UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 6, 2008
DEVON ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
 	 	 	 	 	
DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)	 	001-32318
(Commission File Number)	 	73-1567067
(IRS Employer
Identification Number)	
 	 	 	
20 NORTH BROADWAY, OKLAHOMA CITY, OK	 	73102	
(Address of Principal Executive Offices)	 	(Zip Code)	
Registrant’s telephone number, including area code: ( 405) 235-3611
     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 		
o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 		
o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 		
o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

   

 

Item 2.02 Results of Operations and Financial Condition
     Devon Energy Corporation hereby furnishes the information set forth in its news release dated August 6, 2008 announcing second quarter results, a copy of which is attached as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits
           (d) Exhibits
 	 	 	
99.1	 	Devon Energy Corporation news release dated August 6, 2008.	
SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized.
 	 	 	 	 	
 	DEVON ENERGY CORPORATION
 	 	
 	By:  	/s/ Danny J. Heatly  	 	
 	 	Danny J. Heatly 	 	
 	 	Vice President - Accounting 	 	
 	
Date: August 6, 2008
 2 

 	 	 	
	 	EXHIBIT 99.1	
 	 	 	
News Release	 	Devon Energy Corporation
20 North Broadway
Oklahoma City, OK 73102-8260	
 	 	 	 	 	
Investor Contact	 	Zack Hager	 	405 552 4526 	
Media Contact	 	Chip Minty	 	405 228 8647 	
DEVON ENERGY’S SECOND-QUARTER 2008 NET EARNINGS INCREASE 44 PERCENT TO $1.3 BILLION
OKLAHOMA CITY — August 6, 2008 — Devon Energy Corporation (NYSE:DVN) today reported net earnings for the quarter ended June 30, 2008, of $1.3 billion, or $2.91 per common share ($2.88 per diluted common share). This is a 44 percent increase compared with Devon’s second-quarter 2007 net earnings of $904 million, or $2.02 per common share ($2.00 per diluted common share).
For the six months ended June 30, 2008, Devon reported net earnings of $2.1 billion, or $4.59 per common share ($4.55 per diluted common share). This compares with net earnings for the six months ended June 30, 2007, of $1.6 billion, or $3.48 per common share ($3.44 per diluted common share).
Earnings $3.39 per Share Excluding Items Not Estimated by Analysts
Second-quarter 2008 reported net earnings of $1.3 billion were affected by certain items securities analysts typically exclude from their published estimates. Excluding these adjusting items, Devon earned $1.5 billion or $3.39 per diluted common share.
The most significant of the adjusting items impacting continuing operations was a non-cash, unrealized loss on oil and natural gas derivative instruments of $912 million pre-tax ($584 million after tax). Also impacting continuing operations was $312 million of income tax expense attributable to the repatriation of cash from outside the United States and to a related income tax policy election.
The most significant adjusting item impacting discontinued operations was a $736 million pre-tax gain ($647 million after tax) on divestitures of assets in Africa. These and other adjusting items are discussed in more detail later in this news release.
Oil and Gas Sales Increase by 65 Percent
Sales of oil, natural gas and natural gas liquids from continuing operations increased 65 percent to $4 billion in the second quarter of 2008. The combined effects of increased oil and gas production and higher oil, natural gas and natural gas liquids prices led to the increase in sales.
Combined oil, natural gas and natural gas liquids production from continuing operations reached 58.5 million oil-equivalent barrels (Boe) in the second quarter of 2008. This was a four percent increase compared with the second quarter of 2007. The company produced 643 thousand Boe per day in the second quarter of 2008. This compares with production of 618 thousand Boe per day in the second quarter of 2007 and 640 thousand Boe per day in the first quarter of 2008. Devon has increased oil and natural gas production from retained properties for nine consecutive quarters.
U.S. Onshore and Canadian Operations Lead Quarterly Highlights
Devon drilled 494 wells in the second quarter of 2008, with an overall success rate of 98 percent. Following are recent operating highlights:
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•	 	Devon’s second-quarter net exit-rate production from the Barnett Shale field in north Texas reached almost 1.1 billion cubic feet of natural gas equivalent per day. Devon is the largest producer in the field and brought 189 new Barnett Shale wells on line in the second quarter of 2008.	
 		
•	 	Devon plans to drill more than 650 wells in the Barnett Shale in 2008 and has set a net production target of 1.2 billion cubic feet of natural gas equivalent per day by year-end.	
 		
•	 	In east Texas and northwest Louisiana, Devon added to its lease position in the Haynesville Shale play, bringing its total Haynesville lease holdings to 483,000 net acres.	
 		
•	 	In the Groesbeck area in east Texas, Devon commenced production from three high-rate gas wells in the second quarter. Devon has 100-percent working interests in all three wells, with initial production rates averaging 16.2 million cubic feet of natural gas per day from each well.	
 		
•	 	The company drilled two long-lateral horizontal wells in the Woodford Shale in Coal County, Oklahoma, in the second quarter with excellent results. Initial production rates from the two wells were 7.1 million and 6.7 million cubic feet of natural gas per day. Devon’s working interests in the two wells are 66 percent and 73 percent, respectively.	
 		
•	 	In Canada, Devon’s wholly-owned Jackfish oil sands project reached a cumulative production milestone of one million barrels of oil in the second quarter of 2008. Second-quarter exit-rate production was about 14,500 barrels per day. Production is expected to reach plant capacity of 35,000 barrels per day in the first half of 2009.	
 		
