Devon Energy 8K Reports Second-Quarter 2023 Results and Declares Quarterly Dividend | DVN 1 Aug 23

Exhibit 99.2

Devon Energy Second-Quarter 2023

Supplemental Tables


TABLE OF CONTENTS:	PAGE:

Consolidated Statements of Earnings		2

Supplemental Information for Consolidated Statements of Earnings		3

Consolidated Balance Sheets		4

Consolidated Statements of Cash Flows		5

Production		6

Capital Expenditures and Supplemental Information for Capital Expenditures		7

Realized Pricing		8

Asset Margins		9

Core Earnings		10

EBITDAX, Net Debt, Net Debt-to-EBITDAX, and Free Cash Flow		11

Reinvestment Rate and Variable Dividend		12

CONSOLIDATED STATEMENTS OF EARNINGS


(in millions, except per share amounts)	2023					2022
	Quarter 2			Quarter 1		Quarter 4			Quarter 3			Quarter 2
Oil, gas and NGL sales	$	2,493		$	2,679	$	3,139		$	3,668		$	4,100
Oil, gas and NGL derivatives ⁽¹⁾		(76	)		64		(53	)		248			(170	)
Marketing and midstream revenues		1,037			1,080		1,213			1,516			1,696

Total revenues		3,454			3,823		4,299			5,432			5,626

Production expenses ⁽²⁾		719			693		715			735			729
Exploration expenses		10			3		13			4			10
Marketing and midstream expenses		1,051			1,105		1,231			1,525			1,700
Depreciation, depletion and amortization		638			615		625			581			528
Asset dispositions		(41	)		—		(29	)		—			(14	)
General and administrative expenses		92			106		122			95			84
Financing costs, net ⁽³⁾		78			72		73			67			84
Other, net		10			5		(4	)		(40	)		10

Total expenses		2,557			2,599		2,746			2,967			3,131

Earnings before income taxes		897			1,224		1,553			2,465			2,495
Income tax expense ⁽⁴⁾		199			221		349			565			557

Net earnings		698			1,003		1,204			1,900			1,938
Net earnings attributable to noncontrolling interests		8			8		3			7			6

Net earnings attributable to Devon	$	690		$	995	$	1,201		$	1,893		$	1,932


Net earnings per share:
Basic net earnings per share	$	1.08		$	1.53	$	1.84		$	2.89		$	2.94
Diluted net earnings per share	$	1.07		$	1.53	$	1.83		$	2.88		$	2.93

Weighted average common shares outstanding:
Basic		642			651		653			655			658
Diluted		643			653		655			656			660

SUPPLEMENTAL INFORMATION FOR CONSOLIDATED STATEMENTS OF EARNINGS


(1) OIL, GAS AND NGL DERIVATIVES

(in millions)	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Derivative cash settlements	$	37		$	13		$	(177	)	$	(363	)	$	(472	)
Derivative valuation changes		(113	)		51			124			611			302

Oil, gas and NGL derivatives	$	(76	)	$	64		$	(53	)	$	248		$	(170	)


(2) PRODUCTION EXPENSES

(in millions)	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Lease operating expense	$	353		$	327		$	308		$	284		$	255
Gathering, processing & transportation		177			166			178			177			177
Production taxes		165			175			210			252			278
Property taxes		24			25			19			22			19

Production expenses	$	719		$	693		$	715		$	735		$	729


(3) FINANCING COSTS, NET

(in millions)	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Interest based on outstanding debt	$	96		$	93		$	93		$	92		$	93
Interest income		(15	)		(17	)		(16	)		(19	)		(2	)
Other		(3	)		(4	)		(4	)		(6	)		(7	)

Financing costs, net	$	78		$	72		$	73		$	67		$	84


(4) INCOME TAX EXPENSE

(in millions)	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Current expense	$	80		$	141		$	84		$	120		$	252
Deferred expense		119			80			265			445			305

Income tax expense	$	199		$	221		$	349		$	565		$	557

CONSOLIDATED BALANCE SHEETS


(in millions)	June 30, 2023			December 31, 2022
Current assets:
Cash, cash equivalents and restricted cash	$	488		$	1,454
Accounts receivable		1,519			1,767
Inventory		201			201
Other current assets		397			469

