Devon Energy (DVN) 8-K Results of Operations and Financial Condition

EXHIBIT 99.1

20 North Broadway	Telephone: (405) 235-3611
Oklahoma City, Oklahoma 73102-8260	Fax: (405) 552-4667

NEWS RELEASE

Investor contact:	Zack Hager
	(405) 552-4526
Media contact:	Brian Engel
	(405) 228-7750

DEVON ENERGY REPORTS RECORD EARNINGS AND EARNINGS PER
SHARE FOR 2005; ADDS 439 MILLION BARRELS FROM DRILLING AND
PERFORMANCE REVISIONS

OKLAHOMA CITY — February 1, 2006— Devon Energy Corporation (NYSE:DVN) today reported record net earnings and earnings per share for the year ended December 31, 2005. Net earnings climbed 34 percent in 2005 to $2.9 billion while 2005 earnings per share climbed more that 40 percent to $6.38 per common share ($6.26 per diluted common share). Devon’s 2004 net earnings were $2.2 billion, or $4.51 per common share ($4.38 per diluted common share).

     For the quarter ended December 31, 2005, Devon reported net earnings of $970 million, or $2.18 per common share ($2.14 per diluted common share). The company earned $673 million or $1.38 per common share ($1.35 per diluted common share) in the fourth quarter of 2004. Fourth quarter 2005 net earnings of $970 million were reduced by $85 million, or 19 cents per diluted share, for items securities analyst typically exclude from their published estimates. The excluded items are described in detail in this news release.

     “Devon’s record 2005 earnings were accompanied by excellent drill-bit results,” commented J. Larry Nichols, chairman and chief executive officer. “We added 439 million equivalent barrels of reserves through drilling and performance revisions, or almost double our 2005 production. These reserve additions were achieved with just over $4 billion of related capital. In 2006 we expect to increase capital and to deliver another year of strong reserve additions at very competitive unit costs.”

Capital and Reserve Summary	Year Ended
(detailed tables on pages 13 and 14 and non-GAAP reconciliation on page 17)	December 31,
	2005		2004
Drill-bit Capital (in millions)	$	4,013	$	2,805
Reserve Data (MMBoe)
Discoveries and extensions		401		268
Revisions other than price		38		45
Drill-bit and performance reserve additions		439		313

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2005 Drilling Activity at Record Levels

          Devon drilled 254 successful exploratory wells and 2,060 successful development wells in 2005. This activity resulted in many notable operational achievements in 2005:

• In the Barnett Shale in North Texas, Devon began producing its 2,000^thoperated well and also drilled its 300^th horizontal well. Cumulative gross production from Devon-operated wells in the field surpassed one trillion cubic feet of natural gas in 2005. Devon is by far the largest producer in the Barnett Shale, the largest natural gas field in Texas.

• Devon began drilling and construction activities on its 100 percent-owned Jackfish oil sands project in eastern Alberta. Jackfish will utilize steam assisted gravity drainage technology to achieve planned production of 35,000 barrels per day of oil in 2008. Jackfish is an estimated 300 million barrel resource. The company is considering expansions onto adjacent acreage that could at least double the size of the project.

• Devon drilled 57 wells with 100 percent success in the Iron River area of eastern Alberta, Canada. During 2005, Devon acquired 165,000 net acres at Iron River adjacent to existing production in the company’s Manatokan field. Based upon the success to date, Devon expects to drill 800 wells at Iron River over the next four years increasing field production to about 30,000 barrels of oil per day by 2010.

• The company drilled successful delineation wells on two important deepwater Gulf of Mexico prospects in 2005. The follow-up wells to the Cascade and Jack discoveries in the lower Tertiary were drilled to better define reservoir size and characteristics. Devon and its partners expect to commence an extended production test of the Jack prospect later this month. Devon has a 25 percent working interest in Jack.

• Devon sanctioned development and gained regulatory approval for its Polvo offshore oil project in Brazil’s Campos Basin. During 2005 Devon also began construction of the Polvo facilities with capacity to handle 50,000 barrels of oil per day. First production is expected in the second half of 2007. Devon is the operator of Polvo and owns 60 percent of the working interest.

• Offshore Equatorial Guinea, Devon drilled two discoveries in its high impact West African exploration program. The company plans to conduct additional seismic evaluation and drilling on the discovery blocks in 2006.

Oil, Gas and NGL Sales Climb to Record Levels

          Sales of oil, gas and natural gas liquids increased 20 percent to $8.9 billion in the year ended December 31, 2005, compared with the year ended December 31, 2004. Higher realized oil, gas and natural gas liquids prices more than offset a decrease in production attributable to properties divested in the first half of 2005.

          Combined oil, gas and natural gas liquids production averaged 619 thousand barrels of oil equivalent (Boe) per day in 2005. This was 10 percent less than Devon’s 2004 average daily production of 685 thousand Boe per day. The decrease in 2005 production was entirely attributable to property divestitures in the first half of 2005 and the impact of hurricanes in the Gulf of Mexico.

          Devon’s average realized natural gas price increased 32 percent to $6.99 per thousand cubic feet in 2005, compared with $5.32 per thousand cubic feet in 2004. The company’s 2005 average realized oil price increased 36 percent to $38.44 per barrel compared with $28.18 per

Page 2

barrel in 2004. The average realized price for natural gas liquids in 2005 was $28.96 per barrel, a 26 percent increase over the $23.04 per barrel realized in 2004.

