	  	 	52	 	  	 	54	 	  	 	64	 	
Eagle Ford	  	 	84	 	  	 	63	 	  	 	60	 	  	 	61	 	  	 	60	 	
Powder River Basin	  	 	21	 	  	 	18	 	  	 	18	 	  	 	19	 	  	 	19	 	
Other	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	  	 	1	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	1,034	 	  	 	1,000	 	  	 	961	 	  	 	906	 	  	 	943	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total oil equivalent (MBoe/d)	  				  				  				  				  				
Delaware Basin	  	 	407	 	  	 	421	 	  	 	436	 	  	 	394	 	  	 	416	 	
Anadarko Basin	  	 	77	 	  	 	77	 	  	 	74	 	  	 	75	 	  	 	78	 	
Williston Basin	  	 	57	 	  	 	55	 	  	 	45	 	  	 	48	 	  	 	55	 	
Eagle Ford	  	 	68	 	  	 	39	 	  	 	38	 	  	 	36	 	  	 	38	 	
Powder River Basin	  	 	22	 	  	 	18	 	  	 	19	 	  	 	18	 	  	 	19	 	
Other	  	 	5	 	  	 	4	 	  	 	4	 	  	 	4	 	  	 	5	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	636	 	  	 	614	 	  	 	616	 	  	 	575	 	  	 	611	 	

6

CAPITAL EXPENDITURES

																					
 	  	2022	 	  	2021	 	
(in millions)	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Delaware Basin	  	$	518	 	  	$	444	 	  	$	374	 	  	$	413	 	  	$	392	 	
Anadarko Basin	  	 	59	 	  	 	55	 	  	 	42	 	  	 	16	 	  	 	19	 	
Williston Basin	  	 	90	 	  	 	57	 	  	 	21	 	  	 	17	 	  	 	25	 	
Eagle Ford	  	 	160	 	  	 	38	 	  	 	37	 	  	 	27	 	  	 	21	 	
Powder River Basin	  	 	46	 	  	 	44	 	  	 	37	 	  	 	27	 	  	 	27	 	
Other	  	 	1	 	  	 	1	 	  	 	2	 	  	 	1	 	  	 	2	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total upstream capital	  	$	874	 	  	$	639	 	  	$	513	 	  	$	501	 	  	$	486	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Environmental (1)	  	 	20	 	  	 	27	 	  	 	22	 	  	 	16	 	  	 	—  	 	
Midstream and Corporate	  	 	28	 	  	 	22	 	  	 	32	 	  	 	46	 	  	 	31	 	
Acquisitions (2)	  	 	13	 	  	 	2,534	 	  	 	13	 	  	 	1	 	  	 	4	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total capital	  	$	935	 	  	$	3,222	 	  	$	580	 	  	$	564	 	  	$	521	 	

(1)	Devon began tracking environmental capital separately in 2022.	
(2)	Q3 2022 includes $2,532 million related to Validus and RimRock acquisitions.	
COSTS INCURRED AND RESERVES RECONCILIATION
 
COSTS INCURRED

 	  	Year Ended December 31,	 	
(in millions)	  	2022	 	  	2021	 	
Property acquisition costs:	  				  				
Proved properties	  	$	1,760	 	  	$	7,017	 	
Unproved properties	  	 	803	 	  	 	2,381	 	
Exploration costs	  	 	472	 	  	 	212	 	
Development costs	  	 	2,132	 	  	 	1,643	 	
	  	 	 	 	  	 	 	 	
Costs incurred	  	$	5,167	 	  	$	11,253	 	
	  	 	 	 	  	 	 	 	
RESERVES RECONCILIATION

 	  	Oil
(MMBbls)	 	  	Gas
(Bcf)	 	  	NGL
(MMBbls)	 	  	Total
(MMBoe)	 	
As of December 31, 2021:	  				  				  				  				
Proved developed	  	 	544	 	  	 	2,361	 	  	 	348	 	  	 	1,285	 	
Proved undeveloped	  	 	165	 	  	 	517	 	  	 	89	 	  	 	340	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	709	 	  	 	2,878	 	  	 	437	 	  	 	1,625	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Revisions due to prices	  	 	15	 	  	 	61	 	  	 	8	 	  	 	34	 	
Revisions other than price	  	 	(55	) 	  	 	13	 	  	 	3	 	  	 	(49	) 	
Extensions and discoveries	  	 	127	 	  	 	449	 	  	 	76	 	  	 	278	 	
Purchase of reserves	  	 	106	 	  	 	137	 	  	 	24	 	  	 	153	 	
Production	  	 	(109	) 	  	 	(356	) 	  	 	(54	) 	  	 	(223	) 	
Sale of reserves	  	 	—  	 	  	 	(7	) 	  	 	(1	) 	  	 	(3	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
As of December 31, 2022:	  				  				  				  				
Proved developed	  	 	596	 	  	 	2,595	 	  	 	391	 	  	 	1,419	 	
Proved undeveloped	  	 	197	 	  	 	580	 	  	 	102	 	  	 	396	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total Proved	  	 	793	 	  	 	3,175	 	  	 	493	 	  	 	1,815	 	

