Devon Energy (DVN) 8-K Devon Energy Reports Third-Quarter 2019 Financial and Operational Results

Exhibit 99.3

Income Statement	2
Cash Flow Statement	3
Balance Sheet	4
Production by Asset	5
Capital & Well Activity by Asset	6
Realized Price by Asset	7
Per-Unit Field-Level Cash Margin by Asset	8
Non-GAAP Core Earnings	9
Non-GAAP EBITDAX, Net Debt and Free Cash Flow	10

CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except per share amounts)	2019									2018
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Upstream revenues (1)	$	1,147		$	1,191		$	463		$	2,603		$	934
Marketing revenues		700			730			765			1,114			1,222
Total revenues		1,847			1,921			1,228			3,717			2,156
Production expenses(2)		368			371			365			402			417
Exploration expenses		18			7			4			24			22
Marketing expenses		684			713			750			1,105			1,201
Depreciation, depletion and amortization		402			394			380			339			342
Asset impairments		—			—			—			—			2
Asset dispositions		(2	)		(1	)		(44	)		(268	)		(6	)
General and administrative expenses		107			114			135			136			128
Financing costs, net		60			66			60			59			68
Restructuring and transaction costs		10			12			51			6			6
Other expenses		6			8			(17	)		31			(9	)
Total expenses		1,653			1,684			1,684			1,834			2,171
Earnings (loss) from continuing operations before income taxes		194			237			(456	)		1,883			(15	)
Income tax expense (benefit)		55			71			(110	)		441			(171	)
Net earnings (loss) from continuing operations		139			166			(346	)		1,442			156
Net earnings (loss) from discontinued operations, net of income taxes		(30	)		329			29			(293	)		2,407
Net earnings (loss)		109			495			(317	)		1,149			2,563
Net earnings attributable to noncontrolling interests		—			—			—			—			26
Net earnings (loss) attributable to Devon	$	109		$	495		$	(317	)	$	1,149		$	2,537
Basic net earnings (loss) per share:
Basic earnings (loss) from continuing operations per share	$	0.35		$	0.40		$	(0.81	)	$	3.14		$	0.32
Basic earnings (loss) from discontinued operations per share		(0.08	)		0.80			0.07			(0.64	)		4.85
Basic net earnings (loss) per share	$	0.27		$	1.20		$	(0.74	)	$	2.50		$	5.17
Diluted net earnings (loss) per share:
Diluted earnings (loss) from continuing operations per share	$	0.35		$	0.40		$	(0.81	)	$	3.12		$	0.32
Diluted earnings (loss) from discontinued operations per share		(0.08	)		0.79			0.07			(0.64	)		4.82
Diluted net earnings (loss) per share	$	0.27		$	1.19		$	(0.74	)	$	2.48		$	5.14
Weighted average common shares outstanding:
Basic		397			415			434			459			491
Diluted		399			417			434			462			494
(1)   UPSTREAM REVENUES
(in millions)	2019									2018
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Oil, gas and NGL sales	$	1,020		$	1,051		$	1,068		$	1,170		$	1,310
Derivative cash settlements		71			23			34			(16	)		(175	)
Derivative valuation changes		56			117			(639	)		1,449			(201	)
Upstream revenues	$	1,147		$	1,191		$	463		$	2,603		$	934
(2)   PRODUCTION EXPENSES
(in millions)	2019									2018
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Lease operating expense	$	138		$	133		$	132		$	147		$	142
Gathering, processing & transportation		162			161			159			180			181
Production taxes		60			66			64			66			80
Property taxes		8			11			10			9			14
Production expenses	$	368		$	371		$	365		$	402		$	417

