Devon Energy Increased First-Quarter 2008 Net Earnings 15 Percent; Growth in Oil and Gas Production Fuels Record Cash Flow of $2.6 Billion

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OKLAHOMA CITY, May 7 /PRNewswire-FirstCall/ -- Devon Energy Corporation (NYSE: DVN) today reported net earnings for the quarter ended March 31, 2008, of $749 million, or $1.68 per common share ($1.66 per diluted common share). This is a 15 percent increase compared with Devon's first-quarter 2007 net earnings of $651 million, or $1.46 per common share ($1.44 per diluted common share).

Earnings $2.74 per Share Excluding Items Not Estimated by Analysts

First-quarter 2008 reported net earnings of $749 million were impacted by certain items securities analysts typically exclude from their published estimates. Excluding these items, Devon earned $1.2 billion or $2.74 per diluted share. By far the most significant of these items was a non-cash, unrealized loss on oil and natural gas derivative instruments of $780 million pre-tax ($500 million after tax).

Increased Production Drives 52 Percent Sales Growth

Combined oil, gas and natural gas liquids production from continuing operations averaged 640 thousand oil-equivalent barrels (Boe) per day in the first quarter of 2008. This was a nine percent increase in production from continuing operations compared with the first quarter of 2007. The production growth was concentrated in onshore fields within the United States and Canada. Devon has increased oil and natural gas production from retained properties for eight consecutive quarters.

Sales of oil, gas and natural gas liquids increased 52 percent to $3.2 billion in the first quarter of 2008. The combined effects of increased oil and gas production and higher oil, gas and natural gas liquids prices led to the increase in sales.

Barnett Shale Production Growth Leads Operating Highlights

Devon drilled 646 wells in the first quarter of 2008, with an overall success rate of 97 percent. Following are highlights of operations conducted in the first quarter of 2008:

    --  Devon's net production from the Barnett Shale field in north Texas
        averaged a record 995 million cubic feet of gas equivalent per day in
        the first quarter of 2008. This was 36 percent greater than its
        production in the first quarter of 2007. During April, the company's
        net Barnett Shale production surpassed one billion cubic feet of gas
        equivalent per day. This milestone event occurred approximately
        21 months ahead of Devon's original target date.
    --  In east Texas in the Groesbeck area, the company initiated production
        on three significant horizontal natural gas wells in the first
        quarter. Initial daily production from the three horizontal wells
        averaged more than 19 million cubic feet of gas equivalent per well.
        Devon has 100 percent working interests in two of the wells and
        93 percent in the third.
    --  In the Gulf of Mexico, Devon continued appraisal and development
        operations on its four significant discoveries in the deepwater Lower
        Tertiary trend: Cascade, St. Malo, Jack and Kaskida. The company
        conducted drilling operations on the St. Malo No. 3 and No. 4 wells in
        the quarter. It also commenced drilling the Jack No. 3 appraisal well.
        At Cascade, the company is moving forward with development plans and
        will begin drilling the first of two producing wells later in 2008.
    --  In April, Devon increased its interest in the Kaskida unit by
        exercising a preferential right. Devon now has a 26.67 percent working
        interest in the 51,800-acre Kaskida unit. Kaskida, discovered in 2006,
        is believed to be the largest of the company's four Lower Tertiary
        discoveries.
    --  In Canada, Devon established significant production from its Jackfish
        oil sands project in Alberta during the first quarter of 2008.
        First-quarter exit-rate production reached 10,000 barrels per day.
        Production from the 100 percent-owned Jackfish project is expected to
        ramp up throughout 2008. A peak rate of 35,000 barrels of oil per day
        is expected in early 2009.
    --  Also in Canada, Devon continued an active drilling program in the
        company's Lloydminster oil play, drilling 121 new wells in the first
        quarter. The company's production in Lloydminster has increased by
        30 percent over the past 12 months to nearly 42,000 Boe per day.


