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 report): February 5, 2004
DEVON ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)

DELAWARE	 	000-30176	 	73-1567067	
(State or Other Jurisdiction of	 	(Commission File Number)	 	(IRS Employer	
Incorporation or Organization)	 	 	 	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

 
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
      (c) Exhibits
           99.1 Devon Energy Corporation Press Release dated February 5, 2004. 
Item 12. Results of Operations and Financial Condition
     Devon Energy Corporation hereby furnishes the information set forth in its Press Release, dated February 5, 2004, announcing fourth quarter and year-end results, a copy of which is attached as Exhibit 99.1. 
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: February 5, 2004	 	 	 	 	 	 	
Page 2

EXHIBIT 99.1

	 	20 North Broadway	 	Telephone: (405) 235-3611	
 	 	Oklahoma City, Oklahoma 73102-8260	 	Fax: (405) 552-4667	
NEWS RELEASE

Investor contact:	 	Zack Hager	
 	 	(405) 552-4526	
 	 	 	
Media contact:	 	Brian Engel	
 	 	(405) 228-7750	
DEVON ENERGY REPORTS RECORD 2003 OIL AND GAS PRODUCTION, EARNINGS,
EARNINGS PER SHARE and YEAR-END RESERVES
OKLAHOMA CITY — February 5, 2004 — Devon Energy Corporation (AMEX: DVN, TSX: NSX) today reported that net earnings climbed more than 1,500 percent, making 2003 the most profitable year in the company’s history. Devon reported net earnings of $1.7 billion, or $8.32 per common share ($8.07 per diluted common share) for the year ended December 31, 2003. Devon’s 2002 net earnings were $104 million, or 61 cents per diluted common share. A 21 percent increase in oil and natural gas production and sharply higher oil and gas prices drove the earnings increase.
     For the fourth quarter of 2003, the company reported net earnings of $543 million, or $2.32 per common share ($2.25 per diluted common share). These results included $218 million attributable to lower Canadian income tax rates partially offset by a $74 million after-tax reduction in the carrying value of miscellaneous international oil and gas properties. Devon reported net earnings of $84 million, or 52 cents per diluted common share in the fourth quarter of 2002.
Ocean Merger Topped a Year of Achievements
     The most significant event for the company in 2003 was the merger with Ocean Energy in April. The integration of the two companies was substantially accomplished by year-end. Devon also reported several notable operational accomplishments in 2003:

•	 	The company drilled 2,116 successful wells in 2003, a 32% increase over 2002.	

•	 	In the Barnett Shale in north Texas, Devon added 350 producing wells and increased its net gas production by over 20 percent to approximately 575 million cubic feet equivalent per day. Horizontal wells, which now account for just 53 of Devon’s more than 1,600 producing wells in the Barnett Shale, will be the focus of future Barnett expansion.	

•	 	In Canada, Devon initiated its 300 million barrel potential Jackfish thermal heavy oil project. Jackfish is designed to produce approximately 35,000 barrels per day of crude oil from the vast Alberta oil sands.	

•	 	In the deepwater Gulf of Mexico, the company drilled two exploratory discoveries at Sturgis and St. Malo. The St. Malo discovery and Devon’s 2002 Cascade discovery are located in the emerging lower Tertiary trend. The lower Tertiary trend may prove to hold significant reserve growth potential for the industry. Devon has a substantial acreage position in the	

 

 	 	trend and has identified many additional prospects with characteristics similar to St. Malo and Cascade.	

•	 	Devon initiated production from the Southern Expansion Area of the Zafiro Field in Equatorial Guinea. This increased the company’s net production at Zafiro by about 15,000 barrels to more than 50,000 barrels per day.	

•	 	Offshore China, the Devon-operated Panyu field commenced production into a floating production, storage and offloading vessel. Devon’s share of field production is expected to reach 16,000 barrels per day in 2004. Devon brought Panyu to production in less than two years following the Chinese government’s approval of the project.	

