Devon Energy 8K Reports Second-Quarter 2015 Results | DVN 4 Aug 15

EXHIBIT 99.1


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


NEWS RELEASE

Devon Energy Reports Second-Quarter 2015 Results

•

Delivered record oil production in U.S.

•

Exceeded oil production expectations for fourth consecutive quarter

•

Reduced operating costs 8 percent year over year

•

Improved 2015 capital spending and operating cost outlook

OKLAHOMA CITY – Aug.4, 2015– Devon Energy Corp. (NYSE:DVN) today announced core earnings of $320 million, or $0.78 per diluted share, for the second quarter of 2015. This compares with first-quarter 2015 core earnings of $89 million, or $0.22 per diluted share.

“Devon delivered another high-quality performance in the second quarter as we continued to realize significant operational improvements across our portfolio,” said Dave Hager, president and CEO. “Our oil-focused drilling programs in North America’s best resource plays achieved outstanding well performance, and we made substantial progress reducing well costs and operating expenses. This superior execution contributed to more than 30 percent growth in total oil production year over year and record oil output in the U.S., led by our Eagle Ford and Delaware Basin assets.”

“With current industry conditions, we are focused on maintaining flexibility in our capital programs,” Hager said. “To ensure this optionality, we have minimal exposure to long-term service contracts, no long-term project commitments and negligible leasehold expiration issues. This allows us to dynamically allocate capital to our highest-returning areas while balancing investment with cash flow. We believe this advantage, combined with our high-quality asset base and strong balance sheet, positions Devon as well as anyone in the E&P space.”

On a reported basis, due to a non-cash, full-cost ceiling charge, Devon had a net loss of $2.8 billion, or $6.94 per diluted share, for the second-quarter 2015. This compares with second-quarter 2014 reported net earnings of $675 million, or $1.64 per diluted share.

Oil Production Exceeds Expectations for Fourth Consecutive Quarter

Devon’s oil-driven capital program continued to deliver strong results in the second quarter of 2015. Total oil production averaged 270,000 barrels per day, a 32 percent increase compared to the second quarter of 2014. This result surpassed the midpoint of guidance by 5,000 barrels per day, marking the fourth consecutive quarter the Company has exceeded oil production expectations.

The most significant growth came from the Company’s U.S. operations, where oil production averaged a record high 172,000 barrels per day. This result was 35 percent higher than the year-ago quarter and exceeded the top end of guidance expectations by 2,000 barrels per day. Growth in U.S. production was largely attributable to the Company’s Eagle Ford and Delaware Basin assets. Net production in the Eagle Ford averaged 114,000 Boe per day in the second quarter, a 75 percent increase compared to the second quarter of 2014. In the Delaware Basin, led by outstanding results from the Bone Spring play, production increased to 64,000 Boe per day in the second quarter, a 40 percent increase compared to the year-ago period.

In Canada, net production from the Company’s heavy-oil projects reached an average 98,000 barrels of oil per day in the second quarter. Driven by the continued ramp-up of the Jackfish 3 facility, Canadian oil production increased 27 percent compared to the second quarter of 2014. Scheduled maintenance at the Company’s Jackfish 1 oil sands project limited production by approximately 11,000 barrels per day in the quarter.

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In total, Devon’s production averaged 674,000 Boe per day during the second quarter of 2015. This result represents a 9 percent increase compared to the second quarter of 2014, with liquids accounting for 60 percent of the Company’s production mix.

Operations Report

For additional details on Devon’s E&P operations, please refer to the Company’s second-quarter 2015 Operations Report atwww.devonenergy.com. Highlights from the report include:

•

Delaware Basin type curves improving

•

Eagle Ford produces best-in-class well results

•

Heavy oil output continues to grow while margins expand

•

Cana and Meramec plays generate high-rate wells

•

Powder River Basin delivers substantial growth rates

Upstream Revenue Increases 18 Percent; Midstream Profit Expands

Revenue from oil, natural gas and natural gas liquids sales totaled $1.6 billion, an 18 percent increase compared to the first quarter of 2015. The revenue growth was attributable to the increase in higher margin U.S. oil production combined with improved oil price realizations. These factors resulted in second-quarter oil sales increasing to more than 70 percent of Devon’s total upstream revenues.

Cash settlements related to oil and natural gas hedges increased revenue by nearly $500 million, or $8 per Boe in the second quarter. At the end of June, the Company’s remaining commodity hedges had a fair-market value of approximately $850 million. This attractive hedging position represents 55 percent of forecasted oil production and 45 percent of expected natural gas production for the remaining two quarters of 2015.

