EX-99.3 4 d786062dex993.htm EX-99.3

Exhibit 99.3

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION NET OF ROYALTIES

|  | Quarter Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Oil and bitumen (MBbls/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 142 |  |  |  | 126 |  |  |  | 140 |  |  |  | 119 |
U.S. divest assets |  |  | 3 |  |  |  | 10 |  |  |  | 3 |  |  |  | 10 |
Canada - discontinued operations |  |  | 96 |  |  |  | 109 |  |  |  | 105 |  |  |  | 119 |
Total |  |  | 241 |  |  |  | 245 |  |  |  | 248 |  |  |  | 248 |
Natural gas liquids (MBbls/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 82 |  |  |  | 68 |  |  |  | 78 |  |  |  | 62 |
U.S. divest assets |  |  | 30 |  |  |  | 41 |  |  |  | 30 |  |  |  | 41 |
Total |  |  | 112 |  |  |  | 109 |  |  |  | 108 |  |  |  | 103 |
Gas (MMcf/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 575 |  |  |  | 513 |  |  |  | 578 |  |  |  | 503 |
U.S. divest assets |  |  | 423 |  |  |  | 603 |  |  |  | 431 |  |  |  | 637 |
Canada - discontinued operations |  |  | 4 |  |  |  | 12 |  |  |  | 4 |  |  |  | 12 |
Total |  |  | 1,002 |  |  |  | 1,128 |  |  |  | 1,013 |  |  |  | 1,152 |
Total oil equivalent (MBoe/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 321 |  |  |  | 279 |  |  |  | 314 |  |  |  | 264 |
U.S. divest assets |  |  | 103 |  |  |  | 151 |  |  |  | 105 |  |  |  | 158 |
Canada - discontinued operations |  |  | 97 |  |  |  | 111 |  |  |  | 105 |  |  |  | 121 |
Total |  |  | 521 |  |  |  | 541 |  |  |  | 524 |  |  |  | 543 |

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION TREND

|  | 2018 |  |  | 2019 |
|  | Quarter 2 |  |  | Quarter 3 |  |  | Quarter 4 |  |  | Quarter 1 |  |  | Quarter 2 |
Oil and bitumen (MBbls/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delaware Basin |  |  | 45 |  |  |  | 44 |  |  |  | 45 |  |  |  | 60 |  |  |  | 67 |
STACK |  |  | 34 |  |  |  | 29 |  |  |  | 31 |  |  |  | 32 |  |  |  | 31 |
Powder River Basin |  |  | 13 |  |  |  | 15 |  |  |  | 13 |  |  |  | 15 |  |  |  | 15 |
Eagle Ford |  |  | 28 |  |  |  | 31 |  |  |  | 30 |  |  |  | 25 |  |  |  | 23 |
Other |  |  | 6 |  |  |  | 5 |  |  |  | 6 |  |  |  | 6 |  |  |  | 6 |
New Devon |  |  | 126 |  |  |  | 124 |  |  |  | 125 |  |  |  | 138 |  |  |  | 142 |
U.S. divest assets |  |  | 10 |  |  |  | 9 |  |  |  | 8 |  |  |  | 4 |  |  |  | 3 |
Canada - discontinued operations |  |  | 109 |  |  |  | 102 |  |  |  | 120 |  |  |  | 112 |  |  |  | 96 |
Total |  |  | 245 |  |  |  | 235 |  |  |  | 253 |  |  |  | 254 |  |  |  | 241 |
Natural gas liquids (MBbls/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delaware Basin |  |  | 15 |  |  |  | 19 |  |  |  | 18 |  |  |  | 23 |  |  |  | 27 |
STACK |  |  | 37 |  |  |  | 40 |  |  |  | 37 |  |  |  | 35 |  |  |  | 40 |
Powder River Basin |  |  | 1 |  |  |  | 2 |  |  |  | 2 |  |  |  | 2 |  |  |  | 2 |
Eagle Ford |  |  | 13 |  |  |  | 15 |  |  |  | 15 |  |  |  | 12 |  |  |  | 12 |
Other |  |  | 2 |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |  |  |  | 1 |
New Devon |  |  | 68 |  |  |  | 77 |  |  |  | 73 |  |  |  | 73 |  |  |  | 82 |
U.S. divest assets |  |  | 41 |  |  |  | 36 |  |  |  | 32 |  |  |  | 31 |  |  |  | 30 |
Total |  |  | 109 |  |  |  | 113 |  |  |  | 105 |  |  |  | 104 |  |  |  | 112 |
Gas (MMcf/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delaware Basin |  |  | 94 |  |  |  | 103 |  |  |  | 127 |  |  |  | 146 |  |  |  | 158 |
STACK |  |  | 329 |  |  |  | 337 |  |  |  | 343 |  |  |  | 333 |  |  |  | 313 |
Powder River Basin |  |  | 13 |  |  |  | 18 |  |  |  | 20 |  |  |  | 18 |  |  |  | 22 |
Eagle Ford |  |  | 74 |  |  |  | 84 |  |  |  | 95 |  |  |  | 83 |  |  |  | 81 |
Other |  |  | 3 |  |  |  | 2 |  |  |  | 2 |  |  |  | 1 |  |  |  | 1 |
New Devon |  |  | 513 |  |  |  | 544 |  |  |  | 587 |  |  |  | 581 |  |  |  | 575 |
U.S. divest assets |  |  | 603 |  |  |  | 491 |  |  |  | 457 |  |  |  | 439 |  |  |  | 423 |
Canada - discontinued operations |  |  | 12 |  |  |  | 11 |  |  |  | 6 |  |  |  | 4 |  |  |  | 4 |
Total |  |  | 1,128 |  |  |  | 1,046 |  |  |  | 1,050 |  |  |  | 1,024 |  |  |  | 1,002 |
Total oil equivalent (MBoe/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Delaware Basin |  |  | 76 |  |  |  | 79 |  |  |  | 84 |  |  |  | 107 |  |  |  | 120 |
STACK |  |  | 125 |  |  |  | 126 |  |  |  | 126 |  |  |  | 123 |  |  |  | 124 |
Powder River Basin |  |  | 16 |  |  |  | 19 |  |  |  | 18 |  |  |  | 21 |  |  |  | 21 |
Eagle Ford |  |  | 54 |  |  |  | 60 |  |  |  | 61 |  |  |  | 50 |  |  |  | 49 |
Other |  |  | 8 |  |  |  | 7 |  |  |  | 6 |  |  |  | 7 |  |  |  | 7 |
New Devon |  |  | 279 |  |  |  | 291 |  |  |  | 295 |  |  |  | 308 |  |  |  | 321 |
U.S. divest assets |  |  | 151 |  |  |  | 127 |  |  |  | 116 |  |  |  | 108 |  |  |  | 103 |
Canada - discontinued operations |  |  | 111 |  |  |  | 104 |  |  |  | 121 |  |  |  | 113 |  |  |  | 97 |
Total |  |  | 541 |  |  |  | 522 |  |  |  | 532 |  |  |  | 529 |  |  |  | 521 |