•	 	Devon’s marketing and midstream operations contributed to outstanding results in 2003. Record revenue led to a record operating margin of $286 million. Devon is one of the largest independent midstream operators in the United States.	
     “We hit our production growth targets and now Devon’s oil and gas property base is delivering record volumes at a time when oil, natural gas and natural gas liquids prices are very healthy,” said J. Larry Nichols, chairman and chief executive officer. “Numerous operating achievements accompanied our stellar financial results. High-impact exploration yielded significant discoveries and our marketing and midstream operations had its best year ever. Record earnings allowed us to fund our entire $2.5 billion drilling and facilities budget while generating more than $1 billion for debt retirement.”
Oil and Gas Revenues Approach $6 Billion
     Combined sales of oil, gas and natural gas liquids increased 78 percent in the year ended December 31, 2003, to $5.9 billion. The increase was attributable to rising production and higher product prices.
     Devon increased production 21 percent to a record 228 million barrels of oil equivalent (MMBoe) in 2003. The increase reflects Devon’s larger producing base following the April 2003 merger with Ocean Energy and growth from development projects in North America, West Africa and China.
     The average price realized by Devon for its 2003 natural gas production increased 61 percent to $4.51 per thousand cubic feet from $2.80 per thousand cubic feet in 2002. Devon’s average realized price for oil increased 18 percent to $25.63 per barrel in 2003 compared with $21.71 per barrel in 2002. The company’s average realized price for natural gas liquids increased 33 percent to $18.65 per barrel in 2003, compared with $14.05 per barrel in 2002.
     Higher natural gas and natural gas liquids prices also led to increased marketing and midstream revenue. Marketing and midstream revenue increased to $1.5 billion in 2003, up from $1.0 billion in 2002. Total revenues, including marketing and midstream, climbed 70 percent in 2003, to $7.4 billion.
Higher Operating Costs and Expenses Reflect Expanding Operations
     Devon’s merger with Ocean Energy in April 2003 significantly increased the size and scope of the company’s operations. This is reflected in higher operating costs and expenses.
     Lease operating expenses increased 40 percent to $871 million. On a unit of production basis, lease operating expenses increased 16 percent to $3.83 per barrel of oil equivalent (Boe).
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Higher lease fuel costs, chemicals costs and the effects of the strengthening Canadian dollar contributed to the increase in unit costs.
     Marketing and midstream operating costs for 2003 increased 45 percent to $1.2 billion. The increase in expenses was primarily a result of higher natural gas prices. The increase in costs was more than offset by a related increase in marketing and midstream revenue.
     Depreciation, depletion and amortization expense (DD&A) increased 48 percent in 2003, to $1.8 billion. The increase was driven by the increase in oil and gas production and by a higher DD&A rate. Devon’s DD&A rate increased 22 percent in 2003, to $7.87 per Boe. The combined DD&A rate includes depreciation of Devon’s midstream and corporate assets in addition to depletion of its oil and gas properties.
     General and administrative expense (G&A) also increased in 2003, by 40 percent to $307 million. G&A expense included $4 million related to personnel severance costs in the fourth quarter and $14 million attributable to office closings in previous quarters. G&A expense also included a $15 million non-cash charge related to changes in the value of obligations in certain compensation plans. This charge is offset by increases in other income and comprehensive earnings.
     Income tax expense in 2003 was $514 million, or 23 percent of pre-tax income. Of the total, $321 million was deferred income tax expense, not requiring the current use of cash. Full year and fourth quarter 2003 income tax expense included a $218 million deferred tax benefit attributable to prior years. This is the impact of a reduction in Canadian tax rates on deferred tax liabilities recorded at the beginning of 2003.
Cash Flow Before Balance Sheet Changes Doubles to $3.9 Billion
     Cash flow before balance sheet changes increased 102 percent to a record high $3.9 billion in 2003. Cash on hand climbed to $1.3 billion at year-end. The company expects to utilize the accumulated cash to retire long-term debt of $338 million in 2004 and $920 million in 2005.
Oil and Gas Reserves
     The company’s estimated proved oil and gas reserves were 2,089 MMBoe at December 31, 2003. This is a 30 percent increase over year-end 2002 estimated proved reserves of 1,609 MMBoe. Devon acquired 556 MMBoe in 2003, predominately through its merger with Ocean Energy in April. Devon added another 188 MMBoe through successful drilling (discoveries and extensions). Oil and gas produced during 2003 decreased total proved reserves by 228 MMBoe, and revisions to prior estimates reduced the total by another 11 MMBoe. Devon also sold non-core properties in 2003 with associated proved reserves of 25 MMBoe. Natural gas is converted to its oil equivalent on the basis of six thousand cubic feet of gas to one barrel of oil.
     Proved reserves at December 31, 2003, are composed of 661 million barrels of crude oil, 7.3 trillion cubic feet of natural gas and 209 million barrels of natural gas liquids. These quantities had a combined estimated pre-tax present value, discounted at 10 percent, of $23 billion. This compares to year-end 2002 estimated pre-tax discounted value of $15 billion.
     Proved developed reserves represented 76 percent of total proved reserves at year-end 2003. This compares to 73 percent of total proved reserves at December 31, 2002.
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Items Excluded from Published Estimates
     Devon’s reported net earnings include items of income and expense that are excluded by certain securities analysts in their published estimates of the company’s financial results. Such items and their effects upon full year and fourth quarter 2003 reported earnings were as follows:

•	 	General and administrative expenses attributable to closing Devon’s office in The Woodlands, Texas, decreased full year pre-tax earnings by $11 million ($7 million after tax).	

•	 	Merger costs decreased full year pre-tax earnings by $7 million ($4 million after tax).	

•	 	Reduction in carrying value of miscellaneous international oil and gas properties decreased full year and fourth quarter 2003 pre-tax earnings by $111 million ($74 million after tax).	

•	 	Effects of changes in foreign currency exchange rates increased full year and fourth quarter earnings. The amounts of such full year and fourth quarter earnings increases were $69 million pre-tax ($48 million after tax) and $17 million pre-tax ($12 million after tax), respectively. This is primarily related to U.S. dollar denominated debt in Canada.	

•	 	A change in fair value of financial instruments not associated with hedges increased full year earnings and decreased fourth quarter earnings. For the full year 2003, the increase was $1 million pre-tax ($1 million after tax). In the fourth quarter, the decrease to earnings was $7 million pre-tax ($4 million after tax).	

•	 	A deferred tax benefit attributable to lower Canadian income tax rates increased full year and fourth quarter 2003 net earnings by $218 million.	

•	 	The cumulative effect of adopting SFAS No. 143 on January 1, 2003, increased 2003 net earnings $16 million. SFAS No. 143 concerns costs associated with the retirement of long-lived assets such as well sites, offshore production platforms and natural gas processing plants.	
     In aggregate, these items increased 2003 net earnings by $199 million, or 95 cents per common share (91 cents per diluted common share). For the fourth quarter of 2003, the applicable items increased net earnings by $152 million, or 65 cents per common share (63 cents per diluted common share).
Conference Call to be Webcast Today
     Devon will discuss its 2003 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 the 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 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.
Page 4 

 

     Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration, production and property acquisitions. 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.
Page 5 

 
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION DATA (Unaudited)	 	Year Ended	 	 	Quarter Ended	 	
(net of royalties)	 	December 31,	 	 	December 31,	 	
 	 		 	 		 	
 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
	 		 	 		 	 		 	 		 	
Total Period Production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural Gas (Bcf)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	589.3	 	 	 	482.2	 	 	 	160.9	 	 	 	117.1	 	
 	Canada	 	 	267.4	 	 	 	278.9	 	 	 	67.8	 	 	 	67.9	 	
 	International	 	 	6.7	 	 	 	—	 	 	 	3.5	 	 	 	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas	 	 	863.4	 	 	 	761.1	 	 	 	232.2	 	 	 	185.0	 	
 	 	 		 	 		 	 		 	 		 	
Oil (MMBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	31.1	 	 	 	23.8	 	 	 	8.8	 	 	 	5.4	 	
 	Canada	 	 	13.5	 	 	 	15.8	 	 	 	3.5	 	 	 	3.6	 	
 	International	 	 	17.3	 	 	 	2.3	 	 	 	7.0	 	 	 	0.8	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Oil	 	 	61.9	 	 	 	41.9	 	 	 	19.3	 	 	 	9.8	 	
 	 	 		 	 		 	 		 	 		 	
