Devon Energy (DVN) 10-K risk factor changes: FY2014 vs FY2013

Our business activities, and [removed: the oil and gas] [added: our] industry in general, are subject to a variety of risks.

These factors [removed: include,] [added: include] but are not limited to:

Therefore, our estimated proved reserves and future oil, gas and NGL production will decline materially as reserves are produced [removed: unless we conduct successful exploration and development activities or, through engineering studies,]

[added: unless we conduct successful exploration and development activities or, through engineering studies,] identify additional producing zones in existing wells, [added: utilize] secondary or tertiary recovery [removed: techniques,] [added: techniques] or acquire additional properties containing proved reserves.

In addition, oil and gas properties can become damaged or drilling operations may be curtailed, delayed or canceled as a result of a variety of factors [removed: including,] [added: including] but not limited to:

In addition, many of our larger competitors may have a competitive advantage when responding to factors that affect demand for oil and gas production, such as changing worldwide price and production levels, the cost and availability of alternative [removed: fuels,] [added: fuels] and the application of government regulations.

We rely on midstream facilities and systems to process our natural gas production and to transport our [added: oil, natural gas and NGL] production to downstream markets.

Such midstream systems include [removed: the systems we operate,] [added: EnLink’s systems,] as well as [added: other] systems operated by [added: us or] third parties.

Such access could be lost due to a [removed: number of factors, including,]

[added: number of factors, including,] but not limited to, weather conditions, accidents, field labor issues or strikes.

Political developments can restrict production levels, enact price controls, change environmental protection [removed: requirements,] [added: requirements] and increase taxes, royalties and other amounts payable to governments or governmental agencies.

_Income Taxes_ – We are subject to federal, state, provincial and local income [removed: taxes] [added: taxes,] and our operating cash flow is sensitive to the amount of income taxes we must pay.

[removed: Recently, the] [added: The] United States President and other policy makers have proposed provisions that would, if enacted, make significant changes to United States tax laws applicable to us.

Legislative initiatives and discussions to date have focused [added: on the development of cap-and-trade and/or carbon tax programs.]

We could therefore be subject to [removed: caps,] [added: caps] and penalties if emissions exceeded the caps.

Moreover, because oil and natural gas are used as chemical [removed: feedstocks] [added: feed stocks] and not solely as fossil fuel, applying a carbon tax to oil and gas at the production stage would be excessive with respect to actual carbon emissions from petroleum fuels.

[removed: There is no assurance that changes] [added: Changes] in or additions to public policy regarding the protection of the environment [removed: will not] [added: could] have a significant impact on our operations and profitability.

We have limited influence and control over the operation or future development of such properties, including compliance with environmental, health and safety regulations or the amount of [added: required future capital expenditures.]

[removed: The oil and gas] [added: Our] industry has become increasingly dependent on digital technologies to conduct daily operations.

Cyber attacks often attempt to gain unauthorized access to digital systems for purposes of misappropriating assets or sensitive information, corrupting [removed: data,] [added: data] or causing operational disruption and may be carried out by third parties or insiders.

Although we have not suffered material losses related to cyber attacks, if we were successfully [removed: attacked] [added: attacked,] we may incur substantial remediation and other costs or suffer other negative consequences.

[removed: Finally, as] [added: As] the sophistication of cyber attacks continues to evolve, we may be required to expend significant additional resources to further enhance our digital security or to remediate vulnerabilities.

| | • | | geopolitical risks; |

| --- | --- | --- | --- |

_Hydraulic Fracturing_ – Several proposals are before the U.S. Congress and other federal agencies that, if implemented, could either restrict the practice of hydraulic fracturing or subject the process to further regulation, including regulation of hydraulic fracturing on federal lands and tribal reservations; regulation of air emissions; regulation of wastewater discharges from unconventional oil and gas resources; and required disclosure of chemicals and mixtures used in hydraulic fracturing.

Many states have already adopted and more states are considering adopting laws and/or regulations that require disclosure of chemicals used in hydraulic fracturing and impose stringent permitting, disclosure and well-construction requirements on hydraulic fracturing operations.

Hydraulic fracturing of wells and subsurface water disposal are also under public and governmental scrutiny due to potential environmental and physical impacts.

In addition, some states and municipalities have significantly limited drilling activities and/or hydraulic fracturing, or are considering doing so.

Although it is not possible at this time to predict the final outcome of these proposals, any new federal, state or local restrictions on hydraulic fracturing that may be imposed in areas in which we conduct business could potentially result in increased compliance costs, delays in development or restrictions on our operations.

We apply technical and process controls in line with the National Institute of Standards & Technology framework to secure corporate information assets.

In addition, we participate in information sharing partnerships to collect relevant threat intelligence and pro-actively identify and mitigate targeted attacks.

_Hydraulic Fracturing_ – The Bureau of Land Management is considering the possibility of additional regulation of hydraulic fracturing on federal and Indian lands.

Currently, regulation of hydraulic fracturing is conducted primarily at the state level through permitting and other compliance requirements.

We lease federal and Indian lands and would be affected by the Interior Department proposal if it were to become law.

on the development of cap-and-trade and/or carbon tax programs.

required future capital expenditures.

