Devon Energy Reports First-Quarter 2009 Results



    OKLAHOMA CITY, May 6 /CNW/ -- Devon Energy Corporation (NYSE:   DVN) today
reported a net loss of $4.0 billion for the quarter ended March 31, 2009, or
$8.92 per common share ($8.92 per diluted common share). A $4.2 billion
non-cash, after-tax reduction in the carrying value of oil and gas properties
led to the quarterly net loss. In the first quarter of 2008, Devon reported
net earnings of $749 million, or $1.68 per common share ($1.66 per diluted
common share).
    

    Earnings 48 Cents per Share Excluding Items Not Estimated by Analysts

    
    Devon's first-quarter 2009 financial results were impacted by certain
items securities analysts typically exclude from their published estimates.
The most significant of these items was a $4.2 billion after-tax reduction in
the carrying value of oil and gas properties. Excluding the reduction in
carrying value of oil and gas properties and other adjusting items, Devon
earned $216 million or 48 cents per diluted common share in the first quarter
of 2009. The adjusting items are discussed in more detail later in this news
release.

    The non-cash charge resulted from application of the ceiling test as
prescribed by the Securities and Exchange Commission (SEC) for companies that
follow the full-cost method of accounting. Under the full-cost method of
accounting, a company's net book value of its oil and gas properties, less
related deferred income taxes, may not exceed a calculated "ceiling." The test
is performed separately for each country in which the company operates. The
ceiling is the estimated after-tax stream of future net revenues from proved
oil and gas properties, discounted at 10 percent per year using costs and
prices held flat, plus the cost of unevaluated properties. Any excess is
written off as a non-cash expense. The expense may not be reversed in future
periods, even though higher oil and gas prices may subsequently increase the
ceiling. Full-cost companies must use the prices in effect at the end of each
accounting quarter to calculate the ceiling value of reserves. Future net
revenues are calculated assuming continuation of prices and costs in effect at
the time of the calculation, except for changes that are fixed and
determinable by existing contracts. Although the SEC recently modified its
rules applicable to the ceiling test, the new rules do not take effect until
year-end 2009.
    

    Production Growth Offset by Lower Realized Prices

    
    Combined oil, gas and natural gas liquids production averaged 685
thousand oil-equivalent barrels (Boe) per day in the first quarter of 2009.
This was a seven percent increase in production compared with the first
quarter of 2008. The production growth was concentrated in onshore fields
within the United States and Canada.

    Although production increased, sales of oil, gas and natural gas liquids
decreased 53 percent to $1.5 billion in the first quarter of 2009.
Significantly lower prices for all three products more than offset the
quarter-over-quarter increase in oil-equivalent production.

    Devon's realized price for natural gas decreased 49 percent in the first
quarter of 2009, to $3.73 per thousand cubic feet. This compares with $7.31
per thousand cubic feet in the first quarter of 2008. Devon's average realized
oil price decreased 62 percent to $33.61 per barrel in the first quarter of
2009 compared with $88.23 per barrel in the prior-year period. Devon's
realized natural gas liquids price decreased 61 percent to $18.60 per barrel
from $47.40 per barrel in the first quarter of 2008.
    

    Operating Highlights Show Production Gains

    
    Devon drilled 451 wells in the first quarter of 2009 compared with 646
wells it drilled in the first quarter of 2008. The company has reduced
drilling activity and related capital expenditures in response to declines in
natural gas and oil prices. Despite the reduced level of drilling, Devon
achieved several notable operational accomplishments in the first quarter:
    

    --  Devon increased its net production from the Barnett Shale field in
        north Texas to an all-time high of 1.2 billion cubic feet of gas
        equivalent per day. The company is by far the largest producer in the
        Barnett.
    --  The company increased its net production in the Arkoma-Woodford Shale
        in eastern Oklahoma to 86 million cubic feet of gas equivalent per
day.
    --  In its emerging Cana-Woodford Shale play in western Oklahoma, Devon
        established production from nine wells in the first quarter with an
        average initial production rate of 4.3 million cubic feet of gas per
        day.
    --  At Groesbeck in east Texas, Devon drilled two high-volume wells in the
        Nan-Su-Gail field in the first quarter. The Neal B 14H (93 percent
        working interest) had initial production of 23 million cubic feet of
        gas per day. The Hill 17H (100 percent working interest) initiated
        production at 19 million cubic feet of gas per day.
    --  In the Powder River Basin in Wyoming, Devon's net production reached
an
        all-time high of 114 million cubic feet of gas per day.
    --  In Canada, Devon began injecting steam into the final pair of wells at
        its Jackfish oil sands project in March. All 24 well-pairs are now
        operational.