Natural Gas Liquids (MMBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	16.7	 	 	 	14.4	 	 	 	4.7	 	 	 	3.8	 	
 	Canada	 	 	5.0	 	 	 	5.2	 	 	 	1.2	 	 	 	1.1	 	
 	International	 	 	0.2	 	 	 	—	 	 	 	0.1	 	 	 	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas Liquids	 	 	21.9	 	 	 	19.6	 	 	 	6.0	 	 	 	4.9	 	
 	 	 		 	 		 	 		 	 		 	
Oil Equivalent (MMBoe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	146.0	 	 	 	118.5	 	 	 	40.3	 	 	 	28.7	 	
 	Canada	 	 	63.1	 	 	 	67.5	 	 	 	16.0	 	 	 	16.0	 	
 	International	 	 	18.6	 	 	 	2.3	 	 	 	7.7	 	 	 	0.8	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Oil Equivalent	 	 	227.7	 	 	 	188.3	 	 	 	64.0	 	 	 	45.5	 	
 	 	 		 	 		 	 		 	 		 	
Natural Gas Equivalent (Bcfe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	876.0	 	 	 	711.4	 	 	 	241.9	 	 	 	172.3	 	
 	Canada	 	 	378.6	 	 	 	404.9	 	 	 	96.0	 	 	 	96.1	 	
 	International	 	 	111.6	 	 	 	13.8	 	 	 	46.1	 	 	 	4.8	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas Equivalent	 	 	1,366.2	 	 	 	1,130.1	 	 	 	384.0	 	 	 	273.2	 	
 	 	 		 	 		 	 		 	 		 	
Average Daily Production	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural Gas (MMcf)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	1,614.4	 	 	 	1,321.0	 	 	 	1,748.4	 	 	 	1,272.4	 	
 	Canada	 	 	732.7	 	 	 	764.1	 	 	 	737.3	 	 	 	738.2	 	
 	International	 	 	18.3	 	 	 	—	 	 	 	37.8	 	 	 	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas	 	 	2,365.4	 	 	 	2,085.1	 	 	 	2,523.5	 	 	 	2,010.6	 	
 	 	 		 	 		 	 		 	 		 	
Oil (MBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	85.3	 	 	 	65.3	 	 	 	95.9	 	 	 	58.5	 	
 	Canada	 	 	36.9	 	 	 	43.2	 	 	 	37.4	 	 	 	39.2	 	
 	International	 	 	47.5	 	 	 	6.2	 	 	 	76.5	 	 	 	8.4	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Oil	 	 	169.7	 	 	 	114.7	 	 	 	209.8	 	 	 	106.1	 	
 	 	 		 	 		 	 		 	 		 	
Natural Gas Liquids (MBbls)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	45.8	 	 	 	39.4	 	 	 	50.5	 	 	 	41.3	 	
 	Canada	 	 	13.6	 	 	 	14.3	 	 	 	13.8	 	 	 	12.2	 	
 	International	 	 	0.5	 	 	 	—	 	 	 	0.9	 	 	 	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas Liquids	 	 	59.9	 	 	 	53.7	 	 	 	65.2	 	 	 	53.5	 	
 	 	 		 	 		 	 		 	 		 	
Oil Equivalent (MBoe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	400.2	 	 	 	324.8	 	 	 	437.8	 	 	 	311.9	 	
 	Canada	 	 	172.6	 	 	 	184.9	 	 	 	174.1	 	 	 	174.4	 	
 	International	 	 	51.0	 	 	 	6.2	 	 	 	83.7	 	 	 	8.4	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Oil Equivalent	 	 	623.8	 	 	 	515.9	 	 	 	695.6	 	 	 	494.7	 	
 	 	 		 	 		 	 		 	 		 	
Natural Gas Equivalent (MMcfe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	 	2,401.0	 	 	 	1,949.0	 	 	 	2,626.8	 	 	 	1,871.2	 	
 	Canada	 	 	1,035.7	 	 	 	1,109.3	 	 	 	1,044.5	 	 	 	1,046.6	 	
 	International	 	 	306.3	 	 	 	37.8	 	 	 	502.2	 	 	 	50.4	 	
 	 	 		 	 		 	 		 	 		 	
 	Natural Gas Equivalent	 	 	3,743.0	 	 	 	3,096.1	 	 	 	4,173.5	 	 	 	2,968.2	 	
 	 	 		 	 		 	 		 	 		 	
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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

REALIZED PRICE DATA (Unaudited)	 	Year Ended	 	 	Quarter Ended	 	
(average realized prices in $US)	 	December 31,	 	 	December 31,	 	
 	 		 	 		 	
 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
	 		 	 		 	 		 	 		 	
Realized Prices	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural Gas ($/Mcf)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	$	4.50	 	 	$	2.91	 	 	$	4.15	 	 	$	3.38	 	
 	Canada	 	$	4.57	 	 	$	2.62	 	 	$	4.23	 	 	$	3.38	 	
 	International	 	$	3.47	 	 	$	—	 	 	$	3.41	 	 	$	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas	 	$	4.51	 	 	$	2.80	 	 	$	4.16	 	 	$	3.38	 	
 	 	 		 	 		 	 		 	 		 	
Oil ($/Bbl)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	$	27.64	 	 	$	21.99	 	 	$	26.77	 	 	$	23.50	 	
 	Canada	 	$	23.54	 	 	$	21.00	 	 	$	22.51	 	 	$	21.05	 	
 	International	 	$	23.64	 	 	$	23.70	 	 	$	24.14	 	 	$	25.92	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Oil	 	$	25.63	 	 	$	21.71	 	 	$	25.05	 	 	$	22.79	 	
 	 	 		 	 		 	 		 	 		 	
Natural Gas Liquids ($/Bbl)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	$	17.31	 	 	$	13.37	 	 	$	17.87	 	 	$	15.27	 	
 	Canada	 	$	23.08	 	 	$	15.93	 	 	$	23.00	 	 	$	19.09	 	
 	International	 	$	21.45	 	 	$	—	 	 	$	21.65	 	 	$	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas Liquids	 	$	18.65	 	 	$	14.05	 	 	$	19.01	 	 	$	16.14	 	
 	 	 		 	 		 	 		 	 		 	
