Q2 2021 Earnings Presentation

Q2 2021 Earnings Presentation

August 3, 2021

NYSE: DVN

Key Takeaways From Our Presentation

#1

FIXED + VARIABLE DIVIDEND INCREASES 44%

Total dividend of $0.49 per share announced with Q2 results

#2

FREE CASH FLOW GENERATION ACCELERATES

Free cash flow increases >6x vs. prior quarter

#3

BALANCE SHEET CONTINUES TO STRENGTHEN

Reduced outstanding debt by $1.2 billion year-to-date

#4

DELAWARE BASIN DRIVES Q2 OUTPERFORMANCE

Operating results favorable to guidance on production, capital & costs

#5

OUTLOOK STRENGTHENS IN SECOND HALF OF 2021

Dividend payout expected to be highest yield in the S&P 500 index

LEADING THE INDUSTRY WITH DISCIPLINE & DIVIDENDS

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Our Cash-Return Business Model

"Our CASH-RETURN business model is designed to moderate growth, emphasize capital efficiencies, maximize returns and prioritize the return of increasing amounts of cash to shareholders. These principles have positioned Devon to be a PROMINENT and CONSISTENT builder of economic value through the cycle."

- Rick Muncrief, President & CEO

COMMITMENT RUNS DEEP

DISCIPLINED GROWTH STRATEGY

MODERATING OIL GROWTH targets: up to 5% annually Growing margins through operational & corporate cost reductions

REDUCED REINVESTMENT RATES

Returns-driven strategy prioritizes FREE CASH FLOW generation Committed to maintenance capital program in 2021

MAINTAIN LOW LEVERAGE

Target net debt-to-EBITDAX ratio: 1.0x or less Strong liquidity & disciplined hedging enhance FINANCIAL STRENGTH

PRIORITIZE CASH RETURNS

Deploying free cash flow to dividends & debt reduction Innovative FIXED-PLUS-VARIABLE dividend strategy (pgs. 6 & 7)

PURSUE ESG EXCELLENCE

Established new environmental performance targets (pg. 16) ESG initiatives incorporated into COMPENSATION structure

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Q2 2021 ? Executing on Our Disciplined Strategy

Outstanding Q2 execution

Key quarterly highlights

CAPITAL SPEND ($MM)

9%

BELOW GUIDANCE

PRODUCTION VOLUMES (MBOED)

3%

ABOVE GUIDANCE

CORPORATE COSTS ($MM)(1)

27%

VERSUS Q2 2020

(1) Represents G&A & interest expense compared on a pro forma basis.

Expanding free cash flow

Free cash flow ($ in millions)

(2)

$589

>6x

IMPROVEMENT VS. Q1 2021

$93

Q1 2021

Q2 2021

(2) Free cash flow is defined as operating cash flow ($1,093 million) less cash capital expenditures ($504 million).

Returning value to shareholders

Q2 2021 cash allocation ($ in billions)

$1.4 B

~65%

ALLOCATED TO DIVIDENDS & DEBT REDUCTION

DIVIDENDS & DEBT CAPITAL INVESTMENT

Q2 Uses of Cash

TOTAL DIVIDEND PAYOUT EXPANDS BY 44% IN Q2

(SEE PAGE 6 FOR DETAILS)

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Outlook Strengthens in Second Half of 2021

FREE CASH FLOW SET TO EXPAND

(2H 2021 outlook vs. 1H 2021 results) (1)

OIL PRODUCTION: +4% TOTAL CAPITAL: >10% CORPORATE COSTS: 7%

21%

16%

FREE CASH FLOW YIELD

28%

20%

FREE CASH FLOW YIELD

FUTURE UPSIDE (2)

34%

Unhedged commodity view

100% upfront cost synergies

24%

FREE CASH FLOW YIELD

SECOND-HALF 2021 OUTLOOK

Based on mid-point guidance 2H 2021 ANNUALIZED free cash flow

$60 WTI

$70 WTI

$80 WTI

Note: Free cash flow yield represents operating cash flow, excluding changes in working capital, less total capital divided by market capitalization. Assumes $3.50 Henry Hub & NGL realizations at 40% of WTI. (1) Changes represent 1H 2021 actual results vs. midpoint guidance for the 2H 2021. (2) Excludes commodity hedges and includes upfront benefit of cost synergies.

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