2

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)	2019									2018
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Cash flows from operating activities:
Net earnings (loss)	$	109		$	495		$	(317	)	$	1,149		$	2,563
Reconciliation of net earnings (loss) to net cash from operating activities:
Net (earnings) loss from discontinued operations, net of income taxes		30			(329	)		(29	)		293			(2,407	)
Depreciation, depletion and amortization		402			394			380			339			342
Asset impairments		—			—			—			—			2
Leasehold impairments		13			1			1			19			14
Accretion on discounted liabilities		10			10			10			8			9
Total (gains) losses on commodity derivatives		(127	)		(140	)		605			(1,433	)		376
Cash settlements on commodity derivatives		71			23			31			(16	)		(175	)
Gains on asset dispositions		(2	)		(1	)		(44	)		(268	)		(6	)
Deferred income tax expense (benefit)		53			69			(107	)		446			(145	)
Share-based compensation		23			23			46			25			25
Other		2			2			(14	)		3			43
Changes in assets and liabilities, net		13			(59	)		(84	)		(101	)		(81	)
Net cash from operating activities - continuing operations		597			488			478			464			560
Cash flows from investing activities:
Capital expenditures		(536	)		(494	)		(502	)		(523	)		(548	)
Acquisitions of property and equipment		(5	)		(13	)		(10	)		(20	)		(19	)
Divestitures of property and equipment		7			28			311			317			89
Net cash from investing activities - continuing operations		(534	)		(479	)		(201	)		(226	)		(478	)
Cash flows from financing activities:
Repayments of long-term debt principal		—			—			(162	)		(94	)		(21	)
Repurchases of common stock		(561	)		(187	)		(998	)		(759	)		(1,698	)
Dividends paid on common stock		(35	)		(37	)		(34	)		(37	)		(38	)
Shares exchanged for tax withholdings and other		(1	)		(3	)		(19	)		(8	)		(3	)
Net cash from financing activities - continuing operations		(597	)		(227	)		(1,213	)		(898	)		(1,760	)
Net change in cash, cash equivalents and restricted cash of continuing operations		(534	)		(218	)		(936	)		(660	)		(1,678	)
Cash flows from discontinued operations:
Operating activities		(96	)		135			(102	)		78			293
Investing activities		7			2,544			(47	)		(77	)		2,900
Financing activities		(1,571	)		—			(8	)		—			71
Effect of exchange rate changes on cash		(3	)		37			2			(16	)		10
Net change in cash, cash equivalents and restricted cash of discontinued operations		(1,663	)		2,716			(155	)		(15	)		3,274
Net change in cash, cash equivalents and restricted cash		(2,197	)		2,498			(1,091	)		(675	)		1,596
Cash, cash equivalents and restricted cash at beginning of period		3,853			1,355			2,446			3,121			1,525
Cash, cash equivalents and restricted cash at end of period	$	1,656		$	3,853		$	1,355		$	2,446		$	3,121
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	1,375		$	3,470		$	1,327		$	2,414		$	3,102
Cash restricted for discontinued operations		280			370			—			—			—
Restricted cash included in other current assets		1			13			28			32			19
Total cash, cash equivalents and restricted cash	$	1,656		$	3,853		$	1,355		$	2,446		$	3,121

3

CONSOLIDATED BALANCE SHEETS

(in millions)	September 30,			December 31,
	2019			2018
Current assets:
Cash and cash equivalents	$	1,375		$	2,414
Cash restricted for discontinued operations		280			—
Accounts receivable		787			855
Current assets associated with discontinued operations		21			283
Other current assets		383			885
Total current assets		2,846			4,437
Oil and gas property and equipment, based on successful efforts accounting, net		9,122			8,982
Other property and equipment, net		1,055			1,044
Total property and equipment, net		10,177			10,026
Goodwill		841			841
Right-of-use assets		219			—
Other long-term assets		216			276
Long-term assets associated with discontinued operations		95			3,986
Total assets	$	14,394		$	19,566
Current liabilities:
Accounts payable	$	513		$	563
Revenues and royalties payable		700			832
Short-term debt		—			162
Current liabilities associated with discontinued operations		172			338
Other current liabilities		273			331
Total current liabilities		1,658			2,226
Long-term debt		4,295			4,292
Lease liabilities		244			—
Asset retirement obligations		526			606
Other long-term liabilities		431			442
Long-term liabilities associated with discontinued operations		175			2,285
Deferred income taxes		523			529
Stockholders’ equity:
Common stock		39			45
Additionalpaid-in capital		2,815			4,486
Retained earnings		3,812			3,650
Accumulated other comprehensive earnings (loss)		(116	)		1,027
Treasury stock, at cost, 0.3 million and 1.0 million shares in 2019 and 2018, respectively		(8	)		(22	)
Total stockholders’ equity		6,542			9,186
Total liabilities and stockholders’ equity	$	14,394		$	19,566
Common shares outstanding		387			450

