Devon Energy Reports Fourth-Quarter and Full-Year 2013 Results

  Devon Energy Reports Fourth-Quarter and Full-Year 2013 Results    *Achieved record fourth-quarter oil production exceeding company guidance   *Delivered 32 percent growth in fourth-quarter U.S. oil production   *Increased fourth-quarter operating cash flow by 26 percent   *Repatriated $4.3 billion of foreign cash during 2013   *Increased proved oil reserves to highest level in company history  Business Wire  OKLAHOMA CITY -- February 19, 2014  Devon Energy Corporation (NYSE:DVN) today reported net earnings of $207 million or $0.51 per common share ($0.51 per diluted share) for the quarter ended December 31, 2013. This compares with a fourth-quarter 2012 net loss of $357 million or $0.89 per common share ($0.89 per diluted share).  Adjusting for items securities analysts typically exclude from their published estimates, the company earned $447 million or $1.10 per diluted share in the fourth quarter. This represents a 49 percent increase in adjusted earnings compared to the fourth quarter of 2012.  Operating cash flow in the fourth quarter of 2013 totaled $1.4 billion, a 26 percent increase compared to the year-ago period. For the year ended December 31, 2013, Devon generated operating cash flow of $5.4 billion. Including $419 million of cash received from asset sales, the company’s total cash inflows reached $5.9 billion for 2013.  “2013 was a year of strong execution and exciting change for Devon,” said John Richels, president and chief executive officer. “Our drilling programs not only drove impressive oil production growth, but also expanded margins and improved operating cash flow. Additionally, we high-graded our portfolio through an accretive Eagle Ford Shale acquisition, an innovative midstream combination, and initiated an asset divestiture program. These actions provide a platform for Devon to achieve attractive high-margin growth in 2014 and for many years to come.”  Key Operating Highlights  Permian Basin – Production averaged a record 86,000 oil-equivalent barrels (Boe) per day in the fourth quarter, a 29 percent increase compared to the fourth quarter of 2012. Light oil production accounted for approximately 60 percent of Devon’s total Permian production.  The Bone Spring oil play in the Delaware Basin was a significant contributor to the company’s growth in the Permian. Devon added 21 new Bone Spring wells to production in the fourth quarter, with initial 30-day rates averaging 800 Boe per day, of which 70 percent was light oil. These outstanding initial production rates exceeded the company’s Bone Spring type curve by about 40 percent.  Also in the Delaware Basin, Devon commenced production on its first horizontal Wolfcamp well in Ward County, Texas. Initial 30-day production from the Martinsville 120-4H averaged 950 Boe per day, including 800 barrels of light oil per day. The company has identified more than 100,000 net acres prospective for the Wolfcamp within its Delaware Basin position and will continue to derisk this emerging oil opportunity in 2014.  In the Southern Midland Basin, Devon delivered strong results from its oil development program in the Wolfcamp Shale. During the fourth quarter, the company brought 24 Wolfcamp Shale wells online with initial 30-day rates averaging 410 Boe per day.  Canadian Thermal Oil – Gross production from Devon’s Jackfish 1 and Jackfish 2 thermal oil projects averaged 58,000 barrels of oil per day in the fourth quarter, or 53,000 barrels per day after royalties. This represents a 16 percent increase in net production compared to the third quarter of 2013. The growth in fourth-quarter production was attributable to the resumption of operations at Jackfish 2 after scheduled maintenance downtime during the third quarter.  Construction of the company’s Jackfish 3 thermal oil project is now nearly complete. Plant startup at Jackfish 3 is expected in the third quarter of this year. At peak production, Devon’s three 100 percent-owned Jackfish projects are expected to generate nearly $1 billion of free cash flow annually for the company.  Barnett Shale – Net production averaged 1.4 billion cubic feet of natural gas equivalent per day in 2013. Barnett liquids production increased to an average of 57,000 barrels per day in 2013, a 17 percent increase compared to 2012.  Anadarko Basin – Fourth-quarter Anadarko Basin production averaged a record 85,000 Boe per day. Growth from Devon’s Cana-Woodford Shale and Granite Wash plays drove a 10 percent year-over-year increase in net production. With drilling focused in the most liquids-prone acreage, oil and natural gas liquids production increased to more than 40 percent of total production in the Anadarko Basin.  Mississippian-Woodford Trend – Net production from Devon’s emerging Mississippian-Woodford Trend averaged 16,000 Boe per day in December, representing a 47 percent increase from the September average and exceeding the company’s projected exit rate.  Record Oil Production Driven by Permian Basin  Devon delivered strong oil production growth in the fourth quarter of 2013. Companywide oil production set a new quarterly record averaging 177,000 barrels per day, exceeding the top end of the company’s guidance range. This represents a 17 percent increase in oil production compared to the fourth quarter of 2012 and a 7 percent increase over the third quarter of 2013. Led by the Permian Basin, the most significant growth came from the company’s U.S. operations, where oil production increased 32 percent year over year. Total production increased to an average of 696,000 Boe per day in the fourth quarter of 2013, surpassing the midpoint of the company’s previous forecast by 6,000 Boe per day.  In November, the company announced an initiative to monetize non-core assets in both the U.S. and Canada, sharpening its focus on high-growth retained properties. The assets identified for divestiture averaged 144,000 Boe per day in the fourth quarter, of which almost 80 percent was natural gas. Excluding production associated with these non-core assets, top-line production in the fourth quarter from Devon’s retained asset base increased 7 percent compared to the fourth quarter of 2012. Reconciliations of retained and non-core asset production are provided later in this release.  Upstream Revenue Increases 19 Percent; Cash Margins Expand  Revenue from oil, natural gas and natural gas liquids sales totaled $8.5 billion in 2013, a 19 percent increase compared to 2012. The significant growth in revenue was attributable to higher oil production and improved natural gas realizations. In 2013, oil sales accounted for more than 50 percent of Devon’s total upstream revenues.  