Overview of [removed: 2013] [added: 2014] Results

[removed: 2013] [added: 2014] was [removed: another] [added: a] year of strong execution and [removed: exciting change] [added: strengthening of the portfolio] for Devon.

Key measures of our [removed: 2013] performance are summarized [removed: below, which exclude amounts from our discontinued operations.][added: below.]

| | | [removed: 2013] [added: 2014] | | | | Change | | | | [removed: 2012] [added: 2013] | | | | Change | | | | [removed: 2011] [added: 2012] | | |

| | | ($ in millions, except per share [added: and per Boe] amounts) | | | | | | | | | | | | | | | | | | |

| Net earnings (loss) [added: attributable to Devon (GAAP)] | | $ | [removed: (20 | ) | | | +89] [added: 1,607] | [removed: %] | | $ | [removed: (185] [added: (20] | ) | | [removed: | \-109 | % | |] $ | [removed: 2,134] [added: (185] | [added: )] |

| Earnings (loss) per share [added: (GAAP)] | | $ | [removed: (0.06 | ) | | | +87] [added: 3.91] | [removed: %] | | $ | [removed: (0.47] [added: (0.06] | ) | | [removed: | \-109 | % | |] $ | [removed: 5.10] [added: (0.47] | [added: )] |

| [removed: Adjusted] [added: Core] earnings per share [added: attributable to Devon] (1) | | $ | [removed: 4.26] [added: 4.91] | | | | [removed: +32] [added: +15] | % | | $ | [removed: 3.22] [added: 4.26] | | | | [removed: \-48] [added: +32] | % | | $ | [removed: 6.17] [added: 3.22] | |

| Realized price per Boe | | $ | [removed: 33.70] [added: 40.33] | | | | [removed: +18] [added: +20] | % | | $ | [removed: 28.65] [added: 33.70] | | | | [removed: \-17] [added: +18] | % | | $ | [removed: 34.64] [added: 28.65] | |

| Operating cash flow [added: – continuing operations] | | $ | [removed: 5,436] [added: 5,981] | | | | +10 | % | | $ | [removed: 4,930] [added: 5,436] | | | | [removed: \-21] [added: +10] | % | | $ | [removed: 6,246] [added: 4,930] | |

| Capitalized [removed: costs] [added: costs, including acquisitions] | | $ | [removed: 6,643] [added: 13,559] | | | | [removed: \-22] [added: +104] | % | | $ | [removed: 8,474] [added: 6,643] | | | | [removed: +9] [added: \-22] | % | | $ | [removed: 7,795] [added: 8,474] | |

| Shareholder [added: and noncontrolling interest] distributions [removed: (3)] | | $ | [removed: 348] [added: 621] | | | | [removed: +8] [added: +78] | % | | $ | [removed: 324] [added: 348] | | | | [removed: \-88] [added: +8] | % | | $ | [removed: 2,610] [added: 324] | |

| Reserves (MMBoe) | | | [removed: 2,963] [added: 2,754] | | | | [removed: 0] [added: \-7] | % | | | 2,963 | | | | [removed: \-1] [added: 0] | % | | | [removed: 3,005] [added: 2,963] | |

| (1) | [removed: Adjusted earnings, adjusted] [added: Core] earnings [added: and core earnings] per share [removed: and adjusted operating cash flow] [added: attributable to Devon] are [removed: not] financial measures [added: not] prepared in accordance with accounting principles generally accepted in the [removed: United States] [added: U.S.] (GAAP). For a description of [removed: adjusted earnings, adjusted] [added: core] earnings [added: and core earnings] per share [removed: and adjusted operating cash flow] [added: attributable to Devon,] as well as reconciliations to the comparable GAAP measures, see “Non-GAAP Measures” in this Item 7. |

| (2) | Computed as revenues from commodity [removed: sales, commodity derivatives settlements,] [added: sales] and marketing and midstream operations, less expenses for lease operations, marketing and midstream operations, [added: cash-based] general and [removed: administration, taxes other than income] [added: administrative, production and property] taxes and [removed: interest,] [added: net financing costs,] with the result divided by total production. |

Our [removed: 2013 adjusted] [added: 2014 net earnings attributable to Devon, core] earnings, [removed: adjusted] [added: core] earnings per share and [removed: adjusted] [added: core] operating income per Boe all increased compared to [removed: 2012.][added: 2013.]

North American crude oil and natural gas prices have historically been volatile based on supply and demand [removed: dynamics] [added: dynamics,] and we expect this volatility to continue into [removed: 2014.][added: 2015.]

Although natural gas prices improved in [removed: 2013] [added: 2014] compared to [removed: 2012,] [added: 2013,] natural gas continues to be challenged due to an imbalance between supply and demand across North America.

We exited [removed: 2013] [added: 2014] with a production profile comprised of roughly [removed: 55 percent natural gas, 25] [added: 35] percent oil, [removed: and] 20 percent natural gas [removed: liquids.][added: liquids and 45 percent natural gas.]