4

PRODUCTION TREND

	2019						2018
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Oil (MBbls/d)
Delaware Basin		70		67		60		45		44
STACK		32		31		32		31		29
Powder River Basin		18		15		15		13		15
Eagle Ford		22		23		25		30		31
Other		6		6		6		6		5
New Devon		148		142		138		125		124
U.S. divest assets		3		3		4		8		9
Total - US		151		145		142		133		133
Natural gas liquids (MBbls/d)
Delaware Basin		28		27		23		18		19
STACK		37		40		35		37		40
Powder River Basin		2		2		2		2		2
Eagle Ford		11		12		12		15		15
Other		1		1		1		1		1
New Devon		79		82		73		73		77
U.S. divest assets		30		30		31		32		36
Total - US		109		112		104		105		113
Gas (MMcf/d)
Delaware Basin		167		158		146		127		103
STACK		317		313		333		343		337
Powder River Basin		28		22		18		20		18
Eagle Ford		75		81		83		95		84
Other		1		1		1		2		2
New Devon		588		575		581		587		544
U.S. divest assets		417		423		439		457		491
Total - US		1,005		998		1,020		1,044		1,035
Total oil equivalent (MBoe/d)
Delaware Basin		127		120		107		84		79
STACK		121		124		123		126		126
Powder River Basin		25		21		21		18		19
Eagle Ford		45		49		50		61		60
Other		7		7		7		6		7
New Devon		325		321		308		295		291
U.S. divest assets		103		103		108		116		127
Total - US		428		424		416		411		418

5

CAPITAL EXPENDITURES

(in millions)	2019						2018
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin	$	262	$	235	$	240	$	253	$	198
STACK		67		94		112		195		167
Powder River Basin		89		87		48		56		28
Eagle Ford		90		53		48		32		35
Other		11		9		9		6		12
New Devon upstream capital		519		478		457		542		440
Divest assets upstream capital - US		8		16		10		21		23
Total upstream capital		527		494		467		563		463
Land and other acquisitions		12		14		7		35		22
Other		29		22		7		7		7
Total capital	$	568	$	530	$	481	$	605	$	492
GROSS OPERATED SPUDS
	2019						2018
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin		38		23		39		31		25
STACK		4		16		18		17		26
Powder River Basin		14		17		9		12		6
Eagle Ford		18		31		12		5		15
Other		—		—		—		—		—
New Devon		74		87		78		65		72
GROSS OPERATED WELLSTIED-IN
	2019						2018
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin		34		28		25		27		27
STACK		16		21		29		25		26
Powder River Basin		18		6		3		8		7
Eagle Ford		—		9		18		10		24
Other		—		—		—		—		—
New Devon		68		64		75		70		84
AVERAGE LATERAL LENGTH
(based on wellstied-in)	2019						2018
	Quarter 3		Quarter 2		Quarter 1		Quarter 4		Quarter 3
Delaware Basin		9,700’		7,500’		8,500’		8,800’		7,000’
STACK		9,600’		9,000’		9,000’		8,400’		9,800’
Powder River Basin		9,500’		9,500’		10,000’		9,500’		8,700’
Eagle Ford		N/A		6,000’		6,000’		6,500’		6,000’
Other		—		—		—		—		—
New Devon		9,600’		8,000’		8,000’		8,400’		7,700’

