Devon Energy : Q2 Earnings Presentation

Q2 2021 Earnings Presentation

August 3, 2021

NYSE: DVN

devonenergy.com

Key Takeaways From Our Presentation

#1	FIXED + VARIABLE DIVIDEND INCREASES 44%	LEADING THE INDUSTRY WITH
Total dividend of $0.49 per share announced with Q2 results	DISCIPLINE & DIVIDENDS
#2	FREE CASH FLOW GENERATION ACCELERATES
Free cash flow increases >6x vs. prior quarter
#3	BALANCE SHEET CONTINUES TO STRENGTHEN
Reduced outstanding debt by $1.2 billion year-to-date
#4	DELAWARE BASIN DRIVES Q2 OUTPERFORMANCE
Operating results favorable to guidance on production, capital & costs
#5	OUTLOOK STRENGTHENS IN SECOND HALF OF 2021
Dividend payout expected to be highest yield in the S&P 500 index

| Q2 2021 Earnings Presentation

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Our Cash-Return Business Model

"Our CASH-RETURNbusiness model is designed to moderate growth, emphasize capital efficiencies, maximize returns and prioritize the return of increasing amounts of cash to shareholders. These principles have positioned Devon to be a PROMINENT and CONSISTENT builder of economic value through the cycle."

• Rick Muncrief, President & CEO

COMMITMENT

RUNS DEEP

DISCIPLINED	 MODERATING OIL GROWTH targets: up to 5% annually
GROWTH STRATEGY	 Growing margins through operational & corporate cost reductions
REDUCED	 Returns-driven strategy prioritizes FREE CASH FLOW generation
REINVESTMENT RATES	 Committed to maintenance capital program in 2021
MAINTAIN	 Target net debt-to-EBITDAX ratio: 1.0x or less
LOW LEVERAGE	 Strong liquidity & disciplined hedging enhance FINANCIAL STRENGTH
PRIORITIZE	 Deploying free cash flow to dividends & debt reduction
CASH RETURNS	 Innovative FIXED-PLUS-VARIABLE dividend strategy (pgs. 6 & 7)
PURSUE	 Established new environmental performance targets (pg. 16)
ESG EXCELLENCE	 ESG initiatives incorporated into COMPENSATION structure

| Q2 2021 Earnings Presentation

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Q2 2021 - Executing on Our Disciplined Strategy

Outstanding Q2 execution	Expanding free cash flow
Key quarterly highlights		Free cash flow ($ in millions)	$589(2)
CAPITAL	9%	>6x
SPEND ($MM)	BELOW GUIDANCE
		IMPROVEMENT
PRODUCTION	3%	VS. Q1 2021
VOLUMES (MBOED)	ABOVE GUIDANCE	$93
CORPORATE	27%
COSTS ($MM)(1)	VERSUS Q2 2020	Q1 2021	Q2 2021
(1) Represents G&A & interest expense compared on a pro forma basis.	(2) Free cash flow is defined as operating cash flow ($1,093 million) less cash
		capital expenditures ($504 million).

Returning value to shareholders

Q2 2021 cash allocation ($ in billions)
$1.4 B	~65%
	ALLOCATED TO
	DIVIDENDS &
	DEBT REDUCTION
	DIVIDENDS & DEBT
	CAPITAL INVESTMENT

Q2 Uses of Cash

TOTAL DIVIDEND PAYOUT

EXPANDS BY 44% IN Q2

(SEE PAGE 6 FOR DETAILS)

| Q2 2021 Earnings Presentation

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Outlook Strengthens in Second Half of 2021

FREE CASH FLOW

SET TO EXPAND

(1)

FUTURE UPSIDE (2)

(2H 2021 outlook vs. 1H 2021 results)

34%



Unhedged commodity view



OIL PRODUCTION: +4%



100% upfront cost synergies



TOTAL CAPITAL: ↆ>10%



CORPORATE COSTS: ↆ7%

28%

24%

20%

FREE CASH FLOW

21%

YIELD

SECOND-HALF 2021

16%

FREE CASH FLOW

OUTLOOK

YIELD

 Based on mid-point guidance

 2H 2021 ANNUALIZED free cash flow

FREE CASH FLOW

YIELD

$60 WTI

$70 WTI

$80 WTI

Note: Free cash flow yield represents operating cash flow, excluding changes in working capital, less total capital divided by market capitalization. Assumes $3.50 Henry Hub & NGL realizations at 40% of WTI.

(1) Changes represent 1H 2021 actual results vs. midpoint guidance for the 2H 2021. (2) Excludes commodity hedges and includes upfront benefit of cost synergies.

| Q2 2021 Earnings Presentation

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