•	 	Also in Canada in the second quarter, Devon increased its lease position in the Horn River Shale play in British Columbia to more than 100,000 net acres. The company is now planning its upcoming winter drilling program for the Horn River area.	
African Divestitures Substantially Complete
Devon has now completed substantially all of its planned divestitures in Africa. In May, the company closed the $205.5 million sale of its assets in Gabon. In June, Devon closed the $2.2 billion sale of its assets in Equatorial Guinea. In aggregate, the sale prices of the combined African divestures exceeded $3 billion before taxes. The company expects to close the remaining approximately $250 million in transactions later in 2008.
In accordance with U.S. 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 Rises with Product Prices
Marketing and midstream operating profit increased 71 percent to $204 million in the second quarter of 2008. For comparison, marketing and midstream operating profit was $119 million in the second quarter of 2007. The increase was attributable to higher throughput and higher natural gas and natural gas liquids prices.
Expenses Track Increased Production and Activity Levels
Expenses in most categories were generally in line with expectations in the second quarter of 2008. However, second-quarter general and administrative expenses (G&A) exceeded previous estimates at $180 million. This compares with $113 million in the second quarter of 2007. Higher employee-related costs were the largest contributor to the year-over-year increase. In addition, $27 million of the increase was a one-time charge attributable to a change in the company’s vesting policy for stock grants. Devon believes this modified benefits policy better reflects industry practices. Devon has also increased the size of its workforce to support expanding levels of investment in long cycle-time exploration and development projects.
Interest expense decreased in the second quarter of 2008 to $90 million, compared with interest expense of $107 million in the second quarter of 2007. The decrease reflects a decline in outstanding debt as the company repaid all of its commercial paper and credit facility balances during the second quarter of 2008.
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Repatriation of International Cash Increases Current Income Tax Rate
Current income tax expense on earnings from continuing operations was $414 million in the second quarter of 2008. This amount included $295 million of U.S. income tax attributable to the repatriation of cash from outside the United States and related income tax policy elections. During the second quarter, the proceeds from Devon’s African divestitures combined with cash repatriated from foreign subsidiaries totaled approximately $3 billion.
Record Cash Flow and Debt Repayments Further Strengthen Balance Sheet
Cash flow before balance sheet changes reached a record $2.7 billion in the second quarter of 2008. This was a 48 percent increase compared with the second quarter of 2007. The company funded capital expenditures of $2 billion, including $1.7 billion of exploration and development capital, in the quarter. This resulted in free cash flow of approximately $700 million during the second quarter.
In addition to free cash flow of $700 million, Devon also received $2.4 billion of pre-tax proceeds from its African divestitures in the second quarter. Utilizing free cash flow, proceeds of the divestitures and cash on hand, the company deployed $2.6 billion to retire commercial paper and other short-term borrowings and to repurchase over two million shares of its common stock. In the first seven months of 2008, Devon repurchased 5.7 million shares of its common stock at a cost of $590 million.
Devon also redeemed its $150 million 6.49 percent Series A Cumulative Preferred Stock in the second quarter. Cash and short-term investments were $1.8 billion at June 30, 2008.
Net debt as a percentage of adjusted capitalization decreased to 11 percent at June 30, 2008. Reconciliations of cash flow before balance sheet changes, free cash flow, net debt and adjusted capitalization, which are non-GAAP measures, are provided in this release.
Accounting for Derivative Instruments
Devon accounts for derivative instruments using mark-to-market accounting. As a result, for each reporting period the company recognizes in earnings the unrealized changes in the fair values of its derivative instruments. A second-quarter unrealized loss on derivative instruments was the result of rising oil and natural gas prices during the quarter. The company could record unrealized gains or losses on oil and natural gas derivative instruments in subsequent quarters depending 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 second quarter of 2008 were as follows:
Items affecting continuing operations-

•	 	A change in fair value of non-oil and gas derivative financial instruments increased second-quarter earnings by $40 million pre-tax ($25 million after tax).	

•	 	An unrealized loss on oil and natural gas derivative financial instruments decreased second-quarter earnings by $912 million pre-tax ($584 million after tax).	

•	 	Income tax expense related to the repatriation of cash from outside the United States and a related change in an income tax election decreased second-quarter after-tax earnings by $312 million.	

•	 	A modification to the company’s stock compensation vesting policy decreased second-quarter earnings by $27 million pre-tax ($17 million after tax).	
Items affecting discontinued operations-

•	 	Divestitures of assets in Africa resulted in a second-quarter 2008 gain of $736 million pre-tax ($647 million after tax).	

•	 	The decisions to exit Africa generated other financial benefits that increased second-quarter earnings by $21 million pre-tax ($11 million after tax).	
 Page 3 of 13 

 

The following tables summarize the effects of these items on second-quarter earnings and income taxes.
Summary of Items Typically Excluded by Securities Analysts (in millions)
 Quarter Ended June 30, 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing Operations	 	Pre-tax	 	 	 	 	 	 	 	 	 	 	 	 	 	 	After tax	 	 	Cash Flow Before	 	
 	 	Earnings	 	 	Income Tax Effect	 	 	Earnings	 	 	Balance Sheet	 	
 	 	Effect	 	 	Current	 	 	Deferred	 	 	Total	 	 	Effect	 	 	Changes Effect	 	
Change in fair value of non-oil and gas derivative instruments	 	$	40	 	 	 	—	 	 	 	15	 	 	 	15	 	 	 	25	 	 	 	—	 	
Unrealized loss on oil and gas derivative financial instruments	 	 	(912	)	 	 	—	 	 	 	(328	)	 	 	(328	)	 	 	(584	)	 	 	—	 	
Taxes on repatriation and tax policy elections	 	 	—	 	 	 	295	 	 	 	17	 	 	 	312	 	 	 	(312	)	 	 	(295	)	
Stock compensation vesting	 	 	(27	)	 	 	—	 	 	 	(10	)	 	 	(10	)	 	 	(17	)	 	 	—	 	
 	
Totals	 	$	(899	)	 	 	295	 	 	 	(306	)	 	 	(11	)	 	 	(888	)	 	 	(295	)	

