DVN Devon Energy Corp

• Delivered record oil production in U.S.
• Exceeded oil production expectations for fourth consecutive quarter
• Reduced operating costs 8 percent year over year
• Improved 2015 capital spending and operating cost outlook

Devon Energy Corp. (NYSE:DVN) today announced core earnings of $320 million, or $0.78 per diluted share, for the second quarter of 2015. This compares with first-quarter 2015 core earnings of $89 million, or $0.22 per diluted share.

“Devon delivered another high-quality performance in the second quarter as we continued to realize significant operational improvements across our portfolio,” said Dave Hager, president and CEO. “Our oil-focused drilling programs in North America’s best resource plays achieved outstanding well performance, and we made substantial progress reducing well costs and operating expenses. This superior execution contributed to more than 30 percent growth in total oil production year over year and record oil output in the U.S., led by our Eagle Ford and Delaware Basin assets.”

“With current industry conditions, we are focused on maintaining flexibility in our capital programs,” Hager said. “To ensure this optionality, we have minimal exposure to long-term service contracts, no long-term project commitments and negligible leasehold expiration issues. This allows us to dynamically allocate capital to our highest-returning areas while balancing investment with cash flow. We believe this advantage, combined with our high-quality asset base and strong balance sheet, positions Devon as well as anyone in the E&P space.”

On a reported basis, due to a non-cash, full-cost ceiling charge, Devon had a net loss of $2.8 billion, or $6.94 per diluted share, for the second-quarter 2015. This compares with second-quarter 2014 reported net earnings of $675 million, or $1.64 per diluted share.

Oil Production Exceeds Expectations for Fourth Consecutive Quarter

Devon’s oil-driven capital program continued to deliver strong results in the second quarter of 2015. Total oil production averaged 270,000 barrels per day, a 32 percent increase compared to the second quarter of 2014. This result surpassed the midpoint of guidance by 5,000 barrels per day, marking the fourth consecutive quarter the Company has exceeded oil production expectations.

The most significant growth came from the Company’s U.S. operations, where oil production averaged a record high 172,000 barrels per day. This result was 35 percent higher than the year-ago quarter and exceeded the top end of guidance expectations by 2,000 barrels per day. Growth in U.S. production was largely attributable to the Company’s Eagle Ford and Delaware Basin assets. Net production in the Eagle Ford averaged 114,000 Boe per day in the second quarter, a 75 percent increase compared to the second quarter of 2014. In the Delaware Basin, led by outstanding results from the Bone Spring play, production increased to 64,000 Boe per day in the second quarter, a 40 percent increase compared to the year-ago period.

In Canada, net production from the Company’s heavy-oil projects reached an average 98,000 barrels of oil per day in the second quarter. Driven by the continued ramp-up of the Jackfish 3 facility, Canadian oil production increased 27 percent compared to the second quarter of 2014. Scheduled maintenance at the Company’s Jackfish 1 oil sands project limited production by approximately 11,000 barrels per day in the quarter.

In total, Devon’s production averaged 674,000 Boe per day during the second quarter of 2015. This result represents a 9 percent increase compared to the second quarter of 2014, with liquids accounting for 60 percent of the Company’s production mix.

Operations Report

For additional details on Devon’s E&P operations, please refer to the Company’s second-quarter 2015 Operations Report at www.devonenergy.com. Highlights from the report include:

• Delaware Basin type curves improving
• Eagle Ford produces best-in-class well results
• Heavy oil output continues to grow while margins expand
• Cana and Meramec plays generate high-rate wells
• Powder River Basin delivers substantial growth rates

Upstream Revenue Increases 18 Percent; Midstream Profit Expands

Revenue from oil, natural gas and natural gas liquids sales totaled $1.6 billion, an 18 percent increase compared to the first quarter of 2015. The revenue growth was attributable to the increase in higher margin U.S. oil production combined with improved oil price realizations. These factors resulted in second-quarter oil sales increasing to more than 70 percent of Devon’s total upstream revenues.

Cash settlements related to oil and natural gas hedges increased revenue by nearly $500 million, or $8 per Boe in the second quarter. At the end of June, the Company’s remaining commodity hedges had a fair-market value of approximately $850 million. This attractive hedging position represents 55 percent of forecasted oil production and 45 percent of expected natural gas production for the remaining two quarters of 2015.