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK PRICES

(average prices) |  | Quarter 2 |  |  | June YTD |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Oil ($/Bbl) - West Texas Intermediate (Cushing) |  | $ | 59.85 |  |  | $ | 67.83 |  |  | $ | 57.36 |  |  | $ | 65.38 |
Natural Gas ($/Mcf) - Henry Hub |  | $ | 2.64 |  |  | $ | 2.80 |  |  | $ | 2.90 |  |  | $ | 2.90 |

REALIZED PRICES

|  | Quarter Ended June 30, 2019 |
|  | Oil |  |  | NGL |  |  | Gas |  |  | Total |
|  | (Per Bbl) |  |  | (Per Bbl) |  |  | (Per Mcf) |  |  | (Per Boe) |
Realized price without hedges |  | $ | 57.09 |  |  | $ | 14.79 |  |  | $ | 1.61 |  |  | $ | 27.24 |
Cash settlements |  | $ | (0.41 | ) |  | $ | 1.03 |  |  | $ | 0.20 |  |  | $ | 0.60 |
Realized price, including cash settlements |  | $ | 56.68 |  |  | $ | 15.82 |  |  | $ | 1.81 |  |  | $ | 27.84 |
|  | Quarter Ended June 30, 2018 |
|  | Oil |  |  | NGL |  |  | Gas |  |  | Total |
|  | (Per Bbl) |  |  | (Per Bbl) |  |  | (Per Mcf) |  |  | (Per Boe) |
Realized price without hedges |  | $ | 65.41 |  |  | $ | 24.10 |  |  | $ | 2.03 |  |  | $ | 31.97 |
Cash settlements |  | $ | (11.43 | ) |  | $ | (1.66 | ) |  | $ | 0.13 |  |  | $ | (3.67 | )
Realized price, including cash settlements |  | $ | 53.98 |  |  | $ | 22.44 |  |  | $ | 2.16 |  |  | $ | 28.30 |
|  | Six Months Ended June 30, 2019 |
|  | Oil |  |  | NGL |  |  | Gas |  |  | Total |
|  | (Per Bbl) |  |  | (Per Bbl) |  |  | (Per Mcf) |  |  | (Per Boe) |
Realized price without hedges |  | $ | 54.50 |  |  | $ | 16.62 |  |  | $ | 2.08 |  |  | $ | 27.90 |
Cash settlements |  | $ | 1.58 |  |  | $ | 0.77 |  |  | $ | 0.01 |  |  | $ | 0.76 |
Realized price, including cash settlements |  | $ | 56.08 |  |  | $ | 17.39 |  |  | $ | 2.09 |  |  | $ | 28.66 |
|  | Six Months Ended June 30, 2018 |
|  | Oil |  |  | NGL |  |  | Gas |  |  | Total |
|  | (Per Bbl) |  |  | (Per Bbl) |  |  | (Per Mcf) |  |  | (Per Boe) |
Realized price without hedges |  | $ | 63.71 |  |  | $ | 23.38 |  |  | $ | 2.23 |  |  | $ | 31.20 |
Cash settlements |  | $ | (10.32 | ) |  | $ | (1.13 | ) |  | $ | 0.16 |  |  | $ | (3.01 | )
Realized price, including cash settlements |  | $ | 53.39 |  |  | $ | 22.25 |  |  | $ | 2.39 |  |  | $ | 28.19 |

