Download - DVN June Pres
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Investor Meeting
June 2013
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NYSE: DVN www.devonenergy.com Slide 2
Investor Notices
Safe HarborSome of the information provided in this presentation includes forward-looking statements asdefined by the Securities and Exchange Commission. Words such as forecasts," "projections,""estimates," "plans," "expectations," "targets," and other comparable terminology often identifyforward-looking statements. Such statements concerning future performance are subject to avariety of risks and uncertainties that could cause Devons actual results to differ materiallyfrom the forward-looking statements contained herein, including as a result of the itemsdescribed under "Risk Factors" in our most recent Form 10-K and the items described under
"Information Regarding Forward-Looking Estimates" in our Form 8-K filed February 20, 2013.
Cautionary Note to Investors
The United States Securities and Exchange Commission permits oil and gas companies, in theirfilings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC'sdefinitions for such terms, and price and cost sensitivities for such reserves, and prohibitsdisclosure of resources that do not constitute such reserves. This presentation may contain
certain terms, such as resource potential and exploration target size. These estimates are bytheir nature more speculative than estimates of proved, probable and possible reserves andaccordingly are subject to substantially greater risk of being actually realized. The SECguidelines strictly prohibit us from including these estimates in filings with the SEC. Investorsare urged to consider closely the disclosure in our Form 10-K, available from us at Devon EnergyCorporation, Attn. Investor Relations, 333 West Sheridan, Oklahoma City, OK 73102-5015. Youcan also obtain this form from the SEC by calling 1-800-SEC-0330 or from the SECs website atwww.sec.gov.
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NYSE: DVN www.devonenergy.com Slide 3
Devon Today
Proved reserves: 3.0 billion BOE
(47% liquids)
Q1 2013 production: 687 MBOED
Production mix: 24% oil
17% NGLs
59% natural gas
Significant midstream business
2013e operating profit: $450 million
Enterprise value: $30 billion
JackfishPike
Granite WashBarnett Shale
Permian Basin
Ferrier Corridor
Cana WoodfordMississippian
RockiesOil
Horn River
Deep Basin
Powder River
Washakie
Haynesville/Bossier
CarthageGroesbeck
Oil
Liquids-Rich
Dry Gas
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Progress Report
First-Quarter Highlights
Total oil production increased 14%
Permian Basin oil production up 24%
Jackfish oil production up 18%
Positive results in emerging oil plays
Recent wells in Mississippian play >1,000 BOPD
Promising high rate wells in the Rockies
Added attractive oil and gas hedges for 2013 and 2014
Announced $2 billion repatriation of foreign cash to U.S.
Challenges
Transition to a higher oil-weighted production profile
Near-term price realizations in North AmericaSlide 4
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Devons Strengths
Disciplined focus on per share results
Deep inventory of development opportunities
Strong, highly-visible oil growth
Significant positions in emerging oil plays
Strong balance sheet
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NYSE: DVN www.devonenergy.com Slide 6
Financial Strength & Flexibility
Cash and short-term investments: $6.5 billion(As of 3/31/13)
Net debt-to-cap ratio: 22%
Strong investment grade ratings
Fitch: BBB+
Moodys: Baa1
S&P: BBB+
Provides flexibility to invest in high-return
projects in all market cycles
Note: Includes a non-GAAP measure, see appendix for required disclosures.
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Attractively Hedged
Oil Hedges
Q2-Q4 2013: 135 MBOPD at a protected price of $95 per BBL(80% of forecasted oil production)
2014: 31 MBOPD at a protected price of $92 per BBL
WCS Regional Oil Basis Swaps
Q2-Q4 2013: 35 MBOPD at a differential to WTI of $22 per BBL
Natural Gas Hedges
Q2-Q4 2013: 1.0 BCFD swapped at $4.18 per MCF
Q2-Q4 2013: 0.7 BCFD collared at $4.19 ceiling and $3.55 floor
(2013 swaps and collars cover 75% of forecasted gas production)
2014: 0.9 BCFD at a protected price of $4.34 per MCF
Note: The pricing points referenced above are weighted average prices.
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Capital Allocation Criteria
E&P capital projects
Balancing resource capture and development
Debt reduction
Reduced net debt by 20% since 2003
Share repurchases
Reduced net share count by 20% since 2004
Dividends Average annual increase of 24% since 2004
Note: Includes a non-GAAP measure, see appendix for required disclosures.
