Devon Energy (DVN) 8-K Devon Energy Reports Third-Quarter 2014 Results

Exhibit 99.1

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

NEWS RELEASE

Devon Energy Reports Third-Quarter 2014 Results

• Achieved record oil production exceeding company guidance

• Generated U.S. oil production growth of 77 percent year over year

• Increased full-year production outlook

• Improved pre-tax cash margin by 20 percent year over year

• Closed $2.3 billion asset sale further enhancing strong financial position

OKLAHOMA CITY – Nov. 4, 2014– Devon Energy Corporation (NYSE:DVN) today reported net earnings of $1.0 billion or $2.48 per common share ($2.47 per diluted share) for the quarter ended Sept. 30, 2014. This compares with third-quarter 2013 net earnings of $429 million or $1.06 per common share ($1.05 per diluted share).

Adjusting for items securities analysts typically exclude from their published estimates, the company earned $552 million or $1.34 per diluted share in the third quarter. This represents a 4 percent increase in adjusted earnings compared to the third quarter of 2013.

Devon generated cash flow from operations totaling $1.6 billion in the third quarter. Combined with $2.3 billion of pre-tax proceeds from the sale of non-core U.S. assets, Devon’s total cash inflows for the quarter approached $4 billion.

“Devon’s repositioned portfolio delivered outstanding growth in production and margins in the third quarter,” said John Richels, president and CEO. “With our strong position in many of North America’s best resource plays and our focused efforts to deliver high-quality performance, we saw profitability continue to expand.”

“Based on our strong year-to-date results and the confidence we have in our portfolio, we are raising our full-year production growth outlook to 14 percent, up from our previous guidance of 11 percent,” Richels said. “And we are delivering this incremental production growth without any increase in capital spending.”

Oil Production Exceeds Expectations

In the third quarter, total production from Devon’s retained assets averaged 640,000 oil-equivalent barrels (Boe) per day. This result exceeded the company’s guidance range and represents a 19 percent increase year over year. Oil and liquids production accounted for 55 percent of the company’s retained asset production mix in the third quarter.

Devon delivered record oil production in North America during the third quarter of 2014. Oil production from retained assets averaged 216,000 barrels per day, exceeding the top end of the company’s guidance range by 6,000 barrels per day. This represents a 44 percent increase compared to the third quarter of 2013. The most significant growth came from the company’s U.S. operations, where oil production increased a substantial 77 percent year over year.

Growth in U.S. production was largely attributable to strong results from Devon’s oil development plays. In the third quarter, the company’s world-class Eagle Ford assets continued to deliver prolific well results. Net production in the Eagle Ford increased to an average of 87,000 Boe per day in September, an increase of 76 percent compared to Devon’s first month of ownership in March 2014. In the Permian Basin, led by outstanding results from the Bone Spring play, total production increased to 98,000 Boe per day. This represents a 20 percent increase in Permian production compared to the year-ago quarter.

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In Canada, Devon achieved first oil from its Jackfish 3 project in the third quarter, commencing another leg of multi-year oil production growth from its heavy oil business. Additionally, the start-up of Jackfish 3 will begin a new era from the Jackfish complex, with the potential to generate up to a $1 billion per year of free cash flow, after maintenance capital.

Devon Raises Full-Year Production Outlook

Detailed forward-looking guidance for the fourth quarter of 2014 is provided later in the release. Based on year-to-date results and Devon’s fourth-quarter outlook, most operating and financial metrics remain relatively unchanged compared to previous full-year guidance disclosures. A notable update is the company raising the midpoint of its 2014 production outlook from retained assets by 3 percent to approximately 617,000 Boe per day. This incremental production growth is expected to be delivered without additional capital spending.

