Devon Energy Reports Third-Quarter 2012 Results

  Devon Energy Reports Third-Quarter 2012 Results

Business Wire

OKLAHOMA CITY -- November 07, 2012

Devon Energy Corporation (NYSE:DVN) today reported a net loss of $719 million
for the quarter ended September 30, 2012, or $1.80 per common share ($1.80 per
diluted share). A $1.1 billion non-cash asset impairment charge was the
primary driver of the quarterly loss. Adjusting for this and other items
securities analysts typically exclude from their published estimates, the
company earned $355 million or $0.88 per diluted share in the third quarter of
2012.

The company generated cash flow from operations of $1.4 billion during the
third quarter. Combined with $533 million in cash payments from the closing of
its joint venture agreement with Sumitomo and other minor asset sales, Devon’s
cash inflows totaled $1.9 billion in the quarter.

Strong Oil Growth Drives Production Increase

Devon continued to deliver strong oil production growth in the third quarter
of 2012. Oil production averaged 143,000 barrels per day, a 14 percent
increase compared to the third quarter of 2011. This was achieved in spite of
the scheduled shut-down for facilities maintenance at our Jackfish 1 oil sands
project, which reduced production by approximately 10,000 barrels per day.
Regionally, the most significant growth came from the company’s U.S.
operations, where year-over-year oil production increased 26 percent.

In total, Devon’s production averaged 678,000 oil-equivalent barrels (Boe) per
day in the third quarter, a 3 percent increase compared to the year-ago
quarter. Year-over-year declines in natural gas volumes driven by reduced
activity levels in liquids-rich gas projects partially offset the company’s
oil production growth in the third quarter.

“Devon’s capital program has delivered strong results this year with
aggressive drilling programs in oil-focused basins,” said John Richels,
president and chief executive officer. “As we have pursued higher-returning
oil projects, we also have de-emphasized natural gas drilling, limiting
overall production growth. This is exactly the right tactical decision for
Devon in this environment and is consistent with our longstanding strategy to
optimize returns as opposed to top-line production growth.”

Permian Basin Results Lead Operating Highlights

  *Permian Basin oil production increased 35 percent over the third quarter
    of 2011. Oil production accounted for nearly 60 percent of the company’s
    65,000 Boe per day produced in the Permian during the third quarter.
  *In the Bone Spring and Delaware plays in the Permian Basin, the company
    added 25 new wells to production in the third quarter 2012. Initial 30-day
    production from these wells averaged 575 Boe per day.
  *Also in the Permian, Devon brought five Midland-Wolfcamp Shale wells
    online in the third quarter with initial 30-day production averaging 560
    Boe per day.
  *In September, Devon closed its $1.4 billion joint venture agreement with
    Sumitomo covering 650,000 net acres in the Permian Basin. Devon has now
    successfully entered into two exploration joint ventures during 2012,
    delivering almost $4 billion in value to the company.
  *In Canada, net production from Devon’s Jackfish 1 and Jackfish 2 oil sands
    projects averaged 44,000 barrels per day in the third quarter. This
    represents a 24 percent increase in oil production over the year-ago
    quarter.
  *Construction of Devon’s third Jackfish oil sands project is now
    approximately 45 percent complete, with plant startup expected by year-end
    2014.
  *The company’s third quarter activity in the Mississippian Lime play in
    Oklahoma was highlighted by the increase in activity to 13 operated rigs.
    Results from the Mississippian play continue to support Devon’s target
    economics.
  *Devon brought seven operated Granite Wash wells online in the third
    quarter. The average 30-day production rate from these wells was 1,065 Boe
    per day.
  *The company’s Cana-Woodford Shale production averaged 283 million cubic
    feet of natural gas equivalent per day in the third quarter 2012.
    Third-quarter liquids production increased 64 percent compared to the
    prior-year quarter to 13,000 barrels per day.
  *Net production in the Barnett Shale totaled 1.4 billion cubic feet of
    natural gas equivalent per day in the third quarter. Liquids production
    increased 11 percent compared to the third quarter of 2011 to 51,000
    barrels per day, accounting for 22 percent of total Barnett production.

