DEVON ENERGY CORPDE

Previous wording

The following discussion and analysis addresses material changes in our results of operations for the three-month and six-month periods ended June 30, 2024 compared to previous periods, and in our financial condition and liquidity since December 31, 2023. For information regarding our critical accounting policies and estimates, see our 2023 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Current wording

The following discussion and analysis addresses material changes in our results of operations for the three-month and nine-month periods ended September 30, 2024 compared to previous periods, and in our financial condition and liquidity since December 31, 2023. For information regarding our critical accounting policies and estimates, see our 2023 Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Previous wording

In July 2024, Devon announced it had entered into an agreement to acquire the Williston Basin business of Grayson Mill Energy. The purchase price for the transaction consists of $3.25 billion of cash and approximately 37 million shares of Devon common stock, in each case subject to various purchase price adjustments. The transaction is expected to close by the end of the third quarter of 2024 and increase our volumes in 2025 by approximately 100 MBoe/d, with approximately 55% being oil. The acquisition will allow us to efficiently expand our oil production and operating scale, creating immediate and long-term, sustainable value to shareholders over time. As evidenced by this recent acquisition, we remain focused on building economic value by executing on our strategic priorities of moderating production growth, emphasizing capital and operational efficiencies, optimizing reinvestment rates to maximize free cash flow, maintaining low leverage, delivering cash returns to our shareholders and pursuing ESG excellence. Our recent performance highlights for these priorities include the following items for the second quarter of 2024:

Current wording

On September 27, 2024, we acquired the Williston Basin business of Grayson Mill for total consideration of approximately $5.0 billion, consisting of $3.5 billion of cash and approximately 37.3 million shares of Devon common stock, including purchase price adjustments. The transaction is expected to increase our volumes in 2025 by approximately 100 MBoe/d. The acquisition will allow us to efficiently expand our oil production and operating scale, creating immediate and long-term, sustainable value to shareholders over time.

Previous wording

Oil production totaled 335 MBbls/d, exceeding our plan by 3%.

Current wording

Oil production totaled 335 MBbls/d, exceeding our plan by 4%.

Previous wording

Expanded share repurchase program to $5.0 billion and have repurchased approximately 54.7 million of our common shares for approximately $2.7 billion, or $50.28 per share since inception of the plan.

Current wording

As of September 30, 2024, completed approximately 60% of our authorized $5.0 billion share repurchase program with approximately 61.3 million of our common shares purchased for approximately $3.0 billion, or $49.62 per share since inception of the plan.

Previous wording

Exited with $4.2 billion of liquidity, including $1.2 billion of cash.

Current wording

Exited with $3.7 billion of liquidity, including $0.7 billion of cash.

Previous wording

Generated $1.5 billion of operating cash flow and $6.7 billion for the past twelve trailing months.

Current wording

Generated $1.7 billion of operating cash flow and $6.7 billion for the past twelve trailing months.

Previous wording

Including variable dividends, paid dividends of $223 million and have declared approximately $276 million of dividends to be paid in the third quarter of 2024.

Current wording

Including variable dividends, paid dividends of $272 million and have declared approximately $144 million of dividends to be paid in the fourth quarter of 2024.

Previous wording

Earnings attributable to Devon were $844 million, or $1.34 per diluted share.

Current wording

Earnings attributable to Devon were $812 million, or $1.30 per diluted share.

Previous wording

Core earnings (Non-GAAP) were $885 million, or $1.41 per diluted share.

Current wording

Core earnings (Non-GAAP) were $683 million, or $1.10 per diluted share.

Previous wording

We remain committed to capital discipline and delivering the objectives that underpin our current plan. Those objectives prioritize value creation through moderated capital investment and production growth, particularly with a view of the volatility in commodity prices, supply chain constraints and the economic uncertainty arising from inflation and geopolitical events. Our cash-return objectives remain focused on opportunistic share repurchases, funding our fixed and variable dividends, repaying debt at upcoming maturities and building cash balances.

Current wording

We remain committed to capital discipline and delivering the objectives that underpin our current plan. Those objectives prioritize value creation through moderated capital investment and production growth, particularly with a view of the volatility in commodity prices, supply chain constraints and the economic uncertainty arising from inflation and geopolitical events. Our cash-return objectives remain focused on opportunistic share repurchases, funding our dividends, repaying debt at upcoming maturities and building cash balances.