EX-99.1 2 d678783dex991.htm EX-99.1

EX-99.1

EXHIBIT 99.1

				Devon Energy Corporation
				333 West Sheridan Avenue
				Oklahoma City, OK 73102-5015

News Release

Investor Contacts		Scott Coody Shea Snyder		405 552 4735 405 552 4782
Media Contact		Chip Minty		405 228 8647

Devon Energy Reports Fourth-Quarter and Full-Year 2013 Results

• Achieved record fourth-quarter oil production exceeding company guidance

• Delivered 32 percent growth in fourth-quarter U.S. oil production

• Increased fourth-quarter operating cash flow by 26 percent

• Repatriated $4.3 billion of foreign cash during 2013

• Increased proved oil reserves to highest level in company history

OKLAHOMA CITY – February 19, 2014 – Devon Energy Corporation (NYSE:DVN) today reported net earnings of $207 million or $0.51 per common share ($0.51 per diluted share) for the quarter ended December 31, 2013. This compares with a fourth-quarter 2012 net loss of $357 million or $0.89 per common share ($0.89 per diluted share).

Adjusting for items securities analysts typically exclude from their published estimates, the company earned $447 million or $1.10 per diluted share in the fourth quarter. This represents a 49 percent increase in adjusted earnings compared to the fourth quarter of 2012.

Operating cash flow in the fourth quarter of 2013 totaled $1.4 billion, a 26 percent increase compared to the year-ago period. For the year ended December 31, 2013, Devon generated operating cash flow of $5.4 billion. Including $419 million of cash received from asset sales, the company’s total cash inflows reached $5.9 billion for 2013.

“2013 was a year of strong execution and exciting change for Devon,” said John Richels, president and chief executive officer. “Our drilling programs not only drove impressive oil production growth, but also expanded margins and improved operating cash flow. Additionally, we high-graded our portfolio through an accretive Eagle Ford Shale acquisition, an innovative midstream combination, and initiated an asset divestiture program. These actions provide a platform for Devon to achieve attractive high-margin growth in 2014 and for many years to come.”

Key Operating Highlights

Permian Basin – Production averaged a record 86,000 oil-equivalent barrels (Boe) per day in the fourth quarter, a 29 percent increase compared to the fourth quarter of 2012. Light oil production accounted for approximately 60 percent of Devon’s total Permian production.

The Bone Spring oil play in the Delaware Basin was a significant contributor to the company’s growth in the Permian. Devon added 21 new Bone Spring wells to production in the fourth quarter, with initial 30-day rates averaging 800 Boe per day, of which 70 percent was light oil. These outstanding initial production rates exceeded the company’s Bone Spring type curve by about 40 percent.

Also in the Delaware Basin, Devon commenced production on its first horizontal Wolfcamp well in Ward County, Texas. Initial 30-day production from the Martinsville 120-4H averaged 950 Boe per day, including 800 barrels of light oil per day. The company has identified more than 100,000 net acres prospective for the Wolfcamp within its Delaware Basin position and will continue to derisk this emerging oil opportunity in 2014.

In the Southern Midland Basin, Devon delivered strong results from its oil development program in the Wolfcamp Shale. During the fourth quarter, the company brought 24 Wolfcamp Shale wells online with initial 30-day rates averaging 410 Boe per day.

Canadian Thermal Oil – Gross production from Devon’s Jackfish 1 and Jackfish 2 thermal oil projects averaged 58,000 barrels of oil per day in the fourth quarter, or 53,000 barrels per day after royalties. This represents a 16 percent increase in net production compared to the third quarter of 2013. The growth in fourth-quarter production was attributable to the resumption of operations at Jackfish 2 after scheduled maintenance downtime during the third quarter.

Construction of the company’s Jackfish 3 thermal oil project is now nearly complete. Plant startup at Jackfish 3 is expected in the third quarter of this year. At peak production, Devon’s three 100 percent-owned Jackfish projects are expected to generate nearly $1 billion of free cash flow annually for the company.

Barnett Shale – Net production averaged 1.4 billion cubic feet of natural gas equivalent per day in 2013. Barnett liquids production increased to an average of 57,000 barrels per day in 2013, a 17 percent increase compared to 2012.