Devon’s marketing and midstream operating profit reached $513 million in 2013. This result represents a 25 percent increase compared to the previous year. The increase in operating profit was attributable to higher natural gas prices and strong cost management.  The company’s pre-tax cash costs totaled $14.96 per Boe in 2013, a 4 percent increase compared to 2012. The higher unit cost is attributable to Devon’s dramatic increase in oil production. In general, oil wells have higher operating costs than gas wells, but also have higher margins in the current commodity price environment. In the fourth quarter, the company’s cash margin per Boe increased 15 percent year over year, reflecting the benefits of the increase in higher-margin oil production.  Foreign Cash Repatriated; Balance Sheet Remains Strong  During the fourth quarter, Devon repatriated $2.3 billion of foreign cash to the U.S. For the full-year 2013, the company repatriated $4.3 billion of foreign cash to the U.S. at an estimated effective tax rate of 4 percent. At December 31, 2013, the company’s cash balances totaled $6.1 billion, and its investment-grade balance sheet had a net debt to adjusted capitalization ratio of only 23 percent.  In December, Devon issued $2.25 billion of senior notes through a combination of two-, three- and five-year offerings and entered into an undrawn $2 billion senior term loan facility. Proceeds from the senior notes, the term loan facility, and a portion of the company’s cash on hand will fund Devon’s recently announced Eagle Ford acquisition.  Oil Reserves Climb to Record Levels  At December 31, 2013, Devon increased its proved oil reserves to a record 837 million barrels. During the year, the company’s oil-focused drilling program added 112 million barrels of oil reserves through successful drilling (extensions, discoveries and revisions other than price). This represents a replacement rate of approximately 180 percent of the oil produced during 2013.  In aggregate, Devon’s estimated proved reserves of oil, natural gas and natural gas liquids were 3.0 billion oil-equivalent barrels at year end. Extensions and discoveries through successful drilling, combined with price revisions related to higher natural gas prices, increased proved reserves by 355 million Boe compared to year-end 2012. Divestitures and revisions other than price decreased proved reserves by 103 million Boe in 2013. Revisions other than price were primarily attributable to proved undeveloped gas-weighted locations no longer expected to be drilled given the commodity price environment.  Overall, the company’s reserve life index (proved reserves divided by annual production) remained at approximately 12 years, and its proved undeveloped reserves accounted for only 24 percent of proved reserves. Proved reserves associated with assets identified for divestiture totaled 381 million Boe at December 31, 2013, of which approximately 70 percent were natural gas.  Eagle Ford and EnLink Midstream Update  In November, Devon announced the acquisition of GeoSouthern Energy’s assets in the Eagle Ford oil play. The acquired Eagle Ford acreage includes 82,000 net acres located in DeWitt and Lavaca counties. This acreage is located in the best part of the Eagle Ford, consistently yielding some of the highest initial production rates and estimated ultimate recoveries in the entire play.  The Eagle Ford transaction is on track to close by the end of the first quarter of 2014. Net production is expected to grow at a compound annual growth rate of 25 percent over the next several years, reaching a peak production rate of approximately 140,000 Boe per day. Devon’s development program in 2014 is self-funding and expected to generate significant free cash flow beginning in 2015. The risked recoverable resource associated with this position is estimated at 400 million barrels of oil equivalent, of which more than 60 percent is classified as proved reserves.  Also in 2013, Devon announced the strategic combination of its U.S. midstream assets with Crosstex to form EnLink Midstream. EnLink Midstream will consist of two publicly traded entities: the master limited partnership, EnLink Midstream Partners LP, and a publicly traded general partner entity, EnLink Midstream LLC. This transaction is expected to close in the first quarter of 2014. The common units of both EnLink Midstream Partners LP and EnLink Midstream LLC will trade on the New York Stock Exchange under the symbols “ENLK” and “ENLC”, respectively.  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). Adjusted earnings, net debt and adjusted capitalization are non-GAAP financial measures referenced within this release. Reconciliations of these non-GAAP measures are provided later in this release.  Conference Call to be Webcast Today  Devon will discuss its fourth-quarter and full-year 2013 financial and operating results in a conference call webcast today. The webcast will begin at 10 a.m. Central (11 a.m. Eastern ) 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 (SEC). 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; the extent to which we are successful in acquiring and discovering additional reserves; unforeseen changes in the rate of production from our oil and gas properties; uncertainties in future exploration and drilling results; uncertainties inherent in estimating the cost of drilling and completing wells; drilling risks; competition for leases, materials, people and capital; midstream capacity constraints and potential interruptions in production; risk related to our hedging activities; environmental risks; political changes; changes in laws or regulations; our limited control over third parties who operate our oil and gas properties; our ability to successfully complete mergers, acquisitions and divestitures; and other risks identified in our Form 10-K and our other filings with the SEC. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by Devon on its website or otherwise. Devon does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.  The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves.This release may contain certain terms, such as resource potential 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, available at www.devonenergy.com. 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 information about Devon, please visit our website at www.devonenergy.com.                                                                                                                                                                         DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                           PRODUCTION (net of           Quarter Ended               Year Ended royalties)                             December 31,                December 31, Total Period                 2013       2012          2013       2012 Production: Natural Gas (Bcf)    United States             174.3         186.7         708.7         751.9    Canada                    39.9          43.3          164.9         186.1    Total Natural Gas         214.2         230.0         873.6         938.0 Oil / Bitumen (MMBbls)   United States             7.9           6.0           28.3          21.5   Canada                    8.4           7.9           33.1          32.0    Total Oil / Bitumen       16.3          13.9          61.4          53.5 Natural Gas Liquids (MMBbls)   United States             11.3          9.3           42.3          36.1   Canada                    0.8           0.9           3.6           3.8    Total Natural Gas         12.1          10.2          45.9          39.9    Liquids Oil Equivalent (MMBoe)   United States             48.2          46.4          188.8         182.9   Canada                    15.9          16.0          64.1          66.8    Total Oil                 64.1          62.4          252.9         249.7    Equivalent                                                                                                                                                                              Quarter Ended               Year Ended                              December 31,                December 31, Average Daily                2013          2012          2013          2012 Production: Natural Gas (MMcf)    United States             1,894.7       2,029.0       1,941.8       2,054.5    Canada                    433.3         471.2         451.6         508.3    Total Natural Gas         2,328.0       2,500.2       2,393.4       2,562.8 Oil / Bitumen (MBbls)    United States             85.3          64.8          77.7          58.7    Canada                    91.4          86.2          90.6          87.4    Total Oil / Bitumen       176.7         151.0         168.3         146.1 Natural Gas Liquids (MBbls)    United States             122.4         101.4         116.0         98.6    Canada                    9.1           9.5           9.7           10.5    Total Natural Gas         131.5         110.9         125.7         109.1    Liquids Oil Equivalent (MBoe)    United States             523.4         504.4         517.3         499.7    Canada                    172.8         174.2         175.6         182.6    Total Oil                 696.2         678.6         692.9         682.3    Equivalent                                                                                                                                                                                                          DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                                       KEY OPERATING STATISTICS BY REGION                                   Quarter Ended December 31, 2013                                   Avg.                Gross          Operated                                   Production          Wells          Rigs at                                   (MBOED)             Drilled        December                                                                      31, 2013 Permian Basin                     85.7                73             24 Canadian Heavy Oil                84.5                58             2 Barnett Shale                     223.9               31             5 Anadarko Basin                    85.3                22             11 Mississippian-Woodford            14.1                88             15 Trend Rockies                           21.2                8              3 Other Assets                      37.3                5              - Core & Emerging Assets -          552.0               285            60 Total Canadian Conventional             88.2                31             4 (Non-Core) Rockies (None-Core)               29.7                -              2 Gulf Coast (Non-Core)             18.6                3              1 Mid-Continent (Non-Core)          7.7                 -              - Devon - Total                     696.2               319            67                                                                                                                                                                               Year Ended December 31, 2013                                   Avg.                Gross                                   Production          Wells                                   (MBOED)             Drilled Permian Basin                     78.0                348 Canadian Heavy Oil                83.1                186 Barnett Shale                     227.7               172 Anadarko Basin                    81.7                184 Mississippian-Woodford            7.9                 232 Trend Rockies                           21.5                37 Other Assets                      39.6                5 Core & Emerging Assets -          539.5               1,164 Total Canadian Conventional             92.5                82 (Non-Core) Rockies (None-Core)               32.1                13 Gulf Coast (Non-Core)             20.4                16 Mid-Continent (Non-Core)          8.4                 - Devon - Total                     692.9               1,275                                                                                                                                                                                                       DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                                       BENCHMARK             Quarter Ended                   Year Ended PRICES (average              December 31,                    December 31, prices)                       2013            2012            2013           2012 Natural Gas ($/Mcf) – Henry       $  3.60         $  3.41         $ 3.65         $  2.79 Hub Oil ($/Bbl) – West Texas            $  97.53        $  88.16        $ 98.02        $  94.21 Intermediate (Cushing)                                                                                                                                             REALIZED PRICES       Quarter Ended December 31, 2013                       