OKLAHOMA CITY--(BUSINESS WIRE)--

Devon Energy Corp. (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 America’s 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 Devon’s record-setting oil production was attributable to its U.S. resource plays, which are delivering the Company’s 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 Company’s Eagle Ford, Delaware Basin and Rockies assets. In the third quarter, Devon’s 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 the third quarter, a 32 percent increase compared to the year-ago period. Another key contributor to Devon’s 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, Devon’s heavy-oil operations also delivered impressive production growth. In total, the Company’s 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 Company’s 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 Devon’s 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 Company’s 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, Devon’s 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 Devon’s E&P operations, please refer to the Company’s third-quarter 2015 Operations Report at www.devonenergy.com. 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 Company’s 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 Company’s remaining commodity hedges had a fair-market value of approximately $650 million.

Devon’s midstream business generated operating profits of $212 million in the third quarter, bringing the year-to-date total to $630 million. The majority of this profitability was attributable to the Company’s investment in EnLink Midstream. Year-to-date, EnLink-related operating profits have expanded by 15 percent compared to the same period in 2014.

Lease Operating Expenses Decline 14 Percent; Lowering Full-Year Cost Outlook

The Company has several cost-reduction initiatives under way that positively impacted third-quarter results. Field-level operating costs, which include both lease operating expenses (LOE) and production taxes, declined 18 percent compared to the third quarter of 2014 to $9.59 per Boe.

The most significant operating cost savings came from LOE, which is Devon’s largest field-level cost. LOE declined 14 percent compared to the year-ago period to $8.14 per Boe and was 9 percent below the low end of Devon’s guidance range. These LOE cost savings were realized across all regions of the Company’s portfolio.

Devon also realized significant general and administrative (G&A) cost savings in the third quarter. G&A expenses totaled $198 million, or $3.17 per Boe, an 8 percent improvement compared to the second quarter of 2015, and this strong cost performance was 7 percent below the low end of guidance.

Based on year-to-date cost savings, Devon now anticipates its field-level operating costs and G&A to decline to around $13.80 per Boe for the full-year 2015. These declines represent incremental savings of around $150 million based on the Company’s most recent guidance. Compared to Devon’s original guidance in February, this implies a full-year cash cost savings of around $550 million.

Balance Sheet and Liquidity Remain Strong

Devon’s financial position remains exceptionally strong with investment-grade credit ratings and excellent liquidity. The Company exited the quarter with net debt, excluding non-recourse EnLink obligations, totaling just over $7 billion. Devon had cash balances of $1.8 billion at quarter end, and has no borrowings under its $3.0 billion senior credit facility.

Non-GAAP Reconciliations

Pursuant to regulatory disclosure requirements, Devon is required to reconcile non-GAAP financial measures to the related GAAP information (GAAP refers to generally accepted accounting principles). Core earnings and net debt are non-GAAP financial measures referenced within this release. Reconciliations of these non-GAAP measures are provided later in this release.

Conference Call Webcast and Supplemental Earnings Materials

Please note that as soon as practicable today, Devon will post an operations report to its website at www.devonenergy.com. The Company’s third-quarter conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Nov. 4, 2015, and will serve primarily as a forum for analyst and investor questions and answers.

Forward-Looking Statements

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission (SEC). Such statements include those concerning strategic plans, expectations and objectives for future operations, and are often identified by use of the words “expects,” “believes,” “will,” “would,” “could,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. 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; the extent to which we are successful in acquiring and discovering additional reserves; unforeseen changes in the rate of production from our oil and gas properties; uncertainties in future exploration and drilling results; uncertainties inherent in estimating the cost of drilling and completing wells; drilling risks; competition for leases, materials, people and capital; midstream capacity constraints and potential interruptions in production; risk related to our hedging activities; environmental risks; political changes; changes in laws or regulations; our limited control over third parties who operate our oil and gas properties; our ability to successfully complete mergers, acquisitions and divestitures; and other risks identified in our Form 10-K and our other filings with the SEC. 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 SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. This release may contain certain terms, such as resource potential and exploration target size. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 10-K, available at www.devonenergy.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov.