Devon’s midstream operating profit reached $225 million, which exceeded the Company’s guidance and was 16 percent higher than the first quarter of 2015. The increase in operating profit was driven by growth from EnLink Midstream.

Cost Reduction Initiatives Delivering Results

The Company has several cost reduction initiatives underway that positively impacted second-quarter results. Field-level operating costs, which includes both lease operating expenses and production taxes, declined 8 percent compared to the second quarter of 2014 to $11.05 per Boe. These cost savings were realized across all regions of Devon’s asset portfolio.

Significant general and administrative (G&A) cost savings also were achieved in the second quarter. G&A expenses totaled $212 million, which was below the low end of guidance and a 16 percent decline compared to the first quarter.

Based on year-to-date cost savings, Devon now anticipates its field-level operating costs and G&A to decline to around $14.50 per Boe for the full-year 2015. Compared to original guidance, this implies a full-year cost savings of around $400 million.

Balance Sheet and Liquidity Remain Strong

Operating cash flow in the second quarter, excluding the consolidation of EnLink Midstream, reached $1.0 billion. Combined with the sale of the Victoria Express Pipeline, EnLink secondary offering proceeds and EnLink partnership distributions, Devon’s second-quarter cash inflows totaled $1.3 billion.

Devon’s financial position remained exceptionally strong with investment-grade credit ratings and cash balances of $1.7 billion at the end of the quarter. The Company’s net debt, excluding non-recourse EnLink obligations, totaled $7.6 billion.

Production Outlook on Track; Additional Capital Cost Savings Expected

Detailed forward-looking guidance for the third quarter and full-year 2015 is provided later in the release. Given the strong year-to-date production performance, the Company is well positioned to deliver on its 2015 oil growth target of 25 to 35 percent. Devon also remains on track to increase top-line production by 5 to 10 percent.

The Company expects to achieve these attractive production growth targets with lower capital cost requirements. Since the beginning of the year, Devon has reduced projected 2015 capital spending by approximately $350 million.

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 generally 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 second-quarter 2015 conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, August 5, 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 include those concerning strategic plans, expectations and objectives for future operations, and are often identified by use of the words “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “outlook” and other similar terminology. 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. 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 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 CORPORATIONFINANCIAL AND OPERATIONAL INFORMATION

                        Quarter Ended Six Months Ended PRODUCTION NET OF ROYALTIES June 30, June 30, 2015 2014 2015 2014   Oil and bitumen (MBbls/d) United States 172 128 170 112 Canada 98 77 101 78 Retained assets 270 205 271 190 Divested assets - 4 - 10 Total 270 209 271 200 Natural gas liquids (MBbls/d) United States 134 130 136 125 Divested assets - 6 - 11 Total 134 136 136 136 Gas (MMcf/d) United States 1,607 1,689 1,612 1,638 Canada 20 23 24 22 Retained assets 1,627 1,712 1,636 1,660 Divested assets - 219 - 401 Total 1,627 1,931 1,636 2,061 Oil equivalent (MBoe/d) United States 573 539 574 511 Canada 101 81 105 81 Retained assets 674 620 679 592 Divested assets - 47 - 87 Total 674 667 679 679                   KEY OPERATING STATISTICS BY REGION Quarter Ended June 30, 2015

Avg. Production(MBoe/d)