7

SUPPLEMENTAL INFORMATION FOR CAPITAL EXPENDITURES
 
GROSS OPERATED SPUDS
																					
 	  	2022	 	  	2021	 	
 	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Delaware Basin	  	 	60	 	  	 	50	 	  	 	46	 	  	 	59	 	  	 	54	 	
Anadarko Basin	  	 	8	 	  	 	13	 	  	 	14	 	  	 	13	 	  	 	6	 	
Williston Basin	  	 	9	 	  	 	10	 	  	 	5	 	  	 	—  	 	  	 	9	 	
Eagle Ford	  	 	31	 	  	 	7	 	  	 	4	 	  	 	11	 	  	 	9	 	
Powder River Basin	  	 	4	 	  	 	6	 	  	 	1	 	  	 	—  	 	  	 	4	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	112	 	  	 	86	 	  	 	70	 	  	 	83	 	  	 	82	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
GROSS OPERATED WELLS TIED-IN
																					
 	  	2022	 	  	2021	 	
 	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Delaware Basin	  	 	55	 	  	 	59	 	  	 	52	 	  	 	52	 	  	 	65	 	
Anadarko Basin	  	 	23	 	  	 	13	 	  	 	1	 	  	 	—  	 	  	 	12	 	
Williston Basin	  	 	5	 	  	 	14	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
Eagle Ford	  	 	28	 	  	 	8	 	  	 	14	 	  	 	8	 	  	 	7	 	
Powder River Basin	  	 	3	 	  	 	9	 	  	 	—  	 	  	 	4	 	  	 	2	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	114	 	  	 	103	 	  	 	67	 	  	 	64	 	  	 	86	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
AVERAGE LATERAL LENGTH
(based on wells tied-in)

 	  	2022	 	  	2021	 	
 	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Delaware Basin	  	 	9,600’	 	  	 	10,900’	 	  	 	9,100’	 	  	 	8,900’	 	  	 	10,100’	 	
Anadarko Basin	  	 	8,700’	 	  	 	9,500’	 	  	 	10,100’	 	  	 	—  	 	  	 	11,700’	 	
Williston Basin	  	 	9,900’	 	  	 	10,500’	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	
Eagle Ford	  	 	6,500’	 	  	 	7,800’	 	  	 	5,800’	 	  	 	7,500’	 	  	 	7,100’	 	
Powder River Basin	  	 	9,600’	 	  	 	11,800’	 	  	 	—  	 	  	 	10,400’	 	  	 	9,600’	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total	  	 	8,700’	 	  	 	10,500’	 	  	 	8,400’	 	  	 	8,800’	 	  	 	10,100’	 	

8

REALIZED PRICING
 
BENCHMARK PRICES
(average prices)
																					
 	  	2022	 	  	2021	 	
 	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Oil ($/Bbl)—West Texas Intermediate (Cushing)	  	$	82.53	 	  	$	91.87	 	  	$	108.70	 	  	$	94.45	 	  	$	76.91	 	
Natural Gas ($/Mcf)—Henry Hub	  	$	6.26	 	  	$	8.20	 	  	$	7.17	 	  	$	4.96	 	  	$	5.84	 	
NGL ($/Bbl)—Mont Belvieu Blended	  	$	30.46	 	  	$	39.67	 	  	$	46.44	 	  	$	43.99	 	  	$	40.39	 	
REALIZED PRICES