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share amounts) |  | Quarter Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Upstream revenues |  | $ | 1,191 |  |  | $ | 766 |  |  | $ | 1,654 |  |  | $ | 1,783 |
Marketing revenues |  |  | 730 |  |  |  | 1,156 |  |  |  | 1,495 |  |  |  | 2,018 |
Total revenues |  |  | 1,921 |  |  |  | 1,922 |  |  |  | 3,149 |  |  |  | 3,801 |
Production expenses |  |  | 371 |  |  |  | 406 |  |  |  | 736 |  |  |  | 801 |
Exploration expenses |  |  | 7 |  |  |  | 62 |  |  |  | 11 |  |  |  | 83 |
Marketing expenses |  |  | 713 |  |  |  | 1,149 |  |  |  | 1,463 |  |  |  | 2,015 |
Depreciation, depletion and amortization |  |  | 394 |  |  |  | 342 |  |  |  | 774 |  |  |  | 647 |
Asset impairments |  |  | — |  |  |  | 154 |  |  |  | — |  |  |  | 154 |
Asset dispositions |  |  | (1 | ) |  |  | 23 |  |  |  | (45 | ) |  |  | 11 |
General and administrative expenses |  |  | 114 |  |  |  | 135 |  |  |  | 249 |  |  |  | 310 |
Financing costs, net |  |  | 66 |  |  |  | 64 |  |  |  | 126 |  |  |  | 453 |
Restructuring and transaction costs |  |  | 12 |  |  |  | 85 |  |  |  | 63 |  |  |  | 85 |
Other expenses |  |  | 8 |  |  |  | (15 | ) |  |  | (9 | ) |  |  | (64 | )
Total expenses |  |  | 1,684 |  |  |  | 2,405 |  |  |  | 3,368 |  |  |  | 4,495 |
Earnings (loss) from continuing operations before income taxes |  |  | 237 |  |  |  | (483 | ) |  |  | (219 | ) |  |  | (694 | )
Income tax expense (benefit) |  |  | 71 |  |  |  | 13 |  |  |  | (39 | ) |  |  | 10 |
Net earnings (loss) from continuing operations |  |  | 166 |  |  |  | (496 | ) |  |  | (180 | ) |  |  | (704 | )
Net earnings from discontinued operations, net of income tax expense |  |  | 329 |  |  |  | 161 |  |  |  | 358 |  |  |  | 216 |
Net earnings (loss) |  |  | 495 |  |  |  | (335 | ) |  |  | 178 |  |  |  | (488 | )
Net earnings attributable to noncontrolling interests |  |  | — |  |  |  | 90 |  |  |  | — |  |  |  | 134 |
Net earnings (loss) attributable to Devon |  | $ | 495 |  |  | $ | (425 | ) |  | $ | 178 |  |  | $ | (622 | )
Basic net earnings (loss) per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic earnings (loss) from continuing operations per share |  | $ | 0.40 |  |  | $ | (0.97 | ) |  | $ | (0.43 | ) |  | $ | (1.36 | )
Basic earnings from discontinued operations per share |  |  | 0.80 |  |  |  | 0.14 |  |  |  | 0.85 |  |  |  | 0.16 |
Basic net earnings (loss) per share |  | $ | 1.20 |  |  | $ | (0.83 | ) |  | $ | 0.42 |  |  | $ | (1.20 | )
Diluted net earnings (loss) per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Diluted earnings (loss) from continuing operations per share |  | $ | 0.40 |  |  | $ | (0.97 | ) |  | $ | (0.43 | ) |  | $ | (1.36 | )
Diluted earnings from discontinued operations per share |  |  | 0.79 |  |  |  | 0.14 |  |  |  | 0.85 |  |  |  | 0.16 |
Diluted net earnings (loss) per share |  | $ | 1.19 |  |  | $ | (0.83 | ) |  | $ | 0.42 |  |  | $ | (1.20 | )
Weighted average common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 415 |  |  |  | 521 |  |  |  | 425 |  |  |  | 524 |
Diluted |  |  | 417 |  |  |  | 521 |  |  |  | 425 |  |  |  | 524 |