Total current assets		2,605			3,891
Oil and gas property and equipment, based on successful efforts accounting, net		17,317			16,567
Other property and equipment, net		1,446			1,539

Total property and equipment, net		18,763			18,106
Goodwill		753			753
Right-of-use assets		266			224
Investments		675			440
Other long-term assets		293			307

Total assets	$	23,355		$	23,721


Current liabilities:
Accounts payable	$	843		$	859
Revenues and royalties payable		1,199			1,506
Short-term debt		244			251
Other current liabilities		383			489

Total current liabilities		2,669			3,105
Long-term debt		6,169			6,189
Lease liabilities		299			257
Asset retirement obligations		548			511
Other long-term liabilities		858			900
Deferred income taxes		1,662			1,463
Stockholders’ equity:
Common stock		64			65
Additional paid-in capital		6,131			6,921
Retained earnings		4,940			4,297
Accumulated other comprehensive loss		(114	)		(116	)

Total stockholders’ equity attributable to Devon		11,021			11,167
Noncontrolling interests		129			129

Total equity		11,150			11,296

Total liabilities and equity	$	23,355		$	23,721


Common shares outstanding		641			653

CONSOLIDATED STATEMENTS OF CASH FLOWS


(in millions)	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Cash flows from operating activities:
Net earnings	$	698		$	1,003		$	1,204		$	1,900		$	1,938
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation, depletion and amortization		638			615			625			581			528
Leasehold impairments		3			—			2			2			7
Amortization of liabilities		(8	)		(7	)		(8	)		(8	)		(9	)
Total (gains) losses on commodity derivatives		76			(64	)		53			(248	)		170
Cash settlements on commodity derivatives		37			13			(177	)		(363	)		(472	)
Gains on asset dispositions		(41	)		—			(29	)		—			(14	)
Deferred income tax expense		119			80			265			445			305
Share-based compensation		25			23			23			22			23
Other		(2	)		2			(1	)		8			4
Changes in assets and liabilities, net		(140	)		12			(46	)		(235	)		198

Net cash from operating activities		1,405			1,677			1,911			2,104			2,678

Cash flows from investing activities:
Capital expenditures		(1,079	)		(1,012	)		(804	)		(628	)		(573	)
Acquisitions of property and equipment		(18	)		(13	)		(17	)		(2,465	)		(100	)
Divestitures of property and equipment		1			21			—			4			9
Distributions from investments		9			8			9			7			15
Contributions to investments and other		(15	)		(37	)		(17	)		(16	)		(21	)

Net cash from investing activities		(1,102	)		(1,033	)		(829	)		(3,098	)		(670	)

Cash flows from financing activities:
Repurchases of common stock		(228	)		(517	)		(57	)		(126	)		(324	)
Dividends paid on common stock		(462	)		(596	)		(875	)		(1,007	)		(830	)
Contributions from noncontrolling interests		8			—			—			—			—
Distributions to noncontrolling interests		(13	)		(11	)		(8	)		(9	)		(5	)
Shares exchanged for tax withholdings and other		(9	)		(87	)		—			(1	)		(12	)

Net cash from financing activities		(704	)		(1,211	)		(940	)		(1,143	)		(1,171	)

Effect of exchange rate changes on cash		2			—			2			(10	)		(5	)

Net change in cash, cash equivalents and restricted cash		(399	)		(567	)		144			(2,147	)		832
Cash, cash equivalents and restricted cash at beginning of period		887			1,454			1,310			3,457			2,625

Cash, cash equivalents and restricted cash at end of period	$	488		$	887		$	1,454		$	1,310		$	3,457


Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	372		$	761		$	1,314		$	1,166		$	3,300
Restricted cash		116			126			140			144			157

Total cash, cash equivalents and restricted cash	$	488		$	887		$	1,454		$	1,310		$	3,457

PRODUCTION


	2023				2022
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Oil (MBbls/d)
Delaware Basin		209		211		201		210		222
Eagle Ford		45		40		42		19		19
Anadarko Basin		15		15		15		13		14
Williston Basin		36		36		37		35		27
Powder River Basin		14		14		16		13		14
Other		4		4		5		4		4