          Marketing and midstream margins climbed 25 percent in 2005 to a record $450 million. Marketing and midstream revenues increased $91 million to almost $1.8 billion. Related expenses increased by only $3 million, reflecting refocused activity and the divestiture of some midstream assets.

Oil and Gas Reserves Climb to Record Levels

          Devon ended 2005 with estimated proved reserves of 2,112 million Boe, setting an all-time record for proved reserves. The company increased proved reserves during 2005 in spite of producing 226 million Boe and divesting non-core oil and gas properties with reserves of 183 million Boe.

          In total, through drilling, extensions and revisions, the company added 439 million Boe, or nearly double Devon’s 2005 production. The 2005 drill-bit capital expenditures associated with these reserve additions totaled $4 billion, including $259 million of capitalized interest and administrative expenses. Reserves added through proved property acquisitions were just 4 million Boe, or less than one percent of total additions.

          Devon ended 2005 with 1,599 million Boe, or 76 percent of proved reserves, classified as proved developed. Year-end reserves comprised 649 million barrels of crude oil, 7.3 trillion cubic feet of natural gas and 246 million barrels of natural gas liquids.

Cash Flow Before Balance Sheet Changes Increases 16 percent to $5.7 Billion;
Share Repurchases and Debt Reduction Total $3.6 Billion

          Cash flow before balance sheet changes in 2005 reached $5.7 billion, a 16 percent increase over 2004. During 2005 the company divested non-core oil and gas properties in the United States and Canada generating almost $2 billion of additional cash. These sources of cash allowed Devon to fund over $4 billion in capital expenditures, repurchase $2.3 billion of common stock, retire $1.3 billion of debt and end the year with cash and short-term investments of approximately $2.3 billion.

          At December 31, 2005, net debt to adjusted capitalization was just 19 percent. Reconciliations of cash flow before balance sheet changes, net debt and adjusted capitalization, which are non-GAAP measures, are provided in this release.

Items Excluded from Published Earnings Estimates

          Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates for the company’s financial results. These items and their effects upon full year and fourth quarter 2005 reported earnings were as follows:

• A change in fair value of derivative financial instruments decreased full year earnings by $94 million pre-tax ($60 million after tax) and increased fourth quarter earnings by $74 million pre-tax ($47 million after tax). Of the full year pre-tax amount, $54 million was related to the Chevron exchangeable debentures and the remainder was primarily related to oil and gas hedges that no longer qualify for hedge accounting. Of the fourth quarter pre-tax amount,

Page 3

$66 million was related to the Chevron exchangeable debentures and the remainder was primarily related to oil and gas hedges that no longer qualify for hedge accounting.

• Effects of changes in foreign currency exchange rates increased full year 2005 earnings by $2 million pre-tax ($3 million after tax) and decreased fourth quarter earnings by $2 million pre-tax ($2 million after tax).

• Additional interest expense attributable to redemption of zero coupon convertible debentures and early redemption of 6.75 percent senior notes decreased full year earnings by $81 million pre-tax ($53 million after tax).

• A loss on oil hedges associated with divestiture properties that no longer qualify for hedge accounting decreased full year earnings by $55 million pre-tax ($36 million after tax).

• Current tax expense resulting from the repatriation of foreign earnings under The American Jobs Creation Act of 2004 decreased full year earnings by $28 million.

• A reduction in the carrying value of oil and gas properties reduced full year and fourth quarter earnings by $212 million pre-tax ($161 million after tax).

• Tax benefits related to property divestitures increased full year and fourth quarter net earnings by $17 million.

• Tax benefits resulting from changes in Canadian tax law increased full year and fourth quarter net earnings by $14 million.

• A gain on the sale of marketing and midstream assets increased full year earnings by $150 million pre-tax ($97 million after tax).

          The following tables summarize the full year and fourth quarter effects of these items on 2005 earnings and income taxes. Included in the tables are the tax effects resulting from an income tax accrual adjustment and those oil and gas property divestitures that did not affect net earnings.

Summary of Items Typically Excluded by Securities Analysts — Full Year 2005
(in millions)

	Pretax												After-tax			Cash Flow Before
	Earnings			Income Tax Effect									Earnings			Balance Sheet
	Effect			Current			Deferred			Total			Effect			Changes Effect
Change in fair value of financial instruments	$	(94	)		(14	)		(20	)		(34	)		(60	)		(25	)
Foreign exchange effect		2			—			(1	)		(1	)		3			—
Additional interest costs on debt retirement		(81	)		(28	)		—			(28	)		(53	)		(47	)
Loss on hedges for divestiture properties		(55	)		(19	)		—			(19	)		(36	)		(36	)
Repatriation of Canadian cash		—			28			—			28			(28	)		(28	)
Change in Canadian tax law		—			—			(14	)		(14	)		14			—
Reduction in the carrying value of properties		(212	)		—			(51	)		(51	)		(161	)		—
Income tax accrual adjustment		—			(76	)		76			—			—			76
Gain on sale of certain non-oil and gas assets		150			53			—			53			97			(53	)
Effects of oil and gas property divestitures		—			182			(199	)		(17	)		17			(182	)
Totals	$	(290	)		126			(209	)		(83	)		(207	)		(295	)

     In aggregate, these items decreased full year 2005 net earnings by $207 million, or 45 cents per common share (44 cents per diluted share). These items and their associated tax effects decreased full year 2005 cash flow before balance sheet changes by $295 million.