    --  Jackfish production reached 28,000 barrels of oil per day in March.
The
        company expects Jackfish to reach its design capacity of 35,000
barrels
        of oil per day in the second or third quarter of 2009.


    Marketing and Midstream Profit Declines with Prices

    
    Marketing and midstream operating profit was $142 million in the first
quarter of 2009. This was an 18 percent decrease compared with the first
quarter of 2008. The decrease was largely attributable to lower natural gas
and natural gas liquids prices.
    

    Costs Begin Improving

    
    First-quarter 2009 expenses in most categories decreased in comparison to
the first quarter of 2008. Unit lease operating expenses (LOE) decreased by
two percent to $8.50 per Boe in the first quarter of 2009. The decrease in
unit LOE primarily reflects lower Canadian exchange rates.

    Production taxes declined 68 percent to $42 million in the first quarter
of 2009 compared with the first quarter of 2008. The decline in production
taxes tracks the first-quarter decline in oil and natural gas sales.

    Depreciation, depletion and amortization (DD&A) of oil and gas properties
decreased 19 percent to $599 million in the first quarter of 2009. Unit DD&A
decreased 23 percent to $9.72 per Boe compared with the first quarter of 2008.

    First-quarter 2009 general and administrative expenses (G&A) increased 12
percent to $166 million compared with the first quarter of 2008. The company
expects G&A to trend down for the remainder of the year.

    Interest expense for the first quarter of 2009 decreased to $83 million.
This 19 percent decrease compared with the first quarter of 2008 reflects
decreased long-term debt levels and lower interest rates.
    

    Retaining Balance Sheet Strength and Liquidity

    
    Devon's net debt to adjusted capitalization ratio was 34 percent at March
31, 2009. Cash on hand at quarter-end was $397 million and unused credit
facilities totaled over $2.3 billion. First-quarter 2009 cash flow before
balance sheet changes totaled $988 million. The company funded $1.5 billion of
capital expenditures and paid common dividends of $70 million in the first
quarter of 2009. Reconciliations of cash flow before balance sheet changes,
net debt and adjusted capitalization, which are non-GAAP measures, are
provided in this release.
    

    Items Excluded from Published Earnings Estimates

    
    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. These items and their effects upon reported
earnings for the first quarter of 2009 were as follows:
    
    --  An unrealized gain on oil and natural gas derivative instruments
        increased first-quarter earnings by $36 million pre-tax ($23 million
        after tax).
    --  A change in fair value of other financial instruments decreased
        first-quarter earnings by $11 million pre-tax ($8 million after tax).

    --  A reduction in the carrying value of oil and gas properties decreased
        first-quarter earnings by $6.5 billion pre-tax ($4.2 billion after
        tax).


    
    The following tables summarize the effects of these items on
first-quarter earnings and income taxes.
    


    

    
    Summary of Items Typically Excluded by Securities Analysts - First Quarter
    2009
    (in millions)                                                    Cash Flow
                                                                        Before
                                                            After      Balance
                          Pre-tax     Income Tax Effect     tax          Sheet
                          Earnings    -----------------     Earnings   Changes
                          Effect   Current  Deferred Total  Effect      Effect
    

    
     Unrealized gain on
      oil and gas
      derivative
      instruments           $36       -        13      13      23          -
     Change in fair
      value of other
      financial
      instruments           (11)      -        (3)     (3)     (8)         -
     Reduction in
      the carrying
      value of oil
      and gas
      properties         (6,516)      -    (2,326) (2,326) (4,190)         -
        Totals          $(6,491)      -    (2,316) (2,316) (4,175)         -

    
    In aggregate, these items decreased first-quarter 2009 net earnings by
$4.2 billion, or $9.41 per common share ($9.40 per diluted share).
    

    Conference Call to be Webcast Today

    
    Devon will discuss its first-quarter 2009 financial and operating results
in a conference call webcast today. The webcast will begin at 10 a.m. Central
Time (11 a.m. Eastern Time). The webcast may be accessed from Devon's internet
home page at www.devonenergy.com.