Devon’s midstream operating profit reached $225 million, which exceeded the Company’s guidance and was 16 percent higher than the first quarter of 2015. The increase in operating profit was driven by growth from EnLink Midstream.

Cost Reduction Initiatives Delivering Results

The Company has several cost reduction initiatives underway that positively impacted second-quarter results. Field-level operating costs, which includes both lease operating expenses and production taxes, declined 8 percent compared to the second quarter of 2014 to $11.05 per Boe. These cost savings were realized across all regions of Devon’s asset portfolio.

Significant general and administrative (G&A) cost savings also were achieved in the second quarter. G&A expenses totaled $212 million, which was below the low end of guidance and a 16 percent decline compared to the first quarter.

Based on year-to-date cost savings, Devon now anticipates its field-level operating costs and G&A to decline to around $14.50 per Boe for the full-year 2015. Compared to original guidance, this implies a full-year cost savings of around $400 million.

Balance Sheet and Liquidity Remain Strong

Operating cash flow in the second quarter, excluding the consolidation of EnLink Midstream, reached $1.0 billion. Combined with the sale of the Victoria Express Pipeline, EnLink secondary offering proceeds and EnLink partnership distributions, Devon’s second-quarter cash inflows totaled $1.3 billion.

Devon’s financial position remained exceptionally strong with investment-grade credit ratings and cash balances of $1.7 billion at the end of the quarter. The Company’s net debt, excluding non-recourse EnLink obligations, totaled $7.6 billion.

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Production Outlook on Track; Additional Capital Cost Savings Expected

Detailed forward-looking guidance for the third quarter and full-year 2015 is provided later in the release. Given the strong year-to-date production performance, the Company is well positioned to deliver on its 2015 oil growth target of 25 to 35 percent. Devon also remains on track to increase top-line production by 5 to 10 percent.

The Company expects to achieve these attractive production growth targets with lower capital cost requirements. Since the beginning of the year, Devon has reduced projected 2015 capital spending by approximately $350 million.

Non-GAAP Reconciliations

Pursuant to regulatory disclosure requirements, Devon is required to reconcile non-GAAP financial measures to the related GAAP information (GAAP refers to generally accepted accounting principles). Core earnings and net debt 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 second-quarter 2015 conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, August 5, 2015, 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 include those concerning strategic plans, expectations and objectives for future operations, and are often identified by use of the words “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; unforeseen changes in the rate of production from our oil and gas properties; uncertainties in future exploration and drilling results; uncertainties inherent in estimating the cost of drilling and completing wells; drilling risks; competition for leases, materials, people and capital; midstream capacity constraints and potential interruptions in production; risk related to our hedging activities; environmental risks; political changes; changes in laws or regulations; our limited control over third parties who operate our oil and gas properties; our ability to successfully complete mergers, acquisitions and divestitures; and other risks identified in our Form 10-K and our other filings with the SEC. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by Devon on its website or otherwise. Devon does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC’s definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. This release may contain certain terms, such as resource potential and exploration target size. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. 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.

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About Devon Energy

Devon Energy is a leading independent energy company engaged in finding and producing oil and natural gas. Based in Oklahoma City and included in the S&P 500, Devon operates in several of the most prolific oil and natural gas plays in the U.S. and Canada with an emphasis on a balanced portfolio. The Company is the second-largest oil producer among North American onshore independents. For more information, please visitwww.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

Page 4 of 16

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION NET OF ROYALTIES


	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2015		2014		2015		2014
Oil and bitumen (MBbls/d)
United States		172		128		170		112
Canada		98		77		101		78

Retained assets		270		205		271		190
Divested assets		—		4		—		10

Total		270		209		271		200

Natural gas liquids (MBbls/d)
United States		134		130		136		125
Divested assets		—		6		—		11

Total		134		136		136		136

Gas (MMcf/d)
United States		1,607		1,689		1,612		1,638
Canada		20		23		24		22

Retained assets		1,627		1,712		1,636		1,660
Divested assets		—		219		—		401

Total		1,627		1,931		1,636		2,061

Oil equivalent (MBoe/d)
United States		573		539		574		511
Canada		101		81		105		81