6

BENCHMARK PRICES

(average prices)	2019								2018
	Quarter 3		Quarter 2			Quarter 1			Quarter 4			Quarter 3
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	56.34	$	59.85		$	54.88		$	58.80		$	69.60
Natural Gas ($/Mcf) - Henry Hub	$	2.23	$	2.64		$	3.15		$	3.65		$	2.91
NGL ($/Bbl) - Mont Belvieu Blended	$	16.18	$	19.05		$	22.94		$	26.30		$	33.05
REALIZED PRICES
	2019								2018
	Quarter 3		Quarter 2			Quarter 1			Quarter 4			Quarter 3
Oil (Per Bbl)
Delaware Basin	$	53.85	$	55.54		$	49.48		$	49.04		$	57.90
STACK		54.47		57.67			52.82			58.83			69.73
Powder River Basin		52.50		56.79			49.21			55.62			67.01
Eagle Ford		57.77		61.60			59.45			65.46			72.68
Other		54.57		56.12			48.77			48.09			53.78
New Devon		54.43		57.17			51.99			56.08			65.27
U.S. divest assets		52.33		52.71			46.21			50.65			58.53
Realized price without hedges		54.39		57.09			51.83			55.78			64.80
Cash settlements		2.17		(0.41	)		3.63			0.79			(12.20	)
Realized price, including cash settlements	$	56.56	$	56.68		$	55.46		$	56.57		$	52.60
Natural gas liquids (Per Bbl)
Delaware Basin	$	10.27	$	13.77		$	17.64		$	21.24		$	29.66
STACK		12.61		15.55			18.43			22.57			30.12
Powder River Basin		15.01		17.74			19.64			22.76			28.33
Eagle Ford		13.77		15.84			19.77			23.90			31.63
Other		12.79		9.80			11.94			16.26			26.12
New Devon		12.02		15.00			18.33			22.42			30.23
U.S. divest assets		12.25		14.22			19.38			21.54			28.23
Realized price without hedges		12.09		14.79			18.64			22.15			29.59
Cash settlements		1.84		1.03			0.48			0.18			(2.50	)
Realized price, including cash settlements	$	13.93	$	15.82		$	19.12		$	22.33		$	27.09
Gas (Per Mcf)
Delaware Basin	$	0.90	$	(0.05	)	$	1.84		$	1.68		$	1.81
STACK		1.54		1.74			2.76			2.94			2.12
Powder River Basin		1.96		2.16			2.92			3.85			2.63
Eagle Ford		2.26		2.56			3.39			3.82			2.89
Other		0.99		0.21			1.10			1.28			1.49
New Devon		1.47		1.37			2.62			2.84			2.20
U.S. divest assets		1.70		1.94			2.43			2.98			2.23
Realized price without hedges		1.56		1.61			2.53			2.90			2.21
Cash settlements		0.24		0.20			(0.17	)		(0.28	)		0.01
Realized price, including cash settlements	$	1.80	$	1.81		$	2.36		$	2.62		$	2.22
Total oil equivalent (Per Boe)
Delaware Basin	$	33.48	$	33.94		$	33.92		$	33.30		$	41.10
STACK		22.07		23.96			26.65			29.40			31.48
Powder River Basin		41.20		45.44			41.69			46.27			55.83
Eagle Ford		35.10		37.50			39.41			44.20			49.44
Other		46.41		47.43			42.03			41.53			48.40
New Devon		30.32		31.68			32.60			34.85			39.81
U.S. divest assets		12.02		13.37			17.10			20.95			20.89
Realized price without hedges		25.93		27.24			28.58			30.94			34.06
Cash settlements		1.80		0.60			0.93			(0.42	)		(4.54	)
Realized price, including cash settlements	$	27.73	$	27.84		$	29.51		$	30.52		$	29.52

7

BENCHMARK PRICES

(average prices)	2019									2018
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	56.34		$	59.85		$	54.88		$	58.80		$	69.60
Natural Gas ($/Mcf) - Henry Hub	$	2.23		$	2.64		$	3.15		$	3.65		$	2.91
NGL ($/Bbl) - Mont Belvieu Blended	$	16.18		$	19.05		$	22.94		$	26.30		$	33.05
FIELD-LEVEL CASH MARGIN (per Boe)
	2019									2018
	Quarter 3			Quarter 2			Quarter 1			Quarter 4			Quarter 3
Delaware Basin
Realized price	$	33.48		$	33.94		$	33.92		$	33.30		$	41.10
Lease operating expenses		(4.17	)		(4.33	)		(4.58	)		(6.03	)		(4.88	)
Gathering, processing & transportation		(2.20	)		(2.31	)		(2.23	)		(2.06	)		(2.01	)
Production & property taxes		(2.69	)		(2.84	)		(2.72	)		(2.73	)		(3.36	)
Field-level cash margin	$	24.42		$	24.46		$	24.39		$	22.48		$	30.85
STACK
Realized price	$	22.07		$	23.96		$	26.65		$	29.40		$	31.48
Lease operating expenses		(2.08	)		(1.84	)		(1.87	)		(1.84	)		(2.16	)
Gathering, processing & transportation		(5.05	)		(5.10	)		(5.18	)		(4.62	)		(5.05	)
Production & property taxes		(0.86	)		(1.25	)		(1.33	)		(1.30	)		(1.71	)
Field-level cash margin	$	14.08		$	15.77		$	18.27		$	21.64		$	22.56
Powder River Basin
Realized price	$	41.20		$	45.44		$	41.69		$	46.27		$	55.83
Lease operating expenses		(7.28	)		(6.95	)		(8.00	)		(6.58	)		(6.56	)
Gathering, processing & transportation		(2.07	)		(1.71	)		(1.70	)		(1.89	)		(1.78	)
Production & property taxes		(4.73	)		(4.99	)		(4.97	)		(5.39	)		(6.81	)
Field-level cash margin	$	27.12		$	31.79		$	27.02		$	32.41		$	40.68
Eagle Ford
Realized price	$	35.10		$	37.50		$	39.41		$	44.20		$	49.44
Lease operating expenses		(3.20	)		(2.85	)		(2.81	)		(2.69	)		(2.34	)
Gathering, processing & transportation		(5.93	)		(5.59	)		(5.84	)		(5.72	)		(4.92	)
Production & property taxes		(1.95	)		(2.43	)		(2.23	)		(2.44	)		(2.72	)
Field-level cash margin	$	24.02		$	26.63		$	28.53		$	33.35		$	39.46
Other
Realized price	$	46.41		$	47.43		$	42.03		$	41.53		$	48.40
Lease operating expenses		(15.06	)		(20.34	)		(17.05	)		(17.29	)		(17.07	)
Gathering, processing & transportation		(0.29	)		(0.09	)		(0.31	)		(0.22	)		0.25
Production & property taxes		(3.30	)		(4.33	)		(3.28	)		(3.73	)		(4.17	)
Field-level cash margin	$	27.76		$	22.67		$	21.39		$	20.29		$	27.41
New Devon - Total
Realized price	$	30.32		$	31.68		$	32.60		$	34.85		$	39.81
Lease operating expenses		(3.73	)		(3.66	)		(3.72	)		(3.85	)		(3.57	)
Gathering, processing & transportation		(3.74	)		(3.80	)		(3.92	)		(3.85	)		(3.86	)
Production & property taxes		(2.06	)		(2.34	)		(2.25	)		(2.25	)		(2.75	)
Field-level cash margin	$	20.79		$	21.88		$	22.71		$	24.90		$	29.63