Recognizing the relative value of crude oil, we are devoting the vast majority of our [removed: 2014] [added: 2015] capital investment toward growing our oil production, particularly the sweet grades of oil found in the U.S. [removed: To make a significant shift in our production profile, we expect to complete a $6 billion acquisition of Eagle Ford Shale assets in the first quarter of 2014 and divest non-core, dry natural gas assets throughout 2014.]

All amounts in this document related to our International operations [added: for the year ended December 31, 2012] are presented as discontinued.

[removed: _Oil,] [added: _Oil,] Gas and NGL [removed: Production_][added: Production_]

| | | [removed: 2013] [added: 2014] | | | | Change | | | | [removed: 2012] [added: 2013] | | | | Change | | | | [removed: 2011] [added: 2012] | | |

| Anadarko Basin | | | [removed: 9.1] [added: 10] | | | | [removed: +38] [added: +12] | % | | | [removed: 6.6] [added: 9] | | | | [removed: +52] [added: +38] | % | | | [removed: 4.4] [added: 7] | |

| Barnett Shale | | | [removed: 2.0] [added: 2] | | | | [removed: +22] [added: \-2] | % | | | [removed: 1.6] [added: 2] | | | | [removed: \-12] [added: +22] | % | | | [removed: 1.8] [added: 2] | |

| Mississippian-Woodford Trend | | | [removed: 4.7] [added: 9] | | | | [removed: +625] [added: +93] | % | | | [removed: 0.7] [added: 5] | | | | [removed: N/M] [added: +625] | [added: %] | | | [removed: —] [added: 1] | |

| Permian Basin | | | [removed: 46.4] [added: 56] | | | | [removed: +28] [added: +19] | % | | | [removed: 36.3] [added: 46] | | | | [removed: +30] [added: +28] | % | | | [removed: 27.8] [added: 36] | |

| Anadarko Basin | | | [removed: 285.8] [added: 32] | | | | [removed: 0] [added: +28] | % | | | [removed: 286.3] [added: 25] | | | | [removed: +25] [added: +43] | % | | | [removed: 229.1] [added: 17] | |

| Barnett Shale | | | [removed: 1,024.9] [added: 54] | | | | [removed: \-5] [added: \-1] | % | | | [removed: 1,074.6] [added: 55] | | | | [removed: +7] [added: +17] | % | | | [removed: 1,006.0] [added: 47] | |

| Mississippian-Woodford Trend | | | [removed: 11.6] [added: 30] | | | | [removed: +701] [added: +155] | % | | | [removed: 1.5] [added: 12] | | | | [removed: N/M] [added: +701] | [added: %] | | | [removed: —] [added: 1] | |

| Permian Basin | | | [removed: 104.8] [added: 18] | | | | [removed: +24] [added: +29] | % | | | [removed: 84.8] [added: 14] | | | | [removed: +13] [added: +26] | % | | | [removed: 75.1] [added: 11] | |

| Anadarko Basin | | | [removed: 24.9] [added: 94] | | | | [removed: +43] [added: +15] | % | | | [removed: 17.3] [added: 82] | | | | [removed: +43] [added: +14] | % | | | [removed: 12.2] [added: 72] | |

| Mississippian-Woodford Trend | | | [removed: 1.2] [added: 5] | | | | [removed: +770] [added: +342] | % | | | [removed: 0.1] [added: 1] | | | | [removed: N/M] [added: +770] | [added: %] | | | — | |

| Permian Basin | | | [removed: 14.1] [added: 96] | | | | [removed: +26] [added: +23] | % | | | [removed: 11.2] [added: 78] | | | | [removed: +29] [added: +27] | % | | | [removed: 8.7] [added: 62] | |

| Rockies | | | [removed: 0.8] [added: 9] | | | | [removed: +5] [added: +13] | % | | | [removed: 0.8] [added: 8] | | | | [removed: \-5] [added: +31] | % | | | [removed: 0.8] [added: 6] | |

| Mississippian-Woodford Trend | | | [removed: 7.9] [added: 20] | | | | [removed: +662] [added: +160] | % | | | [removed: 1.0] [added: 8] | | | | [removed: N/M] [added: +662] | [added: %] | | | [removed: —] [added: 1] | |

[removed: _Oil,] [added: _Oil,] Gas and NGL [removed: Pricing_][added: Pricing_]

| | | [removed: 2013] [added: 2014] (1) | | | | Change | | | | [removed: 2012] [added: 2013] (1) | | | | Change | | | | [removed: 2011] [added: 2012] (1) | | |

| U.S. | | $ | [removed: 94.52] [added: 85.64] | | | | [removed: +7] [added: \-9] | % | | $ | [removed: 88.68] [added: 94.52] | | | | [removed: \-3] [added: +7] | % | | $ | [removed: 91.19] [added: 88.68] | |

| Canada | | $ | [removed: 69.18] [added: 68.14] | | | | [removed: +1] [added: \-1] | % | | $ | [removed: 68.29] [added: 69.18] | | | | [removed: \-8] [added: +1] | % | | $ | [removed: 74.32] [added: 68.29] | |

We completed three strategic portfolio transformation initiatives that were focused on building value per share.