Oil and Gas Sales Total $1.7 Billion; Natural Gas Hedge Position Strengthened

Revenue from oil, natural gas and natural gas liquids sales totaled $1.7
billion in the third quarter of 2012, an 18 percent decline from the third
quarter of 2011. Lower realized prices for all three products more than offset
increased production. Cash settlements related to the company’s oil and
natural gas hedges boosted revenue by $243 million or $3.89 per Boe in the
third quarter of 2012.

The recent rise in natural gas prices has provided Devon the opportunity to
add attractive hedges for next year. For the full-year 2013, the company now
has approximately 1.0 billion cubic feet per day of natural gas production
protected at a weighted average floor price of $3.88 per thousand cubic feet.
Devon’s 2013 hedge position covers volumes equal to about 40 percent of the
company’s current rate of natural gas production.

In the third quarter of 2012, the company’s marketing and midstream operating
profit reached $109 million. The solid results were aided by the resumption of
operations at the company’s Gulf Coast Fractionators facility in Mont Belvieu
following the completion of a recent plant expansion.

Operating Costs Below Expectations

The company’s pre-tax, cash costs of $877 million, or $14.04 per Boe, were
lower than forecasted for the third quarter. Pre-tax, cash costs per unit of
production were 4 percent higher than the third quarter of 2011 but declined 2
percent from the second quarter of 2012. Cost containment efforts and
increased production offset higher activity levels in oil-focused basins. In
general, oil projects are more expensive to produce and have higher operating
costs than gas production.

Balance Sheet and Liquidity Remain Strong

With third quarter net cash inflows roughly equal to capital expenditures, the
company ended the quarter with a very strong balance sheet. At September 30,
2012, the company’s cash and short-term investments totaled $7.5 billion, and
Devon’s net debt to adjusted capitalization was just 15 percent.

Impairment Charge Methodology

On a quarterly basis, the carrying value of Devon’s oil and natural gas assets
are subject to a “ceiling test.” Under the full-cost method of accounting, the
net book value of the company’s oil and gas properties, less related deferred
income taxes, may not exceed a calculated ceiling. The ceiling is the
estimated future net cash flow from proved oil and gas properties, discounted
at 10 percent per year. Any excess is written off as a non-cash expense and
may not be reversed in future periods, even though higher oil and gas prices
may subsequently increase the ceiling. Future net cash flows are calculated
assuming continuation of prices and costs in effect at the time of the
calculation, except for changes that are fixed and determinable by existing
contracts. Trailing 12-month average prices at the end of each quarter are
used in the future net cash flow calculation.

As a result of this accounting calculation, Devon recorded a $1.1 billion
non-cash asset impairment charge in the third quarter, reducing the carrying
value of its oil and gas properties. This impairment charge resulted primarily
from the decline of natural gas prices over the past 12 months and is not
reflective of the fair value of the company’s assets and has no impact on cash
flow or cash balances.

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). Net debt and adjusted
capitalization are non-GAAP financial measures referenced within this release.
Reconciliations of these non-GAAP measures are provided on page 11.

Items Excluded from Published Earnings Estimates

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. The following table summarizes the effects of
these items on third-quarter 2012 earnings.

                                           Quarter Ended September 30, 2012
                                              Before-Tax         After-Tax
Net earnings (GAAP)                                                 $  (719  )
Asset impairments                             1,128                    719
Oil and gas derivatives                       538                      349
Interest rate and other financial             9                       6     
instruments
Adjusted earnings (Non-GAAP)                                        $  355   
Diluted share count                                                    405
Adjusted diluted earnings per share                                 $  0.88  
(Non-GAAP)
                                                                             
                                                                             

Conference Call to be Webcast Today

Devon will discuss its third-quarter 2012 financial and operating results in a
conference call webcast today. The webcast will begin at 10 a.m. Central Time
(11 a.m. Eastern Time) and may be accessed from Devon’s home page at
www.devonenergy.com.