Operations Report

For additional details on Devon’s core and emerging assets, please refer to the company’s third-quarter 2014 operations report atwww.devonenergy.com. Highlights from the operations report include:

• Raising the Bone Spring type curve

• Eagle Ford on track to meet production targets

• Canadian heavy-oil results outperform guidance

• Raising Cana-Woodford type curve

• Powder River Basin delivers high-rate development wells

Oil Revenue Grows and Margins Expand

Revenue from oil, natural gas and natural gas liquids sales totaled $2.6 billion in the third quarter, an 11 percent increase compared to the third quarter of 2013. This growth in revenue was attributable to the company’s significant increase in oil production, partially offset by the sale of gas-weighted divestiture assets in both the U.S. and Canada. Third-quarter oil sales accounted for 63 percent of Devon’s total upstream revenues.

Devon’s marketing and midstream operating profit reached $219 million, which exceeded the company’s guidance and represented a 68 percent increase compared to the third quarter of 2013. The year-over-year increase in operating profit was due to expanded margins related to EnLink Midstream.

The company’s strong cost-containment efforts were reflected in third-quarter expense results. Pre-tax cash costs totaled $16.06 per Boe, a 3 percent decrease compared to the previous quarter. Costs in several categories were lower than guidance, most notably Devon’s largest cash cost, lease operating expenses (LOE). On a unit-of-production basis, LOE totaled $9.47 per Boe, flat compared to the year-ago period and 1 percent lower than the second quarter of 2014.

Overall, the benefits of higher-margin oil production and a low-cost structure resulted in expanded cash margin for Devon. Pre-tax cash margin reached $29.42 per Boe in the third quarter, a 20 percent increase compared to the year-ago period.

Balance Sheet and Liquidity Remain Strong

With investment-grade credit ratings and cash balances of $3.4 billion at the end of the third quarter, Devon’s financial position remains exceptionally strong. At Sept. 30, the company’s net debt totaled $8.7 billion, of which $1.9 billion was attributable to the consolidation of EnLink Midstream and is non-recourse to Devon.

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Subsequent to quarter end, in mid-October, Devon announced the redemption of $1.9 billion in senior notes, utilizing a portion of its asset divestiture proceeds. This redemption includes all of the company’s outstanding 2.4% senior notes due 2016, 1.2% senior notes due 2016 and 1.875% senior notes due 2017. Upon redemption later in the month, Devon will complete the debt repayment plan associated with its portfolio transformation.

Attractive Hedges Protect Future Cash Flow

With rapid growth in high-margin production, the company has taken measures to protect its future cash flow. For the fourth quarter of 2014, the company has entered into various swap-and-collar contracts to hedge approximately 60 percent of its expected oil production at an average floor price of $92 per barrel. Nearly 80 percent of Devon’s expected fourth-quarter natural gas production is locked in at an average floor price of $4.28 per thousand cubic feet.

For full-year 2015, the company has 138,000 barrels per day protected through swaps and collars at an average floor price of $91 per barrel. Devon also has 0.5 billion cubic feet per day hedged at an average floor price of $4.20. These hedge positions cover more than 50 percent of Devon’s expected oil production in 2015 and around 30 percent of gas production.

Portfolio Transformation Complete

On Aug. 29, Devon closed the sale of its U.S. non-core assets for $2.3 billion, officially completing its portfolio transformation announced last November. In less than a year, the company transformed its portfolio through three significant steps: an accretive Eagle Ford entry, the creation of EnLink Midstream, and the sale of more than $5 billion of non-core properties in both the U.S. and Canada.

Devon’s retained asset portfolio is now concentrated in some of the most attractive North American resource plays. This formidable and focused asset base creates a platform that supports competitive, high-margin growth for many years.

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 general accepted accounting principles). Adjusted earnings, net debt and pre-tax cash margin are non-GAAP financial measures referenced within this release. Reconciliations of these non-GAAP measures are provided later in this release.

