Devon Energy (DVN) 8-K Devon Energy Reports Second-Quarter 2018 Results

Exhibit 99.1

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

NEWS RELEASE

Devon Energy Reports Second-Quarter 2018 Results

Highlights

• Delaware Basin and STACK drive U.S oil production beat

• Light-oil production growth on track to expand 16 percent in 2018

• EnLink ownership interests monetized at 12 times cash flow

• Industry-leading share-repurchase program increased to $4 billion

• Field-level cash margins expand by 31 percent year over year

• Corporate cost structure to improve by $475 million annually

OKLAHOMA CITY – July 31, 2018– Devon Energy Corp. (NYSE: DVN) today reported operational and financial results for the second quarter of 2018. Also included within the release is the company’s guidance outlook for the third quarter and full-year 2018.

“Devon is executing at a very high level on our 2020 Vision,” said Dave Hager, president and CEO. “Operationally, our second-quarter performance was headlined by strong well productivity in the Delaware Basin and STACK, which drovelight-oil production above the high end of our guidance expectations. Importantly, we converted this volume growth into higher profits with our access to premium pricing in advantaged markets and through our success in driving both field-level and corporate costs lower.

“With the strong well productivity we’ve achieved year to date in the U.S.,light-oil production growth is on track to advance 16 percent in 2018, which is 200 basis points above our original budget expectations,” said Hager. “We expect to deliver this improved outlook without any increase to our planned activity, and this disciplined investment program positions us to generate substantial amounts of free cash flow at today’s market prices.

“In addition to our strong operating results, we took a significant step forward in achieving our 2020 Vision by further simplifying our asset portfolio through our monetization of EnLink,” said Hager. “This highly accretive transaction provides a strategic exit from EnLink at a value of 12 times cash flow, and we’re returning the sales proceeds to our shareholders through our industry-leading $4 billion share-repurchase program.”

Delaware Basin and STACK Drive U.S. Oil Production Beat

Production results in the quarter were highlighted by oil growth from Devon’s U.S. resource plays, which are attaining the highest margins and returns in Devon’s portfolio. In the quarter,light-oil production in the U.S. averaged 136,000 barrels per day, a 12 percent increase compared to the first quarter of 2018. This result exceeded the top end of guidance by 2,000 barrels per day.

The strongest asset-level performance during the second quarter was from the company’s Delaware Basin assets.Light-oil production increased 54 percent year over year in the quarter, driving total volumes in the Delaware to 79,000oil-equivalent barrels (Boe) per day. Growth in the Delaware was driven by prolific well productivity, where the top 10 wells in the quarter averaged initial30-day rates of approximately 3,000 Boe per day.

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Devon’s STACK assets also delivered strong results during the quarter. Total production in the STACK advanced 26 percent compared to the second quarter of 2017. Driven by several strong wells across the play, oil production delivered the highest growth rate, increasing 41 percent year over year.

In Canada, net oil production averaged 109,000 barrels per day in the second quarter. Scheduled maintenance at the company’s Jackfish facility curtailed production by approximately 15,000 barrels per day. Also contributing to lower production was a 2 percentage point increase in royalty rates because of higher commodity prices and improved profitability.

Overall, total companywide production averaged 541,000 Boe per day in the second quarter. Oil accounted for the largest component of the product mix at 45 percent of total volumes. For additional details on Devon’s E&P operations in the quarter, please refer to the company’s second-quarter 2018 operations report atwww.devonenergy.com.

Light-Oil Production Growth on Track to Increase 16 Percent in 2018

With the strong well productivity Devon has achieved year to date in the U.S.,light-oil production growth is on track to advance 16 percent in 2018. This growth rate is trending at approximately 200 basis points above the company’s original budget expectations.

The incremental oil growth in the U.S. is expected to be delivered without an increase to Devon’s capital activity. This disciplined investment program positions the company to generate free cash flow in the second half of 2018 at today’s market prices.

EnLink Ownership Interests Monetized at 12 Times Cash Flow

Inmid-July, Devon completed the sale of its ownership interests in EnLink Midstream Partners, LP (NYSE: ENLK) and EnLink Midstream, LLC (NYSE: ENLC) for $3.125 billion. The company’s interests in EnLink generated $265 million of cash distributions over the past year, valuing the investment at approximately 12 times cash flow. Devon expects no incremental corporate cash taxes resulting from this sale.

