DVN Devon Energy Corp

• Achieved record Q4 oil production exceeding company guidance
• Generated U.S. oil production growth of 82 percent in Q4 year over year
• Increased proved oil reserves to highest level in company history
• Maintained excellent financial strength and liquidity
• Reiterated 2015 oil production growth outlook of 20 to 25 percent
• Decreased 2015 E&P capital budget by 20 percent

Devon Energy Corporation (NYSE:DVN) today reported net earnings for the full-year 2014 of $1.6 billion, or $3.93 per common share ($3.91 per diluted share). This compares to a net loss of $20 million in 2013, or $0.06 per common share ($0.06 per diluted share).

Devon generated cash flow from operations of $6.0 billion in 2014, a 10 percent increase compared to 2013. Including $5.1 billion of cash received from the sale of non-core assets, the company’s total cash inflows for the year exceeded $11 billion.

For the fourth quarter of 2014, Devon’s core earnings totaled $343 million, or $0.84 per common share ($0.83 per diluted share). The company reported a net loss of $408 million, or $1.01 per common share ($1.01 per diluted share) in the fourth quarter.

“Devon delivered another exceptional performance in the fourth quarter, rounding out an outstanding year for the company, including a significant repositioning of the portfolio,” said John Richels, president and CEO. “Production from our top-tier asset portfolio exceeded guidance for all products, proved oil reserves reached a record level and our midstream business increased profitability to an all-time high.

“We expect to sustain operational momentum in 2015 with the significant improvements we have seen in our completion designs and a capital program focused on development drilling,” said Richels. “With strong results from our enhanced completions and a focus on core development areas, we expect growth in oil production to be between 20 and 25 percent in 2015, even with a projected reduction of approximately 20 percent in E&P capital spending compared to 2014.”

Repositioned Portfolio Exceeds Production Expectations

Total production from Devon’s retained assets averaged 664,000 oil-equivalent barrels (Boe) per day during the fourth quarter of 2014. This result exceeded the company’s guidance range by 9,000 Boe per day and represents a 20 percent increase compared to the fourth quarter of 2013. This high-margin growth increased liquids production to 57 percent of the company’s retained asset mix in the fourth quarter.

Devon also delivered record oil production of 239,000 barrels per day in the fourth quarter. This result exceeded the top end of the company’s guidance range and represents a 48 percent increase compared to the fourth quarter of 2013. The most significant growth came from the company’s U.S. operations, where oil production increased a substantial 82 percent for the quarter year over year.

The strong growth in U.S. oil production during the quarter was largely attributable to prolific well results from the company’s world-class Eagle Ford assets. Net production in the Eagle Ford averaged 98,000 Boe per day in the fourth quarter, a 100 percent increase compared to Devon’s first month of ownership in March 2014. The company also achieved another quarter of strong production growth in the Permian Basin. Led by outstanding results from Devon’s Delaware Basin assets, total Permian Basin production increased to 98,000 Boe per day in the fourth quarter, a 14 percent increase compared to the year-ago period.

In Canada, net oil production from the company’s heavy-oil projects increased to a record high of 93,000 barrels per day in the fourth quarter. This strong result exceeded the top end of Devon’s guidance range by 5,000 barrels per day and represents a 15 percent increase in production compared to the fourth quarter of 2013. This growth was driven by the continued ramp-up of the company’s newest heavy-oil facility, Jackfish 3, which exited the year averaging 13,000 barrels per day.

Reserves from Retained Assets Grow; Oil Reserves Climb to Record Levels

Devon’s estimated proved reserves totaled 2.8 billion oil-equivalent barrels on Dec. 31, 2014, a 7 percent increase in reserves compared to the company’s retained asset portfolio in 2013. At year-end, proved oil reserves reached a record 895 million barrels.

The most significant reserve growth came from Devon’s U.S. operations, where oil reserves from retained properties increased 65 percent year over year to 351 million barrels. The substantial growth in U.S. oil reserves is largely attributable to the company’s Eagle Ford acquisition and its Delaware Basin operations. During the year, the company’s U.S. drilling programs added 94 million barrels of light-oil reserves through successful drilling (extensions and discoveries). This represents a replacement rate of approximately 200 percent of the light oil produced during 2014.