Oil Equivalent ($/Boe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	$	26.02	 	 	$	17.87	 	 	$	24.50	 	 	$	20.20	 	
 	Canada	 	$	26.25	 	 	$	16.96	 	 	$	24.55	 	 	$	20.38	 	
 	International	 	$	23.45	 	 	$	23.70	 	 	$	23.84	 	 	$	25.92	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Oil Equivalent	 	$	25.88	 	 	$	17.61	 	 	$	24.44	 	 	$	20.36	 	
 	 	 		 	 		 	 		 	 		 	
Natural Gas Equivalent ($/Mcfe)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	$	4.34	 	 	$	2.98	 	 	$	4.08	 	 	$	3.37	 	
 	Canada	 	$	4.37	 	 	$	2.83	 	 	$	4.09	 	 	$	3.40	 	
 	International	 	$	3.91	 	 	$	3.95	 	 	$	3.97	 	 	$	4.32	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas Equivalent	 	$	4.31	 	 	$	2.94	 	 	$	4.07	 	 	$	3.39	 	

BENCHMARK PRICES	 	Year Ended	 	 	Quarter Ended	 	
(US$)	 	December 31,	 	 	December 31,	 	
 	 		 	 		 	
 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
	 		 	 		 	 		 	 		 	
Benchmark Prices	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural Gas ($/Mcf) — Henry Hub	 	$	5.38	 	 	$	3.22	 	 	$	4.58	 	 	$	3.99	 	
Oil ($/Bbl) — West Texas Intermediate (Cushing)	 	$	31.08	 	 	$	26.10	 	 	$	31.22	 	 	$	28.21	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
PRICE DIFFERENTIALS, EXCLUDING EFFECTS OF HEDGES	 	Year Ended	 	 	Quarter Ended	 	
(floating price differentials from benchmark prices in US$)	 	December 31,	 	 	December 31,	 	
 	 		 	 		 	
 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
	 		 	 		 	 		 	 		 	
Price Differentials	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Natural Gas ($/Mcf)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	$	(0.60	)	 	$	(0.50	)	 	$	(0.42	)	 	$	(0.61	)	
 	Canada	 	$	(0.52	)	 	$	(0.56	)	 	$	(0.20	)	 	$	(0.49	)	
 	International	 	$	(1.92	)	 	$	—	 	 	$	(1.17	)	 	$	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total Natural Gas	 	$	(0.59	)	 	$	(0.52	)	 	$	(0.35	)	 	$	(0.57	)	
 	 	 		 	 		 	 		 	 		 	
Oil ($/Bbl)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	U.S.	 	$	(1.70	)	 	$	(2.72	)	 	$	(2.08	)	 	$	(1.99	)	
 	Canada	 	$	(5.46	)	 	$	(4.66	)	 	$	(6.48	)	 	$	(6.47	)	
 	International	 	$	(4.90	)	 	$	(2.39	)	 	$	(4.01	)	 	$	(2.26	)	
 	 	 		 	 		 	 		 	 		 	
 	Total Oil	 	$	(3.41	)	 	$	(3.48	)	 	$	(3.57	)	 	$	(3.66	)	
 	 	 		 	 		 	 		 	 		 	
Page 7 

 
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS	 	Year Ended	 	 	Unaudited Quarter	 	
(US$ in millions, except per share data)	 	December 31,	 	 	Ended December 31,	 	
	 		 	 		 	
 	 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
 	 	 		 	 		 	 		 	 		 	
Revenues	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Oil sales	 	$	1,588	 	 	$	909	 	 	$	484	 	 	$	222	 	
 	Gas sales	 	 	3,897	 	 	 	2,133	 	 	 	966	 	 	 	625	 	
 	Natural gas liquids sales	 	 	407	 	 	 	275	 	 	 	114	 	 	 	79	 	
 	Marketing & midstream revenues	 	 	1,460	 	 	 	999	 	 	 	357	 	 	 	307	 	
 	 	 		 	 		 	 		 	 		 	
 	Total revenues	 	 	7,352	 	 	 	4,316	 	 	 	1,921	 	 	 	1,233	 	
 	 	 		 	 		 	 		 	 		 	
Operating Costs and Expenses	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Lease operating costs	 	 	871	 	 	 	621	 	 	 	245	 	 	 	153	 	
 	Transportation costs	 	 	207	 	 	 	154	 	 	 	58	 	 	 	39	 	
 	Production taxes	 	 	204	 	 	 	111	 	 	 	52	 	 	 	31	 	
 	Marketing & midstream operating costs and expenses	 	 	1,174	 	 	 	808	 	 	 	273	 	 	 	249	 	
 	Depreciation, depletion and amortization of property & equipment	 	 	1,793	 	 	 	1,211	 	 	 	562	 	 	 	295	 	
 	Accretion of asset retirement obligation	 	 	36	 	 	 	—	 	 	 	10	 	 	 	—	 	
 	General & administrative expenses	 	 	307	 	 	 	219	 	 	 	86	 	 	 	68	 	
 	Expenses related to mergers	 	 	7	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	Reduction of carrying value of oil & gas properties	 	 	111	 	 	 	651	 	 	 	111	 	 	 	—	 	
 	 	 		 	 		 	 		 	 		 	
 	Total operating costs and expenses	 	 	4,710	 	 	 	3,775	 	 	 	1,397	 	 	 	835	 	
 	 	 		 	 		 	 		 	 		 	
Earnings from operations	 	 	2,642	 	 	 	541	 	 	 	524	 	 	 	398	 	
 	 	 		 	 		 	 		 	 		 	
Other Income (Expense)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Interest expense	 	 	(502	)	 	 	(533	)	 	 	(122	)	 	 	(131	)	
 	Dividends on subsidiary’s preferred stock	 	 	(2	)	 	 	—	 	 	 	(1	)	 	 	—	 	
 	Effects of changes in foreign currency exchange rates	 	 	69	 	 	 	1	 	 	 	17	 	 	 	1	 	
 	Change in fair value of financial instruments	 	 	1	 	 	 	28	 	 	 	(7	)	 	 	—	 	
 	Other income	 	 	37	 	 	 	34	 	 	 	8	 	 	 	11	 	
 	Impairment of ChevronTexaco common stock	 	 	—	 	 	 	(205	)	 	 	—	 	 	 	(205	)	
 	 	 		 	 		 	 		 	 		 	