Discontinued Operations	 	Pre-tax	 	 	 	 	 	 	 	 	 	 	 	 	 	 	After tax	 	 	Cash Flow Before	 	
 	 	Earnings	 	 	Income Tax Effect	 	 	Earnings	 	 	Balance Sheet	 	
 	 	Effect	 	 	Current	 	 	Deferred	 	 	Total	 	 	Effect	 	 	Changes Effect	 	
Gain on sale of West African assets	 	 	736	 	 	 	518	 	 	 	(429	)	 	 	89	 	 	 	647	 	 	 	—	 	
Financial benefits of decision to exit Africa	 	 	21	 	 	 	—	 	 	 	10	 	 	 	10	 	 	 	11	 	 	 	—	 	
 	
Totals	 	$	757	 	 	 	518	 	 	 	(419	)	 	 	99	 	 	 	658	 	 	 	—	 	
 	
In aggregate, these items decreased second-quarter 2008 net earnings by $230 million, or 52 cents per common share (51 cents per diluted share). These items and their associated tax effects decreased second-quarter 2008 cash flow before balance sheet changes by $295 million.
Conference Call to be Webcast Today
Devon will discuss its second-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 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 www.devonenergy.com.
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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
PRODUCTION (net of royalties)	 	Quarter Ended	 	 	Six Months Ended	 	
Excludes discontinued operations	 	June 30,	 	 	June 30,	 	
 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
 	
Total Period Production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Natural Gas (Bcf)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	162.3	 	 	 	135.9	 	 	 	314.8	 	 	 	263.6	 	
U.S. Offshore	 	 	14.2	 	 	 	18.9	 	 	 	32.5	 	 	 	37.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	176.5	 	 	 	154.8	 	 	 	347.3	 	 	 	301.1	 	
Canada	 	 	53.0	 	 	 	57.0	 	 	 	104.7	 	 	 	112.3	 	
International	 	 	0.4	 	 	 	0.5	 	 	 	1.0	 	 	 	0.8	 	
 	
Total Natural Gas	 	 	229.9	 	 	 	212.3	 	 	 	453.0	 	 	 	414.2	 	
 	
Oil (MMBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	2.8	 	 	 	2.9	 	 	 	5.7	 	 	 	5.7	 	
U.S. Offshore	 	 	1.8	 	 	 	2.0	 	 	 	3.6	 	 	 	3.7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	4.6	 	 	 	4.9	 	 	 	9.3	 	 	 	9.4	 	
Canada	 	 	5.3	 	 	 	4.0	 	 	 	9.9	 	 	 	7.5	 	
International	 	 	3.3	 	 	 	5.5	 	 	 	8.1	 	 	 	10.8	 	
 	
Total Oil	 	 	13.2	 	 	 	14.4	 	 	 	27.3	 	 	 	27.7	 	
 	
Natural Gas Liquids (MMBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	5.8	 	 	 	5.1	 	 	 	11.6	 	 	 	9.9	 	
U.S. Offshore	 	 	0.2	 	 	 	0.2	 	 	 	0.4	 	 	 	0.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	6.0	 	 	 	5.3	 	 	 	12.0	 	 	 	10.2	 	
Canada	 	 	1.0	 	 	 	1.1	 	 	 	1.9	 	 	 	2.2	 	
International	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	
Total Natural Gas Liquids	 	 	7.0	 	 	 	6.4	 	 	 	13.9	 	 	 	12.4	 	
 	
Oil Equivalent (MMBoe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	35.7	 	 	 	30.7	 	 	 	69.7	 	 	 	59.5	 	
U.S. Offshore	 	 	4.4	 	 	 	5.3	 	 	 	9.4	 	 	 	10.3	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	40.1	 	 	 	36.0	 	 	 	79.1	 	 	 	69.8	 	
Canada	 	 	15.1	 	 	 	14.6	 	 	 	29.4	 	 	 	28.4	 	
International	 	 	3.3	 	 	 	5.6	 	 	 	8.3	 	 	 	10.9	 	
 	
Total Oil Equivalent	 	 	58.5	 	 	 	56.2	 	 	 	116.8	 	 	 	109.1	 	
 	
Average Daily Production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Natural Gas (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	1,783.0	 	 	 	1,493.7	 	 	 	1,729.7	 	 	 	1,456.3	 	
U.S. Offshore	 	 	156.1	 	 	 	207.6	 	 	 	178.7	 	 	 	207.0	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	1,939.1	 	 	 	1,701.3	 	 	 	1,908.4	 	 	 	1,663.3	 	
Canada	 	 	582.6	 	 	 	626.2	 	 	 	575.0	 	 	 	620.7	 	
International	 	 	4.8	 	 	 	5.6	 	 	 	5.4	 	 	 	4.3	 	
 	
Total Natural Gas	 	 	2,526.5	 	 	 	2,333.1	 	 	 	2,488.8	 	 	 	2,288.3	 	
 	
Oil (MBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	30.9	 	 	 	31.5	 	 	 	31.0	 	 	 	31.1	 	
U.S. Offshore	 	 	19.9	 	 	 	22.0	 	 	 	19.9	 	 	 	20.5	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	50.8	 	 	 	53.5	 	 	 	50.9	 	 	 	51.6	 	
Canada	 	 	58.0	 	 	 	44.0	 	 	 	54.7	 	 	 	41.5	 	
International	 	 	35.8	 	 	 	60.9	 	 	 	44.6	 	 	 	59.8	 	
 	
Total Oil	 	 	144.6	 	 	 	158.4	 	 	 	150.2	 	 	 	152.9	 	
 	
Natural Gas Liquids (MBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	64.1	 	 	 	56.4	 	 	 	63.7	 	 	 	54.8	 	
U.S. Offshore	 	 	2.1	 	 	 	2.2	 	 	 	2.0	 	 	 	1.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	66.2	 	 	 	58.6	 	 	 	65.7	 	 	 	56.6	 	
Canada	 	 	10.7	 	 	 	11.7	 	 	 	10.8	 	 	 	12.0	 	
International	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	
Total Natural Gas Liquids	 	 	76.9	 	 	 	70.3	 	 	 	76.5	 	 	 	68.6	 	
 	