    African Divestitures Total $3 Billion

In 2006 and 2007, Devon announced it would divest its assets in Africa and terminate its African operations. In April 2008, Devon announced an agreement to sell its operations in Equatorial Guinea for $2.2 billion. To date, the company has announced sales agreements for its assets in six African countries with aggregate divestiture proceeds of more than $3 billion, before taxes. Devon expects to complete all of the announced transactions around mid-2008.

In accordance with accounting standards, Devon has classified the assets, liabilities and results of its operations in Africa as discontinued operations for all accounting periods presented in this release. Included with this release is a table of revenues, expenses and production categories and amounts reclassified as discontinued operations for each period presented.

Marketing and Midstream Profit Climbs 59 Percent

Marketing and midstream operating profit was $173 million in the quarter ended March 31, 2008, compared with $109 million in the same period in 2007. The 59 percent increase was largely attributable to higher natural gas and natural gas liquids prices.

Rising Expenses Reflect Higher Production and Activity Levels

Lease operating expenses (LOE) in the first quarter of 2008 increased to $506 million. On a unit of production basis, first-quarter 2008 LOE was $8.69 per Boe, or seven percent higher than the first quarter of 2007. The increase in unit LOE in the 2008 quarter reflects higher Canadian exchange rates, higher transportation costs and generally higher expenditures for oilfield services and supplies.

Depreciation, depletion and amortization (DD&A) of oil and gas properties increased to $737 million in the first quarter of 2008. Unit DD&A increased 14 percent to $12.64 per Boe.

As expected, first-quarter general and administrative expenses (G&A) increased to $148 million. Higher employee-related costs were the largest contributor to the quarterly increase in G&A. Devon has increased the size of its workforce to support expanding levels of large-scale exploration and development projects.

Interest expense for the first quarter of 2008 decreased to $102 million. This is seven percent less than first-quarter 2007 interest expense of $110 million.

Cash Flow at Record Level; Balance Sheet Strengthened

First-quarter cash flow before balance sheet changes reached a record $2.6 billion in 2008. This was a 74 percent increase compared with the first quarter of 2007. The company funded $2.0 billion of capital expenditures in the first quarter of 2008 and paid common and preferred dividends totaling $73 million. This resulted in free cash flow of nearly $600 million in the quarter. Cash on hand at March 31, 2008, increased to approximately $1.9 billion. A reconciliation of cash flow before balance sheet changes and free cash flow is provided later in this release.

Accounting for Derivative Instruments

Devon accounts for derivative instruments using mark-to-market accounting. As a result, Devon recognizes in earnings for each reporting period the unrealized changes in the fair values of its derivative instruments. A first-quarter unrealized loss on derivative instruments was the result of rising natural gas prices during the quarter. The company could record unrealized gains or losses on oil and natural gas derivative instruments in subsequent quarters dependent upon the direction of commodity prices.

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 2008 were as follows:

    --  A change in fair value of non-oil and gas derivative financial
        instruments decreased first-quarter earnings by $16 million pre-tax
        ($10 million after tax).
    --  An unrealized loss on oil and natural gas derivative financial
        instruments decreased first-quarter earnings by $780 million pre-tax
        ($500 million after tax).
    --  A reduction in Canadian statutory income tax rates increased
        first-quarter after-tax earnings by $7 million.
    --  The decisions to exit Africa generated financial benefits that
        increased first-quarter earnings by   $ 34 million pre-tax
        ($17 million 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 2008
    (in millions)
                                                      After        Cash Flow
                    Pre-tax                           tax       Before Balance
                    Earnings      Income Tax Effect   Earnings   Sheet Changes
                     Effect   Current Deferred  Total Effect       Effect
    Change in
     fair value
     of non-oil
     and gas
     derivative
     instruments       $(16)       -       (6)    (6)      (10)           -
    Unrealized
     loss on
     oil and gas
     derivative
     financial
     instruments       (780)       -     (280)  (280)     (500)           -
    Change in
     Canadian
     income tax           -        -       (7)    (7)        7
    Financial
     benefits of
     decision to
     exit Africa         34        -       17     17        17            -
       Totals         $(762)       -     (276)  (276)     (486)           -


In aggregate, these items decreased first-quarter 2008 net earnings by $486 million, or $1.09 per common share ($1.08 per diluted share).

