EX-99.3

EX-99.3 4 d107839dex993.htm EX-99.3 EX-99.3

Exhibit 99.3

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Devon Energy Fourth-Quarter 2020

Supplemental Tables


TABLE OF CONTENTS:	PAGE:

Devon Energy
Income Statement		2
Cash Flow Statement		3
Balance Sheet		4
Production by Asset		5
Capital, Costs Incurred and Reserves Reconciliation		6
Well Activity by Asset		7
Realized Price by Asset		8
Per-Unit Cash Margin by Asset		9
Non-GAAP Core Earnings (Loss)		10
Non-GAAP Measures		11-12
WPX
Production by Asset and Capital		13
Pro Forma Key Metrics
Q4 2020 Pro Forma Financials		14

DEVON ENERGY FINANCIAL INFORMATION


CONSOLIDATED STATEMENTS OF EARNINGS (LEGACY DEVON)
(in millions, except per share amounts)	2020												2019
	Quarter 4			Quarter 3			Quarter 2			Quarter 1			Quarter 4
Oil, gas and NGL sales	$	786		$	678		$	424		$	807		$	1,035
Oil, gas and NGL derivatives ⁽¹⁾		(117	)		(87	)		(361	)		720			(116	)
Marketing and midstream revenues		611			476			331			560			670

Total revenues		1,280			1,067			394			2,087			1,589

Production expenses ⁽²⁾		271			271			263			318			324
Exploration expenses		4			39			12			112			29
Marketing and midstream expenses		618			478			339			578			665
Depreciation, depletion and amortization		301			299			299			401			382
Asset impairments		27			—			—			2,666			—
Asset dispositions		(1	)		—			—			—			—
General and administrative expenses		82			75			79			102			119
Financing costs, net		70			66			69			65			64
Restructuring and transaction costs		17			32			—			—			11
Other, net		1			—			13			(48	)		16

Total expenses		1,390			1,260			1,074			4,194			1,610

Loss from continuing operations before income taxes		(110	)		(193	)		(680	)		(2,107	)		(21	)
Income tax benefit		(37	)		(90	)		(3	)		(417	)		(33	)

Net earnings (loss) from continuing operations		(73	)		(103	)		(677	)		(1,690	)		12
Net earnings (loss) from discontinued operations, net of taxes		(25	)		13			9			(125	)		(652	)

Net loss		(98	)		(90	)		(668	)		(1,815	)		(640	)
Net earnings attributable to noncontrolling interests		4			2			2			1			2

Net loss attributable to Devon	$	(102	)	$	(92	)	$	(670	)	$	(1,816	)	$	(642	)

Basic and Diluted earnings (loss) per share:
Continuing operations	$	(0.20	)	$	(0.29	)	$	(1.80	)	$	(4.48	)	$	0.03
Discontinued operations		(0.07	)		0.04			0.02			(0.34	)		(1.73	)

Basic net loss per share	$	(0.27	)	$	(0.25	)	$	(1.78	)	$	(4.82	)	$	(1.70	)

Weighted average common shares outstanding:
Basic		383			383			383			383			383
Diluted		383			383			383			383			385


(1) OIL, GAS AND NGL DERIVATIVES
(in millions)	2020											2019
	Quarter 4			Quarter 3			Quarter 2			Quarter 1		Quarter 4
Derivative cash settlements	$	(27	)	$	10		$	232		$	101	$	42
Derivative valuation changes		(90	)		(97	)		(593	)		619		(158	)

Oil, gas and NGL derivatives	$	(117	)	$	(87	)	$	(361	)	$	720	$	(116	)


(2) PRODUCTION EXPENSES
(in millions)	2020								2019
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Lease operating expense	$	91	$	100	$	108	$	126	$	120
Gathering, processing & transportation		130		125		123		130		131
Production taxes		47		42		25		56		69
Property taxes		3		4		7		6		4

Production expenses	$	271	$	271	$	263	$	318	$	324

CONSOLIDATED STATEMENTS OF CASH FLOWS (LEGACY DEVON)