With the closing of the EnLink transaction, combined with other minor asset sales achieved to date, total proceeds from Devon’s divestiture program have now reached $4.2 billion. The company expects to monetize an additional $1 billion of minor,non-core assets across the United States byyear-end. These divestiture packages include undeveloped leasehold in the southern Delaware Basin, enhanced oil recovery projects in the Rockies and Midland Basin along with Wise County acreage in the Barnett Shale. Data rooms are open for the majority of these packages and bids are expected throughout the second half of 2018.

Industry-Leading Share-Repurchase Program Increased to $4 Billion

In conjunction with closing the EnLink transaction, Devon’s board of directors authorized an increase in the company’s share-repurchase program to $4 billion. This authorization represents the largest share-repurchase program in the upstream industry when measured as a percentage of market capitalization. At the end of July, Devon had repurchased 24 million shares, or nearly 5 percent of outstanding shares, at a total cost of approximately $1 billion.

For the remaining share-repurchase authorization, the company plans to utilize a series of accelerated stock repurchase programs (ASR) that are expected to commence in early August. With these ASR programs, Devon expects to complete its $4 billion share-repurchase program during the first half of 2019. Detailed forward-looking guidance on share count is provided later in this release.

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Financial Reporting Impact of EnLink Monetization

With the closing of the EnLink transaction, the financial results of EnLink Midstream will no longer be consolidated with Devon’s upstream business, and historical results related to EnLink will be presented as discontinued operations in the company’s consolidated financial statements.

To assist with this financial reporting transition, Devon has provided pro forma financial statements for its upstream business in a Form8-K filing in July. Additionally, updated detailed forward-looking guidance for financial statement line items impacted by this transaction in 2018 is provided later in this release.

Upstream Revenue Benefits from Premium Gulf Coast Pricing

Devon’s upstream revenue, excluding commodity derivatives, totaled $1.6 billion in the second quarter, a 15 percent improvement compared to the previous quarter. The strong growth in revenue was driven by growth in higher-margin,light-oil production coupled with improved price realizations across the company’s asset portfolio.

Also contributing to the improving price realizations in the quarter were Devon’s firm transport and marketing agreements that provide the majority of U.S. oil production direct access to premium Gulf Coast markets. Combined with the price protection provided by regional basis swaps, second-quarter oil realizations in the U.S. averaged approximately 98 percent of the West Texas Intermediate benchmark. Importantly, the company is positioned to maintain these strong U.S. oil price realizations through the end of the decade.

In Canada, Devon continues to benefit from Western Canadian Select (WCS) basis swaps on approximately 50 percent of its estimated oil production in 2018. These attractive WCS basis swaps are locked in at $15 off the WTI benchmark price and have generated cash settlements of $109 million year to date.

U.S. Operating Costs Improve and Field-Level Margins Expand

Devon continued to effectively manage operating costs during the second quarter. Production expense, which represents field-level operating costs, totaled $572 million in the second quarter. The largest components of production expense are lease operating expense and transportation, which totaled $493 million in the quarter. Taxes also contributed $79 million to production expense during the second quarter.

The company’s U.S. resource plays delivered the strongest cost performance, where lease operating expense and transportation costs declined 3 percent on aper-unit basis compared to the first quarter. In Canada, production expense in the quarter was impacted by $21 million ofnon-recurring costs associated with maintenance work at the Jackfish complex.

Overall, the benefits of higher-margin oil production, improved price realizations and a lower cost structure resulted in expanded margins for Devon. Field-level cash margin reached $20.19 per Boe in the second quarter, a 31 percent increase compared to theyear-ago period. Field-level cash margin is computed as upstream revenues, excluding commodity derivatives, less production expenses with the result divided by oil equivalent production volumes.

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Corporate Cost Structure to Improve by $475 Million Annually

Further expanding Devon’s profitability is its improving general and administrative (G&A) cost structure. Upstream-related G&A expenses totaled $153 million, a 22 percent improvement compared to the first quarter. The significantly lower overhead costs were driven by reduced personnel expenses.

The company has also reduced financing costs. With the early retirement of $807 million of debt early in the year, the company expects to reduce net financing costs by approximately $64 million on an annual basis.