About Devon Energy

Devon Energy is a leading independent energy company engaged in finding and producing oil and natural gas. Based in Oklahoma City and included in the S&P 500, Devon operates in several of the most prolific oil and natural gas plays in the U.S. and Canada with an emphasis on a balanced portfolio. The Company is the second-largest oil producer among North American onshore independents. For more information, please visit www.devonenergy.com.

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
				Quarter Ended								Nine Months Ended
PRODUCTION NET OF ROYALTIES				September 30,								September 30,
				2015				2014				2015				2014
Oil and bitumen (MBbls/d)
United States				161				136				167				121
Canada				121				80				107				78
Retained assets				282				216				274				199
Divested assets				-				3				-				7
Total				282				219				274				206
Natural gas liquids (MBbls/d)
United States				134				138				136				129
Divested assets				-				5				-				9
Total				134				143				136				138
Gas (MMcf/d)
United States				1,570				1,690				1,598				1,656
Canada				16				26				21				24
Retained assets				1,586				1,716				1,619				1,680
Divested assets				-				138				-				311
Total				1,586				1,854				1,619				1,991
Oil equivalent (MBoe/d)
United States				556				556				569				526
Canada				124				84				111				82
Retained assets				680				640				680				608
Divested assets				-				31				-				68
Total				680				671				680				676

KEY OPERATING STATISTICS BY REGION
				Quarter Ended September 30, 2015
				Avg. Production				Gross Wells				Operated Rigs at
				(MBoe/d)				Drilled				September 30, 2015
Delaware Basin				61				40				10
Midland Basin				48				2				-
Eagle Ford				113				74				-
Canadian Heavy Oil				124				7				1
Anadarko Basin				83				45				5
Barnett Shale				176				-				-
Rockies				28				14				2
Other assets				47				-				-
Total				680				182				18

PRODUCTION TREND				2014				2014				2015				2015				2015
				Quarter 3				Quarter 4				Quarter 1				Quarter 2				Quarter 3
Oil (MBbls/d)
Delaware Basin				27				27				33				41				41
Midland Basin				29				28				27				26				23
Eagle Ford				47				60				75				67				62
Canadian Heavy Oil				80				93				104				98				121
Anadarko Basin				10				10				9				10				9
Barnett Shale				2				2				1				1				1
Rockies				10				9				12				16				16
Other assets				11				10				11				11				9
Retained assets				216				239				272				270				282
Divested assets				3				-				-				-				-
Total				219				239				272				270				282
Natural gas liquids (MBbls/d)
Delaware Basin				7				8				8				10				8
Midland Basin				12				12				11				11				12
Eagle Ford				14				18				23				24				26
Anadarko Basin				34				34				30				24				27
Barnett Shale				54				53				51				49				44
Rockies				1				1				1				1				2
Other assets				16				15				15				15				15
Retained assets				138				141				139				134				134
Divested assets				5				-				-				-				-
Total				143				141				139				134				134
Gas (MMcf/d)
Delaware Basin				68				66				66				75				70
Midland Basin				68				71				71				77				76
Eagle Ford				109				127				143				146				154
Canadian Heavy Oil				26				23				28				20				16
Anadarko Basin				323				329				297				290				278
Barnett Shale				896				878				827				805				788
Rockies				66				58				53				62				58
Other assets				160				155				160				152				146
Retained assets				1,716				1,707				1,645				1,627				1,586
Divested assets				138				3				-				-				-
Total				1,854				1,710				1,645				1,627				1,586
Oil equivalent (MBoe/d)
Delaware Basin				46				46				52				64				61
Midland Basin				52				52				50				49				48
Eagle Ford				79				99				122				114				113
Canadian Heavy Oil				84				97				109				101				124
Anadarko Basin				98				100				88				82				83
Barnett Shale				205				201				191				185				176
Rockies				22				19				22				27				28
Other assets				54				50				51				52				47
Retained assets				640				664				685				674				680
Divested assets				31				1				-				-				-
Total				671				665				685				674				680