(in millions)	2020												2019
	Quarter 4			Quarter 3			Quarter 2			Quarter 1			Quarter 4
Cash flows from operating activities:
Net loss	$	(98	)	$	(90	)	$	(668	)	$	(1,815	)	$	(640	)
Adjustments to reconcile net loss to net cash from operating activities:
Net (earnings) loss from discontinued operations, net of income taxes		25			(13	)		(9	)		125			652
Depreciation, depletion and amortization		301			299			299			401			382
Asset impairments		27			—			—			2,666			—
Leasehold impairments		3			36			3			110			3
Accretion on discounted liabilities		8			8			8			8			8
Total (gains) losses on commodity derivatives		117			87			361			(720	)		116
Cash settlements on commodity derivatives		(27	)		10			232			101			41
Gains on asset dispositions		(1	)		—			—			—			—
Deferred income tax benefit		(17	)		—			—			(311	)		(27	)
Share-based compensation		18			31			19			20			23
Other		—			1			4			—			2
Changes in assets and liabilities, net		2			58			(99	)		(56	)		18

Net cash from operating activities - continuing operations		358			427			150			529			578

Cash flows from investing activities:
Capital expenditures		(217	)		(204	)		(307	)		(425	)		(408	)
Acquisitions of property and equipment		(3	)		—			(1	)		(4	)		(3	)
Divestitures of property and equipment		5			1			3			25			43

Net cash from investing activities - continuing operations		(215	)		(203	)		(305	)		(404	)		(368	)

Cash flows from financing activities:
Repurchases of common stock		—			—			—			(38	)		(103	)
Dividends paid on common stock		(138	)		(43	)		(42	)		(34	)		(34	)
Contributions from noncontrolling interests		9			1			6			5			116
Distributions to noncontrolling interest		(4	)		(4	)		(3	)		(3	)		—
Shares exchanged for tax withholdings and other		(1	)		—			—			(17	)		(2	)

Net cash from financing activities - continuing operations		(134	)		(46	)		(39	)		(87	)		(23	)

Net change in cash, cash equivalents and restricted cash of continuing operations		9			178			(194	)		38			187

Cash flows from discontinued operations:
Operating activities		19			45			(43	)		(131	)		(9	)
Investing activities		310			1			171			(1	)		—
Financing activities		—			—			—			—			—
Effect of exchange rate changes on cash		2			4			8			(23	)		10

Net change in cash, cash equivalents and restricted cash of discontinued operations		331			50			136			(155	)		1

Net change in cash, cash equivalents and restricted cash		340			228			(58	)		(117	)		188
Cash, cash equivalents and restricted cash at beginning of period		1,897			1,669			1,727			1,844			1,656

Cash, cash equivalents and restricted cash at end of period	$	2,237		$	1,897		$	1,669		$	1,727		$	1,844

Reconciliation of cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash	$	2,047		$	1,707		$	1,474		$	1,527		$	1,464
Restricted cash		190			190			195			200			380

Total cash, cash equivalents and restricted cash	$	2,237		$	1,897		$	1,669		$	1,727		$	1,844

CONSOLIDATED BALANCE SHEETS (LEGACY DEVON)


(in millions)	December 31, 2020			December 31, 2019
Current assets:
Cash, cash equivalents and restricted cash	$	2,237		$	1,844
Accounts receivable		601			832
Current assets associated with discontinued operations		—			896
Income tax receivable		174			47
Other current assets		248			232

Total current assets		3,260			3,851
Oil and gas property and equipment, based on successful efforts accounting, net		4,436			7,558
Other property and equipment, net		957			1,035

Total property and equipment, net		5,393			8,593
Goodwill		753			753
Right-of-use assets		223			243
Other long-term assets		283			196
Long-term assets associated with discontinued operations		—			81

Total assets	$	9,912		$	13,717

Current liabilities:
Accounts payable	$	242		$	428
Revenues and royalties payable		662			730
Current liabilities associated with discontinued operations		—			459
Other current liabilities		536			310

Total current liabilities		1,440			1,927

Long-term debt		4,298			4,294
Lease liabilities		246			244
Asset retirement obligations		358			380
Other long-term liabilities		551			426
Long-term liabilities associated with discontinued operations		—			185
Deferred income taxes		—			341
Stockholders’ equity:
Common stock		38			38
Additional paid-in capital		2,766			2,735
Retained earnings		208			3,148
Accumulated other comprehensive loss		(127	)		(119	)