The aforementioned cost savings, combined with the financial benefits related to the sale of EnLink Midstream, position Devon’sgo-forward G&A and interest expense to improve by approximately $475 million annually.

Investment-Grade Financial Position Continues to Strengthen

Devon’s financial position remains exceptionally strong, with investment-grade credit ratings and excellent liquidity. The company exited the second quarter with $1.5 billion of cash on hand. Adjusted for the sale of EnLink Midstream in July, pro forma cash balances reached $4.6 billion and the company’s consolidated debt declined by 40 percent to $6.1 billion.

Second-Quarter Earnings and Cash-Flow Results

The company reported a net loss attributable to Devon of $425 million or $0.83 per diluted share in the second quarter. Excluding the impact of noncontrolling interests, the company reported a net loss of $335 million. Devon’s results were impacted by certain items securities analysts typically exclude from their published estimates. After excluding adjusting items, the company’s core earnings totaled $177 million or $0.34 per diluted share. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $1.0 billion in the quarter.

Devon’s operating cash flow from continuing operations totaled $269 million in the second quarter. Operating cash flow in the quarter was impacted by severalnon-recurring or unusual items, including a non-cash foreign exchange loss, restructuring charges, EnLink’s reclassification to discontinued operations and working capital changes. The most significant item was related to a non-cash, foreign exchange loss. This impact was driven by foreign currency denominated intercompany loan activity resulting in a realized loss of $244 million as a result of the strengthening of the U.S. dollar in relation to the Canadian dollar. For more understanding of the company’s cash flow performance during the quarter please refer to the explanations and reconciliations provided later in this release.

Pursuant to regulatory disclosure requirements, Devon is required to reconcilenon-GAAP (generally accepted accounting principles) financial measures to the related GAAP information. Reconciliations of thesenon-GAAP measures are provided within the tables of this release.

Conference Call Webcast and Supplemental Earnings Materials

Also provided with today’s release is the company’s detailed operations report that is available on the company’s website atwww.devonenergy.com. The company’s second-quarter conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Aug. 1, 2018, and will serve primarily as a forum for analyst and investor questions and answers.

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Forward-Looking Statements

This 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 “expects,” “believes,” “will,” “would,” “could,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “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 our business and operations 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, gas and NGL prices; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved in oil and gas operations; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to environmental matters; risks related to our hedging activities; counterparty credit risks; risks relating to our indebtedness; cyberattack risks; our limited control over third parties who operate our oil and gas properties; midstream capacity constraints and potential interruptions in production; the extent to which insurance covers any losses we may experience; competition for leases, materials, people and capital; our ability to successfully complete mergers, acquisitions and divestitures; and any of the other risks and uncertainties identified in our Form10-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 release are made as of the date of this 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, potential locations, risked and unrisked locations, estimated ultimate recovery (or EUR), exploration target size and other similar terms. 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 Form10-K, available atwww.devonenergy.com. You can also obtain this form from the SEC by calling1-800-SEC-0330 or from the SEC’s website atwww.sec.gov.

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 achieving strong returns and capital-efficient cash flow growth. For more information, please visitwww.devonenergy.com.

Investor Contacts	Media Contact
Scott Coody,405-552-4735	John Porretto,405-228-7506
Chris Carr,405-228-2496

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION NET OF ROYALTIES
	Quarter Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Oil and bitumen (MBbls/d)
U. S. - Core		136		113		129		117
Heavy Oil		109		122		119		130
Retained assets		245		235		248		247
Divested assets		—		3		—		2
Total		245		238		248		249
Natural gas liquids (MBbls/d)
U. S. - Core		105		90		98		89
Divested assets		4		7		5		8
Total		109		97		103		97
Gas (MMcf/d)
U. S. - Core		1,013		1,010		1,007		1,012
Heavy Oil		12		14		12		18
Retained assets		1,025		1,024		1,019		1,030
Divested assets		103		184		133		188
Total		1,128		1,208		1,152		1,218
Total oil equivalent (MBoe/d)
U. S. - Core		409		371		395		375
Heavy Oil		111		124		121		133
Retained assets		520		495		516		508
Divested assets		21		41		27		42
Total		541		536		543		550