Page 4

Summary of Items Typically Excluded by Securities Analysts — Fourth Quarter 2005
(in millions)

	Pretax											After-tax			Cash Flow Before
	Earnings			Income Tax Effect								Earnings			Balance Sheet
	Effect			Current		Deferred			Total			Effect			Changes Effect
Change in fair value of financial instruments	$	74			4		23			27			47			(18	)
Foreign exchange effect		(2	)		—		—			—			(2	)		—
Change in Canadian tax law		—			—		(14	)		(14	)		14			—
Reduction in the carrying value of properties		(212	)		—		(51	)		(51	)		(161	)		—
Effects of oil and gas property divestitures		—			49		(66	)		(17	)		17			(49	)
Totals	$	(140	)		53		(108	)		(55	)		(85	)		(67	)

          In aggregate, these items decreased fourth quarter 2005 net earnings by $85 million, or 20 cents per common share (19 cents per diluted share). These items and their associated tax effects decreased fourth quarter 2005 cash flow before balance sheet changes by $67 million.

Conference Call to be Webcast Today

          Devon will discuss its 2005 financial and operating results in a conference call webcast today. The webcast will begin at 10 a.m. Central Time (11 a.m. Eastern Time). The webcast may be accessed from Devon’s internet home page atwww.devonenergy.com

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission. 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, inflation or lack of availability of goods and services, environmental risks, drilling risks and regulatory changes. 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.

          Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration, production and property acquisitions. Devon is the largest 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 atwww.devonenergy.com.

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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION DATA	Year Ended				Quarter Ended
(net of royalties)	December 31,				December 31,
	2005		2004		2005		2004
Total Period Production
Natural Gas (Bcf)
U.S. Onshore		462.7		480.5		119.1		120.8
U.S. Offshore		92.5		120.6		15.0		28.2
Total U.S.		555.2		601.1		134.1		149.0
Canada		261.0		279.1		61.3		70.7
International		10.8		10.2		3.2		3.0
Total Natural Gas		827.0		890.4		198.6		222.7
Oil (MMBbls)
U.S. Onshore		12.1		13.9		2.9		3.3
U.S. Offshore		13.4		17.8		2.3		4.0
Total U.S.		25.5		31.7		5.2		7.3
Canada		13.1		13.9		3.3		3.5
International		25.8		32.6		5.9		8.0
Total Oil		64.4		78.2		14.4		18.8
Natural Gas Liquids (MMBbls)
U.S. Onshore		17.3		17.7		4.3		4.3
U.S. Offshore		0.8		1.2		0.0		0.3
Total U.S.		18.1		18.9		4.3		4.6
Canada		5.3		4.9		1.4		1.3
International		0.3		0.3		0.1		0.1
Total Natural Gas Liquids		23.7		24.1		5.8		6.0
Oil Equivalent (MMBoe)
U.S. Onshore		106.6		111.7		27.1		27.8
U.S. Offshore		29.6		39.1		4.8		9.0
Total U.S.		136.2		150.8		31.9		36.8
Canada		61.9		65.2		14.9		16.5
International		27.9		34.6		6.5		8.6
Total Oil Equivalent		226.0		250.6		53.3		61.9
Average Daily Production
Natural Gas (MMcf)
U.S. Onshore		1,267.6		1,312.9		1,295.0		1,312.8
U.S. Offshore		253.5		329.5		163.1		306.9
Total U.S.		1,521.1		1,642.4		1,458.1		1,619.7
Canada		715.1		762.5		665.9		768.3
International		29.5		27.8		34.3		32.7
Total Natural Gas		2,265.7		2,432.7		2,158.3		2,420.7
Oil (MBbls)
U.S. Onshore		33.2		37.9		31.6		35.7
U.S. Offshore		36.6		48.6		25.0		43.6
Total U.S.		69.8		86.5		56.6		79.3
Canada		36.0		37.8		35.8		38.1
International		70.8		89.2		63.9		87.4
Total Oil		176.6		213.5		156.3		204.8
Natural Gas Liquids (MBbls)
U.S. Onshore		47.5		48.4		46.9		46.7
U.S. Offshore		2.2		3.2		0.4		2.8
Total U.S.		49.7		51.6		47.3		49.5
Canada		14.5		13.3		15.3		14.2
International		0.9		0.8		0.8		0.8
Total Natural Gas Liquids		65.1		65.7		63.4		64.5
Oil Equivalent (MBoe)
U.S. Onshore		292.0		305.1		294.3		301.3
U.S. Offshore		81.1		106.7		52.5		97.5
Total U.S.		373.1		411.8		346.8		398.8
Canada		169.7		178.3		162.1		180.3
International		76.5		94.6		70.5		93.7
Total Oil Equivalent		619.3		684.7		579.4		672.8

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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