Total stockholders’ equity attributable to Devon		2,885			5,802
Noncontrolling interests		134			118

Total equity		3,019			5,920

Total liabilities and equity	$	9,912		$	13,717

Common shares outstanding		382			382

PRODUCTION TREND (LEGACY DEVON)


	2020								2019
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Oil (MBbls/d)
Delaware Basin		99		77		79		84		84
Powder River Basin		16		21		18		21		20
Eagle Ford		18		22		27		26		23
Anadarko Basin		16		19		21		24		27
Other		7		7		8		8		9

Total		156		146		153		163		163

Natural gas liquids (MBbls/d)
Delaware Basin		43		38		29		37		32
Powder River Basin		3		3		2		3		2
Eagle Ford		9		11		12		9		9
Anadarko Basin		25		30		25		30		30
Other		—		1		1		1		1

Total		80		83		69		80		74

Gas (MMcf/d)
Delaware Basin		267		239		241		244		234
Powder River Basin		22		23		20		29		28
Eagle Ford		60		73		87		86		76
Anadarko Basin		233		242		262		272		295
Other		2		3		4		3		4

Total		584		580		614		634		637

Total oil equivalent (MBoe/d)
Delaware Basin		186		155		149		162		154
Powder River Basin		22		28		24		29		27
Eagle Ford		37		46		53		50		45
Anadarko Basin		81		89		90		98		107
Other		7		8		9		9		10

Total		333		326		325		348		343

UPSTREAM CAPITAL EXPENDITURES (LEGACY DEVON)


(in millions)	2020								2019
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin	$	153	$	179	$	148	$	220	$	170
Powder River Basin		22		11		39		90		89
Eagle Ford		2		1		10		70		65
Anadarko Basin		3		1		3		4		38
Other		3		3		3		7		12

Total upstream capital	$	183	$	195	$	203	$	391	$	374


COSTS INCURRED (LEGACY DEVON)	Year Ended December 31,
(in millions)	2020		2019
Property acquisition costs:
Unproved properties	$	8	$	35
Exploration costs		159		312
Development costs		820		1,499

Costs incurred	$	987	$	1,846

RESERVES RECONCILIATION (LEGACY DEVON)


	Oil (MMBbls)			Gas (Bcf)			NGL (MMBbls)			Total (MMBoe)
As of December 31, 2019:
Proved developed		198			1,344			167			589
Proved undeveloped		78			277			44			168

Total Proved		276			1,621			211			757

Revisions due to prices		(26	)		(209	)		(17	)		(78	)
Revisions other than price		18			119			17			55
Extensions and discoveries		71			188			33			135
Purchase of reserves		1			19			3			7
Production		(57	)		(221	)		(28	)		(122	)
Sale of reserves		(1	)		(5	)		(1	)		(2	)

As of December 31, 2020:
Proved developed		194			1,244			173			574
Proved undeveloped		88			268			45			178

Total Proved		282			1,512			218			752


GROSS OPERATED SPUDS (LEGACY DEVON)
	2020								2019
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin		21		35		27		38		24
Powder River Basin		2		—		—		12		19
Eagle Ford		—		—		—		10		25
Anadarko Basin		—		—		—		—		—

Total		23		35		27		60		68


GROSS OPERATED WELLS TIED-IN (LEGACY DEVON)
	2020								2019
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin		23		32		22		32		36
Powder River Basin		2		9		4		14		19
Eagle Ford		—		—		13		30		21
Anadarko Basin		—		—		—		4		9

Total		25		41		39		80		85


NET OPERATED WELLS TIED-IN (LEGACY DEVON)
	2020								2019
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin		21		23		18		25		25
Powder River Basin		1		7		4		10		15
Eagle Ford		—		—		7		14		11
Anadarko Basin		—		—		—		3		7

Total		22		30		29		52		58

AVERAGE LATERAL LENGTH (LEGACY DEVON)

(based on wells tied-in)

2020

2019

Quarter 4

Quarter 3

Quarter 2

Quarter 1

Quarter 4

Delaware Basin

9,800’

9,900’

9,100’

8,000’

Powder River Basin

13,600’

9,800’

8,100’

9,100’

9,700’

Eagle Ford

—

5,900’

5,400’