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION TREND
	2017						2018
	Quarter 2		Quarter 3		Quarter 4		Quarter 1		Quarter 2
Oil and bitumen (MBbls/d)
STACK		25		27		30		35		35
Delaware Basin		30		31		32		36		46
Rockies Oil		13		12		15		18		16
Heavy Oil		122		121		132		129		109
Eagle Ford		34		28		27		23		28
Barnett Shale		1		1		1		1		1
Other		10		11		9		9		10
Retained assets		235		231		246		251		245
Divested assets		3		2		—		—		—
Total		238		233		246		251		245
Natural gas liquids (MBbls/d)
STACK		31		32		34		37		38
Delaware Basin		10		11		13		11		16
Rockies Oil		1		1		1		2		2
Eagle Ford		10		12		13		8		13
Barnett Shale		35		29		36		31		34
Other		3		2		3		2		2
Retained assets		90		87		100		91		105
Divested assets		7		7		6		6		4
Total		97		94		106		97		109
Gas (MMcf/d)
STACK		298		313		316		344		352
Delaware Basin		94		90		89		97		100
Rockies Oil		17		13		14		18		18
Heavy Oil		14		16		15		12		12
Eagle Ford		92		86		87		63		74
Barnett Shale		496		498		466		470		460
Other		13		10		13		10		9
Retained assets		1,024		1,026		1,000		1,014		1,025
Divested assets		184		175		175		163		103
		��
Total		1,208		1,201		1,175		1,177		1,128
Total oil equivalent (MBoe/d)
STACK		105		111		117		129		132
Delaware Basin		55		57		60		64		79
Rockies Oil		17		16		19		23		21
Heavy Oil		124		124		134		131		111
Eagle Ford		60		54		55		41		54
Barnett Shale		118		113		114		110		111
Other		16		14		13		13		12
Retained assets		495		489		512		511		520
Divested assets		41		38		36		33		21
Total		536		527		548		544		541

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK PRICES

(average prices)

	Quarter 2				June YTD
	2018		2017		2018		2017
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	67.83	$	48.32	$	65.38	$	50.16
Natural Gas ($/Mcf) - Henry Hub	$	2.80	$	3.19	$	2.90	$	3.25

REALIZED PRICES

	Quarter Ended June 30, 2018
	Oil /Bitumen (Per Bbl)			NGL (Per Bbl)			Gas (Per Mcf)		Total (Per Boe)
United States	$	65.41		$	24.10		$	2.01	$	31.97
Canada	$	31.70			N/M			N/M	$	31.17
Realized price without hedges	$	50.43		$	24.10		$	2.01	$	31.81
Cash settlements	$	(5.80	)	$	(1.66	)	$	0.13	$	(2.68	)
Realized price, including cash settlements	$	44.63		$	22.44		$	2.14	$	29.13
	Quarter Ended June 30, 2017
	Oil /Bitumen (Per Bbl)			NGL (Per Bbl)			Gas (Per Mcf)		Total (Per Boe)
United States	$	46.65		$	13.26		$	2.50	$	23.58
Canada	$	29.05			N/M			N/M	$	28.50
Realized price without hedges	$	37.63		$	13.26		$	2.50	$	24.72
Cash settlements	$	0.29		$	(0.03	)	$	0.04	$	0.22
Realized price, including cash settlements	$	37.92		$	13.23		$	2.54	$	24.94
	Six Months Ended June 30, 2018
	Oil /Bitumen (Per Bbl)			NGL (Per Bbl)			Gas (Per Mcf)		Total (Per Boe)
United States	$	63.71		$	23.38		$	2.21	$	31.20
Canada	$	25.24			N/M			N/M	$	24.84
Realized price without hedges	$	45.25		$	23.38		$	2.21	$	29.79
Cash settlements	$	(2.93	)	$	(1.13	)	$	0.16	$	(1.23	)
Realized price, including cash settlements	$	42.32		$	22.25		$	2.37	$	28.56
	Six Months Ended June 30, 2017
	Oil /Bitumen (Per Bbl)			NGL (Per Bbl)			Gas (Per Mcf)		Total (Per Boe)
United States	$	48.18		$	14.36		$	2.59	$	24.72
Canada	$	27.60			N/M			N/M	$	27.03
Realized price without hedges	$	37.48		$	14.36		$	2.59	$	25.28
Cash settlements	$	0.39		$	(0.02	)	$	—	$	0.19
Realized price, including cash settlements	$	37.87		$	14.34		$	2.59	$	25.47

