DEVON ENERGY CORPORATION Q1 2024 Earnings Presentation
May 1, 2024
NYSE: DVN
devonenergy.com
Key Takeaways From Our Presentation
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Q1 PRODUCTION EXCEEDS GUIDANCE BY 4%
Volumes beat top-end of guidance across all products
DELAWARE BASIN DRIVES Q1 OUTPERFORMANCE
Improving well productivity & efficiency gains drive strong results
FREE CASH FLOW REACHES $844 MILLION IN Q1
15th consecutive quarter of free cash flow generation
SHARE BUYBACKS BOLSTER CASH RETURNS IN Q1
Total cash-return payout reaches $430 million in the quarter
RAISING FULL-YEAR 2024 PRODUCTION OUTLOOK
Improved production & free cash flow outlook for 2024
OUR DISCIPLINED MODEL CREATES SIGNIFICANT VALUE
| Q1 2024 Earnings Presentation | 2 |
Our Disciplined Business Model
DISCIPLINED GROWTH STRATEGY
- MODERATED OIL GROWTH targets: up to 5% annually
- Focused on growing per-share value
CONSISTENT REINVESTMENT RATES
- Returns-drivenstrategy prioritizes FREE CASH FLOW generation
- Optimizing results with steady activity levels through the cycle
ATTRACTIVE CASH RETURNS
- Strategy designed to deliver higher cash returns vs. broader market
- Optimize allocation between DIVIDENDS & SHARE REPURCHASES
MAINTAIN LOW LEVERAGE
- Net debt-to-EBITDAX: 0.7x (as of 3/31/2024)
- Strong liquidity & low breakeven levels enhance FINANCIAL STRENGTH
PURSUE
ESG EXCELLENCE
- ESG initiatives incorporated into COMPENSATION structure
- Committed to aggressive emissions reduction targets
| Q1 2024 Earnings Presentation | 3 |
Strategy Creating Significant Value for Shareholders
Delivering on our promise to shareholders | |||||||||
Cumulative uses of cash ($ in billions) | |||||||||
~$14 BILLION | |||||||||
$13.2 | SINCE 2020 | ||||||||
Industry-first cash-return framework unveiled in 2020 | |||||||||
Strategy designed for sustainable free cash flow generation | |||||||||
Flexibility to optimize value creation through the cycle | $10.1 | ||||||||
CASH-RETURN | $5.4 | ||||||||||||||
FRAMEWORK | |||||||||||||||
UNVEILED | |||||||||||||||
$3.4 | |||||||||||||||
$1.9 | |||||||||||||||
Acquisitions | Share Repurchases | ||||||||||||||
$0.3 | Debt Reduction | Dividends | |||||||||||||
2020 | 1H 2021 | 2H 2021 | 1H 2022 | 2H 2022 | 2023 | Q1 2024 | |||||||||
| Q1 2024 Earnings Presentation | 4 |
Portfolio Built to Deliver Sustainable Performance
PREMIER MULTI-BASIN PORTFOLIO
Acreage resides in top U.S. resource plays
- Underpinned by world-class Delaware Basin position
DIVERSIFIED COMMODITY MIX
$ | | Balanced exposure to oil, NGLs & natural gas production |
| Access to premium markets improves realized pricing |
OPERATING SCALE ENHANCES PROFITABILITY
Low-cost structure drives differentiated margins
- Track record of improving efficiencies & lowering cost of supply
DEEP INVENTORY OF REPEATABLE OPPORTUNITIES
- Possess >10 years of low-risk development inventory
- Upside from ongoing appraisal (>1.2 million acres in U.S. resource plays)
WILLISTON BASIN
61 MBOED
POWDER RIVER BASIN
18 MBOED
OUR SUSTAINABLE PLATFORM
MULTI-DECADE
RESOURCE OPPORTUNITY
ANADARKO BASIN
74 MBOED
DELAWARE BASIN
437 MBOED
EAGLE FORD
70 MBOED
| Q1 2024 Earnings Presentation | 5 |
Q1 2024 - Executing on Our Disciplined Plan
ADVANCING OUR
DISCIPLINED PLAN
DELIVERING STRONG PRODUCTION | EFFICIENT UPSTREAM CAPITAL SPENDING | ||||||
(MBOED) | +4% | ($ IN MILLIONS) | |||||
700 | 664 | $933 | $958 | AVERAGE | |||