Retained assets		674		620		679		592
Divested assets		—		47		—		87

Total		674		667		679		679

KEY OPERATING STATISTICS BY REGION


	Quarter Ended June 30, 2015
	Avg. Production (MBoe/d)		Gross Wells Drilled		Operated Rigs at June 30, 2015
Permian Basin		113		61		14
Eagle Ford		114		55		—
Canadian Heavy Oil		101		10		1
Anadarko Basin		82		22		6
Barnett Shale		185		—		—
Rockies		27		21		2
Other assets		52		20		—

Total		674		189		23

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION TREND


	2014		2014		2014		2015		2015
	Quarter 2		Quarter 3		Quarter 4		Quarter 1		Quarter 2
Oil (MBbls/d)
Permian Basin		55		56		55		60		67
Eagle Ford		40		47		60		75		67
Canadian Heavy Oil		77		80		93		104		98
Anadarko Basin		11		10		10		9		10
Barnett Shale		2		2		2		1		1
Rockies		8		10		9		12		16
Other assets		12		11		10		11		11

Retained assets		205		216		239		272		270
Divested assets		4		3		—		—		—

Total		209		219		239		272		270

Natural gas liquids (MBbls/d)
Permian Basin		18		19		20		19		21
Eagle Ford		11		14		18		23		24
Anadarko Basin		31		34		34		30		24
Barnett Shale		55		54		53		51		49
Rockies		1		1		1		1		1
Other assets		14		16		15		15		15

Retained assets		130		138		141		139		134
Divested assets		6		5		—		—		—

Total		136		143		141		139		134

Gas (MMcf/d)
Permian Basin		134		136		137		137		152
Eagle Ford		88		109		127		143		146
Canadian Heavy Oil		23		26		23		28		20
Anadarko Basin		309		323		329		297		290
Barnett Shale		932		896		878		827		805
Rockies		67		66		58		53		62
Other assets		159		160		155		160		152

Retained assets		1,712		1,716		1,707		1,645		1,627
Divested assets		219		138		3		—		—

Total		1,931		1,854		1,710		1,645		1,627

Oil equivalent (MBoe/d)
Permian Basin		95		98		98		102		113
Eagle Ford		65		79		99		122		114
Canadian Heavy Oil		81		84		97		109		101
Anadarko Basin		93		98		100		88		82
Barnett Shale		212		205		201		191		185
Rockies		21		22		19		22		27
Other assets		53		54		50		51		52

Retained assets		620		640		664		685		674
Divested assets		47		31		1		—		—

Total		667		671		665		685		674

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK PRICES

(average prices)


	Quarter Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	57.78	$	103.09	$	53.33	$	100.87
Natural Gas ($/Mcf) - Henry Hub	$	2.65	$	4.68	$	2.82	$	4.81

REALIZED PRICES


	Quarter Ended June 30, 2015
	Oil /Bitumen			NGL		Gas			Total
	(Per Bbl)			(Per Bbl)		(Per Mcf)			(Per Boe)
United States	$	52.52		$	10.31	$	2.16		$	24.18
Canada⁽¹⁾	$	36.49		$	N/M	$	0.33		$	35.33

Realized price without hedges	$	46.69		$	10.31	$	2.13		$	25.86
Cash settlements	$	16.08		$	—	$	0.58		$	7.83

Realized price, including cash settlements	$	62.77		$	10.31	$	2.71		$	33.69


	Quarter Ended June 30, 2014
	Oil /Bitumen			NGL		Gas			Total
	(Per Bbl)			(Per Bbl)		(Per Mcf)			(Per Boe)
United States	$	95.71		$	25.22	$	4.19		$	41.06
Canada⁽¹⁾	$	69.45		$	N/M	$	1.56		$	65.96

Realized price without hedges	$	86.00		$	25.13	$	4.15		$	44.12
Cash settlements	$	(4.17	)	$	—	$	(0.16	)	$	(1.78	)

Realized price, including cash settlements	$	81.83		$	25.13	$	3.99		$	42.34


	Six Months Ended June 30, 2015
	Oil			NGL		Gas			Total
	(Per Bbl)			(Per Bbl)		(Per Mcf)			(Per Boe)
United States	$	47.74		$	9.85	$	2.31		$	22.93
Canada⁽¹⁾	$	29.51		$	N/M	$	0.79		$	28.56

Realized price without hedges	$	40.94		$	9.85	$	2.29		$	23.80
Cash settlements	$	18.59		$	—	$	0.55		$	8.72

Realized price, including cash settlements	$	59.53		$	9.85	$	2.84		$	32.52


	Six Months Ended June 30, 2014
	Oil			NGL		Gas			Total
	(Per Bbl)			(Per Bbl)		(Per Mcf)			(Per Boe)
United States	$	93.96		$	27.34	$	4.26		$	40.30
Canada⁽¹⁾	$	65.37		$	50.17	$	3.97		$	53.26