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share amounts)

	Quarter Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Upstream revenues	$	1,069		$	1,332		$	2,388		$	2,873
Marketing revenues		1,180			833			2,059			1,692
Total revenues		2,249			2,165			4,447			4,565
Production expenses		572			455			1,115			912
Exploration expenses		68			57			101			152
Marketing expenses		1,160			849			2,033			1,728
Depreciation, depletion and amortization		420			369			819			769
Asset impairments		154			—			154			—
Asset dispositions		23			(22	)		11			(30	)
General and administrative expenses		153			181			352			376
Financing costs, net		62			77			449			160
Restructuring and transaction costs		94			—			94			—
Other expenses		24			(8	)		45			(22	)
Total expenses		2,730			1,958			5,173			4,045
Earnings (loss) from continuing operations before income taxes		(481	)		207			(726	)		520
Income tax benefit		(7	)		(5	)		(41	)		—
Net earnings (loss) from continuing operations		(474	)		212			(685	)		520
Net earnings from discontinued operations, net of income tax expense		139			33			197			42
Net earnings (loss)		(335	)		245			(488	)		562
Net earnings attributable to noncontrolling interests		90			26			134			40
Net earnings (loss) attributable to Devon	$	(425	)	$	219		$	(622	)	$	522
Basic net earnings (loss) per share:
Basic earnings (loss) from continuing operations per share	$	(0.92	)	$	0.40		$	(1.33	)	$	0.99
Basic earnings from discontinued operations per share		0.09			0.01			0.13			—
Basic net earnings (loss) per share	$	(0.83	)	$	0.41		$	(1.20	)	$	0.99
Diluted net earnings (loss) per share:
Diluted earnings (loss) from continuing operations per share	$	(0.92	)	$	0.40		$	(1.33	)	$	0.99
Diluted earnings from discontinued operations per share		0.09			0.01			0.13			—
Diluted net earnings (loss) per share	$	(0.83	)	$	0.41		$	(1.20	)	$	0.99
Weighted average common shares outstanding:
Basic		521			526			524			525
Diluted		524			529			527			528

UPSTREAM REVENUES

(in millions)

	Quarter Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017
Oil, gas and NGL sales	$	1,566		$	1,206	$	2,926		$	2,515
Derivative cash settlements		(131	)		11		(120	)		19
Derivative valuation changes		(366	)		115		(418	)		339
Upstream revenues	$	1,069		$	1,332	$	2,388		$	2,873

PRODUCTION EXPENSES

(in millions)

	Quarter Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017
Lease operating expense	$	269	$	239	$	510	$	462
Gathering, processing & transportation		224		160		452		323
Production taxes		67		41		126		96
Property taxes		12		15		27		31
Production expense	$	572	$	455	$	1,115	$	912

