Devon Energy Reports Second-Quarter 2014 Results

  Devon Energy Reports Second-Quarter 2014 Results

  *Delivered U.S. oil production growth of 79 percent year over year
  *Increased operating cash flow by 47 percent year over year
  *Achieved outstanding well results in the Delaware Basin
  *Completed non-core asset divestiture program with excellent results
  *Reduced debt by $3.2 billion

Business Wire

OKLAHOMA CITY -- August 6, 2014

Devon Energy Corporation (NYSE:DVN) today reported net earnings of $675
million or $1.65 per common share ($1.64 per diluted share) for the quarter
ended June 30, 2014. This compares with second-quarter 2013 net earnings of
$683 million or $1.69 per common share ($1.68 per diluted share).

Adjusting for items securities analysts typically exclude from their published
estimates, the company earned $574 million or $1.40 per diluted share in the
second quarter. This represents a 16 percent increase in adjusted earnings
compared to the second quarter of 2013.

“The second quarter was an outstanding one for Devon as we continued to focus
on execution in our core and emerging areas, delivering great results,” said
John Richels, president and chief executive officer. “Our drilling programs
drove impressive oil production growth in our retained assets, and our
disciplined pursuit of high-margin production also improved pre-tax cash
margins by 40 percent year over year.”

Devon generated cash flow from operations of $2.0 billion in the second
quarter, a 47 percent increase compared to the second quarter of 2013.
Combined with $2.8 billion of pre-tax proceeds received from the sale of the
company’s Canadian conventional gas business, Devon’s total cash inflows for
the quarter reached $4.8 billion.

“With the announced sale of our U.S. non-core assets in June, the portfolio
transformation that we announced late last year is now complete,” Richels
said. “Devon emerges with a formidable, more focused portfolio positioned in
some of the most attractive North America resource plays. We project liquids
to approach 60 percent of our production by year-end and expect to deliver
attractive high-margin production growth for many years to come.”

Retained Assets Drive Strong Production Growth

Total production of oil, natural gas and natural gas liquids averaged 667,000
oil-equivalent barrels (Boe) per day in the second quarter of 2014. Excluding
production associated with divestiture properties, production from Devon’s
retained, go-forward asset base increased to 620,000 Boe per day in the second
quarter. This represents a 14 percent increase compared to the second quarter
of 2013. The company’s divestiture assets averaged 47,000 Boe per day in the
second quarter, of which 77 percent was natural gas.

Growth in oil production drove the increase in second-quarter production from
the company’s go-forward assets. Oil production from these retained assets
averaged 205,000 barrels per day, a 34 percent increase compared to the second
quarter of 2013. The most significant growth came from the company’s U.S.
operations, where oil production increased a substantial 79 percent year over
year. This dramatic increase in U.S. oil production is largely attributable to
growth from Devon’s Permian Basin and Eagle Ford operations. Reconciliations
of retained and non-core asset production are provided later in this release.

Key Operating Highlights

Permian Basin – Net production averaged a record 95,000 Boe per day in the
second quarter, a 25 percent increase compared to the second quarter of 2013.
Light-oil production accounted for nearly 60 percent of Devon’s total Permian
production.

The Bone Spring play in the Delaware Basin was a significant contributor to
the company’s growth in the Permian. Devon added 22 new Bone Spring wells to
production in the second quarter, with initial 30-day rates averaging 660 Boe
per day, exceeding the company’s type-curve expectations. Devon has identified
3,500 risked, undrilled locations across its Bone Spring acreage position and
expects to generate additional inventory increases over time.

Also in the Delaware Basin, Devon commenced production on two high-rate oil
wells targeting the Delaware Sands in Lea County, New Mexico. Initial 30-day
production from each of these two wells averaged about 1,000 Boe per day,
which was nearly 70 percent light oil. The company has approximately 80,000
net acres prospective for the Delaware Sands within Southeast New Mexico.

In the Southern Midland Basin, Devon delivered another quarter of strong
results from its oil development program in the Wolfcamp Shale. During the
second quarter, the company brought 30 Wolfcamp Shale wells online, increasing
average net production in this play to 12,000 Boe per day. This represents
year-over-year net production growth of 9,000 Boe per day.