Total		323		320		316		294		300

Natural gas liquids (MBbls/d)
Delaware Basin		105		97		101		108		111
Eagle Ford		16		15		12		9		9
Anadarko Basin		31		26		23		27		25
Williston Basin		9		8		9		8		9
Powder River Basin		2		2		3		2		2
Other		1		1		—		—		—

Total		164		149		148		154		156

Gas (MMcf/d)
Delaware Basin		636		640		626		623		618
Eagle Ford		86		82		84		63		60
Anadarko Basin		254		237		238		224		212
Williston Basin		59		54		64		71		52
Powder River Basin		18		16		21		18		18
Other		1		1		1		1		1

Total		1,054		1,030		1,034		1,000		961

Total oil equivalent (MBoe/d)
Delaware Basin		420		415		407		421		436
Eagle Ford		74		68		68		39		38
Anadarko Basin		89		81		77		77		74
Williston Basin		56		53		57		55		45
Powder River Basin		19		19		22		18		19
Other		4		5		5		4		4

Total		662		641		636		614		616

CAPITAL EXPENDITURES


(in millions)	2023				2022
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin	$	583	$	572	$	518	$	444	$	374
Eagle Ford		179		188		160		38		37
Anadarko Basin		67		66		59		55		42
Williston Basin		89		73		90		57		21
Powder River Basin		39		32		46		44		37
Other		1		2		1		1		2

Total upstream capital	$	958	$	933	$	874	$	639	$	513

Carbon capital		30		27		20		27		22
Midstream and Corporate		30		28		28		22		32
Acquisitions ⁽¹⁾		18		13		13		2,534		13

Total capital	$	1,036	$	1,001	$	935	$	3,222	$	580

(1)	Q3 2022 includes $2,532 million related to Validus and RimRock acquisitions.

SUPPLEMENTAL INFORMATION FOR CAPITAL EXPENDITURES


GROSS OPERATED SPUDS

	2023				2022
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin		65		60		60		50		46
Eagle Ford		18		23		31		7		4
Anadarko Basin		9		19		8		13		14
Williston Basin		8		6		9		10		5
Powder River Basin		3		3		4		6		1

Total		103		111		112		86		70


GROSS OPERATED WELLS TIED-IN

	2023				2022
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin		76		42		55		59		52
Eagle Ford		29		26		28		8		14
Anadarko Basin		16		7		23		13		1
Williston Basin		8		17		5		14		—
Powder River Basin		2		5		3		9		—

Total		131		97		114		103		67


AVERAGE LATERAL LENGTH

(based on wells tied-in)	2023				2022
	Quarter 2		Quarter 1		Quarter 4		Quarter 3		Quarter 2
Delaware Basin		10,100’		9,900’		9,600’		10,900’		9,100’
Eagle Ford		6,200’		6,700’		6,500’		7,800’		5,800’
Anadarko Basin		9,100’		9,300’		8,700’		9,500’		10,100’
Williston Basin		10,000’		11,500’		9,900’		10,500’		—
Powder River Basin		15,000’		10,700’		9,600’		11,800’		—

Total		9,200’		9,300’		8,700’		10,500’		8,400’

REALIZED PRICING

BENCHMARK PRICES


(average prices)	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	73.76		$	76.17		$	82.53		$	91.87		$	108.70
Natural Gas ($/Mcf) - Henry Hub	$	2.09		$	3.44		$	6.26		$	8.20		$	7.17
NGL ($/Bbl) - Mont Belvieu Blended	$	23.99		$	29.48		$	30.46		$	39.67		$	46.44

REALIZED PRICES

	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Oil (Per Bbl)
Delaware Basin	$	71.86		$	74.43		$	82.48		$	93.60		$	109.05
Eagle Ford		72.36			74.06			83.23			91.53			109.77
Anadarko Basin		71.52			74.14			82.57			91.42			108.15
Williston Basin		70.80			74.09			81.05			91.30			109.85
Powder River Basin		70.75			74.30			81.29			91.33			104.75

Realized price without hedges		71.74			74.32			82.31			92.98			108.93
Cash settlements		—			(0.10	)		(4.87	)		(8.60	)		(13.13	)

Realized price, including cash settlements	$	71.74		$	74.22		$	77.44		$	84.38		$	95.80