On February 28, 2014, we acquired certain of GeoSouthern’s Eagle Ford assets and operations in south Texas for approximately $6.0 billion.

This acquisition included approximately 250 MMBoe of proved reserves.

Additionally, since closing the transaction, we have produced approximately 24 MMBoe from our Eagle Ford development, with oil accounting for approximately 61% of our production from the play.

On March 7, 2014, we completed a transaction to combine substantially all of our U.S. midstream assets with Crosstex’s assets to form EnLink, a new midstream business that we control.

This transaction is described more fully in Note 2 to the financial statements included in “Item 8.

Subsequent to the formation of EnLink’s midstream business, EnLink acquired additional oil and gas pipeline assets.

The results of operations from our assets contributed to EnLink are included in our consolidated financial statements for all periods presented.

Additionally, the results of operations for all assets contributed to EnLink are included in our consolidated financial statements subsequent to the completion of the transaction.

The portions of EnLink’s net earnings and stockholders’ equity not attributable to Devon’s controlling interest are shown separately as noncontrolling interests in our consolidated comprehensive statements of earnings and consolidated balance sheets.

Finally, we completed our asset divestitures of certain U.S. and Canadian properties through two significant transactions.

On April 1, 2014, we sold Canadian conventional assets for $2.8 billion ($3.125 billion Canadian dollars), and on August 29, 2014, we sold certain U.S. assets for $2.2 billion.

| Net earnings (loss) attributable to Devon | | $ | 1,607 | | | | +8184 | % | | $ | (20 | ) | | | +90 | % | | $ | (206 | ) |

| Core earnings attributable to Devon (1) | | $ | 2,017 | | | | +16 | % | | $ | 1,734 | | | | +33 | % | | $ | 1,305 | |

| Retained production (MBoe/d) | | | 622 | | | | +15 | % | | | 541 | | | | +6 | % | | | 511 | |

| Total production (MBoe/d) | | | 673 | | | | \-3 | % | | | 693 | | | | +2 | % | | | 682 | |

| Core operating income per Boe (2) | | $ | 27.28 | | | | +27 | % | | $ | 21.47 | | | | +28 | % | | $ | 16.78 | |

The improved 2014 results were driven primarily by increases in production from our retained properties, particularly higher-margin liquids volumes, combined with higher gas and bitumen price realizations.

EnLink’s earnings growth also contributed to improved 2014 results.

These factors, along with our portfolio transformation, drove higher earnings and operating cash flow in 2014.

In the second half of 2014, crude oil prices began a rapid and significant decline as global supply outpaced demand.

The decline increased further following OPEC’s announcement in late November 2014 that it would not reduce its production targets.

This decline continued into 2015 but has started to stabilize with the West Texas Intermediate (“WTI”) benchmark generally ranging between $45-$50 per barrel throughout January and early February 2015.

If WTI remained at this level throughout 2015, our realized crude price, excluding the effects of hedges, would decrease approximately 50% compared to 2014.

We expect most natural gas benchmark prices to be lower in 2015, as supply continues to surpass demand.

Our industry will be challenged by lower commodity prices.

However, we have strategically positioned our company so that we can prudently continue investing in our portfolio of assets.

First, following our 2014 asset divestitures our portfolio is more focused, and we will concentrate our capital programs on the highest return assets in our portfolio.

Second, we have hedged approximately 50 percent of our projected 2015 crude production at a floor price of $91 per barrel and approximately 40 percent of our natural gas production at $4.17 per Mcf.

These 2015 contracts had an approximate value of $2 billion at December 31, 2014.

Additionally, costs for the services we use are declining in response to lower commodity prices.

These factors will partially mitigate the effects of lower commodity prices.

Finally, EnLink’s growth as a result of recent acquisitions and planned asset dropdowns from Devon will generate additional cash resources that can be used for our capital investment.

Nevertheless, lower commodity prices create headwinds on our business.

Therefore, we are projecting a 20 percent decrease in capital spending in 2015.

Such spending will be focused on the oily assets in our portfolio currently generating the highest returns.

With this focus on our highest return assets, we expect growth in oil production to be between 20 and 25 percent in 2015.

Therefore, all results from those operations are excluded in the “Results of Operations” section unless otherwise noted.

| Eagle Ford | | | 39 | | | | N/M | | | | — | | | | N/M | | | | — | |

| Total U.S. | | | 127 | | | | +74 | % | | | 73 | | | | +35 | % | | | 54 | |

Our oil-focused drilling programs not only accomplished impressive oil production growth, but also expanded margins and improved operating cash flow.

Additionally, we took steps to high-grade our portfolio.

We did this by announcing an accretive Eagle Ford Shale acquisition, an innovative midstream combination, and the initiation of an asset divestiture program.

These actions will provide the platform from which we will deliver outstanding high-margin growth in 2014 and for many years to come.

| Adjusted earnings (1) | | $ | 1,734 | | | | +33 | % | | $ | 1,305 | | | | \-49 | % | | $ | 2,578 | |

| Production (MBoe/d) | | | 692.9 | | | | +2 | % | | | 682.3 | | | | +4 | % | | | 657.7 | |

| Adjusted operating income per Boe (2) | | $ | 19.86 | | | | +2 | % | | $ | 19.41 | | | | \-23 | % | | $ | 25.11 | |

| --- | --- |

| (3) | Includes common stock dividends and share repurchases. |

Our 2013 net loss resulted from noncash asset impairments, which reduced our earnings by $2.0 billion ($1.4 billion after tax).