Anadarko Basin – Fourth-quarter Anadarko Basin production averaged a record 85,000 Boe per day. Growth from Devon’s Cana-Woodford Shale and Granite Wash plays drove a 10 percent year-over-year increase in net production. With drilling focused in the most liquids-prone acreage, oil and natural gas liquids production increased to more than 40 percent of total production in the Anadarko Basin.

Mississippian-Woodford Trend – Net production from Devon’s emerging Mississippian-Woodford Trend averaged 16,000 Boe per day in December, representing a 47 percent increase from the September average and exceeding the company’s projected exit rate.

Record Oil Production Driven by Permian Basin

Devon delivered strong oil production growth in the fourth quarter of 2013. Companywide oil production set a new quarterly record averaging 177,000 barrels per day, exceeding the top end of the company’s guidance range. This represents a 17 percent increase in oil production compared to the fourth quarter of 2012 and a 7 percent increase over the third quarter of 2013. Led by the Permian Basin, the most significant growth came from the company’s U.S. operations, where oil production increased 32 percent year over year. Total production increased to an average of 696,000 Boe per day in the fourth quarter of 2013, surpassing the midpoint of the company’s previous forecast by 6,000 Boe per day.

In November, the company announced an initiative to monetize non-core assets in both the U.S. and Canada, sharpening its focus on high-growth retained properties. The assets identified for divestiture averaged 144,000 Boe per day in the fourth quarter, of which almost 80 percent was natural gas. Excluding production associated with these non-core assets, top-line production in the fourth quarter from Devon’s retained asset base increased 7 percent compared to the fourth quarter of 2012. Reconciliations of retained and non-core asset production are provided later in this release.

Upstream Revenue Increases 19 Percent; Cash Margins Expand

Revenue from oil, natural gas and natural gas liquids sales totaled $8.5 billion in 2013, a 19 percent increase compared to 2012. The significant growth in revenue was attributable to higher oil production and improved natural gas realizations. In 2013, oil sales accounted for more than 50 percent of Devon’s total upstream revenues.

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Devon’s marketing and midstream operating profit reached $513 million in 2013. This result represents a 25 percent increase compared to the previous year. The increase in operating profit was attributable to higher natural gas prices and strong cost management.

The company’s pre-tax cash costs totaled $14.96 per Boe in 2013, a 4 percent increase compared to 2012. The higher unit cost is attributable to Devon’s dramatic increase in oil production. In general, oil wells have higher operating costs than gas wells, but also have higher margins in the current commodity price environment. In the fourth quarter, the company’s cash margin per Boe increased 15 percent year over year, reflecting the benefits of the increase in higher-margin oil production.

Foreign Cash Repatriated; Balance Sheet Remains Strong

During the fourth quarter, Devon repatriated $2.3 billion of foreign cash to the U.S. For the full-year 2013, the company repatriated $4.3 billion of foreign cash to the U.S. at an estimated effective tax rate of 4 percent. At December 31, 2013, the company’s cash balances totaled $6.1 billion, and its investment-grade balance sheet had a net debt to adjusted capitalization ratio of only 23 percent.

In December, Devon issued $2.25 billion of senior notes through a combination of two-, three- and five-year offerings and entered into an undrawn $2 billion senior term loan facility. Proceeds from the senior notes, the term loan facility, and a portion of the company’s cash on hand will fund Devon’s recently announced Eagle Ford acquisition.

Oil Reserves Climb to Record Levels

At December 31, 2013, Devon increased its proved oil reserves to a record 837 million barrels. During the year, the company’s oil-focused drilling program added 112 million barrels of oil reserves through successful drilling (extensions, discoveries and revisions other than price). This represents a replacement rate of approximately 180 percent of the oil produced during 2013.

In aggregate, Devon’s estimated proved reserves of oil, natural gas and natural gas liquids were 3.0 billion oil-equivalent barrels at year end. Extensions and discoveries through successful drilling, combined with price revisions related to higher natural gas prices, increased proved reserves by 355 million Boe compared to year-end 2012. Divestitures and revisions other than price decreased proved reserves by 103 million Boe in 2013. Revisions other than price were primarily attributable to proved undeveloped gas-weighted locations no longer expected to be drilled given the commodity price environment.

Overall, the company’s reserve life index (proved reserves divided by annual production) remained at approximately 12 years, and its proved undeveloped reserves accounted for only 24 percent of proved reserves. Proved reserves associated with assets identified for divestiture totaled 381 million Boe at December 31, 2013, of which approximately 70 percent were natural gas.