FULL-YEAR PRODUCTION DATA - RETAINED PROPERTIES	Year Ended
Both periods exclude properties divested in 2005	December 31,				YOY
	2005		2004		% Change
Total Period Production
Natural Gas (Bcf)
U.S. Onshore		455.2		449.6		1	%
U.S. Offshore		80.3		67.1		20	%
Total U.S.		535.5		516.7		4	%
Canada		246.6		239.7		3	%
International		10.8		10.2		6	%
Total Natural Gas		792.9		766.6		3	%
Oil (MMBbls)
U.S. Onshore		11.6		11.6		0	%
U.S. Offshore		10.7		11.5		-7	%
Total U.S.		22.3		23.1		-3	%
Canada		12.4		11.5		8	%
International		25.8		32.6		-21	%
Total Oil		60.5		67.2		-10	%
Natural Gas Liquids (MMBbls)
U.S. Onshore		17.1		16.5		4	%
U.S. Offshore		0.6		0.6		0	%
Total U.S.		17.7		17.1		4	%
Canada		5.1		4.6		11	%
International		0.3		0.3		-1	%
Total Natural Gas Liquids		23.1		22.0		5	%
Oil Equivalent (MMBoe)
U.S. Onshore		104.5		103.1		1	%
U.S. Offshore		24.8		23.3		6	%
Total U.S.		129.3		126.4		2	%
Canada		58.6		56.0		5	%
International		27.9		34.6		-19	%
Total Oil Equivalent		215.8		217.0		-1	%
Average Daily Production
Natural Gas (MMcf)
U.S. Onshore		1,247.1		1,228.4		2	%
U.S. Offshore		220.1		183.5		20	%
Total U.S.		1,467.2		1,411.9		4	%
Canada		675.5		654.8		3	%
International		29.5		27.8		6	%
Total Natural Gas		2,172.2		2,094.5		4	%
Oil (MBbls)
U.S. Onshore		31.8		31.8		0	%
U.S. Offshore		29.4		31.3		-6	%
Total U.S.		61.2		63.1		-3	%
Canada		33.9		31.4		8	%
International		70.8		89.2		-21	%
Total Oil		165.9		183.7		-10	%
Natural Gas Liquids (MBbls)
U.S. Onshore		46.6		45.2		3	%
U.S. Offshore		1.7		1.6		6	%
Total U.S.		48.3		46.8		3	%
Canada		14.0		12.6		11	%
International		0.9		0.8		13	%
Total Natural Gas Liquids		63.2		60.2		5	%
Oil Equivalent (MBoe)
U.S. Onshore		286.3		281.7		2	%
U.S. Offshore		67.7		63.5		7	%
Total U.S.		354.0		345.2		3	%
Canada		160.7		153.1		5	%
International		76.5		94.6		-19	%
Total Oil Equivalent		591.2		592.9		0	%

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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

QUARTERLY PRODUCTION DATA - RETAINED PROPERTIES
All periods exclude properties divested in 2005							YOY			Sequential
	Q4 2005		Q4 2004		Q3 2005		% Change			% Change
Total Period Production
Natural Gas (Bcf)
U.S. Onshore		119.1		113.8		113.9		5	%		5	%
U.S. Offshore		15.0		17.9		22.0		-16	%		-32	%
Total U.S.		134.1		131.7		135.9		2	%		-1	%
Canada		61.2		60.6		66.6		1	%		-8	%
International		3.2		3.0		2.5		5	%		28	%
Total Natural Gas		198.5		195.3		205.0		2	%		-3	%
Oil (MMBbls)
U.S. Onshore		2.9		2.8		2.9		2	%		1	%
U.S. Offshore		2.3		2.5		2.6		-7	%		-11	%
Total U.S.		5.2		5.3		5.5		-2	%		-5	%
Canada		3.2		3.0		3.1		11	%		5	%
International		5.9		8.0		6.1		-27	%		-3	%
Total Oil		14.3		16.3		14.7		-12	%		-2	%
Natural Gas Liquids (MMBbls)
U.S. Onshore		4.3		4.1		4.2		6	%		3	%
U.S. Offshore		0.0		0.1		0.3		-74	%		-88	%
Total U.S.		4.3		4.2		4.5		4	%		-3	%
Canada		1.4		1.2		1.3		15	%		8	%
International		0.1		0.1		0.1		1	%		-9	%
Total Natural Gas Liquids		5.8		5.5		5.9		6	%		-1	%
Oil Equivalent (MMBoe)
U.S. Onshore		27.1		25.9		26.1		5	%		4	%
U.S. Offshore		4.8		5.6		6.5		-13	%		-26	%
Total U.S.		31.9		31.5		32.6		2	%		-2	%
Canada		14.8		14.3		15.6		4	%		-4	%
International		6.5		8.6		6.5		-25	%		-1	%
Total Oil Equivalent		53.2		54.4		54.7		-2	%		-3	%
Average Daily Production
Natural Gas (MMcf)
U.S. Onshore		1,295.0		1,235.9		1,238.1		5	%		5	%
U.S. Offshore		163.1		194.3		239.8		-16	%		-32	%
Total U.S.		1,458.1		1,430.2		1,477.9		2	%		-1	%
Canada		665.9		660.6		723.5		1	%		-8	%
International		34.3		32.7		26.8		5	%		28	%
Total Natural Gas		2,158.3		2,123.5		2,228.2		2	%		-3	%
Oil (MBbls)
U.S. Onshore		31.6		30.9		31.1		2	%		1	%
U.S. Offshore		25.0		27.0		28.3		-7	%		-11	%
Total U.S.		56.6		57.9		59.4		-2	%		-5	%
Canada		35.8		32.2		34.2		11	%		5	%
International		63.9		87.4		65.8		-27	%		-3	%
Total Oil		156.3		177.5		159.4		-12	%		-2	%
Natural Gas Liquids (MBbls)
U.S. Onshore		46.9		44.1		45.7		6	%		3	%
U.S. Offshore		0.3		1.4		3.0		-74	%		-88	%
Total U.S.		47.2		45.5		48.7		4	%		-3	%
Canada		15.3		13.3		14.2		15	%		8	%
International		0.8		0.8		0.9		1	%		-9	%
Total Natural Gas Liquids		63.3		59.6		63.8		6	%		-1	%
Oil Equivalent (MBoe)
U.S. Onshore		294.3		280.9		283.2		5	%		4	%
U.S. Offshore		52.5		60.7		71.1		-13	%		-26	%
Total U.S.		346.8		341.6		354.3		2	%		-2	%
Canada		162.0		155.6		169.0		4	%		-4	%
International		70.5		93.7		71.2		-25	%		-1	%
Total Oil Equivalent		579.3		590.9		594.5		-2	%		-3	%