 	  	2022	 	 	2021	 	
 	  	Quarter 4	 	 	Quarter 3	 	 	Quarter 2	 	 	Quarter 1	 	 	Quarter 4	 	
Oil (Per Bbl)	  				 				 				 				 				
Delaware Basin	  	$	82.48	 	 	$	93.60	 	 	$	109.05	 	 	$	93.12	 	 	$	75.67	 	
Anadarko Basin	  	 	82.57	 	 	 	91.42	 	 	 	108.15	 	 	 	92.70	 	 	 	76.07	 	
Williston Basin	  	 	81.05	 	 	 	91.30	 	 	 	109.85	 	 	 	90.87	 	 	 	74.02	 	
Eagle Ford	  	 	83.23	 	 	 	91.53	 	 	 	109.77	 	 	 	94.51	 	 	 	75.35	 	
Powder River Basin	  	 	81.29	 	 	 	91.33	 	 	 	104.75	 	 	 	92.69	 	 	 	72.86	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	 	82.31	 	 	 	92.98	 	 	 	108.93	 	 	 	92.94	 	 	 	75.36	 	
Cash settlements	  	 	(4.87	) 	 	 	(8.60	) 	 	 	(13.13	) 	 	 	(11.32	) 	 	 	(13.14	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	77.44	 	 	$	84.38	 	 	$	95.80	 	 	$	81.62	 	 	$	62.22	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural gas liquids (Per Bbl)	  				 				 				 				 				
Delaware Basin	  	$	23.68	 	 	$	34.37	 	 	$	40.75	 	 	$	38.43	 	 	$	35.56	 	
Anadarko Basin	  	 	29.58	 	 	 	35.52	 	 	 	41.64	 	 	 	38.38	 	 	 	35.66	 	
Williston Basin	  	 	7.97	 	 	 	25.41	 	 	 	23.88	 	 	 	20.71	 	 	 	24.97	 	
Eagle Ford	  	 	29.06	 	 	 	35.55	 	 	 	41.98	 	 	 	39.68	 	 	 	38.17	 	
Powder River Basin	  	 	34.91	 	 	 	44.85	 	 	 	55.62	 	 	 	52.49	 	 	 	47.30	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	 	24.32	 	 	 	34.44	 	 	 	40.28	 	 	 	37.76	 	 	 	35.36	 	
Cash settlements	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	(0.54	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	24.32	 	 	$	34.44	 	 	$	40.28	 	 	$	37.76	 	 	$	34.82	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Gas (Per Mcf)	  				 				 				 				 				
Delaware Basin	  	$	4.30	 	 	$	7.06	 	 	$	6.41	 	 	$	3.83	 	 	$	4.60	 	
Anadarko Basin	  	 	5.37	 	 	 	8.89	 	 	 	7.11	 	 	 	4.00	 	 	 	5.37	 	
Williston Basin	  	 	0.44	 	 	 	3.23	 	 	 	1.56	 	 	 	0.74	 	 	 	1.53	 	
Eagle Ford	  	 	5.02	 	 	 	7.53	 	 	 	7.10	 	 	 	4.91	 	 	 	5.76	 	
Powder River Basin	  	 	5.57	 	 	 	8.23	 	 	 	7.93	 	 	 	4.24	 	 	 	6.10	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	 	4.39	 	 	 	7.25	 	 	 	6.37	 	 	 	3.77	 	 	 	4.68	 	
Cash settlements	  	 	(0.38	) 	 	 	(1.42	) 	 	 	(1.31	) 	 	 	(0.62	) 	 	 	(1.42	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	4.01	 	 	$	5.83	 	 	$	5.06	 	 	$	3.15	 	 	$	3.26	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total oil equivalent (Per Boe)	  				 				 				 				 				
Delaware Basin	  	$	53.34	 	 	$	65.80	 	 	$	75.02	 	 	$	63.75	 	 	$	54.28	 	
Anadarko Basin	  	 	41.25	 	 	 	53.72	 	 	 	54.46	 	 	 	42.08	 	 	 	41.39	 	
Williston Basin	  	 	54.51	 	 	 	66.65	 	 	 	73.15	 	 	 	63.31	 	 	 	53.44	 	
Eagle Ford	  	 	62.92	 	 	 	65.49	 	 	 	75.07	 	 	 	62.74	 	 	 	56.06	 	
Powder River Basin	  	 	67.59	 	 	 	78.58	 	 	 	89.84	 	 	 	75.75	 	 	 	63.45	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price without hedges	  	 	53.66	 	 	 	64.89	 	 	 	73.13	 	 	 	61.40	 	 	 	53.12	 	
Cash settlements	  	 	(3.04	) 	 	 	(6.41	) 	 	 	(8.43	) 	 	 	(6.65	) 	 	 	(8.78	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Realized price, including cash settlements	  	$	50.62	 	 	$	58.48	 	 	$	64.70	 	 	$	54.75	 	 	$	44.34	 	

9

ASSET MARGINS
 
BENCHMARK PRICES
(average prices)
																					
 	  	2022	 	  	2021	 	
 	  	Quarter 4	 	  	Quarter 3	 	  	Quarter 2	 	  	Quarter 1	 	  	Quarter 4	 	
Oil ($/Bbl)—West Texas Intermediate (Cushing)	  	$	82.53	 	  	$	91.87	 	  	$	108.70	 	  	$	94.45	 	  	$	76.91	 	
Natural Gas ($/Mcf)—Henry Hub	  	$	6.26	 	  	$	8.20	 	  	$	7.17	 	  	$	4.96	 	  	$	5.84	 	
NGL ($/Bbl)—Mont Belvieu Blended	  	$	30.46	 	  	$	39.67	 	  	$	46.44	 	  	$	43.99	 	  	$	40.39	 	
PER-UNIT CASH MARGIN BY ASSET (per Boe)