Eagle Ford – In the second quarter, Devon’s net production averaged 65,000 Boe
per day. This result was in line with the company’s guidance range in spite of
production interruptions related to third-party gathering system downtime.
These gathering constraints reduced production by approximately 8,000 Boe per
day in the quarter. With the acceleration of well tie-ins, Devon’s net
production in June increased to an average 73,000 Boe per day, representing an
increase of nearly 50 percent from the first-quarter exit rate. The company
remains on track to average 70,000 to 80,000 net Boe per day from this
world-class asset for its 10 months of ownership in 2014.

During the second quarter, the company added 60 new Eagle Ford wells to
production, with initial 30-day production rates for these wells approaching
1,200 Boe per day. Included in Devon’s second quarter results was the
company’s first operated well in Lavaca County, Texas. Initial 24-hour
production from the Ronyn 1H was approximately 1,600 Boe per day, which was 70
percent light oil.

In addition to an active upstream program, the company recently completed
construction of its Victoria Express Pipeline (VEX) in the Eagle Ford which
provides marketing flexibility. VEX is a 56-mile oil pipeline that runs from
Devon’s core position in DeWitt County to Port of Victoria terminal on the
Texas Gulf Coast. Initial capacity on VEX is 50,000 barrels per day, with
invested capital to date totaling $70 million. Devon owns 100 percent of VEX,
making this strategic midstream asset a possible candidate for drop down into
EnLink Midstream.

Canadian Thermal Oil –The significant improvement in Western Canadian Select
benchmark pricing during the quarter increased price realizations at Devon’s
Jackfish thermal oil projects to $65.88, a 22 percent increase compared to the
second quarter of 2013.

Gross production from Devon’s Jackfish 1 and Jackfish 2 thermal oil projects
averaged 60,000 barrels of oil per day in the second quarter, a 3 percent
increase compared to the year-ago period. After accounting for royalties, net
production from the company’s Jackfish complex averaged 52,000 barrels per
day. Second-quarter results were highlighted by the excellent performance at
Jackfish 1, where gross production exceeded name-plate facility capacity,
averaging 36,000 barrels per day.

Construction of the company’s Jackfish 3 thermal oil project was completed in
the second quarter, and first steam commenced in early July. First oil will
occur in the third quarter, with production ramping throughout 2015. At peak
production, Devon’s three 100 percent-owned Jackfish projects are expected to
produce 105,000 barrels per day before royalties and have the potential to
generate in excess of $1 billion of free cash flow annually.

Also completed in the second quarter was the expansion of Devon’s Access
Pipeline. The Access Pipeline system services the company’s growing thermal
oil business in Canada by delivering diluent to its production facilities and
transporting blended oil to market in Edmonton. The company owns a 50 percent
interest in this strategically located pipeline, which has a gross capacity of
340,000 barrels per day. To date, the company has invested approximately $1
billion in this project. Devon has granted EnLink Midstream a right of first
offer for its interest in Access Pipeline.

Anadarko Basin – Net production in the second quarter averaged a record 93,000
Boe per day. Second-quarter liquids production increased 26 percent compared
to the prior-year quarter. Liquids now account for 45 percent of total
production in the Anadarko Basin.

The Cana-Woodford play in the Anadarko Basin was the most significant
contributor to this strong second-quarter production growth. Devon brought 20
Cana-Woodford wells online, with initial 30-day rates averaging 1,250 Boe per
day, of which 55 percent was liquids. Driven by an enhanced completion design,
these outstanding initial production rates exceeded the company’s
Cana-Woodford type curve by more than 35 percent.

Given the company’s recent success in the Cana-Woodford, Devon further
bolstered its leasehold position in May by acquiring an additional 50,000 net
acres in the core of the play. This transaction closed in late June,
increasing the company’s total Cana-Woodford position to roughly 280,000 net
surface acres with stacked-pay potential. This additional acreage further
bolsters the thousands of undrilled locations the company’s has in this
high-quality, liquids-rich play.

The company also commenced production on four high-rate wells in the Granite
Wash play. Initial 30-day rates from these wells averaged approximately 1,900
Boe per day, including 1,200 barrels of liquids per day. These results include
a Mathers Ranch 167-3H well that achieved an outstanding 30-day rate of nearly
4,000 Boe per day.