Conference Call Webcast and Supplemental Earnings Materials

Please note that as soon as practicable today, Devon will post additional information, consisting of an operations report and management commentary with associated slides, to its website atwww.devonenergy.com. The company’s third-quarter 2014 conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Nov. 5, 2014, and will serve primarily as a forum for analyst and investor questions and answers.

Forward-Looking Statements

This press release includes “forward-looking statements” as defined by the Securities and Exchange Commission (SEC). Such statements 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

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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 atwww.devonenergy.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or from the SEC’s website atwww.sec.gov.

About Devon Energy

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 atwww.devonenergy.com.

Investor Contacts

Howard Thill, 405-552-3693

Scott Coody, 405-552-4735

Shea Snyder, 405-552-4782

Media Contact

John Porretto, 405-228-7506

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

	Quarter Ended				Nine Months Ended
PRODUCTION NET OF ROYALTIES	September 30,				September 30,
	2014		2013		2014		2013
Oil / Bitumen (MBbls/d)
United States		136		77		121		70
Canada		80		73		78		79
Retained assets		216		150		199		149
Divested assets		3		15		7		16
Total Oil / Bitumen		219		165		206		165
Natural Gas (MMcf/d)
United States		1,690		1,656		1,656		1,666
Canada		26		17		24		29
Retained assets		1,716		1,673		1,680		1,695
Divested assets		138		710		311		720
Total Natural Gas		1,854		2,383		1,991		2,415
Natural Gas Liquids (MBbls/d)
United States		138		110		129		105
Divested assets		5		19		9		19
Total Natural Gas Liquids		143		129		138		124
Oil Equivalent (Mboe/d)
United States		556		462		526		453
Canada		84		76		82		84
Retained assets		640		538		608		537
Divested assets		31		153		68		155
Total Oil Equivalent		671		691		676		692

KEY OPERATING STATISTICS BY REGION

	Quarter Ended September 30, 2014
	Avg. Production (MBoe/d)		Gross Wells Drilled		Operated Rigs at September 30, 2014
Permian Basin		98		81		21
Eagle Ford		78		57		3
Canadian Heavy Oil		84		57		5
Barnett Shale		205		13		—
Anadarko Basin		98		38		3
Mississippian-Woodford Trend		21		52		6
Rockies		22		17		4
Other Assets		34		—		—
Retained Assets - Total		640		315		42
Divested assets		31		—		—
Devon - Total		671		315		42

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION TREND

	2013				2014
	Quarter 3		Quarter 4		Quarter 1		Quarter 2		Quarter 3
Oil (MBbls/d)
Permian Basin		49		50		55		55		56
Eagle Ford		—		—		11		40		46
Canadian Heavy Oil		73		81		78		77		80
Barnett Shale		2		2		2		2		2
Anadarko Basin		10		9		9		11		10
Mississippian-Woodford Trend		5		8		10		9		10
Rockies		8		8		8		8		10
Other assets		3		3		2		3		2
Retained assets		150		161		175		205		216
Divested assets		15		16		15		4		3
Total		165		177		190		209		219
Gas (MMcf/d)
Permian Basin		109		116		121		134		136
Eagle Ford		—		—		22		86		107
Canadian Heavy Oil		17		28		19		23		26
Barnett Shale		1,009		995		931		932		896
Anadarko Basin		297		294		281		309		323
Mississippian-Woodford Trend		14		19		28		28		32
Rockies		76		75		65		67		66
Other assets		151		141		140		135		130
Retained assets		1,673		1,668		1,607		1,714		1,716
Divested assets		710		660		585		217		138
Total		2,383		2,328		2,192		1,931		1,854
NGL (MBbls/d)
Permian Basin		15		16		16		18		19
Eagle Ford		—		—		3		10		14
Canadian Heavy Oil		—		—		—		—		—
Barnett Shale		57		56		55		55		54
Anadarko Basin		24		27		29		31		34
Mississippian-Woodford Trend		1		3		5		5		6
Rockies		1		1		1		1		1
Other assets		12		11		10		10		10
Retained assets		110		114		119		130		138
Divested assets		19		18		16		6		5
Total		129		132		135		136		143
Combined (MBoe/d)
Permian Basin		82		86		91		95		98
Eagle Ford		—		—		17		65		78
Canadian Heavy Oil		76		86		81		81		84
Barnett Shale		226		224		213		212		205
Anadarko Basin		83		85		85		93		98
Mississippian-Woodford Trend		9		14		19		18		21
Rockies		23		21		20		21		22
Other assets		39		37		37		35		34
Retained assets		538		553		563		620		640
Divested assets		153		143		128		47		31
Total		691		696		691		667		671