6,600’

Anadarko Basin

—

9,800’

11,200’

Total

10,100’

9,900’

7,900’

7,300’

8,400’


BENCHMARK PRICES
(average prices)	2020										2019
	Quarter 4			Quarter 3			Quarter 2		Quarter 1		Quarter 4
Oil ($/Bbl)—West Texas Intermediate (Cushing)	$	42.65		$	40.86		$	28.42	$	46.44	$	57.02
Natural Gas ($/Mcf)—Henry Hub	$	2.67		$	1.98		$	1.71	$	1.95	$	2.50
NGL ($/Bbl)—Mont Belvieu Blended	$	20.01		$	16.69		$	12.57	$	14.39	$	18.69
REALIZED PRICES (LEGACY DEVON)
	2020										2019
	Quarter 4			Quarter 3			Quarter 2		Quarter 1		Quarter 4
Oil (Per Bbl)
Delaware Basin	$	40.67		$	39.19		$	22.70	$	45.18	$	56.23
Powder River Basin		36.42			35.39			24.03		41.14		52.02
Eagle Ford		37.83			33.68			15.30		44.90		55.11
Anadarko Basin		40.34			37.88			19.52		45.32		55.71
Other		39.93			37.33			25.45		44.53		55.14

Realized price without hedges		39.84			37.56			21.25		44.59		55.41
Cash settlements		(1.83	)		0.65			15.25		5.14		1.48

Realized price, including cash settlements	$	38.01		$	38.21		$	36.50	$	49.73	$	56.89

Natural gas liquids (Per Bbl)
Delaware Basin	$	13.67		$	11.49		$	7.94	$	8.36	$	13.30
Powder River Basin		19.39			13.10			10.07		15.86		17.36
Eagle Ford		15.66			13.74			10.02		14.77		18.84
Anadarko Basin		15.65			12.68			9.31		10.90		17.47
Other		24.24			21.74			10.19		15.82		13.62

Realized price without hedges		14.77			12.36			8.89		10.40		15.79
Cash settlements		(0.01	)		(0.30	)		0.51		0.61		1.75

Realized price, including cash settlements	$	14.76		$	12.06		$	9.40	$	11.01	$	17.54

Gas (Per Mcf)
Delaware Basin	$	1.51		$	1.11		$	1.05	$	0.58	$	1.22
Powder River Basin		2.70			1.94			1.80		1.71		2.51
Eagle Ford		2.38			1.95			1.79		2.05		2.52
Anadarko Basin		2.29			1.66			1.31		1.45		1.81
Other		2.87			1.52			1.32		1.69		0.43

Realized price without hedges		1.96			1.48			1.29		1.21		1.70
Cash settlements		0.00			0.06			0.28		0.36		0.13

Realized price, including cash settlements	$	1.96		$	1.54		$	1.57	$	1.57	$	1.83

Total oil equivalent (Per Boe)
Delaware Basin	$	26.94		$	24.00		$	15.39	$	26.19	$	35.05
Powder River Basin		31.08			29.83			20.80		33.65		42.45
Eagle Ford		25.97			22.78			12.90		29.94		36.51
Anadarko Basin		19.79			16.81			10.98		18.14		24.28
Other		37.67			34.15			22.95		39.15		46.49

Realized price without hedges		25.63			22.60			14.37		25.43		32.82
Cash settlements		(0.86	)		0.33			7.83		3.20		1.32

Realized price, including cash settlements	$	24.77		$	22.93		$	22.20	$	28.63	$	34.14


BENCHMARK PRICES
(average prices)	2020												2019
	Quarter 4			Quarter 3			Quarter 2			Quarter 1			Quarter 4
Oil ($/Bbl)—West Texas Intermediate (Cushing)	$	42.65		$	40.86		$	28.42		$	46.44		$	57.02
Natural Gas ($/Mcf)—Henry Hub	$	2.67		$	1.98		$	1.71		$	1.95		$	2.50
NGL ($/Bbl)—Mont Belvieu Blended	$	20.01		$	16.69		$	12.57		$	14.39		$	18.69
PER-UNIT CASH MARGIN BY ASSET (per Boe) (LEGACY DEVON)
	2020												2019
	Quarter 4			Quarter 3			Quarter 2			Quarter 1			Quarter 4
Delaware Basin
Realized price	$	26.94		$	24.00		$	15.39		$	26.19		$	35.05
Lease operating expenses		(2.38	)		(3.00	)		(3.56	)		(3.61	)		(3.36	)
Gathering, processing & transportation		(2.40	)		(2.68	)		(2.88	)		(2.71	)		(2.59	)
Production & property taxes		(2.08	)		(1.80	)		(1.14	)		(2.15	)		(2.80	)