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Developing the Resource BaseE&P Game Plan
Goal: Maximize return on investment
Balance resource capture and resource development
Current focus on high-margin oil opportunities
Utilize joint ventures to recover exploration costs
Maintain gas optionality
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NYSE: DVN www.devonenergy.com Slide 10
E&P Capital Allocation
Explorationactivity
Developmentactivity
Leasehold
capture
2013 Capital Budget
$4.9 - $5.3 Billion
100% of capital allocated towards oil and liquids-rich projects
90%
3%7%
Note: Capital figures exclude capitalized G&A and interest, midstream and other corporate capital. For 2013, thisrepresents approximately $1.5 billion.
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2013 Capital ProgramDelivering Strong Oil Growth
Total oil production growth rate: mid-teens
U.S. growth rate: 40%
Concentrate capital in oil-driven development projects
Accelerate drilling in Permian Basin
Reduce activity in liquids-rich gas regions
No dry gas drilling
Utilize joint venture carries to minimize exploration costs Accelerates de-risking of Mississippian trend acreage
Continue appraisal drilling in Rockies
Increase Permian exploration activity
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NYSE: DVN www.devonenergy.com Slide 12
146
123
106101
90
75
66
164-174
2006 2007 2008 2009 2010 2011 2012 2013e
Significant Oil Production GrowthNorth American Onshore
Production Data in MBOPD
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Permian Basin OverviewOil Opportunities
Net risked resource: 2.8 BBOE
Risked locations: >8,000
Net acreage: 1.3 million basin-wide
Q1 2013 net production: 68 MBOED(60% oil)
Activity targeting several play types
Expect 40% oil growth in 2013
29 operated rigs
2013 capital: $1.5 billion
2013 plans: Drill >300 wells
TEXAS
NEW MEXICO OKLAHOMA
NYSE: DVN
MidlandBasin
Northwestern
Shelf
CentralBasinPlatform
Ozona ArchDiabloPlatform
New
Mexico
Texas
Midland
WolfberryBone Spring& Delaware
Conventional WolfcampShale
Eastern
Shelf
Cline Shale
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Permian BasinBone Spring & Delaware
Overview
Net acreage: 210,000
Q1 2013 net production: 21 MBOED (65% oil)
Low-risk, high-margin oil plays
12 operated rigs
Doubled inventory over past year (1,300 locations)
Bone Spring
High impact wells (Best wells: IPs >1,000 BOED)
Drilling depth: 8,000 10,500
Multi-year drilling inventory (700 locations)
2013 plans: Drill 100 wells
Delaware
Revitalized by horizontal drilling
Repeatable results (600 undrilled locations)
Drilling depth: 7,000 8,000
2013 plans: Drill 20 wells
www.devonenergy.com Slide 14
Midland
MidlandEctor
Andrews
Gaines Dawson
Martin
UptonCrane
Winkler
Ward
Loving
Reeves
Pecos
Lea
Eddy
Bone Spring
& Delaware
NewM
exico
Texas
NW Shelf
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Permian BasinCentral and Midland Basin Oil Opportunities
Midland-Wolfcamp Shale
Net acreage: 67,000
Delivering consistent economic results
Multi-year drilling inventory (800 locations)
2013 plans: Drill >100 wells (7 operated rigs)
Wolfberry Net acreage: 160,000 (2013 plans: Drill 80 wells)
Predominantly vertical development program
Upside: Downspacing and Wolfcamp exploitation
Other Conventional Activity
Legacy position enhances full-cycle returns
Exploiting Central Basin Platform oil targets(Tubb, Wichita-Albany, Strawn, Clear Fork & others)
Cline Shale
Net acreage: 389,000 (2013 plans: Drill 30 wells)
High-impact exploration opportunity
Joint venture minimizes capital commitment
MidlandBasin
Northwestern
Shelf
CentralBasinPlatform
Ozona Arch
New
Mexico
Texas
Midland
Wolfberry
Conventional WolfcampShale
Eastern
Shelf
Cline Shale