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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 third-quarter 2019 earnings.

(in millions, except per share amounts)	Quarter Ended September 30, 2019
	Before-tax			After-tax			Per Diluted Share
Continuing Operations
Net earnings (GAAP)	$	194		$	139		$	0.35
Adjustments:
Asset dispositions		(2	)		(1	)		(0.00	)
Asset and exploration impairments		14			11			0.03
Deferred tax asset valuation allowance		—			4			0.01
Fair value changes in financial instruments		(57	)		(44	)		(0.12	)
Restructuring and transaction costs		10			8			0.02
Core earnings(Non-GAAP)	$	159		$	117		$	0.29
Discontinued Operations
Net loss (GAAP)	$	(43	)	$	(30	)	$	(0.08	)
Adjustments:
Gain on sale of Canadian operations		(34	)		(20	)		(0.05	)
Deferred tax asset valuation allowance		—			(4	)		(0.01	)
Early retirement of debt		58			45			0.11
Fair value changes in financial instruments and foreign currency and other		(6	)		(9	)		(0.01	)
Restructuring and transaction costs		5			4			0.01
Core loss(Non-GAAP)	$	(20	)	$	(14	)	$	(0.03	)
Total
Net earnings (GAAP)	$	151		$	109		$	0.27
Adjustments:
Continuing Operations		(35	)		(22	)		(0.06	)
Discontinued Operations		23			16			0.05
Core earnings(Non-GAAP)	$	139		$	103		$	0.26

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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)
	Q3’19			Q2’19			Q1’19			Q4’18			TTM			Q3’18			Q2’18			Q1’18
Net earnings (loss) (GAAP)	$	109		$	495		$	(317	)	$	1,149		$	1,436		$	2,563		$	(335	)	$	(153	)
Net (earnings) loss from discontinued operations, net of tax		30			(329	)		(29	)		293		$	(35	)		(2,407	)		(161	)		(55	)
Financing costs, net		60			66			60			59			245			68			64			389
Income tax expense (benefit)		55			71			(110	)		441			457			(171	)		13			(3	)
Exploration expenses		18			7			4			24			53			22			62			21
Depreciation, depletion and amortization		402			394			380			339			1,515			342			342			305
Asset impairments		—			—			—			—			—			2			154			—
Asset dispositions		(2	)		(1	)		(44	)		(268	)		(315	)		(6	)		23			(12	)
Share-based compensation		20			21			23			23			87			23			26			33
Derivative and financial instrumentnon-cash valuation changes		(57	)		(117	)		638			(1,447	)		(983	)		202			322			(15	)
Restructuring and transaction costs		10			12			51			6			79			6			85			—
Accretion on discounted liabilities and other		7			8			(16	)		30			29			(10	)		6			(6	)
EBITDAX(Non-GAAP)	$	652		$	627		$	640		$	649		$	2,568		$	634		$	601		$	504

NET DEBT

Devon defines net debt as debt less cash, cash equivalents and cash restricted for discontinued operations. 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)
	September 30, 2019			December 31, 2015
Total debt (GAAP)	$	4,295		$	13,032
Less:
Cash and cash equivalents		(1,375	)		(2,310	)
Cash restricted for discontinued operations		(280	)		—
Net debt(Non-GAAP)	$	2,640		$	10,722

FREE CASH FLOW

Devon defines free cash flow as total operating cash flow less capital expenditures and acquisitions. Devon believes that free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.