This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements are those concerning
strategic plans, expectations and objectives for future operations. All
statements, other than statements of historical facts, included in this press
release that address activities, events or developments that the company
expects, believes or anticipates will or may occur in the future are
forward-looking statements. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of
the company. Statements regarding future drilling and production are subject
to all of the risks and uncertainties normally incident to the exploration for
and development and production of oil and gas. These risks include, but are
not limited to the volatility of oil, natural gas and NGL prices;
uncertainties inherent in estimating oil, natural gas and NGL reserves;
drilling risks; environmental risks; and political or regulatory changes.
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 United States Securities and Exchange Commission 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 andexploration target size.These
estimates are by their nature more speculative than estimates of proved,
probable and possible reserves and accordingly are subject to substantially
greater risk of being actually realized. The SEC guidelines strictly prohibit
us from including these estimates in filings with the SEC. U.S. investors are
urged to consider closely the disclosure in our Form 10-K for the fiscal year
ended December 31, 2011, available from us at Devon Energy Corporation, Attn.
Investor Relations, 333 West Sheridan Avenue, Oklahoma City, OK 73102-5015.
You can also obtain this form from the SEC by calling 1-800-SEC-0330 or from
the SEC’s website at www.sec.gov.

Devon Energy Corporation is an Oklahoma City-based independent energy company
engaged in oil and gas exploration and production. Devon is a leading
U.S.-based independent oil and gas producer and is included in the S&P 500
Index. For more in the S&P 500 Index. For more information about Devon, please
visit our website at www.devonenergy.com.



DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
                                                  
PRODUCTION (net of           Quarter Ended               Nine Months Ended
royalties)
                             September 30,               September 30,
Total Period                 2012       2011          2012       2011
Production:
Natural Gas (Bcf)
United States                190.2         186.5         565.3         547.9
Canada                       44.8          53.4          142.7         160.3
Total Natural Gas            235.0         239.9         708.0         708.2
Oil (MMBbls)
United States                5.4           4.3           15.5          12.2
Canada                       7.7           7.2           24.1          20.2
Total Oil                    13.1          11.5          39.6          32.4
Natural Gas Liquids
(MMBbls)
United States                9.3           8.4           26.7          24.3
Canada                       0.8           0.9           3.0           2.7
Total Natural Gas            10.1          9.3           29.7          27.0
Liquids
Oil Equivalent (MMBoe)
United States                46.4          43.8          136.5         127.8
Canada                       16.0          17.0          50.8          49.7
Total Oil Equivalent         62.4          60.8          187.3         177.5
                                                                       
                                                                       
                             Quarter Ended               Nine Months Ended
                             September 30,               September 30,
Average Daily                2012          2011          2012          2011
Production:
Natural Gas (MMcf)
United States                2,067.1       2,027.7       2,063.0       2,007.1
Canada                       487.2         580.0         520.8         587.1
Total Natural Gas            2,554.3       2,607.7       2,583.8       2,594.2
Oil (MBbls)
United States                58.9          46.7          56.6          44.6
Canada                       83.6          78.3          87.8          74.1
Total Oil                    142.5         125.0         144.4         118.7
Natural Gas Liquids
(MBbls)
United States                100.8         91.0          97.7          89.0
Canada                       9.2           10.2          10.8          10.0
Total Natural Gas            110.0         101.2         108.5         99.0
Liquids
Oil Equivalent (MBoe)
United States                504.2         475.6         498.1         468.1
Canada                       174.0         185.2         185.4         181.9
Total Oil Equivalent         678.2         660.8         683.5         650.0



DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
                                                  
BENCHMARK PRICES             Quarter Ended               Nine Months Ended
(average prices)             September 30,               September 30,
                             2012       2011          2012       2011
Natural Gas ($/Mcf) –        $ 2.80        $ 4.20        $ 2.58        $ 4.21
Henry Hub
Oil ($/Bbl) – West
Texas Intermediate           $ 92.32       $ 89.55       $ 96.23       $ 95.42
(Cushing)

                  
REALIZED PRICES       Quarter Ended September 30, 2012
                      Oil          Gas         NGLs         Total
                      (Per Bbl)       (Per           (Per Bbl)       (Per Boe)
                                      Mcf)
United States         $  84.84        $  2.37        $  25.07        $  24.64
Canada                $  58.75        $  2.31        $  46.41        $  37.14
Realized price        $  69.53        $  2.36        $  26.86        $  27.85
without hedges
Cash                  $  6.58         $  0.66        $  0.03         $  3.89
settlements
Realized price,
including cash        $  76.11        $  3.02        $  26.89        $  31.74
settlements