Oil /           Gas             NGLs           Total                       Bitumen                       (Per Bbl)       (Per Mcf)       (Per Bbl)      (Per Boe) United States         $  96.04        $  3.01         $ 27.51        $  32.96 Canada                $  48.50        $  3.07         $ 45.00       $  35.74 Realized price        $  71.45        $  3.02         $ 28.73        $  33.65 without hedges Cash                  $  3.33         $  0.23         $ (0.19 )      $  1.59 settlements Realized price, including cash        $  74.78        $  3.25         $ 28.54       $  35.24 settlements                                                                                                                                                                   Quarter Ended December 31, 2012                       Oil /           Gas             NGLs           Total                       Bitumen                       (Per Bbl)       (Per Mcf)       (Per Bbl)      (Per Boe) United States         $  83.18        $  2.93         $ 26.12        $  27.72 Canada                $  52.31        $  3.26         $ 47.64       $  37.28 Realized price        $  65.56        $  2.99         $ 27.96        $  30.17 without hedges Cash                  $  8.76         $  0.34         $ 0.07        $  3.24 settlements Realized price, including cash        $  74.32        $  3.33         $ 28.03       $  33.41 settlements                                                                                                                                                                   Year Ended December 31, 2013                       Oil /           Gas             NGLs           Total                       Bitumen                       (Per Bbl)       (Per Mcf)       (Per Bbl)      (Per Boe) United States         $  94.52        $  3.10         $ 25.75        $  31.59 Canada                $  57.18        $  3.05         $ 46.17       $  39.91 Realized price        $  74.41        $  3.09         $ 27.33        $  33.70 without hedges Cash                  $  0.90         $  0.16         $ 0.01        $  0.77 settlements Realized price, including cash        $  75.31        $  3.25         $ 27.34       $  34.47 settlements                                                                                                                                                                   Year Ended December 31, 2012                       Oil /           Gas             NGLs           Total                       Bitumen                       (Per Bbl)       (Per Mcf)       (Per Bbl)      (Per Boe) United States         $  88.68        $  2.32         $ 28.49        $  25.59 Canada                $  57.01        $  2.49         $ 48.63       $  37.01 Realized price        $  69.73        $  2.36         $ 30.42        $  28.65 without hedges Cash                  $  4.84         $  0.65         $ 0.04        $  3.48 settlements Realized price, including cash        $  74.57        $  3.01         $ 30.46       $  32.13 settlements                                                                                                                                                                                                          DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                                       CONSOLIDATED STATEMENTS OF        Quarter Ended                   Year Ended OPERATIONS (in millions, except per           December 31,                    December 31, share amounts)                      2013         2012            2013            2012 Revenues: Oil, gas and         $ 2,155         $ 1,883         $ 8,522         $ 7,153 NGL sales Oil, gas and NGL                    (96   )         178             (191   )        693 derivatives Marketing and midstream             565           519           2,066         1,655  revenues Total operating             2,624         2,580         10,397        9,501  revenues Expenses and other: Lease operating              584             534             2,268           2,074 expenses Marketing and midstream              425             399             1,553           1,246 operating expenses General and administrative         157             198             617             692 expenses Production and         108             108             461             414 property taxes Depreciation, depletion and          711             731             2,780           2,811 amortization Asset                  16              896             1,976           2,024 impairments Other operating             28            39            121           92     items Total operating             2,029         2,905         9,776         9,353  expenses Operating              595             (325  )         621             148 income Net financing          111             98              417             370 costs Restructuring          4               74              54              74 costs Other nonoperating          4             4             1             21     items Earnings (loss) from continuing             475             (501  )         149             (317  ) operations before income taxes Income tax expense               268           (144  )        169           (132  ) (benefit) Earnings (loss) from            207             (357  )         (20    )        (185  ) continuing operations Earnings (loss) from discontinued          -             -             -             (21   ) operations, net of tax Net earnings         $ 207          $ (357  )       $ (20    )      $ (206  ) (loss)                                                                       Basic net earnings (loss) per share Basic earnings (loss) from continuing           $ 0.51          $ (0.89 )       $ (0.06  )      $ (0.47 ) operations per share Basic loss from discontinued          -             -             -             (0.05 ) operations per share Basic net earnings             $ 0.51         $ (0.89 )       $ (0.06  )      $ (0.52 ) (loss) per share                                                                       Diluted net earnings (loss) per share Diluted earnings (loss) from          $ 0.51          $ (0.89 )       $ (0.06  )      $ (0.47 ) continuing operations per share Diluted loss from discontinued          -             -             -             (0.05 ) operations per share Diluted net earnings             $ 0.51         $ (0.89 )       $ (0.06  )      $ (0.52 ) (loss) per share                                                                       Weighted average common