Gross Wells Drilled

Operated Rigs atJune 30, 2015

Permian Basin 113 61 14 Eagle Ford 114 55 - Canadian Heavy Oil 101 10 1 Anadarko Basin 82 22 6 Barnett Shale 185 - - Rockies 27 21 2 Other assets 52 20 - Total 674 189 23                               PRODUCTION TREND 2014 2014 2014 2015 2015 Quarter 2 Quarter 3 Quarter 4 Quarter 1 Quarter 2   Oil (MBbls/d) Permian Basin 55 56 55 60 67 Eagle Ford 40 47 60 75 67 Canadian Heavy Oil 77 80 93 104 98 Anadarko Basin 11 10 10 9 10 Barnett Shale 2 2 2 1 1 Rockies 8 10 9 12 16 Other assets 12 11 10 11 11 Retained assets 205 216 239 272 270 Divested assets 4 3 - - - Total 209 219 239 272 270 Natural gas liquids (MBbls/d) Permian Basin 18 19 20 19 21 Eagle Ford 11 14 18 23 24 Anadarko Basin 31 34 34 30 24 Barnett Shale 55 54 53 51 49 Rockies 1 1 1 1 1 Other assets 14 16 15 15 15 Retained assets 130 138 141 139 134 Divested assets 6 5 - - - Total 136 143 141 139 134 Gas (MMcf/d) Permian Basin 134 136 137 137 152 Eagle Ford 88 109 127 143 146 Canadian Heavy Oil 23 26 23 28 20 Anadarko Basin 309 323 329 297 290 Barnett Shale 932 896 878 827 805 Rockies 67 66 58 53 62 Other assets 159 160 155 160 152 Retained assets 1,712 1,716 1,707 1,645 1,627 Divested assets 219 138 3 - - Total 1,931 1,854 1,710 1,645 1,627 Oil equivalent (MBoe/d) Permian Basin 95 98 98 102 113 Eagle Ford 65 79 99 122 114 Canadian Heavy Oil 81 84 97 109 101 Anadarko Basin 93 98 100 88 82 Barnett Shale 212 205 201 191 185 Rockies 21 22 19 22 27 Other assets 53 54 50 51 52 Retained assets 620 640 664 685 674 Divested assets 47 31 1 - - Total 667 671 665 685 674                           BENCHMARK PRICES (average prices) Quarter Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Oil ($/Bbl) - West Texas Intermediate (Cushing) $ 57.78 $ 103.09 $ 53.33 $ 100.87 Natural Gas ($/Mcf) - Henry Hub $ 2.65 $ 4.68 $ 2.82 $ 4.81   REALIZED PRICES Quarter Ended June 30, 2015 Oil /Bitumen NGL Gas Total (Per Bbl) (Per Bbl) (Per Mcf) (Per Boe) United States $ 52.52 $ 10.31 $ 2.16 $ 24.18 Canada (1) $ 36.49  

$

N/M

$ 0.33   $ 35.33   Realized price without hedges $ 46.69 $ 10.31 $ 2.13 $ 25.86 Cash settlements $ 16.08   $ - $ 0.58   $ 7.83   Realized price, including cash settlements $ 62.77   $ 10.31 $ 2.71   $ 33.69     Quarter Ended June 30, 2014 Oil /Bitumen NGL Gas Total (Per Bbl) (Per Bbl) (Per Mcf) (Per Boe) United States $ 95.71 $ 25.22 $ 4.19 $ 41.06 Canada (1) $ 69.45  

$

N/M

$ 1.56   $ 65.96   Realized price without hedges $ 86.00 $ 25.13 $ 4.15 $ 44.12 Cash settlements $ (4.17 ) $ - $ (0.16 ) $ (1.78 ) Realized price, including cash settlements $ 81.83   $ 25.13 $ 3.99   $ 42.34     Six Months Ended June 30, 2015 Oil NGL Gas Total (Per Bbl) (Per Bbl) (Per Mcf) (Per Boe) United States $ 47.74 $ 9.85 $ 2.31 $ 22.93 Canada (1) $ 29.51  