Conference Call to be Webcast Today

Devon will discuss its first-quarter 2008 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 http://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, inflation or lack of availability of goods and services, environmental risks, drilling risks and 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 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 http://www.devonenergy.com.

                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    PRODUCTION (net of royalties)                        Quarter Ended
    Excludes discontinued operations                        March 31,
                                                       2008           2007
    Total Period Production
    Natural Gas (Bcf)
      U.S. Onshore                                    152.6          127.6
      U.S. Offshore                                    18.3           18.6
      Total U.S.                                      170.9          146.2
      Canada                                           51.6           55.4
      International                                     0.5            0.3
      Total Natural Gas                               223.0          201.9
    Oil (MMBbls)
      U.S. Onshore                                      2.8            2.8
      U.S. Offshore                                     1.8            1.7
      Total U.S.                                        4.6            4.5
      Canada                                            4.7            3.5
      International                                     4.9            5.3
      Total Oil                                        14.2           13.3
    Natural Gas Liquids (MMBbls)
      U.S. Onshore                                      5.8            4.8
      U.S. Offshore                                     0.2            0.1
      Total U.S.                                        6.0            4.9
      Canada                                            1.0            1.1
      International                                       -              -
      Total Natural Gas Liquids                         7.0            6.0
    Oil Equivalent (MMBoe)
      U.S. Onshore                                     34.0           28.9
      U.S. Offshore                                     5.0            4.9
      Total U.S.                                       39.0           33.8
      Canada                                           14.3           13.8
      International                                     5.0            5.3
      Total Oil Equivalent                             58.3           52.9
    Average Daily Production
    Natural Gas (MMcf)
      U.S. Onshore                                  1,676.4        1,418.5
      U.S. Offshore                                   201.2          206.4
      Total U.S.                                    1,877.6        1,624.9
      Canada                                          567.4          615.0
      International                                     6.0            3.0
      Total Natural Gas                             2,451.0        2,242.9
    Oil (MBbls)
      U.S. Onshore                                     30.9           30.7
      U.S. Offshore                                    19.9           19.1
      Total U.S.                                       50.8           49.8
      Canada                                           51.4           39.0
      International                                    53.4           58.6
      Total Oil                                       155.6          147.4
    Natural Gas Liquids (MBbls)
      U.S. Onshore                                     63.4           53.2
      U.S. Offshore                                     1.9            1.4
      Total U.S.                                       65.3           54.6
      Canada                                           10.9           12.3
      International                                       -              -
      Total Natural Gas Liquids                        76.2           66.9
    Oil Equivalent (MBoe)
      U.S. Onshore                                    373.7          320.3
      U.S. Offshore                                    55.3           54.9
      Total U.S.                                      429.0          375.2
      Canada                                          156.9          153.8
      International                                    54.4           59.2
      Total Oil Equivalent                            640.3          588.2



                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    BENCHMARK PRICES                                      Quarter Ended
     (average prices)                                        March 31,
                                                      2008              2007
    Natural Gas ($/Mcf) - Henry Hub                  $8.03             $6.77
    Oil ($/Bbl) - West Texas Intermediate
     (Cushing)                                      $97.67            $58.33