 	  	2022	 	 	2021	 	
 	  	Quarter 4	 	 	Quarter 3	 	 	Quarter 2	 	 	Quarter 1	 	 	Quarter 4	 	
Delaware Basin	  				 				 				 				 				
Realized price	  	$	53.34	 	 	$	65.80	 	 	$	75.02	 	 	$	63.75	 	 	$	54.28	 	
Lease operating expenses	  	 	(4.55	) 	 	 	(4.39	) 	 	 	(3.98	) 	 	 	(3.79	) 	 	 	(4.02	) 	
Gathering, processing & transportation	  	 	(2.52	) 	 	 	(2.40	) 	 	 	(2.37	) 	 	 	(2.32	) 	 	 	(2.27	) 	
Production & property taxes	  	 	(3.89	) 	 	 	(4.81	) 	 	 	(5.35	) 	 	 	(4.65	) 	 	 	(3.40	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Field-level cash margin	  	$	42.38	 	 	$	54.20	 	 	$	63.32	 	 	$	52.99	 	 	$	44.59	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Anadarko Basin	  				 				 				 				 				
Realized price	  	$	41.25	 	 	$	53.72	 	 	$	54.46	 	 	$	42.08	 	 	$	41.39	 	
Lease operating expenses	  	 	(3.59	) 	 	 	(3.46	) 	 	 	(3.49	) 	 	 	(2.75	) 	 	 	(2.70	) 	
Gathering, processing & transportation	  	 	(6.84	) 	 	 	(6.91	) 	 	 	(6.65	) 	 	 	(6.67	) 	 	 	(6.60	) 	
Production & property taxes	  	 	(2.29	) 	 	 	(3.26	) 	 	 	(3.17	) 	 	 	(2.35	) 	 	 	(2.44	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Field-level cash margin	  	$	28.53	 	 	$	40.09	 	 	$	41.15	 	 	$	30.31	 	 	$	29.65	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Williston Basin	  				 				 				 				 				
Realized price	  	$	54.51	 	 	$	66.65	 	 	$	73.15	 	 	$	63.31	 	 	$	53.44	 	
Lease operating expenses	  	 	(9.93	) 	 	 	(9.97	) 	 	 	(9.40	) 	 	 	(7.67	) 	 	 	(5.76	) 	
Gathering, processing & transportation	  	 	(1.92	) 	 	 	(2.40	) 	 	 	(2.44	) 	 	 	(2.32	) 	 	 	(2.09	) 	
Production & property taxes	  	 	(5.64	) 	 	 	(6.33	) 	 	 	(6.75	) 	 	 	(5.67	) 	 	 	(4.64	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Field-level cash margin	  	$	37.02	 	 	$	47.95	 	 	$	54.56	 	 	$	47.65	 	 	$	40.95	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Eagle Ford	  				 				 				 				 				
Realized price	  	$	62.92	 	 	$	65.49	 	 	$	75.07	 	 	$	62.74	 	 	$	56.06	 	
Lease operating expenses	  	 	(5.63	) 	 	 	(4.94	) 	 	 	(4.98	) 	 	 	(4.63	) 	 	 	(3.78	) 	
Gathering, processing & transportation	  	 	(3.08	) 	 	 	(4.94	) 	 	 	(6.39	) 	 	 	(5.67	) 	 	 	(6.65	) 	
Production & property taxes	  	 	(2.97	) 	 	 	(3.79	) 	 	 	(3.99	) 	 	 	(3.52	) 	 	 	(2.93	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Field-level cash margin	  	$	51.24	 	 	$	51.82	 	 	$	59.71	 	 	$	48.92	 	 	$	42.70	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Powder River Basin	  				 				 				 				 				
Realized price	  	$	67.59	 	 	$	78.58	 	 	$	89.84	 	 	$	75.75	 	 	$	63.45	 	
Lease operating expenses	  	 	(7.15	) 	 	 	(7.03	) 	 	 	(7.04	) 	 	 	(9.01	) 	 	 	(7.49	) 	
Gathering, processing & transportation	  	 	(2.98	) 	 	 	(3.24	) 	 	 	(3.50	) 	 	 	(3.19	) 	 	 	(2.86	) 	
Production & property taxes	  	 	(8.13	) 	 	 	(9.50	) 	 	 	(10.89	) 	 	 	(9.23	) 	 	 	(7.49	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Field-level cash margin	  	$	49.33	 	 	$	58.81	 	 	$	68.41	 	 	$	54.32	 	 	$	45.61	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Devon—Total	  				 				 				 				 				
Realized price	  	$	53.66	 	 	$	64.89	 	 	$	73.13	 	 	$	61.40	 	 	$	53.12	 	
Lease operating expenses	  	 	(5.26	) 	 	 	(5.02	) 	 	 	(4.56	) 	 	 	(4.33	) 	 	 	(4.18	) 	
Gathering, processing & transportation	  	 	(3.05	) 	 	 	(3.13	) 	 	 	(3.15	) 	 	 	(3.11	) 	 	 	(3.08	) 	
Production & property taxes	  	 	(3.91	) 	 	 	(4.84	) 	 	 	(5.30	) 	 	 	(4.51	) 	 	 	(3.49	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Field-level cash margin	  	$	41.44	 	 	$	51.90	 	 	$	60.12	 	 	$	49.45	 	 	$	42.37	 	

10

NON-GAAP MEASURES
 
(all monetary values in millions, except per share amounts)
Devon’s earnings materials include 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 the earnings materials, including reconciliations to their most directly comparable GAAP measure.
The earnings materials may include forward-looking non-GAAP measures. The company is unable to provide reconciliations of these forward-looking non-GAAP measures, because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, the timing of changes in capital accruals, unknown future events and estimating certain future GAAP measures. The inability to reliably quantify certain components of the calculation would significantly affect the usefulness and accuracy of a reconciliation.
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 full year and fourth-quarter 2022 earnings.