    This press release includes "forward-looking statements" as defined by
the Securities and Exchange Commission. Such statements are those concerning
strategic plans, expectations and objectives for future operations. All
statements, other than statements of historical facts, included in this press
release that address activities, events or developments that the company
expects, believes or anticipates will or may occur in the future are
forward-looking statements. Such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the control of
the company. Statements regarding future drilling and production are subject
to all of the risks and uncertainties normally incident to the exploration for
and development and production of oil and gas. These risks include, but are
not limited to the volatility of oil, natural gas and NGL prices;
uncertainties inherent in estimating oil, natural gas and NGL reserves;
drilling risks; environmental risks; and political or regulatory changes.
Investors are cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ materially from
those projected in the forward-looking statements. The forward-looking
statements in this press release are made as of the date of this press
release, even if subsequently made available by Devon on its website or
otherwise. Devon does not undertake any obligation to update the
forward-looking statements as a result of new information, future events or
otherwise.

    The United States Securities and Exchange Commission permits oil and gas
companies, in their filings with the SEC, to disclose only proved reserves
that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and
operating conditions. This release may contain certain terms, such as resource
potential, reserve potential, probable reserves, possible reserves and
exploration target size. The SEC guidelines strictly prohibit us from
including these terms in filings with the SEC. U.S. investors are urged to
consider closely the disclosure in our Form 10-K, File No. 001-32318,
available from us at Devon Energy Corporation, Attn. Investor Relations, 20
North Broadway, Oklahoma City, OK 73102. You can also obtain this form from
the SEC by calling 1-800-SEC-0330.

    Devon Energy Corporation is an Oklahoma City-based independent energy
company engaged in oil and gas exploration and production. Devon is the
largest U.S.-based independent oil and gas producer and is included in the S&P
500 Index. For more information about Devon, please visit our website at
www.devonenergy.com.
    


    


    
                          DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION
    

    
    PRODUCTION (net of royalties)                    Quarter Ended
    Excludes discontinued operations                    March 31,
                                                      2009     2008
    Total Period Production
    Natural Gas (Bcf)
      U.S. Onshore                                    181.1    152.6
      U.S. Offshore                                    10.7     18.3
      Total U.S.                                      191.8    170.9
      Canada                                           52.7     51.6
      International                                     0.3      0.5
      Total Natural Gas                               244.8    223.0
    Oil (MMBbls)
      U.S. Onshore                                      3.0      2.8
      U.S. Offshore                                     1.1      1.8
      Total U.S.                                        4.1      4.6
      Canada                                            6.3      4.7
      International                                     3.1      4.9
      Total Oil                                        13.5     14.2
    Natural Gas Liquids (MMBbls)
      U.S. Onshore                                      6.2      5.8
      U.S. Offshore                                     0.2      0.2
      Total U.S.                                        6.4      6.0
      Canada                                            0.9      1.0
      International                                       -        -
      Total Natural Gas Liquids                         7.3      7.0
    Oil Equivalent (MMBoe)
      U.S. Onshore                                     39.3     34.0
      U.S. Offshore                                     3.1      5.0
      Total U.S.                                       42.4     39.0
      Canada                                           16.1     14.3
      International                                     3.1      5.0
      Total Oil Equivalent                             61.6     58.3
    Average Daily Production
    Natural Gas (MMcf)
      U.S. Onshore                                  2,011.7  1,676.4
      U.S. Offshore                                   119.4    201.2
      Total U.S.                                    2,131.1  1,877.6
      Canada                                          585.5    567.4
      International                                     3.4      6.0
      Total Natural Gas                             2,720.0  2,451.0
    Oil (MBbls)
      U.S. Onshore                                     33.0     30.9
      U.S. Offshore                                    12.1     19.9
      Total U.S.                                       45.1     50.8
      Canada                                           70.5     51.4
      International                                    34.4     53.4
      Total Oil                                       150.0    155.6
    Natural Gas Liquids (MBbls)
      U.S. Onshore                                     68.7     63.4
      U.S. Offshore                                     2.4      1.9
      Total U.S.                                       71.1     65.3
      Canada                                           10.5     10.9
      International                                       -        -
      Total Natural Gas Liquids                        81.6     76.2
    Oil Equivalent (MBoe)
      U.S. Onshore                                    437.0    373.7
      U.S. Offshore                                    34.4     55.3
      Total U.S.                                      471.4    429.0
      Canada                                          178.5    156.9
      International                                    35.0     54.4
      Total Oil Equivalent                            684.9    640.3
    