Realized price without hedges	$	82.10		$	28.11	$	4.23		$	42.61
Cash settlements	$	(3.19	)	$	—	$	(0.25	)	$	(1.70	)

Realized price, including cash settlements	$	78.91		$	28.11	$	3.98		$	40.91

(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 EARNINGS

(in millions, except per share amounts)


	Quarter Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Oil, gas and NGL sales	$	1,587		$	2,679		$	2,926		$	5,236
Oil, gas and NGL derivatives		(282	)		(399	)		12			(719	)
Marketing and midstream revenues		2,088			2,230			3,720			3,718

Total operating revenues		3,393			4,510			6,658			8,235

Lease operating expenses		562			582			1,115			1,180
Marketing and midstream operating expenses		1,863			2,006			3,302			3,311
General and administrative expenses		212			189			463			400
Production and property taxes		116			150			224			287
Depreciation, depletion and amortization		814			828			1,744			1,567
Asset impairments		4,168			—			9,628			—
Restructuring costs		—			5			—			42
Gains and losses on asset sales		(1	)		(1,057	)		(1	)		(1,072	)
Other operating items		22			33			41			56

Total operating expenses		7,756			2,736			16,516			5,771

Operating income (loss)		(4,363	)		1,774			(9,858	)		2,464
Net financing costs		125			131			242			243
Other nonoperating items		(9	)		89			3			107

Earnings (loss) before income taxes		(4,479	)		1,554			(10,103	)		2,114
Income tax expense (benefit)		(1,686	)		854			(3,721	)		1,085

Net earnings (loss)		(2,793	)		700			(6,382	)		1,029
Net earnings attributable to noncontrolling interests		23			25			33			30

Net earnings (loss) attributable to Devon	$	(2,816	)	$	675		$	(6,415	)	$	999

Net earnings (loss) per share attributable to Devon:
Basic	$	(6.94	)	$	1.65		$	(15.81	)	$	2.45
Diluted	$	(6.94	)	$	1.64		$	(15.81	)	$	2.44
Weighted average common shares outstanding:
Basic		411			408			411			408
Diluted		411			411			411			410

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)


	Quarter Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Cash flows from operating activities:
Net earnings (loss)	$	(2,793	)	$	700		$	(6,382	)	$	1,029
Adjustments to reconcile net earnings (loss)to net cash from operating activities:
Depreciation, depletion and amortization		814			828			1,744			1,567
Asset impairments		4,168			—			9,628			—
Gains and losses on asset sales		(1	)		(1,057	)		(1	)		(1,072	)
Deferred income tax expense (benefit)		(1,593	)		569			(3,640	)		777
Derivatives and other financial instruments		305			454			(125	)		761
Cash settlements on derivatives and financial instruments		464			(191	)		1,183			(245	)
Other noncash charges		42			106			267			229
Net change in working capital		(189	)		622			26			470
Change in long-term other assets		18			11			159			(77	)
Change in long-term other liabilities		(134	)		7			(110	)		20

Net cash from operating activities		1,101			2,049			2,749			3,459

Cash flows from investing activities:
Capital expenditures		(1,432	)		(1,758	)		(3,149	)		(3,341	)
Acquisitions of property, equipment and businesses		(13	)		(289	)		(417	)		(6,224	)
Divestitures of property and equipment		6			2,800			8			2,942
Redemptions of long-term investments		—			—			—			57
Other		(8	)		47			(5	)		84

Net cash from investing activities		(1,447	)		800			(3,563	)		(6,482	)

Cash flows from financing activities:
Borrowings of long-term debt, net of issuance costs		2,094			374			3,051			3,720
Net short-term debt repayments		(778	)		(1,119	)		(763	)		(862	)
Repayments of long-term debt		(1,034	)		(2,413	)		(1,521	)		(3,990	)
Stock option exercises		4			72			4			83
Sale of subsidiary units		85			—			654			—
Issuance of subsidiary units		2			20			4			20
Dividends paid on common stock		(98	)		(99	)		(197	)		(189	)
Distributions to noncontrolling interests		(65	)		(41	)		(118	)		(141	)
Other		—			12			(12	)		9

Net cash from financing activities		210			(3,194	)		1,102			(1,350	)

Effect of exchange rate changes on cash		3			24			(43	)		13

Net change in cash and cash equivalents		(133	)		(321	)		245			(4,360	)
Cash and cash equivalents at beginning of period		1,858			2,027			1,480			6,066