Eagle Ford and EnLink Midstream Update

In November, Devon announced the acquisition of GeoSouthern Energy’s assets in the Eagle Ford oil play. The acquired Eagle Ford acreage includes 82,000 net acres located in DeWitt and Lavaca counties. This acreage is located in the best part of the Eagle Ford, consistently yielding some of the highest initial production rates and estimated ultimate recoveries in the entire play.

The Eagle Ford transaction is on track to close by the end of the first quarter of 2014. Net production is expected to grow at a compound annual growth rate of 25 percent over the next several years, reaching a peak production rate of approximately 140,000 Boe per day. Devon’s development program in 2014 is self-funding and expected to generate significant free cash flow beginning in 2015. The risked recoverable resource associated with this position is estimated at 400 million barrels of oil equivalent, of which more than 60 percent is classified as proved reserves.

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Also in 2013, Devon announced the strategic combination of its U.S. midstream assets with Crosstex to form EnLink Midstream. EnLink Midstream will consist of two publicly traded entities: the master limited partnership, EnLink Midstream Partners LP, and a publicly traded general partner entity, EnLink Midstream LLC. This transaction is expected to close in the first quarter of 2014. The common units of both EnLink Midstream Partners LP and EnLink Midstream LLC will trade on the New York Stock Exchange under the symbols “ENLK” and “ENLC”, respectively.

Non-GAAP Reconciliations

Pursuant to regulatory disclosure requirements, Devon is required to reconcile non-GAAP financial measures to the related GAAP information (GAAP refers to generally accepted accounting principles). Adjusted earnings, net debt and adjusted capitalization are non-GAAP financial measures referenced within this release. Reconciliations of these non-GAAP measures are provided later in this release.

Conference Call to be Webcast Today

Devon will discuss its fourth-quarter and full-year 2013 financial and operating results in a conference call webcast today. The webcast will begin at 10 a.m. Central (11 a.m. Eastern ) and may be accessed from Devon’s home page at www.devonenergy.com.

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission (SEC). Such statements are those concerning strategic plans, expectations and objectives for future operations. 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 future drilling and production 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, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; unforeseen changes in the rate of production from our oil and gas properties; uncertainties in future exploration and drilling results; uncertainties inherent in estimating the cost of drilling and completing wells; drilling risks; competition for leases, materials, people and capital; midstream capacity constraints and potential interruptions in production; risk related to our hedging activities; environmental risks; political changes; changes in laws or regulations; our limited control over third parties who operate our oil and gas properties; our ability to successfully complete mergers, acquisitions and divestitures; and other risks 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 and exploration target size. 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. U.S. 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.

Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production. Devon is a leading U.S.-based independent oil and gas producer and is included in the S&P 500 Index. For more information about Devon, please visit our website at www.devonenergy.com.

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION (net of royalties)

		Quarter Ended								Year Ended
		December 31,								December 31,
		2013				2012				2013				2012
Total Period Production:
Natural Gas (Bcf)
United States			174.3				186.7				708.7				751.9
Canada			39.9				43.3				164.9				186.1
Total Natural Gas			214.2				230.0				873.6				938.0
Oil / Bitumen (MMBbls)
United States			7.9				6.0				28.3				21.5
Canada			8.4				7.9				33.1				32.0
Total Oil / Bitumen			16.3				13.9				61.4				53.5
Natural Gas Liquids (MMBbls)
United States			11.3				9.3				42.3				36.1
Canada			0.8				0.9				3.6				3.8
Total Natural Gas Liquids			12.1				10.2				45.9				39.9
Oil Equivalent (MMBoe)
United States			48.2				46.4				188.8				182.9
Canada			15.9				16.0				64.1				66.8
Total Oil Equivalent			64.1				62.4				252.9				249.7
		Quarter Ended								Year Ended
		December 31,								December 31,
		2013				2012				2013				2012
Average Daily Production:
Natural Gas (MMcf)
United States			1,894.7				2,029.0				1,941.8				2,054.5
Canada			433.3				471.2				451.6				508.3
Total Natural Gas			2,328.0				2,500.2				2,393.4				2,562.8
Oil / Bitumen (MBbls)
United States			85.3				64.8				77.7				58.7
Canada			91.4				86.2				90.6				87.4
Total Oil / Bitumen			176.7				151.0				168.3				146.1
Natural Gas Liquids (MBbls)
United States			122.4				101.4				116.0				98.6
Canada			9.1				9.5				9.7				10.5
Total Natural Gas Liquids			131.5				110.9				125.7				109.1
Oil Equivalent (MBoe)
United States			523.4				504.4				517.3				499.7
Canada			172.8				174.2				175.6				182.6
Total Oil Equivalent			696.2				678.6				692.9				682.3