Oil Equivalent (MBoe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
U.S. Onshore	 	 	392.2	 	 	 	336.9	 	 	 	382.9	 	 	 	328.7	 	
U.S. Offshore	 	 	48.0	 	 	 	58.8	 	 	 	51.7	 	 	 	56.8	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total U.S.	 	 	440.2	 	 	 	395.7	 	 	 	434.6	 	 	 	385.5	 	
Canada	 	 	165.8	 	 	 	160.1	 	 	 	161.3	 	 	 	157.0	 	
International	 	 	36.6	 	 	 	61.8	 	 	 	45.6	 	 	 	60.5	 	
 	
Total Oil Equivalent	 	 	642.6	 	 	 	617.6	 	 	 	641.5	 	 	 	603.0	 	
 	
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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
BENCHMARK PRICES	 	Quarter Ended	 	 	Six Months Ended	 	
(average prices)	 	June 30,	 	 	June 30,	 	
 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
Natural Gas ($/Mcf) — Henry Hub	 	$	10.94	 	 	$	7.55	 	 	$	9.49	 	 	$	7.16	 	
Oil ($/Bbl) — West Texas Intermediate (Cushing)	 	$	124.28	 	 	$	65.08	 	 	$	110.98	 	 	$	61.71	 	
 	
REALIZED PRICES
(Excludes the effects of unrealized gains and losses from hedging)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Quarter Ended June 30, 2008	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	
 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Bbl)	 	 	(Per Boe)	 	
 	
U.S. Onshore	 	$	120.69	 	 	$	9.40	 	 	$	50.56	 	 	$	60.51	 	
U.S. Offshore	 	$	125.24	 	 	$	11.43	 	 	$	53.63	 	 	$	91.38	 	
Total U.S.	 	$	122.47	 	 	$	9.56	 	 	$	50.66	 	 	$	63.88	 	
Canada	 	$	94.35	 	 	$	9.76	 	 	$	75.10	 	 	$	72.14	 	
International	 	$	119.87	 	 	$	11.00	 	 	$	—	 	 	$	118.70	 	
 	
Realized price without hedges	 	$	110.56	 	 	$	9.61	 	 	$	54.08	 	 	$	69.14	 	
Cash settlements	 	$	(0.01	)	 	$	(1.32	)	 	$	—	 	 	$	(5.18	)	
 	
Realized price, including cash settlements	 	$	110.55	 	 	$	8.29	 	 	$	54.08	 	 	$	63.96	 	

Quarter Ended June 30, 2007	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	
 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Bbl)	 	 	(Per Boe)	 	
 	
U.S. Onshore	 	$	60.82	 	 	$	6.14	 	 	$	33.35	 	 	$	38.52	 	
U.S. Offshore	 	$	65.35	 	 	$	7.82	 	 	$	31.14	 	 	$	53.24	 	
Total U.S.	 	$	62.68	 	 	$	6.35	 	 	$	33.26	 	 	$	40.71	 	
Canada	 	$	46.32	 	 	$	6.66	 	 	$	43.82	 	 	$	41.99	 	
International	 	$	67.57	 	 	$	6.19	 	 	$	—	 	 	$	67.11	 	
 	
Realized price without hedges	 	$	60.01	 	 	$	6.43	 	 	$	35.03	 	 	$	43.68	 	
Cash settlements	 	$	—	 	 	$	0.03	 	 	$	—	 	 	$	0.10	 	
 	
Realized price, including cash settlements	 	$	60.01	 	 	$	6.46	 	 	$	35.03	 	 	$	43.78	 	

Six Months Ended June 30, 2008	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	
 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Bbl)	 	 	(Per Boe)	 	
 	
U.S. Onshore	 	$	107.15	 	 	$	8.26	 	 	$	47.65	 	 	$	53.91	 	
U.S. Offshore	 	$	112.07	 	 	$	9.94	 	 	$	51.77	 	 	$	79.52	 	
Total U.S.	 	$	109.08	 	 	$	8.42	 	 	$	47.78	 	 	$	56.95	 	
Canada	 	$	84.16	 	 	$	8.66	 	 	$	68.86	 	 	$	64.01	 	
International	 	$	105.63	 	 	$	9.56	 	 	$	—	 	 	$	104.68	 	
 	
Realized price without hedges	 	$	98.98	 	 	$	8.48	 	 	$	50.76	 	 	$	62.12	 	
Cash settlements	 	$	—	 	 	$	(0.69	)	 	$	—	 	 	$	(2.67	)	
 	
Realized price, including cash settlements	 	$	98.98	 	 	$	7.79	 	 	$	50.76	 	 	$	59.45	 	

Six Months Ended June 30, 2007	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	
 	 	(Per Bbl)	 	 	(Per Mcf)	 	 	(Per Bbl)	 	 	(Per Boe)	 	
 	
U.S. Onshore	 	$	56.02	 	 	$	6.04	 	 	$	30.54	 	 	$	37.15	 	
U.S. Offshore	 	$	60.16	 	 	$	7.51	 	 	$	30.52	 	 	$	50.05	 	
Total U.S.	 	$	57.67	 	 	$	6.22	 	 	$	30.54	 	 	$	39.05	 	
Canada	 	$	45.01	 	 	$	6.55	 	 	$	40.37	 	 	$	40.88	 	
International	 	$	62.76	 	 	$	5.16	 	 	$	—	 	 	$	62.39	 	
 	
Realized price without hedges	 	$	56.22	 	 	$	6.31	 	 	$	32.26	 	 	$	41.87	 	
Cash settlements	 	$	—	 	 	$	0.04	 	 	$	—	 	 	$	0.16	 	
 	