Excluding the asset impairments and other items typically excluded by securities analysts, our adjusted earnings were $1.7 billion, or $4.26 per diluted share.

This compares to adjusted earnings of $1.3 billion, or $3.22 per diluted share in 2012.

The improved 2013 results were driven primarily by increases in gas prices, oil volumes and oil realizations.

These factors also contributed to higher adjusted operating cash flow, which combined with a reduction in capitalized costs, caused our cash flow deficit to narrow considerably in 2013.

However, arctic air movements across North America during the early weeks of 2014 have caused natural gas demand to surge.

As storage inventories have significantly declined in response to the recent weather conditions, natural gas prices have surpassed $5 per Mcf for the first time since the summer of 2010.

Further helping demand, new uses of natural gas in industrial, power and other sectors will continue to help support price dynamics.

Nevertheless, we still expect natural gas prices to be range-bound as natural gas supply continues to grow, particularly in the U.S. Looking to 2014, we expect natural gas prices will remain relatively consistent or possibly increase moderately from 2013 levels.

Similar to natural gas in recent years, a surge in the supply of natural gas liquids has kept prices challenged.

The majority of our natural gas is comprised of ethane, one of the most price-challenged liquids processed from the natural gas stream.

We expect 2014 natural gas liquids prices will be range-bound and remain relatively flat compared to 2013.

Crude oil prices remained relatively stable throughout 2013, and oil continues to be more valuable than natural gas on a relative energy-equivalent basis.

As a result, we and other producers have been focused on growing oil production.

North American crude oil supply continues to increase due to the continued use of horizontal drilling technology throughout the U.S. and expansions of heavy oil production operations primarily in Canada.

Global crude oil demand is expected to grow with supply in 2014.

As crude oil supply grows, transportation capacity to downstream markets will be increasingly important.

Bottlenecks and other transportation limitations may continue to add volatility among U.S. and Canadian grades of oil.

However, we expect 2014 oil prices will remain relatively consistent with 2013.

Once these transactions are complete, we expect oil will represent more than 30 percent of our production profile.

Further enhancing the value of our assets, we are combining substantially all of our U.S. midstream assets with Crosstex Energy, Inc.’s and Crosstex Energy, L.P.’s assets to form a new midstream business.

The new business will consist of EnLink Midstream Partners, L.P. (the “Partnership”) and EnLink Midstream, LLC (“EnLink”), a master limited partnership and a general partner entity, which will both be publicly traded entities.

The new midstream business will own Devon’s midstream assets in the Barnett Shale in north Texas and the Cana and Arkoma Woodford Shales in Oklahoma, as well as Devon’s economic interest in Gulf Coast Fractionators in Mt.

Belvieu, Texas.

Devon will own a 70 percent controlling interest in EnLink and an approximate 53 percent controlling interest in the Partnership.

Therefore, the production, revenue and expense amounts presented in this “Results of Operations” section exclude amounts related to our International assets unless otherwise noted.

| Rockies | | | 7.8 | | | | +30 | % | | | 6.0 | | | | +38 | % | | | 4.3 | |

| Other | | | 3.0 | | | | +5 | % | | | 2.8 | | | | +12 | % | | | 2.6 | |

| U.S. core and emerging properties | | | 73.0 | | | | +35 | % | | | 54.0 | | | | +32 | % | | | 40.9 | |

| Canadian heavy oil | | | 27.9 | | | | \-3 | % | | | 28.8 | | | | \-8 | % | | | 31.2 | |

| Total core and emerging properties | | | 100.9 | | | | +22 | % | | | 82.8 | | | | +15 | % | | | 72.1 | |

The following disclosures are not meant to be precise indicators of expected future [removed: losses,] [added: losses] but rather indicators of reasonably possible losses.

Realized pricing is primarily driven by the prevailing worldwide price for crude oil and spot market prices applicable to our U.S. and Canadian gas [removed: and NGL] production.

Pricing for [removed: oil, gas] [added: oil] and [removed: NGL] [added: gas] production has been volatile and unpredictable as discussed in “Item 1A.

The key terms to all our [removed: oil, gas] [added: oil] and [removed: NGL] [added: gas] derivative financial instruments as of December 31, [removed: 2013] [added: 2014] are presented in Note [removed: 2] [added: 3] to the financial statements under “Item 8.

At December 31, [removed: 2013,] [added: 2014,] a 10 percent increase [removed: and] [added: or a] 10 percent decrease in the forward curves associated with our commodity derivative instruments would have changed our net asset positions by the following amounts:

| Gas derivatives | | $ | [removed: (225] [added: (74] | ) | | $ | [removed: 202] [added: 69] | |

At December 31, [removed: 2013,] [added: 2014,] we had total debt of [removed: $12.0] [added: $11.3] billion.