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

KEY OPERATING STATISTICS BY REGION

		Quarter Ended December 31, 2013
		Avg. Production				Gross Wells				Operated Rigs at
		(MBOED)				Drilled				December 31, 2013
Permian Basin			85.7				73				24
Canadian Heavy Oil			84.5				58				2
Barnett Shale			223.9				31				5
Anadarko Basin			85.3				22				11
Mississippian-Woodford Trend			14.1				88				15
Rockies			21.2				8				3
Other Assets			37.3				5				—
Core & Emerging Assets—Total			552.0				285				60
Canadian Conventional (Non-Core)			88.2				31				4
Rockies (None-Core)			29.7				—				2
Gulf Coast (Non-Core)			18.6				3				1
Mid-Continent (Non-Core)			7.7				—				—
Devon—Total			696.2				319				67

		Year Ended December 31, 2013
		Avg. Production				Gross Wells
		(MBOED)				Drilled
Permian Basin			78.0				348
Canadian Heavy Oil			83.1				186
Barnett Shale			227.7				172
Anadarko Basin			81.7				184
Mississippian-Woodford Trend			7.9				232
Rockies			21.5				37
Other Assets			39.6				5
Core & Emerging Assets—Total			539.5				1,164
Canadian Conventional (Non-Core)			92.5				82
Rockies (None-Core)			32.1				13
Gulf Coast (Non-Core)			20.4				16
Mid-Continent (Non-Core)			8.4				—
Devon—Total			692.9				1,275

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK PRICES

(average prices)

		Quarter Ended								Year Ended
		December 31,								December 31,
		2013				2012				2013				2012
Natural Gas ($/Mcf) – Henry Hub		$	3.60			$	3.41			$	3.65			$	2.79
Oil ($/Bbl) – West Texas Intermediate (Cushing)		$	97.53			$	88.16			$	98.02			$	94.21
REALIZED PRICES
		Quarter Ended December 31, 2013
		Oil / Bitumen				Gas				NGLs				Total
		(Per Bbl)				(Per Mcf)				(Per Bbl)				(Per Boe)
United States		$	96.04			$	3.01			$	27.51			$	32.96
Canada		$	48.50			$	3.07			$	45.00			$	35.74
Realized price without hedges		$	71.45			$	3.02			$	28.73			$	33.65
Cash settlements		$	3.33			$	0.23			$	(0.19	)		$	1.59
Realized price, including cash settlements		$	74.78			$	3.25			$	28.54			$	35.24
		Quarter Ended December 31, 2012
		Oil / Bitumen				Gas				NGLs				Total
		(Per Bbl)				(Per Mcf)				(Per Bbl)				(Per Boe)
United States		$	83.18			$	2.93			$	26.12			$	27.72
Canada		$	52.31			$	3.26			$	47.64			$	37.28
Realized price without hedges		$	65.56			$	2.99			$	27.96			$	30.17
Cash settlements		$	8.76			$	0.34			$	0.07			$	3.24
Realized price, including cash settlements		$	74.32			$	3.33			$	28.03			$	33.41
		Year Ended December 31, 2013
		Oil / Bitumen				Gas				NGLs				Total
		(Per Bbl)				(Per Mcf)				(Per Bbl)				(Per Boe)
United States		$	94.52			$	3.10			$	25.75			$	31.59
Canada		$	57.18			$	3.05			$	46.17			$	39.91
Realized price without hedges		$	74.41			$	3.09			$	27.33			$	33.70
Cash settlements		$	0.90			$	0.16			$	0.01			$	0.77
Realized price, including cash settlements		$	75.31			$	3.25			$	27.34			$	34.47
		Year Ended December 31, 2012
		Oil / Bitumen				Gas				NGLs				Total
		(Per Bbl)				(Per Mcf)				(Per Bbl)				(Per Boe)
United States		$	88.68			$	2.32			$	28.49			$	25.59
Canada		$	57.01			$	2.49			$	48.63			$	37.01
Realized price without hedges		$	69.73			$	2.36			$	30.42			$	28.65
Cash settlements		$	4.84			$	0.65			$	0.04			$	3.48
Realized price, including cash settlements		$	74.57			$	3.01			$	30.46			$	32.13