$

N/M

$ 0.79   $ 28.56   Realized price without hedges $ 40.94 $ 9.85 $ 2.29 $ 23.80 Cash settlements $ 18.59   $ - $ 0.55   $ 8.72   Realized price, including cash settlements $ 59.53   $ 9.85 $ 2.84   $ 32.52     Six Months Ended June 30, 2014 Oil NGL Gas Total (Per Bbl) (Per Bbl) (Per Mcf) (Per Boe) United States $ 93.96 $ 27.34 $ 4.26 $ 40.30 Canada (1) $ 65.37   $ 50.17 $ 3.97   $ 53.26   Realized price without hedges $ 82.10 $ 28.11 $ 4.23 $ 42.61 Cash settlements $ (3.19 ) $ - $ (0.25 ) $ (1.70 ) Realized price, including cash settlements $ 78.91   $ 28.11 $ 3.98   $ 40.91     (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 EARNINGS (in millions, except per share amounts) Quarter Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Oil, gas and NGL sales $ 1,587 $ 2,679 $ 2,926 $ 5,236 Oil, gas and NGL derivatives (282 ) (399 ) 12 (719 ) Marketing and midstream revenues   2,088     2,230     3,720     3,718   Total operating revenues   3,393     4,510     6,658     8,235   Lease operating expenses 562 582 1,115 1,180 Marketing and midstream operating expenses 1,863 2,006 3,302 3,311 General and administrative expenses 212 189 463 400 Production and property taxes 116 150 224 287 Depreciation, depletion and amortization 814 828 1,744 1,567 Asset impairments 4,168 - 9,628 - Restructuring costs - 5 - 42 Gains and losses on asset sales (1 ) (1,057 ) (1 ) (1,072 ) Other operating items   22     33     41     56   Total operating expenses   7,756     2,736     16,516     5,771   Operating income (loss) (4,363 ) 1,774 (9,858 ) 2,464 Net financing costs 125 131 242 243 Other nonoperating items   (9 )   89     3     107   Earnings (loss) before income taxes (4,479 ) 1,554 (10,103 ) 2,114 Income tax expense (benefit)   (1,686 )   854     (3,721 )   1,085   Net earnings (loss) (2,793 ) 700 (6,382 ) 1,029 Net earnings attributable to noncontrolling interests   23     25     33     30   Net earnings (loss) attributable to Devon $ (2,816 ) $ 675   $ (6,415 ) $ 999     Net earnings (loss) per share attributable to Devon: Basic $ (6.94 ) $ 1.65 $ (15.81 ) $ 2.45 Diluted $ (6.94 ) $ 1.64 $ (15.81 ) $ 2.44   Weighted average common shares outstanding: Basic 411 408 411 408 Diluted 411 411 411 410                           CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Quarter Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Cash flows from operating activities: Net earnings (loss) $ (2,793 ) $ 700 $ (6,382 ) $ 1,029 Adjustments to reconcile net earnings (loss) to net cash from operating activities: Depreciation, depletion and amortization 814 828 1,744 1,567 Asset impairments 4,168 - 9,628 - Gains and losses on asset sales (1 ) (1,057 ) (1 ) (1,072 ) Deferred income tax expense (benefit) (1,593 ) 569 (3,640 ) 777 Derivatives and other financial instruments 305 454 (125 ) 761 Cash settlements on derivatives and financial instruments 464 (191 ) 1,183 (245 ) Other noncash charges 42 106 267 229 Net change in working capital (189 ) 622 26 470 Change in long-term other assets 18 11 159 (77 ) Change in long-term other liabilities   (134 )   7     (110 )   20   Net cash from operating activities   1,101     2,049     2,749     3,459     Cash flows from investing activities: Capital expenditures (1,432 ) (1,758 ) (3,149 ) (3,341 ) Acquisitions of property, equipment and businesses (13 ) (289 ) (417 ) (6,224 ) Divestitures of property and equipment 6 2,800 8 2,942 Redemptions of long-term investments - - - 57 Other   (8 )   47     (5 )   84   Net cash from investing activities   (1,447 )   800     (3,563 )   (6,482 )   Cash flows from financing activities: Borrowings of long-term debt, net of issuance costs 2,094 374 3,051 3,720 Net short-term debt repayments (778 ) (1,119 ) (763 ) (862 ) Repayments of long-term debt (1,034 ) (2,413 ) (1,521 ) (3,990 ) Stock option exercises 4 72 4 83 Sale of subsidiary units 85 - 654 - Issuance of subsidiary units 2 20 4 20 Dividends paid on common stock (98 ) (99 ) (197 ) (189 ) Distributions to noncontrolling interests (65 ) (41 ) (118 ) (141 ) Other   -     12     (12 )   9   Net cash from financing activities   210     (3,194 )   1,102     (1,350 ) Effect of exchange rate changes on cash   3     24     (43 )   13   Net change in cash and cash equivalents (133 ) (321 ) 245 (4,360 )   Cash and cash equivalents at beginning of period   1,858     2,027     1,480     6,066     Cash and cash equivalents at end of period $ 1,725   $ 1,706   $ 1,725   $ 1,706               CONSOLIDATED BALANCE SHEETS (in millions) June 30, December 31, Current assets: 2015 2014 Cash and cash equivalents $ 1,725 $ 1,480 Accounts receivable 1,602 1,959 Derivatives, at fair value 924 1,993 Income taxes receivable 9 522 Other current assets   470     544   Total current assets   4,730     6,498   Property and equipment, at cost: Oil and gas, based on full cost accounting: Subject to amortization 77,191 75,738 Not subject to amortization   2,685     2,752   Total oil and gas 79,876 78,490 Midstream and other   10,354     9,695   Total property and equipment, at cost 90,230 88,185 Less accumulated depreciation, depletion and amortization   (62,406 )   (51,889 ) Property and equipment, net   27,824     36,296   Goodwill 6,349 6,303 Other long-term assets   1,703     1,540   Total assets $ 40,606   $ 50,637     Current liabilities: Accounts payable $ 1,035 $ 1,400 Revenues and royalties payable 1,095 1,193 Short-term debt 670 1,432 Deferred income taxes 346 730 Other current liabilities   852     1,180   Total current liabilities   3,998     5,935   Long-term debt 11,375 9,830 Asset retirement obligations 1,391 1,339 Other long-term liabilities 782 948 Deferred income taxes 2,909 6,244 Stockholders' equity: Common stock 41 41 Additional paid-in capital 4,736 4,088 Retained earnings 10,018 16,631 Accumulated other comprehensive earnings   528     779   Total stockholders' equity attributable to Devon 15,323 21,539 Noncontrolling interests   4,828     4,802   Total stockholders' equity   20,151     26,341   Total liabilities and stockholders' equity $ 40,606   $ 50,637   Common shares outstanding 411 409                         CONSOLIDATING STATEMENTS OF OPERATIONS (in millions) Quarter Ended June 30, 2015

