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Devon Energy: 333 West Sheridan Avenue

The following excerpt is from the company's SEC filing.

Oklahoma City, OK 73102-5015


Devon Energy Reports Third-Quarter 2015 Results

Produced Company record 282,000 barrels of oil per day

Exceeded oil production guidance for fifth consecutive quarter

Raised oil production growth for the second time in 2015

Reduced lease operating expenses 14 percent year over year

Decreased G&A costs by 8 percent from second quarter

Improved 2015 capital and operating cost outlook

- Devon Energy Corp. (NYSE: DVN) today announced core earnings of $316 million, or $0.76 per diluted share, for the third quarter of 2015. This level of earnings generated cash flow from operations of $1.6 billion in the third quarter, a 41 percent increase compared to the second quarter of 2015.

Devon delivered another outstanding operational performance in the third quarter, said Dave Hager, president and CEO. Our strategy of operating in North Americas best resource plays, coupled with a focus on delivering best-in-class execution, continues to generate top-tier results. Across our asset portfolio, well performance has consistently exceeded type curve expectations through higher production rates, declining capital costs and lower operating expenses.

Based on these strong results, we are raising our full-year oil production outlook for the second time this year, Hager said. And we are delivering this incremental production growth with significantly lower costs. We are now on pace to save around $1 billion of capital and operating costs in 2015 versus original expectations.

Looking ahead, we will continue to take the appropriate actions to preserve operational momentum and protect our balance sheet, Hager said. Our teams will maximize the value of production by aggressively pursuing cost reductions and we will maintain the flexibility of our capital programs. The advantage of having minimal long-term commitments allows us to dynamically allocate capital to our highest-returning areas while balancing investment with cash flow.

On a reported basis, due to non-cash, asset-impairment charges, Devon had a net loss of $3.5 billion, or $8.64 per diluted share, for the third quarter of 2015. This compares with third-quarter 2014 reported net earnings of $1.0 billion, or $2.47 per diluted share.

Record Oil Production Exceeds Guidance for Fifth Consecutive Quarter

Devon delivered record oil production of 282,000 barrels per day, a 31 percent increase compared to the third quarter of 2014. This result surpassed the top end of guidance by 2,000 barrels per day, marking the fifth consecutive quarter the Company has exceeded oil production expectations.

The majority of Devons record-setting oil production was attributable to its U.S. resource plays, which are delivering the Companys highest margins. U.S. oil production averaged 161,000 barrels per day in the third quarter, an increase of 18 percent compared to the third-quarter of 2014. Growth in U.S. production was largely attributable to the Companys Eagle Ford, Delaware Basin and Rockies assets. In the third quarter, Devons world-class Eagle Ford assets continued to deliver prolific well results. Net production in the Eagle Ford averaged 113,000 oil-equivalent barrels (Boe) per day, a 43 percent increase year over year. The Company also had another quarter of strong production results from its stacked-pay position in the Delaware Basin, where net production increased to 61,000 Boe per day in

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the third quarter, a 32 percent increase compared to the year-ago period. Another key contributor to Devons growth for the quarter was a 61 percent increase in oil production from its Rockies assets. Driven by development drilling in the Power River Basin, oil production in the Rockies averaged 16,000 barrels per day in the third quarter.

In Canada, Devons heavy-oil operations also delivered impressive production growth. In total, the Companys heavy-oil production increased to a record 121,000 barrels of oil per day in the third quarter. Driven by the ramp-up of the Jackfish 3 facility to nameplate capacity four months ahead of schedule, Canadian oil production increased 52 percent compared to the third quarter of 2014.

Total production of oil, gas and natural gas liquids averaged 680,000 Boe per day during the third quarter. This result exceeded the top end of the Companys guidance by 4,000 Boe per day and represents a 6 percent increase compared to the third quarter of 2014. With the strong growth in high-margin production, oil is now the largest component of the Devons product mix at 41 percent of total production.

Devon Raises Full-Year Production Outlook

Based on strong operating results year to date, Devon has raised its 2015 oil production guidance by 2 percent to a mid-point of 276,000 barrels per day. This marks the second time in 2015 the Company has increased its oil production outlook. Total oil production growth in 2015 is now expected to range from 31 to 33 percent. Due to the improving outlook for oil production, the Company has also raised its top-line production growth guidance for 2015 to a range of 8 to 10 percent.

Full-Year Capital Savings To Reach $500 Million

In addition to higher production, Devon is also benefiting from lower capital spending. The Companys 2015 E&P capital program, excluding acquisitions, is now expected to range from $3.8 to $4.0 billion, a $100 million decrease compared to previous guidance. Combined with additional non-E&P capital savings, Devons total 2015 capital spending is expected to be $150 million lower than previous guidance. As a result of these additional savings, Devon has now reduced its 2015 capital spending guidance by $500 million compared to its original expectations issued in February.

Operations Report Highlights

For additional details on Devons E&P operations, please refer to the Companys third-quarter 2015 Operations Report at

. Highlights from the report include:

Bone Spring basin type curve raised

Leonard Shale program delivers excellent results

Eagle Ford delivers record-setting well results

Jackfish 3 reaches nameplate capacity ahead of schedule

Meramec appraisal success expands potential

Hedges Increase Upstream Revenue; EnLink Profit Expands

Revenue from oil, natural gas and natural gas liquids sales totaled $1.3 billion in the third quarter of 2015, with oil revenue accounting for nearly 70 percent of total upstream revenues. This increased oil sales weighting was attributable to the Companys substantial growth in both U.S. and Canadian oil production.

Cash settlements related to oil and natural gas hedges increased revenue by more than $600 million, or approximately $10 per Boe, in the third quarter. At the end of September, the Companys remaining commodity hedges had a fair-market value of approximately $650 million.