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

		Quarter Ended								Year Ended
		December 31,								December 31,
		2013				2012				2013				2012
Revenues:
Oil, gas and NGL sales		$	2,155			$	1,883			$	8,522			$	7,153
Oil, gas and NGL derivatives			(96	)			178				(191	)			693
Marketing and midstream revenues			565				519				2,066				1,655
Total operating revenues			2,624				2,580				10,397				9,501
Expenses and other:
Lease operating expenses			584				534				2,268				2,074
Marketing and midstream operating expenses			425				399				1,553				1,246
General and administrative expenses			157				198				617				692
Production and property taxes			108				108				461				414
Depreciation, depletion and amortization			711				731				2,780				2,811
Asset impairments			16				896				1,976				2,024
Other operating items			28				39				121				92
Total operating expenses			2,029				2,905				9,776				9,353
Operating income			595				(325	)			621				148
Net financing costs			111				98				417				370
Restructuring costs			4				74				54				74
Other nonoperating items			4				4				1				21
Earnings (loss) from continuing operations before income taxes			475				(501	)			149				(317	)
Income tax expense (benefit)			268				(144	)			169				(132	)
Earnings (loss) from continuing operations			207				(357	)			(20	)			(185	)
Earnings (loss) from discontinued operations, net of tax			—				—				—				(21	)
Net earnings (loss)		$	207			$	(357	)		$	(20	)		$	(206	)
Basic net earnings (loss) per share
Basic earnings (loss) from continuing operations per share		$	0.51			$	(0.89	)		$	(0.06	)		$	(0.47	)
Basic loss from discontinued operations per share			—				—				—				(0.05	)
Basic net earnings (loss) per share		$	0.51			$	(0.89	)		$	(0.06	)		$	(0.52	)
Diluted net earnings (loss) per share
Diluted earnings (loss) from continuing operations per share		$	0.51			$	(0.89	)		$	(0.06	)		$	(0.47	)
Diluted loss from discontinued operations per share			—				—				—				(0.05	)
Diluted net earnings (loss) per share		$	0.51			$	(0.89	)		$	(0.06	)		$	(0.52	)
Weighted average common shares outstanding:
Basic			406				405				406				404
Diluted			407				405				406				404

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

		Quarter Ended								Year Ended
		December 31,								December 31,
		2013				2012				2013				2012
Cash flows from operating activities:
Net earnings (loss)		$	207			$	(357	)		$	(20	)		$	(206	)
Loss from discontinued operations, net of tax			—				—				—				21
Adjustments to reconcile earnings (loss) from continuing operations to net cash from operating activities:
Depreciation, depletion and amortization			711				731				2,780				2,811
Asset impairments			16				896				1,976				2,024
Deferred income tax expense (benefit)			278				(188	)			97				(184	)
Derivatives and other financial instruments			70				(185	)			135				(660	)
Cash settlements on derivatives and financial instruments			130				217				277				865
Other noncash charges			112				104				318				240
Net cash from operating activities before balance sheet changes			1,524				1,218				5,563				4,911
Net change in working capital			(194	)			(98	)			(298	)			(50	)
Change in long-term other assets			38				(14	)			10				(36	)
Change in long-term other liabilities			69				37				161				105
Cash from operating activities—continuing operations			1,437				1,143				5,436				4,930
Cash from operating activities—discontinued operations			—				—				—				26
Net cash from operating activities			1,437				1,143				5,436				4,956
Cash flows from investing activities:
Capital expenditures			(1,539	)			(1,997	)			(6,758	)			(8,225	)
Proceeds from property and equipment divestitures			103				71				419				1,468
Purchases of short-term investments			—				(1,137	)			(1,076	)			(4,106	)
Redemptions of short-term investments			—				958				3,419				3,266
Other			(86	)			(4	)			(3	)			14
Cash from investing activities—continuing operations			(1,522	)			(2,109	)			(3,999	)			(7,583	)
Cash from investing activities—discontinued operations			—				(1	)			—				57
Net cash from investing activities			(1,522	)			(2,110	)			(3,999	)			(7,526	)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt, net of issuance costs			2,233				(7	)			2,233				2,458
Net short-term debt borrowings (repayments)			(295	)			361				(1,872	)			(537	)
Credit facility borrowings			—				—				—				750
Credit facility repayments			—				—				—				(750	)
Proceeds from stock option exercises			2				2				3				27
Dividends paid on common stock			(89	)			(82	)			(348	)			(324	)
Excess tax benefits related to share-based compensation			(1	)			—				4				5
Net cash from financing activities			1,850				274				20				1,629
Effect of exchange rate changes on cash			(19	)			(8	)			(28	)			23
Net change in cash and cash equivalents			1,746				(701	)			1,429				(918	)
Cash and cash equivalents at beginning of period			4,320				5,338				4,637				5,555
Cash and cash equivalents at end of period		$	6,066			$	4,637			$	6,066			$	4,637