Overall, the company’s reserve life index (proved reserves divided by annual production from retained properties) remained at approximately 12 years, and its proved undeveloped reserves accounted for only 25 percent of proved reserves.

Operations Report

For additional details on Devon’s core and emerging assets, please refer to the company’s fourth-quarter 2014 Operations Report at www.devonenergy.com. Highlights from the operations report include:

• Prolific Q4 results, increasing type curve for Eagle Ford
• Improved completion design delivers excellent results in Delaware Basin
• Ramp-up exceeds expectations at Jackfish 3
• High-rate development wells from Cana-Woodford

Upstream Revenue Increases 16 Percent; Midstream Profit Rises

Revenue from oil, natural gas and natural gas liquids sales totaled $9.9 billion in 2014, a 16 percent increase compared to 2013. The growth in revenue was attributable to the company’s significant increase in U.S. light-oil production. This high-margin growth increased oil sales to 60 percent of Devon’s total upstream revenues during the year.

In the fourth quarter, upstream revenue was $2.1 billion, a 3 percent decrease compared to the fourth quarter of 2013. Cash settlements related to the company’s oil and natural gas hedges increased revenue by $4.23 per Boe in the fourth quarter of 2014, partially offsetting lower realized oil and natural gas liquids prices. At Dec. 31, 2014, Devon’s attractive commodity hedges had a fair market value of nearly $2.0 billion.

The company’s marketing and midstream business also delivered excellent results in 2014, with operating profits reaching an all-time high of $852 million, a 66 percent increase compared to 2013. The year-over-year increase in operating profit was largely driven by growth from EnLink Midstream.

Cash Operating Costs Decline

The company’s successful cost containment efforts resulted in lease operating expenses (LOE), the largest cash cost, of $9.29 per Boe in the fourth quarter. LOE was 5 percent below the low end of Devon’s guidance range and 2 percent lower than the third quarter of 2014. The company’s significant scale in core plays coupled with a consistent focus on efficient operations continues to position Devon as a low-cost producer.

Production and property taxes were $108 million in the quarter, essentially flat compared to the fourth quarter of 2013. Compared to the previous quarter, lower commodity prices drove a decline in production and property taxes of 23 percent.

Net financing costs totaled $167 million in the fourth quarter of 2014, an increase of 50 percent compared to the year-ago quarter. The higher financing costs were due to a $48 million charge attributable to the early redemption of $1.9 billion in senior notes.

General and administrative expenses totaled $252 million in the fourth quarter of 2014. This compares with $157 million in the fourth quarter of 2013. The year-over-year increase resulted from the consolidation of EnLink Midstream and higher employee-related costs.

Depreciation, depletion and amortization expense (DD&A) amounted to $14.89 per Boe in the fourth quarter. For the full-year, DD&A was $13.51 per Boe and compares to a rate of $10.99 in 2013. The increase in DD&A rate was primarily attributable to the company’s Eagle Ford acquisition and EnLink Midstream transaction.

Devon incurred a $1.9 billion non-cash impairment of goodwill in the fourth quarter of 2014. The goodwill was recorded more than a decade ago and was related to an acquisition comprised almost entirely of conventional gas assets in Canada that Devon no longer owns. This non-cash impairment was related to the recent drop in oil prices.

Full-year 2014 income tax expense was $2.4 billion, or 58 percent of pre-tax earnings. This unusually high tax rate resulted principally from the goodwill impairment charge that lowered pre-tax earnings but did not impact the company’s full-year tax obligations. Excluding this impairment charge and other non-recurring items, Devon’s income tax rate was 35 percent of adjusted pre-tax earnings for the full year.

Balance Sheet and Liquidity Remain Strong

Devon’s financial position remains exceptionally strong with investment-grade credit ratings and cash balances of $1.5 billion at the end of the fourth quarter. During the quarter, the company redeemed $1.9 billion in senior notes, completing the debt repayment plan associated with its portfolio transformation. At Dec. 31, the company’s net debt, excluding non-recourse EnLink obligations, totaled $7.8 billion.

2015 Outlook: Production Guidance Unchanged; E&P Capital Reduced 20 Percent

Detailed forward-looking guidance for the first quarter and full year of 2015 is provided later in the release. A notable component of this outlook is Devon’s 2015 E&P capital budget of $4.1 to $4.4 billion. This level of investment implies around a 20 percent decline in E&P spending compared to 2014 and is designed to better balance capital expenditures with expected cash inflows.