UPSTREAM REVENUES

(in millions) |  | Quarter Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Oil, gas and NGL sales |  | $ | 1,051 |  |  | $ | 1,253 |  |  | $ | 2,119 |  |  | $ | 2,383 |
Derivative cash settlements |  |  | 23 |  |  |  | (144 | ) |  |  | 57 |  |  |  | (229 | )
Derivative valuation changes |  |  | 117 |  |  |  | (343 | ) |  |  | (522 | ) |  |  | (371 | )
Upstream revenues |  | $ | 1,191 |  |  | $ | 766 |  |  | $ | 1,654 |  |  | $ | 1,783 |

PRODUCTION EXPENSES

(in millions) |  | Quarter Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Lease operating expense |  | $ | 133 |  |  | $ | 154 |  |  | $ | 265 |  |  | $ | 302 |
Gathering, processing & transportation |  |  | 161 |  |  |  | 180 |  |  |  | 320 |  |  |  | 362 |
Production taxes |  |  | 66 |  |  |  | 64 |  |  |  | 130 |  |  |  | 121 |
Property taxes |  |  | 11 |  |  |  | 8 |  |  |  | 21 |  |  |  | 16 |
Production expenses |  | $ | 371 |  |  | $ | 406 |  |  | $ | 736 |  |  | $ | 801 |

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions) |  | Quarter Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earnings (loss) |  | $ | 495 |  |  | $ | (335 | ) |  | $ | 178 |  |  | $ | (488 | )
Adjustments to reconcile net earnings (loss) to net cash from operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earnings from discontinued operations, net of income tax expense |  |  | (329 | ) |  |  | (161 | ) |  |  | (358 | ) |  |  | (216 | )
Depreciation, depletion and amortization |  |  | 394 |  |  |  | 342 |  |  |  | 774 |  |  |  | 647 |
Asset impairments |  |  | — |  |  |  | 154 |  |  |  | — |  |  |  | 154 |
Leasehold impairments |  |  | 1 |  |  |  | 53 |  |  |  | 2 |  |  |  | 61 |
Accretion on discounted liabilities |  |  | 10 |  |  |  | 9 |  |  |  | 20 |  |  |  | 18 |
Total (gains) losses on commodity derivatives |  |  | (140 | ) |  |  | 487 |  |  |  | 465 |  |  |  | 600 |
Cash settlements on commodity derivatives |  |  | 23 |  |  |  | (144 | ) |  |  | 54 |  |  |  | (229 | )
(Gains) losses on asset dispositions |  |  | (1 | ) |  |  | 23 |  |  |  | (45 | ) |  |  | 11 |
Deferred income tax expense (benefit) |  |  | 69 |  |  |  | — |  |  |  | (38 | ) |  |  | (4 | )
Share-based compensation |  |  | 23 |  |  |  | 53 |  |  |  | 69 |  |  |  | 87 |
Early retirement of debt |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 312 |
Other |  |  | 2 |  |  |  | (20 | ) |  |  | (12 | ) |  |  | (65 | )
Changes in assets and liabilities, net |  |  | (59 | ) |  |  | 65 |  |  |  | (143 | ) |  |  | 71 |
Net cash from operating activities - continuing operations |  |  | 488 |  |  |  | 526 |  |  |  | 966 |  |  |  | 959 |
Net cash from operating activities - discontinued operations |  |  | 135 |  |  |  | (21 | ) |  |  | 33 |  |  |  | 350 |
Net cash from operating activities - total |  |  | 623 |  |  |  | 505 |  |  |  | 999 |  |  |  | 1,309 |
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital expenditures |  |  | (494 | ) |  |  | (543 | ) |  |  | (996 | ) |  |  | (1,105 | )
Acquisitions of property and equipment |  |  | (13 | ) |  |  | (10 | ) |  |  | (23 | ) |  |  | (16 | )
Divestitures of property and equipment |  |  | 28 |  |  |  | 560 |  |  |  | 339 |  |  |  | 607 |
Net cash from investing activities - continuing operations |  |  | (479 | ) |  |  | 7 |  |  |  | (680 | ) |  |  | (514 | )
Net cash from investing activities - discontinued operations |  |  | 2,544 |  |  |  | (281 | ) |  |  | 2,497 |  |  |  | (550 | )
Net cash from investing activities - total |  |  | 2,065 |  |  |  | (274 | ) |  |  | 1,817 |  |  |  | (1,064 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Repayments of long-term debt principal |  |  | — |  |  |  | — |  |  |  | (162 | ) |  |  | (807 | )
Early retirement of debt |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (304 | )
Repurchases of common stock |  |  | (187 | ) |  |  | (428 | ) |  |  | (1,185 | ) |  |  | (499 | )
Dividends paid on common stock |  |  | (37 | ) |  |  | (42 | ) |  |  | (71 | ) |  |  | (74 | )
Shares exchanged for tax withholdings |  |  | (3 | ) |  |  | (6 | ) |  |  | (22 | ) |  |  | (35 | )
Net cash from financing activities - continuing operations |  |  | (227 | ) |  |  | (476 | ) |  |  | (1,440 | ) |  |  | (1,719 | )
Net cash from financing activities - discontinued operations |  |  | — |  |  |  | 73 |  |  |  | (8 | ) |  |  | 103 |
Net cash from financing activities - total |  |  | (227 | ) |  |  | (403 | ) |  |  | (1,448 | ) |  |  | (1,616 | )
Effect of exchange rate changes on cash - discontinued operations |  |  | 37 |  |  |  | 227 |  |  |  | 39 |  |  |  | 212 |
Net change in cash, cash equivalents and restricted cash |  |  | 2,498 |  |  |  | 55 |  |  |  | 1,407 |  |  |  | (1,159 | )
Cash, cash equivalents and restricted cash at beginning of period |  |  | 1,355 |  |  |  | 1,470 |  |  |  | 2,446 |  |  |  | 2,684 |
Cash, cash equivalents and restricted cash at end of period |  | $ | 3,853 |  |  | $ | 1,525 |  |  | $ | 3,853 |  |  | $ | 1,525 |
Reconciliation of cash, cash equivalents and restricted cash: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 3,470 |  |  | $ | 1,460 |  |  | $ | 3,470 |  |  | $ | 1,460 |
Cash restricted for discontinued operations |  |  | 370 |  |  |  | — |  |  |  | 370 |  |  |  | — |
Restricted cash included in other current assets |  |  | 13 |  |  |  | 28 |  |  |  | 13 |  |  |  | 28 |
Cash and cash equivalents included in current assets associated with discontinued operations |  |  | — |  |  |  | 37 |  |  |  | — |  |  |  | 37 |
Total cash, cash equivalents and restricted cash |  | $ | 3,853 |  |  | $ | 1,525 |  |  | $ | 3,853 |  |  | $ | 1,525 |