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS

(in millions)

		December 31,				December 31,
		2013				2012
Current assets:
Cash and cash equivalents		$	6,066			$	4,637
Short-term investments			—				2,343
Accounts receivable			1,520				1,245
Other current assets			419				746
Total current assets			8,005				8,971
Property and equipment, at cost:
Oil and gas, based on full cost accounting:
Subject to amortization			73,995				69,410
Not subject to amortization			2,791				3,308
Total oil and gas			76,786				72,718
Other			6,195				5,630
Total property and equipment, at cost			82,981				78,348
Less accumulated depreciation, depletion and amortization			(54,534	)			(51,032	)
Property and equipment, net			28,447				27,316
Goodwill			5,858				6,079
Other long-term assets			567				960
Total assets		$	42,877			$	43,326
Current liabilities:
Accounts payable		$	1,229			$	1,451
Revenues and royalties payable			786				750
Short-term debt			4,066				3,189
Other current liabilities			574				613
Total current liabilities			6,655				6,003
Long-term debt			7,956				8,455
Asset retirement obligations			2,140				1,996
Other long-term liabilities			834				901
Deferred income taxes			4,793				4,693
Stockholders’ equity:
Common stock			41				41
Additional paid-in capital			3,780				3,688
Retained earnings			15,410				15,778
Accumulated other comprehensive earnings			1,268				1,771
Total stockholders’ equity			20,499				21,278
Total liabilities and stockholders’ equity		$	42,877			$	43,326
Common shares outstanding			406				406

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CAPITAL EXPENDITURES

(in millions)

		Quarter Ended December 31, 2013
		United States				Canada				Total
Exploration		$	158			$	13			$	171
Development			816				296				1,112
Exploration and development capital (1)		$	974			$	309			$	1,283
Capitalized G&A											96
Capitalized interest											12
Midstream capital (2)											174
Other capital											51
Total Operations										$	1,616

⁽¹⁾  Includes $124 million attributable to assets identified for divestiture.

⁽²⁾  Includes $42 million attributable to assets that will reside within EnLink Midstream.

		Year Ended December 31, 2013
		United States				Canada				Total
Exploration		$	626			$	128			$	754
Development			3,541				1,114				4,655
Exploration and development capital (1)		$	4,167			$	1,242			$	5,409
Capitalized G&A											368
Capitalized interest											42
Midstream capital (2)											703
Other capital											121
Total Operations										$	6,643

⁽¹⁾  Includes $483 million attributable to assets identified for divestiture.

⁽²⁾  Includes $215 million attributable to assets that will reside within EnLink Midstream.

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

COSTS INCURRED

(in millions)

		Total Year Ended December 31,
		2013				2012
Property acquisition costs:
Proved properties		$	22			$	73
Unproved properties			216				1,167
Exploration costs			595				666
Development costs			5,089				6,099
Costs Incurred		$	5,922			$	8,005
		United States Year Ended December 31,
		2013				2012
Property acquisition costs:
Proved properties		$	19			$	2
Unproved properties			213				1,135
Exploration costs			443				351
Development costs			3,838				4,408
Costs Incurred		$	4,513			$	5,896
		Canada Year Ended December 31,
		2013				2012
Property acquisition costs:
Proved properties		$	3			$	71
Unproved properties			3				32
Exploration costs			152				315
Development costs			1,251				1,691
Costs Incurred		$	1,409			$	2,109