                  
                      Quarter Ended September 30, 2011
                      Oil          Gas         NGLs         Total
                      (Per Bbl)       (Per           (Per Bbl)       (Per Boe)
                                      Mcf)
United States         $ 86.30         $  3.71        $  40.95        $  32.11
Canada                $ 61.70        $  3.93        $  54.85        $  41.42
Realized price        $ 70.89         $  3.76        $  42.35        $  34.72
without hedges
Cash                  $ (0.13 )       $  0.40        $  0.09         $  1.58
settlements
Realized price,
including cash        $ 70.76        $  4.16        $  42.44        $  36.30
settlements

                  
                      Nine Months Ended September 30, 2012
                      Oil          Gas         NGLs         Total
                      (Per Bbl)       (Per           (Per Bbl)       (Per Boe)
                                      Mcf)
United States         $  90.79        $  2.12        $  29.31        $  24.86
Canada                $  58.56        $  2.26        $  48.92        $  36.93
Realized price        $  71.19        $  2.15        $  31.27        $  28.14
without hedges
Cash                  $  3.47         $  0.75        $  0.02         $  3.56
settlements
Realized price,
including cash        $  74.66        $  2.90        $  31.29        $  31.70
settlements

                  
                      Nine Months Ended September 30, 2011
                      Oil          Gas         NGLs         Total
                      (Per Bbl)       (Per           (Per Bbl)       (Per Boe)
                                      Mcf)
United States         $ 91.18         $  3.64        $  39.05        $  31.73
Canada                $ 65.30        $  4.01        $  55.92        $  42.61
Realized price        $ 75.04         $  3.73        $  40.74        $  34.78
without hedges
Cash                  $ (0.70 )       $  0.37        $  0.07         $  1.35
settlements
Realized price,
including cash        $ 74.34        $  4.10        $  40.81        $  36.13
settlements



DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED
STATEMENTS OF     Quarter Ended                 Nine Months Ended
OPERATIONS
(in millions,
except per           September 30,                    September 30,
share amounts)
                      2012        2011          2012       2011  
Revenues:
Oil, gas and         $ 1,738          $ 2,111         $ 5,270         $ 6,171
NGL sales
Oil, gas and
NGL                    (295   )         738             515             986
derivatives
Marketing and
midstream             422            653           1,136         1,712 
revenues
Total revenues        1,865          3,502         6,921         8,869 
Expenses and
other, net:
Lease
operating              513              475             1,540           1,352
expenses
Marketing and
midstream
operating              313              515             847             1,304
costs and
expenses
Depreciation,
depletion and          716              566             2,080           1,622
amortization
General and
administrative         150              138             494             403
expenses
Taxes other
than income            104              108             306             336
taxes
Interest               110              104             296             270
expense
Restructuring          -                (3    )         -               (2    )
costs
Asset                  1,128            -               1,128           -
impairments
Other, net            (8     )        61            46            88    
Total expenses        3,026          1,964         6,737         5,373 
and other, net
Earnings
(loss) from
continuing             (1,161 )         1,538           184             3,496
operations
before income
taxes
Current income
tax expense            (41    )         (248  )         8               (301  )
(benefit)
Deferred
income tax            (401   )        746           4             2,184 
expense
(benefit)
Earnings
(loss) from            (719   )         1,040           172             1,613
continuing
operations
Earnings
(loss) from
discontinued          -              (2    )        (21   )        2,584 
operations,
net of tax
Net earnings         $ (719   )       $ 1,038        $ 151          $ 4,197 
(loss)
                                                                      
Basic net
earnings
(loss) per
share:
Basic earnings
(loss) from
continuing           $ (1.80  )       $ 2.51          $ 0.42          $ 3.83
operations per
share
Basic earnings
(loss) from
discontinued          -              -             (0.05 )        6.14  
operations per
share
Basic net
earnings             $ (1.80  )       $ 2.51         $ 0.37         $ 9.97  
(loss) per
share
                                                                      
Diluted net
earnings
(loss) per
share:
Diluted
earnings
(loss) from          $ (1.80  )       $ 2.50          $ 0.42          $ 3.82
continuing
operations per
share
Diluted
earnings
(loss) from           -              -             (0.05 )        6.11  
discontinued
operations per
share
Diluted net
earnings             $ (1.80  )       $ 2.50         $ 0.37         $ 9.93  
(loss) per
share
                                                                      