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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

REALIZED PRICE DATA	Year Ended				Quarter Ended
(average realized prices)	December 31,				December 31,
	2005		2004		2005		2004
Realized Prices
Natural Gas ($/Mcf)
U.S. Onshore	$	6.90	$	5.20	$	9.41	$	5.69
U.S. Offshore	$	7.95	$	6.31	$	11.15	$	7.00
Total U.S.	$	7.08	$	5.43	$	9.61	$	5.94
Canada	$	6.95	$	5.15	$	9.36	$	5.49
International	$	3.76	$	3.33	$	2.75	$	3.23
Total Natural Gas	$	6.99	$	5.32	$	9.42	$	5.76
Oil ($/Bbl)
U.S. Onshore	$	51.23	$	31.03	$	55.58	$	32.91
U.S. Offshore	$	32.96	$	30.69	$	31.08	$	31.49
Total U.S.	$	41.64	$	30.84	$	44.75	$	32.13
Canada	$	26.88	$	21.60	$	26.09	$	18.18
International	$	41.16	$	28.40	$	42.65	$	27.89
Total Oil	$	38.44	$	28.18	$	39.62	$	27.72
Natural Gas Liquids ($/Bbl)
U.S. Onshore	$	26.50	$	21.12	$	31.16	$	24.88
U.S. Offshore	$	30.61	$	26.78	$	47.72	$	30.43
Total U.S.	$	26.68	$	21.47	$	31.29	$	25.20
Canada	$	37.19	$	29.23	$	41.13	$	33.93
International	$	22.81	$	21.12	$	21.07	$	21.14
Total Natural Gas Liquids	$	28.96	$	23.04	$	33.53	$	27.06
Oil Equivalent ($/Boe)
U.S. Onshore	$	40.10	$	29.59	$	52.34	$	32.56
U.S. Offshore	$	40.58	$	34.27	$	49.73	$	36.96
Total U.S.	$	40.21	$	30.80	$	51.94	$	33.64
Canada	$	38.17	$	28.80	$	48.10	$	29.88
International	$	39.76	$	27.92	$	40.28	$	27.34
Total Oil Equivalent	$	39.59	$	29.88	$	49.45	$	31.75

BENCHMARK PRICES	Year Ended				Quarter Ended
(average prices)	December 31,				December 31,
	2005		2004		2005		2004
Benchmark Prices
Natural Gas ($/Mcf) — Henry Hub	$	8.64	$	6.13	$	13.00	$	7.07
Oil ($/Bbl) — West Texas Intermediate (Cushing)	$	56.57	$	41.38	$	60.00	$	48.34

PRICE DIFFERENTIALS, EXCLUDING EFFECTS OF HEDGES	Year Ended						Quarter Ended
(average floating price differentials from benchmark prices)	{December 31,						December 31,
	2005			2004			2005			2004
Price Differentials
Natural Gas ($/Mcf)
U.S. Onshore	$	(1.71	)	$	(0.88	)	$	(3.54	)	$	(1.25	)
U.S. Offshore	$	(0.42	)	$	0.21		$	(0.50	)	$	0.05
Total U.S.	$	(1.50	)	$	(0.66	)	$	(3.20	)	$	(1.00	)
Canada	$	(1.46	)	$	(0.83	)	$	(3.26	)	$	(1.42	)
International	$	(3.88	)	$	(2.80	)	$	(9.92	)	$	(3.84	)
Total Natural Gas	$	(1.50	)	$	(0.74	)	$	(3.29	)	$	(1.17	)
Oil ($/Bbl)
U.S. Onshore	$	(4.85	)	$	(2.68	)	$	(4.42	)	$	(3.09	)
U.S. Offshore	$	(5.45	)	$	(2.35	)	$	(4.85	)	$	(2.90	)
Total U.S.	$	(5.16	)	$	(2.45	)	$	(4.61	)	$	(2.99	)
Canada	$	(15.48	)	$	(9.40	)	$	(19.64	)	$	(14.45	)
International	$	(7.19	)	$	(6.50	)	$	(7.44	)	$	(9.98	)
Total Oil	$	(8.08	)	$	(5.39	)	$	(9.21	)	$	(8.10	)