Barnett Shale – Continuing efforts to optimize existing well performance
sustained net production at 1.3 billion cubic feet of natural gas equivalent
per day in the second quarter compared to the previous quarter. Liquids
production increased 2 percent year over year to an average of 57,000 barrels
per day, accounting for 27 percent of total Barnett production.

Rockies – Devon’s Powder River Basin oil program continued to deliver
encouraging results in the second quarter. The company’s drilling activity was
highlighted by two wells targeting the Parkman formation in Campbell County,
Wyoming. Initial 30-day production from these wells averaged 950 Boe per day,
of which 95 percent was light oil, at an average well cost of roughly $5
million per well.

To date, the company has identified approximately 1,000 risked oil locations
across its Powder River Basin position, with the Parkman formation accounting
for nearly 75 percent of this inventory. Devon expects this drilling inventory
to increase over time as the company continues to appraise its 150,000 net
acres across the Powder River Basin that is prospective for the Parkman,
Turner and Frontier intervals.

Mississippian-Woodford Trend – Net production from Devon’s
Mississippian-Woodford Trend averaged 18,000 Boe per day in the second
quarter, of which approximately 50 percent was light oil. This represents a
production growth rate of 13,000 Boe per day compared to the second quarter of
2013. The company commenced production on 55 operated wells within the Sinopec
joint-venture area during the quarter. Overall results in the emerging oil
opportunity continue to support target economics.

Upstream Revenue Increases and Margins Expand

Revenue from oil, natural gas and natural gas liquids sales totaled $2.7
billion in the second quarter, a 21 percent increase compared to the second
quarter of 2013. This growth in revenue was attributable to the increase in
high-margin oil production combined with improved oil price realizations.
These factors resulted in second-quarter oil sales increasing to more than 60
percent of Devon’s total upstream revenues.

Devon’s marketing and midstream operating profit reached $224 million, which
exceeded the company’s guidance and represented a 90 percent increase compared
to the second quarter of 2013. The year-over-year increase in operating profit
was driven by the consolidation of EnLink Midstream and improved marketing
margins.

Pre-tax cash expenses totaled $1.1 billion in the second quarter, in line with
previous guidance. Excluding the costs associated with the consolidation of
EnLink Midstream, pre-tax cash costs for the company’s upstream business were
7 percent higher than the second quarter of 2013. The increase in cash costs
were attributable to higher production taxes related to strong revenue growth
and higher operating costs associated with the company’s rapidly growing
high-margin oil production.

Overall, the benefits of higher-margin oil production, improved price
realizations, and a low cost structure resulted in expanded cash margin for
Devon. Pre-tax cash margin reached $30.47 per Boe in the second quarter, a 40
percent increase compared to the year-ago period.

Financial Position Remains Strong; Foreign Cash Repatriated

With investment-grade credit ratings and cash balances of $1.7 billion at the
end of the second quarter, Devon’s financial position remains exceptionally
strong. At June 30, the company’s net debt totaled $10.7 billion, of which
$1.7 billion was attributable to the consolidation of EnLink Midstream and is
non-recourse to Devon.

In the second quarter, Devon repatriated $2.8 billion from the sale of its
Canadian conventional gas assets. The company utilized these divestiture
proceeds, cash on hand, and free cash flow generated during the quarter to
reduce debt balances by $3.2 billion. Proceeds from the company’s recently
announced U.S. non-core asset sale will be used to further reduce net debt in
the third quarter.

Divestiture Program Complete

Last November, Devon announced an initiative to monetize non-core assets in
both the U.S. and Canada, sharpening its focus on retained, high-growth
assets. Since that announcement the company has sold or agreed to sell $5.1
billion in non-core assets. In April, the company completed the sale of its
largest divestiture package, the Canadian conventional gas business, for $2.8
billion (C$3.125 billion). In June, Devon announced an agreement to sell all
of its non-core U.S. oil and gas properties for $2.3 billion. The agreement
covers the company’s remaining assets targeted for divestiture and completes
the divestiture program.