Of this amount, [removed: $9.9] [added: $9.3] billion bears fixed interest rates averaging [removed: 4.9] [added: 5.4] percent.

[removed: The remaining $2.1] [added: Of the $11.3] billion of [removed: debt] [added: total debt, $2.0 billion] is comprised of [removed: commercial paper borrowings that bear interest rates averaging 0.30 percent and] floating rate debt that [removed: at December 31, 2013 had] [added: bear interest] rates averaging [removed: 0.73] [added: 0.74] percent.

A 10 percent unfavorable change in the Canadian-to-U.S. dollar exchange rate would not materially impact our December 31, [removed: 2013] [added: 2014] balance sheet.

However, one of these foreign subsidiaries holds Canadian-dollar cash and engages in [removed: short-term] intercompany loans with Canadian subsidiaries that are based in Canadian dollars.

Additionally, at December 31, [removed: 2013,] [added: 2014,] we held foreign currency exchange forward contracts to hedge exposures to fluctuations in exchange rates on the Canadian-dollar cash and intercompany loans.

Based on the amount of the cash and intercompany loans as of December 31, [removed: 2013,] [added: 2014,] a 10 percent change in the foreign currency exchange rates would not have materially impacted our balance sheet.

| Oil derivatives | | $ | (282 | ) | | $ | 279 | |

| Processing and fractionation derivatives | | $ | (2 | ) | | $ | 2 | |

As of December 31, 2014, we had open interest rate swap positions that are presented in “Item 8.

Financial Statements and Supplementary Data – Note 3” in this report.

The fair values of our interest rate swaps are largely determined by estimates of the forward curves of the 3 month LIBOR rate.

A 10 percent change in these forward curves would not have materially impacted our balance sheet at December 31, 2014.

| Oil derivatives | | $ | (594 | ) | | $ | 545 | |

| NGL derivatives | | $ | (1 | ) | | $ | — | |

For the fiscal year ended December 31, [removed: 2013][added: 2014]

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June [removed: 28, 2013,] [added: 30, 2014,] was approximately [removed: $20.9] [added: $32.3] billion, based upon the closing price of [removed: $51.88] [added: $79.40] per share as reported by the New York Stock Exchange on such date.

On February [removed: 12, 2014, 407.4] [added: 11, 2015, 411.1] million shares of common stock were outstanding.

Proxy statement for the [removed: 2014] [added: 2015] annual meeting of stockholders – Part III

| [Items 1 and 2. Business and [removed: Properties](#tx656849_2)] [added: Properties](#tx859923_2)] | | | 3 | |

| [removed: Item] [added: [Item] 1A. [removed: [Risk Factors](#tx656849_3)] [added: Risk Factors](#tx859923_3)] | | | [removed: 17] [added: 18] | |

| [removed: Item] [added: [Item] 1B. [removed: [Unresolved] [added: Unresolved] Staff [removed: Comments](#tx656849_4)] [added: Comments](#tx859923_4)] | | | [removed: 21] [added: 22] | |

| [removed: Item] [added: [Item] 3. [removed: [Legal Proceedings](#tx656849_5)] [added: Legal Proceedings](#tx859923_5)] | | | [removed: 21] [added: 22] | |

| [removed: Item] [added: [Item] 4. [removed: [Mine] [added: Mine] Safety [removed: Disclosures](#tx656849_6)] [added: Disclosures](#tx859923_6)] | | | [removed: 21] [added: 22] | |

| [removed: Item] [added: [Item] 5. [removed: [Market] [added: Market] for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#tx656849_8)] [added: Securities](#tx859923_8)] | | | [removed: 22] [added: 23] | |

| [removed: Item] [added: [Item] 6. [removed: [Selected] [added: Selected] Financial [removed: Data](#tx656849_9)] [added: Data](#tx859923_9)] | | | [removed: 24] [added: 25] | |

| [removed: Item] [added: [Item] 7. [removed: [Management’s] [added: Management’s] Discussion and Analysis of Financial Condition and Results of [removed: Operations](#tx656849_10)] [added: Operations](#tx859923_10)] | | | [removed: 25] [added: 26] | |

| [removed: Item] [added: [Item] 7A. [removed: [Quantitative] [added: Quantitative] and Qualitative Disclosures about Market [removed: Risk](#tx656849_11)] [added: Risk](#tx859923_11)] | | | [removed: 47] [added: 50] | |

| [removed: Item] [added: [Item] 8. [removed: [Financial] [added: Financial] Statements and Supplementary [removed: Data](#tx656849_12)] [added: Data](#tx859923_12)] | | | [removed: 49] [added: 52] | |

| [removed: Item] [added: [Item] 9. [removed: [Changes] [added: Changes] in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#tx656849_13)] [added: Disclosure](#tx859923_13)] | | | [removed: 104] [added: 115] | |

| [removed: Item] [added: [Item] 9A. [removed: [Controls] [added: Controls] and [removed: Procedures](#tx656849_14)] [added: Procedures](#tx859923_14)] | | | [removed: 104] [added: 115] | |