shares outstanding: Basic                  406             405             406             404 Diluted                407             405             406             404                                                                                                                                                                                                                               DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                                               CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)             Quarter Ended                     Year Ended                        December 31,                      December 31,                           2013             2012             2013             2012 Cash flows from operating activities:       Net earnings        $ 207            $ (357   )       $ (20    )       $ (206   )       (loss)       Loss from       discontinued          -                -                -                21       operations,       net of tax       Adjustments       to reconcile       earnings       (loss) from       continuing       operations to       net cash from       operating       activities:       Depreciation,       depletion and         711              731              2,780            2,811       amortization       Asset                 16               896              1,976            2,024       impairments       Deferred       income tax            278              (188   )         97               (184   )       expense       (benefit)       Derivatives       and other             70               (185   )         135              (660   )       financial       instruments       Cash       settlements       on                    130              217              277              865       derivatives       and financial       instruments       Other noncash        112            104            318            240           charges       Net cash from       operating       activities            1,524            1,218            5,563            4,911       before       balance sheet       changes       Net change in       working               (194   )         (98    )         (298   )         (50    )       capital       Change in       long-term             38               (14    )         10               (36    )       other assets       Change in       long-term            69             37             161            105           other       liabilities       Cash from       operating       activities -          1,437            1,143            5,436            4,930       continuing       operations       Cash from       operating       activities -         -              -              -              26            discontinued       operations       Net cash from       operating            1,437          1,143          5,436          4,956         activities                                                                               Cash flows from investing activities:       Capital               (1,539 )         (1,997 )         (6,758 )         (8,225 )       expenditures       Proceeds from       property and          103              71               419              1,468       equipment       divestitures       Purchases of       short-term            -                (1,137 )         (1,076 )         (4,106 )       investments       Redemptions       of short-term         -                958              3,419            3,266       investments       Other                (86    )        (4     )        (3     )        14            Cash from       investing       activities -          (1,522 )         (2,109 )         (3,999 )         (7,583 )       continuing       operations       Cash from       investing       activities -         -              (1     )        -              57            discontinued       operations       Net cash from       investing            (1,522 )        (2,110 )        (3,999 )        (7,526 )       activities                                                                               Cash flows from financing activities:       Proceeds from       borrowings of       long-term             2,233            (7     )         2,233            2,458       debt, net of       issuance       costs       Net       short-term       debt                  (295   )         361              (1,872 )         (537   )       borrowings       (repayments)       Credit       facility              -                -                -                750       borrowings       Credit       facility              -                -                -                (750   )       repayments       Proceeds from       stock option          2                2                3                27       exercises       Dividends       paid on               (89    )         (82    )         (348   )         (324   )       common stock       Excess tax       benefits       related to           (1     )        -              4              5             share-based       compensation       Net cash from       financing            1,850          274            20             1,629         activities Effect of exchange rate changes on            (19    )        (8     )        (28    )        23      cash Net change in cash and cash                    1,746            (701   )         1,429            (918   ) equivalents                                                                               Cash and cash equivalents at             4,320          5,338          4,637          5,555   beginning of period Cash and cash equivalents at end        $ 6,066         $ 4,637         $ 6,066         $ 4,637   of period                                                                                                                                                                                                    DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                                    CONSOLIDATED BALANCE SHEETS (in millions)                                  December 31,       December 31,                                             2013               2012 Current assets:             Cash and cash equivalents          $  6,066           $  4,637             Short-term investments                -                  2,343             Accounts receivable                   1,520              1,245             Other current assets                 419              746                  Total current assets                 8,005            8,971    Property and equipment, at