 	Net other expense	 	 	(397	)	 	 	(675	)	 	 	(105	)	 	 	(324	)	
 	 	 		 	 		 	 		 	 		 	
Earnings (loss) from continuing operations before income taxes & cumulative effect of change in accounting principle	 	 	2,245	 	 	 	(134	)	 	 	419	 	 	 	74	 	
 	 	 		 	 		 	 		 	 		 	
Income Tax Expense (Benefit)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Current	 	 	193	 	 	 	23	 	 	 	28	 	 	 	(99	)	
 	Deferred	 	 	321	 	 	 	(216	)	 	 	(152	)	 	 	78	 	
 	 	 		 	 		 	 		 	 		 	
 	Total income tax expense (benefit)	 	 	514	 	 	 	(193	)	 	 	(124	)	 	 	(21	)	
 	 	 		 	 		 	 		 	 		 	
Earnings from continuing operations before cumulative effect of change in accounting principle	 	 	1,731	 	 	 	59	 	 	 	543	 	 	 	95	 	
 	 	 		 	 		 	 		 	 		 	
Discontinued Operations	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Results of operations	 	 	—	 	 	 	23	 	 	 	—	 	 	 	2	 	
 	Gain (loss) on sale	 	 	—	 	 	 	31	 	 	 	—	 	 	 	(12	)	
 	Income tax expense	 	 	—	 	 	 	9	 	 	 	—	 	 	 	1	 	
 	 	 		 	 		 	 		 	 		 	
 	Results of discontinued operations	 	 	—	 	 	 	45	 	 	 	—	 	 	 	(11	)	
 	 	 		 	 		 	 		 	 		 	
 	Earnings before cumulative effect of change in accounting principle	 	 	1,731	 	 	 	104	 	 	 	543	 	 	 	84	 	
 	 	 		 	 		 	 		 	 		 	
Cumulative effect of change in accounting principle	 	 	16	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 		 	 		 	 		 	 		 	
Net earnings	 	 	1,747	 	 	 	104	 	 	 	543	 	 	 	84	 	
 	 	 		 	 		 	 		 	 		 	
Dividends on preferred stock	 	 	10	 	 	 	10	 	 	 	3	 	 	 	3	 	
 	 	 		 	 		 	 		 	 		 	
Net earnings applicable to common stockholders	 	$	1,737	 	 	$	94	 	 	$	540	 	 	$	81	 	
 	 	 		 	 		 	 		 	 		 	
Net earnings per weighted average common share outstanding	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Basic	 	$	8.32	 	 	$	0.61	 	 	$	2.32	 	 	$	0.52	 	
 	Diluted	 	$	8.07	 	 	$	0.61	 	 	$	2.25	 	 	$	0.52	 	
Basic weighted average shares outstanding	 	 	209	 	 	 	155	 	 	 	233	 	 	 	157	 	
Diluted weighted average shares outstanding	 	 	217	 	 	 	156	 	 	 	242	 	 	 	163	 	
Page 8 

 
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS	 	 	 	 	 	 	
(US$ in millions)	 	December 31,	 	 	December 31,	 	
 	 		 	 		 	
 	 	2003	 	 	2002	 	
 	 		 	 		 	
Assets	 	 	 	 	 	 	 	 	
Current assets	 	 	 	 	 	 	 	 	
 	Cash and cash equivalents	 	 	1,273	 	 	 	292	 	
 	Accounts receivable	 	 	946	 	 	 	639	 	
 	Inventories	 	 	72	 	 	 	26	 	
 	Fair value of financial instruments	 	 	13	 	 	 	4	 	
 	Income taxes receivable	 	 	11	 	 	 	56	 	
 	Assets of discontinued operations	 	 	—	 	 	 	7	 	
 	Investments and other current assets	 	 	49	 	 	 	40	 	
 	 		 	 		 	
 	Total current assets	 	 	2,364	 	 	 	1,064	 	
 	 		 	 		 	
Property and equipment, at cost	 	 	28,546	 	 	 	18,786	 	
 	Less accumulated depreciation, depletion and amortization	 	 	10,212	 	 	 	7,934	 	
 	 		 	 		 	
 	Net property and equipment	 	 	18,334	 	 	 	10,852	 	
 	 		 	 		 	
Investment in ChevronTexaco Corporation common stock	 	 	613	 	 	 	472	 	
Fair value of financial instruments	 	 	14	 	 	 	1	 	
Goodwill	 	 	5,477	 	 	 	3,555	 	
Other assets	 	 	360	 	 	 	281	 	
 	 		 	 		 	
 	Total assets	 	$	27,162	 	 	$	16,225	 	
 	 		 	 		 	
Liabilities and Stockholders’ Equity	 	 	 	 	 	 	 	 	
Current liabilities	 	 	 	 	 	 	 	 	
 	Accounts payable	 	 	1,174	 	 	 	637	 	
 	Income taxes payable	 	 	15	 	 	 	9	 	
 	Current portion of long-term debt	 	 	338	 	 	 	—	 	
 	Accrued interest payable	 	 	130	 	 	 	119	 	
 	Deferred revenue	 	 	56	 	 	 	—	 	
 	Merger related expenses payable	 	 	21	 	 	 	12	 	
 	Fair value of financial instruments	 	 	153	 	 	 	151	 	
 	Current portion of asset retirement obligation	 	 	42	 	 	 	—	 	
 	Accrued expenses and other current liabilities	 	 	142	 	 	 	114	 	
 	 		 	 		 	
 	Total current liabilities	 	 	2,071	 	 	 	1,042	 	
 	 		 	 		 	
Other liabilities	 	 	349	 	 	 	323	 	
Asset retirement obligation, long-term	 	 	629	 	 	 	—	 	
Debentures exchangeable into shares of ChevronTexaco Corporation common stock	 	 	677	 	 	 	662	 	
Other long-term debt	 	 	7,903	 	 	 	6,900	 	
Preferred stock of subsidiary	 	 	55	 	 	 	—	 	
Fair value of financial instruments	 	 	52	 	 	 	18	 	
Deferred income taxes	 	 	4,370	 	 	 	2,627	 	
 	 		 	 		 	
