Devon Energy (DVN) 8-K Devon Energy Reports First-Quarter 2019 Results

Exhibit 99.3

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION NET OF ROYALTIES

	Quarter Ended
	March 31,
	2019		2018
Oil and bitumen (MBbls/d)
New Devon		138		111
Canada divest assets		112		129
U.S. divest assets		4		11
Total		254		251
Natural gas liquids (MBbls/d)
New Devon		73		56
U.S. divest assets		31		41
Total		104		97
Gas (MMcf/d)
New Devon		581		493
Canada divest assets		4		12
U.S. divest assets		439		672
Total		1,024		1,177
Total oil equivalent (MBoe/d)
New Devon		308		249
Canada divest assets		113		131
U.S. divest assets		108		164
Total		529		544

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION TREND

	2018								2019
	Quarter 1		Quarter 2		Quarter 3		Quarter 4		Quarter 1
Oil and bitumen (MBbls/d)
Delaware Basin		34		45		44		45		60
STACK		34		34		29		31		32
Powder River Basin		15		13		15		13		15
Eagle Ford		23		28		31		30		25
Other		5		6		5		6		6
New Devon		111		126		124		125		138
Canada divest assets		129		109		102		120		112
U.S. divest assets		11		10		9		8		4
Total		251		245		235		253		254
Natural gas liquids (MBbls/d)
Delaware Basin		11		15		19		18		23
STACK		35		37		40		37		35
Powder River Basin		1		1		2		2		2
Eagle Ford		8		13		15		15		12
Other		1		2		1		1		1
New Devon		56		68		77		73		73
U.S. divest assets		41		41		36		32		31
Total		97		109		113		105		104
Gas (MMcf/d)
Delaware Basin		93		94		103		127		146
STACK		324		329		337		343		333
Powder River Basin		12		13		18		20		18
Eagle Ford		63		74		84		95		83
Other		1		3		2		2		1
New Devon		493		513		544		587		581
Canada divest assets		12		12		11		6		4
U.S. divest assets		672		603		491		457		439
Total		1,177		1,128		1,046		1,050		1,024
Total oil equivalent (MBoe/d)
Delaware Basin		61		76		79		84		107
STACK		123		125		126		126		123
Powder River Basin		18		16		19		18		21
Eagle Ford		41		54		60		61		50
Other		6		8		7		6		7
New Devon		249		279		291		295		308
Canada divest assets		131		111		104		121		113
U.S. divest assets		164		151		127		116		108
Total		544		541		522		532		529

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK PRICES

(average prices)	Quarter 1
	2019		2018
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	54.88	$	62.93
Natural Gas ($/Mcf) - Henry Hub	$	3.15	$	3.01

REALIZED PRICES

	Quarter Ended March 31, 2019
	Oil /Bitumen			NGL			Gas			Total
	(Per Bbl)			(Per Bbl)			(Per Mcf)			(Per Boe)
United States	$	51.83		$	18.64		$	2.53		$	28.58
Canada	$	34.60			N/M			N/M		$	34.42
Realized price without hedges	$	44.20		$	18.64		$	2.53		$	29.83
Cash settlements	$	(1.18	)	$	0.48		$	(0.17	)	$	(0.82	)
Realized price, including cash settlements	$	43.02		$	19.12		$	2.36		$	29.01
	Quarter Ended March 31, 2018
	Oil /Bitumen			NGL			Gas			Total
	(Per Bbl)			(Per Bbl)			(Per Mcf)			(Per Boe)
United States	$	61.79		$	22.56		$	2.41		$	30.39
Canada	$	19.74			N/M			N/M		$	19.45
Realized price without hedges	$	40.15		$	22.56		$	2.41		$	27.75
Cash settlements	$	(0.10	)	$	(0.53	)	$	0.17		$	0.23
Realized price, including cash settlements	$	40.05		$	22.03		$	2.58		$	27.98