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK PRICES

	Quarter 3						September YTD
(average prices)	FY2014			FY2013			FY2014		FY2013
Natural Gas ($/Mcf) - Henry Hub	$	4.07		$	3.58		$	4.57	$	3.67
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	97.26		$	105.94		$	99.67	$	98.18
REALIZED PRICES
	Quarter Ended September 30, 2014
	Oil /Bitumen (Per Bbl)			Gas (Per Mcf)			NGL (Per Bbl)		Total (Per Boe)
United States	$	90.23		$	3.61		$	25.82	$	38.90
Canada(1)	$	65.88		$	0.76		$	63.46	$	63.23
Realized price without hedges	$	81.37		$	3.57		$	25.90	$	41.92
Cash settlements	$	(1.06	)	$	0.15		$	0.01	$	0.07
Realized price, including cash settlements	$	80.31		$	3.72		$	25.91	$	41.99
	Quarter Ended September 30, 2013
	Oil /Bitumen (Per Bbl)			Gas (Per Mcf)			NGL (Per Bbl)		Total (Per Boe)
United States	$	101.40		$	3.08		$	24.36	$	32.72
Canada(1)	$	79.88		$	2.67		$	48.48	$	49.65
Realized price without hedges	$	90.51		$	3.00		$	26.23	$	36.84
Cash settlements	$	(4.00	)	$	0.24		$	0.02	$	(0.12	)
Realized price, including cash settlements	$	86.51		$	3.24		$	26.25	$	36.72
	Nine Months Ended September 30, 2014
	Oil (Per Bbl)			Gas (Per Mcf)			NGL (Per Bbl)		Total (Per Boe)
United States	$	92.55		$	4.04		$	26.80	$	39.81
Canada(1)	$	65.54		$	3.80		$	50.57	$	55.85
Realized price without hedges	$	81.84		$	4.02		$	27.34	$	42.38
Cash settlements	$	(2.43	)	$	(0.12	)	$	—	$	(1.11	)
Realized price, including cash settlements	$	79.41		$	3.90		$	27.34	$	41.27
	Nine Months Ended September 30, 2013
	Oil (Per Bbl)			Gas (Per Mcf)			NGL (Per Bbl)		Total (Per Boe)
United States	$	93.94		$	3.13		$	25.12	$	31.12
Canada(1)	$	60.14		$	3.05		$	46.54	$	41.29
Realized price without hedges	$	75.48		$	3.11		$	26.83	$	33.71
Cash settlements	$	0.02		$	0.14		$	0.08	$	0.50
Realized price, including cash settlements	$	75.50		$	3.25		$	26.91	$	34.21

(1) The reported Canadian gas volumes include volumes that are produced from certain of our leases and then transported to our Jackfish operations where the gas is used as fuel. However, the revenues and expenses related to this consumed gas are eliminated in our consolidated financials.