Stockholders’ equity	 	 	 	 	 	 	 	 	
 	Preferred stock	 	 	1	 	 	 	1	 	
 	Common stock	 	 	24	 	 	 	16	 	
 	Additional paid-in capital	 	 	9,066	 	 	 	5,178	 	
 	Retained earnings (accumulated deficit)	 	 	1,614	 	 	 	(84	)	
 	Accumulated other comprehensive income (loss)	 	 	569	 	 	 	(267	)	
 	Other	 	 	(32	)	 	 	(3	)	
 	Treasury stock, at cost	 	 	(186	)	 	 	(188	)	
 	 		 	 		 	
Stockholders’ Equity	 	$	11,056	 	 	$	4,653	 	
 	 		 	 		 	
Total Liabilities & Stockholders’ Equity	 	$	27,162	 	 	$	16,225	 	
 	 		 	 		 	
Common Shares Outstanding	 	 	236	 	 	 	157	 	
 	 		 	 		 	
Page 9 

 
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS	 	 	 	
(US$ in millions)	 	Year Ended December 31,	 	
 	 		 	
 	 	2003	 	 	2002	 	
 	 		 	 		 	
Cash Flows From Operating Activities	 	 	 	 	 	 	 	 	
 	Earnings from continuing operations	 	$	1,731	 	 	$	59	 	
 	Depreciation, depletion and amortization of property and equipment	 	 	1,793	 	 	 	1,211	 	
 	Accretion of asset retirement obligation	 	 	36	 	 	 	—	 	
 	Accretion of discounts on long-term debt, net	 	 	19	 	 	 	33	 	
 	Effects of changes in foreign currency exchange rates	 	 	(69	)	 	 	(1	)	
 	Change in fair value of derivative instruments	 	 	(1	)	 	 	(28	)	
 	Reduction of carrying value of oil and gas properties	 	 	111	 	 	 	651	 	
 	Impairment of ChevronTexaco Corporation common stock	 	 	—	 	 	 	205	 	
 	Loss (gain) on sale of assets	 	 	7	 	 	 	(2	)	
 	Deferred income tax expense (benefit)	 	 	321	 	 	 	(216	)	
 	Other	 	 	(48	)	 	 	(9	)	
Changes in assets and liabilities, net of acquisitions of businesses	 	 	 	 	 	 	 	 	
 	Accounts receivable	 	 	(164	)	 	 	(80	)	
 	Inventories	 	 	(8	)	 	 	10	 	
 	Investments and other current assets	 	 	(26	)	 	 	12	 	
 	Accounts payable	 	 	42	 	 	 	(74	)	
 	Income taxes payable	 	 	62	 	 	 	21	 	
 	Accrued interest and expenses	 	 	39	 	 	 	36	 	
 	Deferred revenue	 	 	(41	)	 	 	(46	)	
 	Long-term other liabilities	 	 	(36	)	 	 	(56	)	
 	 		 	 		 	
Net cash provided by continuing operations	 	 	3,768	 	 	 	1,726	 	
 	 		 	 		 	
 	Net cash provided by discontinued operations	 	 	—	 	 	 	28	 	
Net cash provided by operating activities	 	$	3,768	 	 	$	1,754	 	
 	 		 	 		 	
Cash Flows From Investing Activities	 	 	 	 	 	 	 	 	
 	Proceeds from sales of property and equipment	 	$	179	 	 	$	1,067	 	
 	Capital expenditures	 	 	(2,587	)	 	 	(3,426	)	
 	Discontinued operations	 	 	—	 	 	 	316	 	
 	Other	 	 	(24	)	 	 	(3	)	
 	 		 	 		 	
Net cash used in investing activities	 	$	(2,432	)	 	$	(2,046	)	
 	 		 	 		 	
Cash Flows From Financing Activities	 	 	 	 	 	 	 	 	
 	Proceeds from borrowings of long-term debt, net of issuance costs	 	$	597	 	 	$	6,067	 	
 	Principal payments on long-term debt	 	 	(1,118	)	 	 	(5,657	)	
 	Issuance of common stock, net of issuance costs	 	 	155	 	 	 	32	 	
 	Dividends paid on common stock	 	 	(39	)	 	 	(31	)	
 	Dividends paid on preferred stock	 	 	(10	)	 	 	(10	)	
 	Decrease in long-term liabilities	 	 	1	 	 	 	—	 	
 	 		 	 		 	
