Stock Quote: NYSE

OKLAHOMA CITY--(BUSINESS WIRE)-- Devon Energy Corp. (NYSE: DVN) today reported operational and financial results for the first quarter of 2016 and provided guidance for the second quarter and full-year 2016.

Highlights

• Exceeded midpoint expectations for all production products
• Raised full-year production guidance by 3 percent
• Reduced LOE costs by 21 percent year over year
• Lowered 2016 operating cost outlook by $50 million
• Improved balance sheet strength with liquidity increasing to $4.6 billion

“In spite of the challenging industry conditions, Devon achieved another high-quality operating performance in the first quarter as we continued to take the appropriate steps to deliver significant cost reductions and accelerate efficiency gains across our portfolio,” said Dave Hager, president and CEO. “These successful efforts resulted in production exceeding the midpoint of guidance for all products and operating costs declining by more than 20 percent year over year. Additionally, G&A costs savings remain on track to reduce overhead by up to $500 million on an annual basis.”

“Looking ahead, our top priority is to maintain a strong balance sheet,” said Hager. “We are balancing capital requirements with cash flow and enhancing our financial strength by utilizing asset sale proceeds to reduce debt. This disciplined financial strategy positions us to take advantage of our world-class resource plays when prices incentivize higher activity levels.”

Raising 2016 Production Guidance

Devon’s reported oil production averaged 285,000 barrels per day in the first quarter of 2016. Of this amount, 255,000 barrels per day were from the Company’s core assets, where investment will be focused going forward. Oil production from these assets increased 10 percent year over year, exceeding the midpoint of guidance by 5,000 barrels per day.

Overall, net production from Devon’s core assets averaged 581,000 oil-equivalent barrels (Boe) per day during the first quarter, surpassing the midpoint of guidance by 6,000 Boe per day. With the strong growth in higher-margin production, oil is now the largest component of Devon’s product mix at 44 percent of total production.

Given the strong year-to-date production performance, Devon has raised the midpoint of its 2016 guidance by 15,000 Boe per day, or 3 percent. This incremental production is expected to be delivered without additional capital spending.

Strong Operating Costs Performance in Q1; Additional Savings Expected

The Company has several cost-reduction initiatives underway that positively impacted first-quarter results. The most significant operating cost savings came from lease operating expenses (LOE), which is Devon’s largest field-level cost. LOE declined 21 percent compared to the first quarter of 2015 to $7.13 per Boe, and LOE was $6 million below the bottom-end of guidance. The decrease in LOE was primarily driven by improved power and water-handling infrastructure, declining labor expense and lower supply chain costs.

With these outstanding results in the first quarter and additional cost savings expected throughout 2016, the Company is lowering its full-year LOE outlook by $50 million to a range of $1.75 billion to $1.85 billion. Due to these additional savings, the Company expects field-level costs, which include both LOE and production taxes, to decline by up to $400 million for the full-year 2016.

G&A Cost Savings Initiatives Ahead of Schedule

Devon also realized significant general and administrative (G&A) cost savings in the first quarter. G&A expenses totaled $194 million, a 23 percent improvement compared to the first quarter of 2015. This decrease was driven by lower employee-related costs.

In the first quarter of 2016, the Company reduced its employee count by approximately 20 percent, bringing the total workforce reduction to more than 25 percent over the past 12 months. This reorganization effort resulted in $234 million of non-recurring charges, with minimal cash payments occurring in the first quarter. Overall, approximately 75 percent of the reorganization charges will result in cash payments, with the vast majority in subsequent quarters.

As a result of the G&A cost-reduction initiatives, overhead costs are projected to decline to approximately $160 million in the second quarter, and the Company is on track to reduce G&A costs by up to $500 million on an annual basis.

Disciplined Capital Program Yields Strong Results

Devon’s accrued E&P capital spending, which accounts for activity that was incurred during the reporting period, amounted to $363 million in the first quarter. This strong cost performance was 9 percent below the Company’s guidance midpoint.