Cash and cash equivalents at end of period	$	1,725		$	1,706		$	1,725		$	1,706

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS

(in millions)


	June 30,			December 31,
	2015			2014
Current assets:
Cash and cash equivalents	$	1,725		$	1,480
Accounts receivable		1,602			1,959
Derivatives, at fair value		924			1,993
Income taxes receivable		9			522
Other current assets		470			544

Total current assets		4,730			6,498

Property and equipment, at cost:
Oil and gas, based on full cost accounting:
Subject to amortization		77,191			75,738
Not subject to amortization		2,685			2,752

Total oil and gas		79,876			78,490
Midstream and other		10,354			9,695

Total property and equipment, at cost		90,230			88,185
Less accumulated depreciation, depletion and amortization		(62,406	)		(51,889	)

Property and equipment, net		27,824			36,296

Goodwill		6,349			6,303
Other long-term assets		1,703			1,540

Total assets	$	40,606		$	50,637

Current liabilities:
Accounts payable	$	1,035		$	1,400
Revenues and royalties payable		1,095			1,193
Short-term debt		670			1,432
Deferred income taxes		346			730
Other current liabilities		852			1,180

Total current liabilities		3,998			5,935

Long-term debt		11,375			9,830
Asset retirement obligations		1,391			1,339
Other long-term liabilities		782			948
Deferred income taxes		2,909			6,244
Stockholders’ equity:
Common stock		41			41
Additional paid-in capital		4,736			4,088
Retained earnings		10,018			16,631
Accumulated other comprehensive earnings		528			779

Total stockholders’ equity attributable to Devon		15,323			21,539
Noncontrolling interests		4,828			4,802

Total stockholders’ equity		20,151			26,341

Total liabilities and stockholders’ equity	$	40,606		$	50,637

Common shares outstanding		411			409

Page 10 of 16

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATING STATEMENTS OF OPERATIONS

(in millions)


	Quarter Ended June 30, 2015
	Devon U.S. & Canada			EnLink			Eliminations			Total
Oil, gas and NGL sales	$	1,587		$	—		$	—		$	1,587
Oil, gas and NGL derivatives		(282	)		—			—			(282	)
Marketing and midstream revenues		985			1,274			(171	)		2,088

Total operating revenues		2,290			1,274			(171	)		3,393

Lease operating expenses		562			—			—			562
Marketing and midstream operating expenses		970			1,064			(171	)		1,863
General and administrative expenses		184			28			—			212
Production and property taxes		104			12			—			116
Depreciation, depletion and amortization		716			98			—			814
Asset impairments		4,168			—			—			4,168
Gains and losses on asset sales		(1	)		—			—			(1	)
Other operating items		22			—			—			22

Total operating expenses		6,725			1,202			(171	)		7,756

Operating income (loss)		(4,435	)		72			—			(4,363	)
Net financing costs		99			26			—			125
Other nonoperating items		—			(9	)		—			(9	)

Earnings (loss) before income taxes		(4,534	)		55			—			(4,479	)
Income tax expense (benefit)		(1,696	)		10			—			(1,686	)

Net earnings (loss)		(2,838	)		45			—			(2,793	)
Net earnings attributable to noncontrolling interests		1			22			—			23

Net earnings (loss) attributable to Devon	$	(2,839	)	$	23		$	—		$	(2,816	)

OTHER KEY STATISITICS

(in millions)


	Quarter Ended June 30, 2015
	Devon U.S. & Canada			EnLink			Eliminations		Total
Cash flow statement items:
Operating cash flow	$	995		$	106		$	—	$	1,101
Capital expenditures	$	(1,243	)	$	(189	)	$	—	$	(1,432	)
Acquisitions of property, equipment and businesses	$	—		$	(13	)	$	—	$	(13	)
Sale of subsidiary units	$	85		$	—		$	—	$	85
EnLink distributions received (paid)⁽¹⁾	$	236		$	(301	)	$	—	$	(65	)
Balance sheet statement items:
Net debt⁽²⁾	$	7,565		$	2,755		$	—	$	10,320

(1)	Includes $171 million for the sale of the Victoria Express Pipeline.

(2)	Net debt is a Non-GAAP measure. For a reconciliation of the comparable GAAP measure, see “Non-GAAP Financial Measures” later in this release.