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS

(in millions) |  | June 30, |  |  | December 31, |
|  | 2019 |  |  | 2018 |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 3,470 |  |  | $ | 2,414 |
Cash restricted for discontinued operations |  |  | 370 |  |  |  | — |
Accounts receivable |  |  | 842 |  |  |  | 855 |
Current assets associated with discontinued operations |  |  | 131 |  |  |  | 283 |
Other current assets |  |  | 354 |  |  |  | 885 |
Total current assets |  |  | 5,167 |  |  |  | 4,437 |
Oil and gas property and equipment, based on successful efforts accounting, net |  |  | 8,987 |  |  |  | 8,982 |
Other property and equipment, net |  |  | 1,050 |  |  |  | 1,044 |
Total property and equipment, net |  |  | 10,037 |  |  |  | 10,026 |
Goodwill |  |  | 841 |  |  |  | 841 |
Right-of-use assets |  |  | 273 |  |  |  | — |
Other long-term assets |  |  | 232 |  |  |  | 276 |
Long-term assets associated with discontinued operations |  |  | 99 |  |  |  | 3,986 |
Total assets |  | $ | 16,649 |  |  | $ | 19,566 |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 522 |  |  | $ | 563 |
Revenues and royalties payable |  |  | 772 |  |  |  | 832 |
Short-term debt |  |  | — |  |  |  | 162 |
Current liabilities associated with discontinued operations |  |  | 1,894 |  |  |  | 338 |
Other current liabilities |  |  | 279 |  |  |  | 331 |
Total current liabilities |  |  | 3,467 |  |  |  | 2,226 |
Long-term debt |  |  | 4,294 |  |  |  | 4,292 |
Lease liabilities |  |  | 263 |  |  |  | — |
Asset retirement obligations |  |  | 528 |  |  |  | 606 |
Other long-term liabilities |  |  | 431 |  |  |  | 442 |
Long-term liabilities associated with discontinued operations |  |  | 189 |  |  |  | 2,285 |
Deferred income taxes |  |  | 483 |  |  |  | 529 |
Stockholders’ equity: |  |  |  |  |  |  |  |
Common stock |  |  | 41 |  |  |  | 45 |
Additional paid-in capital |  |  | 3,352 |  |  |  | 4,486 |
Retained earnings |  |  | 3,738 |  |  |  | 3,650 |
Accumulated other comprehensive earnings (loss) |  |  | (117 | ) |  |  | 1,027 |
Treasury stock, at cost, 0.7 million and 1.0 million shares in 2019 and 2018, respectively |  |  | (20 | ) |  |  | (22 | )
Total stockholders’ equity |  |  | 6,994 |  |  |  | 9,186 |
Total liabilities and stockholders’ equity |  | $ | 16,649 |  |  | $ | 19,566 |
Common shares outstanding |  |  | 410 |  |  |  | 450 |

CAPITAL EXPENDITURES

(in millions) |  | Quarter Ended |  |  | Six Months Ended |
|  | June 30, 2019 |  |  | June 30, 2019 |
New Devon upstream capital |  | $ | 478 |  |  | $ | 935 |
Divest assets upstream capital |  |  | 16 |  |  |  | 26 |
Land and other acquisitions |  |  | 14 |  |  |  | 21 |
Exploration and production (E&P) capital |  |  | 508 |  |  |  | 982 |
Other |  |  | 22 |  |  |  | 29 |
Total continuing operations |  | $ | 530 |  |  | $ | 1,011 |
Total discontinued operations |  | $ | 51 |  |  | $ | 100 |

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

NON-GAAP FINANCIAL MEASURES

This press release includes non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.