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
pre-tax cash margin 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 conduct a conference call webcast (with associated slides) today at
10 a.m. Central (11 a.m. Eastern). The webcast will feature discussion of the
company’s second-quarter results. To listen to the webcast, including
synchronized slides, visit www.devonenergy.com. Additionally, the slides will
be available via the website for printing or download approximately 10 minutes
before the webcast. A replay of the webcast will be available on our website.

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 royalties)       Quarter Ended           Six Months Ended
                                    June 30,                June 30,
Average Daily Production:           2014     2013        2014     2013
Natural Gas (MMcf)                        
United States - Core                1,691       1,678       1,641       1,667
Canada - Core                       23          32          23          35
Non-Core                            217         730         397         730
Total Natural Gas                   1,931       2,440       2,061       2,432
Oil / Bitumen (MBbls)
United States - Core                128         71          112         67
Canada - Core                       77          82          78          82
Non-Core                            4           16          10          17
Total Oil / Bitumen                 209         169         200         166
Natural Gas Liquids (MBbls)
United States - Core                130         105         125         103
Non-Core                            6           17          11          18
Total Natural Gas Liquids           136         122         136         121
Oil Equivalent (MBoe)
United States - Core                539         456         511         448
Canada - Core                       81          87          81          88
Non-Core                            47          155         87          156
Total Oil Equivalent                667         698         679         692


KEY OPERATING STATISTICS BY REGION
                                  Quarter Ended June 30, 2014
                                     Avg.           Gross       Operated
                                     Production        Wells          Rigs at
                                     (MBOED)           Drilled        June 30,
                                                                      2014
Permian Basin                        95                71             23
Eagle Ford                           65                90             2
Canadian Heavy Oil                   81                13             3
Barnett Shale                        212               29             2
Anadarko Basin                       93                21             2
Mississippian-Woodford Trend         18                53             8
Rockies                              21                6              4
Other Assets                         35                -              -
Core & Emerging Assets - Total       620               283            44
Rockies (Non-Core)                   24                -              -
Gulf Coast (Non-Core)                16                -              -
Mid-Continent (Non-Core)             7                 -              -
Devon - Total                        667               283            44


DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

BENCHMARK          Quarter Ended                Six Months Ended
PRICES
(average              June 30,                        June 30,
prices)
                       2014        2013          2014       2013  
Natural Gas
($/Mcf) –             $ 4.68          $ 4.10          $ 4.81         $ 3.72
Henry Hub
Oil ($/Bbl) –
West Texas            $ 103.09        $ 94.14         $ 100.87       $ 94.29
Intermediate
(Cushing)
                                                                     
REALIZED              Quarter Ended June 30, 2014
PRICES
                      Oil /           Gas             NGLs           Total
                      Bitumen
                      (Per Bbl)       (Per Mcf)       (Per           (Per Boe)
                                                      Bbl)
United States         $ 95.71         $ 4.19          $ 25.22        $ 41.06
Canada ^(1)           $ 69.45        $ 1.56          N/M          $ 65.96 
Realized
price without         $ 86.00         $ 4.15          $ 25.13        $ 44.12
hedges
Cash                  $ (4.17  )      $ (0.16 )       $ -            $ (1.78 )
settlements
Realized
price,
including             $ 81.83        $ 3.99         $ 25.13        $ 42.34 
cash
settlements
                                                                     
                      Quarter Ended June 30, 2013
                      Oil /           Gas             NGLs           Total
                      Bitumen
                      (Per Bbl)       (Per Mcf)       (Per           (Per Boe)
                                                      Bbl)
United States         $ 91.56         $ 3.49          $ 24.80        $ 32.19
Canada ^(1)           $ 61.84        $ 3.44         $ 43.68        $ 43.02 
Realized
price without         $ 75.23         $ 3.48          $ 26.29        $ 35.00
hedges
Cash                  $ 1.94         $ (0.07 )       $ 0.10         $ 0.23  
settlements
Realized
price,
including             $ 77.17        $ 3.41         $ 26.39        $ 35.23 
cash
settlements
                                                                     