cost:             Oil and gas, based on full             cost accounting:             Subject to amortization               73,995             69,410             Not subject to amortization          2,791            3,308                Total oil and gas                     76,786             72,718             Other                                6,195            5,630    Total property and equipment, at cost             82,981             78,348 Less accumulated depreciation, depletion         (54,534 )         (51,032 ) and amortization             Property and equipment, net          28,447           27,316   Goodwill                                          5,858              6,079 Other long-term assets                           567              960      Total assets                                   $  42,877         $  43,326                                                                      Current liabilities:             Accounts payable                   $  1,229           $  1,451             Revenues and royalties                786                750             payable             Short-term debt                       4,066              3,189             Other current liabilities            574              613                  Total current liabilities            6,655            6,003    Long-term debt                                    7,956              8,455 Asset retirement obligations                      2,140              1,996 Other long-term liabilities                       834                901 Deferred income taxes                             4,793              4,693 Stockholders' equity:             Common stock                          41                 41             Additional paid-in capital            3,780              3,688             Retained earnings                     15,410             15,778             Accumulated other                    1,268            1,771                comprehensive earnings Total stockholders' equity                       20,499           21,278   Total liabilities and stockholders'            $  42,877         $  43,326   equity Common shares outstanding                         406                406                                                                                                                                                                                                                DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                                         CAPITAL EXPENDITURES (in millions)                        Quarter Ended December 31, 2013                                     United States       Canada        Total    Exploration                       $    158            $ 13          $ 171    Development                           816             296          1,112    Exploration and development       $    974            $ 309         $ 1,283    capital ^(1)    Capitalized G&A                                                       96    Capitalized interest                                                  12    Midstream capital ^(2)                                                174    Other capital                                                        51 Total Operations                                                       $ 1,616                                                                         ^(1) Includes $124 million attributable to assets identified for divestiture. ^(2) Includes $42 million attributable to assets that will reside within EnLink Midstream.                                                                                                                                                                                      Year Ended December 31, 2013                                      United States       Canada        Total    Exploration                       $    626            $ 128         $ 754    Development                           3,541           1,114        4,655    Exploration and development       $    4,167          $ 1,242       $ 5,409    capital ^(1)    Capitalized G&A                                                       368    Capitalized interest                                                  42    Midstream capital ^(2)                                                703    Other capital                                                        121 Total Operations                                                       $ 6,643                                                                         ^(1) Includes $483 million attributable to assets identified for divestiture. ^(2) Includes $215 million attributable to assets that will reside within EnLink Midstream.                                                                                                                                                    DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                    COSTS INCURRED (in millions)                     Total                                Year Ended December 31,                                     2013          2012 Property acquisition costs:         Proved properties         $  22           $ 73         Unproved properties          216            1,167 Exploration costs                    595            666 Development costs                   5,089         6,099 Costs Incurred                    $  5,922        $ 8,005                                                                                      United States                                   Year Ended December 31,                                     2013          2012 Property acquisition costs:         Proved properties         $  19           $ 2         Unproved properties          213            1,135 Exploration costs                    443            351 Development costs                   3,838         4,408 Costs Incurred                    $  4,513        $ 5,896                                                                                      Canada                                   Year Ended December 31,                                     2013          2012 Property acquisition costs:         Proved properties         $  3            $ 71         Unproved properties          3              32 Exploration costs                    152            315 Development costs                   1,251         1,691 Costs Incurred                    $  1,409        $ 2,109                                                               DEVON ENERGY CORPORATION  FINANCIAL AND OPERATIONAL INFORMATION                                                                         