Weighted
average common
shares
outstanding:
Basic                  405              414             404             421
Diluted                405              415             405             423



DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED
STATEMENTS OF                                             
CASH FLOWS
(in millions)       Quarter Ended                     Nine Months Ended
                    September 30,                     September 30,
                     2012           2011           2012           2011   
Cash flows
from
operating
activities:
Net earnings        $ (719   )       $ 1,038          $ 151            $ 4,197
(loss)
(Earnings)
loss from
discontinued          -                2                21               (2,584 )
operations,
net of tax
Adjustments
to reconcile
earnings from
continuing
operations to
net cash from
operating
activities:
Depreciation,
depletion and         716              566              2,080            1,622
amortization
Asset                 1,128            -                1,128            -
impairments
Deferred
income tax            (401   )         746              4                2,184
expense
Unrealized
change in
fair value of         535              (587   )         173              (661   )
financial
instruments
Other noncash        22             103            136            185    
charges
Net cash from
operating
activities            1,281            1,868            3,693            4,943
before
balance sheet
changes
Net decrease
(increase) in         26               (219   )         48               (308   )
working
capital
Decrease
(increase) in         (25    )         6                (22    )         51
long-term
other assets
Increase
(decrease) in
long-term            79             (258   )        68             (459   )
other
liabilities
Cash from
operating
activities -          1,361            1,397            3,787            4,227
continuing
operations
Cash from
operating
activities -         -              7              26             (13    )
discontinued
operations
Net cash from
operating            1,361          1,404          3,813          4,214  
activities
                                                                       
Cash flows
from
investing
activities:
Capital               (1,961 )         (1,795 )         (6,228 )         (5,515 )
expenditures
Purchases of
short-term            (1,498 )         (1,231 )         (2,969 )         (5,751 )
investments
Redemptions
of short-term         278              3,367            2,308            4,665
investments
Proceeds from
property and          533              8                1,397            13
equipment
divestitures
Other                4              9              18             (23    )
Cash from
investing
activities -          (2,644 )         358              (5,474 )         (6,611 )
continuing
operations
Cash from
investing
activities -         -              (8     )        58             3,162  
discontinued
operations
Net cash from
investing            (2,644 )        350            (5,416 )        (3,449 )
activities
                                                                       
Cash flows
from
financing
activities:
Proceeds from
borrowings of
long-term             -                2,221            2,465            2,221
debt, net of
issuance
costs
Net
short-term            600              856              (898   )         3,196
borrowings
(repayments)
Debt                  -                (1,760 )         -                (1,760 )
repayments
Credit
facility              -                -                750              -
borrowings
Credit
facility              -                -                (750   )         -
repayments
Proceeds from
stock option          3                5                25               101
exercises
Repurchases
of common             -                (697   )         -                (1,987 )
stock
Dividends
paid on               (80    )         (69    )         (242   )         (209   )
common stock
Excess tax
benefits
related to           4              (1     )        5              11     
share-based
compensation
Net cash from
financing            527            555            1,355          1,573  
activities
Effect of
exchange rate        (7     )        (42    )        31             (10    )
changes on
cash
Net change in
cash and cash         (763   )         2,267            (217   )         2,328
equivalents
                                                                       
Cash and cash
equivalents          6,101          3,351          5,555          3,290  
at beginning
of period
Cash and cash
equivalents         $ 5,338         $ 5,618         $ 5,338         $ 5,618  
at end of
period



DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS                                
(in millions)                                 September 30,       December 31,
                                                2012              2011    
Current assets:
Cash and cash equivalents                     $  5,338            $  5,555
Short-term investments                           2,164               1,503
Accounts receivable                              1,113               1,379
Other current assets                            818               868     
Total current assets                            9,433             9,305   
Property and equipment, at cost:
Oil and gas, based on full cost
accounting:
Subject to amortization                          67,345              61,696
Not subject to amortization                     3,827             3,982   
Total oil and gas                                71,172              65,678
Other                                           5,643             5,098   
Total property and equipment, at cost            76,815              70,776
Less accumulated depreciation,                  (49,669  )         (46,002 )
depletion and amortization
Property and equipment, net                     27,146            24,774  
Goodwill                                         6,114               6,013
Other long-term assets                          855               1,025   
Total assets                                  $  43,548          $  41,117  
                                                                  