PRODUCTION BEAT | $864 | ||||||
525 | (VS. Q1 MIDPOINT GUIDE) | $830 | $842 | ||||
350 | GAS | ||||||
NGL | |||||||
175 | OIL | ||||||
Q1 2024 Production | Q1 23 | Q2 23 | Q3 23 | Q4 23 | Q1 24 |
CONSISTENTLY GENERATING FREE CASH FLOW | RETURNING VALUE TO SHAREHOLDERS | |||||||||||
($ IN BILLIONS) | 15 | ($ IN MILLIONS) | ||||||||||
$2.1 | Share | Variable | ||||||||||
CONSECUTIVE | Buybacks | Dividend | ||||||||||
QUARTERS | ||||||||||||
$1.0 | $205 MM | $430 MM | $82 MM | |||||||||
$0.5 | Q1 2024 | |||||||||||
CASH RETURNS | Fixed | |||||||||||
Dividend | ||||||||||||
2020 | 2021 | 2022 | 2023 Q1 24 | $143 MM | ||||||||
| Q1 2024 Earnings Presentation | 6 |
Delaware Basin - Drives Q1 Outperformance
PARKWAY | 2024 Projects |
Core Focus Areas
POTATO BASIN | TODD | THISTLE/GAUCHO |
Eddy | Lea | |
COTTON DRAW | RATTLESNAKE | |
New Mexico | STATELINE | |
Texas | Winkler | |
MONUMENT DRAW |
Loving
BUILDING OPERATIONAL
MOMENTUM
400K | Mexico |
New | |
NET ACRES | Texas |
EXPECT RECORD VOLUMES IN 2024
TOTAL DELAWARE PRODUCTION (MBOED)
437
427
414
2022 | 2023 | Q1 2024 | 2024e |
| Q1 2024 Earnings Presentation | 7 |
Delaware Basin - High-Impact Results in Q1
HIGH-IMPACT UPPER WOLFCAMP WELLS
4,000 BOED
AVG. IP30 RATES/WELL
PROLIFIC 3-MILE WOLFCAMP RESULTS SUCCESSFUL WOLFCAMP B APPRAISAL
5,600 BOED | 5,900 BOED | |
AVG. IP30 RATES/WELL | AVG. IP30 RATE |
Van Doo Dah (10,000' laterals) 13 Wolfcamp wells (52% oil) Rates constrained by facilities
CBR 15-10 (15,400' laterals) | ||
Eddy | | 6 Wolfcamp wells (46% oil) |
| Land trade enabled 3-mile wells |
Thistle 186H (10,000' lateral)
Initial Wolfcamp B well (40% oil) De-risks ~50 locations
COTTON DRAW
Eddy | Lea |
New Mexico
THISTLE/GAUCHO
STATELINE | |
New | Lea |
Mexico |
Lea | |
Reeves | |
Loving | |
Texas | New Mexico |
| Q1 2024 Earnings Presentation | 8 |
Delaware Basin - Operating Efficiencies Advance
WELL PRODUCTIVITY ON TRACK | COMPLETION EFFICIENCIES |
CUMULATIVE OIL VOLUMES (NORMALIZED FOR 10,000' LATERALS) | COMPLETED FEET PER DAY (ALL FORMATIONS) |
250
200
150
100
50
0
TO
UP 10%
IMPROVEMENT
(vs. 2023 PROGRAM)
2024e Projection
2023 Results
2,152 | 2,265 | ||||||||||||||
1,911 | 1,955 | 5% | |||||||||||||
1,713 | IMPROVEMENT | ||||||||||||||
(Q1 2024 vs. 2023) | |||||||||||||||
2020 | 2021 | 2022 | 2023 | Q1 2024 |
DRILLING EFFICIENCIES | |||
New | DRILLED FEET PER DAY (ALL FORMATIONS) | ||
Mexico | 1,034 | 1,076 | |
Texas | 1,065 | ||
999 | 4% | ||
943 | |||
IMPROVEMENT | |||
(Q1 2024 vs. 2023) |
0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 2020 | 2021 | 2022 | 2023 | Q1 2024 |
| Q1 2024 Earnings Presentation | 9 |
Delaware Infrastructure Buildout Supports 2024 Plan
GAS PROCESSING & DOWNSTREAM
2 BCFD of gas processing capacity additions over past year
Matterhorn Pipeline online in 2024
(2.5 BCFD of takeaway; Devon 10% of capacity)
LOCALIZED INFRASTRUCTURE
- Investing ~$100 million annually in field-level gathering & compression
- Building out self-generated power & microgrid capabilities
WATER HANDLING CAPABILITIES
- WaterBridge JV provides water handling optionality within the basin
- Water recycling improves flow assurance & provides advantaged cost structure
| Q1 2024 Earnings Presentation | 10 |
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Devon Energy Corporation published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 May 2024 20:14:26 UTC.