Field-level cash margin	$	20.08		$	16.52		$	7.81		$	17.72		$	26.30

Powder River Basin
Realized price	$	31.08		$	29.83		$	20.80		$	33.65		$	42.45
Lease operating expenses		(5.47	)		(5.41	)		(6.60	)		(6.65	)		(5.00	)
Gathering, processing & transportation		(3.01	)		(2.30	)		(2.71	)		(2.32	)		(3.40	)
Production & property taxes		(3.91	)		(3.49	)		(2.40	)		(4.20	)		(5.19	)

Field-level cash margin	$	18.69		$	18.63		$	9.09		$	20.48		$	28.86

Eagle Ford
Realized price	$	25.97		$	22.78		$	12.90		$	29.94		$	36.51
Lease operating expenses		(2.79	)		(2.47	)		(2.59	)		(2.93	)		(4.52	)
Gathering, processing & transportation		(5.89	)		(4.73	)		(4.96	)		(5.96	)		(6.52	)
Production & property taxes		(0.16	)		(0.92	)		(0.85	)		(1.85	)		(1.75	)

Field-level cash margin	$	17.13		$	14.66		$	4.50		$	19.20		$	23.72

Anadarko Basin
Realized price	$	19.79		$	16.81		$	10.98		$	18.14		$	24.28
Lease operating expenses		(2.57	)		(2.16	)		(2.42	)		(2.79	)		(2.24	)
Gathering, processing & transportation		(8.39	)		(7.39	)		(6.57	)		(6.36	)		(5.98	)
Production & property taxes		(0.55	)		(0.54	)		(0.32	)		(0.77	)		(1.00	)

Field-level cash margin	$	8.28		$	6.72		$	1.67		$	8.22		$	15.06

Other
Realized price	$	37.67		$	34.15		$	22.95		$	39.15		$	46.49
Lease operating expenses		(15.35	)		(19.92	)		(17.40	)		(18.95	)		(20.04	)
Gathering, processing & transportation		(0.59	)		(0.51	)		(0.34	)		(0.31	)		(0.34	)
Production & property taxes		(3.38	)		(3.62	)		(5.11	)		(4.34	)		(3.78	)

Field-level cash margin	$	18.35		$	10.10		$	0.10		$	15.55		$	22.33

Devon—Total
Realized price	$	25.63		$	22.60		$	14.37		$	25.43		$	32.82
Lease operating expenses		(2.97	)		(3.32	)		(3.69	)		(3.96	)		(3.79	)
Gathering, processing & transportation		(4.23	)		(4.17	)		(4.16	)		(4.11	)		(4.16	)
Production & property taxes		(1.66	)		(1.52	)		(1.07	)		(1.95	)		(2.32	)

Field-level cash margin	$	16.77		$	13.59		$	5.45		$	15.41		$	22.55

NON-GAAP FINANCIAL MEASURES

(all monetary values in millions, except per share amounts)

The earnings materials include non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in this press release, including reconciliations to their most directly comparable GAAP measure.

CORE EARNINGS (LOSS) (LEGACY DEVON)

Devon’s reported net earnings (loss) include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings (loss) and core earnings (loss) per share attributable to Devon. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on fourth-quarter 2020 earnings.