Current liabilities:
Accounts payable                              $  1,485            $  1,471
Revenues and royalties payable                   696                 678
Short-term debt                                  2,780               3,811
Other current liabilities                       535               778     
Total current liabilities                       5,496             6,738   
Long-term debt                                   8,455               5,969
Asset retirement obligations                     2,009               1,496
Other long-term liabilities                      863                 721
Deferred income taxes                            4,944               4,763
Stockholders' equity:
Common stock                                     41                  40
Additional paid-in capital                       3,644               3,507
Retained earnings                                16,217              16,308
Accumulated other comprehensive                 1,879             1,575   
earnings
Total stockholders' equity                      21,781            21,430  
Total liabilities and stockholders'           $  43,548          $  41,117  
equity
Common shares outstanding                        405                 404



DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

COMPANY OPERATED RIGS                       As of September 30,
                                               2012        2011
Number of Company Operated Rigs Running:
United States                                  65             59
Canada                                         4              11
Total                                          69             70

                                                            
KEY OPERATING STATISTICS
BY REGION
                                Quarter Ended September 30, 2012
                                Avg.              Operated Rigs       Gross
                                Production        at                  Wells
                                (MBOED)           September 30,       Drilled
                                                  2012
Barnett Shale                   233.6             10                  65
Canadian Oilsands -             44.3              -                   9
Jackfish / Pike
Cana-Woodford Shale             47.2              7                   41
Granite Wash                    18.5              3                   11
Gulf Coast / East Texas         60.5              4                   18
Lloydminster                    37.1              1                   47
Permian Basin                   65.1              20                  54
Rocky Mountains                 57.1              4                   8
Other                           114.8             20                  24
Total                           678.2             69                  277

                                                             
CAPITAL EXPENDITURES (in
millions)
                                      Quarter Ended September 30, 2012
                                      United States       Canada       Total
Exploration                           $    304            17           $ 321
Development                               1,026          310           1,336
Exploration and development           $    1,330          327          $ 1,657
capital
Capitalized G&A and interest                                             108
Midstream capital                                                        137
Other capital                                                           66
Total Continuing Operations                                            $ 1,968
Discontinued operations                                                 -
Total Operations                                                       $ 1,968

                                                             
CAPITAL EXPENDITURES (in
millions)
                                      Nine Months Ended September 30, 2012
                                      United States       Canada       Total
Exploration                           $    1,217          221          $ 1,438
Development                               3,015          888           3,903
Exploration and development           $    4,232          1,109        $ 5,341
capital
Capitalized G&A and interest                                             308
Midstream capital                                                        364
Other capital                                                           270
Total Continuing Operations                                            $ 6,283
Discontinued operations                                                 13
Total Operations                                                       $ 6,296
                                                                         
                                                                         

                           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. Devon believes that using net debt for the calculation of “net
debt to adjusted capitalization” provides a better measure than using debt.
Devon defines net debt as debt less cash, cash equivalents and short-term
investments. Devon believes that netting these sources of cash against debt
provides a clearer picture of the future demands on cash to repay debt.

                                                 
RECONCILIATION TO GAAP INFORMATION
(in millions)
                                         September 30,
                                         2012           2011
Total debt (GAAP)                        $ 11,235       $ 9,257
Adjustments:
Cash and short-term investments           7,502         6,849
Net debt (Non-GAAP)                      $ 3,733        $ 2,408
                                                        
Total debt                               $ 11,235       $ 9,257
Stockholders' equity                      21,781        21,102
Total capitalization (GAAP)              $ 33,016       $ 30,359
                                                        
Net debt                                 $ 3,733        $ 2,408
Stockholders' equity                      21,781        21,102
Adjusted capitalization (Non-GAAP)       $ 25,514       $ 23,510

Contact:

Devon Energy Corporation
Investor Contacts
Scott Coody, 405-552-4735
or
Shea Snyder, 405-552-4782
or
Media Contact
Chip Minty, 405-228-8647