Natural gas liquids (Per Bbl)
Delaware Basin	$	18.07		$	23.72		$	23.68		$	34.37		$	40.75
Eagle Ford		20.22			26.18			29.06			35.55			41.98
Anadarko Basin		19.42			27.88			29.58			35.52			41.64
Williston Basin		2.52			8.97			7.97			25.41			23.88
Powder River Basin		24.52			35.72			34.91			44.85			55.62

Realized price without hedges		17.79			24.12			24.32			34.44			40.28
Cash settlements		—			—			—			—			—

Realized price, including cash settlements	$	17.79		$	24.12		$	24.32		$	34.44		$	40.28


Gas (Per Mcf)
Delaware Basin	$	1.18		$	1.90		$	4.30		$	7.06		$	6.41
Eagle Ford		1.80			2.99			5.02			7.53			7.10
Anadarko Basin		1.72			3.14			5.37			8.89			7.11
Williston Basin		(0.85	)		1.57			0.44			3.23			1.56
Powder River Basin		2.41			4.25			5.57			8.23			7.93

Realized price without hedges		1.27			2.29			4.39			7.25			6.37
Cash settlements		0.39			0.18			(0.38	)		(1.42	)		(1.31	)

Realized price, including cash settlements	$	1.66		$	2.47		$	4.01		$	5.83		$	5.06


Total oil equivalent (Per Boe)
Delaware Basin	$	42.05		$	46.35		$	53.34		$	65.80		$	75.02
Eagle Ford		49.69			52.81			62.92			65.49			75.07
Anadarko Basin		24.04			32.16			41.25			53.72			54.46
Williston Basin		45.94			52.94			54.51			66.65			73.15
Powder River Basin		56.33			63.01			67.59			78.58			89.84

Realized price without hedges		41.39			46.44			53.66			64.89			73.13
Cash settlements		0.61			0.22			(3.04	)		(6.41	)		(8.43	)

Realized price, including cash settlements	$	42.00		$	46.66		$	50.62		$	58.48		$	64.70

ASSET MARGINS


BENCHMARK PRICES
(average prices)	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Oil ($/Bbl) - West Texas Intermediate (Cushing)	$	73.76		$	76.17		$	82.53		$	91.87		$	108.70
Natural Gas ($/Mcf) - Henry Hub	$	2.09		$	3.44		$	6.26		$	8.20		$	7.17
NGL ($/Bbl) - Mont Belvieu Blended	$	23.99		$	29.48		$	30.46		$	39.67		$	46.44

PER-UNIT CASH MARGIN BY ASSET (per Boe)

	2023						2022
	Quarter 2			Quarter 1			Quarter 4			Quarter 3			Quarter 2
Delaware Basin
Realized price	$	42.05		$	46.35		$	53.34		$	65.80		$	75.02
Lease operating expenses		(4.96	)		(4.58	)		(4.55	)		(4.39	)		(3.98	)
Gathering, processing & transportation		(2.63	)		(2.63	)		(2.52	)		(2.40	)		(2.37	)
Production & property taxes		(3.18	)		(3.43	)		(3.89	)		(4.81	)		(5.35	)

Field-level cash margin	$	31.28		$	35.71		$	42.38		$	54.20		$	63.32


Eagle Ford
Realized price	$	49.69		$	52.81		$	62.92		$	65.49		$	75.07
Lease operating expenses		(6.18	)		(6.32	)		(5.63	)		(4.94	)		(4.98	)
Gathering, processing & transportation		(1.67	)		(1.49	)		(3.08	)		(4.94	)		(6.39	)
Production & property taxes		(2.97	)		(3.25	)		(2.97	)		(3.79	)		(3.99	)

Field-level cash margin	$	38.87		$	41.75		$	51.24		$	51.82		$	59.71


Anadarko Basin
Realized price	$	24.04		$	32.16		$	41.25		$	53.72		$	54.46
Lease operating expenses		(3.13	)		(3.41	)		(3.59	)		(3.46	)		(3.49	)
Gathering, processing & transportation		(5.97	)		(5.93	)		(6.84	)		(6.91	)		(6.65	)
Production & property taxes		(1.22	)		(1.73	)		(2.29	)		(3.26	)		(3.17	)