BENCHMARK PRICES
(average prices)				Quarter Ended September 30,											Nine Months Ended September 30,
					2015					2014						2015						2014
Oil ($/Bbl) - West Texas Intermediate (Cushing)				$	46.69					$	97.26				$	51.11					$	99.67
Natural Gas ($/Mcf) - Henry Hub				$	2.77					$	4.07				$	2.80					$	4.57
REALIZED PRICES				Quarter Ended September 30, 2015
				Oil /Bitumen						NGL					Gas						Total
				(Per Bbl)						(Per Bbl)					(Per Mcf)						(Per Boe)
United States				$	42.09					$	8.80				$	2.26					$	20.66
Canada (1)				$	25.10					$	N/M				$	0.09					$	24.55
Realized price without hedges				$	34.78					$	8.80				$	2.24					$	21.37
Cash settlements				$	21.16					$	-				$	0.47					$	9.86
Realized price, including cash settlements				$	55.94					$	8.80				$	2.71					$	31.23
				Quarter Ended September 30, 2014
				Oil /Bitumen						NGL					Gas						Total
				(Per Bbl)						(Per Bbl)					(Per Mcf)						(Per Boe)
United States				$	90.23					$	25.82				$	3.61					$	38.90
Canada (1)				$	65.88					$	63.46				$	0.76					$	63.23
Realized price without hedges				$	81.37					$	25.90				$	3.57					$	41.92
Cash settlements				$	(1.06	)				$	0.01				$	0.15					$	0.07
Realized price, including cash settlements				$	80.31					$	25.91				$	3.72					$	41.99
				Nine Months Ended September 30, 2015
				Oil						NGL					Gas						Total
				(Per Bbl)						(Per Bbl)					(Per Mcf)						(Per Boe)
United States				$	45.91					$	9.50				$	2.30					$	22.18
Canada (1)				$	27.84					$	N/M				$	0.61					$	27.06
Realized price without hedges				$	38.81					$	9.50				$	2.27					$	22.98
Cash settlements				$	19.48					$	-				$	0.53					$	9.11
Realized price, including cash settlements				$	58.29					$	9.50				$	2.80					$	32.09
				Nine Months Ended September 30, 2014
				Oil						NGL					Gas						Total
				(Per Bbl)						(Per Bbl)					(Per Mcf)						(Per Boe)
United States				$	92.55					$	26.80				$	4.04					$	39.81
Canada (1)				$	65.54					$	50.57				$	3.80					$	55.85
Realized price without hedges				$	81.84					$	27.34				$	4.02					$	42.38
Cash settlements				$	(2.43	)				$	-				$	(0.12	)				$	(1.11	)
Realized price, including cash settlements				$	79.41					$	27.34				$	3.90					$	41.27

(1) The reported Canadian gas volumes include volumes that are produced from certain of our leases and then transported to our Jackfish operations where the gas is used as fuel. However, the revenues and expenses related to this consumed gas are eliminated in our consolidated financials.

CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share amounts)				Quarter Ended											Nine Months Ended
				September 30,											September 30,
					2015						2014					2015						2014
Oil, gas and NGL sales				$	1,338					$	2,588				$	4,264					$	7,824
Oil, gas and NGL derivatives					414						748					426						29
Marketing and midstream revenues					1,849						2,000					5,569						5,718
Total operating revenues					3,601						5,336					10,259						13,571
Lease operating expenses					510						584					1,625						1,764
Marketing and midstream operating expenses					1,637						1,781					4,939						5,092
General and administrative expenses					198						195					661						595
Production and property taxes					91						140					315						427
Depreciation, depletion and amortization					744						842					2,488						2,409
Asset impairments					5,851						-					15,479						-
Restructuring costs					-						2					-						44
Gains and losses on asset sales					3						-					2						(1,072	)
Other operating items					11						18					52						74
Total operating expenses					9,045						3,562					25,561						9,333
Operating income (loss)					(5,444	)					1,774					(15,302	)					4,238
Net financing costs					136						116					378						359
Other nonoperating items					43						4					46						111
Earnings (loss) before income taxes					(5,623	)					1,654					(15,726	)					3,768
Income tax expense (benefit)					(1,714	)					613					(5,435	)					1,698
Net earnings (loss)					(3,909	)					1,041					(10,291	)					2,070
Net earnings (loss) attributable to noncontrolling interests					(402	)					25					(369	)					55
Net earnings (loss) attributable to Devon				$	(3,507	)				$	1,016				$	(9,922	)				$	2,015
Net earnings (loss) per share attributable to Devon:
Basic				$	(8.64	)				$	2.48				$	(24.45	)				$	4.94
Diluted				$	(8.64	)				$	2.47				$	(24.45	)				$	4.91
Weighted average common shares outstanding:
Basic					411						409					411						408
Diluted					411						411					411						410