 	  	Year Ended December 31, 2022	 	 	Quarter Ended December 31, 2022	 	
 	  	Before-
tax	 	 	After-
tax	 	 	After
NCI	 	 	Per
Diluted
Share	 	 	Before-
tax	 	 	After-
tax	 	 	After
NCI	 	 	Per
Diluted
Share	 	
Total	  				 				 				 				 				 				 				 				
Earnings (GAAP)	  	$	7,775	 	 	$	6,037	 	 	$	6,015	 	 	$	9.12	 	 	$	1,553	 	 	$	1,204	 	 	$	1,201	 	 	$	1.83	 	
Adjustments:	  				 				 				 				 				 				 				 				
Asset dispositions	  	 	(44	) 	 	 	(34	) 	 	 	(34	) 	 	 	(0.05	) 	 	 	(29	) 	 	 	(22	) 	 	 	(22	) 	 	 	(0.02	) 	
Asset and exploration impairments	  	 	13	 	 	 	10	 	 	 	10	 	 	 	0.02	 	 	 	4	 	 	 	3	 	 	 	3	 	 	 	—  	 	
Deferred tax asset valuation allowance	  	 	—  	 	 	 	17	 	 	 	17	 	 	 	0.03	 	 	 	—  	 	 	 	2	 	 	 	2	 	 	 	—  	 	
Fair value changes in financial instruments	  	 	(690	) 	 	 	(532	) 	 	 	(532	) 	 	 	(0.81	) 	 	 	(125	) 	 	 	(99	) 	 	 	(99	) 	 	 	(0.15	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Core earnings (Non-GAAP)	  	$	7,054	 	 	$	5,498	 	 	$	5,476	 	 	$	8.31	 	 	$	1,403	 	 	$	1,088	 	 	$	1,085	 	 	$	1.66	 	

*	The tax impact for the adjustments to core earnings in the tables above are all deferred.	
 
11

RETURN ON CAPITAL EMPLOYED
Devon defines return on capital employed as pre-interest core earnings divided by averaged capital employed. Devon believes return on capital employed provides a useful measure of how efficiently the company is using its capital to generate profits. Average capital employed is the average of the capital employed as of the beginning and ending of the relevant period, with capital employed calculated as debt plus stockholders’ equity attributable to Devon less cash and cash equivalents.

 	  	Year Ended
December 31, 2022	 	
Earnings (GAAP)	  	$	6,015	 	
Non-GAAP adjustments	  	 	(539	) 	
	  	 	 	 	
Core earnings (Non-GAAP)	  	 	5,476	 	
Net financing costs (GAAP)	  	 	309	 	
Less tax impact (22%)	  	 	(69	) 	
	  	 	 	 	
Pre-interest core earnings (Non-GAAP)	  	$	5,716	 	
	  	 	 	 	
Beginning balance:	  				
Gross debt	  	$	6,482	 	
Stockholders’ equity	  	 	9,262	 	
Less cash	  	 	(2,271	) 	
	  	 	 	 	
Beginning capital employed	  	$	13,473	 	
	  	 	 	 	
Ending balance:	  				
Gross debt	  	$	6,440	 	
Stockholders’ equity	  	 	11,167	 	
Less cash	  	 	(1,454	) 	
	  	 	 	 	
Ending capital employed	  	$	16,153	 	
	  	 	 	 	
Average capital employed	  	$	14,813	 	
	  	 	 	 	
ROCE	  	 	39	% 	
	  	 	 	 	
EBITDAX
Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings before income tax expense; financing costs, net; exploration expenses; depreciation, depletion and amortization; asset impairments; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; restructuring and transaction costs; accretion on discounted liabilities; and other items not related to normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies.

 	  	FY ‘22	 	 	Q4 ‘22	 	 	Q3 ‘22	 	 	Q2 ‘22	 	 	Q1 ‘22	 	 	Q4 ‘21	 	 	Q3 ‘21	 	 	Q2 ‘21	 	 	Q1 ‘21	 	
Net earnings (GAAP)	  	$	6,037	 	 	$	1,204	 	 	$	1,900	 	 	$	1,938	 	 	$	995	 	 	$	1,512	 	 	$	844	 	 	$	261	 	 	$	216	 	
Financing costs, net	  	 	309	 	 	 	73	 	 	 	67	 	 	 	84	 	 	 	85	 	 	 	86	 	 	 	86	 	 	 	80	 	 	 	77	 	
Income tax expense (benefit)	  	 	1,738	 	 	 	349	 	 	 	565	 	 	 	557	 	 	 	267	 	 	 	150	 	 	 	120	 	 	 	43	 	 	 	(248	) 	
Exploration expenses	  	 	29	 	 	 	13	 	 	 	4	 	 	 	10	 	 	 	2	 	 	 	5	 	 	 	3	 	 	 	3	 	 	 	3	 	
Depreciation, depletion and amortization	  	 	2,223	 	 	 	625	 	 	 	581	 	 	 	528	 	 	 	489	 	 	 	577	 	 	 	578	 	 	 	536	 	 	 	467	 	
Asset dispositions	  	 	(44	) 	 	 	(29	) 	 	 	—  	 	 	 	(14	) 	 	 	(1	) 	 	 	(49	) 	 	 	—  	 	 	 	(87	) 	 	 	(32	) 	
Share-based compensation	  	 	87	 	 	 	22	 	 	 	22	 	 	 	22	 	 	 	20	 	 	 	19	 	 	 	18	 	 	 	20	 	 	 	20	 	
Derivative & financial instrument non-cash val. changes	  	 	(698	) 	 	 	(122	) 	 	 	(613	) 	 	 	(302	) 	 	 	339	 	 	 	(515	) 	 	 	(35	) 	 	 	336	 	 	 	296	 	
Restructuring and transaction costs	  	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	—  	 	 	 	28	 	 	 	18	 	 	 	23	 	 	 	189	 	
Accretion on discounted liabilities and other	  	 	(95	) 	 	 	(6	) 	 	 	(38	) 	 	 	10	 	 	 	(61	) 	 	 	(2	) 	 	 	2	 	 	 	(14	) 	 	 	(29	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
EBITDAX (Non-GAAP)	  	$	9,586	 	 	$	2,130	 	 	$	2,488	 	 	$	2,833	 	 	$	2,135	 	 	$	1,811	 	 	$	1,634	 	 	$	1,201	 	 	$	959	 	