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

    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


    Quarter Ended
     March 31, 2007               Oil          Gas         NGLs       Total
                               (Per Bbl)    (Per Mcf)    (Per Bbl)  (Per Boe)
    U.S. Onshore                $51.04        $5.92       $27.54     $35.69
    U.S. Offshore               $54.13        $7.19       $29.51     $46.60
    Total U.S.                  $52.22        $6.08       $27.59     $37.29
    Canada                      $43.51        $6.43       $37.03     $39.71
    International               $57.72        $3.21           $-     $57.40
    Realized price without
     hedges                     $52.11        $6.17       $29.33     $39.94
    Cash settlements                $-        $0.06           $-      $0.22
    Realized price, including
     cash settlements           $52.11        $6.23       $29.33     $40.16



    CAPITAL EXPENDITURES (in millions)
    Quarter Ended
     March 31, 2008

                             U.S.      U.S.
                           Onshore   Offshore   Canada   International  Total
    Capital Expenditures
       Exploration           $53        145       131          71        $400
       Development           865         88       332          59       1,344
       Exploration and
        development
        capital             $918        233       463         130      $1,744
       Capitalized G&A                                                     99
       Capitalized
        interest                                                           20
       Discontinued
        operations                                                         14
       Midstream capital                                                   99
       Other capital                                                       16
    Total Capital
     Expenditures                                                      $1,992



                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    CONSOLIDATED STATEMENTS OF OPERATIONS                Quarter Ended
     (in millions, except per share amounts)                March 31,
                                                      2008             2007
    Revenues
      Oil sales                                      $1,250             $691
      Gas sales                                       1,630            1,246
      NGL sales                                         328              177
      Net loss on oil and gas derivative
       financial instruments                           (788)             (20)
      Marketing and midstream revenues                  555              379
        Total revenues                                2,975            2,473
    Expenses and other income, net
      Lease operating expenses                          506              430
      Production taxes                                  134               80
      Marketing and midstream operating
       costs and expenses                               382              270
      Depreciation, depletion and
       amortization of oil and gas properties           737              587
      Depreciation and amortization of non-
       oil and gas properties                            57               46
      Accretion of asset retirement
       obligation                                        22               18
      General and administrative expenses               148              119
      Interest expense                                  102              110
      Change in fair value of non-oil and
       gas derivative financial instruments              16                1
      Other income, net                                 (21)             (26)
        Total expenses and other income, net          2,083            1,635
    Earnings from continuing operations
     before income tax expense                          892              838
    Income tax expense
      Current                                           103              189
      Deferred                                          138               75
        Total income tax expense                        241              264
    Earnings from continuing operations                 651              574
    Discontinued operations
      Earnings from discontinued operations
       before income tax expense                        189              137
      Income tax expense                                 91               60
        Earnings from discontinued
         operations                                      98               77
    Net earnings                                        749              651
    Preferred stock dividends                             2                2
    Net earnings applicable to common stockholders     $747             $649

    Basic net earnings per share
      Earnings from continuing operations             $1.46            $1.29
      Earnings from discontinued operations            0.22             0.17
      Net earnings                                    $1.68            $1.46

    Diluted net earnings per share
      Earnings from continuing operations             $1.44            $1.27
      Earnings from discontinued operations            0.22             0.17
      Net earnings                                    $1.66            $1.44

    Weighted average common shares outstanding
      Basic                                             445              444
      Diluted                                           449              450