The $363 million of accrued upstream capital activity in the first quarter compares to $749 million reported on Devon’s consolidated statement of cash flows. The difference primarily relates to EnLink capital incurred and the timing of payables from higher activity levels in late 2015.

First-Quarter 2016 Operations Report

For additional details on Devon’s E&P operations, please refer to the Company’s first-quarter 2016 operations report at www.devonenergy.com. Highlights from the report include:

• STACK delivering top-tier results
• Leonard Shale potential expands in the Delaware Basin
• Eagle Ford generating substantial free cash flow
• Powder River Basin delivers best-in-class well results
• Jackfish 2 exceeds nameplate capacity

EnLink Midstream Delivers Steady Cash Flow

Devon’s midstream business generated $202 million of operating profit in the first quarter, driven entirely by Devon’s strategic investment in EnLink Midstream. The Company has a 64 percent ownership in the general partner (ENLC) and a 25 percent interest in the limited partnership (ENLK). In aggregate, Devon’s ownership in EnLink is valued at approximately $3 billion and is expected to generate cash distributions of $270 million in 2016.

Balance Sheet and Liquidity Bolstered

Devon exited the first quarter with $4.6 billion of liquidity, consisting of $1.6 billion of cash on hand and $3.0 billion of capacity on its senior credit facility. Liquidity was bolstered during the first quarter by a secondary stock offering.

Devon exited the quarter with net debt, excluding non-recourse EnLink obligations, totaling $7.7 billion. The Company has managed its debt-maturity schedule to provide maximum flexibility with near-term liquidity and has no significant debt maturities until December 2018. The weighted-average cost of Devon’s outstanding debt is only 5 percent.

Asset Divestiture Programs Advance

To further enhance its financial strength, the Company is targeting total divestiture proceeds of $2 billion to $3 billion. In April, Devon took an important step toward that divestiture goal by announcing the sale of its non-core Mississippian assets in northern Oklahoma for $200 million, which is expected to close in the second quarter.

The divestiture process for the Company’s remaining non-core assets is ongoing. Devon is marketing its 50 percent interest in the Access Pipeline in Canada and anticipates an announcement in the first half of 2016. Efforts to monetize remaining non-core upstream assets in the U.S. are also progressing. Data rooms have been open since early March and bids are expected by the end of the second quarter.

Core Earnings Results and Non-GAAP Reconciliations

Adjusting for items that securities analysts typically exclude from their published estimates, Devon had a core loss of $249 million, or $0.53 per share in the first quarter of 2016. On a reported basis, Devon had a net loss of $3.1 billion for the first-quarter 2016.

For the quarter ended the Company had $149 million in net cash from operating activities. This included a positive working capital adjustment of $224 million and negative adjustments of $167 million and $130 million for restructuring and foreign exchange derivative settlements, respectively. These items are typically excluded from analyst estimates of cash flow from operations.

Pursuant to regulatory disclosure requirements, Devon is required to reconcile non-GAAP (generally accepted accounting principles) financial measures to the related GAAP information. 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 an operations report to its website at www.devonenergy.com. The Company’s first-quarter conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, May 4, 2016, 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 “expects,” “believes,” “will,” “would,” “could,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “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 our business and operations 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, gas and NGL prices, including the currently depressed commodity price environment; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved in exploration and development activities; risks related to our hedging activities; counterparty credit risks; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to environmental matters; risks relating to our indebtedness; our ability to successfully complete mergers, acquisitions and divestitures; the extent to which insurance covers any losses we may experience; our limited control over third parties who operate our oil and gas properties; midstream capacity constraints and potential interruptions in production; competition for leases, materials, people and capital; cyberattacks targeting our systems and infrastructure; and any of the other risks and uncertainties 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 CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
				Quarter Ended
PRODUCTION NET OF ROYALTIES				March 31,
				2016				2015
Oil and bitumen (MBbls/d)
U. S. - Core				129				127
Heavy Oil				126				104
Core assets				255				231
Other				30				41
Total				285				272
Natural gas liquids (MBbls/d)
U. S. - Core				108				105
Other				29				34
Total				137				139
Gas (MMcf/d)
U. S. - Core				1,295				1,304
Heavy Oil				15				28
Core assets				1,310				1,332
Other				271				313
Total				1,581				1,645
Oil equivalent (MBoe/d)
U. S. - Core				452				449
Heavy Oil				129				109
Core assets				581				558
Other				104				127
Total				685				685