Even with reduced E&P capital investment in 2015, the company’s production growth outlook remains unchanged. With significant improvements in completion design and a capital program focused on development drilling, Devon expects to deliver oil production growth of 20 to 25 percent year over year on a retained property basis. This production outlook is driven by balanced oil growth in both the U.S. and Canada.

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 general accepted accounting principles). Core earnings and net debt are non-GAAP financial measures referenced within this release. Reconciliations of these non-GAAP measures are provided later in this release.

Conference Call Webcast and Supplemental Earnings Materials

Please note that as soon as practicable today, Devon will post additional information, consisting of an operations report and management commentary with associated slides, to its website at www.devonenergy.com. The company’s fourth-quarter 2014 conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Feb. 18, 2015, and will serve primarily as a forum for analyst and investor questions and answers.

Forward-Looking Statements

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 and exploration 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.

About Devon Energy

Devon Energy Corp. (NYSE: DVN) is a leading independent energy company engaged in finding and producing oil and natural gas. Based in Oklahoma City and included in the S&P 500, Devon operates in several of the most prolific oil and natural gas plays in the U.S. and Canada with an emphasis on a balanced portfolio. The company is the second-largest oil producer among North American onshore independents. For more information, please visit www.devonenergy.com.

DEVON ENERGY CORPORATION

FINANCIAL AND OPERATIONAL INFORMATION

                          Quarter Ended Year Ended PRODUCTION NET OF ROYALTIES December 31, December 31, 2014 2013 2014 2013   Oil / Bitumen (MBbls/d) United States 146 80 127 73 Canada 93 81 82 79 Retained assets 239 161 209 152 Divested assets - 16 5 16 Total Oil / Bitumen 239 177 214 168 Natural Gas (MMcf/d) United States 1,684 1,639 1,662 1,658 Canada 23 28 23 28 Retained assets 1,707 1,667 1,685 1,686 Divested assets 3 661 235 707 Total Natural Gas 1,710 2,328 1,920 2,393 Natural Gas Liquids (MBbls/d) United States 141 114 132 107 Divested assets - 18 7 19 Total Natural Gas Liquids 141 132 139 126 Oil Equivalent (Mboe/d) United States 567 467 536 456 Canada 97 86 86 85 Retained assets 664 553 622 541 Divested assets 1 143 51 152 Total Oil Equivalent 665 696 673 693                     KEY OPERATING STATISTICS BY REGION Quarter Ended December 31, 2014 Avg. Production Gross Wells Operated Rigs at (MBoe/d) Drilled December 31, 2014 Permian Basin 98 80 18 Eagle Ford 98 78 3 Canadian Heavy Oil 97 78 11 Barnett Shale 201 14 - Anadarko Basin 100 30 5 Mississippian-Woodford Trend 20 53 2 Rockies 19 9 4 Other Assets 31 4 - Retained Assets - Total 664 346 43 Divested assets 1 - - Devon - Total 665 346 43     Year Ended December 31, 2014 Avg. Production Gross Wells (MBoe/d) Drilled Permian Basin 96 324 Eagle Ford 65 242 Canadian Heavy Oil 86 205 Barnett Shale 208 84 Anadarko Basin 94 130 Mississippian-Woodford Trend 20 236 Rockies 20 40 Other Assets 33 5 Retained Assets - Total 622 1,266 Divested assets 51 - Devon - Total 673 1,266                                 PRODUCTION TREND 2013 2014 Quarter 4 Quarter 1 Quarter 2 Quarter 3 Quarter 4   Oil (MBbls/d) Permian Basin 50 55 55 56 55 Eagle Ford - 11 40 46 60 Canadian Heavy Oil 81 78 77 80 93 Barnett Shale 2 2 2 2 2 Anadarko Basin 9 9 11 10 10 Mississippian-Woodford Trend 8 10 9 10 9 Rockies 8 8 8 10 9 Other assets 3 2 3 2 1 Retained assets 161 175 205 216 239 Divested assets 16 15 4 3 - Total 177 190 209 219 239 Gas (MMcf/d) Permian Basin 116 121 134 136 137 Eagle Ford - 22 86 107 126 Canadian Heavy Oil 28 19 23 26 23 Barnett Shale 995 931 932 896 878 Anadarko Basin 294 281 309 323 329 Mississippian-Woodford Trend 19 28 28 32 31 Rockies 75 65 67 66 58 Other assets 140 140 135 130 125 Retained assets 1,667 1,607 1,714 1,716 1,707 Divested assets 661 585 217 138 3 Total 2,328 2,192 1,931 1,854 1,710 NGL (MBbls/d) Permian Basin 16 16 18 19 20 Eagle Ford - 3 10 14 18 Canadian Heavy Oil - - - - - Barnett Shale 56 55 55 54 53 Anadarko Basin 27 29 31 34 34 Mississippian-Woodford Trend 3 5 5 6 6 Rockies 1 1 1 1 1 Other assets 11 10 10 10 9 Retained assets 114 119 130 138 141 Divested assets 18 16 6 5 - Total 132 135 136 143 141 Combined (MBoe/d) Permian Basin 86 91 95 98 98 Eagle Ford - 17 65 78 98 Canadian Heavy Oil 86 81 81 84 97 Barnett Shale 224 213 212 205 201 Anadarko Basin 85 85 93 98 100 Mississippian-Woodford Trend 14 19 18 21 20 Rockies 21 20 21 22 19 Other assets 37 37 35 34 31 Retained assets 553 563 620 640 664 Divested assets 143 128 47 31 1 Total 696 691 667 671 665                           BENCHMARK PRICES (average prices) Quarter 4 December YTD FY2014 FY2013 FY2014 FY2013 Natural Gas ($/Mcf) - Henry Hub $ 4.04 $ 3.60 $ 4.43 $ 3.65 Oil ($/Bbl) - West Texas Intermediate (Cushing) $ 73.05 $ 97.53 $ 93.01 $ 98.02   REALIZED PRICES Quarter Ended December 31, 2014 Oil /Bitumen Gas NGL Total (Per Bbl) (Per Mcf) (Per Bbl) (Per Boe) United States $ 68.19 $ 3.53 $ 17.79 $ 32.45 Canada (1) $ 45.71 $ 0.87   $ 54.32   $ 44.01 Realized price without hedges $ 59.46 $ 3.49 $ 17.75 $ 34.14 Cash settlements $ 10.34 $ 0.20   $ 0.04   $ 4.23 Realized price, including cash settlements $ 69.80 $ 3.69   $ 17.79   $ 38.37   Quarter Ended December 31, 2013 Oil /Bitumen Gas NGL Total (Per Bbl) (Per Mcf) (Per Bbl) (Per Boe) United States $ 96.04 $ 3.01 $ 27.51 $ 32.96 Canada (1) $ 48.50 $ 3.07   $ 45.00   $ 35.74 Realized price without hedges $ 71.45 $ 3.02 $ 28.73 $ 33.65 Cash settlements $ 3.33 $ 0.23   $ (0.19 ) $ 1.59 Realized price, including cash settlements $ 74.78 $ 3.25   $ 28.54   $ 35.24   Year Ended December 31, 2014 Oil Gas NGL Total (Per Bbl) (Per Mcf) (Per Bbl) (Per Boe) United States $ 85.64 $ 3.92 $ 24.46 $ 37.96 Canada (1) $ 60.05 $ 3.64   $ 50.52   $ 53.11 Realized price without hedges $ 75.55 $ 3.90 $ 24.89 $ 40.33 Cash settlements $ 1.16 $ (0.05 ) $ 0.02   $ 0.22 Realized price, including cash settlements $ 76.71 $ 3.85   $ 24.91   $ 40.55   Year Ended December 31, 2013 Oil Gas NGL Total (Per Bbl) (Per Mcf) (Per Bbl) (Per Boe) United States $ 94.52 $ 3.10 $ 25.75 $ 31.59 Canada (1) $ 57.18 $ 3.05   $ 46.17   $ 39.91 Realized price without hedges $ 74.41 $ 3.09 $ 27.33 $ 33.70 Cash settlements $ 0.90 $ 0.16   $ 0.01   $ 0.77 Realized price, including cash settlements $ 75.31 $ 3.25   $ 27.34   $ 34.47

(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.