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share amounts)	Quarter Ended March 31,
	2019			2018
Upstream revenues	$	710		$	1,319
Marketing revenues		791			879
Total revenues		1,501			2,198
Production expenses		506			543
Exploration expenses		13			33
Marketing expenses		759			873
Depreciation, depletion and amortization		459			399
Asset dispositions		(44	)		(12	)
General and administrative expenses		153			199
Financing costs, net		73			387
Restructuring and transaction costs		54			—
Other expenses		(45	)		21
Total expenses		1,928			2,443
Loss from continuing operations before income taxes		(427	)		(245	)
Income tax benefit		(110	)		(34	)
Net loss from continuing operations		(317	)		(211	)
Net earnings from discontinued operations, net of income tax expense		—			58
Net loss		(317	)		(153	)
Net earnings attributable to noncontrolling interests		—			44
Net loss attributable to Devon	$	(317	)	$	(197	)
Basic net loss per share:
Basic loss from continuing operations per share	$	(0.74	)	$	(0.41	)
Basic earnings from discontinued operations per share		—			0.03
Basic net loss per share	$	(0.74	)	$	(0.38	)
Diluted net loss per share:
Diluted loss from continuing operations per share	$	(0.74	)	$	(0.41	)
Diluted earnings from discontinued operations per share		—			0.03
Diluted net loss per share	$	(0.74	)	$	(0.38	)
Weighted average common shares outstanding - basic and diluted		434			527

UPSTREAM REVENUES

(in millions)	Quarter Ended March 31,
	2019			2018
Oil, gas and NGL sales	$	1,419		$	1,360
Derivative cash settlements		(39	)		11
Derivative valuation changes		(670	)		(52	)
Upstream revenues	$	710		$	1,319

PRODUCTION EXPENSES

(in millions)	Quarter Ended March 31,
	2019		2018
Lease operating expense	$	220	$	241
Gathering, processing & transportation		203		228
Production taxes		68		59
Property taxes		15		15
Production expenses	$	506	$	543

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)	Quarter Ended March 31,
	2019			2018
Cash flows from operating activities:
Net loss	$	(317	)	$	(153	)
Adjustments to reconcile net loss to net cash from operating activities:
Net earnings from discontinued operations, net of income tax expense		—			(58	)
Depreciation, depletion and amortization		459			399
Leasehold impairments		1			8
Accretion on discounted liabilities		17			16
Total losses on commodity derivatives		709			41
Cash settlements on commodity derivatives		(43	)		11
Gains on asset dispositions		(44	)		(12	)
Deferred income tax benefit		(107	)		(38	)
Share-based compensation		48			38
Early retirement of debt		—			312
Total (gains) losses on foreign exchange		(34	)		50
Other		(10	)		(29	)
Changes in assets and liabilities, net		(302	)		25
Net cash from operating activities - continuing operations		377			610
Cash flows from investing activities:
Capital expenditures		(548	)		(651	)
Acquisitions of property and equipment		(11	)		(6	)
Divestitures of property and equipment		311			47
Net cash from investing activities - continuing operations		(248	)		(610	)
Cash flows from financing activities:
Repayments of long-term debt principal		(162	)		(807	)
Early retirement of debt		—			(304	)
Repurchases of common stock		(999	)		(71	)
Dividends paid on common stock		(34	)		(32	)
Shares exchanged for tax withholdings		(26	)		(38	)
Net cash from financing activities - continuing operations		(1,221	)		(1,252	)
Effect of exchange rate changes on cash - continuing operations		1			(15	)
Net change in cash, cash equivalents and restricted cash of continuing operations		(1,091	)		(1,267	)
Cash flows from discontinued operations:
Operating activities		—			194
Investing activities		—			(180	)
Financing activities		—			39
Net change in cash, cash equivalents and restricted cash of discontinued operations		—			53
Net change in cash, cash equivalents and restricted cash		(1,091	)		(1,214	)
Cash, cash equivalents and restricted cash at beginning of period		2,446			2,684
Cash, cash equivalents and restricted cash at end of period	$	1,355		$	1,470
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	1,327		$	1,407
Restricted cash included in other current assets		28			46
Cash and cash equivalents included in current assets held for sale		—			17
Total cash, cash equivalents and restricted cash	$	1,355		$	1,470