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

	Quarter Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Cash flows from operating activities:
Net earnings (loss)	$	(335	)	$	245		$	(488	)	$	562
Adjustments to reconcile net earnings to net cash from operating activities:
Earnings from discontinued operations, net of tax		(139	)		(33	)		(197	)		(42	)
Depreciation, depletion and amortization		420			369			819			769
Asset impairments		154			—			154			—
Leasehold impairments		53			22			61			64
Accretion on discounted liabilities		15			15			31			32
Total (gains) losses on commodity derivatives		497			(126	)		538			(358	)
Cash settlements on commodity derivatives		(131	)		11			(120	)		19
(Gains) and losses on asset dispositions		23			(22	)		11			(30	)
Deferred income tax expense (benefit)		20			(17	)		(18	)		(32	)
Share-based compensation		58			45			96			81
Early retirement of debt		—			—			312			—
Total (gains) losses on foreign exchange		31			(49	)		81			(64	)
Settlements of intercompany foreign denominated assets/liabilities		(244	)		1			(243	)		10
Other		(20	)		23			(50	)		11
Changes in assets and liabilities, net		(133	)		102			(108	)		133
Net cash from operating activities - continuing operations		269			586			879			1,155
Cash flows from investing activities:
Capital expenditures		(602	)		(434	)		(1,253	)		(831	)
Acquisitions of property and equipment		(10	)		(13	)		(16	)		(33	)
Divestitures of property and equipment		560			75			607			107
Net cash from investing activities - continuing operations		(52	)		(372	)		(662	)		(757	)
Cash flows from financing activities:
Repayments of long-term debt principal		—			—			(807	)		—
Early retirement of debt		—			—			(304	)		—
Repurchases of common stock		(428	)		—			(499	)		—
Dividends paid on common stock		(42	)		(33	)		(74	)		(65	)
Shares exchanged for tax withholdings		(6	)		(3	)		(44	)		(56	)
Net cash from financing activities - continuing operations		(476	)		(36	)		(1,728	)		(121	)
Effect of exchange rate changes on cash:
Settlements of intercompany foreign denominated assets/liabilities		244			(1	)		243			(10	)
Other		(17	)		9			(31	)		10
Total effect of exchange rate changes on cash – continuing operations		227			8			212			—
Net change in cash, cash equivalents and restricted cash of continuing operations		(32	)		186			(1,299	)		277
Cash flows from discontinued operations:
Operating activities		236			151			430			328
Investing activities		(222	)		(215	)		(402	)		(284	)
Financing activities		73			128			112			89
Net change in cash, cash equivalents and restricted cash of discontinued operations		87			64			140			133
Net change in cash, cash equivalents and restricted cash		55			250			(1,159	)		410
Cash, cash equivalents and restricted cash at beginning of period		1,470			2,119			2,684			1,959
Cash, cash equivalents and restricted cash at end of period	$	1,525		$	2,369		$	1,525		$	2,369
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	1,460		$	2,358		$	1,460		$	2,358
Restricted cash included in other current assets		28			—			28			—
Cash and cash equivalents included in current assets held for sale		37			11			37			11
Total cash, cash equivalents and restricted cash	$	1,525		$	2,369		$	1,525		$	2,369

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS

(in millions)

	June 30,			December 31,
	2018			2017
Current assets:
Cash and cash equivalents	$	1,460		$	2,642
Accounts receivable		1,141			989
Current assets held for sale		10,764			760
Other current assets		455			400
Total current assets		13,820			4,791
Oil and gas property and equipment, based on successful efforts accounting, net		12,957			13,318
Other property and equipment, net		1,164			1,266
Total property and equipment, net		14,121			14,584
Goodwill		841			841
Other long-term assets		377			296
Long-term assets held for sale		—			9,729
Total assets	$	29,159		$	30,241
Current liabilities:
Accounts payable	$	771		$	633
Revenues and royalties payable		959			748
Short-term debt		277			115
Current liabilities held for sale		5,291			991
Other current liabilities		1,079			828
Total current liabilities		8,377			3,315
Long-term debt		5,790			6,749
Asset retirement obligations		1,088			1,099
Other long-term liabilities		624			549
Long-term liabilities held for sale		—			3,936
Deferred income taxes		432			489
Equity:
Common stock		51			53
Additionalpaid-in capital		6,888			7,333
Retained earnings		6			702
Accumulated other comprehensive earnings		1,091			1,166
Treasury stock, at cost, 0.5 million shares in 2018		(22	)		—
Total stockholders’ equity attributable to Devon		8,014			9,254
Noncontrolling interests		4,834			4,850
Total equity		12,848			14,104
Total liabilities and equity	$	29,159		$	30,241
Common shares outstanding		515			525

CAPITAL EXPENDITURES

(in millions)

	Quarter Ended June 30, 2018		Six Months Ended June 30, 2018
Upstream capital	$	607	$	1,271
Land and other acquisitions		12		18
Exploration and production (E&P) capital		619		1,289
Capitalized interest		17		35
Other		9		22
Devon capital expenditures	$	645	$	1,346

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

NON-GAAP FINANCIAL MEASURES

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

CORE EARNINGS

Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes thesenon-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes thesenon-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 2018 earnings.