12

NET DEBT
Devon defines net debt as debt (includes short-term and long-term debt) less cash, cash equivalents and cash restricted for discontinued operations. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.

 	  	Dec. 31, 2022	 	 	Sep. 30, 2022	 	 	Jun. 30, 2022	 	 	Mar. 31, 2022	 	 	Dec. 31, 2021	 	 	Sep. 30, 2021	 	
Total debt (GAAP)	  	$	6,440	 	 	$	6,451	 	 	$	6,461	 	 	$	6,471	 	 	$	6,482	 	 	$	6,492	 	
Less:	  				 				 				 				 				 				
Cash, cash equivalents and restricted cash	  	 	(1,454	) 	 	 	(1,310	) 	 	 	(3,457	) 	 	 	(2,625	) 	 	 	(2,271	) 	 	 	(2,321	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net debt (Non-GAAP)	  	$	4,986	 	 	$	5,141	 	 	$	3,004	 	 	$	3,846	 	 	$	4,211	 	 	$	4,171	 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
NET DEBT-TO-EBITDAX
Devon defines net debt-to-EBITDAX as net debt divided by an annualized EBITDAX measure. Devon believes this ratio provides information useful to investors in assessing the company’s credit position and debt leverage.

 	  	Dec. 31, 2022	 	  	Sep. 30, 2022	 	  	Jun. 30, 2022	 	  	Mar. 31, 2022	 	  	Dec. 31, 2021	 	  	Sep. 30, 2021	 	
Net debt (Non-GAAP)	  	$	4,986	 	  	$	5,141	 	  	$	3,004	 	  	$	3,846	 	  	$	4,211	 	  	$	4,171	 	
EBITDAX (Non-GAAP) (1)	  	$	9,586	 	  	$	9,267	 	  	$	8,413	 	  	$	6,781	 	  	$	5,605	 	  	$	5,059	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net debt-to-EBITDAX (Non-GAAP)	  	 	0.5	 	  	 	0.6	 	  	 	0.4	 	  	 	0.6	 	  	 	0.8	 	  	 	0.8	 	

(1)	EBITDAX is an annualized measure using a trailing twelve-month calculation. Due to the merger with WPX closing in the first quarter of 2021, third quarter 2021 EBITDAX was calculated using annualized September YTD 2021 results.	
FIELD-LEVEL CASH MARGIN
Devon defines field-level cash margin as oil, gas and NGL revenues less production expenses. Devon believes field-level cash margin provides a useful measure of value generated for shareholders.

 	  	Full Year
2022	 	  	Six Months Ended
Dec. 31, 2021	 	  	Six Months Ended
Jun. 30, 2021	 	  	Full Year
2020	 	
Realized price	  	$	63.20	 	  	$	50.10	 	  	$	40.54	 	  	$	22.10	 	
Production expenses	  	 	(12.55	) 	  	 	(10.33	) 	  	 	(10.06	) 	  	 	(9.21	) 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Field-level cash margin	  	$	50.65	 	  	$	39.77	 	  	$	30.48	 	  	$	12.89	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
FREE CASH FLOW
Devon defines free cash flow as total operating cash flow less capital expenditures. Devon believes free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.

 	  	Quarter Ended
Dec. 31, 2022	 	 	Quarter Ended
Sep. 30, 2022	 	 	Quarter Ended
Jun. 30, 2022	 	 	Quarter Ended
Mar. 31, 2022	 	 	Quarter Ended
Dec. 31, 2021	 	
Total operating cash flow (GAAP)	  	$	1,911	 	 	$	2,104	 	 	$	2,678	 	 	$	1,837	 	 	$	1,616	 	
Less capital expenditures:	  				 				 				 				 				
Capital expenditures	  	 	(804	) 	 	 	(628	) 	 	 	(573	) 	 	 	(537	) 	 	 	(512	) 	
	  	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Free cash flow (Non-GAAP)	  	$	1,107	 	 	$	1,476	 	 	$	2,105	 	 	$	1,300	 	 	$	1,104	 	

									
 	  	Full Year 2022	 	  	Full Year 2021	 	
Total operating cash flow (GAAP)	  	$	8,530	 	  	$	4,899	 	
Less capital expenditures:	  				  				
Capital expenditures	  	 	(2,542	) 	  	 	(1,989	) 	
	  	 	 	 	  	 	 	 	
Free cash flow (Non-GAAP)	  	$	5,988	 	  	$	2,910	 	

13

REINVESTMENT RATE
Devon defines reinvestment rate as accrued capital expenditures (excluding acquisitions) divided by operating cash flow. Devon believes this measure provides useful information to our investors as an indicator of the capital demands of our business relative to the cash flow generated from normal business operations.