KEY OPERATING STATISTICS BY REGION
				Quarter Ended March 31, 2016
				Avg. Production				Gross Wells				Rigs at March 31, 2016
				(MBoe/d)				Drilled				(including partner rigs)
STACK				91				17				4
Delaware Basin				63				21				-
Eagle Ford				107				24				2
Rockies				23				8				-
Heavy Oil				129				9				-
Barnett Shale				168				-				-
Core assets				581				79				6

PRODUCTION TREND				2015																2016
				Quarter 1				Quarter 2				Quarter 3				Quarter 4				Quarter 1
Oil and bitumen (MBbls/d)
STACK				6				6				6				7				14
Delaware Basin				33				41				41				42				38
Eagle Ford				75				67				62				60				59
Rockies				12				16				16				16				17
Heavy Oil				104				98				121				121				126
Barnett Shale				1				1				1				1				1
Core assets				231				229				247				247				255
Other				41				41				35				31				30
Total				272				270				282				278				285
Natural gas liquids (MBbls/d)
STACK				22				16				22				23				29
Delaware Basin				8				10				8				11				12
Eagle Ford				23				24				26				27				24
Rockies				1				1				2				1				1
Barnett Shale				51				49				44				46				42
Core assets				105				100				102				108				108
Other				34				34				32				31				29
Total				139				134				134				139				137
Gas (MMcf/d)
STACK				230				221				216				235				286
Delaware Basin				66				75				70				82				84
Eagle Ford				143				146				154				151				144
Rockies				38				41				41				38				32
Heavy Oil				28				20				16				24				15
Barnett Shale				827				805				788				768				749
Core assets				1,332				1,308				1,285				1,298				1,310
Other				313				319				301				285				271
Total				1,645				1,627				1,586				1,583				1,581
Oil equivalent (MBoe/d)
STACK				65				59				64				70				91
Delaware Basin				52				64				61				66				63
Eagle Ford				122				114				113				111				107
Rockies				19				24				25				23				23
Heavy Oil				109				101				124				126				129
Barnett Shale				191				185				176				175				168
Core assets				558				547				563				571				581
Other				127				127				117				110				104
Total				685				674				680				681				685

BENCHMARK PRICES
(average prices)				Quarter 1
					2016					2015
Oil ($/Bbl) - West Texas Intermediate (Cushing)				$	33.66				$	48.87
Natural Gas ($/Mcf) - Henry Hub				$	2.09				$	2.99
REALIZED PRICES				Quarter Ended March 31, 2016
				Oil /Bitumen					NGL					Gas					Total
				(Per Bbl)					(Per Bbl)					(Per Mcf)					(Per Boe)
United States				$	28.74				$	6.84				$	1.53				$	14.22
Canada (1)				$	9.18				$	N/M				$	N/M				$	8.95
Realized price without hedges				$	20.06				$	6.84				$	1.53				$	13.23
Cash settlements				$	-				$	-				$	0.13				$	0.30
Realized price, including cash settlements				$	20.06				$	6.84				$	1.66				$	13.53
				Quarter Ended March 31, 2015
				Oil /Bitumen					NGL					Gas					Total
				(Per Bbl)					(Per Bbl)					(Per Mcf)					(Per Boe)
United States				$	42.80				$	9.40				$	2.45				$	21.66
Canada (1)				$	22.87				$	N/M				$	N/M				$	22.16
Realized price without hedges				$	35.17				$	9.40				$	2.45				$	21.74
Cash settlements				$	21.12				$	-				$	0.51				$	9.62
Realized price, including cash settlements				$	56.29				$	9.40				$	2.96				$	31.36