                          CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) Quarter Ended Year Ended December 31, December 31,   2014     2013     2014     2013   Oil, gas and NGL sales $ 2,086 $ 2,155 $ 9,910 $ 8,522 Oil, gas and NGL derivatives 1,960 (96 ) 1,989 (191 ) Marketing and midstream revenues   1,949     565     7,667     2,066   Total operating revenues   5,995     2,624     19,566     10,397   Lease operating expenses 568 584 2,332 2,268 Marketing and midstream operating expenses 1,723 425 6,815 1,553 General and administrative expenses 252 157 847 617 Production and property taxes 108 108 535 461 Depreciation, depletion and amortization 910 711 3,319 2,780 Asset impairments 1,953 16 1,953 1,976 Restructuring costs 2 4 46 54 Gains and losses on asset sales - (2 ) (1,072 ) 9 Other operating items   19     30     93     112   Total operating expenses   5,535     2,033     14,868     9,830   Operating income 460 591 4,698 567 Net financing costs 167 111 526 417 Other nonoperating items   2     5     113     1   Earnings from continuing operations before income taxes 291 475 4,059 149 Income tax expense   670     268     2,368     169   Net earnings (loss) (379 ) 207 1,691 (20 ) Net earnings attributable to noncontrolling interests   29     -     84     -   Net earnings (loss) attributable to Devon $ (408 ) $ 207   $ 1,607   $ (20 )     Net earnings (loss) per share attributable to Devon: Basic earnings (loss) from discontinued operations per share $ (1.01 ) $ 0.51 $ 3.93 $ (0.06 ) Diluted earnings (loss) from continuing operations per share $ (1.01 ) $ 0.51 $ 3.91 $ (0.06 )     Weighted average common shares outstanding: Basic 409 406 409 406 Diluted 409 407 411 406                           CONSOLIDATED STATEMENTS OF OPERATIONS (in millions)

Quarter Ended December 31, 2014

Devon U.S. & Canada EnLink Eliminations Total Oil, gas and NGL sales $ 2,086 $ - $ - $ 2,086 Oil, gas and NGL derivatives 1,960 - - 1,960 Marketing and midstream revenues   1,141     995     (187 )   1,949   Total operating revenues   5,187     995     (187 )   5,995   Lease operating expenses 568 - - 568 Marketing and midstream expenses 1,139 771 (187 ) 1,723 General and administrative expenses 222 30 - 252 Production and property taxes 100 8 - 108 Depreciation, depletion and amortization 826 84 - 910 Asset impairments 1,953 - - 1,953 Restructuring costs 2 - - 2 Other operating items   19     -     -     19   Total operating expenses   4,829     893     (187 )   5,535   Operating income 358 102 - 460 Net financing costs 147 20 - 167 Other nonoperating items   9     (7 )   -     2   Earnings before income taxes 202 89 - 291 Income tax expense   654     16     -     670   Net earnings (loss) (452 ) 73 - (379 ) Net earnings attributable to noncontrolling interests   -     29     -     29   Net earnings (loss) attributable to Devon $ (452 ) $ 44   $ -   $ (408 )                           CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Quarter Ended Year Ended December 31, December 31,   2014     2013     2014     2013   Cash flows from operating activities: Net earnings (loss) $ (379 ) $ 207 $ 1,691 $ (20 ) Adjustments to reconcile earnings (loss) from continuing operations to net cash from operating activities: Depreciation, depletion and amortization 910 711 3,319 2,780 Asset impairments 1,953 16 1,953 1,976 Gains and losses on asset sales - (2 ) (1,072 ) 9 Deferred income tax expense

1,091

278 1,891 97 Derivatives and other financial instruments (2,027 ) 70 (2,070 ) 135 Cash settlements on derivatives and financial instruments 305 130 104 277 Other noncash charges 100 114 457 309 Net change in working capital (716 ) (194 ) 50 (298 ) Change in long-term other assets (306 ) 38 (421 ) 10 Change in long-term other liabilities   32     69     79     161   Net cash from operating activities  