	Quarter Ended December 31, 2020
	Before-tax			After-tax			After Noncontrolling Interests			Per Diluted Share
Continuing Operations
Loss (GAAP)	$	(110	)	$	(73	)	$	(77	)	$	(0.20	)
Adjustments:
Asset dispositions		(1	)		—			—			(0.00	)
Asset and exploration impairments		31			29			29			0.07
Deferred tax asset valuation allowance		—			(22	)		(22	)		(0.06	)
Fair value changes in financial instruments		90			70			70			0.18
Change in tax legislation		—			(8	)		(8	)		(0.02	)
Restructuring and transaction costs		17			13			13			0.04

Core earnings (Non-GAAP)	$	27		$	9		$	5		$	0.01

Discontinued Operations
Loss (GAAP)	$	(2	)	$	(25	)	$	(25	)	$	(0.07	)
Adjustments:
Asset dispositions		3			20			20			0.05
Deferred tax asset valuation allowance		—			2			2			0.01
Fair value changes in foreign currency and other		(12	)		(9	)		(9	)		(0.02	)
Restructuring and transaction costs		9			6			6			0.02

Core loss (Non-GAAP)	$	(2	)	$	(6	)	$	(6	)	$	(0.01	)

Total
Loss (GAAP)	$	(112	)	$	(98	)	$	(102	)	$	(0.27	)
Adjustments:
Continuing Operations		137			82			82			0.21
Discontinued Operations		—			19			19			0.06

Core earnings (loss) (Non-GAAP)	$	25		$	3		$	(1	)	$	—

EBITDAX (LEGACY DEVON)

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


	Q4 ‘20			Q3 ‘20			Q2 ‘20			Q1 ‘20			TTM			Q4’19
Net loss (GAAP)	$	(98	)	$	(90	)	$	(668	)	$	(1,815	)	$	(2,671	)	$	(640	)
Net earnings (loss) from discontinued operations, net of tax		25			(13	)		(9	)		125			128			652
Financing costs, net		70			66			69			65			270			64
Income tax benefit		(37	)		(90	)		(3	)		(417	)		(547	)		(33	)
Exploration expenses		4			39			12			112			167			29
Depreciation, depletion and amortization		301			299			299			401			1,300			382
Asset impairments		27			—			—			2,666			2,693			—
Asset dispositions		(1	)		—			—			—			(1	)		—
Share-based compensation		18			19			19			20			76			19
Derivative and financial instrument non-cash valuation changes		90			97			593			(619	)		161			159
Restructuring and transaction costs		17			32			—			—			49			11
Accretion on discounted liabilities and other		1			—			13			(48	)		(34	)		14

EBITDAX (Non-GAAP)	$	417		$	359		$	325		$	490		$	1,591		$	657

NET DEBT (LEGACY DEVON)

Devon defines net debt as debt less cash, cash equivalents and cash restricted. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.


	December 31, 2020
Total debt (GAAP)	$	4,298
Less:
Cash, cash equivalents and restricted cash		(2,237	)

Net debt (Non-GAAP)	$	2,061

NET DEBT-TO-EBITDAX (LEGACY DEVON)

Devon defines net debt-to-EBITDAX as net debt divided by trailing twelve months EBITDAX.


	December 31, 2020
Net debt (Non-GAAP)	$	2,061
EBITDAX (trailing 12 months) (Non-GAAP)	$	1,591

Net debt-to-EBITDAX (Non-GAAP)		1.3

FREE CASH FLOW (LEGACY DEVON)

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


	Quarter Ended December, 2020
Total operating cash flow (GAAP)	$	358
Less capital expenditures:
Capital expenditures		(217	)

Free cash flow (Non-GAAP)	$	141

The pro forma metrics have been prepared to reflect Devon and WPX for the completion of the merger. The numbers have been developed from Devon’s Annual Report on Form 10-K for the year ended December 31, 2020 and from WPX’s audited consolidated financial statements for the year ended December 31, 2020 as filed within Devon’s Current Report on Form 8-KA, both expected to be filed on February 17, 2021.

PRO FORMA NET DEBT


	Q4 2020
(in millions)	Pro Forma			Devon			WPX
Total debt	$	7,862		$	4,298		$	3,564
Cash, cash equivalents & restricted cash		(2,593	)		(2,237	)		(356	)

Net debt	$	5,269		$	2,061		$	3,208

PRO FORMA FREE CASH FLOW


	Q4 2020
(in millions)	Pro Forma			Devon			WPX
Operating cash flow	$	773		$	358		$	415
Cash capital expenditures		(510	)		(217	)		(293	)

Free cash flow	$	263		$	141		$	122

VARIABLE DIVIDEND CALCULATION

Devon may pay a variable dividend up to 50 percent of its excess cash flow. Each quarter’s excess cash flow is computed as operating cash flow less capital expenditures and the fixed dividend.