(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
				March 31,
					2016						2015
Oil, gas and NGL sales				$	825					$	1,339
Oil, gas and NGL derivatives					33						294
Marketing and midstream revenues					1,268						1,632
Total operating revenues					2,126						3,265
Lease operating expenses					444						553
Marketing and midstream operating expenses					1,066						1,439
General and administrative expenses					194						251
Production and property taxes					78						108
Depreciation, depletion and amortization					542						930
Asset impairments					3,035						5,460
Restructuring and transaction costs					247						-
Other operating items					20						19
Total operating expenses					5,626						8,760
Operating loss					(3,500	)					(5,495	)
Net financing costs					164						117
Other nonoperating items					21						12
Loss before income taxes					(3,685	)					(5,624	)
Income tax benefit					(217	)					(2,035	)
Net loss					(3,468	)					(3,589	)
Net earnings (loss) attributable to noncontrolling interests					(412	)					10
Net loss attributable to Devon				$	(3,056	)				$	(3,599	)
Net loss per share attributable to Devon:
Basic				$	(6.44	)				$	(8.88	)
Diluted				$	(6.44	)				$	(8.88	)
Weighted average common shares outstanding:
Basic					479						410
Diluted					479						410

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)				Quarter
				Ended March 31,
					2016						2015
Cash flows from operating activities:
Net loss				$	(3,468	)				$	(3,589	)
Adjustments to reconcile net loss
to net cash from operating activities:
Depreciation, depletion and amortization					542						930
Asset impairments					3,035						5,460
Deferred income tax benefit					(207	)					(2,047	)
Derivatives and other financial instruments					194						(430	)
Cash settlements on derivatives and financial instruments					(104	)					719
Other noncash charges					(67	)					225
Net change in working capital					198						215
Change in long-term other assets					53						141
Change in long-term other liabilities					(27	)					24
Net cash from operating activities					149						1,648
Cash flows from investing activities:
Capital expenditures					(749	)					(1,717	)
Acquisitions of property, equipment and businesses					(1,627	)					(404	)
Divestitures of property and equipment					18						2
Other					(1	)					3
Net cash from investing activities					(2,359	)					(2,116	)
Cash flows from financing activities:
Borrowings of long-term debt, net of issuance costs					396						957
Repayments of long-term debt					(259	)					(487	)
Net short-term debt borrowings (repayments)					(626	)					15
Issuance of common stock					1,469						-
Sale of subsidiary units					-						569
Issuance of subsidiary units					727						2
Dividends paid on common stock					(125	)					(99	)
Distributions to noncontrolling interests					(73	)					(53	)
Other					-						(12	)
Net cash from financing activities					1,509						892
Effect of exchange rate changes on cash					26						(46	)
Net change in cash and cash equivalents					(675	)					378
Cash and cash equivalents at beginning of period					2,310						1,480
Cash and cash equivalents at end of period				$	1,635					$	1,858

CONSOLIDATED BALANCE SHEETS
(in millions)
				March 31,						December 31,
					2016						2015
Current assets:
Cash and cash equivalents				$	1,635					$	2,310
Accounts receivable					1,023						1,105
Derivatives, at fair value					54						43
Income taxes receivable					24						147
Other current assets					214						416
Total current assets					2,950						4,021
Property and equipment, at cost:
Oil and gas, based on full cost accounting:
Subject to amortization					79,907						78,190
Not subject to amortization					3,901						2,584
Total oil and gas					83,808						80,774
Midstream and other					10,979						10,380
Total property and equipment, at cost					94,787						91,154
Less accumulated depreciation, depletion and amortization					(75,523	)					(72,086	)
Property and equipment, net					19,264						19,068
Goodwill					4,159						5,032
Other long-term assets					2,264						1,330
Total assets				$	28,637					$	29,451
Current liabilities:
Accounts payable				$	640					$	906
Revenues and royalties payable					705						763
Short-term debt					350						976
Other current liabilities					905						650
Total current liabilities					2,600						3,295
Long-term debt					12,195						12,056
Asset retirement obligations					1,491						1,370
Other long-term liabilities					1,112						853
Deferred income taxes					731						888
Stockholders' equity:
Common stock					52						42
Additional paid-in capital					7,501						4,996
Retained earnings (accumulated deficit)					(1,400	)					1,781
Accumulated other comprehensive earnings					257						230
Total stockholders' equity attributable to Devon					6,410						7,049
Noncontrolling interests					4,098						3,940
Total stockholders' equity					10,508						10,989
Total liabilities and stockholders' equity				$	28,637					$	29,451
Common shares outstanding					524						418

CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions)
				Quarter Ended March 31, 2016
				Devon U.S. & Canada						EnLink						Eliminations						Total
Oil, gas and NGL sales				$	825					$	-					$	-					$	825
Oil, gas and NGL derivatives					33						-						-						33
Marketing and midstream revenues					561						890						(183	)					1,268
Total operating revenues					1,419						890						(183	)					2,126
Lease operating expenses					444						-						-						444
Marketing and midstream operating expenses					576						673						(183	)					1,066
General and administrative expenses					164						30						-						194
Production and property taxes					67						11						-						78
Depreciation, depletion and amortization					420						122						-						542
Asset impairments					2,162						873						-						3,035
Restructuring and transaction costs					242						5						-						247
Other operating items					19						1						-						20
Total operating expenses					4,094						1,715						(183	)					5,626
Operating loss					(2,675	)					(825	)					-						(3,500	)
Net financing costs					120						44						-						164
Other nonoperating items					19						2						-						21
Loss before income taxes					(2,814	)					(871	)					-						(3,685	)
Income tax benefit					(213	)					(4	)					-						(217	)
Net loss					(2,601	)					(867	)					-						(3,468	)
Net loss attributable to noncontrolling interests					-						(412	)					-						(412	)
Net loss attributable to Devon				$	(2,601	)				$	(455	)				$	-					$	(3,056	)

OTHER KEY STATISTICS
(in millions)				Quarter Ended March 31, 2016
				Devon U.S. & Canada						EnLink						Eliminations					Total
Cash flow statement related items:
Operating cash flow				$	(45	)				$	194					$	-				$	149
Capital expenditures				$	(614	)				$	(135	)				$	-				$	(749	)
Acquisitions of property, equipment and businesses				$	(830	)				$	(797	)				$	-				$	(1,627	)
EnLink distributions received (paid)				$	66					$	(139	)				$	-				$	(73	)
Issuance of subsidiary units				$	-					$	727					$	-				$	727
Balance sheet statement items:
Net debt(1)				$	7,712					$	3,198					$	-				$	10,910

(1) 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 March 31, 2016
Exploration and development capital				$	363
Capitalized G&A					73
Capitalized interest					14
Acquisitions					1,518
Midstream					2
Corporate and other					4
Devon capital expenditures (1)				$	1,974

(1) Excludes $545 million attributable to EnLink.

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

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 first-quarter 2016 earnings.

(in millions, except per share amounts)				Quarter Ended March 31, 2016
				Before-Tax				After-Tax
Net loss attributable to Devon (GAAP)								$	(3,056	)
Asset impairments				3,035					2,299
Deferred tax asset valuation allowance									808
Restructuring and transaction costs (1) SEE CASH FLOW FOOTNOTE BELOW				247					159
Changes in financial instruments and FX (2) SEE CASH FLOW FOOTNOTE BELOW				12					(39	)
Core earnings before noncontrolling interest (non-GAAP)									171
Noncontrolling interest									420
Core loss attributable to Devon (non-GAAP)								$	(249	)
Share count									479
Core loss per share attributable to Devon (non-GAAP)								$	(0.53	)

CASH FLOW FOOTNOTES

(1) Includes a negative $167 million impact to cash flow before balance sheet changes that is typically excluded from analyst estimates.

(2) Includes a negative $130 million impact to cash flow before balance sheet changes and operating cash flow that is typically excluded from analyst estimates.

NET DEBT

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.