Field-level cash margin	$	13.72		$	21.09		$	28.53		$	40.09		$	41.15


Williston Basin
Realized price	$	45.94		$	52.94		$	54.51		$	66.65		$	73.15
Lease operating expenses		(13.43	)		(13.25	)		(9.93	)		(9.97	)		(9.40	)
Gathering, processing & transportation		(2.29	)		(2.19	)		(1.92	)		(2.40	)		(2.44	)
Production & property taxes		(4.68	)		(4.85	)		(5.64	)		(6.33	)		(6.75	)

Field-level cash margin	$	25.54		$	32.65		$	37.02		$	47.95		$	54.56


Powder River Basin
Realized price	$	56.33		$	63.01		$	67.59		$	78.58		$	89.84
Lease operating expenses		(10.03	)		(11.07	)		(7.15	)		(7.03	)		(7.04	)
Gathering, processing & transportation		(2.97	)		(2.73	)		(2.98	)		(3.24	)		(3.50	)
Production & property taxes		(6.79	)		(7.78	)		(8.13	)		(9.50	)		(10.89	)

Field-level cash margin	$	36.54		$	41.43		$	49.33		$	58.81		$	68.41


Devon - Total
Realized price	$	41.39		$	46.44		$	53.66		$	64.89		$	73.13
Lease operating expenses		(5.86	)		(5.67	)		(5.26	)		(5.02	)		(4.56	)
Gathering, processing & transportation		(2.94	)		(2.88	)		(3.05	)		(3.13	)		(3.15	)
Production & property taxes		(3.14	)		(3.47	)		(3.91	)		(4.84	)		(5.30	)

Field-level cash margin	$	29.45		$	34.42		$	41.44		$	51.90		$	60.12

NON-GAAP MEASURES

(all monetary values in millions, except per share amounts)

Devon’s earnings materials include non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in the earnings materials, including reconciliations to their most directly comparable GAAP measure.

The earnings materials may include forward-looking non-GAAP measures. The company is unable to provide reconciliations of these forward-looking non-GAAP measures, because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, the timing of changes in capital accruals, unknown future events and estimating certain future GAAP measures. The inability to reliably quantify certain components of the calculation would significantly affect the usefulness and accuracy of a reconciliation.

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 share attributable to Devon. 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 second- quarter and first-quarter 2023 earnings.


	Quarter Ended June 30, 2023
	Before-tax			After-tax			After NCI			Per Diluted Share
Total
Earnings (GAAP)	$	897		$	698		$	690		$	1.07
Adjustments:
Asset dispositions		(41	)		(31	)		(31	)		(0.05	)
Asset and exploration impairments		3			2			2			0.01
Deferred tax asset valuation allowance		—			10			10			0.02
Fair value changes in financial instruments		112			84			84			0.13

Core earnings (Non-GAAP)	$	971		$	763		$	755		$	1.18


	Quarter Ended March 31, 2023
	Before-tax			After-tax			After NCI			Per Diluted Share
Total
Earnings (GAAP)	$	1,224		$	1,003		$	995		$	1.53
Adjustments:
Deferred tax asset valuation allowance		—			(3	)		(3	)		(0.01	)
Fair value changes in financial instruments		(53	)		(40	)		(40	)		(0.06	)

Core earnings (Non-GAAP)	$	1,171		$	960		$	952		$	1.46

EBITDAX

Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings before financing costs, net; income tax expense; exploration expenses; depreciation, depletion and amortization; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; accretion on discounted liabilities; and other items not related to normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies.


	Q2 ‘23			Q1 ‘23			Q4 ‘22			Q3 ‘22			TTM			Q2 ‘22
Net earnings (GAAP)	$	698		$	1,003		$	1,204		$	1,900		$	4,805		$	1,938
Financing costs, net		78			72			73			67			290			84
Income tax expense		199			221			349			565			1,334			557
Exploration expenses		10			3			13			4			30			10
Depreciation, depletion and amortization		638			615			625			581			2,459			528
Asset dispositions		(41	)		—			(29	)		—			(70	)		(14	)
Share-based compensation		25			23			23			22			93			22
Derivative & financial instrument non-cash val. changes		113			(51	)		(122	)		(613	)		(673	)		(302	)
Accretion on discounted liabilities and other		10			5			(6	)		(38	)		(29	)		10

EBITDAX (Non-GAAP)	$	1,730		$	1,891		$	2,130		$	2,488		$	8,239		$	2,833

NET DEBT

Devon defines net debt as debt (includes short-term and long-term debt) less cash, cash equivalents and restricted cash. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.