	Q4 2020
(in millions)	Pro Forma
Operating cash flow (GAAP)	$	773
Changes in assets and liabilities, net		22

Cash from operations before balance sheet changes (Non-GAAP)	$	795
Capital expenditures (Accrued)		(486	)

Adjusted free cash flow (Non-GAAP)		309
Fixed quarterly dividend ($0.11/share)		(42	)

Excess free cash flow		267
48% pay out (Board Discretion: Up to 50%)		48	%

Total variable dividend	$	128

LEGACY WPX PRODUCTION AND CAPITAL

PRODUCTION TREND (LEGACY WPX)


	2020								2019
	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Oil (MBbls/d)
Delaware Basin		84		71		77		60		48
Williston Basin		65		51		47		62		64

Total		149		122		124		122		112

Natural gas liquids (MBbls/d)
Delaware Basin		35		32		27		25		22
Williston Basin		11		9		8		9		8

Total		46		40		35		34		30

Gas (MMcf/d)
Delaware Basin		271		219		239		195		174
Williston Basin		66		51		48		49		50

Total		337		270		287		244		223

Total oil equivalent (MBoe/d)
Delaware Basin		164		139		144		117		99
Williston Basin		87		69		63		79		80

Total		251		208		207		197		179

UPSTREAM CAPITAL EXPENDITURES (LEGACY WPX)


	2020								2019
(in millions)	Quarter 4		Quarter 3		Quarter 2		Quarter 1		Quarter 4
Delaware Basin	$	247	$	186	$	143	$	191	$	157
Williston Basin		36		60		34		115		110

Total Upstream Capital	$	283	$	246	$	177	$	305	$	267

PRO FORMA KEY METRICS—Q4 2020

PRODUCTION


	Q4 2020
	Pro Forma		Devon		WPX
Oil (MBbls/d)		305		156		149
Natural gas liquids (MBbls/d)		126		80		46
Gas (MMcf/d)		921		584		337

Total oil equivalent (Mboe/d)		584		333		251

OTHER KEY METRICS


	Q4 2020
($ millions, except Boe)	Pro Forma		Devon		WPX
Oil, gas and NGL sales	$	1,421	$	786	$	635
LOE & GP&T per BOE	$	7.57	$	7.21	$	8.05
General & administrative expenses	$	144	$	82	$	62
Net financing costs	$	119	$	71	$	48

Operating cash flow	$	773	$	358	$	415
Total cash capital	$	510	$	217	$	293
Free cash flow	$	263	$	141	$	122

Cash, cash equivalents & restricted cash	$	2,593	$	2,237	$	356
Total debt	$	7,862	$	4,298	$	3,564
Proved reserves (MMBoe)		1,434		752		682

LOGO

GUIDANCE

2021 OUTLOOK

Note: Devon intends to provide detailed first-quarter 2021 guidance once the company can properly access the impact of the extreme winter weather on its field operations. Devon has incorporated weather-related downtime in its 2021 outlook and does not expect the severe winter weather to materially impact its full-year guidance ranges.

PRODUCTION GUIDANCE⁽¹⁾


	Full Year⁽¹⁾
	Low		High
Oil (MBbls/d)		280		300
Natural gas liquids (MBbls/d)		120		130
Gas (MMcf/d)		860		900

Total oil equivalent (MBoe/d)		543		580

(1)

Due to the timing of the WPX merger closing, all reported 2021 amounts will not include legacy WPX until January 7, 2021.

CAPITAL EXPENDITURES GUIDANCE


	Full Year
(in millions)	Low		High
Upstream capital	$	1,600	$	1,800
Midstream capital		80		100
Other capital		40		80

Total capital	$	1,720	$	1,980

Note: The company’s capital program is designed to have the highest capital spend occurring in the first quarter due to the timing of drilling and completion activity across the company’s asset portfolio (~30% of full-year budget). After heightened activity in the first-quarter, capital is expected to normalize to lower investment levels throughout the remainder of 2021.