(in millions)				March 31, 2016
				Devon U.S. & Canada						EnLink						Devon Consolidated
Total debt (GAAP)				$	9,341					$	3,204					$	12,545
Less cash and cash equivalents					(1,629	)					(6	)					(1,635	)
Net debt (non-GAAP)				$	7,712					$	3,198					$	10,910

PRODUCTION GUIDANCE				Quarter 2								Full Year
				Low				High				Low				High
Oil and bitumen (MBbls/d)
U. S. - core				103				108				105				110
Heavy Oil				122				127				128				133
Core assets				225				235				233				243
Other				24				29				20				25
Total				249				264				253				268
Natural gas liquids (MBbls/d)
U. S. - core				100				105				98				103
Other				25				30				22				27
Total				125				135				120				130
Gas (MMcf/d)
U. S. - core				1,200				1,250				1,185				1,235
Heavy Oil				14				17				14				17
Core assets				1,214				1,267				1,199				1,252
Other				240				260				228				248
Total				1,454				1,527				1,427				1,500
Oil equivalent (MBoe/d)
U. S. - core				403				421				401				419
Heavy Oil				124				130				130				136
Core assets				527				551				531				555
Other				89				102				80				93
Total				616				653				611				648

PRICE REALIZATIONS GUIDANCE				Quarter 2												Full Year
				Low						High						Low						High
Oil and bitumen - % of WTI
U. S.					83	%					93	%					83	%					93	%
Canada					38	%					48	%					34	%					44	%
NGL - realized price				$	6					$	10					$	7					$	11
Natural gas - % of Henry Hub					73	%					83	%					75	%					85	%

OTHER GUIDANCE ITEMS				Quarter 2												Full Year
($ millions, except %)				Low						High						Low						High
Marketing & midstream operating profit				$	200					$	225					$	875					$	925
Lease operating expenses				$	440					$	470					$	1,750					$	1,850
General & administrative expenses				$	150					$	170					$	625					$	675
Production and property taxes				$	70					$	80					$	285					$	315
Depreciation, depletion and amortization				$	510					$	560					$	2,100					$	2,300
Other operating items				$	15					$	20					$	50					$	75
Net financing costs (1)				$	160					$	170					$	650					$	700
Current income tax rate					0.0	%					0.0	%					0.0	%					0.0	%
Deferred income tax rate					35.0	%					45.0	%					35.0	%					45.0	%
Total income tax rate					35.0	%					45.0	%					35.0	%					45.0	%
Net earnings attributable to noncontrolling interests				$	—					$	—					$	—					$	—

(1) Full year 2016 includes $50 million of non-cash accretion on EnLink’s installment purchase obligations.

CAPITAL EXPENDITURES GUIDANCE				Quarter 2										Full Year
(in millions)				Low					High					Low					High
Exploration and development				$	250				$	300				$	900				$	1,100
Capitalized G&A					55					65					200					250
Capitalized interest					10					20					40					50
Midstream					—					5					—					10
Corporate and other					10					15					30					35
Devon capital expenditures (2)				$	325				$	405				$	1,170				$	1,445

(2) Excludes capital expenditures related to EnLink.

COMMODITY HEDGES
	Oil Commodity Hedges
			Price Swaps									Price Collars														Oil 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)
Q2-2016			30,000				$	39.24				73,000				$	33.85				$	41.59				18,500				$	60.99
Q3-2016			15,000				$	45.63				65,000				$	40.37				$	46.91				18,500				$	55.00
Q4-2016			15,000				$	46.16				20,000				$	40.85				$	50.85				18,500				$	55.00

			Oil Basis Swaps
Period			Index				Volume (Bbls/d)				Weighted Average Differential to WTI ($/Bbl)
Q2-2016			Western Canadian Select				42,000				$	(13.31	)
Q3-2016			Western Canadian Select				39,000				$	(13.38	)
Q4-2016			Western Canadian Select				33,000				$	(13.40	)

	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)
Q2-2016			481,400				$	2.73				24,725				$	1.97				$	2.30				400,000				$	2.80
Q3-2016			100,000				$	2.84				-				$	-				$	-				400,000				$	2.80
Q4-2016			-				$	-				70,000				$	2.56				$	2.76				400,000				$	2.80

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. Commodity hedge positions are shown as of April 29, 2016.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160503007038/en/

Source: Devon Energy Corp.