Realized price, including cash settlements	 	$	56.22	 	 	$	6.35	 	 	$	32.26	 	 	$	42.03	 	
 	
 Page 6 of 13 

 

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
CONSOLIDATED STATEMENTS OF OPERATIONS	 	Quarter Ended	 	 	Six Months Ended	 	
(in millions, except per share amounts)	 	June 30,	 	 	June 30,	 	
 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
 	
Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Oil sales	 	$	1,455	 	 	$	865	 	 	$	2,705	 	 	$	1,556	 	
Gas sales	 	 	2,210	 	 	 	1,366	 	 	 	3,840	 	 	 	2,612	 	
NGL sales	 	 	379	 	 	 	224	 	 	 	707	 	 	 	401	 	
Net (loss) gain on oil and gas derivative financial instruments	 	 	(1,215	)	 	 	14	 	 	 	(2,003	)	 	 	(6	)	
Marketing and midstream revenues	 	 	719	 	 	 	460	 	 	 	1,274	 	 	 	839	 	
 	
Total revenues	 	 	3,548	 	 	 	2,929	 	 	 	6,523	 	 	 	5,402	 	
 	
Expenses and other income, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Lease operating expenses	 	 	537	 	 	 	439	 	 	 	1,043	 	 	 	869	 	
Production taxes	 	 	176	 	 	 	90	 	 	 	310	 	 	 	170	 	
Marketing and midstream operating costs and expenses	 	 	515	 	 	 	341	 	 	 	897	 	 	 	611	 	
Depreciation, depletion and amortization of oil and gas properties	 	 	762	 	 	 	645	 	 	 	1,499	 	 	 	1,232	 	
Depreciation and amortization of non-oil and gas properties	 	 	62	 	 	 	49	 	 	 	119	 	 	 	95	 	
Accretion of asset retirement obligation	 	 	22	 	 	 	18	 	 	 	44	 	 	 	36	 	
General and administrative expenses	 	 	180	 	 	 	113	 	 	 	328	 	 	 	232	 	
Interest expense	 	 	90	 	 	 	107	 	 	 	192	 	 	 	217	 	
Change in fair value of non-oil and gas derivative financial instruments	 	 	(40	)	 	 	(10	)	 	 	(24	)	 	 	(9	)	
Other income, net	 	 	(17	)	 	 	(17	)	 	 	(38	)	 	 	(43	)	
 	
Total expenses and other income, net	 	 	2,287	 	 	 	1,775	 	 	 	4,370	 	 	 	3,410	 	
 	
Earnings from continuing operations before income tax expense	 	 	1,261	 	 	 	1,154	 	 	 	2,153	 	 	 	1,992	 	
 	
Income tax expense	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Current	 	 	414	 	 	 	174	 	 	 	517	 	 	 	363	 	
Deferred	 	 	253	 	 	 	156	 	 	 	391	 	 	 	231	 	
 	
Total income tax expense	 	 	667	 	 	 	330	 	 	 	908	 	 	 	594	 	
 	
Earnings from continuing operations	 	 	594	 	 	 	824	 	 	 	1,245	 	 	 	1,398	 	
 	
Discontinued operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Earnings from discontinued operations before income tax expense	 	 	851	 	 	 	128	 	 	 	1,040	 	 	 	265	 	
Income tax expense	 	 	144	 	 	 	48	 	 	 	235	 	 	 	108	 	
 	
Earnings from discontinuing operations	 	 	707	 	 	 	80	 	 	 	805	 	 	 	157	 	
 	
Net earnings	 	 	1,301	 	 	 	904	 	 	 	2,050	 	 	 	1,555	 	
Preferred stock dividends	 	 	3	 	 	 	3	 	 	 	5	 	 	 	5	 	
 	
Net earnings applicable to common stockholders	 	$	1,298	 	 	$	901	 	 	$	2,045	 	 	$	1,550	 	

Basic net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings from continuing operations	 	$	1.33	 	 	$	1.84	 	 	$	2.79	 	 	$	3.13	 	
Earnings from discontinued operations	 	$	1.58	 	 	$	0.18	 	 	$	1.80	 	 	$	0.35	 	
 	
Net earnings	 	$	2.91	 	 	$	2.02	 	 	$	4.59	 	 	$	3.48	 	

Diluted net earnings per share	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings from continuing operations	 	$	1.31	 	 	$	1.82	 	 	$	2.76	 	 	$	3.09	 	
Earnings from discontinued operations	 	$	1.57	 	 	$	0.18	 	 	$	1.79	 	 	$	0.35	 	
 	
Net earnings	 	$	2.88	 	 	$	2.00	 	 	$	4.55	 	 	$	3.44	 	

Weighted average common shares outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	 	446	 	 	 	446	 	 	 	445	 	 	 	445	 	
Diluted	 	 	450	 	 	 	450	 	 	 	450	 	 	 	450	 	
 Page 7 of 13 

 

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED BALANCE SHEETS
 	 	 	 	 	 	 	 	 	
(in millions)	 	June 30,	 	December 31,	
 	 	2008	 	2007	
Assets	 	 	 	 	 	(Audited)	
 	
Current assets	 	 	 	 	 	 	 	 	
 	
Cash and cash equivalents	 	$	1,837	 	 	$	1,364	 	
Short-term investments, at fair value	 	 	1	 	 	 	372	 	
Accounts receivable	 	 	2,460	 	 	 	1,779	 	
Deferred income taxes	 	 	775	 	 	 	44	 	
Current assets held for sale	 	 	105	 	 	 	120	 	
Other current assets	 	 	255	 	 	 	235	 	
 	