PRICE REALIZATIONS GUIDANCE


	Full Year
	Low			High
Oil - % of WTI		90	%		100	%
NGL - % of WTI		25	%		35	%
Natural gas - % of Henry Hub		70	%		80	%

OTHER GUIDANCE ITEMS


	Full Year
($ millions, except Boe and %)	Low			High
Marketing & midstream operating profit	$	(50	)	$	(40	)
LOE & GP&T per BOE	$	7.50		$	7.70
Production & property taxes as % of upstream sales		7.0	%		8.0	%
Exploration expenses	$	10		$	20
Depreciation, depletion and amortization	$	1,900		$	2,000
General & administrative expenses⁽²⁾	$	400		$	420
Restructuring & transaction expenses⁽³⁾	$	160		$	200
Cash financing costs, net	$	420		$	440
Other expenses	$	20		$	30
Current income tax rate from continuing operations		0	%		0	%
Deferred income tax rate from continuing operations		20	%		30	%

Total income tax rate from continuing operations		20	%		30	%

(2)

Devon anticipates approximately $110 million to $120 million of the G&A expenses to be incurred in the first quarter of 2021.

(3)

Devon anticipates approximately $125 million to $145 million of the restructuring expenses to be incurred in the first quarter of 2021 (~80% is cash). One-time cash restructuring charges will be added back to cash flow from operations in the calculation of the variable dividend payout.

CONTINGENT PAYMENTS FOR BARNETT SHALE DIVERSITURE (4-year period beginning in 2021)


WTI Threshold		WTI Annual Earnout Amount		Henry Hub Threshold		Henry Hub Annual Earnout Amount
$	50.00	$	10,000,000	$	2.75	$	20,000,000
$	55.00	$	12,500,000	$	3.00	$	25,000,000
$	60.00	$	15,000,000	$	3.25	$	35,000,000
$	65.00	$	20,000,000	$	3.50	$	45,000,000

2021 HEDGING POSITIONS

Oil Commodity Hedges


	Price Swaps				Price Collars
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q1 2021		127,500	$	39.52		20,000	$	49.20	$	59.20
Q2 2021		131,500	$	39.71		21,000	$	42.46	$	52.46
Q3 2021		57,500	$	41.68		52,250	$	39.56	$	49.56
Q4 2021		56,500	$	41.44		47,250	$	38.60	$	48.60


	Price Swaptions				Price Call Options
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)		Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q1 2021			$			5,000	$	39.50
Q2 2021			$			5,000	$	39.50
Q3 2021		10,000	$	40.12		5,000	$	39.50
Q4 2021		10,000	$	40.12		5,000	$	39.50

Oil Basis Swaps


Period	Index	Volume (Bbls/d)		Weighted Average Differential to WTI ($/Bbl)
Q1-Q4 2021	Midland Sweet		22,000	$	0.84
Q1-Q4 2021	BRENT/WTI Spread		1,000	$	(8.00	)

Natural Gas Commodity Hedges - Henry Hub


	Price Swaps				Price Collars
Period	Volume (MMBtu/d)		Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)		Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q1 2021		279,000	$	2.64		203,000	$	2.43	$	2.93
Q2 2021		279,000	$	2.64		228,000	$	2.43	$	2.93
Q3 2021		279,000	$	2.64		228,000	$	2.43	$	2.93
Q4 2021		254,000	$	2.63		133,000	$	2.55	$	3.05


	Price Call Options
Period	Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q1 2021		50,000	$2.68
Q2 2021		50,000	$2.68
Q3 2021		50,000	$2.68
Q4 2021		50,000	$2.68

Natural Gas Basis Swaps


Period	Index	Volume (MMBtu/d)		Weighted Average Differential to Henry Hub ($/MMBtu)
Q1-Q4 2021	El Paso Natural Gas		35,000	$	(0.92	)
Q1-Q4 2021	WAHA		80,000	$	(0.65	)

NGL Commodity Hedges


		Price Swaps
Period	Product	Volume (Bbls/d)		Weighted Average Price ($/Bbl)
Q1-Q4 2021	Natural Gasoline		915	$	47.57
Q1-Q4 2021	Natural Butane		915	$	31.40
Q1-Q4 2021	Propane		915	$	27.88

Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index. Devon’s NGL derivatives settle against the average of the prompt month OPIS Mont Belvieu, Texas index. Commodity hedge positions are shown as of February 12, 2021.