RESERVES RECONCILIATION                         Total                            Oil /          Gas           NGLs           Total                            Bitumen                            (MMBbls)    (Bcf)      (MMBbls)    (MMBoe) As of December 31,                                          2012:         Proved             327            8,070         451            2,123         developed         Proved             471        1,376     140        840            undeveloped Total Proved               798        9,446     591        2,963  Revisions due to           (11   )        566           11             94 prices Revisions other than       (2    )        (232  )       (47   )        (88   ) price Extensions and             114            490           65             261 discoveries Purchase of reserves       1              1             -              1 Production                 (62   )        (874  )       (45   )        (253  ) Sale of reserves           (1    )        (89   )       -              (15   ) As of December 31,                                          2013:         Proved             361            8,459         491            2,262         developed         Proved             476        849       84         701            undeveloped Total Proved               837        9,308     575        2,963                                                                                                                                 United States                            Oil            Gas           NGLs           Total                            (MMBbls)    (Bcf)      (MMBbls)    (MMBoe) As of December 31,                                          2012:         Proved             166            7,391         431            1,829         developed         Proved             39         1,371     140        407            undeveloped Total Proved               205        8,762     571        2,236  Revisions due to           1              405           8              76 prices Revisions other than       (18   )        (299  )       (50   )        (117  ) price Extensions and             69             471           64             212 discoveries Purchase of reserves       1              1             -              1 Production                 (28   )        (709  )       (41   )        (189  ) Sale of reserves           (1    )        (81   )       -              (14   ) As of December 31,                                          2013:         Proved             194            7,707         468            1,947         developed         Proved             35         843       84         258            undeveloped Total Proved               229        8,550     552        2,205                                                                                                                                                                             Canada                            Oil /          Gas           NGLs           Total                            Bitumen                            (MMBbls)    (Bcf)      (MMBbls)    (MMBoe) As of December 31,                                          2012:         Proved             161            679           20             294         developed         Proved             432        5         -          433            undeveloped Total Proved               593        684       20         727    Revisions due to           (12   )        161           3              18 prices Revisions other than       16             67            3              29 price Extensions and             45             19            1              49 discoveries Purchase of reserves       -              -             -              - Production                 (34   )        (165  )       (4    )        (64   ) Sale of reserves           -              (8    )       -              (1    ) As of December 31,                                          2013:         Proved             167            752           23             315         developed         Proved             441        6         -          443            undeveloped Total Proved               608        758       23         758                                                                                   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'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 tables summarize the effects of these items on fourth-quarter 2013 earnings.                                                               RECONCILIATION TO GAAP INFORMATION (in millions)                                                Quarter Ended December 31, 2013                                                Before-Tax           After-Tax Net earnings (GAAP)                                                 $    207 Derivatives and other financial                105                       67 instruments Cash settlements on derivatives and            101                       64 financial instruments Cash repatriation                              -                         97 Asset impairments                              16                        10 Restructuring costs                            4                        2 Adjusted earnings (Non-GAAP)                                        $    447 Diluted share count                                                      407 Adjusted diluted earnings per share                                 $    1.10 (Non-GAAP)                                                                                                                                                      NON-GAAP FINANCIAL MEASURES  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)                                          December 31,                                           2013          2012 Total debt (GAAP)                        $ 12,022       $ 11,644 Adjustments: Cash and short-term investments           6,066         6,980 Net debt (Non-GAAP)                      $ 5,956        $ 4,664                                                          Total debt                               $ 12,022       $ 11,644 Stockholders' equity                      20,499        21,278 Total capitalization (GAAP)              $ 32,521       $ 32,922                                                          Net debt                                 $ 5,956        $ 4,664 Stockholders' equity                      20,499        21,278 Adjusted capitalization (Non-GAAP)       $ 26,455       $ 25,942  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