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)				Quarter Ended												Nine Months Ended
				September 30,												September 30,
					2015						2014						2015						2014
Cash flows from operating activities:
Net earnings (loss)				$	(3,909	)				$	1,041					$	(10,291	)				$	2,070
Adjustments to reconcile net earnings (loss)
to net cash from operating activities:
Depreciation, depletion and amortization					744						842						2,488						2,409
Asset impairments					5,851						-						15,479						-
Gains and losses on asset sales					3						-						2						(1,072	)
Deferred income tax expense (benefit)					(1,708	)					23						(5,348	)					800
Derivatives and other financial instruments					(481	)					(804	)					(606	)					(43	)
Cash settlements on derivatives and financial instruments					730						44						1,913						(201	)
Other noncash charges					168						128						435						357
Net change in working capital					67						296						93						766
Change in long-term other assets					52						(38	)					211						(115	)
Change in long-term other liabilities					36						27						(74	)					47
Net cash from operating activities					1,553						1,559						4,302						5,018
Cash flows from investing activities:
Capital expenditures					(1,080	)					(1,672	)					(4,229	)					(5,013	)
Acquisitions of property, equipment and businesses					(113	)					(31	)					(530	)					(6,255	)
Divestitures of property and equipment					27						2,260						35						5,202
Redemptions of long-term investments					-						-						-						57
Other					(3	)					3						(8	)					87
Net cash from investing activities					(1,169	)					560						(4,732	)					(5,922	)
Cash flows from financing activities:
Borrowings of long-term debt, net of issuance costs					277						438						3,328						4,158
Repayments of long-term debt					(252	)					(275	)					(1,773	)					(4,265	)
Net short-term debt repayments					(169	)					(456	)					(932	)					(1,318	)
Stock option exercises					-						9						4						92
Sale of subsidiary units					-						-						654						-
Issuance of subsidiary units					9						52						13						72
Dividends paid on common stock					(99	)					(98	)					(296	)					(287	)
Distributions to noncontrolling interests					(68	)					(46	)					(186	)					(187	)
Other					2						(13	)					(10	)					(4	)
Net cash from financing activities					(300	)					(389	)					802						(1,739	)
Effect of exchange rate changes on cash					(22	)					(28	)					(65	)					(15	)
Net change in cash and cash equivalents					62						1,702						307						(2,658	)
Cash and cash equivalents at beginning of period					1,725						1,706						1,480						6,066
Cash and cash equivalents at end of period				$	1,787					$	3,408					$	1,787					$	3,408