	Quarter Ended June 30, 2018
(in millions, except per share amounts)	Before-tax			After-tax			After Noncontrolling Interests			Per Diluted Share
Continuing Operations
Loss attributable to Devon (GAAP)	$	(481	)	$	(474	)	$	(474	)	$	(0.92	)
Adjustments:
Asset dispositions		23			18			18			0.03
Asset and exploration impairments		207			159			159			0.31
Deferred tax asset valuation allowance		—			73			73			0.14
Fair value changes in financial instruments and foreign currency		376			291			291			0.56
Restructuring and transaction costs		94			72			72			0.14
Core earnings attributable to Devon(Non-GAAP)	$	219		$	139		$	139		$	0.26
Discontinued Operations
Earnings attributable to Devon (GAAP)	$	149		$	139		$	49		$	0.09
Adjustments:
Fair value changes and minimum volume commitment settlement		(36	)		(30	)		(11	)		(0.01	)
Core earnings attributable to Devon(Non-GAAP)	$	113		$	109		$	38		$	0.08
Total
Loss attributable to Devon (GAAP)	$	(332	)	$	(335	)	$	(425	)	$	(0.83	)
Adjustments:
Continuing Operations		700			613			613			1.18
Discontinued Operations		(36	)		(30	)		(11	)		(0.01	)
Core earnings attributable to Devon(Non-GAAP)	$	332		$	248		$	177		$	0.34

NET DEBT

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

(in millions)	June 30, 2018
Total debt (GAAP)(1)	$	6,067
Less cash and cash equivalents		(1,460	)
Net debt(Non-GAAP)	$	4,607

(1) Excludes EnLink since its debt-related amounts are included in liabilities held for sale.

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DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

ADJUSTED EBITDA

We define Adjusted EBITDA, anon-GAAP financial measure, as EBITDA adjusted for certain items presented in the accompanying reconciliation. We believe that EBITDA is widely used by investors to measure a company’s performance without regard to items such as interest expense, taxes, depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired. In addition, Adjusted EBITDA generally excludes certain other items that management believes affect the comparability of operating results or are not related to Devon’s ongoing operations. Management uses Adjusted EBITDA to evaluate the company’s operational trends and performance relative to other oil and gas companies.

ADJUSTED EBITDA

(in millions)

	Quarter Ended June 30, 2018
	Continuing			Discontinued
	Operations			Operations			Total
Net earnings (loss)	$	(474	)	$	139		$	(335	)
Financing costs, net		62			45			107
Income tax expense (benefit)		(7	)		10			3
Depreciation, depletion and amortization		420			106			526
Accretion of discounted liabilities		15			—			15
EBITDA	$	16		$	300		$	316
Non-cash stock compensation		32			10			42
Asset and leasehold impairments		207			—			207
Asset disposition losses		23			—			23
Restructuring and transaction costs		94			—			94
Derivative and financial instrument valuation changes		376			12			388
EnLink minimum volume commitment settlement		—			(48	)		(48	)
Adjusted EBITDA	$	748		$	274		$	1,022

PRO FORMA CASH & CASH EQUIVALENTS

Devon defines pro forma cash and cash equivalents as cash and cash equivalents plus proceeds from the recently closed EnLink Midstream sale. Devon believes adjusting for this item provides a clearer picture of Devon’s financial position.

(in millions)	June 30, 2018
Cash and cash equivalents (GAAP)	$	1,460
Proceeds from EnLink Midstream monetization that closed inmid-July		3,125
Pro forma cash and cash equivalents(Non-GAAP)	$	4,585

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DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

PRODUCTION GUIDANCE

	Quarter 3				Full Year
	Low		High		Low			High
Oil and bitumen (MBbls/d)
U.S. – retained assets		132		137		130			135
Heavy Oil		115		120		120			125
Total – retained assets		247		257		250			260
Natural gas liquids (MBbls/d)
Total – retained assets		100		105		100			104
Gas (MMcf/d)
U.S. – retained assets		1,010		1,060		1,000			1,050
Heavy Oil		11		13		11			13
Total – retained assets		1,021		1,073		1,011	��		1,063
Total oil equivalent (MBoe/d)
U.S. – retained assets		400		419		397			414
Heavy Oil		117		122		122			127
Total – retained assets		517		541		519			541

PRICE REALIZATIONS GUIDANCE

	Quarter 3						Full Year
	Low			High			Low			High
Oil and bitumen - % of WTI
U.S.(1)		88	%(1)		93	%(1)		92	%(1)		97	%(1)
Canada(1)		40	%(1)		50	%(1)		37	%(1)		42	%(1)
NGL - realized price	$	23		$	28		$	22		$	27
Natural gas - % of Henry Hub		70	%		80	%		70	%		80	%

(1) Does not include benefits from basis swaps and firm transportation agreements.