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page 16
Mississippian TrendEmerging Oil Opportunity
Grant
Kay
Osage
Pawnee
Payne
Logan
Garfield
Noble
Oklahoma
Kansas Net risked resource: >800 MMBOE
Risked locations: >5,000
Devon/Sinopec JV Acreage
Net acreage: 600,000(450,000 net acres outside of Sinopec JV)
Operated rig count: 15(Potential to operate >20 rigs by year-end)
3D seismic enhancing results
Recent wells >1,000 BOPD(Not including high BTU gas)
Results constrained by infrastructure
70 wells awaiting completion
2013 plans: Drill 400 wells
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Field characteristics Low F&D
Flat production profile
Long reserve life >20 years
Jackfish 1
Top-tier operating performance Q1 2013 net production: 33 MBOPD
Initiated solvent and gas co-injection pilots
Jackfish 2
Q1 2013 net production: 21 MBOPD
Installing facilities for additional pad
Jackfish 3
Construction 60% complete
Pike
Up to five SAGD development phases
Regulatory approval expected by year-end
Devons Thermal Oil PositionSAGD Development
Jackfish (100% WI)
Pike (50% WI)
Access Pipeline
Jackfish 2
Jackfish 3
Jackfish
NYSE: DVN www.devonenergy.com Slide 17
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NYSE: DVN www.devonenergy.com
Note: Industry average includes: Bolney-Celtic, Christina Lake, Firebag, Foster Creek, Great Divide, Hangingstone, Kerrobert, Leismer, LongLake, MacKay River, MEG, Orion, Senlac, Surmont, Tangleflags, Tucker, and Wolf Lake.
Source: FirstEnergy Capital and company disclosures
Jackfish PerformanceJackfish 1 PerformanceComparison to Industry SAGD Projects
3.56
2.70
IndustryAverage
Cumulative Steam Oil Ratio (SOR)
63 Months After Project Startup
890
370
IndustryAverage
Production Per Well (BOPD)
Slide 18
P d i O l k
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Long-Term Production OutlookThermal OilNet Barrels Per Day
54,000
Q1 2013 2020
150,000
175,000
Net Risked Resource: 1.4 BBO
C di Oil Diff i l O l k
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Canadian Oil Differential Outlook
Increased refinery capacity for heavier crudes
260 MBOPD of incremental demand by 2H 2013 (Whiting)
Significant pipeline expansions
Flanagan South & Seaway: 585 MBOPD by mid-2014
Keystone XL : 830 MBOPD by 2015
Energy East: Up to 850 MBOPD by 2017
Trans Mountain & Northern Gateway: 1.1 MMBOPD by 2018
Increasing rail utilization in North America (>200 MBOPD by end of 2013)
Conclusion: Incremental demand and infrastructure additions support
improved oil differentials
C W df d Sh l
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Dewey Blaine
Custer
Washita
Caddo Grady
Canadian
Cana Plant
NYSE: DVN www.devonenergy.com Slide 21
Cana Woodford ShaleLiquids-Rich Gas Development
Net risked resource: 11.4 TCFE
Risked locations: 5,400
Net acreage: 250,000
Low average royalty burden: 21%
Q1 2013 net production: 340 MMCFED
26% growth year over year
Oil & NGLs production: 23,000 BOED(41% of total production)
Expanding gas processing facility:
30 MBPD of NGL capacity
Significant undrilled liquids-rich inventory 3,000 locations
2013 plans: Drill 150 wells
TEXAS
OKLAHOMA
B tt Sh l
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Barnett ShaleLiquids-Rich Gas Development
Net acreage: 615,000
Low average royalty burden: 18%
Q1 2013 net production: 1.4 BCFED
Liquids production: 55,000 BOED(24% of total production)
Significant free cash flow ($600 million in 2013)
Liquids-rich drilling inventory: 2,500 locations
Operated rig count: reduced to 5 in Q2 2013
2013 plans: Drill 150 wells
Net risked resource: 14 TCFE
Risked locations: 5,000
ParkerPalo Pinto
Hood
Tarrant
JohnsonErath
Hill
Jack
Denton
Wise Denton
Ft. Worth
DRY GAS175,000 net acres