                      Six Months Ended June 30, 2014
                      Oil /           Gas             NGLs           Total
                      Bitumen
                      (Per Bbl)       (Per Mcf)       (Per           (Per Boe)
                                                      Bbl)
United States         $ 93.96         $ 4.26          $ 27.34        $ 40.30
Canada ^(1)           $ 65.37        $ 3.97         $ 50.17        $ 53.26 
Realized
price without         $ 82.10         $ 4.23          $ 28.11        $ 42.61
hedges
Cash                  $ (3.19  )      $ (0.25 )       $ -            $ (1.70 )
settlements
Realized
price,
including             $ 78.91        $ 3.98         $ 28.11        $ 40.91 
cash
settlements
                                                                     
                      Six Months Ended June 30, 2013
                      Oil /           Gas             NGLs           Total
                      Bitumen
                      (Per Bbl)       (Per Mcf)       (Per           (Per Boe)
                                                      Bbl)
United States         $ 89.64         $ 3.15          $ 25.53        $ 30.29
Canada ^(1)           $ 51.21        $ 3.24         $ 45.54        $ 37.34 
Realized
price without         $ 67.88         $ 3.17          $ 27.16        $ 32.13
hedges
Cash                  $ 2.06         $ 0.08         $ 0.11         $ 0.80  
settlements
Realized
price,
including             $ 69.94        $ 3.25         $ 27.27        $ 32.93 
cash
settlements
                                                                     
^(1) The reported Canadian gas volumes include volumes that are produced from
certain of our leases and then transported to our Jackfish operations where
the gas is used as fuel. However, the revenues and expenses related to this
consumed gas are eliminated in our consolidated financials.


DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION
                                                         
CONSOLIDATED
STATEMENTS OF
OPERATIONS
(in millions,
except per share     Quarter Ended                  Six Months Ended
amounts)
                     June 30,                       June 30,
                     2014            2013          2014            2013    
Oil, gas and NGL     $ 2,679          $ 2,222       $ 5,236          $ 4,026
sales
Oil, gas and NGL       (399   )         366           (719   )         46
derivatives
Marketing and
midstream             2,230          500          3,718          987   
revenues
Total operating       4,510          3,088        8,235          5,059 
revenues
Lease operating        582              559           1,180            1,084
expenses
Marketing and
midstream              2,006            382           3,311            745
operating
expenses
General and
administrative         189              167           400              317
expenses
Production and         150              125           287              238
property taxes
Depreciation,
depletion and          828              674           1,567            1,378
amortization
Asset                  -                40            -                1,953
impairments
Restructuring          5                8             42               46
costs
Gains and losses       (1,057 )         1             (1,072 )         -
on asset sales
Other operating       33             32           56             55    
items
Total operating       2,736          1,988        5,771          5,816 
expenses
Operating income       1,774            1,100         2,464            (757  )
(loss)
Net financing          131              103           243              206
costs
Other
nonoperating          89             -            107            2     
items
Earnings (loss)
before income          1,554            997           2,114            (965  )
taxes
Income tax
expense               854            314          1,085          (309  )
(benefit)
Net earnings           700              683           1,029            (656  )
(loss)
Net earnings
attributable to       25             -            30             -     
noncontrolling
interests
Net earnings
(loss)               $ 675           $ 683         $ 999           $ (656  )
attributable to
Devon
                                                                     
Net earnings
(loss) per share
attributable to
Devon:
Basic                $ 1.65           $ 1.69        $ 2.45           $ (1.63 )
Diluted              $ 1.64           $ 1.68        $ 2.44           $ (1.63 )
                                                                     
Weighted average
common shares
outstanding:
Basic                  408              406           408              406
Diluted                411              407           410              406


DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATING STATEMENT OF OPERATIONS
(in millions)
                  Quarter Ended June 30, 2014
                     Devon U.S.    EnLink     Eliminations    Total
                     & Canada                       ^(1)
Oil, gas and         $ 2,679          $ -           $   -              $ 2,679
NGL sales
Oil, gas and
NGL                    (399   )         -               -                (399   )
derivatives
Marketing and
midstream             1,478          927           (175  )         2,230  
revenues
Total
operating             3,758          927           (175  )         4,510  
revenues
Lease
operating              582              -               -                582
expenses
Marketing and
midstream              1,454            727             (175  )          2,006
expenses
General and
administrative         162              27              -                189
expenses
Production and         142              8               -                150
property taxes
Depreciation,
depletion and          754              74              -                828
amortization
Restructuring          5                -               -                5
costs
Gain on asset          (1,057 )         -               -                (1,057 )
sales
Other
operating             34             (1  )          -              33     
items
Total
operating             2,076          835           (175  )         2,736  
expenses
Operating              1,682            92              -                1,774
income
Net financing          117              14              -                131
costs
Other
nonoperating          94             (5  )          -              89     
items
Earnings
before income          1,471            83              -                1,554
taxes
Income tax            836            18            -              854    
expense
Net earnings           635              65              -                700
Net earnings
attributable
to                    1              24            -              25     
noncontrolling
interests
Net earnings
attributable         $ 634           $ 41         $   -             $ 675    
to Devon
                                                                       