Devon U.S.& Canada

EnLink Eliminations Total Oil, gas and NGL sales $ 1,587 $ - $ - $ 1,587 Oil, gas and NGL derivatives (282 ) - - (282 ) Marketing and midstream revenues   985     1,274     (171 )   2,088   Total operating revenues   2,290     1,274     (171 )   3,393   Lease operating expenses 562 - - 562 Marketing and midstream operating expenses 970 1,064 (171 ) 1,863 General and administrative expenses 184 28 - 212 Production and property taxes 104 12 - 116 Depreciation, depletion and amortization 716 98 - 814 Asset impairments 4,168 - - 4,168 Gains and losses on asset sales (1 ) - - (1 ) Other operating items   22     -     -     22   Total operating expenses   6,725     1,202     (171 )   7,756   Operating income (loss) (4,435 ) 72 - (4,363 ) Net financing costs 99 26 - 125 Other nonoperating items   -     (9 )   -     (9 ) Earnings (loss) before income taxes (4,534 ) 55 - (4,479 ) Income tax expense (benefit)   (1,696 )   10     -     (1,686 ) Net earnings (loss) (2,838 ) 45 - (2,793 ) Net earnings attributable to noncontrolling interests   1     22     -     23   Net earnings (loss) attributable to Devon $ (2,839 ) $ 23   $ -   $ (2,816 )  

OTHER KEY STATISTICS

(in millions) Quarter Ended June 30, 2015

Devon U.S.& Canada

EnLink Eliminations Total Cash flow statement items: Operating cash flow $ 995 $ 106 $ - $ 1,101 Capital expenditures $ (1,243 ) $ (189 ) $ - $ (1,432 ) Acquisitions of property, equipment and businesses $ - $ (13 ) $ - $ (13 ) Sale of subsidiary units $ 85 $ - $ - $ 85 EnLink distributions received (paid) (1) $ 236 $ (301 ) $ - $ (65 )   Balance sheet statement items: Net debt(2) $ 7,565 $ 2,755 $ - $ 10,320   (1) Includes $171 million for the sale of the Victoria Express Pipeline. (2) Net debt is a Non-GAAP measure. For a reconciliation of the comparable GAAP measure, see "Non-GAAP Financial Measures" later in this release.             CAPITAL EXPENDITURES (in millions) Quarter Ended June 30, 2015 Six Months Ended June 30, 2015 Exploration and development capital $ 882 $ 2,208 Capitalized G&A and interest 116 223 Acquisitions - 92 Midstream(1) 21 37 Corporate and other   14   41 Devon capital expenditures $ 1,033 $ 2,601  

(1) Excludes $158 million and $672 million attributable to EnLink for the second quarter and first six months of 2015, respectively.

 

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 analysts in their published estimates of the Company’s financial results. Accordingly, the Company also uses the measures of core earnings and core earnings per diluted share. 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 second-quarter 2015 earnings.

          Quarter Ended June 30, 2015 Before-Tax After-Tax   Net loss attributable to Devon (GAAP) $ (2,816 ) Asset impairments 4,168 2,646 Fair value changes in financial instruments and foreign currency 761   490   Core earnings attributable to Devon (Non-GAAP) $ 320   Diluted share count 414 Core diluted earnings per share attributable to Devon (Non-GAAP) $ 0.78    

NET DEBT(in millions)

Devon defines net debt as debt less cash and cash equivalents and net debt attributable to the consolidation of EnLink Midstream as presented in the following table. Devon believes that netting these sources of cash against debt and adjusting for EnLink net debt provides a clearer picture of the future demands on cash from Devon to repay debt.