(in millions)
	Quarter Ended September 30, 2019
Total operating cash flow (GAAP)	$	597
Less capital expenditures and acquisitions:
Capital expenditures		(536	)
Acquisitions		(5	)
Free cash flow(Non-GAAP)	$	56

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Devon Energy Fourth-Quarter 2019 Guidance

PRODUCTION GUIDANCE

	Quarter 4
	Low			High
Oil (MBbls/d)
New Devon		154			160
U.S. divest assets		2			3
Total		156			163
Natural gas liquids (MBbls/d)
New Devon		78			82
U.S. divest assets		26			30
Total		104			112
Gas (MMcf/d)
New Devon		570			620
U.S. divest assets		390			420
Total		960			1,040
Total oil equivalent (MBoe/d)
New Devon		327			345
U.S. divest assets		93			103
Total		420			448
PRICE REALIZATIONS GUIDANCE
	Quarter 4
	Low			High
Oil - % of WTI		90	%		100	%
NGL - realized price	$	13		$	16
Natural gas - % of Henry Hub		50	%		70	%
OTHER GUIDANCE ITEMS
	Quarter 4
($ millions, except Boe and %)	Low			High
Marketing & midstream operating profit	$	—		$	—
LOE & GP&T per BOE	$	7.35		$	7.65
Production & Property Tax	$	75		$	85
Exploration expenses	$	5		$	15
Depreciation, depletion and amortization	$	420		$	460
General & administrative expenses	$	105		$	115
Financing costs, net	$	60		$	70
Other expenses	$	10		$	20
Current income tax rate		0	%		5	%
Deferred income tax rate		20	%		25	%
Total income tax rate		20	%		30	%
CAPITAL EXPENDITURES GUIDANCE
	Quarter 4
(in millions)	Low			High
New Devon Upstream capital	$	375		$	420
Divest assets upstream capital		5			10
Other		5			10
Total	$	385		$	440

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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)
Q4 2019		35,600	$	61.21		79,500	$	54.06	$	64.13
Q1-Q4 2020		7,238	$	57.29		31,932	$	51.85	$	61.93
Q1-Q4 2021		493	$	52.75		1,479	$	48.48	$	58.48

	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)
Q4 2019		5,000	$	50.00	$	63.00	$	74.80

Oil Basis Swaps

Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q4 2019	Midland Sweet		28,000	$	(0.46	)
Q4 2019	Argus LLS		7,500	$	5.18
Q4 2019	Argus MEH		26,000	$	3.33
Q4 2019	NYMEX Roll		38,000	$	0.45
Q1-Q4 2020	Argus MEH		9,000	$	3.44
Q1-Q4 2020	NYMEX Roll		44,000	$	0.34

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)
Q4 2019		243,300	$	2.80		195,000	$	2.64	$	3.03
Q1-Q4 2020		81,409	$	2.77		42,557	$	2.73	$	3.03

Natural Gas Basis Swaps

Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q4 2019	Panhandle Eastern Pipe Line		20,000	$	(0.56	)
Q4 2019	El Paso Natural Gas		130,000	$	(1.46	)
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		45,000	$	(0.70	)
Q1-Q4 2020	Houston Ship Channel		10,000	$	0.02

NGL Commodity Hedges

		Price Swaps
Period	Product	Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q4 2019	Ethane		1,000	$	11.55
Q4 2019	Natural Gasoline		4,500	$	55.93
Q4 2019	Normal Butane		4,000	$	33.69
Q4 2019	Propane		8,500	$	30.01
Q1-Q4 2020	Natural Gasoline		1,000	$	44.84
Q1-Q4 2020	Normal Butane		1,000	$	23.52
Q1-Q4 2020	Propane		4,500	$	25.18

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. Devon’s NGL derivatives settle against the average of the prompt month OPIS Mont Belvieu, Texas index. Commodity hedge positions are shown as of September 30, 2019.

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