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter Ended September 30,					Nine Months Ended September 30,
(in millions, except per share amounts)	2014		2013			2014			2013
Oil, gas and NGL sales	$	2,588	$	2,341		$	7,824		$	6,367
Oil, gas and NGL derivatives		748		(141	)		29			(95	)
Marketing and midstream revenues		2,000		514			5,718			1,501
Total operating revenues		5,336		2,714			13,571			7,773
Lease operating expenses		584		600			1,764			1,684
Marketing and midstream operating expenses		1,781		383			5,092			1,128
General and administrative expenses		195		143			595			460
Production and property taxes		140		115			427			353
Depreciation, depletion and amortization		842		691			2,409			2,069
Asset impairments		—		7			—			1,960
Restructuring costs		2		4			44			50
Gains and losses on asset sales		—		11			(1,072	)		11
Other operating items		18		27			74			82
Total operating expenses		3,562		1,981			9,333			7,797
Operating income (loss)		1,774		733			4,238			(24	)
Net financing costs		116		100			359			306
Other nonoperating items		4		(6	)		111			(4	)
Earnings (loss) before income taxes		1,654		639			3,768			(326	)
Income tax expense (benefit)		613		210			1,698			(99	)
Net earnings (loss)		1,041		429			2,070			(227	)
Net earnings attributable to noncontrolling interests		25		—			55			—
Net earnings (loss) attributable to Devon	$	1,016	$	429		$	2,015		$	(227	)
Net earnings (loss) per share attributable to Devon:
Basic	$	2.48	$	1.06		$	4.94		$	(0.57	)
Diluted	$	2.47	$	1.05		$	4.91		$	(0.57	)
Weighted average common shares outstanding:
Basic		409		406			408			406
Diluted		411		407			410			407

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS

	Quarter ended September 30, 2014
(in millions)	Devon U.S. & Canada		EnLink			Eliminations			Total
Oil, gas and NGL sales	$	2,588	$	—		$	—		$	2,588
Oil, gas and NGL derivatives		748		—			—			748
Marketing and midstream revenues		1,344		855			(199	)		2,000
Total operating revenues		4,680		855			(199	)		5,336
Lease operating expenses		584		—			—			584
Marketing and midstream expenses		1,320		660			(199	)		1,781
General and administrative expenses		170		25			—			195
Production and property taxes		132		8			—			140
Depreciation, depletion and amortization		768		74			—			842
Restructuring costs		2		—			—			2
Other operating items		20		(2	)		—			18
Total operating expenses		2,996		765			(199	)		3,562
Operating income		1,684		90			—			1,774
Net financing costs		102		14			—			116
Other nonoperating items		12		(8	)		—			4
Earnings before income taxes		1,570		84			—			1,654
Income tax expense		595		18			—			613
Net earnings		975		66			—			1,041
Net earnings attributable to noncontrolling interests		—		25			—			25
Net earnings attributable to Devon	$	975	$	41		$	—		$	1,016

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Quarter Ended September 30,						Nine Months Ended September 30,
(in millions)	2014			2013			2014			2013
Cash flows from operating activities:
Net earnings (loss)	$	1,041		$	429		$	2,070		$	(227	)
Adjustments to reconcile net earnings (loss) to net cash from operating activities:
Depreciation, depletion and amortization		842			691			2,409			2,069
Gains and losses on asset sales		—			11			(1,072	)		11
Asset impairments		—			7			—			1,960
Deferred income tax expense (benefit)		23			260			800			(181	)
Derivatives and other financial instruments		(804	)		168			(43	)		65
Cash settlements on derivatives and financial instruments		44			(2	)		(201	)		147
Other noncash charges		128			19			357			195
Net change in working capital		296			24			766			(104	)
Change in long-term other assets		(38	)		(50	)		(115	)		(28	)
Change in long-term other liabilities		27			44			47			92
Net cash from operating activities		1,559			1,601			5,018			3,999
Cash flows from investing activities:
Acquisitions of property, equipment and businesses		(31	)		—			(6,255	)		—
Capital expenditures		(1,672	)		(1,650	)		(5,013	)		(5,219	)
Proceeds from property and equipment divestitures		2,260			282			5,202			316
Purchases of short-term investments		—			—			—			(1,076	)
Redemptions of short-term investments		—			869			—			3,419
Redemptions of long-term investments		—			—			57			—
Other		3			1			87			83
Net cash from investing activities		560			(498	)		(5,922	)		(2,477	)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt, net of issuance costs		438			—			4,158			—
Net short-term debt repayments		(456	)		(82	)		(1,318	)		(1,577	)
Long-term debt repayments		(275	)		—			(4,265	)		—
Proceeds from stock option exercises		9			—			92			1
Proceeds from issuance of subsidiary units		52			—			72			—
Dividends paid on common stock		(98	)		(89	)		(287	)		(259	)
Distributions to noncontrolling interests		(46	)		—			(187	)		—
Other		(13	)		—			(4	)		5
Net cash from financing activities		(389	)		(171	)		(1,739	)		(1,830	)
Effect of exchange rate changes on cash		(28	)		25			(15	)		(9	)
Net change in cash and cash equivalents		1,702			957			(2,658	)		(317	)
Cash and cash equivalents at beginning of period		1,706			3,363			6,066			4,637
Cash and cash equivalents at end of period	$	3,408		$	4,320		$	3,408		$	4,320