	Jun. 30, 2023			Mar. 31, 2023			Dec. 31, 2022			Sep. 30, 2022			Jun. 30, 2022
Total debt (GAAP)	$	6,413		$	6,422		$	6,440		$	6,451		$	6,461
Less:
Cash, cash equivalents and restricted cash		(488	)		(887	)		(1,454	)		(1,310	)		(3,457	)

Net debt (Non-GAAP)	$	5,925		$	5,535		$	4,986		$	5,141		$	3,004

NET DEBT-TO-EBITDAX

Devon defines net debt-to-EBITDAX as net debt divided by an annualized EBITDAX measure. Devon believes this ratio provides information useful to investors in assessing the company’s credit position and debt leverage.


	Jun. 30, 2023		Mar. 31, 2023		Dec. 31, 2022		Sep. 30, 2022		Jun. 30, 2022
Net debt (Non-GAAP)	$	5,925	$	5,535	$	4,986	$	5,141	$	3,004
EBITDAX (Non-GAAP) ⁽¹⁾	$	8,239	$	9,342	$	9,586	$	9,267	$	8,413

Net debt-to-EBITDAX (Non-GAAP)		0.7		0.6		0.5		0.6		0.4

(1)	EBITDAX is an annualized measure using a trailing twelve-month calculation.

FREE CASH FLOW

Devon defines free cash flow as total operating cash flow less capital expenditures. Devon believes free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.


	Quarter Ended Jun. 30, 2023			Quarter Ended Mar. 31, 2023			Quarter Ended Dec. 31, 2022			Quarter Ended Sep. 30, 2022			Quarter Ended Jun. 30, 2022
Total operating cash flow (GAAP)	$	1,405		$	1,677		$	1,911		$	2,104		$	2,678
Less capital expenditures:		(1,079	)		(1,012	)		(804	)		(628	)		(573	)

Free cash flow (Non-GAAP)	$	326		$	665		$	1,107		$	1,476		$	2,105

REINVESTMENT RATE

Devon defines reinvestment rate as accrued capital expenditures (excluding acquisitions) divided by operating cash flow. Devon believes this measure provides useful information to our investors as an indicator of the capital demands of our business relative to the cash flow generated from normal business operations.


	Quarter Ended Jun. 30, 2023			Quarter Ended Mar. 31, 2023			Year Ended Dec. 31, 2022
Capital expenditures (excludes acquisitions)	$	1,018		$	988		$	2,740
Operating cash flow	$	1,405		$	1,677		$	8,530

Reinvestment rate (Non-GAAP)		72	%		59	%		32	%

VARIABLE DIVIDEND

Devon may pay a variable dividend of up to 50 percent of its excess cash flow. Each quarter’s excess cash flow is computed as adjusted cash flow less capital expenditures and the fixed dividend.


	Quarter Ended Jun. 30, 2023
Operating cash flow (GAAP)	$	1,405
Changes in assets and liabilities, net		140

Adjusted cash flow (Non-GAAP)		1,545
Capital expenditures (Accrued)		(1,036	)

Adjusted free cash flow (Non-GAAP)		509
Fixed quarterly dividend		(128	)

Excess free cash flow (Non-GAAP)	$	381
~ 50% Pay out (Board Discretion: Up to 50%)		50	%

Total variable dividend	$	186


THIRD-QUARTER AND FULL-YEAR 2023 GUIDANCE

PRODUCTION GUIDANCE


	Quarter 3				Full Year
	Low		High		Low		High
Oil (MBbls/d)		322		330		320		326
Natural gas liquids (MBbls/d)		164		170		156		162
Gas (MMcf/d)		1,030		1,080		1,000		1,050

Total oil equivalent (MBoe/d)		658		680		643		663

CAPITAL EXPENDITURES GUIDANCE


	Quarter 3				Full Year
(in millions)	Low		High		Low		High
Upstream capital	$	800	$	840	$	3,440	$	3,560
Carbon capital		25		35		80		120
Midstream & other capital		30		50		80		120