CONSOLIDATED BALANCE SHEETS
(in millions)
				September 30,						December 31,
Current assets:					2015						2014
Cash and cash equivalents				$	1,787					$	1,480
Accounts receivable					1,318						1,959
Derivatives, at fair value					690						1,993
Income taxes receivable					8						522
Other current assets					495						544
Total current assets					4,298						6,498
Property and equipment, at cost:
Oil and gas, based on full cost accounting:
Subject to amortization					77,093						75,738
Not subject to amortization					2,688						2,752
Total oil and gas					79,781						78,490
Midstream and other					10,410						9,695
Total property and equipment, at cost					90,191						88,185
Less accumulated depreciation, depletion and amortization					(67,416	)					(51,889	)
Property and equipment, net					22,775						36,296
Goodwill					5,775						6,303
Other long-term assets					1,503						1,540
Total assets				$	34,351					$	50,637
Current liabilities:
Accounts payable				$	940					$	1,400
Revenues and royalties payable					985						1,193
Short-term debt					500						1,432
Deferred income taxes					261						730
Other current liabilities					815						1,180
Total current liabilities					3,501						5,935
Long-term debt					11,400						9,830
Asset retirement obligations					1,377						1,339
Other long-term liabilities					818						948
Deferred income taxes					1,333						6,244
Stockholders' equity:
Common stock					41						41
Additional paid-in capital					4,773						4,088
Retained earnings					6,413						16,631
Accumulated other comprehensive earnings					321						779
Total stockholders' equity attributable to Devon					11,548						21,539
Noncontrolling interests					4,374						4,802
Total stockholders' equity					15,922						26,341
Total liabilities and stockholders' equity				$	34,351					$	50,637
Common shares outstanding					411						409

CONSOLIDATING STATEMENTS OF OPERATIONS
(in millions)
				Quarter Ended September 30, 2015
				Devon U.S. & Canada						EnLink						Eliminations						Total
Oil, gas and NGL sales				$	1,338					$	-					$	-					$	1,338
Oil, gas and NGL derivatives					414						-						-						414
Marketing and midstream revenues					850						1,171						(172	)					1,849
Total operating revenues					2,602						1,171						(172	)					3,601
Lease operating expenses					510						-						-						510
Marketing and midstream operating expenses					849						960						(172	)					1,637
General and administrative expenses					163						35						-						198
Production and property taxes					84						7						-						91
Depreciation, depletion and amortization					644						100						-						744
Asset impairments					5,052						799						-						5,851
Gains and losses on asset sales					-						3						-						3
Other operating items					11						-						-						11
Total operating expenses					7,313						1,904						(172	)					9,045
Operating loss					(4,711	)					(733	)					-						(5,444	)
Net financing costs					106						30						-						136
Other nonoperating items					48						(5	)					-						43
Loss before income taxes					(4,865	)					(758	)					-						(5,623	)
Income tax expense (benefit)					(1,721	)					7						-						(1,714	)
Net loss					(3,144	)					(765	)					-						(3,909	)
Net loss attributable to noncontrolling interests					-						(402	)					-						(402	)
Net loss attributable to Devon				$	(3,144	)				$	(363	)				$	-					$	(3,507	)

OTHER KEY STATISTICS
(in millions)				Quarter Ended September 30, 2015
				Devon U.S. & Canada						EnLink						Eliminations					Total
Cash flow statement related items:
Operating cash flow				$	1,337					$	216					$	-				$	1,553
Capital expenditures				$	(979	)				$	(101	)				$	-				$	(1,080	)
Acquisitions of property, equipment and businesses				$	(107	)				$	(6	)				$	-				$	(113	)
EnLink distributions received (paid)				$	65					$	(133	)				$	-				$	(68	)
Balance sheet statement items:
Net debt(1)				$	7,344					$	2,769					$	-				$	10,113

(1) Net debt is a Non-GAAP measure. For a reconciliation of the comparable GAAP measure, see "Non-GAAP Financial Measures" later in this release.

CAPITAL EXPENDITURES
(in millions)
				Quarter Ended September 30, 2015					Nine Months Ended September 30, 2015
Exploration and development capital				$	834				$	3,043
Capitalized G&A and interest					105					327
Acquisitions					113					199
Midstream (1)					12					48
Corporate and other					18					66
Devon capital expenditures				$	1,082				$	3,683

(1) Excludes $105 and $777 million attributable to EnLink for the third quarter and first nine months of 2015, respectively.

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.

CORE EARNINGS

(in millions)

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. Accordingly, the Company also uses the measures of core earnings and core earnings per diluted share. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on third-quarter 2015 earnings.