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS

(in millions)	September 30, 2014			December 31, 2013
Current assets:
Cash and cash equivalents	$	3,408		$	6,066
Accounts receivable		2,009			1,520
Other current assets		556			419
Total current assets		5,973			8,005
Property and equipment, at cost:
Oil and gas, based on full-cost accounting:
Subject to amortization		73,733			73,995
Not subject to amortization		3,642			2,791
Total oil and gas		77,375			76,786
Other		9,204			6,195
Total property and equipment, at cost		86,579			82,981
Less accumulated depreciation, depletion and amortization		(51,410	)		(54,534	)
Property and equipment, net		35,169			28,447
Goodwill		8,310			5,858
Other long-term assets		1,387			567
Total assets	$	50,839		$	42,877
Current liabilities:
Accounts payable	$	1,344		$	1,229
Revenues and royalties payable		1,455			786
Short-term debt		1,898			4,066
Income taxes payable		651			1
Other current liabilities		646			573
Total current liabilities		5,994			6,655
Long-term debt		10,161			7,956
Asset retirement obligations		1,348			2,140
Other long-term liabilities		926			834
Deferred income taxes		5,642			4,793
Stockholders’ equity:
Common stock		41			41
Additional paid-in capital		4,004			3,780
Retained earnings		17,138			15,410
Accumulated other comprehensive earnings		993			1,268
Total stockholders’ equity attributable to Devon		22,176			20,499
Noncontrolling interests		4,592			—
Total stockholders’ equity		26,768			20,499
Total liabilities and stockholders’ equity	$	50,839		$	42,877
Common shares outstanding		409			406

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CAPITAL EXPENDITURES

	Quarter Ended September 30, 2014
(in millions)	U.S.		Canada		Total
Exploration	$	49	$	2	$	51
Development		1,044		213		1,257
Exploration and development capital	$	1,093	$	215	$	1,308
Capitalized G&A						94
Capitalized interest						12
Acquisitions						6
Devon midstream capital						96
Other capital						32
Total(1)					$	1,548

(1) Excludes $207 million attributable to EnLink.

	Nine Months Ended September 30, 2014
	U.S.		Canada		Total
Exploration	$	187	$	34	$	221
Development		2,872		684		3,556
Exploration and development capital	$	3,059	$	718	$	3,777
Capitalized G&A						268
Capitalized interest						32
Eagle Ford, Cana and other acquisitions						6,366
Devon midstream capital						275
Other capital						85
Total(1)					$	10,803

(1) Excludes $491 million attributable to EnLink.

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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.

ADJUSTED EARNINGS

(in millions)

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. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on third-quarter 2014 earnings.