Bridgeport Plant
LIQUIDS-RICH440,000 net acres
TEXAS
OKLAHOMA
www.devonenergy.com Slide 22
E h d B Mid t O ti
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Enhanced By Midstream Operations
Profitable midstream enhances operational effectiveness
Gulf Coast Fractionators
38.75% WI
Inlet: 145 MBPD
Access Pipeline (Thermal Oil)
50% WI
Capacity net to Devon:
Blended bitumen: 170 MBOPD*
Condensate: 95 MBOPD*
*Capacity after 2014 expansion
Edmonton
Jackfish
Key Midstream Assets
Cana Plant
Inlet: 350 MMCFD*
Liquids: 30 MBPD**Capacity after 2Q13 expansion
Northridge Plant
Inlet: 200 MMCFD
Liquids: 17 MBPD
Barnett Plant
Inlet: 790 MMCFD*
Liquids: 63 MBPD*
*Capacity after 2Q13 expansion
Ownership in 16,000 miles of pipeline
United States: 6,500 miles
Canada: 9,500 miles
Ownership in 62 plants
United States: 6 plants
Canada: 56 plants
Enhances margins by $2 per BOE
2013e operating profit: $450 million
2013e capital: $1 billion
Ferrier Plant
Inlet: 100 MMCFD*
Liquids: 13 MBPD*
*Capacity after 2014 completion
P t ti l T U l k V l
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Potential To Unlock Value
Considering several options including:
Joint Ventures
Asset sales
Midstream MLP
C ti f Mid t MLP
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Creation of Midstream MLP
Announced June 6, 2013
MLP will initially own a minority interest in
Devons U.S. midstream business
Devon will own the general partner
Devon will initially own a majority of the
partnership units following the IPO
Allows the market to establish an independent
value for midstream business
Wh O D ?
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Why Own Devon?
Disciplined focus on per share results
Deep inventory of development opportunities
World-class SAGD position
Strong Permian Basin position
Premier positions in Barnett & Cana Shale plays
Strong, highly-visible oil growth
Significant positions in emerging oil plays
Strong balance sheet
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Thank You.
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Appendix A
Strategy & Operations
Strategic Objective
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Strategic Objective
Devon strives to maximize long-term
value for our shareholders by growing
cash flow per share, adjusted for debt.
We Pursue Our Strategic
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We Pursue Our StrategicObjective By:
Exercising capital discipline
Maintaining a low-cost structure to maximize operating margins
Focusing on high-return projects
Improving performance through our midstream
operations
Preserving financial strength and flexibility
Advantaged Resource Base
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Advantaged Resource Base
Low entry costs (acreage and royalties)
Large, concentrated positions
High-graded portfolio (capturing and divesting)
Strategic midstream presence in key plays
Portfolio Management
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NYSE: DVN www.devonenergy.com Slide 32
Portfolio Management
Goal: Optimize depth, diversity, and quality of drilling inventory
Harvesting mature and lower return assets
(Since 2002 divested $18 billion of assets)
New leasehold capture
(Since 2009 invested >$4 billion into leasehold capture and exploration)
Joint ventures / farm-ins(Closed $4.0 billion of joint ventures in 2012)
Joint Venture Rationale
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Joint Venture Rationale
Objective: Utilize partnerships in exploration
Improves capital efficiency
Accelerates de-risking and commercialization
Mitigates exploration risk
Flexibility to generate new prospects
Preserves cash flow for development projects
Other Natural Gas Optionality