Total capital	$	855	$	925	$	3,600	$	3,800

PRICE REALIZATIONS GUIDANCE


	Quarter 3						Full Year
	Low			High			Low			High
Oil - % of WTI		95	%		100	%		95	%		100	%
NGL - % of WTI		25	%		35	%		25	%		35	%
Natural gas - % of Henry Hub		60	%		70	%		60	%		70	%

OTHER GUIDANCE ITEMS


	Quarter 3						Full Year
($millions, except Boe and %)	Low			High			Low			High
Marketing & midstream operating profit	$	(15	)	$	(5	)	$	(60	)	$	(50	)
LOE & GP&T per BOE ⁽¹⁾	$	8.80		$	9.00		$	8.60		$	9.00
Production & property taxes as % of upstream sales		7.0	%		8.0	%		7.0	%		8.0	%
Exploration expenses	$	—		$	5		$	5		$	15
Depreciation, depletion and amortization	$	630		$	670		$	2,500		$	2,600
General & administrative expenses	$	95		$	105		$	390		$	410
Net financing costs, net	$	80		$	90		$	290		$	310
Other expenses	$	—		$	5		$	—		$	20


(1)				LOE per BOE is expected to increase due to a recently executed water handling joint venture in the Delaware Basin.

INCOME TAX GUIDANCE


	Quarter 3						Full Year
(% of pre-tax earnings)	Low			High			Low			High
Current income tax rate		11	%		13	%		10	%		12	%
Deferred income tax rate		9	%		11	%		10	%		12	%

Total income tax rate		~22%						~22%


CONTINGENT PAYMENTS FOR BARNETT SHALE DIVESTITURE (2 more years through 2024)


WTI Threshold		WTI Annual Earnout Amount		Henry Hub Threshold		Henry Hub Annual Earnout Amount
$	50.00	$	10,000,000	$	2.75	$	20,000,000
$	55.00	$	12,500,000	$	3.00	$	25,000,000
$	60.00	$	15,000,000	$	3.25	$	35,000,000
$	65.00	$	20,000,000	$	3.50	$	45,000,000

2023 & 2024 HEDGING POSITIONS

Oil Commodity Hedges


	Price Swaps			Price Collars
Period	Volume (Bbls/d)	Weighted Average Price ($/Bbl)		Volume (Bbls/d)	Weighted Average Floor Price ($/Bbl)		Weighted Average Ceiling Price ($/Bbl)
Q3 2023	13,293	$	71.10	84,500	$	69.41	$	94.84
Q4 2023	19,000	$	72.09	81,000	$	69.63	$	94.29
Q1-Q4 2024	4,724	$	72.09	32,486	$	60.15	$	84.71

Oil Basis Swaps


Period	Index	Volume (Bbls/d)	Weighted Average Differential to WTI ($/Bbl)
Q3-Q4 2023	Midland Sweet	66,500	$	1.11
Q1-Q4 2024	Midland Sweet	61,500	$	1.17

Natural Gas Commodity Hedges - Henry Hub


	Price Swaps			Price Collars
Period	Volume (MMBtu/d)	Weighted Average Price ($/MMBtu)		Volume (MMBtu/d)	Weighted Average Floor Price ($/MMBtu)		Weighted Average Ceiling Price ($/MMBtu)
Q3 2023	108,000	$	3.30	195,000	$	3.61	$	7.29
Q4 2023	113,000	$	3.31	147,000	$	3.67	$	7.62
Q1-Q4 2024	99,426	$	3.31	40,527	$	3.78	$	7.05

Natural Gas Basis Swaps


Period	Index	Volume (MMBtu/d)	Weighted Average Differential to Henry Hub ($/MMBtu)
Q3 - Q4 2023	El Paso Permian	145,000	$	(1.58	)
Q3 - Q4 2023	Houston Ship Channel	140,000	$	(0.19	)
Q3 - Q4 2023	WAHA	70,000	$	(0.51	)
Q1-Q4 2024	El Paso Permian	34,863	$	(0.91	)
Q1-Q4 2024	Houston Ship Channel	90,000	$	(0.25	)
Q1-Q4 2024	WAHA	44,973	$	(0.58	)

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 end of the month NYMEX index. Commodity hedge positions are shown as of July 27, 2023.

Devon Energy (DVN) 8-KDevon Energy Reports Second-Quarter 2023 Results and Declares Quarterly Dividend