				Quarter Ended September 30, 2015
				Before-Tax				After-Tax and Noncontrolling Interests
Net loss attributable to Devon (GAAP)								$	(3,507	)
Asset impairments				5,851					3,622
Fair value changes in financial instruments and foreign currency				254					201
Core earnings attributable to Devon (non-GAAP)								$	316
Diluted share count									414
Core diluted earnings per share attributable to Devon (non-GAAP)								$	0.76

NET DEBT

(in millions)

Devon defines net debt as debt less cash and cash equivalents and net debt attributable to the consolidation of EnLink Midstream as presented in the following table. Devon believes that netting these sources of cash against debt and adjusting for EnLink net debt provides a clearer picture of the future demands on cash from Devon to repay debt.

				September 30, 2015
				Devon U.S. & Canada						EnLink						Devon Consolidated
Total debt (GAAP)				$	9,048					$	2,852					$	11,900
Less cash and cash equivalents					(1,704	)					(83	)					(1,787	)
Net debt (non-GAAP)				$	7,344					$	2,769					$	10,113

DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
PRODUCTION GUIDANCE				Quarter 4
				Low						High
Oil and bitumen (MBbls/d)
United States					158						163
Canada					118						123
Total					276						286
Natural gas liquids (MBbls/d)
United States					130						135
Gas (MMcf/d)
United States					1,520						1,550
Canada					15						15
Total					1,535						1,565
Oil equivalent (MBoe/d)
United States					541						556
Canada					121						126
Total					662						682
PRICE REALIZATIONS GUIDANCE				Quarter 4
				Low						High
Oil and bitumen - % of WTI
United States					87	%					97	%
Canada					44	%					54	%
NGL - realized price				$	7					$	12
Natural gas - % of Henry Hub					78	%					88	%

OTHER GUIDANCE ITEMS				Quarter 4
($ millions, except Boe)				Low						High
Marketing & midstream operating profit				$	195					$	225
Lease operating expenses per Boe				$	8.00					$	8.50
General & administrative expenses per Boe				$	3.00					$	3.30
Production and property taxes as % of upstream sales					6.3	%					7.3	%
Depreciation, depletion and amortization per Boe				$	10.50					$	11.50
Other operating items				$	15					$	20
Net financing costs				$	130					$	140
Current income tax rate					0.0	%					5.0	%
Deferred income tax rate					30.0	%					35.0	%
Total income tax rate					30.0	%					40.0	%
Net earnings attributable to noncontrolling interests				$	10					$	30
CAPITAL EXPENDITURES GUIDANCE				Quarter 4
(in millions)				Low						High
Exploration and development				$	800					$	900
Capitalized G&A and interest					95						115
Midstream (1)					5						15
Corporate and other					15						25
Devon capital expenditures				$	915					$	1,055

(1) Excludes capital expenditures related to EnLink.

COMMODITY HEDGES
				Oil Commodity Hedges
				Price Swaps									Price Collars														Call Options Sold
Period				Volume (Bbls/d)				Weighted Average Price ($/Bbl)					Volume (Bbls/d)				Weighted Average Floor Price ($/Bbl)					Weighted Average Ceiling Price ($/Bbl)					Volume (Bbls/d)				Weighted Average Price ($/Bbl)
Q4 2015				107,000				$	90.61				44,000				$	81.36				$	88.63				28,000				$	116.43

Oil Basis Swaps

Period

Index

Volume (Bbls/d)

Weighted Average Differential to WTI ($/Bbl)

Q4 2015

Western Canadian Select

40,000

$

(15.58

)

				Natural Gas Commodity Hedges
				Price Swaps									Price Collars														Call Options Sold
Period				Volume (MMBtu/d)				Weighted Average Price ($/MMBtu)					Volume (MMBtu/d)				Weighted Average Floor Price ($/MMBtu)					Weighted Average Ceiling Price ($/MMBtu)					Volume (MMBtu/d)				Weighted Average Price ($/MMBtu)
Q4 2015				250,000				$	4.32				480,000				$	3.52				$	3.83				550,000				$	5.09

Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index.

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