Q4 2016 Real-Time Call Brief

Highlights

We maximized the value of every barrel produced with cost reduction efforts that reached $1.3 billion of annual savings.

We also took important steps during the year to strengthen our investment-grade financial position with the timely completion of our $3.2 billion asset divestiture program.

With an improving cash flow stream, we are planning to steadily ramp up drilling activity throughout the year to as many as 20 operated drilling rigs by the end of 2017.

This ramp up in activity would represent an upstream investment of $2.0 billion to $2.3 billion for the full year 2017.

The majority of this capital will be concentrated on low risk drilling activity in the Stack and Delaware Basin and is expected to jump start companywide production growth, driving light-oil production in US approximately 15% higher for the full year 2017 compared to the fourth quarter of 2016.

Additionally, we expect to deliver this attractive growth profile with substantially lower operating costs.

In fact, lease operating expenses within our US resource plays in 2017 are expected to be 30% lower than peak rates a few years ago.

The majority of the rig activity deployed in 2017 will provide an even greater impact to production in 2018.

Due to these timing considerations, there is significant operational momentum across our US resource plays heading into 2018 which we project will advance light oil production by approximately 20% on a year-over-year basis.

In the STACK we are participating in several Merrimac in fill that can further expand our inventory beyond the 40% increase we announced today.

We believe we could have spacing as high as 20 to 30 wells in a single drilling unit when co-developing the Meramec and Woodford together.

Early full back results from our operated position of hubs and rail outstanding with initial well reserve tracking at or above our EUR type curve of 1.6 million boe per well.

Gross peak production from the Hobson Row are well on the way to exceeding 40,000 BOE per day in the second quarter of this year.

2017 will also be an important year for Leonard and Wolfcamp programs in Delaware Basin with nearly 60% of our drilling programs in the area devoted toward characterizing emerging oil plays.

Efforts have not only lowered costs across the board, but they have dramatically increased Devon's oil productivity by greater than 300% since 2012.