                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    CONSOLIDATED BALANCE SHEETS
    (in millions)                                   March 31,     December 31,
                                                      2008           2007
    Assets                                                         (Audited)
    Current assets
      Cash and cash equivalents                      $1,875         $1,364
      Short-term investments, at fair value              23            372
      Accounts receivable                             2,090          1,779
      Deferred income taxes                             325             44
      Current assets held for sale                      112            120
      Other current assets                              232            235
         Total current assets                         4,657          3,914
    Property and equipment, at cost, based on
     the full cost method of accounting for oil
     and gas properties ($3,492 and $3,417
     excluded from amortization in 2008 and
     2007, respectively)                             49,816         48,473
      Less accumulated depreciation, depletion
       and amortization                              20,883         20,394
      Net property and equipment                     28,933         28,079
    Investment in Chevron Corporation common
     stock, at fair value                             1,211          1,324
    Goodwill                                          6,054          6,172
    Long-term assets held for sale                    1,531          1,512
    Other long-term assets                              599            455
    Total Assets                                    $42,985        $41,456
    Liabilities and Stockholders' Equity
    Current liabilities
      Accounts payable - trade                       $1,440         $1,360
      Revenues and royalties due to others              695            578
      Short-term debt                                 1,446          1,004
      Derivative financial instruments, at
       fair value                                       775              -
      Current portion of asset retirement
       obligation, at fair value                         68             82
      Current liabilities associated with
       assets held for sale                             173            145
      Accrued expenses and other current
       liabilities                                      398            488
         Total current liabilities                    4,995          3,657
    Debentures exchangeable into shares of
     Chevron Corporation common stock                   620            641
    Other long-term debt                              5,751          6,283
    Derivative financial instruments, at fair value     376            488
    Asset retirement obligation, at fair value        1,377          1,236
    Long-term liabilities associated with assets
     held for sale                                      428            404
    Other long-term liabilities                         701            699
    Deferred income taxes                             6,339          6,042
    Stockholders' equity
      Preferred stock                                     1              1
      Common stock                                       45             44
      Additional paid-in capital                      6,820          6,743
      Retained earnings                              13,489         12,813
      Accumulated other comprehensive income          2,043          2,405
    Total Stockholders' Equity                       22,398         22,006
    Total Liabilities and Stockholders' Equity      $42,985        $41,456
    Common Shares Outstanding                           446            444



                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    CONSOLIDATED STATEMENTS OF CASH FLOWS
     (in millions)                                    Quarter Ended March 31,
                                                      2008              2007
    Cash Flows From Operating Activities
      Net earnings                                    $749              $651
      Earnings from discontinued
       operations, net of tax                          (98)              (77)
      Adjustments to reconcile net
       earnings from continuing operations
       to net cash provided by operating activities:
          Depreciation, depletion and
           amortization                                794               633
          Deferred income tax expense                  138                75
          Net unrealized loss on oil and
           gas derivative financial instruments        780                32
          Other noncash charges                         74                43
      Changes in assets and liabilities:
        Increase in:
          Accounts receivable                         (328)              (29)
          Other current assets                         (39)              (10)
          Long-term other assets                       (11)              (25)
        Increase (decrease) in:
          Accounts payable                              38                66
          Revenues and royalties due to others         119               (46)
          Other current liabilities                   (167)               89
          Long-term other liabilities                   21                (2)
      Cash provided by operating
       activities - continuing operations            2,070             1,400
      Cash provided by operating
       activities - discontinued operations            185               117
    Net cash provided by operating activities        2,255             1,517

    Cash Flows From Investing Activities
      Proceeds from sales of property and
       equipment                                       105                25
      Capital expenditures                          (1,862)           (1,484)
      Purchases of short-term investments              (50)             (424)
      Sales of short-term investments                  270               723
      Cash used in investing activities -
       continuing operations                        (1,537)           (1,160)
      Cash used in investing activities -
       discontinued operations                         (24)              (53)
    Net cash used in investing activities           (1,561)           (1,213)

    Cash Flows From Financing Activities
      Credit facility repayments                    (1,450)                -
      Credit facility borrowings                       920                 -
      Net commercial paper borrowings
       (repayments)                                    442              (348)
      Principal payments on debt                       (41)                -
      Proceeds from stock options exercises             74                23
      Repurchases of common stock                      (64)                -
      Dividends paid on common and
       preferred stock                                 (73)              (64)
      Excess tax benefits related to
       share-based compensation                         27                 5
    Net cash used in financing activities             (165)             (384)

    Effect of exchange rate changes on cash            (19)                2
    Net increase (decrease) in cash and
     cash equivalents                                  510               (78)
    Cash and cash equivalents at
     beginning of period (including
     assets held for sale)                           1,373               756
    Cash and cash equivalents at end of
     period (including assets held for sale)        $1,883              $678