CORE EARNINGS

Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on second-quarter 2019 earnings.

(in millions, except per share amounts) |  | Quarter Ended June 30, 2019 |
|  | Before-tax |  |  | After-tax |  |  | Per Diluted Share |
Continuing Operations |  |  |  |  |  |  |  |  |  |  |  |
Net earnings (GAAP) |  | $ | 237 |  |  | $ | 166 |  |  | $ | 0.40 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |
Asset dispositions |  |  | (1 | ) |  |  | (1 | ) |  |  | (0.00 | )
Asset and exploration impairments |  |  | 2 |  |  |  | 2 |  |  |  | 0.00 |
Deferred tax asset valuation allowance |  |  | — |  |  |  | 11 |  |  |  | 0.03 |
Fair value changes in financial instruments |  |  | (117 | ) |  |  | (91 | ) |  |  | (0.22 | )
Restructuring and transaction costs |  |  | 12 |  |  |  | 10 |  |  |  | 0.02 |
Core earnings (Non-GAAP) |  | $ | 133 |  |  | $ | 97 |  |  | $ | 0.23 |
Discontinued Operations |  |  |  |  |  |  |  |  |  |  |  |
Net earnings (GAAP) |  | $ | 44 |  |  | $ | 329 |  |  | $ | 0.79 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |
Gain on sale of Canadian operations |  |  | (189 | ) |  |  | (460 | ) |  |  | (1.12 | )
Asset and exploration impairments |  |  | 37 |  |  |  | 27 |  |  |  | 0.07 |
Deferred tax asset valuation allowance |  |  | — |  |  |  | 32 |  |  |  | 0.08 |
Fair value changes in financial instruments and foreign currency |  |  | (20 | ) |  |  | (17 | ) |  |  | (0.04 | )
Restructuring and transaction costs |  |  | 236 |  |  |  | 172 |  |  |  | 0.42 |
Core earnings (Non-GAAP) |  | $ | 108 |  |  | $ | 83 |  |  | $ | 0.20 |
Total |  |  |  |  |  |  |  |  |  |  |  |
Net earnings (GAAP) |  | $ | 281 |  |  | $ | 495 |  |  | $ | 1.19 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |
Continuing Operations |  |  | (104 | ) |  |  | (69 | ) |  |  | (0.17 | )
Discontinued Operations |  |  | 64 |  |  |  | (246 | ) |  |  | (0.59 | )
Core earnings (Non-GAAP) |  | $ | 241 |  |  | $ | 180 |  |  | $ | 0.43 |

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

EBITDAX

Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings from continuing operations 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 and should be considered in conjunction with net earnings from continuing operations.

(in millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Q3 2018 |  |  | Q4 2018 |  |  | Q1 2019 |  |  | Q2 2019 |  |  | Trailing 12 months |
Net earnings (loss) from continuing operations (GAAP) |  | $ | 156 |  |  | $ | 1,442 |  |  | $ | (346 | ) |  | $ | 166 |  |  | $ | 1,418 |
Financing costs, net |  |  | 68 |  |  |  | 59 |  |  |  | 60 |  |  |  | 66 |  |  |  | 253 |
Income tax expense (benefit) |  |  | (171 | ) |  |  | 441 |  |  |  | (110 | ) |  |  | 71 |  |  |  | 231 |
Exploration expenses |  |  | 22 |  |  |  | 24 |  |  |  | 4 |  |  |  | 7 |  |  |  | 57 |
Depreciation, depletion and amortization |  |  | 342 |  |  |  | 339 |  |  |  | 380 |  |  |  | 394 |  |  |  | 1,455 |
Asset impairments |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |
Asset dispositions |  |  | (6 | ) |  |  | (268 | ) |  |  | (44 | ) |  |  | (1 | ) |  |  | (319 | )
Share-based compensation |  |  | 23 |  |  |  | 23 |  |  |  | 23 |  |  |  | 21 |  |  |  | 90 |
Derivative and financial instrument non-cash valuation changes |  |  | 200 |  |  |  | (1,447 | ) |  |  | 638 |  |  |  | (117 | ) |  |  | (726 | )
Restructuring and transaction costs |  |  | 6 |  |  |  | 6 |  |  |  | 51 |  |  |  | 12 |  |  |  | 75 |
Accretion on discounted liabilities and other |  |  | (6 | ) |  |  | 30 |  |  |  | (16 | ) |  |  | 8 |  |  |  | 16 |
EBITDAX (Non-GAAP) |  | $ | 636 |  |  | $ | 649 |  |  | $ | 640 |  |  | $ | 627 |  |  | $ | 2,552 |

NET DEBT

Devon defines net debt as 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.