Page 9

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS	Year Ended						Unaudited Quarter
(in millions, except per share data)	December 31,						Ended December 31,
	2005			2004			2005			2004
Revenues
Oil sales	$	2,478		$	2,202		$	570		$	523
Gas sales		5,784			4,732			1,871			1,282
Natural gas liquids sales		687			554			195			161
Marketing & midstream revenues		1,792			1,701			582			499
Total revenues		10,741			9,189			3,218			2,465
Expenses and Other Income, net
Lease operating expenses		1,345			1,280			340			341
Production taxes		335			255			101			74
Marketing & midstream operating costs and expenses		1,342			1,339			421			390
Depreciation, depletion and amortization of oil and gas properties		2,031			2,141			503			554
Depreciation and amortization of non-oil and gas properties		160			149			41			39
Accretion of asset retirement obligation		44			44			9			11
General & administrative expenses		291			277			85			72
Interest expense		533			475			105			114
Effects of changes in foreign currency exchange rates		(2	)		(23	)		2			(17	)
Change in fair value of derivative financial instruments		94			62			(74	)		8
Reduction of carrying value of oil and gas properties		212			—			212			—
Other income, net		(196	)		(103	)		(17	)		(49	)
Total expenses and other income, net		6,189			5,896			1,728			1,537
Earnings before income tax expense		4,552			3,293			1,490			928
Income Tax Expense
Current		1,238			752			406			183
Deferred		384			355			114			72
Total income tax expense		1,622			1,107			520			255
Net earnings		2,930			2,186			970			673
Preferred stock dividends		10			10			3			3
Net earnings applicable to common stockholders		2,920			2,176			967			670
Net earnings per weighted average common shares outstanding
Basic	$	6.38		$	4.51		$	2.18		$	1.38
Diluted	$	6.26		$	4.38		$	2.14		$	1.35
Basic weighted average shares outstanding		458			482			443			484
Diluted weighted average shares outstanding		470			499			451			500

Page 10

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS
(in millions)	December 31,			December 31,
	2005			2004
Assets
Current assets
Cash and cash equivalents	$	1,606		$	1,152
Short-term investments		680			967
Accounts receivable		1,601			1,320
Fair value of derivative financial instruments		—			1
Deferred income taxes		158			289
Other current assets		161			143
Total current assets		4,206			3,872
Property and equipment, at cost, based on the full cost method of accounting for oil and gas properties ($2,747 and $3,187 excluded from amortization in 2005 and 2004, respectively)		34,246			32,114
Less accumulated depreciation, depletion and amortization		15,114			12,768
Net property and equipment		19,132			19,346
Investment in Chevron Corporation common stock, at fair value		805			745
Fair value of derivative financial instruments		—			8
Goodwill		5,705			5,637
Other assets		425			417
Total Assets	$	30,273		$	30,025
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable:
Trade	$	947		$	715
Revenues and royalties due to others		666			487
Income taxes payable		293			223
Current portion of long-term debt		662			933
Accrued interest payable		127			139
Fair value of derivative financial instruments		18			399
Current portion of asset retirement obligation		50			46
Accrued expenses and other current liabilities		171			158
Total current liabilities		2,934			3,100
Debentures exchangeable into shares of Chevron Corporation common stock		709			692
Other long-term debt		5,248			6,339
Fair value of derivative financial instruments		125			72
Asset retirement obligation, long-term		618			693
Other liabilities		372			366
Deferred income taxes		5,405			5,089
Stockholders’ equity
Preferred stock		1			1
Common stock		44			48
Additional paid-in capital		7,066			9,087
Retained earnings		6,477			3,693
Accumulated other comprehensive income		1,414			930
Deferred compensation and other		(138	)		(85	)
Treasury stock		(2	)		—
Stockholders’ Equity		14,862			13,674
Total Liabilities & Stockholders’ Equity	$	30,273		$	30,025
Common Shares Outstanding		443			484

Page 11

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)	Year Ended December 31,
	2005			2004
Cash Flows From Operating Activities
Net earnings	$	2,930		$	2,186
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation, depletion and amortization		2,191			2,290
Accretion of asset retirement obligation		44			44
Amortization of premiums on long-term debt, net		—			(5	)
Effects of changes in foreign currency exchange rates		(2	)		(23	)
Non-cash change in fair value of derivative financial instruments		55			62
Deferred income tax expense		384			355
Net gain on sales of non-oil and gas properties		(150	)		(34	)
Reduction of carrying value of oil and gas properties		212			—
Other		31			31
		5,695			4,906
Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		(270	)		(345	)
Other current assets		(16	)		(20	)
Long-term other assets		52			(91	)
Increase (decrease) in:
Accounts payable		262			190
Income taxes payable		69			208
Accrued interest and expenses		(41	)		(79	)
Long-term debt, including current maturities		(67	)		16
Long-term other liabilities		(72	)		31
Net cash provided by operating activities		5,612			4,816
Cash Flows From Investing Activities
Proceeds from sales of property and equipment		2,151			95
Capital expenditures		(4,090	)		(3,103	)
Purchases of short-term investments		(4,020	)		(3,215	)
Sales of short-term investments		4,307			2,589
Net cash used in investing activities		(1,652	)		(3,634	)
Cash Flows From Financing Activities
Principal payments on long-term debt		(1,258	)		(973	)
Issuance of common stock, net of issuance costs		124			268
Repurchase of common stock		(2,263	)		(189	)
Dividends paid on common stock		(136	)		(97	)
Dividends paid on preferred stock		(10	)		(10	)
Net cash used in financing activities		(3,543	)		(1,001	)
Effect of exchange rate changes on cash		37			39
Net increase in cash and cash equivalents		454			220
Cash and cash equivalents at beginning of period		1,152			932
Cash and cash equivalents at end of period	$	1,606		$	1,152