    Supplementary cash flow data:
      Interest paid (net of capitalized
       interest)                                      $136              $138
      Income taxes paid (received) -
       continuing and discontinued operations          $83              $(24)



                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    DRILLING ACTIVITY                                     Quarter Ended
                                                             March 31,
                                                      2008              2007
    Exploration Wells Drilled
      U.S.                                               9                22
      Canada                                            51                55
      International                                      6                 1
      Total                                             66                78
    Exploration Wells Success Rate
      U.S.                                             56%               77%
      Canada                                           96%              100%
      International                                     0%                0%
      Total                                            82%               92%
    Development Wells Drilled
      U.S.                                             372               264
      Canada                                           198               252
      International                                     10                 3
      Total                                            580               519
    Development Wells Success Rate
      U.S.                                             98%               98%
      Canada                                          100%              100%
      International                                    90%              100%
      Total                                            99%               99%
    Total Wells Drilled
      U.S.                                             381               286
      Canada                                           249               307
      International                                     16                 4
      Total                                            646               597
    Total Wells Success Rate
      U.S.                                             97%               97%
      Canada                                           99%              100%
      International                                    56%               75%
      Total                                            97%               98%



    COMPANY OPERATED RIGS                                 Quarter Ended
                                                             March 31,
                                                      2008              2007
    Number of Company Operated Rigs
      Running
      U.S.                                              72                65
      Canada                                             2                 5
      International                                      2                 -
      Total                                             76                70



                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    PRODUCTION FROM DISCONTINUED OPERATIONS                Quarter Ended
                                                              March 31,
                                                       2008              2007
    Total Period Production
      Oil (MMBbls)                                      2.1               3.1
      Natural Gas (Bcf)                                 1.1               1.4
      Total Oil Equivalent (MMBoe)                      2.3               3.3



    STATEMENTS OF DISCONTINUED OPERATIONS                  Quarter Ended
    (in millions)                                             March 31,
                                                       2008              2007
    Revenues
      Oil sales                                        $196              $170
      Gas sales                                           4                 4
      Marketing and midstream revenues                    5                 1
      Total revenues                                    205               175
    Expenses and other income, net
      Lease operating expenses                           14                20
      Marketing and midstream operating
       costs and expenses                                 1                 1
      Depreciation, depletion and
       amortization of oil and gas properties             -                16
      Accretion of asset retirement obligation            1                 1
      Total expenses and other income, net               16                38
    Earnings before income tax expense                  189               137
    Income tax expense
      Current                                            67                44
      Deferred                                           24                16
      Total income tax expense                           91                60
    Earnings from discontinued operations               $98               $77



    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 and free cash flow are Non-GAAP financial measures. 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. Devon believes free cash flow is relevant because it is a measure of cash available to service debt. Cash flow before balance sheet changes and free cash flow are also used by certain securities analysts as a measure of Devon's financial results.

                           DEVON ENERGY CORPORATION
               UNAUDITED FINANCIAL AND OPERATIONAL INFORMATION

    RECONCILIATION TO GAAP INFORMATION                     Quarter Ended
     (in millions)                                            March 31,
                                                       2008              2007
    Net Cash Provided By Operating
     Activities (GAAP)                               $2,255            $1,517
      Changes in assets and liabilities -
       continuing operations                            367               (43)
      Changes in assets and liabilities -
       discontinued operations                          (63)               (6)
    Cash flow before balance sheet changes
     (Non-GAAP)                                      $2,559            $1,468
    Less:
      Capital expenditures                            1,992             1,578
    Free cash flow (Non-GAAP)                          $567             $(110)

SOURCE Devon Energy Corp.

CONTACT: investors, Zack Hager, +1-405-552-4526, or media, Chip Minty, +1-405-228-8647, both of Devon Energy Corp.