963

    1,437     5,981     5,436     Cash flows from investing activities: Capital expenditures (1,975 ) (1,539 ) (6,988 ) (6,758 ) Acquisitions of property, equipment and businesses (207 ) - (6,462 ) - Proceeds from property and equipment divestitures (82 ) 103 5,120 419 Purchases of short-term investments - - - (1,076 ) Redemptions of short-term investments - - - 3,419 Redemptions of long-term investments - - 57 - Other   2     (86 )   89     (3 ) Net cash from investing activities   (2,262 )   (1,522 )   (8,184 )   (3,999 )   Cash flows from financing activities: Proceeds from borrowings of long-term debt, net of issuance costs 1,182 2,233 5,340 2,233

Net short-term debt borrowings (repayments)

933 (295 ) (385 ) (1,872 ) Long-term debt repayments (2,924 ) - (7,189 ) - Proceeds from stock option exercises 1 2 93 3 Proceeds from issuance of subsidiary units 338 - 410 - Dividends paid on common stock (99 ) (89 ) (386 ) (348 ) Distributions to noncontrolling interests (48 ) - (235 ) - Other  

2

    (1 )   (2 )   4   Net cash from financing activities  

(615

)   1,850     (2,354 )   20   Effect of exchange rate changes on cash   (14 )   (19 )   (29 )   (28 ) Net change in cash and cash equivalents (1,928 ) 1,746 (4,586 ) 1,429   Cash and cash equivalents at beginning of period   3,408     4,320     6,066     4,637     Cash and cash equivalents at end of period $ 1,480   $ 6,066   $ 1,480   $ 6,066                 CONSOLIDATED BALANCE SHEETS (in millions) December 31, December 31, Current assets:   2014     2013   Cash and cash equivalents $ 1,480 $ 6,066 Accounts receivable 1,959 1,520 Derivatives, at fair value 1,993 75 Income taxes receivable 522 89 Other current assets   544     255   Total current assets   6,498     8,005   Property and equipment, at cost: Oil and gas, based on full cost accounting: Subject to amortization 75,738 73,995 Not subject to amortization   2,752     2,791   Total oil and gas 78,490 76,786 Midstream and other   9,695     6,195   Total property and equipment, at cost 88,185 82,981 Less accumulated depreciation, depletion and amortization   (51,889 )   (54,534 ) Property and equipment, net   36,296     28,447   Goodwill 6,303 5,858 Other long-term assets   1,540     567   Total assets $ 50,637   $ 42,877     Current liabilities: Accounts payable 1,400 1,229 Revenues and royalties payable 1,193 786 Short-term debt 1,432 4,066 Deferred income taxes 730 19 Other current liabilities   1,180     555   Total current liabilities   5,935     6,655   Long-term debt 9,830 7,956 Asset retirement obligations 1,339 2,140 Other long-term liabilities 948 834 Deferred income taxes 6,244 4,793 Stockholders' equity: Common Stock 41 41 Additional paid-in capital 4,088 3,780 Retained earnings 16,631 15,410 Accumulated other comprehensive earnings   779     1,268   Total stockholders' equity attributable to Devon 21,539 20,499 Noncontrolling interests   4,802     -   Total stockholders' equity   26,341     20,499   Total liabilities and stockholders' equity $ 50,637   $ 42,877   Common shares outstanding 409 406                     CAPITAL EXPENDITURES (in millions) Quarter Ended December 31, 2014 U.S. Canada Total Exploration $ 105 $ 6 $ 111 Development   1,243   224   1,467 Exploration and development capital $ 1,348 $ 230 $ 1,578 Capitalized G&A 108 Capitalized interest 13 Acquisitions 10 Devon midstream capital 37 Other capital   40 Total (1) $ 1,786   (1) Excludes $479 million attributable to EnLink.   Year Ended December 31, 2014 U.S. Canada Total Exploration $ 292 $ 40 $ 332 Development   4,115   908   5,023 Exploration and development capital $ 4,407 $ 948 $ 5,355 Capitalized G&A 376 Capitalized interest 45 Eagle Ford, Cana and other acquisitions 6,376 Devon midstream capital 312 Other capital   125 Total (1) $ 12,589   (1) Excludes $970 million attributable to EnLink.               COSTS INCURRED Total (in millions) Year Ended December 31, 2014 2013   Property acquisition costs: Proved properties $ 5,210 $ 22 Unproved properties 1,177 216 Exploration costs 322 595 Development costs   5,463   5,089 Costs Incurred $ 12,172 $ 5,922     United States Year Ended December 31, 2014 2013   Property acquisition costs: Proved properties $ 5,210 $ 19 Unproved properties 1,176 213 Exploration costs 270 443 Development costs   4,400   3,838 Costs Incurred $ 11,056 $ 4,513     Canada Year Ended December 31, 2014 2013   Property acquisition costs: Proved properties $ — $ 3 Unproved properties 1 3 Exploration costs 52 152 Development costs   1,063   1,251 Costs Incurred $ 1,116 $ 1,409                           RESERVES RECONCILIATION Total Oil / Bitumen Gas NGL Total (MMBbls)       (Bcf)       (MMBbls)       (MMBoe) As of December 31, 2013:                           Proved developed 361 8,459 491 2,262 Proved undeveloped 476       849       84       701 Total Proved 837       9,308       575       2,963 Revisions due to prices (38) 236 8 9 Revisions other than price (19) (295) 2 (65) Extensions and discoveries 107 343 47 211 Purchase of reserves 132 457 57 265 Production (78) (701) (51) (246) Sale of reserves (46) (1,661) (60) (383) As of December 31, 2014:                           Proved developed 415 6,984 486 2,065 Proved undeveloped 480       703       92       689 Total Proved 895       7,687       578       2,754     United States Oil / Bitumen Gas NGL Total (MMBbls)       (Bcf)       (MMBbls)       (MMBoe) As of December 31, 2013:                           Proved developed 194 7,707 468 1,947 Proved undeveloped 35       843       84       258 Total Proved 229       8,550       552       2,205 Revisions due to prices (1) 191 7 38 Revisions other than price (38) (299) 2 (86) Extensions and discoveries 94 335 47 197 Purchase of reserves 132 457 57 265 Production (48) (660) (50) (207) Sale of reserves (17) (923) (37) (207) As of December 31, 2014:                           Proved developed 255 6,948 486 1,900 Proved undeveloped 96       703       92       305 Total Proved 351       7,651       578       2,205     Canada Oil / Bitumen Gas NGL Total (MMBbls)       (Bcf)       (MMBbls)       (MMBoe) As of December 31, 2013:                           Proved developed 167 752 23 315 Proved undeveloped 441       6       —       443 Total Proved 608       758       23       758 Revisions due to prices (37) 45 1 (29) Revisions other than price 19 4 — 21 Extensions and discoveries 13 8 — 14 Purchase of reserves — — — — Production (30) (41) (1) (39) Sale of reserves (29) (738) (23) (176) As of December 31, 2014:                           Proved developed 160 36 — 165 Proved undeveloped 384       —       —       384 Total Proved 544       36       —       549    