Page 12 of 14

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

RESERVES RECONCILIATION

		Total
		Oil / Bitumen				Gas				NGLs				Total
		(MMBbls)				(Bcf)				(MMBbls)				(MMBoe)
As of December 31, 2012:
Proved developed			327				8,070				451				2,123
Proved undeveloped			471				1,376				140				840
Total Proved			798				9,446				591				2,963
Revisions due to prices			(11	)			566				11				94
Revisions other than price			(2	)			(232	)			(47	)			(88	)
Extensions and discoveries			114				490				65				261
Purchase of reserves			1				1				—				1
Production			(62	)			(874	)			(45	)			(253	)
Sale of reserves			(1	)			(89	)			—				(15	)
As of December 31, 2013:
Proved developed			361				8,459				491				2,262
Proved undeveloped			476				849				84				701
Total Proved			837				9,308				575				2,963
		United States
		Oil (MMBbls)				Gas (Bcf)				NGLs (MMBbls)				Total (MMBoe)
As of December 31, 2012:
Proved developed			166				7,391				431				1,829
Proved undeveloped			39				1,371				140				407
Total Proved			205				8,762				571				2,236
Revisions due to prices			1				405				8				76
Revisions other than price			(18	)			(299	)			(50	)			(117	)
Extensions and discoveries			69				471				64				212
Purchase of reserves			1				1				—				1
Production			(28	)			(709	)			(41	)			(189	)
Sale of reserves			(1	)			(81	)			—				(14	)
As of December 31, 2013:
Proved developed			194				7,707				468				1,947
Proved undeveloped			35				843				84				258
Total Proved			229				8,550				552				2,205
		Canada
		Oil / Bitumen (MMBbls)				Gas (Bcf)				NGLs (MMBbls)				Total (MMBoe)
As of December 31, 2012:
Proved developed			161				679				20				294
Proved undeveloped			432				5				—				433
Total Proved			593				684				20				727
Revisions due to prices			(12	)			161				3				18
Revisions other than price			16				67				3				29
Extensions and discoveries			45				19				1				49
Purchase of reserves			—				—				—				—
Production			(34	)			(165	)			(4	)			(64	)
Sale of reserves			—				(8	)			—				(1	)
As of December 31, 2013:
Proved developed			167				752				23				315
Proved undeveloped			441				6				—				443
Total Proved			608				758				23				758

Page 13 of 14

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

NON-GAAP FINANCIAL MEASURES

The United States Securities and Exchange Commission has adopted disclosure requirements for public companies such as Devon concerning Non-GAAP financial measures. (GAAP refers to generally accepted accounting principles). The company must reconcile the Non-GAAP financial measure to related GAAP information. 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. The following tables summarize the effects of these items on fourth-quarter 2013 earnings.

RECONCILIATION TO GAAP INFORMATION

(in millions)

		Quarter Ended December 31, 2013
		Before-Tax				After-Tax
Net earnings (GAAP)						$	207
Derivatives and other financial instruments			105				67
Cash settlements on derivatives and financial instruments			101				64
Cash repatriation			—				97
Asset impairments			16				10
Restructuring costs			4				2
Adjusted earnings (Non-GAAP)						$	447
Diluted share count							407
Adjusted diluted earnings per share (Non-GAAP)						$	1.10

NON-GAAP FINANCIAL MEASURES

Devon believes that using net debt for the calculation of “net debt to adjusted capitalization” provides a better measure than using debt. Devon defines net debt as debt less cash, cash equivalents and short-term investments. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash to repay debt.

RECONCILIATION TO GAAP INFORMATION

(in millions)

		December 31,
		2013				2012
Total debt (GAAP)		$	12,022			$	11,644
Adjustments:
Cash and short-term investments			6,066				6,980
Net debt (Non-GAAP)		$	5,956			$	4,664
Total debt		$	12,022			$	11,644
Stockholders’ equity			20,499				21,278
Total capitalization (GAAP)		$	32,521			$	32,922
Net debt		$	5,956			$	4,664
Stockholders’ equity			20,499				21,278
Adjusted capitalization (Non-GAAP)		$	26,455			$	25,942

Page 14 of 14