| [removed: Item] [added: [Item] 9B. [removed: [Other Information](#tx656849_15)] [added: Other Information](#tx859923_15)] | | | [removed: 104] [added: 115] | |

| [PART [removed: III](#tx656849_16)] [added: III](#tx859923_16)] | | | | |

| [removed: Item] [added: [Item] 10. [removed: [Directors,] [added: Directors,] Executive Officers and Corporate [removed: Governance](#tx656849_17)] [added: Governance](#tx859923_17)] | | | [removed: 105] [added: 116] | |

| [removed: Item] [added: [Item] 11. [removed: [Executive Compensation](#tx656849_18)] [added: Executive Compensation](#tx859923_18)] | | | [removed: 105] [added: 116] | |

| [removed: Item] [added: [Item] 12. [removed: [Security] [added: Security] Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#tx656849_19)] [added: Matters](#tx859923_19)] | | | [removed: 105] [added: 116] | |

| [removed: Item] [added: [Item] 13. [removed: [Certain] [added: Certain] Relationships and Related Transactions, and Director [removed: Independence](#tx656849_20)] [added: Independence](#tx859923_20)] | | | [removed: 105] [added: 116] | |

| [removed: Item] [added: [Item] 14. [removed: [Principal] [added: Principal] Accountant Fees and [removed: Services](#tx656849_21)] [added: Services](#tx859923_21)] | | | [removed: 105] [added: 116] | |

| [removed: Item] [added: [Item] 15. [removed: [Exhibits] [added: Exhibits] and Financial Statement [removed: Schedules](#tx656849_23)] [added: Schedules](#tx859923_23)] | | | [removed: 106] [added: 117] | |

Such forward-looking statements are based on our examination of historical operating trends, the information used to prepare our December 31, [removed: 2013] [added: 2014] reserve reports and other data in our possession or available from third parties.

Devon Energy Corporation (“Devon”) is a leading independent energy company engaged primarily in the exploration, development and production of oil, natural gas and [removed: NGLs.][added: natural gas liquids (NGLs).]

We have [removed: nearly] doubled our onshore North American oil production since [removed: 2008] [added: 2010 to more than 200,000 barrels per day] and have a deep inventory of development [removed: opportunities to deliver future oil growth.][added: opportunities.]

In pursuit of this objective, we focus on growing cash flow per share, adjusted for debt, which [added: we believe] has the greatest long-term correlation to share price appreciation in our industry.

| | • | | maintaining [added: financial flexibility and] a strong balance sheet. |

In exchange for a controlling interest in both EnLink and the [removed: Partnership, Devon will contribute its] [added: General Partner, we contributed our] equity interest in [added: EnLink Midstream Holdings, LP,] a newly formed Devon subsidiary (“EnLink Holdings”) and $100 million in cash.

EnLink Holdings [removed: will own Devon’s] [added: owns] midstream assets in the Barnett Shale in north Texas and the [removed: Cana] [added: Cana-] and [removed: Arkoma Woodford] [added: Arkoma-Woodford] Shales in Oklahoma, as well as [removed: Devon’s] [added: an] economic interest in Gulf Coast Fractionators in [removed: Mt.][added: Mont Belvieu, Texas.]

[removed: The Partnership] [added: As of December 31, 2014, the General Partner] and EnLink [removed: will] each [removed: own] [added: held] 50% of EnLink Holdings.

The locations of our [removed: key] [added: oil and gas] properties are presented on the following map.

[removed: ][added: ]

The following table outlines a summary of key data in each of our operating areas for [removed: 2013.][added: 2014.]

Gas proved reserves and production are [removed: converted] [added: converted, at the pressure base standard of each respective state in which the gas is produced,] to Boe at the rate of six Mcf of gas per Bbl of oil, based upon the approximate relative energy content of gas and oil.

| | | Proved Reserves | | | | | | | | | | | | Production | | | | | | | | | | | | [removed: Gross Wells Drilled] | | |

| | | MMBoe | | | | % of Total | | | | % Liquids | | | | MBoe/d | | | | % of Total | | | | [removed: % Liquids] [added: % Liquids] | | | | [added: Gross Wells Drilled] | | |

| Mississippian-Woodford Trend | | | [removed: 32] [added: 22] | | | | 1 | % | | | [removed: 66] [added: 73] | % | | | [removed: 7.9] [added: 20] | | | | [removed: 1] [added: 3] | % | | | [removed: 75] [added: 79] | % | | | [removed: 232] [added: 236] | |

| Rockies | | | [removed: 37] [added: 42] | | | | [removed: 1] [added: 2] | % | | | [removed: 47] [added: 48] | % | | | [removed: 21.5] [added: 20] | | | | 3 | % | | | [removed: 40] [added: 50] | % | | | [removed: 37] [added: 40] | |

10-K 1 d859923d10k.htm FORM 10-K

| [PART I](#tx859923_1) | | | | |

| [PART II](#tx859923_7) | | | | |

| [PART IV](#tx859923_22) | | | | |

| [Signatures](#tx859923_24) | | | 124 | |

Devon also produces over 1.6 billion cubic feet of natural gas a day and more than 130,000 barrels of natural gas liquids per day.