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.

CORE EARNINGS(in millions)

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. 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 tables summarize the effects of these items on fourth-quarter and total-year 2014 earnings.

            Quarter Ended December 31, 2014 Before-Tax After-Tax   Net loss attributable to Devon (GAAP) $ (408 ) Asset impairments 1,953 1,948 Fair value changes in financial instruments and foreign currency (1,721 ) (1,086 ) Gain on asset sales and related repatriation - (143 ) Early retirement of debt 48 31 Restructuring costs 2   1   Core earnings attributable to Devon (Non-GAAP) $ 343   Diluted share count 411 Core diluted earnings per share attributable to Devon (Non-GAAP) $ 0.83       Year Ended December 31, 2014 Before-Tax After-Tax   Net earnings attributable to Devon (GAAP) $ 1,607 Asset impairments 1,953 1,948 Fair value changes in financial instruments and foreign currency (1,945 ) (1,231 ) Gain on asset sales and related repatriation (955 ) (421 ) Investment in EnLink deferred income tax - 48 Restructuring costs 46 35 Early retirement of debt 48   31   Core earnings attributable to Devon (Non-GAAP) $ 2,017   Diluted share count 411 Core diluted earnings per share attributable to Devon (Non-GAAP) $ 4.91      

NET DEBT(in millions)

Devon defines net debt as debt less cash and cash equivalents 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.