 	  	Year Ended
Dec. 31, 2022	 	 	Year Ended
Dec. 31, 2021	 	
Capital expenditures (excludes acquisitions)	  	$	2,740	 	 	$	1,998	 	
Operating cash flow	  	$	8,530	 	 	$	4,899	 	
	  	 	 	 	 	 	 	 	
Reinvestment rate (Non-GAAP)	  	 	32	% 	 	 	41	% 	
	  	 	 	 	 	 	 	 	
VARIABLE DIVIDEND
Devon may pay a variable dividend of up to 50 percent of its excess cash flow. Each quarter’s excess cash flow is computed as adjusted cash flow less capital expenditures and the fixed dividend.

 	  	Quarter Ended
December 31, 2022	 	
Operating cash flow (GAAP)	  	$	1,911	 	
Changes in assets and liabilities, net	  	 	46	 	
	  	 	 	 	
Adjusted cash flow (Non-GAAP)	  	 	1,957	 	
Capital expenditures (Accrued)	  	 	(935	) 	
	  	 	 	 	
Adjusted free cash flow (Non-GAAP)	  	 	1,022	 	
Fixed quarterly dividend	  	 	(117	) 	
	  	 	 	 	
Excess free cash flow (Non-GAAP)	  	$	905	 	
~50% Pay out (Board Discretion: Up to 50%)	  	 	50	% 	
	  	 	 	 	
Total variable dividend	  	$	449	 	

14

			
FIRST-QUARTER AND FULL-YEAR 2023 GUIDANCE	  		
 
PRODUCTION GUIDANCE

 	  	Quarter 1 (1)	 	  	Full Year 	 	
 	  	Low	 	  	High	 	  	Low	 	  	High	 	
Oil (MBbls/d)	  	 	315	 	  	 	321	 	  	 	320	 	  	 	326	 	
Natural gas liquids (MBbls/d)	  	 	143	 	  	 	149	 	  	 	156	 	  	 	162	 	
Gas (MMcf/d)	  	 	1,000	 	  	 	1,050	 	  	 	1,000	 	  	 	1,050	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total oil equivalent (MBoe/d) (1)	  	 	625	 	  	 	645	 	  	 	643	 	  	 	663	 	

(1)	First-quarter volumes are temporarily impacted by:	
 
 	•	Infrastructure outages in the Delaware Basin (~10,000 Boe per day)	
 
 	•	Timing of wells placed online (90 wells in Q1; ~400 for full-year 2023)	
 
 	•	Ethane rejection (~10,000 Boe per day)	
CAPITAL EXPENDITURES GUIDANCE

 	  	Quarter 1 (2)	 	  	Full Year	 	
(in millions)	  	Low	 	  	High	 	  	Low	 	  	High	 	
Upstream capital (2)	  	$	900	 	  	$	940	 	  	$	3,440	 	  	$	3,560	 	
Environmental capital	  	 	25	 	  	 	35	 	  	 	80	 	  	 	120	 	
Midstream & other capital	  	 	25	 	  	 	35	 	  	 	80	 	  	 	120	 	
	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Total capital	  	$	950	 	  	$	1,010	 	  	$	3,600	 	  	$	3,800	 	

(2)	Upstream capital is expected to be higher in the first half of 2023 due to a temporary fourth frac crew added in the Delaware Basin. Activity from this incremental frac crew is expected to be completed around mid-year, resulting in lower capital spending over the second half of 2023.	
PRICE REALIZATIONS GUIDANCE

 	  	Quarter 1	 	 	Full Year	 	
 	  	Low	 	 	High	 	 	Low	 	 	High	 	
Oil - % of WTI	  	 	95	% 	 	 	100	% 	 	 	95	% 	 	 	100	% 	
NGL - % of WTI	  	 	25	% 	 	 	35	% 	 	 	25	% 	 	 	35	% 	
Natural gas - % of Henry Hub	  	 	60	% 	 	 	70	% 	 	 	60	% 	 	 	75	% 	
OTHER GUIDANCE ITEMS