^(1) During the second quarter of 2014, Devon had $175 million of inter-segment
fee-based revenues and expenses related to EnLink that require elimination.


DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION


CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)     Quarter Ended                  Six Months Ended
                     June 30,                          June 30,
                      2014        2013           2014        2013   
Cash flows
from operating
activities:
Net earnings         $ 700            $ 683            $ 1,029          $ (656   )
(loss)
Adjustments to
reconcile
earnings
(loss) to net
cash from
operating
activities:
Depreciation,
depletion and          828              674              1,567            1,378
amortization
Gains and
losses on              (1,057 )         1                (1,072 )         -
asset sales
Asset                  -                40               -                1,953
impairments
Deferred
income tax             569              182              777              (441   )
expense
(benefit)
Derivatives
and other              454              (408   )         761              (103   )
financial
instruments
Cash
settlements on
derivatives            (191   )         35               (245   )         149
and financial
instruments
Other noncash         106            92             229            176    
charges
Net cash from
operating
activities             1,409            1,299            3,046            2,456
before balance
sheet changes
Net change in
working                622              30               470              (128   )
capital
Change in
long-term              11               28               (77    )         22
other assets
Change in
long-term             7              39             20             48     
other
liabilities
Net cash from
operating             2,049          1,396          3,459          2,398  
activities
                                                                        
Cash flows
from investing
activities:
Acquisitions
of property,           (238   )         -                (6,224 )         -
equipment and
businesses
Capital                (1,758 )         (1,643 )         (3,341 )         (3,569 )
expenditures
Proceeds from
property and           2,800            5                2,942            34
equipment
divestitures
Purchases of
short-term             -                (205   )         -                (1,076 )
investments
Redemptions of
short-term             -                562              -                2,550
investments
Redemptions of
long-term              -                (1     )         57               -
investments
Other                 (4     )        85             84             82     
Net cash from
investing             800            (1,197 )        (6,482 )        (1,979 )
activities
                                                                        
Cash flows
from financing
activities:
Proceeds from
borrowings of
long-term              374              -                3,720            -
debt, net of
issuance costs
Net short-term
debt                   (1,119 )         (2,003 )         (862   )         (1,495 )
borrowings
Long-term debt         (2,413 )         -                (3,990 )         -
repayments
Proceeds from
stock option           72               1                83               1
exercises
Proceeds from
issuance of            20               -                20               -
subsidiary
units
Dividends paid
on common              (99    )         (89    )         (189   )         (170   )
stock
Distributions
to                     (41    )         -                (141   )         -
noncontrolling
interests
Other                 12             2              9              5      
Net cash from
financing             (3,194 )        (2,089 )        (1,350 )        (1,659 )
activities
Effect of
exchange rate         24             (22    )        13             (34    )
changes on
cash
Net change in
cash and cash          (321   )         (1,912 )         (4,360 )         (1,274 )
equivalents
                                                                        
Cash and cash
equivalents at        2,027          5,275          6,066          4,637  
beginning of
period
Cash and cash
equivalents at       $ 1,706         $ 3,363         $ 1,706         $ 3,363  
end of period


DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS                                
(in millions)                                   June 30,          December 31,
                                                 2014             2013    
Current assets:
Cash and cash equivalents                       $ 1,706           $  6,066
Accounts receivable                               2,301              1,520
Other current assets                             385              419     
Total current assets                             4,392            8,005   
Property and equipment, at cost:
Oil and gas, based on full cost
accounting:
Subject to amortization                           75,242             73,995
Not subject to amortization                      3,984            2,791   
Total oil and gas                                 79,226             76,786
Other                                            8,956            6,195   
Total property and equipment, at cost             88,182             82,981
Less accumulated depreciation, depletion         (51,183 )         (54,534 )
and amortization
Property and equipment, net                      36,999           28,447  
Goodwill                                          8,408              5,858
Other long-term assets                           1,316            567     
Total assets                                    $ 51,115         $  42,877  
                                                                  