            December 31, 2014 2013   Total debt (GAAP) $ 11,262 $ 12,022 Adjustments: Cash and cash equivalents   1,480   6,066 Net debt (Non-GAAP) $ 9,782 $ 5,956                           PRODUCTION GUIDANCE Quarter 1 Full Year Low High Low High   Oil and bitumen (MBbls/d) United States 150 155 150 155 Canada 100 105 100 105 Total 250 260 250 260 Natural gas (MMcf/d) United States 1,600 1,650 1,550 1,600 Canada 20 20 20 20 Total 1,620 1,670 1,570 1,620 Natural gas liquids (MBbls/d) United States 130 135 126 132 Total Boe (MBoe/d) United States 547 565 534 554 Canada 103 108 103 108 Total 650 673 637 662                           PRICE REALIZATIONS GUIDANCE Quarter 1 Full Year Low High Low High   Oil and bitumen - % of WTI United States 83 % 93 % 85 % 95 % Canada 46 % 56 % 55 % 65 % Natural gas - % of Henry Hub 83 % 93 % 83 % 93 % NGL - realized price $ 9 $ 14 $ 8 $ 18                           OTHER GUIDANCE ITEMS Quarter 1 Full Year ($ millions, except Boe) Low High Low High   Marketing & midstream operating profit $ 180 $ 210 $ 860 $ 920 Lease operating expenses per Boe $ 9.60 $ 10.20 $ 9.70 $ 10.30 General & administrative expenses per Boe $ 4.00 $ 4.30 $ 3.75 $ 4.25 Production and property taxes as % of upstream sales 7.1 % 8.1 % 6.7 % 7.7 % Depreciation, depletion and amortization per Boe $ 14.75 $ 15.75 $ 15.25 $ 16.25

Other operating items

$

20

$

25

$

80

$

100

Net financing costs $ 110 $ 130 $ 440 $ 500 Current income tax rate

5.0

% 10.0 %

5.0

% 10.0 % Deferred income tax rate  

25.0

%  

30.0

%  

25.0

%  

30.0

% Total income tax rate  

30.0

%  

40.0

%  

30.0

%  

40.0

%   Net earnings attributable to noncontrolling interests $ — $ 20 $ 50 $ 100                           CAPITAL EXPENDITURES GUIDANCE Quarter 1 Full Year (in millions) Low High Low High   Exploration and development $

1,300

$

1,400

$ 4,100 $ 4,400 Capitalized G&A and interest   100   120   400   500 Total oil and gas  

1,400

 

1,520

  4,500   4,900 Midstream (1) 50 70 110 160 Corporate and other   30   40   100   150 Devon capital expenditures $

1,480

$

1,630

$ 4,710 $ 5,210   (1) Excludes capital expenditures related to EnLink.                                             COMMODITY HEDGES Oil Commodity Hedges Price Swaps Price Collars Call Options Sold Period

Volume(Bbls/d)

WeightedAveragePrice ($/Bbl)

Volume(Bbls/d)

WeightedAverage FloorPrice ($/Bbl)

WeightedAverageCeiling Price($/Bbl)

Volume(Bbls/d)

WeightedAverage Price($/Bbl)

Q1-Q4 2015 107,203 $ 91.07 31,500 $ 89.67 $ 97.84 28,000 $ 116.43 Q1-Q4 2016 - $ - - $ - $ - 18,500

$

103.11     Oil Basis Swaps Period Index Volume (Bbls/d)

Weighted Average Differential toWTI ($/Bbl)

Q1-Q4 2015 Western Canadian Select 31,682 $(17.42)     Natural Gas Commodity Hedges Price Swaps Price Collars Call Options Sold Period

Volume(MMBtu/d)

WeightedAverage Price($/MMBtu)

Volume(MMBtu/d)

WeightedAverage FloorPrice($/MMBtu)

WeightedAverageCeiling Price($/MMBtu)

Volume(MMBtu/d)

WeightedAverage Price($/MMBtu)

Q1-Q4 2015 250,000 $ 4.32 328,452 $ 4.05 $ 4.36 550,000 $ 5.09 Q1-Q4 2016 - $ - - $ - $ - 400,000 $ 5.00  

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 Energy CorporationInvestor ContactsHoward Thill, 405-552-3693Scott Coody, 405-552-4735Shea Snyder, 405-552-4782Media ContactJohn Porretto, 405-228-7506