Total current assets	 	 	5,433	 	 	 	3,914	 	
 	
Property and equipment, at cost, based on the full cost method of accounting for oil and gas properties ($3,741 and $3,417 excluded from amortization in 2008 and 2007, respectively)	 	 	51,953	 	 	 	48,473	 	
Less accumulated depreciation, depletion and amortization	 	 	21,769	 	 	 	20,394	 	
 	
Net property and equipment	 	 	30,184	 	 	 	28,079	 	
 	
Investment in Chevron Corporation common stock, at fair value	 	 	1,406	 	 	 	1,324	 	
Goodwill	 	 	6,081	 	 	 	6,172	 	
Long-term assets held for sale	 	 	84	 	 	 	1,512	 	
Other long-term assets, including $126 million at fair value in 2008	 	 	592	 	 	 	455	 	
 	
Total Assets	 	$	43,780	 	 	$	41,456	 	
 	
Liabilities and Stockholders’ Equity	 	 	 	 	 	 	 	 	
 	
Current liabilities	 	 	 	 	 	 	 	 	
 	
Accounts payable — trade	 	$	1,525	 	 	$	1,360	 	
Revenues and royalties due to others	 	 	966	 	 	 	578	 	
Income taxes payable	 	 	306	 	 	 	97	 	
Debentures exchangeable into shares of Chevron Corporation common stock	 	 	621	 	 	 	—	 	
Other short-term debt	 	 	—	 	 	 	1,004	 	
Derivative financial instruments, at fair value	 	 	2,125	 	 	 	—	 	
Current portion of asset retirement obligation, at fair value	 	 	63	 	 	 	82	 	
Current liabilities associated with assets held for sale	 	 	16	 	 	 	145	 	
Accrued expenses and other current liabilities	 	 	410	 	 	 	391	 	
 	
Total current liabilities	 	 	6,032	 	 	 	3,657	 	
 	
Debentures exchangeable into shares of Chevron Corporation common stock	 	 	—	 	 	 	641	 	
Other long-term debt	 	 	4,829	 	 	 	6,283	 	
Derivative financial instruments, at fair value	 	 	83	 	 	 	488	 	
Asset retirement obligation, at fair value	 	 	1,430	 	 	 	1,236	 	
Long-term liabilities associated with assets held for sale	 	 	24	 	 	 	404	 	
Other long-term liabilities	 	 	905	 	 	 	699	 	
Deferred income taxes	 	 	7,044	 	 	 	6,042	 	
 	
Stockholders’ equity	 	 	 	 	 	 	 	 	
 	
Preferred stock	 	 	—	 	 	 	1	 	
Common stock	 	 	44	 	 	 	44	 	
Additional paid-in capital	 	 	6,591	 	 	 	6,743	 	
Retained earnings	 	 	14,717	 	 	 	12,813	 	
Accumulated other comprehensive income	 	 	2,131	 	 	 	2,405	 	
Treasury stock	 	 	(50	)	 	 	—	 	
 	
Total Stockholders’ Equity	 	 	23,433	 	 	 	22,006	 	
 	
Total Liabilities and Stockholders’ Equity	 	$	43,780	 	 	$	41,456	 	
 	
Common Shares Outstanding	 	 	445	 	 	 	444	 	
 	
 Page 8 of 13 

 

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
 	 	 	 	 	 	 	 	 	
(in millions)	 	Six Months Ended June 30,	
 	 	2008	 	2007	
 	
Cash Flows From Operating Activities	 	 	 	 	 	 	 	 	
 	
Net earnings	 	$	2,050	 	 	$	1,555	 	
Earnings from discontinued operations, net of tax	 	 	(805	)	 	 	(157	)	
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities:	 	 	 	 	 	 	 	 	
Depreciation, depletion and amortization	 	 	1,618	 	 	 	1,327	 	
Deferred income tax expense	 	 	391	 	 	 	231	 	
Net unrealized loss on oil and gas derivative financial instruments	 	 	1,692	 	 	 	23	 	
Other noncash charges	 	 	122	 	 	 	71	 	
Changes in assets and liabilities:	 	 	 	 	 	 	 	 	
(Increase) decrease in:	 	 	 	 	 	 	 	 	
Accounts receivable	 	 	(604	)	 	 	32	 	
Other current assets	 	 	(44	)	 	 	(27	)	
Other long-term assets	 	 	(40	)	 	 	(46	)	
Increase (decrease) in:	 	 	 	 	 	 	 	 	
Accounts payable	 	 	120	 	 	 	64	 	
Revenues and royalties due to others	 	 	348	 	 	 	(17	)	
Income taxes payable	 	 	136	 	 	 	178	 	
Other current liabilities	 	 	(99	)	 	 	(96	)	
Other long-term liabilities	 	 	181	 	 	 	14	 	
 	
Cash provided by operating activities — continuing operations	 	 	5,066	 	 	 	3,152	 	
Cash provided by operating activities — discontinued operations	 	 	120	 	 	 	197	 	
 	
Net cash provided by operating activities	 	 	5,186	 	 	 	3,349	 	

 	
Cash Flows From Investing Activities	 	 	 	 	 	 	 	 	
 	
Proceeds from sales of property and equipment	 	 	108	 	 	 	37	 	
Capital expenditures	 	 	(3,867	)	 	 	(2,990	)	
Purchases of short-term investments	 	 	(50	)	 	 	(589	)	
Redemptions of short-term and long-term investments	 	 	295	 	 	 	848	 	
 	
Cash used in investing activities — continuing operations	 	 	(3,514	)	 	 	(2,694	)	
Cash used in investing activities — discontinued operations	 	 	1,709	 	 	 	(115	)	
 	
Net cash used in investing activities	 	 	(1,805	)	 	 	(2,809	)	