OTHER GUIDANCE ITEMS

	Quarter 3						Full Year
($ millions, except Boe and %)	Low			High			Low			High
Marketing & midstream operating profit	$	5		$	15		$	40		$	50
LOE & GP&T per BOE	$	9.50		$	9.75		$	9.40		$	9.90
Production & Property Tax (% of upstream sales)		5.20	%		5.40	%		5.20	%		5.40	%
Exploration expenses	$	20		$	30		$	90		$	100
Depreciation, depletion and amortization	$	420		$	470		$	1,700		$	1,800
General & administrative expenses	$	150		$	170		$	650		$	700
Financing costs, net(2)	$	70	(2)	$	80	(2)	$	285	(2)	$	295	(2)
Other expenses	$	15		$	20		$	60		$	80
Current income tax rate		0	%		5	%		0	%		5	%
Deferred income tax rate		20	%		25	%		20	%		25	%
Total income tax rate		20	%		30	%		20	%		30	%
Average basic share count outstanding (MM)		493			496			500			505

(2) On ago-forward basis interest expense that had been historically capitalized will now be included in financing costs, net.

CAPITAL EXPENDITURES GUIDANCE

	Quarter 3				Full Year
(in millions)	Low		High		Low		High
Upstream capital	$	550	$	600	$	2,200	$	2,400
Capitalized interest and other(2)		20		30		100		150
Total	$	570	$	630	$	2,300	$	2,550

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DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

Oil Commodity Hedges

	Price Swaps				Price Collars
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q3-Q4 2018		91,300	$	58.15		100,700	$	52.27	$	62.87
Q1-Q4 2019		54,225	$	59.34		65,875	$	52.76	$	62.76

Oil Basis Swaps

	Oil Basis Swaps						Oil Basis Collars
Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)			Volume (Bbls/d)		Weighted Average Floor Differential to WTI ($/Bbl)			Weighted Average Ceiling Differential to WTI ($/Bbl)
Q3-Q4 2018	Midland Sweet		23,000	$	(1.02	)		—	$	—		$	—
Q3-Q4 2018	Argus LLS		12,000	$	3.95			—	$	—		$	—
Q3-Q4 2018	Argus MEH		15,832	$	2.82			—	$	—		$	—
Q3-Q4 2018	NYMEX Roll		21,315	$	0.63			—	$	—		$	—
Q3-Q4 2018	Western Canadian Select		78,000	$	(14.91	)		2,000	$	(15.50	)	$	(13.93	)
Q1-Q4 2019	Midland Sweet		28,000	$	(0.46	)		—	$	—		$	—
Q1-Q4 2019	Argus LLS		1,000	$	4.60			—	$	—		$	—
Q1-Q4 2019	Argus MEH		16,000	$	2.84			—	$	—		$	—
Q1-Q4 2019	NYMEX Roll		24,000	$	0.51			—	$	—		$	—
Q1-Q4 2020	NYMEX Roll		24,000	$	0.31			—	$	—		$	—

Natural Gas Commodity Hedges - Henry Hub

	Price Swaps				Price Collars
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q3-Q4 2018		278,750	$	2.91		246,500	$	2.76	$	3.09
Q1-Q4 2019		194,000	$	2.81		155,750	$	2.64	$	3.03

Natural Gas Basis Swaps

Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q3-Q4 2018	Panhandle Eastern Pipe Line		120,000	$	(0.51	)
Q3-Q4 2018	El Paso Natural Gas		100,000	$	(1.25	)
Q3-Q4 2018	Houston Ship Channel		115,000	$	0.01
Q3-Q4 2018	Transco Zone 4		15,000	$	(0.03	)
Q1-Q4 2019	Panhandle Eastern Pipe Line		62,500	$	(0.77	)
Q1-Q4 2019	El Paso Natural Gas		120,000	$	(1.48	)
Q1-Q4 2019	Houston Ship Channel		100,000	$	(0.01	)
Q1-Q4 2019	Transco Zone 4		7,500	$	(0.03	)

Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index. Commodity hedge positions are shown as of July 27, 2018.

15