                June 30, 2015 Devon U.S. & Canada EnLink Devon Consolidated   Total debt (GAAP) $ 9,218 $ 2,827 $ 12,045 Less cash and cash equivalents   (1,653 )   (72 )   (1,725 ) Net debt (Non-GAAP) $ 7,565   $ 2,755   $ 10,320      

DEVON ENERGY CORPORATIONFORWARD LOOKING GUIDANCE

            PRODUCTION GUIDANCE Quarter 3 Full Year Low       High Low       High   Oil and bitumen (MBbls/d) United States 155 165 160 170 Canada   105     115     100     110   Total   260     280     260     280   Natural gas liquids (MBbls/d) United States 125 135 128 134 Gas (MMcf/d) United States 1,500 1,550 1,550 1,600 Canada   15     20     15     20   Total   1,515     1,570     1,565     1,620   Oil equivalent (MBoe/d) United States 530 558 546 571 Canada   108     118     103     113   Total   638     676     649     684       PRICE REALIZATIONS GUIDANCE Quarter 3 Full Year Low High Low High   Oil and bitumen - % of WTI United States 84 % 94 % 85 % 95 % Canada 58 % 68 % 53 % 63 % NGL - realized price $ 7 $ 12 $ 6 $ 16 Natural gas - % of Henry Hub 78 % 88 % 78 % 88 %                           OTHER GUIDANCE ITEMS Quarter 3 Full Year ($ millions, except Boe) Low High Low High   Marketing & midstream operating profit $ 195 $ 225 $ 830 $ 890 Lease operating expenses per Boe $ 8.90 $ 9.40 $ 8.80 $ 9.30 General & administrative expenses per Boe $ 3.40 $ 3.70 $ 3.40 $ 3.90 Production and property taxes as % of upstream sales 6.7 % 7.7 % 6.7 % 7.7 % Depreciation, depletion and amortization per Boe $ 12.50 $ 13.50 $ 13.00 $ 14.00 Other operating items $ 15 $ 20 $ 60 $ 80 Net financing costs $ 130 $ 140 $ 480 $ 540 Current income tax rate 0.0 % 5.0 % 0.0 % 5.0 % Deferred income tax rate   30.0 %   35.0 %   30.0 %   35.0 % Total income tax rate   30.0 %   40.0 %   30.0 %   40.0 %   Net earnings attributable to noncontrolling interests $ 10 $ 30 $ 50 $ 100     CAPITAL EXPENDITURES GUIDANCE Quarter 3 Full Year (in millions) Low High Low High   Exploration and development $ 900 $ 1,000 $ 3,900 $ 4,100 Capitalized G&A and interest 100 120 380 480 Midstream(1) 10 20 70 120 Corporate and other   15     25     60     110   Devon capital expenditures $ 1,025   $ 1,165   $

4,410

  $

4,810

    (1) Excludes capital expenditures related to EnLink.                                         COMMODITY HEDGES Oil Commodity Hedges Price Swaps Price Collars Call Options Sold Period Volume (Bbls/d) Weighted Average Price ($/Bbl) Volume (Bbls/d) Weighted Average Floor Price ($/Bbl) Weighted Average Ceiling Price ($/Bbl) Volume (Bbls/d) Weighted Average Price ($/Bbl) Q3-Q4 2015 106,000 $90.85 42,000 $82.40 $89.78 28,000 $116.43     Oil Basis Swaps Period Index Volume (Bbls/d) Weighted Average Differential to WTI ($/Bbl) Q3-Q4 2015 Western Canadian Select 40,000 $(15.79)     Natural Gas Commodity Hedges Price Swaps Price Collars Call Options Sold Period Volume (MMBtu/d) Weighted Average Price ($/MMBtu) Volume (MMBtu/d) Weighted Average Floor Price ($/MMBtu) Weighted Average Ceiling Price ($/MMBtu) Volume (MMBtu/d) Weighted Average Price ($/MMBtu) Q3-Q4 2015 250,000 $4.32 462,500 $3.55 $3.85 550,000 $5.09  

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.

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