Net cash (used in) provided by financing activities	 	$	(414	)	 	$	401	 	
 	 		 	 		 	
Effect of exchange rate changes on cash	 	 	59	 	 	 	—	 	
 	 		 	 		 	
Net increase in cash and cash equivalents	 	 	981	 	 	 	109	 	
 	 		 	 		 	
Cash and cash equivalents at beginning of period	 	 	292	 	 	 	183	 	
 	 		 	 		 	
Cash and cash equivalents at end of period	 	 	1,273	 	 	 	292	 	
 	 		 	 		 	
Page 10 

 
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

RESERVE RECONCILIATION	 	 	 	 	 	 	
 	 	Total	 	 	Domestic	 	
 	 		 	 		 	
 	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	
 	 	(MMBbls)	 	 	(Bcf)	 	 	(MMBbls)	 	 	(MMboe)	 	 	(MMBbls)	 	 	(Bcf)	 	 	(MMBbls)	 	 	(MMboe)	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
As of December 31, 2002:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Proved developed	 	 	260	 	 	 	4,618	 	 	 	150	 	 	 	1,180	 	 	 	135	 	 	 	2,802	 	 	 	117	 	 	 	719	 	
 	Proved undeveloped	 	 	184	 	 	 	1,218	 	 	 	42	 	 	 	429	 	 	 	12	 	 	 	750	 	 	 	29	 	 	 	166	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
Total proved	 	 	444	 	 	 	5,836	 	 	 	192	 	 	 	1,609	 	 	 	147	 	 	 	3,552	 	 	 	146	 	 	 	885	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
Production	 	 	(62	)	 	 	(863	)	 	 	(22	)	 	 	(228	)	 	 	(31	)	 	 	(589	)	 	 	(17	)	 	 	(146	)	
Discoveries and extensions	 	 	29	 	 	 	834	 	 	 	20	 	 	 	188	 	 	 	12	 	 	 	510	 	 	 	14	 	 	 	111	 	
Divestitures	 	 	(3	)	 	 	(132	)	 	 	—	 	 	 	(25	)	 	 	(2	)	 	 	(120	)	 	 	—	 	 	 	(22	)	
Acquisitions	 	 	262	 	 	 	1,650	 	 	 	19	 	 	 	556	 	 	 	92	 	 	 	1,474	 	 	 	19	 	 	 	357	 	
Revisions	 	 	(9	)	 	 	(9	)	 	 	—	 	 	 	(11	)	 	 	(6	)	 	 	57	 	 	 	(1	)	 	 	2	 	
As of December 31, 2003:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Proved developed	 	 	408	 	 	 	5,980	 	 	 	179	 	 	 	1,584	 	 	 	171	 	 	 	3,935	 	 	 	136	 	 	 	964	 	
 	Proved undeveloped	 	 	253	 	 	 	1,336	 	 	 	30	 	 	 	505	 	 	 	41	 	 	 	949	 	 	 	25	 	 	 	223	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
Total proved	 	 	661	 	 	 	7,316	 	 	 	209	 	 	 	2,089	 	 	 	212	 	 	 	4,884	 	 	 	161	 	 	 	1,187	 	

 	 	 	Canada	 	 	International	 	
 	 	 		 	 		 	
 	 	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	 	Oil	 	 	Gas	 	 	NGLs	 	 	Total	 	
 	 	 	(MMBbls)	 	 	(Bcf)	 	 	(MMBbls)	 	 	(MMboe)	 	 	(MMBbls)	 	 	(Bcf)	 	 	(MMBbls)	 	 	(MMboe)	 	
 	 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
As of December 31, 2002:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Proved developed	 	 	119	 	 	 	1,816	 	 	 	33	 	 	 	455	 	 	 	6	 	 	 	—	 	 	 	—	 	 	 	6	 	
 	Proved undeveloped	 	 	30	 	 	 	468	 	 	 	13	 	 	 	121	 	 	 	142	 	 	 	—	 	 	 	—	 	 	 	142	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
Total proved	 	 	149	 	 	 	2,284	 	 	 	46	 	 	 	576	 	 	 	148	 	 	 	—	 	 	 	—	 	 	 	148	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
Production	 	 	(14	)	 	 	(267	)	 	 	(5	)	 	 	(63	)	 	 	(17	)	 	 	(7	)	 	 	—	 	 	 	(19	)	
Discoveries and extensions	 	 	16	 	 	 	324	 	 	 	6	 	 	 	76	 	 	 	1	 	 	 	—	 	 	 	—	 	 	 	1	 	
Divestitures	 	 	(1	)	 	 	(12	)	 	 	—	 	 	 	(3	)	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
Acquisitions	 	 	2	 	 	 	1	 	 	 	—	 	 	 	2	 	 	 	168	 	 	 	175	 	 	 	—	 	 	 	197	 	
Revisions	 	 	(4	)	 	 	(33	)	 	 	1	 	 	 	(9	)	 	 	1	 	 	 	(33	)	 	 	—	 	 	 	(4	)	
As of December 31, 2003:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Proved developed	 	 	123	 	 	 	1,964	 	 	 	43	 	 	 	493	 	 	 	114	 	 	 	81	 	 	 	—	 	 	 	127	 	
 	Proved undeveloped	 	 	25	 	 	 	333	 	 	 	5	 	 	 	86	 	 	 	187	 	 	 	54	 	 	 	—	 	 	 	196	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
Total proved	 	 	148	 	 	 	2,297	 	 	 	48	 	 	 	579	 	 	 	301	 	 	 	135	 	 	 	—	 	 	 	323	 	
 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	 		 	
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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

COSTS INCURRED	 	Total	 	 	Domestic	 	
 	 		 	 		 	
(US$ in millions)	 	Year Ended December 31,	 	 	Year Ended December 31,	 	
 	 		 	 		 	
 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
 	 		 	 		 	 		 	 		 	
Property Acquisition Costs:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Total proved	 	$	4,209	 	 	$	1,538	 	 	$	2,582	 	 	$	1,536	 	
 	 		 	 		 	 		 	 		 	
 	Unproved:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Business combinations	 	 	1,063	 	 	 	639	 	 	 	551	 	 	 	639	 	
 	Other acquisitions	 	 	87	 	 	 	64	 	 	 	48	 	 	 	27	 	
 	 		 	 		 	 		 	 		 	
 	Total unproved	 	$	1,150	 	 	$	703	 	 	$	599	 	 	$	666	 	
 	 		 	 		 	 		 	 		 	
Exploration Costs	 	$	714	 	 	$	383	 	 	$	343	 	 	$	161	 	
 	 		 	 		 	 		 	 		 	
Development Costs	 	$	1,853	 	 	$	1,140	 	 	$	1,191	 	 	$	808	 	
 	 		 	 		 	 		 	 		 	
Finding and Development Costs	 	$	7,926	 	 	$	3,764	 	 	$	4,715	 	 	$	3,171	 	
 	 		 	 		 	 		 	 		 	
 	Asset retirement costs — business combinations	 	 	134	 	 	 	—	 	 	 	115	 	 	 	—	 	
 	Asset retirement costs — drilling	 	 	48	 	 	 	—	 	 	 	24	 	 	 	—	 	
 	Less: Actual retirement expenditures	 	 	(37	)	 	 	—	 	 	 	(22	)	 	 	—	 	
 	 		 	 		 	 		 	 		 	
Costs Incurred	 	$	8,071	 	 	$	3,764	 	 	$	4,832	 	 	$	3,171	 	

 	 	 	Canada	 	 	International	 	
 	 	 		 	 		 	
 	 	 	Year Ended December 31,	 	 	Year Ended December 31,	 	
 	 	 		 	 		 	
 	 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
 	 	 		 	 		 	 		 	 		 	
Property Acquisition Costs:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Total proved	 	$	26	 	 	$	2	 	 	$	1,601	 	 	$	—	 	
 	 		 	 		 	 		 	 		 	