    
                           DEVON ENERGY CORPORATION
              UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION
    

    
    BENCHMARK PRICES                                    Quarter Ended
    (average prices)                                       March 31,
                                                         2009     2008
    Natural Gas ($/Mcf) - Henry Hub                     $4.91    $8.03
    Oil ($/Bbl) - West Texas Intermediate (Cushing)    $43.18   $97.67
    


    
    REALIZED PRICES
    (excludes the effects of unrealized gains and losses from hedging)
    

    
    Quarter Ended March 31, 2009         Oil       Gas      NGLs      Total
                                      (Per Bbl) (Per Mcf) (Per Bbl) (Per Boe)
    U.S. Onshore                       $34.88     $3.43    $17.43    $21.16
    U.S. Offshore                      $42.38     $5.15    $20.48    $34.21
    Total U.S.                         $36.89     $3.53    $17.53    $22.11
    Canada                             $27.89     $4.48    $25.85    $27.21
    International                      $41.00     $3.47        $-    $40.68
    Realized price without hedges      $33.61     $3.73    $18.60    $24.39
    Cash settlements                       $-     $0.48        $-     $1.91
    Realized price, including
     cash settlements                  $33.61     $4.21    $18.60    $26.30
    


    
    Quarter Ended March 31, 2008         Oil       Gas      NGLs      Total
                                      (Per Bbl) (Per Mcf) (Per Bbl) (Per Boe)
    U.S. Onshore                       $93.61     $7.05    $44.72    $46.97
    U.S. Offshore                      $98.95     $8.78    $49.65    $69.23
    Total U.S.                         $95.70     $7.24    $44.86    $49.84
    Canada                             $72.68     $7.53    $62.67    $55.42
    International                      $96.08     $8.41        $-    $95.24
    Realized price without hedges      $88.23     $7.31    $47.40    $55.07
    Cash settlements                       $-    $(0.04)       $-    $(0.14)
    Realized price, including
     cash settlements                  $88.23     $7.27    $47.40    $54.93
    


    
    CAPITAL EXPENDITURES (in millions)
    Quarter Ended March 31, 2009
    

    
                                U.S.      U.S.
                              Onshore  Offshore  Canada  International  Total
    

    
    Capital Expenditures
      Exploration               $26      83        50          40       $199
      Development               721     119       230          17      1,087
      Exploration and
       development capital     $747     202       280          57     $1,286
      Capitalized G&A                                                    104
      Capitalized interest                                                25
      Discontinued operations                                             21
      Midstream capital                                                   87
      Other capital                                                       20
    Total Capital Expenditures                                        $1,543
    


    
                          DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION
    

    
    CONSOLIDATED STATEMENTS OF OPERATIONS                      Quarter Ended
    (in millions, except per share data)                         March 31,
                                                               2009     2008
    Revenues
      Oil sales                                                $454   $1,250
      Gas sales                                                 913    1,630
      NGL sales                                                 136      328
      Net gain (loss) on oil and gas derivative financial
       instruments                                              154     (788)
      Marketing and midstream revenues                          371      555
        Total revenues                                        2,028    2,975
    Expenses and other income, net
      Lease operating expenses                                  524      506
      Production taxes                                           42      134
      Marketing and midstream operating costs and expenses      229      382
      Depreciation, depletion and amortization of oil and
       gas properties                                           599      737
      Depreciation and amortization of non-oil and gas
       properties                                                70       57
      Accretion of asset retirement obligation                   24       22
      General and administrative expenses                       166      148
      Interest expense                                           83      102
      Change in fair value of other financial instruments        (5)      16
      Reduction of carrying value of oil and gas properties   6,516        -
      Other expense (income), net                                 7      (21)
        Total expenses and other income, net                  8,255    2,083
    (Loss) earnings from continuing operations before
     income taxes                                            (6,227)     892
    Income tax (benefit) expense
       Current                                                    2      103
       Deferred                                              (2,271)     138
         Total income tax (benefit) expense                  (2,269)     241
    (Loss) earnings from continuing operations               (3,958)     651
    Discontinued operations
      (Loss) earnings from discontinued operations before
       income taxes                                              (1)     189
      Income tax expense                                          -       91
        (Loss) earnings from discontinuing operations            (1)      98
    Net (loss) earnings                                      (3,959)     749
    Preferred stock dividends                                     -        2
    Net (loss) earnings applicable to common stockholders   $(3,959)    $747
    

