Devon Energy : Williston Basin Acquisition

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Devon Energy to Acquire Grayson Mill

July 8, 2024

NYSE: DVN

devonenergy.com

Transaction Advances Our Strategic Plan

IMMEDIATELY ACCRETIVE TO KEY FINANCIAL METRICS

Drives improvement to key measures: EPS, CFPS, FCF per share & NAV

ENHANCES SCALE & SCOPE OF OPERATIONS

Positioned as a leading U.S. oil producer with ~375,000 barrels per day(1)

TRANSFORMS WILLISTON BASIN BUSINESS

Triples in-basin production & adds significant inventory depth

MIDSTREAM OWNERSHIP IMPROVES MARGINS

Extensive midstream infrastructure delivers peer-leading margins

INCREASES CASH RETURNS TO SHAREHOLDERS

Board expands buyback authorization by 67% to $5 billion

	WILLISTON
	BASIN
	POWDER RIVER
WILLISTON	BASIN
ACQUISITION

• Purchase Price: $5 billion
• Funding: 65% cash & 35% stock

 Targeted Closing: End of Q3 2024		ANADARKO
DELAWARE	BASIN
BASIN
		EAGLE
DEVON ASSETS	FORD
GRAYSON MILL ASSETS

1. Pro forma production is a combination of Devon's 2024 guidance and Grayson Mill's 2025e volumes of ~100 MBOED (~55% oil).

| Devon Acquires Grayson Mill

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Enhances Scale & Scope of Operations

TOP U.S. ONSHORE PURE-PLAY PRODUCERS

1,000

750

500

250

0

PRO FORMA TOTAL PRODUCTION (MBOED)(1)

Oil	NGL
55%	25%

~100 MBOED

Gas 20%

Total Production (MBOED)

Oil Production (MBOD)

TOP ONSHORE PRODUCERS

(1) Sourced from FactSet & Devon. Pro forma production is a combination of Devon's 2024 guidance and Grayson Mill's 2025e volumes of ~100 MBOED (~55% oil). Represents upstream peers with >10% oil mix.

| Devon Acquires Grayson Mill

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History of Growing Oil Production

TOTAL OIL PRODUCTION (MBOD)

	~375
	Legacy Devon
	Grayson Mill
155	~2.5x
	OIL GROWTH
	SINCE 2020

2020

2021

2022

2023

2024e

Pro Forma (1)

(1) Pro forma production is a combination of Devon's 2024 guidance and Grayson Mill's 2025e volumes of ~100 MBOED (~55% oil).

ACCRETIVE ACQUISITION

IN WILLISTON BASIN

| Devon Acquires Grayson Mill

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Transforms Williston Basin Business

• Creates a leading 430,000 net acre position in the Williston Basin
• Triples Devon's in-basin production to ~150,000 BOED
• Project returns immediately compete for capital within Devon's diversified portfolio

KEY ASSET-LEVEL METRICS			Pro Forma
Williston Basin Acreage	123,000	307,000	430,000		DakotaNorth
Williston Production (BOED)	~50,000	~100,000	~150,000	Montana
Williston Oil Mix (% of production)	62%	55%	57%

Pro forma production is a combination of Devon's estimated Williston volumes in 2H 2024 and Grayson Mill's 2025e volumes of ~100 MBOED (~55% oil).

Williams			Devon
		Grayson Mill

Mountrail

McKenzie

NORTH
DAKOTA	Dunn

| Devon Acquires Grayson Mill

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Expands Williston Basin Inventory Depth

IRR (%)

125%

100%

75%

50%

25%

COMBINED WILLISTON BASIN INVENTORY

(ASSUMES $80 WTI)

DAKOTA	TO 10YEARS
	UP	(1)
NORTH
	OF INVENTORY

Devon

Grayson Mill (2)

100

200

300

400

500

600

700

800

900

1,000

GROSS OPERATED LOCATIONS

Note: Wells projected to exceed 125% IRR are reflected at 125%.

(1) At pace of pro forma Williston Basin activity. (2) Grayson Mill inventory includes 500 drilling locations and 300 high-quality refrac candidates (~81% 8/8ths NRI).

| Devon Acquires Grayson Mill

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Best-In-Class Well Performance in Williston

TOP-TIER HISTORICAL WELL PERFORMANCE

12-MONTH CUME. OIL PRODUCTIVITY (MBO PER 1,000')

EXCELLENT RESULTS IN 2024

% OF TOP 50 WILLISTON WELLS YTD (MBO PER 1,000')

25

20

15

10

5

35%

MORE PRODUCTIVE

4-YEAR PEER AVERAGE

PEER AVERAGE

28%

14 WELLS

20%

10 WELLS

TOP WILLISTON PRODUCERS

Note: Data sourced from Enverus Prism dated 7/5/2024. Williston Basin oil wells online since 7/1/2020 with 12-month oil production available. Includes operators with a minimum of 15 wells.

Note: Data sourced from Enverus Prism dated 7/5/2024. Top 50 performing Williston Basin oil wells online since 12/31/2023.

| Devon Acquires Grayson Mill

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Midstream Ownership Delivers Peer-Leading Margins

$40

$35

$30

$25

$20

MIDSTREAM CREATES MARGIN UPLIFT

2023 WILLISTON PER UNIT FIELD-LEVEL MARGINS VS. BASIN PEERS

GME		GME
Total	Upstream

MIDSTREAM BUSINESS: >$125 MILLION OF EBITDAX ANNUALLY

Montana		North Dakota

Grayson Mill

Williams

Mountrail

McKenzie

	Dunn
NORTH	MARKETING OPTIONALITY
DAKOTA	ACCESS TO DAPL, NDPL, PLAINS, & OTHERS

| Devon Acquires Grayson Mill

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Immediately Accretive to Key Financial Metrics

Immediately accretive to our shareholders

Pro forma year-one benefits (Assumes $80 WTI)

$	ATTRACTIVE	<4.0X
PURCHASE PRICE	EBITDAX
						CASH FLOW	~10%
						GROWTH	PER SHARE
						FREE CASH FLOW	~15%
						GENERATION	IMPROVEMENT

ACCRETIVE TO SHARE BUYBACK

CAPABILITIES & DIVIDEND PAYOUT

Transaction bolsters free cash flow capabilities

Pro forma free cash flow yield sensitivities

	Legacy Devon		14%
	Grayson Accretion
		12%	FREE CASH FLOW
		YIELD
9%	FREE CASH FLOW
YIELD
FREE CASH FLOW
	YIELD

$70 WTI

$80 WTI

$90 WTI

Note: Free cash flow is a combination of Devon's 2024 guidance and Grayson Mill's 2025e free cash flow. Free cash flow yield represents operating cash flow less capital requirements divided by market capitalization.

| Devon Acquires Grayson Mill

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Transaction Increases Cash Returns to Shareholders

DISCIPLINED SHARE REPURCHASES

Increasing buyback authorization by 67% to $5 billion

• Repurchased $2.5 billion of shares to date (as of 3/31/24)

TARGET PAYOUT

(% OF FREE CASH FLOW)

ATTRACTIVE DIVIDEND YIELD

• Dividend designed to deliver advantaged yield vs. S&P 500
• Flexible variable dividend evaluated quarterly

BALANCE SHEET IMPROVEMENT

Initiating a $2.5 billion debt reduction program

• Targeting <1.0x net debt-to-EBITDAX

ACCRETIVE RESOURCE CAPTURE

• Evaluate opportunities to add high-quality resource to portfolio
• Must advance financial strategy & deliver per-share growth

BALANCE SHEET

30%

70%

CASH

RETURNS

| Devon Acquires Grayson Mill

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