 	
Cash Flows From Financing Activities	 	 	 	 	 	 	 	 	
 	
Credit facility repayments	 	 	(3,070	)	 	 	—	 	
Credit facility borrowings	 	 	1,620	 	 	 	—	 	
Net commercial paper repayments	 	 	(1,004	)	 	 	(183	)	
Principal payments on debt	 	 	(47	)	 	 	—	 	
Preferred stock redemption	 	 	(150	)	 	 	—	 	
Proceeds from stock options exercises	 	 	104	 	 	 	60	 	
Repurchases of common stock	 	 	(252	)	 	 	(10	)	
Dividends paid on common and preferred stock	 	 	(146	)	 	 	(129	)	
Excess tax benefits related to share-based compensation	 	 	55	 	 	 	17	 	
 	
Net cash used in financing activities	 	 	(2,890	)	 	 	(245	)	

Effect of exchange rate changes on cash	 	 	(19	)	 	 	16	 	
 	
Net increase in cash and cash equivalents	 	 	472	 	 	 	311	 	
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)	 	$	1,845	 	 	$	1,067	 	

Supplementary cash flow data:	 	 	 	 	 	 	 	 	
Interest paid (net of capitalized interest)	 	$	189	 	 	$	202	 	
Income taxes paid — continuing and discontinued operations	 	$	826	 	 	$	159	 	
 Page 9 of 13 

 

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
DRILLING ACTIVITY	 	Quarter Ended	 	Six Months Ended	
 	 	June 30,	 	June 30,	
 	 	2008	 	2007	 	2008	 	2007	
 	
Exploration Wells Drilled	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
U.S.	 	 	8	 	 	 	5	 	 	 	17	 	 	 	27	 	
Canada	 	 	7	 	 	 	9	 	 	 	58	 	 	 	64	 	
International	 	 	1	 	 	 	—	 	 	 	7	 	 	 	1	 	
 	
Total	 	 	16	 	 	 	14	 	 	 	82	 	 	 	92	 	
 	
Exploration Wells Success Rate	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
U.S.	 	 	88	%	 	 	100	%	 	 	71	%	 	 	81	%	
Canada	 	 	86	%	 	 	67	%	 	 	95	%	 	 	95	%	
International	 	 	0	%	 	 	—	 	 	 	0	%	 	 	0	%	
 	
Total	 	 	81	%	 	 	91	%	 	 	82	%	 	 	90	%	
 	
Development Wells Drilled	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
U.S.	 	 	405	 	 	 	360	 	 	 	777	 	 	 	624	 	
Canada	 	 	61	 	 	 	54	 	 	 	259	 	 	 	306	 	
International	 	 	12	 	 	 	6	 	 	 	22	 	 	 	9	 	
 	
Total	 	 	478	 	 	 	420	 	 	 	1,058	 	 	 	939	 	
 	
Development Wells Success Rate	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
U.S.	 	 	98	%	 	 	98	%	 	 	98	%	 	 	98	%	
Canada	 	 	100	%	 	 	100	%	 	 	100	%	 	 	100	%	
International	 	 	92	%	 	 	100	%	 	 	91	%	 	 	100	%	
 	
Total	 	 	98	%	 	 	99	%	 	 	98	%	 	 	99	%	
 	
Total Wells Drilled	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
U.S.	 	 	413	 	 	 	365	 	 	 	794	 	 	 	651	 	
Canada	 	 	68	 	 	 	63	 	 	 	317	 	 	 	370	 	
International	 	 	13	 	 	 	6	 	 	 	29	 	 	 	10	 	
 	
Total	 	 	494	 	 	 	434	 	 	 	1,140	 	 	 	1,031	 	
 	
Total Wells Success Rate	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
U.S.	 	 	98	%	 	 	98	%	 	 	98	%	 	 	98	%	
Canada	 	 	99	%	 	 	95	%	 	 	99	%	 	 	99	%	
International	 	 	85	%	 	 	100	%	 	 	69	%	 	 	90	%	
 	
Total	 	 	98	%	 	 	98	%	 	 	97	%	 	 	98	%	
 	
COMPANY OPERATED RIGS
 	 	 	 	 	 	 	 	 	
 	 	June 30,	
 	 	2008	 	2007	
 	
Number of Company Operated Rigs Running	 	 	 	 	 	 	 	 	
 	
U.S.	 	 	79	 	 	 	77	 	
Canada	 	 	12	 	 	 	10	 	
International	 	 	1	 	 	 	1	 	
 	
Total	 	 	92	 	 	 	88	 	
 	
CAPITAL EXPENDITURES (in millions)
 Quarter Ended June 30, 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	U.S. Onshore	 	U.S. Offshore	 	Canada	 	International	 	Total	
 	
Capital Expenditures	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Exploration	 	$	128	 	 	 	259	 	 	 	52	 	 	 	71	 	 	$	510	 	
Development	 	 	956	 	 	 	112	 	 	 	101	 	 	 	56	 	 	 	1,225	 	
 	
Exploration and development capital	 	$	1,084	 	 	 	371	 	 	 	153	 	 	 	127	 	 	$	1,735	 	
Capitalized G&A	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	100	 	
Capitalized interest	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	22	 	
Discontinued operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	9	 	
Midstream capital	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	99	 	
Other capital	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	30	 	
 	
Total Capital Expenditures	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,995	 	
 	
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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
CAPITAL EXPENDITURES (in millions)
Six Months Ended June 30, 2008
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	U.S. Onshore	 	U.S. Offshore	 	Canada	 	International	 	Total	
 	
Capital Expenditures	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Exploration	 	$	181	 	 	 	404	 	 	 	183	 	 	 	142	 	 	$	910	 	
Development	 	 	1,821	 	 	 	200	 	 	 	433	 	 	 	115	 	 	 	2,569	 	
 	
Exploration and development capital	 	$	2,002	 	 	 	604	 	 	 	616	 	 	 	257	 	 	$	3,479	 	
Capitalized G&A	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	199	 	
Capitalized interest	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	42	 	
Discontinued operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	23	 	
Midstream capital	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	198	 	
Other capital	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	46	 	
 	
