CEO Letter

DOING THE RIGHT THINGS THE RIGHT WAY

Since Devon Energy and WPX Energy completed our merger in January 2021, we’ve been able to quickly unite our workforce and advance our business on all fronts. I’m excited to lead this premier company that has resilience rooted in a half-century of achievement, and I’m confident our innovative spirit, financial strength and continuous improvement mindset will allow us to succeed over the next 50 years and beyond.

Devon is first and foremost an energy company. Oil and gas enable us all to house and feed our families, heat and cool our indoor spaces, travel, manufacture necessities and carry out other essential activities. We’re proud to produce the energy that makes all this possible, and to do it safely, responsibly and with care for the environment and our stakeholders. At Devon, creating shareholder value through better results in every part of our business, including our environmental, social and governance performance, is our goal every day.

Guided by values

We’re pursuing both ESG and operational excellence in thoughtful ways, and with a sense of urgency. Because we’re guided by strong values, one of the first steps our newly merged company took was to define the values we all share – integrity, relationships, courage and results. These values build on each other to drive our performance.

Integrity

Everything starts with integrity at Devon. Openness and honesty are at the core of our relationships, our commitments and our actions. We believe integrity requires transparency, and we seek to demonstrate both by discussing our ESG efforts in this 2021 Sustainability Report, as well as our 2020 Climate Change Assessment Report and other public disclosures.

Relationships

Interactions based on integrity enable Devon to earn trust and establish strong relationships. We seek input from a wide variety of stakeholders, listen carefully and work together to solve problems. Internally, this approach is giving us momentum as we adopt best practices from both legacy companies across our business. It also allows us to create constructive connections with external stakeholders that help us advance our environmental objectives, public advocacy positions and community partnerships.

Courage

Empowered by our strong track record of integrity and our respectful relationships, Devon employees are courageous in challenging the status quo. We encourage our people to take intelligent risks, and not to be paralyzed by fear of failure. During the challenging market conditions in 2020 and throughout the ongoing global public health crisis, we have thought carefully about our decision to stick to our core activities, making sensible adjustments to consistently

produce oil and gas. In 2021, courage is also evident in our new, aggressive environmental targets and in the corporate goals we set each year to challenge ourselves to do better.

Results

Our corporate culture encourages people to take pride of ownership in what they’re working on, and to deliver strong results. The Devon team made important strides in ESG in the past year, while taking on the challenge to do more.

Setting targets for environmental performance

Internally and externally, we are being called upon to do more to address the challenges of climate change. As we focus on continuous improvement in everything we do, we have set aggressive targets to reduce the carbon intensity of our operations. We’ve been focused on this for many years, and in fact over the past three years we’ve successfully reduced our methane intensity 58%. Now we’re identifying additional technologies and best practices to further reduce emissions.

We’re also evaluating opportunities to create value in the coming transition to ever-cleaner forms of energy, seeking to leverage our strengths and partnerships. As Devon and others work toward a lower carbon future, any meaningful advancement is going to require continued investment in all types of infrastructure and in particular, electrical infrastructure. So it’s incumbent upon us all to be less divisive and more constructive in these conversations.

As we move forward, Devon will be thoughtful about capital spending to achieve our targets and finding new ways to be environmentally responsible in a financially responsible way.

Caring for people

In the past year, we focused our social efforts on the wellbeing of our workforce and communities, and on being a valued community partner. We accelerated some social investments and modified our programs to help our partners meet immediate needs due to the COVID-19 pandemic.

With the help of Devon’s Diversity, Equity and Inclusion (DEI) Team, we launched new grants for community organizations in Oklahoma City. In Tulsa, to honor the community’s support of legacy WPX Energy, we made a series of grants to advance economic development, education, social services and community enrichment. We also worked to deepen our understanding of social and racial issues through intentional conversations and listening as steps toward improving our community and company.

Providing a safe work environment for our employees and contractors is our responsibility and an extension of our caring culture. We’ve adopted safety best practices from both legacy companies and in our 2021 corporate safety goals, we will hold ourselves accountable for improved outcomes.

Working for all stakeholders

We’re able to make progress on ESG because the Devon board of directors is highly engaged and committed to progressive governance that benefits all of our stakeholders. Since 2020, we’ve further diversified the board, enhanced its oversight of ESG and continued to align executive compensation with the interests of our stockholders. Our board endorses our new environmental targets and our commitment to public ESG disclosures to show we’re accountable for how we do business.

The world is changing, and Devon is changing with it. To be a leading U.S. energy company, we’re working diligently to make a positive and sustainable impact for all of our stakeholders. Our targets require us to improve how we deliver oil and gas to mitigate climate change risk and to publicly disclose our progress. We’re cultivating a safe, inclusive, diverse and equitable work environment, and engaging our communities to understand how Devon can make a difference beyond our workplace. I’m constantly inspired and encouraged by the great attitude and positive outlook of Devon’s people, and am very optimistic about the company’s future.

Thank you for taking the time to learn what the Devon team is doing to be a safe, ethical and environmentally responsible oil and gas producer to a world that demands energy. We welcome your thoughts on this report so that we can tailor our future reporting and disclosures to your interests.

Sincerely,

Richard E. “Rick” Muncrief
President and CEO

Core Values:

The Devon Way

Trust is a key ingredient in Devon’s success. It is vital that our stakeholders trust us to deliver results the right way. The Devon Way.

Core Values: The Devon Way

Message from Our Board

OVERSEEING ESG PROGRESS

Our board of directors knows that Devon’s success is highly dependent on the company’s environmental, safety, social and governance-focused efforts. As we considered the merger of Devon Energy and WPX Energy in late 2020, we explored our vision for the performance of the go-forward company in light of our shared belief in the importance of the ESG-related efforts. We concluded that the merger offered a unique operational and cultural opportunity: The expanded footprint of the combined company would allow us to scale up our ESG-related performance.

We quickly followed through on this vision after the merger of Devon and WPX in January 2021. We took a hard look at the best practices of each legacy company. To facilitate our efforts, we expanded the scope of our board’s Governance Committee, re-naming it the Governance, Environmental, and Public Policy (GEPP) Committee, to overtly acknowledge our heightened focus on these areas. Hand-in-hand with our endeavors, management reviewed practices and performance at each legacy company and synthesized data in order to develop quantitative targets for our ESG priorities. We were also attentive to the perspectives of our stakeholders.

Our post-merger work reflects that our board and management believe that continuously improving our environmental performance is one of our company’s and industry’s core responsibilities. Indeed, the board has unanimously endorsed Devon’s ambitious new environmental targets to lower the company’s carbon impact. These targets now directly inform how we allocate capital, employ new technologies, optimize production from our assets, and broadly engage with our stakeholders.

At Devon, we welcome the accountability arising from our targets. To meet these bold environmental targets, we know that innovation, as well as diverse and creative viewpoints, will be key contributors to our success. We are confident that we can deliver strong operational and financial results in a manner that reduces our environmental impact while safeguarding our workforce and the communities in which we operate. Devon is committed to leadership in ESG.

The GEPP Committee as well as the entire board of directors are eager to hear your feedback on our approach and performance on the full range of our environmental, health, safety, diversity and governance programs. Thank you for your continuing interest in Devon.

Sincerely,

Dave Hager
Executive Chair


Barbara M. Baumann
Chair of Governance, Environmental and Public Policy Committee