    
    Basic net (loss) earnings per share
      (Loss) earnings from continuing operations             $(8.92)   $1.46
      Earnings from discontinued operations                      $-    $0.22
      Net (loss) earnings                                    $(8.92)   $1.68
    

    
    Diluted net (loss) earnings per share
      (Loss) earnings from continuing operations             $(8.92)   $1.44
      Earnings from discontinued operations                      $-    $0.22
      Net (loss) earnings                                    $(8.92)   $1.66
    

    
    Weighted average common shares outstanding
      Basic                                                     444      445
      Diluted                                                   444      449
    


    
                          DEVON ENERGY CORPORATION
              UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION
    

    
    CONSOLIDATED BALANCE SHEETS
    (in millions)                                      March 31, December 31,
                                                         2009        2008
    Assets                                                        (Audited)
    Current assets
      Cash and cash equivalents                          $397       $379
      Accounts receivable                               1,221      1,412
      Income taxes receivable                             106        334
      Derivative financial instruments, at fair value     327        282
      Other current assets                                325        277
        Total current assets                            2,376      2,684
    Property and equipment, at cost, based on the
     full cost method of accounting for oil and gas
     properties ($4,186 and $4,540 excluded from
     amortization in 2009 and 2008, respectively)      56,784     55,657
      Less accumulated depreciation, depletion and
       amortization                                    39,568     32,683
      Property and equipment, net                      17,216     22,974
    Goodwill                                            5,509      5,579
    Other long-term assets, including $177 million
     and $199 million at fair value in 2009 and
     2008, respectively                                   622        671
    Total Assets                                      $25,723    $31,908
    Liabilities and Stockholders' Equity
    Current liabilities
      Accounts payable - trade                         $1,261     $1,819
      Revenues and royalties due to others                373        496
      Short-term debt                                   1,073        180
      Current portion of asset retirement
       obligation, at fair value                          157        138
      Accrued expenses and other current liabilities      370        502
        Total current liabilities                       3,234      3,135
    Long-term debt                                      5,851      5,661
    Asset retirement obligation, at fair value          1,340      1,347
    Other long-term liabilities                           992      1,026
    Deferred income taxes                               1,364      3,679
    Stockholders' equity
      Common stock                                         44         44
      Additional paid-in capital                        6,310      6,257
      Retained earnings                                 6,347     10,376
      Accumulated other comprehensive income              241        383
    Total Stockholders' Equity                         12,942     17,060
    Total Liabilities and Stockholders' Equity        $25,723    $31,908
    Common Shares Outstanding                             444        444
    


    
                          DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION
    

    
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in millions)                                     Quarter Ended March 31,
                                                           2009      2008
    Cash Flows From Operating Activities
      Net (loss) earnings                               $(3,959)      $749
      Loss (earnings) from discontinued operations,
       net of tax                                             1        (98)
      Adjustments to reconcile (loss) earnings
       from continuing operations to net
       cash provided by operating activities:
        Depreciation, depletion and amortization            669        794
        Deferred income tax (benefit) expense            (2,271)       138
        Reduction of carrying value of oil and
         gas properties                                   6,516          -
        Net unrealized (gain) loss on oil and
         gas derivative financial instruments               (36)       780
        Other noncash charges                                68         74
        Net decrease (increase) in working capital           83       (377)
        Decrease (increase) in long-term other assets         2        (11)
        (Decrease) increase in long-term other
         liabilities                                        (31)        21
      Cash provided by operating activities
       - continuing operations                            1,042      2,070
      Cash provided by operating activities
       - discontinued operations                              5        185
    Net cash provided by operating activities            $1,047    $ 2,255
    

    
    Cash Flows From Investing Activities
      Proceeds from sales of property and equipment           1        105
      Capital expenditures                               (2,019)    (1,862)
      Purchases of short-term investments                     -        (50)
      Sales of long-term and short-term investments           2        270
      Cash used in investing activities - continuing
       operations                                        (2,016)    (1,537)
      Cash used in investing activities - discontinued
       operations                                           (14)       (24)
    Net cash used in investing activities               $(2,030)   $(1,561)
    