Page 12

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

	Total												Total U.S.
	Oil			Gas			NGLs			Total			Oil			Gas			NGLs			Total
	(MMBbls)			(Bcf)			(MMBbls)			(MMboe)			(MMBbls)			(Bcf)			(MMBbls)			(MMboe)
As of December 31, 2004:
Proved developed		411			6,219			204			1,652			168			4,105			161			1,014
Proved undeveloped		185			1,275			28			425			35			831			21			194
Total proved		596			7,494			232			2,077			203			4,936			182			1,208
Production		(64	)		(827	)		(24	)		(226	)		(25	)		(555	)		(18	)		(136	)
Discoveries and extensions		167			1,220			30			401			16			793			20			169
Divestitures		(58	)		(676	)		(12	)		(183	)		(29	)		(306	)		(9	)		(89	)
Acquisitions		2			10			—			4			—			—			—			—
Revisions due to prices		(16	)		78			4			1			6			58			3			19
Revisions other than price		22			(3	)		16			38			2			238			19			61
As of December 31, 2005:
Proved developed		363			6,111			216			1,599			149			4,343			175			1,049
Proved undeveloped		286			1,185			30			513			24			821			22			183
Total proved		649			7,296			246			2,112			173			5,164			197			1,232

	U.S. Onshore												U.S. Offshore
	Oil			Gas			NGLs			Total			Oil			Gas			NGLs			Total
	(MMBbls)			(Bcf)			(MMBbls)			(MMboe)			(MMBbls)			(Bcf)			(MMBbls)			(MMboe)
As of December 31, 2004:
Proved developed		126			3,751			158			909			42			354			3			105
Proved undeveloped		9			608			19			129			26			223			2			65
Total proved		135			4,359			177			1,038			68			577			5			170
Production		(12	)		(463	)		(17	)		(106	)		(13	)		(92	)		(1	)		(30	)
Discoveries and extensions		15			771			20			164			1			22			—			5
Divestitures		(11	)		(197	)		(8	)		(51	)		(18	)		(109	)		(1	)		(38	)
Acquisitions		—			—			—			—			—			—			—			—
Revisions due to prices		5			55			3			16			1			3			—			3
Revisions other than price		(3	)		236			18			55			5			2			1			6
As of December 31, 2005:
Proved developed		120			4,110			173			979			29			233			2			70
Proved undeveloped		9			651			20			137			15			170			2			46
Total proved		129			4,761			193			1,116			44			403			4			116

	Canada												International
	Oil			Gas			NGLs			Total			Oil			Gas			NGLs		Total
	(MMBbls)			(Bcf)			(MMBbls)			(MMboe)			(MMBbls)			(Bcf)			(MMBbls)		(MMboe)
As of December 31, 2004:
Proved developed		123			2,043			43			507			120			71			—		131
Proved undeveloped		24			377			7			93			126			67			—		138
Total proved		147			2,420			50			600			246			138			—		269
Production		(13	)		(261	)		(6	)		(62	)		(26	)		(11	)		—		(28	)
Discoveries and extensions		144			427			10			225			7			—			—		7
Divestitures		(29	)		(370	)		(3	)		(94	)		—			—			—		—
Acquisitions		2			10			—			4			—			—			—		—
Revisions due to prices		—			22			1			4			(22	)		(2	)		—		(22	)
Revisions other than price		2			(242	)		(3	)		(41	)		18			1			—		18
As of December 31, 2005:
Proved developed		103			1,708			41			429			111			60			—		121
Proved undeveloped		150			298			8			207			112			66			—		123
Total proved		253			2,006			49			636			223			126			—		244

Page 13

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

COSTS INCURRED	Total				Total U.S.
(in millions)	Year Ended December 31,				Year Ended December 31,
	2005		2004		2005		2004
Property Acquisition Costs:
Total proved	$	54	$	38	$	5	$	27
Total unproved	$	349	$	141	$	106	$	75
Exploration Costs	$	931	$	735	$	422	$	335
Development Costs	$	2,805	$	1,938	$	1,597	$	1,163
Costs Incurred	$	4,139	$	2,852	$	2,130	$	1,600

	U.S. Onshore				U.S. Offshore
	Year Ended December 31,				Year Ended December 31,
	2005		2004		2005		2004
Property Acquisition Costs:
Total proved	$	3	$	24	$	2	$	3
Total unproved	$	86	$	46	$	20	$	29
Exploration Costs	$	173	$	92	$	249	$	243
Development Costs	$	1,381	$	983	$	216	$	180
Costs Incurred	$	1,643	$	1,145	$	487	$	455

	Canada				International
	Year Ended December 31,				Year Ended December 31,
	2005		2004		2005		2004
Property Acquisition Costs:
Total proved	$	49	$	11	$	—	$	—
Total unproved	$	239	$	52	$	4	$	14
Exploration Costs	$	361	$	272	$	148	$	128
Development Costs	$	1,020	$	625	$	188	$	150
Costs Incurred	$	1,669	$	960	$	340	$	292

Devon capitalizes certain general and administrative expenses which are related to property acquisition, exploration and development activities. Such capitalized expenses, which are included in the costs shown in the preceding tables, were $189 million and $172 million in the years 2005 and 2004, respectively. In addition, Devon capitalizes certain interest expenses which are related to property development activities. Such capitalized expenses, which are also included in the costs shown in the preceding tables, were $70 million and $70 million in the years 2005 and 2004, respectively.

