Devon Energy Announces First-Quarter 2013 Results

May 2, 2013

    Total production exceeds company guidance
    Permian Basin drives 23 percent year-over-year growth in U.S. oil production
    Positive well results in emerging oil plays
    Pre-tax cash costs per unit of production decline 4 percent sequentially
    Oil and natural gas hedges added for 2013 and 2014
    Financial strength and liquidity remain in excellent condition

Devon Energy Corporation (NYSE:DVN) today reported a net loss of $1.3 billion or $3.34 per common share ($3.34 per diluted share) for the quarter ended March 31, 2013. The quarterly loss was attributable to a $1.9 billion non-cash asset impairment charge primarily related to lower oil and natural gas liquids pricing. Adjusting for this non-cash charge and other items securities analysts typically exclude from their published estimates, the company earned $270 million or $0.66 per diluted share in the first quarter of 2013.

Strong Oil Growth Driven by U.S. Operations

Devon continued to deliver strong oil production growth in the first quarter of 2013. Companywide oil production averaged 162,000 barrels per day, a 14 percent increase compared to the first quarter of 2012 and an 8 percent increase over the fourth quarter of 2012. Driven by the Permian Basin, the most significant growth came from the company’s U.S. operations, where oil production increased 23 percent year over year.

Total production of oil, natural gas and natural gas liquids increased to an average of 687,000 oil-equivalent barrels (Boe) per day in the first quarter. This exceeded the top end of the company’s guidance by 2,000 barrels per day. First-quarter production benefited from better-than-expected results across several core development assets, including Jackfish and Cana-Woodford.

“Our continued focus on oil production growth is successfully transitioning Devon’s production mix to a higher oil weighting, as evidenced by our first-quarter results. Oil and liquids production, our highest margin products, now account for 41 percent of our total production,” said John Richels, president and chief executive officer. “Driven by our success in the Permian, we are on track to grow our U.S. oil production by almost 40 percent in 2013.”

First-Quarter Operating Highlights

    Permian Basin oil production increased 24 percent over the first quarter of 2012. Oil accounted for 60 percent of the company’s 68,000 Boe per day produced in the Permian Basin during the quarter.
    In the Bone Spring oil play, the company added 20 new wells to production in the first quarter of 2013. Initial 30-day production from these wells averaged 590 Boe per day.
    Net production from Devon’s Jackfish 1 and Jackfish 2 oil sands projects averaged a record 54,000 barrels of oil per day in the first quarter of 2013. Compared to the first quarter of 2012, this represents an 18 percent increase in production.
    Construction of Devon’s third Jackfish oil sands project is now approximately 60 percent complete, with startup expected by year-end 2014.
    In the Mississippian trend located in Oklahoma, the company brought 24 operated wells online in the first quarter. Overall results in this emerging oil