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Other Natural Gas Optionality
Groesbeck
Washakie
East TexasUnconventional
Conventional Plays
Powder River
Horn River
Arkoma Woodford
Natural GasPlay
Net AcreagePosition
CanadaConventional
>4 million acres
Carthage 209,000 acres
Horn River 178,000 acres
Groesbeck 170,000 acres
Washakie 162,000 acres
Powder River 109,000 acres
ArkomaWoodford
40,000 acres
East TexasUnconventional
37,000 acres
Carthage
Other Natural Gas Optionality
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Other Natural Gas Optionality
Natural Gas PlayNet Acreage
PositionNet Production
Q1 2013Proved Reserves
12/31/12
Canada Conventional >4 million acres 448 MMCFED 684 BCFE
Powder River 109,000 acres 47 MMCFED 19 BCFE
Carthage 209,000 acres 178 MMCFED 818 BCFE
Horn River 178,000 acres 7 MMCFED n/m
Groesbeck 170,000 acres 61 MMCFED 218 BCFE
Washakie 162,000 acres 112 MMCFED 446 BCFE
Arkoma Woodford 40,000 acres 55 MMCFED 210 BCFE
East Texas Unconventional 37,000 acres 16 MMCFED 54 BCFE
Canadian Oil Sands
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Canadian Oil SandsIndustry Overview
In-Situ Projects
Mining Projects
Project Type
Peace River
Athabasca
Cold Lake
Oil Sands Region
Fort HillsHorizon
Joslyn Creek
Syncrude
Suncor
Muskeg RiverAlbian
Dover
MacKay River
Firebag
Hangingstone
Long LakeSurmont
Christina Lake
FosterCreek
Wolf Lake/Primrose
Hilda Lake
Cold Lake
Tucker Lake
Jackfish
KearlLake
Jackpine
NorthernLights
White SandsPike
Kirby
Peace River
Seal
MEG
Pike Project Overview
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Pike Project Overview
Pike leasehold
50% operated working interest
Similar reservoir characteristics
to Jackfish
Up to five 35 MBOPD SAGDdevelopment phases
Potential Pike 1 development
Single plant pad
Up to three 35 MBOPD projects
Developed concurrently
Regulatory approval expected by
year-end
Jackfish
Pike acreage (50% WI) >15m (50ft) continuous bitumen pay
Pike Project Area
Seismic shoot
Pike 1A, 1B & 1CFocus Area
Access Pipeline (50% Ownership)
SAGD Upside
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SAGD UpsideSolvents
Potential Benefits
Increases production rates per well and
plant production capacity
Lower steam-oil ratios (15% - 50% decrease)
Reduces plant emissions
Risks
Access to solvent
Solvent recovery
Status Update
1st pilot program: Initiated in Q1 2013
Small-Scale SAGD
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Small-Scale SAGD
Reusable SAGD facilities designed to exploit smaller accumulations
of bitumen (4 prospects identified)
Targeted resource: 35-70 MMBO per project
Peak production rates up to 10 MBOPD per project
Less upfront capital commitments
(30% of the capital required for traditional SAGD projects)
Earlier return on capital(1stoil sale 25 months after sanctioning)
Heavy Oil Midstream Infrastructure
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Heavy Oil Midstream InfrastructureAccess Pipeline
EDMONTON
HARDISTY
Express P/LTo U.S. Rockies
Access BitumenBlend Pipeline
Access DiluentPipeline
Oil Pipelines
200 mile dual pipeline from Edmonton to
Devons thermal acreage
Devon ownership: 50%
Capacity net to Devon
Blended bitumen: 105 MBOPD(170 MBOPD after expansion in 2014)
Condensate: 45 MBPD(95 MBPD after expansion in 2014)
Access to Edmonton condensate, synthetic
crude and light oil markets
Flexibility enhances economics
JACKFISH & PIKE
Sturgeon Terminal
Lloydminster
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Iron River
Manatokan
End Lake
Lloydminster
LloydminsterOil Development
Net acreage: 700,000
Low-risk development
Strong operating margins
Q1 2013 net production: 30 MBOED
2013 plans: 150 wells
Net risked resource: 60 MMBOE
Risked locations: >1,000
B. C.
Alberta
Sask.