Total Capital Expenditures	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	3,987	 	
 	
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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
PRODUCTION FROM DISCONTINUED OPERATIONS	 	Quarter Ended	 	 	Six Months Ended	 	
 	 	June 30,	 	 	June 30,	 	
 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
 	
Total Period Production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Oil (MMBbls)	 	 	1.1	 	 	 	3.2	 	 	 	3.2	 	 	 	6.3	 	
Natural Gas (Bcf)	 	 	1.1	 	 	 	1.2	 	 	 	2.2	 	 	 	2.6	 	
 	
Total Oil Equivalent (MMBoe)	 	 	1.3	 	 	 	3.4	 	 	 	3.6	 	 	 	6.7	 	

STATEMENTS OF DISCONTINUED OPERATIONS	 	Quarter Ended	 	 	Six Months Ended	 	
(in millions)	 	June 30,	 	 	June 30,	 	
 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
 	
Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Oil sales	 	$	122	 	 	$	205	 	 	$	318	 	 	$	375	 	
Gas sales	 	 	5	 	 	 	4	 	 	 	9	 	 	 	8	 	
Marketing and midstream revenues	 	 	—	 	 	 	6	 	 	 	5	 	 	 	7	 	
 	
Total revenues	 	 	127	 	 	 	215	 	 	 	332	 	 	 	390	 	
 	
Expenses and other income, net	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Lease operating expenses	 	 	10	 	 	 	19	 	 	 	24	 	 	 	39	 	
Marketing and midstream operating costs and expenses	 	 	2	 	 	 	2	 	 	 	3	 	 	 	3	 	
Depreciation, depletion and amortization of oil and gas properties	 	 	—	 	 	 	2	 	 	 	—	 	 	 	18	 	
Accretion of asset retirement obligation	 	 	—	 	 	 	1	 	 	 	1	 	 	 	2	 	
Gain on sale of oil and gas properties	 	 	(736	)	 	 	—	 	 	 	(736	)	 	 	—	 	
Reduction of carrying value of oil and gas properties	 	 	—	 	 	 	63	 	 	 	—	 	 	 	63	 	
 	
Total expenses and other income, net	 	 	(724	)	 	 	87	 	 	 	(708	)	 	 	125	 	
 	
Earnings before income tax expense	 	 	851	 	 	 	128	 	 	 	1,040	 	 	 	265	 	
 	
Income tax expense (benefit)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	
Current	 	 	574	 	 	 	71	 	 	 	641	 	 	 	115	 	
Deferred	 	 	(430	)	 	 	(23	)	 	 	(406	)	 	 	(7	)	
 	
Total income tax expense	 	 	144	 	 	 	48	 	 	 	235	 	 	 	108	 	
 	
Earnings from discontinued operations	 	$	707	 	 	$	80	 	 	$	805	 	 	$	157	 	
 	
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DEVON ENERGY CORPORATION
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 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 used by certain securities analysts as a measure of Devon’s financial results.
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
RECONCILIATION TO GAAP INFORMATION	 	Quarter Ended	 	 	Six Months Ended	 	
(in millions)	 	June 30,	 	 	June 30,	 	
 	 	2008	 	 	2007	 	 	2008	 	 	2007	 	
 	
Net Cash Provided By Operating Activities (GAAP)	 	$	2,931	 	 	$	1,832	 	 	$	5,186	 	 	$	3,349	 	
 	
Changes in assets and liabilities — continuing operations	 	 	(365	)	 	 	(59	)	 	 	2	 	 	 	(102	)	
Changes in assets and liabilities — discontinued operations	 	 	124	 	 	 	43	 	 	 	61	 	 	 	37	 	
 	
Cash flow before balance sheet changes (Non-GAAP)	 	$	2,690	 	 	$	1,816	 	 	$	5,249	 	 	$	3,284	 	
 	
Less:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Capital expenditures	 	 	1,995	 	 	 	1,428	 	 	 	3,987	 	 	 	3,005	 	
 	
Free cash flow (Non-GAAP)	 	$	695	 	 	$	388	 	 	$	1,262	 	 	$	279	 	
 	
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 short-term investments and debentures exchangeable into shares of Chevron Corporation common stock. Devon believes that because cash and short-term investments can be used to repay indebtedness, netting cash and short-term investments against debt provides a clearer picture of the future demands on cash to repay debt. Devon also believes that excluding debentures exchangeable into shares of Chevron Corporation common stock provides a clearer view of net debt. Devon owns 14.2 million shares of Chevron Corporation common stock. The majority of these shares are on deposit with an exchange agent for the possible exchange on the $621 million principal amount of exchangeable debentures.
 	 	 	 	 	 	 	 	 	
RECONCILIATION TO GAAP INFORMATION	 	 	 	
(in millions)	 	 	 	
 	 	June 30,	 	
 	 	2008	 	 	2007	 	
 	
Total debt (GAAP)	 	$	5,450	 	 	$	7,596	 	
Adjustments:	 	 	 	 	 	 	 	 	
Cash and short-term investments	 	 	(1,838	)	 	 	(1,357	)	
Debentures exchangeable into Chevron stock	 	 	(621	)	 	 	(737	)	
 	
Net Debt (Non-GAAP)	 	$	2,991	 	 	$	5,502	 	

 	
Total debt	 	$	5,450	 	 	$	7,596	 	
Stockholders’ equity	 	 	23,433	 	 	 	19,686	 	
 	
Total Capitalization (GAAP)	 	$	28,883	 	 	$	27,282	 	

 	
Net debt	 	$	2,991	 	 	$	5,502	 	
Stockholders’ equity	 	 	23,433	 	 	 	19,686	 	
 	
Adjusted Capitalization (Non-GAAP)	 	$	26,424	 	 	$	25,188	 	
 	
 Page 13 of 13