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS

(in millions)	March 31, 2019			December 31, 2018
Current assets:
Cash and cash equivalents	$	1,327		$	2,414
Accounts receivable		1,038			885
Current assets held for sale		—			197
Other current assets		338			941
Total current assets		2,703			4,437
Oil and gas property and equipment, based on successful efforts accounting, net		12,766			12,813
Other property and equipment, net		1,098			1,122
Total property and equipment, net		13,864			13,935
Goodwill		841			841
Right-of-use assets		365			—
Other long-term assets		304			353
Total assets	$	18,077		$	19,566
Current liabilities:
Accounts payable	$	603		$	662
Revenues and royalties payable		850			898
Short-term debt		—			162
Current liabilities held for sale		—			69
Other current liabilities		515			435
Total current liabilities		1,968			2,226
Long-term debt		5,786			5,785
Lease liabilities		298			—
Asset retirement obligations		938			1,030
Other long-term liabilities		458			462
Deferred income taxes		772			877
Stockholders’ equity:
Common stock		42			45
Additionalpaid-in capital		3,518			4,486
Retained earnings		3,280			3,650
Accumulated other comprehensive earnings		1,064			1,027
Treasury stock, at cost, 1.5 million and 1.0 million shares in 2019 and 2018, respectively		(47	)		(22	)
Total stockholders’ equity		7,857			9,186
Total liabilities and stockholders’ equity	$	18,077		$	19,566
Common shares outstanding		417			450

CAPITAL EXPENDITURES

(in millions)	Quarter Ended March 31, 2019
New Devon upstream capital	$	457
Divest assets upstream capital		59
Land and other acquisitions		7
Exploration and production (E&P) capital		523
Other		7
Devon capital expenditures	$	530

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 first-quarter 2019 earnings.

(in millions, except per share amounts)	Quarter Ended March 31, 2019
	Before-tax			After-tax			Per Diluted Share
Net loss (GAAP)	$	(427	)	$	(317	)	$	(0.74	)
Adjustments:
Asset dispositions		(44	)		(34	)		(0.08	)
Asset and exploration impairments		1			1			—
Deferred tax asset valuation allowance		—			(18	)		(0.04	)
Fair value changes in financial instruments and foreign currency		635			484			1.12
Restructuring and transaction costs		54			42			0.10
Core earnings(Non-GAAP)	$	219		$	158		$	0.36

EBITDAX

Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings from continuing operations before income tax expense; financing costs, net; exploration expenses; depreciation, depletion and amortization; asset impairments; asset disposition gains and losses;non-cash share-based compensation;non-cash valuation changes for derivatives and financial instruments; restructuring and transaction costs; accretion on discounted liabilities; and other items not related to normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net earnings from continuing operations.

(in millions)	Q1 2019			Q4 2018
Net earnings (loss) from continuing operations (GAAP)	$	(317	)	$	1,149
Financing costs, net		73			70
Income tax expense (benefit)		(110	)		335
Exploration expenses		13			44
Depreciation, depletion and amortization		459			423
Asset disposition gains		(44	)		(268	)
Share-based compensation		26			27
Derivative and financial instrumentnon-cash valuation changes		635			(1,209	)
Restructuring and transaction costs		54			9
Accretion on discounted liabilities and other		(10	)		40
EBITDAX(Non-GAAP)	$	779		$	620

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)	March 31, 2019
Total debt (GAAP)	$	5,786
Less cash and cash equivalents		(1,327	)
Net debt(Non-GAAP)	$	4,459

DEVON ENERGY CORPORATION

FORWARD LOOKING GUIDANCE

PRODUCTION GUIDANCE
	Quarter 2				Full Year
	Low		High		Low		High
Oil and bitumen (MBbls/d)
New Devon		134		141		140		145
Assets to be sold - Canada		95		100		108		112
Assets to be sold - U.S.		2		4		3		5
Total		231		245		251		262
Natural gas liquids (MBbls/d)
New Devon		72		76		72		77
Assets to be sold - U.S.		27		32		26		30
Total		99		108		98		107
Gas (MMcf/d)
New Devon		530		580		540		580
Assets to be sold - Canada		2		4		2		4
Assets to be sold - U.S.		420		440		400		440
Total		952		1,024		942		1,024
Total oil equivalent (MBoe/d)
New Devon		295		314		302		319
Assets to be sold - Canada		95		101		108		113
Assets to be sold - U.S.		99		109		96		108
Total		489		524		506		540