Page 14

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

DRILLING ACTIVITY	Year Ended
	December 31,
	2005			2004
Exploration Wells Drilled
U.S.		49			40
Canada		234			228
International		13			6
Total		296			274
Exploration Wells Success Rate
U.S.		69	%		58	%
Canada		93	%		90	%
International		23	%		33	%
Total		86	%		84	%
Development Wells Drilled
U.S.		1,249			1,217
Canada		786			621
International		44			66
Total		2,079			1,904
Development Wells Success Rate
U.S.		99	%		99	%
Canada		99	%		96	%
International		100	%		100	%
Total		99	%		98	%
Total Wells Drilled
U.S.		1,298			1,257
Canada		1,020			849
International		57			72
Total		2,375			2,178
Total Wells Success Rate
U.S.		98	%		97	%
Canada		98	%		95	%
International		82	%		94	%
Total		97	%		96	%

COMPANY OPERATED RIGS	December 31,
	2005		2004
Number of Company Operated Rigs Running
U.S.		53		54
Canada		16		26
International		3		3
Total		72		83

CAPITAL EXPENDITURES DATA	Year Ended		Quarter Ended
(in millions)	December 31, 2005		December 31, 2005
Capital Expenditures
U.S. Onshore	$	1,550	$	456
U.S. Offshore		391		97
Total U.S.		1,941		553
Canada		1,607		285
International		263		157
Marketing & midstream		121		49
Capitalized general & administrative costs		189		54
Capitalized interest costs		70		17
Other		84		51
Total	$	4,275	$	1,166

Page 15

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. Cash flow before balance sheet changes is a Non-GAAP financial measure. Devon believes cash flow before balance sheet changes is relevant because it is a measure of cash available to fund the company’s capital expenditures, dividends and to service its debt. Cash flow before balance sheet changes is also used by certain securities analysts as a measure of Devon’s financial results.

RECONCILIATION TO GAAP INFORMATION	Year Ended				Quarter Ended
(in millions)	December 31,				December 31,
	2005		2004		2005			2004
Net Cash Provided By Operating Activities (GAAP)	$	5,612	$	4,816	$	1,960		$	1,124
Changes in assets and liabilities, net of effects of acquisitions of businesses		83		90		(221	)		172
Cash flow before balance sheet changes (Non-GAAP)	$	5,695	$	4,906	$	1,739		$	1,296

     Devon believes that using net debt, defined as debt less cash and the market value of Chevron common stock, for the calculation of “net debt to adjusted capitalization” provides a better measure than using debt. Devon believes that because cash can be used to repay indebtedness, netting cash against debt provides a clearer picture of the future demands on cash to repay debt. Included in Devon’s indebtedness are $709 million of debentures exchangeable into 14.2 million shares of Chevron common stock owned outright by Devon. As of December 31, 2005, the market value of the shares ($805 million) exceeded the related debt obligation of $709 million. Since the value of Chevron common stock held by Devon is higher than the debt obligation, Devon believes deducting the market value of the stock provides a clearer picture of future demands on cash to repay debt. This methodology is also ut ilized by various lenders, rating agencies and securities analysts as a measure of Devon’s indebtedness.

RECONCILIATION TO GAAP INFORMATION
(in millions)	December 31,
	2005			2004
Total debt (GAAP)	$	6,619			7,964
Adjustments:
Cash and short-term investments		(2,286	)		(2,119	)
Market value of Chevron Corporation common stock		(805	)		(745	)
Net Debt (Non-GAAP)	$	3,528			5,100
Total Capitalization
Total debt	$	6,619			7,964
Stockholders’ equity		14,862			13,674
Total Capitalization (GAAP)	$	21,481			21,638
Adjusted Capitalization
Net debt	$	3,528			5,100
Stockholders’ equity		14,862			13,674
Adjusted Capitalization (Non-GAAP)	$	18,390			18,774

Page 16

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

     Drill-bit capital is defined as costs incurred less proved acquisition costs, unproved acquisition costs resulting from business combinations, and the net difference of accrued future asset retirement costs less actual cash retirement expenditures. Drill-bit capital is a non-GAAP measure. Management believes drill-bit capital is relevant because it provides additional insight into costs associated with current year drilling, facilities and unproved acreage acquisitions unrelated to business combinations. It should be noted that the actual costs of reserves added through the company’s drilling program will differ, sometimes significantly, from the direct comparison of capital spent and reserves added in any given period due to the timing of capital expenditures and reserve bookings. This methodology is also utilized by certain securities analysts as a measure of Devon’s performance.

RECONCILIATION TO GAAP INFORMATION	Total				Total U.S.
(in millions)	Year Ended December 31,				Year Ended December 31,
	2005		2004		2005		2004
Costs Incurred (GAAP)	$	4,139	$	2,852	$	2,130	$	1,600
Less:
Proved acquisition costs		54		38		5		27
Accrued asset retirement costs		113		51		70		28
Plus: Actual retirement expenditures		41		42		22		27
Drill-bit capital (Non-GAAP)	$	4,013	$	2,805	$	2,077	$	1,572

	U.S. Onshore				U.S. Offshore
	Year Ended December 31,				Year Ended December 31,
	2005		2004		2005		2004
Costs Incurred (GAAP)	$	1,643	$	1,145	$	487	$	455
Less:
Proved acquisition costs		3		24		2		3
Accrued asset retirement costs		23		14		47		14
Plus: Actual retirement expenditures		5		5		17		22
Drill-bit capital (Non-GAAP)	$	1,622	$	1,112	$	455	$	460

	Canada				International
	Year Ended December 31,				Year Ended December 31,
	2005		2004		2005		2004
Costs Incurred (GAAP)	$	1,669	$	960	$	340	$	292
Less:
Proved acquisition costs		49		11		—		—
Accrued asset retirement costs		37		18		6		5
Plus: Actual retirement expenditures		16		14		3		1
Drill-bit capital (Non-GAAP)	$	1,599	$	945	$	337	$	288

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