 	Unproved:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	Business combinations	 	 	—	 	 	 	—	 	 	 	512	 	 	 	—	 	
 	Other acquisitions	 	 	39	 	 	 	28	 	 	 	—	 	 	 	9	 	
 	 		 	 		 	 		 	 		 	
 	Total unproved	 	$	39	 	 	$	28	 	 	$	512	 	 	$	9	 	
 	 		 	 		 	 		 	 		 	
Exploration Costs	 	$	214	 	 	$	207	 	 	$	157	 	 	$	15	 	
 	 		 	 		 	 		 	 		 	
Development Costs	 	$	488	 	 	$	299	 	 	$	174	 	 	$	33	 	
 	 		 	 		 	 		 	 		 	
Finding and Development Costs	 	$	767	 	 	$	536	 	 	$	2,444	 	 	$	57	 	
 	 		 	 		 	 		 	 		 	
 	Asset retirement costs — business combinations	 	 	—	 	 	 	—	 	 	 	19	 	 	 	—	 	
 	Asset retirement costs — drilling	 	 	17	 	 	 	—	 	 	 	7	 	 	 	—	 	
 	Less: Actual retirement expenditures	 	 	(14	)	 	 	—	 	 	 	(1	)	 	 	—	 	
 	 		 	 		 	 		 	 		 	
Costs Incurred	 	$	770	 	 	$	536	 	 	$	2,469	 	 	$	57	 	
 	 		 	 		 	 		 	 		 	
Pursuant to the full cost method of accounting, Devon capitalizes certain general and administrative expenses which are related to property acquisition, exploration and development activities. Such capitalized expenses, which are included in the costs shown in the preceding tables, were $140 million and $97 million in the years 2003 and 2002, respectively. In addition, Devon capitalizes certain interest expenses which are related to property development activities. Such capitalized expenses, which are also included in the costs shown in the preceding tables, were $50 million and $4 million in the years 2003 and 2002, respectively.
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DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

EXPLORATION AND DEVELOPMENT WELLS	 	Year Ended December 31,	 	
 	 		 	
 	 	2003	 	 	2002	 	
 	 		 	 		 	
Exploration Wells Drilled	 	 	 	 	 	 	 	 	
 	U.S	 	 	44	 	 	 	39	 	
 	Canada	 	 	244	 	 	 	233	 	
 	International	 	 	5	 	 	 	4	 	
 	 		 	 		 	
 	Total	 	 	293	 	 	 	276	 	
 	 		 	 		 	
Exploration Wells Success Rate	 	 	 	 	 	 	 	 	
 	U.S	 	 	50	%	 	 	54	%	
 	Canada	 	 	86	%	 	 	84	%	
 	International	 	 	—	%	 	 	—	%	
 	 		 	 		 	
 	Total	 	 	79	%	 	 	79	%	
 	 		 	 		 	
Development Wells Drilled	 	 	 	 	 	 	 	 	
 	U.S	 	 	1,281	 	 	 	940	 	
 	Canada	 	 	606	 	 	 	428	 	
 	International	 	 	49	 	 	 	41	 	
 	 		 	 		 	
 	Total	 	 	1,936	 	 	 	1,409	 	
 	 		 	 		 	
Development Wells Success Rate	 	 	 	 	 	 	 	 	
 	U.S	 	 	98	%	 	 	99	%	
 	Canada	 	 	97	%	 	 	95	%	
 	International	 	 	98	%	 	 	100	%	
 	 		 	 		 	
 	Total	 	 	97	%	 	 	98	%	
 	 		 	 		 	
Total Wells Drilled	 	 	 	 	 	 	 	 	
 	U.S	 	 	1,325	 	 	 	979	 	
 	Canada	 	 	850	 	 	 	661	 	
 	International	 	 	54	 	 	 	45	 	
 	 		 	 		 	
 	Total	 	 	2,229	 	 	 	1,685	 	
 	 		 	 		 	
Total Wells Success Rate	 	 	 	 	 	 	 	 	
 	U.S	 	 	96	%	 	 	97	%	
 	Canada	 	 	94	%	 	 	91	%	
 	International	 	 	89	%	 	 	91	%	
 	 		 	 		 	
 	Total	 	 	95	%	 	 	95	%	

COMPANY OPERATED RIGS	 	At December 31,	 	
 	 		 	
 	 	2003	 	 	2002	 	
 	 		 	 		 	
Number of Company Operated Rigs Running	 	 	 	 	 	 	 	 	
 	U.S	 	 	40	 	 	 	27	 	
 	Canada	 	 	35	 	 	 	32	 	
 	International	 	 	4	 	 	 	1	 	
 	 		 	 		 	
 	Total	 	 	79	 	 	 	60	 	
 	 		 	 		 	
Page 13 

 

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
Non-GAAP Financial Measure
     The United States Securities and Exchange Commission has recently adopted new disclosure requirements for public companies such as Devon. One provision of these disclosure requirements concerns references to Non-GAAP financial measures. (GAAP refers to accounting principles generally accepted in the United States.) Non-GAAP financial measures may be provided if the company explains the relevance of the information. The company must also reconcile the Non-GAAP financial Measure to related GAAP information. Cash flow before balance sheet changes is a Non-GAAP financial measure provided by Devon in this earnings release. 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 and to service its debt and other obligations. Cash flow before balance sheet changes is also important to certain financial analysts who provide estimates of Devon’s quarterly financial results to investors. 

RECONCILIATION TO GAAP INFORMATION	 	Year Ended	 	 	Unaudited Quarter Ended	 	
(US$ in millions)	 	December 31,	 	 	December 31,	 	
 	 		 	 		 	
 	 	2003	 	 	2002	 	 	2003	 	 	2002	 	
 	 		 	 		 	 		 	 		 	
Net Cash Provided By Operating Activities	 	$	3,768	 	 	$	1,754	 	 	$	988	 	 	$	578	 	
 	 		 	 		 	 		 	 		 	
 	Changes in assets and liabilities, net of effects of acquisitions of businesses	 	 	132	 	 	 	177	 	 	 	61	 	 	 	166	 	
 	 		 	 		 	 		 	 		 	
Cash flow before balance sheet changes	 	$	3,900	 	 	$	1,931	 	 	$	1,049	 	 	$	744	 	
 	 		 	 		 	 		 	 		 	
Page 14