 	  	Quarter 1	 	 	Full Year	 	
($ millions, except Boe and %)	  	Low	 	 	High	 	 	Low	 	 	High	 	
Marketing & midstream operating profit	  	$	(30	) 	 	$	(20	) 	 	$	(60	) 	 	$	(50	) 	
LOE & GP&T per BOE	  	$	8.60	 	 	$	9.00	 	 	$	8.30	 	 	$	8.80	 	
Production & property taxes as % of upstream sales	  	 	7.0	% 	 	 	8.0	% 	 	 	7.0	% 	 	 	8.0	% 	
Exploration expenses	  	$	—  	 	 	$	5	 	 	$	5	 	 	$	15	 	
Depreciation, depletion and amortization	  	$	600	 	 	$	640	 	 	$	2,500	 	 	$	2,600	 	
General & administrative expenses	  	$	100	 	 	$	110	 	 	$	390	 	 	$	410	 	
Net financing costs, net	  	$	70	 	 	$	80	 	 	$	290	 	 	$	310	 	
Other expenses	  	$	—  	 	 	$	5	 	 	$	—  	 	 	$	20	 	
INCOME TAX GUIDANCE

(% of pre-tax earnings)	  	Quarter 1	 	 	Full Year	 	
Current income tax rate	  	 	15	% 	 	 	15	% 	
Deferred income tax rate	  	 	7	% 	 	 	7	% 	
	  	 	 	 	 	 	 	 	
Total income tax rate	  	 	22	% 	 	 	22	% 	

1

			
CONTINGENT PAYMENTS FOR BARNETT SHALE DIVESTITURE (4-year period beginning in 2021)	  		

															
WTI Threshold	 	 	WTI Annual Earnout Amount	 	 	Henry Hub Threshold	 	 	Henry Hub Annual Earnout
Amount	 	
$	50.00	 	 	$	10,000,000	 	 	$	2.75	 	 	$	20,000,000	 	
$	55.00	 	 	$	12,500,000	 	 	$	3.00	 	 	$	25,000,000	 	
$	60.00	 	 	$	15,000,000	 	 	$	3.25	 	 	$	35,000,000	 	
$	65.00	 	 	$	20,000,000	 	 	$	3.50	 	 	$	45,000,000	 	
2023 & 2024 HEDGING POSITIONS
 
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 2023	  	 	—  	 	  	$	—  	 	  	 	95,000	 	  	$	67.82	 	  	$	94.68	 		
Q2 2023	  	 	—  	 	  	$	—  	 	  	 	84,500	 	  	$	69.41	 	  	$	94.84	 		
Q3 2023	  	 	—  	 	  	$	—  	 	  	 	84,500	 	  	$	69.41	 	  	$	94.84	 		
Q4 2023	  	 	—  	 	  	$	—  	 	  	 	81,000	 	  	$	69.63	 	  	$	94.29	 		
Oil Basis Swaps

	Period	  		Index	  	Volume (Bbls/d)	 	  	Weighted Average
Differential to WTI
($/Bbl)	 	
Q1 2023	  	Midland Sweet	  	 	6,311	 	  	$	0.69	 		
Q2 2023	  	Midland Sweet	  	 	25,000	 	  	$	0.90	 		
Q3 2023	  	Midland Sweet	  	 	45,000	 	  	$	0.98	 		
Q4 2023	  	Midland Sweet	  	 	45,000	 	  	$	0.98	 		
Q1-Q4 2024	  	Midland Sweet	  	 	29,500	 	  	$	1.14	 		
Natural Gas Commodity Hedges—Henry Hub

 	  	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 2023	  	 	35,000	 	  	$	5.99	 	  	 	237,000	 	  	$	4.16	 	  	$	10.68	 		
Q2 2023	  	 	20,000	 	  	$	3.60	 	  	 	220,000	 	  	$	3.60	 	  	$	7.00	 		
Q3 2023	  	 	10,000	 	  	$	3.55	 	  	 	195,000	 	  	$	3.61	 	  	$	7.29	 		
Q4 2023	  	 	10,000	 	  	$	3.55	 	  	 	147,000	 	  	$	3.67	 	  	$	7.62	 		
Q1-Q4 2024	  	 	7,486	 	  	$	3.55	 	  	 	40,527	 	  	$	3.78	 	  	$	7.05	 		
Natural Gas Basis Swaps

	Period	  		Index	  	Volume (MMBtu/d)	 	  	Weighted Average
Differential to Henry
Hub ($/MMBtu)	 	
Q1 - Q2 2023	  	El Paso Permian	  	 	135,000	 	  	$	(1.59	) 		
Q3 - Q4 2023	  	El Paso Permian	  	 	145,000	 	  	$	(1.58	) 		
Q1 2023	  	Houston Ship Channel	  	 	120,000	 	  	$	(0.17	) 		
Q2 - Q4 2023	  	Houston Ship Channel	  	 	130,000	 	  	$	(0.19	) 		
Q1-Q4 2023	  	WAHA	  	 	70,000	 	  	$	(0.51	) 		
Q1-Q4 2024	  	El Paso Permian	  	 	10,000	 	  	$	(1.00	) 		
Q1-Q4 2024	  	Houston Ship Channel	  	 	10,000	 	  	$	(0.37	) 		
Q1-Q4 2024	  	WAHA	  	 	44,973	 	  	$	(0.58	) 		
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 end of the month NYMEX index. Commodity hedge positions are shown as of February 8, 2023.
 
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