PRICE REALIZATIONS GUIDANCE
	Quarter 2						Full Year
	Low			High			Low			High
Oil and bitumen - % of WTI
U.S.		90	%		100	%		90	%		100	%
Canada		65	%		75	%		55	%		65	%
NGL - realized price	$	16		$	20		$	16		$	20
Natural gas - % of Henry Hub		70	%		80	%		70	%		80	%

OTHER GUIDANCE ITEMS -Expense line items include full-year impact of assets that are currently in the process of being sold.

	Quarter 2						Full Year
($ millions, except Boe and %)	Low			High			Low			High
Marketing & midstream operating profit	$	10		$	20		$	50		$	70
LOE & GP&T per BOE	$	9.30		$	9.55	(1)	$	8.80		$	9.05
Production & property tax	$	80		$	90		$	340		$	380
Exploration expenses	$	10		$	15		$	40		$	60
Depreciation, depletion and amortization	$	440		$	490		$	1,800		$	1,900
General & administrative expenses	$	130		$	140		$	520		$	540
Financing costs, net	$	75		$	85		$	300		$	340
Other expenses	$	10		$	20		$	30		$	40
Current income tax rate		0	%		0	%		0	%		0	%
Deferred income tax rate		20	%		25	%		20	%		25	%
Total income tax rate		20	%		25	%		20	%		25	%

(1) Included in the Q2 LOE & GP&T guidance is the expected impact from a turnaround at the company’s Jackfish facility within its Canadian operations.

CAPITAL EXPENDITURES GUIDANCE

	Quarter 2				Full Year
(in millions)	Low		High		Low		High
New Devon upstream capital	$	500	$	550	$	1,800	$	2,000
Assets to be sold upstream capital (assumes full year)		60		80		225		275
Corporate		5		10		25		35
Devon capital expenditures	$	565	$	640	$	2,050	$	2,310

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)
Q2-Q4 2019		46,891	$	59.97		87,484	$	54.60	$	64.62
Q1-Q4 2020		3,238	$	60.13		19,186	$	52.23	$	62.36
	Three-Way Price Collars
Period	Volume (Bbls/d)		Weighted Average Floor Sold Price ($/Bbl)		Weighted Average Floor Purchased Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q2-Q4 2019		5,000	$	50.00	$	63.00	$	74.80

Oil Basis Swaps

Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q2-Q4 2019	Midland Sweet		24,945	$	(0.46	)
Q2-Q4 2019	Argus LLS		8,900	$	5.10
Q2-Q4 2019	Argus MEH		20,945	$	3.24
Q2-Q4 2019	NYMEX Roll		38,000	$	0.45
Q2-Q4 2019	Western Canadian Select		62,762	$	(19.21	)
Q1-Q4 2020	Argus MEH		3,000	$	3.43
Q1-Q4 2020	NYMEX Roll		42,000	$	0.32
Q1-Q4 2020	Western Canadian Select		4,577	$	(20.80	)

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)
	Q2-Q4 2019		262,525	$	2.81		213,884	$	2.64	$	3.02
	Q1-Q4 2020		51,409	$	2.86		40,071	$	2.73	$	3.03

Natural Gas Basis Swaps

Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q2-Q4 2019	Panhandle Eastern Pipe Line		63,018	$	(0.71	)
Q2-Q4 2019	El Paso Natural Gas		130,000	$	(1.46	)
Q2-Q4 2019	Houston Ship Channel		162,500	$	0.01
Q1-Q4 2020	Panhandle Eastern Pipe Line		30,000	$	(0.47	)
Q1-Q4 2020	El Paso Natural Gas		40,000	$	(0.67	)
Q1-Q4 2020	Houston Ship Channel		10,000	$	0.02

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 April 25, 2019.