Lloydminster
Ferrier
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FerrierEmerging Liquids Opportunity
Net acreage: 240,000
Multiple target formations:
(Cardium oil, Viking, Glauconite, & Lower Cretaceous)
Phase 1 development:
>200 drilling locations
>1 MMBOE risked resource
Liquids 50% of expected production
Constructing gas processing facility
Inlet capacity: 100 MMcfd Liquids: 13,000 Bbl/d
Expected completion: Mid-2014
2013 plans: Drill 15 wells
B. C. Alberta
Sask.Ferrier Corridor
Ferrier Plant
Phase 1 development area
Granite Wash
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Granite WashOil & Liquids-Rich Development
Net acreage: 66,000
Legacy land position held by production
Low average royalty burden: 19%
Q1 2013 net production: 16 MBOED
Liquids drive superior economics
4 operated rigs
2013 plans: Drill 50 wells
OKLAHOMA
Oklahoma City
TEXAS
Granite Wash
Hemphill
Wheeler
Net risked resource: 200 MMBOE
Risked locations: 350 net wells
Joint Venture Transactions
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Mississippian
Tuscaloosa Shale
Rockies OilUtica Ohio
Michigan
Joint Venture TransactionsOil & Liquids Exploration
Sinopec Joint Venture
$2.5 billion transaction($900 million cash and $1.6 billion drilling carry)
Sinopec receives 33% of Devons interest
Net acreage in joint venture: 1.5 million Devon serves as operator
Sumitomo Joint Venture
$1.4 billion transaction($400 million cash and $1.0 billion drilling carry)
Sumitomo receives 30% of Devons interest
Net acreage in joint venture: 650,000
Devon serves as operatorSinopec joint venture assets
Cline Shale &Wolfcamp Shale
Sumitomo joint venture assets
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Appendix B
Financial
Debt Maturity Schedule
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NYSE: DVN www.devonenergy.com Slide 46
Debt Maturity ScheduleAs of March 31, 2013
Due Date Interest Rate $ In Millions
Commercial Paper 0.4% $3,697
January 2014 5.6% $500
July 2016 2.4% $500
May 2017 1.9% $750
July 2018 8.3% $125
January 2019 6.3% $700
July 2021 4.0% $500
May 2022 3.3% $1,000
2023+ 4.8% - 8.0% $4,380
Total Debt $12,152
Cash and Short-TermInvestments
$6,501
Net Debt $5,651
Natural Gas Hedges
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Natural Gas Hedges
Q2-Q4 2013
750 MMCFD collared: $3.55 floor and $4.19 ceiling
988 MMCFD swapped at $4.09
FY 2014
140 MMCFD collared: $4.00 floor and $4.62 ceiling
763 MMCFD swapped at $4.40
500 MMCFD of call options sold at $5.00
Note: The pricing points referenced above are weighted average prices.
Oil Hedges
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Oil Hedges
Q2-Q4 2013
65 MBOPD collared: $90 floor and $112 ceiling
70 MBOPD swapped at $100
35 MBOPD swapped at a differential to WTI of $22 (WCS regional basis swaps)
10 MBOPD of call options sold at $120
FY 2014
10 MBOPD collared: $87 floor and $103 ceiling
21 MBOPD swapped at $95
41 MBOPD of call options sold at $116.30
Note: The pricing points referenced above are weighted average prices.
2013 Operating Cash Flow Estimates
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2013 Operating Cash Flow Estimates$ In Billions
WTI-Cushing Price
Henry Hub Price $80.00 $90.00 $100.00
$3.25 $5.0 $5.0 $5.3
$3.75 $5.0 $5.1 $5.4
$4.25 $5.1 $5.2 $5.5
Note: Operating cash flow assumes the mid-point of Devons full-year guidance for production, pricedifferentials, and costs. For more details on Devons guidance see the form 8-K filed on February20, 2013.
Sources and Uses of Cash
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Sources and Uses of CashBefore Share Buybacks and Dividends
$ In Billions
2009 2010 2011 20122009-2012
Total
Operating Cash Flow 4.8 5.5 6.2 5.0 21.5
Asset Sales / JV Proceeds 0.0 7.0 3.4 1.5 11.9
Capital Expenditures (5.4) (7.0) (7.6) (8.2) (28.2)
Net Cash Effect (0.6) 5.5 2.0 (1.7) 5.2
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Appendix C
Supply & Demand
Canadian Crude Oil
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NYSE: DVN www.devonenergy.com Slide 52
Canadian Crude OilSupply and System Capacity
Source: Canadian Association of Petroleum Producers