Current liabilities:
Accounts payable                                $ 1,529           $  1,229
Revenues and royalties payable                    1,581              786
Short-term debt                                   475                4,066
Other current liabilities                        1,094            574     
Total current liabilities                        4,679            6,655   
Long-term debt                                    11,880             7,956
Asset retirement obligations                      1,541              2,140
Other long-term liabilities                       1,029              834
Deferred income taxes                             5,927              4,793
Stockholders' equity:
Common stock                                      41                 41
Additional paid-in capital                        3,943              3,780
Retained earnings                                 16,220             15,410
Accumulated other comprehensive earnings         1,270            1,268   
Total stockholders' equity attributable           21,474             20,499
to Devon
Noncontrolling interests                         4,585            -       
Total stockholders' equity                       26,059           20,499  
Total liabilities and stockholders'             $ 51,115         $  42,877  
equity
Common shares outstanding                         409                406


DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

CAPITAL EXPENDITURES
(in millions)                            Quarter Ended June 30, 2014
                                            U.S.       Canada    Total
Exploration                                 $ 65          $  -         $ 65
Development                                  996           192        1,188
Exploration and development capital         $ 1,061       $  192       $ 1,253
Capitalized G&A                                                          91
Capitalized interest                                                     10
Eagle Ford and Cana acquisitions                                         231
Midstream capital ^(1)                                                   303
Other capital                                                           38
Total Continuing Operations                                            $ 1,926
                                                                       
^(1) Includes $216 million attributable to EnLink.
                                                                       
                                           Six Months Ended June 30, 2014
                                            U.S.          Canada       Total
Exploration                                 $ 138         $  32        $ 170
Development                                  1,829         470        2,299
Exploration and development capital         $ 1,967       $  502       $ 2,469
^(1)
Capitalized G&A                                                          174
Capitalized interest                                                     20
Eagle Ford and Cana acquisitions                                         6,359
Midstream capital ^(2)                                                   463
Other capital                                                           54
Total Continuing Operations                                            $ 9,539
                                                                       
^(1) Includes $87 million attributable to assets identified for divestiture.
^(2) Includes $284 million attributable to EnLink.


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’s reported net earnings include items of income and expense that are
typically excluded by securities analyst in their published estimates of the
company’s financial results. The following table summarizes the effects of
these items on second-quarter 2014 earnings.


RECONCILIATION TO GAAP INFORMATION

(in millions)

                                                Quarter Ended June 30, 2014
                                                   Before-Tax     After-Tax
Net earnings attributable to Devon (GAAP)                            $  675
Fair value changes in financial instruments        289                  181
Gain on asset sales and related repatriation       (964    )            (286 )
Restructuring costs                                5                   4    
Adjusted earnings attributable to Devon                              $  574  
(Non-GAAP)
Diluted share count                                                     411
Adjusted diluted earnings per share                                  $  1.40 
attributable to Devon (Non-GAAP)

Devon defines net debt as debt less cash, cash equivalents and short-term
investments as presented in the following table. 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)

                                   June 30,
                                       2014       2013
Total debt (GAAP)                     $ 12,355       $ 10,150
Adjustments:
Cash and short-term investments        1,706         4,232
Net debt (Non-GAAP)                   $ 10,649       $ 5,918

Devon defines pre-tax cash margin as revenues from commodity sales, marketing
and midstream operations, less expenses for lease operations, marketing and
midstream operations, general and administrative, production and property
taxes and net financing costs, with the result divided by total production.
Devon believes that pre-tax cash margin can facilitate comparisons of our
performance between periods and to the performance of our peers.

Contact:

Devon Energy Corporation
Investor Contacts
Howard Thill, 405-552-3693
or
Scott Coody, 405-552-4735
or
Shea Snyder, 405-552-4782
or
Media Contact
Chip Minty, 405-228-8647
 
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