Page 11 of 16

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CAPITAL EXPENDITURES

(in millions)


	Quarter Ended June 30, 2015		Six Months Ended June 30, 2015
Exploration and development capital	$	882	$	2,208
Capitalized G&A and interest		116		223
Acquisitions		—		92
Midstream⁽¹⁾		21		37
Corporate and other		14		41

Devon capital expenditures	$	1,033	$	2,601

(1)	Excludes $158 million and $672 million attributable to EnLink for the second quarter and first six months of 2015, respectively.

Page 12 of 16

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.

CORE 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. Accordingly, the Company also uses the measures of core earnings and core earnings per diluted share. 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 2015 earnings.


	Quarter Ended June 30, 2015
	Before-Tax		After-Tax
Net loss attributable to Devon (GAAP)			$	(2,816	)
Asset impairments		4,168		2,646
Fair value changes in financial instruments and foreign currency		761		490

Core earnings attributable to Devon (Non-GAAP)			$	320

Diluted share count				414
Core diluted earnings per share attributable to Devon (Non-GAAP)			$	0.78

NET DEBT

(in millions)

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


	June 30, 2015
	Devon U.S. & Canada			EnLink			Devon Consolidated
Total debt (GAAP)	$	9,218		$	2,827		$	12,045
Less cash and cash equivalents		(1,653	)		(72	)		(1,725	)

Net debt (Non-GAAP)	$	7,565		$	2,755		$	10,320

Page 13 of 16

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

PRODUCTION GUIDANCE


	Quarter 3				Full Year
	Low		High		Low		High
Oil and bitumen (MBbls/d)
United States		155		165		160		170
Canada		105		115		100		110

Total		260		280		260		280

Natural gas liquids (MBbls/d)
United States		125		135		128		134
Gas (MMcf/d)
United States		1,500		1,550		1,550		1,600
Canada		15		20		15		20

Total		1,515		1,570		1,565		1,620

Oil equivalent (MBoe/d)
United States		530		558		546		571
Canada		108		118		103		113

Total		638		676		649		684

PRICE REALIZATIONS GUIDANCE


	Quarter 3						Full Year
	Low			High			Low			High
Oil and bitumen - % of WTI
United States		84	%		94	%		85	%		95	%
Canada		58	%		68	%		53	%		63	%
NGL - realized price	$	7		$	12		$	6		$	16
Natural gas - % of Henry Hub		78	%		88	%		78	%		88	%

Page 14 of 16

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

OTHER GUIDANCE ITEMS

($ millions, except Boe)


	Quarter 3						Full Year
	Low			High			Low			High
Marketing & midstream operating profit	$	195		$	225		$	830		$	890
Lease operating expenses per Boe	$	8.90		$	9.40		$	8.80		$	9.30
General & administrative expenses per Boe	$	3.40		$	3.70		$	3.40		$	3.90
Production and property taxes as % of upstream sales		6.7	%		7.7	%		6.7	%		7.7	%
Depreciation, depletion and amortization per Boe	$	12.50		$	13.50		$	13.00		$	14.00
Other operating items	$	15		$	20		$	60		$	80
Net financing costs	$	130		$	140		$	480		$	540
Current income tax rate		0.0	%		5.0	%		0.0	%		5.0	%
Deferred income tax rate		30.0	%		35.0	%		30.0	%		35.0	%

Total income tax rate		30.0	%		40.0	%		30.0	%		40.0	%

Net earnings attributable to noncontrolling interests	$	10		$	30		$	50		$	100

CAPITAL EXPENDITURES GUIDANCE

(in millions)


	Quarter 3				Full Year
	Low		High		Low		High
Exploration and development	$	900	$	1,000	$	3,900	$	4,100
Capitalized G&A and interest		100		120		380		480
Midstream⁽¹⁾		10		20		70		120
Corporate and other		15		25		60		110

Devon capital expenditures	$	1,025	$	1,165	$	4,410	$	4,810

(1)	Excludes capital expenditures related to EnLink.

Page 15 of 16

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

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)
Q3-Q4 2015		106,000	$	90.85		42,000	$	82.40	$	89.78		28,000	$	116.43

Oil Basis Swaps

Period

Index

Volume (Bbls/d)

Weighted Average Differential to
WTI ($/Bbl)

Q3-Q4 2015

Western Canadian Select

40,000

$ (15.79

)


	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)
Q3-Q4 2015		250,000	$	4.32		462,500	$	3.55	$	3.85		550,000	$	5.09

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.

Page 16 of 16

Devon Energy (DVN) 8-KDevon Energy Reports Second-Quarter 2015 Results