(in millions) |  |  |
|  | June 30, 2019 |
Debt - continuing operations (GAAP) |  | $ | 4,294 |
Debt classified as current liabilities associated with discontinued operations |  |  | 1,494 |
Total debt |  |  | 5,788 |
Cash and cash equivalents |  |  | (3,470 | )
Cash restricted for discontinued operations |  |  | (370 | )
Total cash |  |  | (3,840 | )
Net debt (Non-GAAP) |  | $ | 1,948 |

FREE CASH FLOW

Devon defines free cash flow as total operating cash flow less capital expenditures and acquisitions. Devon believes that free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.

(in millions) |  |  |
|  | Quarter Ended June 30, 2019 |
Total operating cash flow (GAAP) |  | $ | 623 |
Less capital expenditures and acquisitions: |  |  |  |
Capital expenditures - continuing operations |  |  | (494 | )
Capital expenditures - discontinued operations |  |  | (57 | )
Acquisitions - continuing operations |  |  | (13 | )
Free cash flow (Non-GAAP) |  | $ | 59 |

SUPPLEMENTAL INFORMATION

The following table presents the amounts reported in the consolidated comprehensive statements of earnings as discontinued operations.

STATEMENTS OF EARNINGS - DISCONTINUED OPERATIONS

(in millions) |  |  |  |  |  |
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, 2019 |
Upstream revenues |  | $ | 388 |  |  | $ | 635 |
Marketing revenues |  |  | 12 |  |  |  | 38 |
Total revenues |  |  | 400 |  |  |  | 673 |
Production expenses |  |  | 153 |  |  |  | 294 |
Exploration expenses |  |  | 4 |  |  |  | 13 |
Marketing expenses |  |  | 9 |  |  |  | 18 |
Depreciation, depletion and amortization |  |  | 49 |  |  |  | 128 |
Asset impairments |  |  | 37 |  |  |  | 37 |
Asset dispositions |  |  | (189 | ) |  |  | (189 | )
General and administrative expenses |  |  | 13 |  |  |  | 31 |
Financing costs, net |  |  | 13 |  |  |  | 26 |
Restructuring and transaction costs |  |  | 236 |  |  |  | 239 |
Other expenses |  |  | 31 |  |  |  | 3 |
Total expenses |  |  | 356 |  |  |  | 600 |
Earnings from discontinued operations before income taxes |  |  | 44 |  |  |  | 73 |
Income tax benefit |  |  | (285 | ) |  |  | (285 | )
Net earnings from discontinued operations, net of tax |  | $ | 329 |  |  | $ | 358 |

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

PRODUCTION GUIDANCE

|  | Quarter 3 |  |  | Full Year |
|  | Low |  |  | High |  |  | Low |  |  | High |
Oil (MBbls/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 141 |  |  |  | 147 |  |  |  | 143 |  |  |  | 146 |
U.S. divest assets |  |  | 2 |  |  |  | 4 |  |  |  | 2 |  |  |  | 4 |
Total |  |  | 143 |  |  |  | 151 |  |  |  | 145 |  |  |  | 150 |
Natural gas liquids (MBbls/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 75 |  |  |  | 80 |  |  |  | 76 |  |  |  | 81 |
U.S. divest assets |  |  | 26 |  |  |  | 32 |  |  |  | 26 |  |  |  | 31 |
Total |  |  | 101 |  |  |  | 112 |  |  |  | 102 |  |  |  | 112 |
Gas (MMcf/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 540 |  |  |  | 580 |  |  |  | 560 |  |  |  | 590 |
U.S. divest assets |  |  | 400 |  |  |  | 430 |  |  |  | 400 |  |  |  | 440 |
Total |  |  | 940 |  |  |  | 1,010 |  |  |  | 960 |  |  |  | 1,030 |
Total oil equivalent (MBoe/d) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New Devon |  |  | 306 |  |  |  | 323 |  |  |  | 312 |  |  |  | 325 |
U.S. divest assets |  |  | 95 |  |  |  | 108 |  |  |  | 95 |  |  |  | 108 |
Total |  |  | 401 |  |  |  | 431 |  |  |  | 407 |  |  |  | 433 |

PRICE REALIZATIONS GUIDANCE

|  | Quarter 3 |  |  | Full Year |
|  | Low |  |  | High |  |  | Low |  |  | High |
Oil - % of WTI |  |  | 90 | % |  |  | 100 | % |  |  | 90 | % |  |  | 100 | %
NGL - realized price |  | $ | 12.00 |  |  | $ | 16.00 |  |  | $ | 13.00 |  |  | $ | 17.00 |
Natural gas - % of Henry Hub |  |  | 50 | % |  |  | 60 | % |  |  | 65 | % |  |  | 70 | %