	Quarter Ended September 30, 2014
	Before-Tax			After-Tax
Net earnings attributable to Devon (GAAP)				$	1,016
Fair value changes in financial instruments and foreign currency		(733	)		(466	)
Restructuring costs		2			2
Current tax on property divestiture(1)		—			543
Deferred tax on property divestiture(1)		—			(543	)
Adjusted earnings attributable to Devon (Non-GAAP)				$	552
Diluted share count					411
Adjusted diluted earnings per share attributable to Devon (Non-GAAP)				$	1.34

(1) In the third quarter of 2014, Devon completed its U.S. non-core divestiture program. In conjunction with the divestiture closing, Devon recognized $543 million of current income tax expense. The current tax expense was entirely offset by the recognition of deferred tax benefits.

NET DEBT

(in millions)

Devon defines net debt as debt less cash and cash equivalents as presented in the following table. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash to repay debt.

	September 30,
	2014		2013
Total debt (GAAP)	$	12,059	$	10,068
Adjustments:
Cash and cash equivalents		3,408		4,320
Net debt (Non-GAAP)	$	8,651	$	5,748

PRE-TAX CASH MARGIN

Devon defines pre-tax cash margin as revenues from commodity sales and marketing and midstream operations, less expenses for lease operations, marketing and midstream operations, cash-based general and administrative, production and property taxes and net financing costs, with the result divided by total production. Devon believes that pre-tax cash margin can facilitate comparisons of our performance between periods and to the performance of our peers.

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DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

PRODUCTION GUIDANCE

	Quarter 4
	Low		High
Oil and bitumen (MBbls/d)
United States		145		150
Canada		83		88
Total		228		238
Natural gas (MMcf/d)
United States		1,610		1,660
Canada		19		24
Total		1,629		1,684
Natural gas liquids (MBbls/d)
United States		131		136
Total Boe (MBoe/d)
United States		544		563
Canada		86		92
Total		630		655

PRICE REALIZATIONS GUIDANCE

	Quarter 4
	Low			High
Oil and bitumen -% of WTI
United States		86	%		96	%
Canada		63	%		73	%
Natural gas -% of Henry Hub		87	%		93	%
NGL - realized price	$	20		$	30

OTHER GUIDANCE ITEMS

	Quarter 4
($ millions, except Boe)	Low			High
Marketing & midstream operating profit	$	200		$	220
Lease operating expenses per Boe	$	9.75		$	9.95
General & administrative expenses per Boe	$	3.50		$	3.70
Production and property taxes as % of upstream sales		4.8	%		5.8	%
Depreciation, depletion and amortization per Boe	$	13.75		$	14.75
Net financing costs	$	115		$	125
Current income tax rate		5.0	%		8.0	%
Deferred income tax rate		24.0	%		30.0	%
Total income tax rate		29.0	%		38.0	%
Net earnings attributable to noncontrolling interests	$	20		$	30

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DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

CAPITAL EXPENDITURES GUIDANCE

	Quarter 4
(in millions)	Low		High
Exploration and development	$	1,400	$	1,500
Capitalized G&A and interest		100		120
Total oil and gas		1,500		1,620
Midstream(1)		50		80
Corporate and other		40		60
Devon capital expenditures	$	1,590	$	1,760

(1) Excludes capital expenditures related to EnLink.

COMMODITY HEDGES

	Oil Commodity Hedges
	Price Swaps				Price Collars						Call Options Sold
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q4 2014		75,000	$	94.14		64,750	$	89.33	$	100.00		42,000	$	116.43

	Oil Basis Swaps
Period	Index		Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q4 2014		Western Canadian Select		50,000	$	(17.40	)

	Natural Gas Commodity Hedges
	Price Swaps				Price Collars						Call Options Sold
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)
Q4 2014		800,000	$	4.42		460,000	$	4.03	$	4.51		500,000	$	5.00

	Natural Gas Basis Swaps
Period	Index		Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q4 2014		AECO		94,781	$	(0.52	)

Devon’s oil derivatives that settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index.

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