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2011 2012 2013e 2014e 2015e 2016e 2017e 2018e
MMBOD
Oil Supply Current Export & Local Demand Capacity
Rail Flanagan South
Keystone XL Trans Mountain Expansion
Energy East Northern Gateway
Canadian Oil
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Vancouver
NYSE: DVN www.devonenergy.com Slide 53
U.S. Gulf Coast(USGC)
Cushing
Hardisty
Edmonton
Chicago
Canadian OilPipeline Capacity Additions
Flanagan South: Chicago to USGC Capacity: 0.6 MMBOPD
Estimated in service by mid-2014
Keystone XL: Hardisty to USGC
Capacity: 0.8 MMBOPD
Estimated in service by 2015
Trans Mountain: Edmonton to Vancouver
Incremental capacity: 0.6 MMBOPD
Estimated in service by 2017
Energy East: Hardisty to Canaport
Capacity: Up to 0.9 MMBOPD
Estimated in service by mid-2017
Northern Gateway: Edmonton to Kitimat
Capacity: 0.5 MMBOPD
Estimated in service by 2018
Kitimat
Canaport
Heavy Oil Blend
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Heavy Oil BlendRail Transport Fees
Potential Rail Costs $ Per Bbl
Trucking & Loading $7.00
Rail Car Rental $5.00
Transport FeeVariable
(Mileage Based)
Offloading Fee $3.00
Oil Sands
West CoastRefining
Gulf CoastRefining
East CoastRefining
Heavy Oil
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www.devonenergy.com Slide 55
Heavy OilRefinery Expansions
Operator LocationIn Service
DateCapacity
Increase (BOPD)
BP Whiting, Indiana 2H 2013 260,000
NorthwestUpgrading
Edmonton, Alberta 2016 80,000
Total Capacity Increase from 2013 to 2016 340,000
NYSE: DVN
North America Natural Gas
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NYSE: DVN www.devonenergy.com Slide 56
Demand Growth By Sector 2013-2017
Source: Wood Mackenzie, EIA, Bentek, and company data
70
2.00.8
3.0
1.7
78
65
70
75
80
2013Baseline
Industrial Res/Com Power LNG Exports 2017e
BCFD
North America Natural Gas
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Cumulative Coal Retirement Demand Forecast
0.5 0.71.0
2.63.00.8
2.9
3.2
0
2
4
6
8
2013e 2014e 2015e 2016e 2017e
Forecasted Retirement Demand Potential Demand
Source: Wood Mackenzie, CRA, NYMEX, Platts, and company data
BCFD
North America Natural Gas
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Annual Industrial Demand
15
16
17
18
19
20
21
22
2008 2009 2010 2011 2012 2013e 2014e 2015e 2016e 2017e
BCFD
Source: Wood Mackenzie, EIA, and company data
North America Natural Gas
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NYSE: DVN www.devonenergy.com
U.S. LNG Projects
Facility Developer(s) Location Capacity(BCFD)
Start-Up Date
ApprovalDOE Exports
ApprovalFERC
Final
InvestmentDecision
(FID)
Sabine Pass Cheniere Cameron, LA 2.3 4Q 2015 Approved Approved July 2012
Freeport LNG Freeport LNG Freeport, TX 1.4 2016 Approved Filed --
Cameron Sempra Energy Hackberry, LA 1.7 2017 Pending Filed --
Cove Point Dominion Lusby, MD 1.0 2017 Pending -- --
Jordan Cove Fort Chicago Coos Bay, OR 1.2 2017 Pending -- --
Oregon LNG LNG Development Co Astoria, OR 1.3 2017 Pending -- --
Lavaca Bay LNG Excelerate Floating LNG,Corpus Christi,TX
0.5 2017 Pending -- --
Lake Charles Energy Transfer / BG Lake Charles, LA 2.0 2018 Pending -- --
Corpus Christi Cheniere Corpus Christi,TX
1.2 2018 Not Filed Filed --
Gulf Coast LNG Freeport LNG Brownsville, TX 1.4 2018 Pending -- --
Golden Pass ExxonMobil, QatarPet
Port Arthur, TX 2.0 N/A Pending -- --
Others 4.0 to 5.5 N/A -- -- --
U.S. TOTAL 20 to 21.5
North America Natural Gas
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Canada LNG Projects
Facility Developer(s) LocationCapacity(BCFD)
Start-Up DateNEB
ExportLicense
Douglas ChannelEnergy
LNG Partners, HaislaNation
Floating LNG,Kitimat, B.C.
0.1 2015 Approved
Kitimat LNG Apache, Chevron Kitimat, B.C. 0.7 2018 Approved
Goldboro LNG Pieridae Energy Nova Scotia 1.3 2018 --
LNG Canada Shell, Mitsubishi,KOGAS, PetroChina
Kitimat, B.C. 1.6 2019 Approved
Pacific Northwest LNG Petronas, Japex Prince Rupert, B.C. 1.6 2019 FiledBG Group LNG BG Group Prince Rupert, B.C. 3.9* 2020 --
CANADA TOTAL 9.2
* Announced pipeline capacity of 4.2 Bcf/d. Liquefaction estimated based on pipe capacity.