    
    Cash Flows From Financing Activities
      Debt issuance                                       1,187          -
      Credit facility repayments                              -     (1,450)
      Credit facility borrowings                              -        920
      Net commercial paper (repayments) borrowings         (111)       442
      Debt repayments                                        (1)       (41)
      Proceeds from stock option exercises                    4         74
      Repurchases of common stock                             -        (64)
      Dividends paid on common and preferred stock          (70)       (73)
      Excess tax benefits related to share-based
       compensation                                           2         27
    Net cash provided by (used in) financing activities  $1,011     $ (165)
    

    
    Effect of exchange rate changes on cash                 (11)       (19)
    Net increase in cash and cash equivalents                17        510
    Cash and cash equivalents at beginning of period
     (including assets held for sale)                       384      1,373
    Cash and cash equivalents at end of period
     (including assets held for sale)                      $401     $1,883
    


    
                          DEVON ENERGY CORPORATION
                UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION
    

    
    DRILLING ACTIVITY                               Quarter Ended
                                                       March 31,
                                                      2009   2008
    Exploration Wells Drilled
      U.S.                                              7      9
      Canada                                           22     51
      International                                     1      6
      Total                                            30     66
    Exploration Wells Success Rate
      U.S.                                             86%    56%
      Canada                                          100%    96%
      International                                     0%     0%
      Total                                            93%    82%
    Development Wells Drilled
      U.S.                                            294    372
      Canada                                          121    198
      International                                     6     10
      Total                                           421    580
    Development Wells Success Rate
      U.S.                                             99%    98%
      Canada                                           98%   100%
      International                                   100%    90%
      Total                                            99%    99%
    Total Wells Drilled
      U.S.                                            301    381
      Canada                                          143    249
      International                                     7     16
      Total                                           451    646
    Total Wells Success Rate
      U.S.                                             98%    97%
      Canada                                           99%    99%
      International                                    86%    56%
      Total                                            98%    97%
    


    
    COMPANY OPERATED RIGS                            Quarter Ended
                                                        March 31,
                                                      2009     2008
    Number of Company Operated Rigs Running
      U.S.                                             26       72
      Canada                                            2        2
      International                                     2        2
      Total                                            30       76
    


    
                          DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION
    

    NON-GAAP FINANCIAL MEASURES

    
    The United States Securities and Exchange Commission has adopted
    disclosure requirements for public companies such as Devon concerning
    Non-GAAP financial measures. (GAAP refers to generally accepted
    accounting principles.) The company must reconcile the Non-GAAP financial
    measure to related GAAP information. Cash flow before balance sheet
    changes is a Non-GAAP financial measure. Devon believes cash flow before
    balance sheet changes is relevant because it is a measure of cash
    available to fund the company's capital expenditures, dividends and to
    service its debt. Cash flow before balance sheet changes is also used by
    certain securities analysts as a measure of Devon's financial results.
    


    
    RECONCILIATION TO GAAP INFORMATION
    (in millions)                                            March 31,
                                                           2009    2008
    Net Cash Provided By Operating Activities (GAAP)      $1,047  $2,255
      Changes in assets and liabilities - continuing
       operations                                            (54)    367
      Changes in assets and liabilities - discontinued
       operations                                             (5)    (63)
    Cash flow before balance sheet changes (Non-GAAP)       $988  $2,559
    


    
    Devon believes that using net debt for the calculation of "net debt to
    adjusted capitalization" provides a better measure than using debt. Devon
    defines net debt as debt less cash and cash equivalents. Devon believes
    that because cash can be used to repay indebtedness, netting cash and cash
    equivalents against debt provides a clearer picture of the future demands
    on cash to repay debt.
    

    
    RECONCILIATION TO GAAP INFORMATION
    (in millions)                                  March 31,
                                              2009         2008
    Total debt (GAAP)                        $6,924       $7,817
    Adjustments:
      Cash and cash equivalents                 397        1,898
      Net Debt (Non-GAAP)                    $6,527       $5,919
    

    
    Total debt                               $6,924       $7,817
    Stockholders' equity                     12,942       22,398
      Total Capitalization (GAAP)           $19,866      $30,215
    

    
    Net debt                                 $6,527       $5,919
    Stockholders' equity                     12,942       22,398
      Adjusted Capitalization (Non-GAAP)    $19,469      $28,317




    




For further information:

For further information: Investors, Zack Hager, +1-405-552-4526, or
Media, Chip Minty, +1-405-228-8647, both of Devon Energy Corporation Web Site:
http://www.devonenergy.com

Organization Profile

DEVON ENERGY CORPORATION

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