OTHER GUIDANCE ITEMS

|  | Quarter 3 |  |  | Full Year |
($ millions, except Boe and %) |  | Low |  |  | High |  |  | Low |  |  | High |
Marketing & midstream operating profit |  | $ | 5 |  |  | $ | 15 |  |  | $ | 40 |  |  | $ | 50 |
LOE & GP&T per BOE |  | $ | 7.50 |  |  | $ | 7.75 |  |  | $ | 7.50 |  |  | $ | 7.75 |
Production & property tax |  | $ | 70 |  |  | $ | 90 |  |  | $ | 300 |  |  | $ | 350 |
Exploration expenses |  | $ | 5 |  |  | $ | 10 |  |  | $ | 20 |  |  | $ | 30 |
Depreciation, depletion and amortization |  | $ | 370 |  |  | $ | 410 |  |  | $ | 1,550 |  |  | $ | 1,600 |
General & administrative expenses |  | $ | 105 |  |  | $ | 115 |  |  | $ | 450 |  |  | $ | 490 |
Financing costs, net |  | $ | 60 |  |  | $ | 70 |  |  | $ | 250 |  |  | $ | 270 |
Other expenses |  | $ | 10 |  |  | $ | 20 |  |  | $ | 40 |  |  | $ | 50 |
Current income tax rate |  |  | 0 | % |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
Deferred income tax rate |  |  | 20 | % |  |  | 25 | % |  |  | 20 | % |  |  | 25 | %
Total income tax rate |  |  | 20 | % |  |  | 25 | % |  |  | 20 | % |  |  | 25 | %

CAPITAL EXPENDITURES GUIDANCE

|  | Quarter 3 |  |  | Full Year |
(in millions) |  | Low |  |  | High |  |  | Low |  |  | High |
New Devon upstream capital |  | $ | 450 |  |  | $ | 550 |  |  | $ | 1,800 |  |  | $ | 1,900 |
Divest assets upstream capital (assumes full year) |  |  | 5 |  |  |  | 15 |  |  |  | 40 |  |  |  | 50 |
Corporate |  |  | 5 |  |  |  | 10 |  |  |  | 40 |  |  |  | 50 |
Devon capital expenditures |  | $ | 460 |  |  | $ | 575 |  |  | $ | 1,880 |  |  | $ | 2,000 |

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

Oil Commodity Hedges

|  | Price Swaps |  |  | Price Collars |
Period |  | Volume (Bbls/d) |  |  | Weighted Average Price ($/Bbl) |  |  | Volume (Bbls/d) |  |  | Weighted Average Floor Price ($/Bbl) |  |  | Weighted Average Ceiling Price ($/Bbl) |
Q3-Q4 2019 |  |  | 41,100 |  |  | $ | 60.76 |  |  |  | 79,750 |  |  | $ | 54.89 |  |  | $ | 64.92 |
|  | Three-Way Price Collars |  |  |  |
Period |  | Volume (Bbls/d) |  |  | Weighted Average Floor Sold Price ($/Bbl) |  |  | Weighted Average Floor Purchased Price ($/Bbl) |  |  | Weighted Average Ceiling Price ($/Bbl) |  |  |  |
Q3-Q4 2019 |  |  | 5,000 |  |  | $ | 50.00 |  |  | $ | 63.00 |  |  | $ | 74.80 |  |  |  |  |

Oil Basis Swaps

Period |  | Index |  | Volume (Bbls/d) |  |  | Weighted Average Differential to WTI ($/Bbl) |
Q3-Q4 2019 |  | Midland Sweet |  |  | 28,000 |  |  | $ | (0.46 | )
Q3-Q4 2019 |  | Argus LLS |  |  | 7,500 |  |  | $ | 5.18 |
Q3-Q4 2019 |  | Argus MEH |  |  | 26,000 |  |  | $ | 3.33 |
Q3-Q4 2019 |  | NYMEX Roll |  |  | 38,000 |  |  | $ | 0.45 |
Q3-Q4 2019 |  | Western Canadian Select |  |  | 12,469 |  |  | $ | (20.03 | )

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) |
Q3-Q4 2019 |  |  | 257,800 |  |  | $ | 2.80 |  |  |  | 200,500 |  |  | $ | 2.63 |  |  | $ | 3.02 |

Natural Gas Basis Swaps

Period |  | Index |  | Volume (MMBtu/d) |  |  | Weighted Average Differential to Henry Hub ($/MMBtu) |
Q3-Q4 2019 |  | Panhandle Eastern Pipe Line |  |  | 20,000 |  |  | $ | (0.56 | )
Q3-Q4 2019 |  | El Paso Natural Gas |  |  | 130,000 |  |  | $ | (1.46 | )
Q3-Q4 2019 |  | Houston Ship Channel |  |  | 162,500 |  |  | $ | 0.01 |

Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index. Commodity hedge positions are shown as of July 26, 2019.