Additionally, in 2014, we combined substantially all of our U.S. midstream assets with Crosstex Energy, Inc. and Crosstex Energy, LP (together “Crosstex”) to form a leading integrated midstream business with enhanced size and scale in key operating regions in the U.S. This midstream business focuses on providing gathering, transmission, processing, fractionation and marketing to producers of natural gas, NGLs, crude oil and condensate.

As of December 31, 2014, Devon and its consolidated subsidiaries had approximately 6,600 employees.

Approximately 1,100 of such employees are employed by EnLink Midstream Partners, LP (“EnLink”) (through its subsidiaries).

| | • | | growing and sustaining a premier portfolio of assets focused on high rate-of-return projects; |

| | • | | achieving superior execution through operational and technical excellence, effective project management and exceptional safety results; |

| | • | | optimizing cash flow through disciplined capital allocation and cost management; and |

In pursuit of our goal to build value per share, we executed three strategic initiatives in 2014:

| | • | | _Eagle Ford Acquisition_ – On February 28, 2014, we completed our $6 billion acquisition of interests in certain oil and gas properties, leasehold mineral interests and related assets located in the Eagle Ford from GeoSouthern Energy Corporation (“GeoSouthern”). We funded the acquisition price with cash on hand and debt financing. In connection with the GeoSouthern transaction, we acquired approximately 82,000 net acres located in DeWitt and Lavaca counties in south Texas. |

| | • | | _MLP Formation_ – On March 7, 2014, Devon and Crosstex completed a transaction to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business. The new business consists of EnLink and EnLink Midstream, LLC (the “General Partner”), a master limited partnership (“MLP”) and a general partner entity, respectively, which are both publicly traded. Devon controls this consolidated entity through its ownership interest in the General Partner. |

| | • | | _Asset Divestitures_ – In 2014, we completed the divestitures of certain U.S. and Canadian assets for total cash consideration in excess of $5 billion. Proceeds were primarily used to repay debt resulting from the Eagle Ford acquisition noted above. |

The initiatives above resulted in a more focused asset base, allowing us to better allocate capital and employee resources to the highest-value properties and prospects in our portfolio.

Additional information related to these properties follows this map, as well as information describing EnLink’s assets.

| Anadarko Basin | | | 419 | | | | 15 | % | | | 42 | % | | | 94 | | | | 14 | % | | | 45 | % | | | 130 | |

| Barnett Shale | | | 1,037 | | | | 38 | % | | | 25 | % | | | 208 | | | | 31 | % | | | 27 | % | | | 84 | |

| Eagle Ford | | | 247 | | | | 9 | % | | | 74 | % | | | 65 | | | | 10 | % | | | 78 | % | | | 242 | |

| Permian Basin | | | 279 | | | | 10 | % | | | 79 | % | | | 96 | | | | 14 | % | | | 77 | % | | | 324 | |

| U.S. – other | | | 159 | | | | 5 | % | | | 35 | % | | | 33 | | | | 5 | % | | | 32 | % | | | 5 | |

| Total U.S. | | | 2,205 | | | | 80 | % | | | 42 | % | | | 536 | | | | 80 | % | | | 48 | % | | | 1,061 | |

| Canadian heavy oil | | | 549 | | | | 20 | % | | | 99 | % | | | 86 | | | | 12 | % | | | 95 | % | | | 205 | |

| Total retained properties | | | 2,754 | | | | 100 | % | | | 53 | % | | | 622 | | | | 92 | % | | | 55 | % | | | 1,266 | |

| Divested properties | | | — | | | | N/A | | | | N/A | | | | 51 | | | | 8 | % | | | 24 | % | | | — | |

| Total | | | 2,754 | | | | 100 | % | | | 53 | % | | | 673 | | | | 100 | % | | | 52 | % | | | 1,266 | |

In 2015, we plan to drill approximately 95 gross wells in the Anadarko Basin.

_Eagle Ford_ – We have approximately 82,000 net acres located in the DeWitt and Lavaca counties in south Texas.

The Eagle Ford is an industry-leading, light-oil play and is delivering some of the highest rate-of-return drilling opportunities in North America.

We acquired our position in the Eagle Ford on February 28, 2014 from GeoSouthern and subsequently have produced approximately 24 MMBoe with oil accounting for 61 percent of production from the play.

Our acreage in DeWitt County is derisked with at least one well drilled in each of the drilling units, providing us with a significant development drilling inventory.

Our development in Lavaca County is less mature, but we have had encouraging results from recently drilled wells.

In addition, we have a 100 percent interest in the Victoria Express Pipeline (“VEX”) in south Texas.

The VEX pipeline is a 56 mile crude oil pipeline from the Eagle Ford to the Port of Victoria terminal that has a current capacity of 50 MBOPD.

_Permian Basin_ – The Permian Basin has been a legacy asset for Devon and continues to offer exploration and low-risk development opportunities from many geologic reservoirs and play types, including the oil-rich Bone Spring, Wolfcamp Shale, Delaware and various conventional formations.

These and other emerging oil and liquids-rich opportunities across our acreage in the Permian Basin will deliver high-margin growth for many years to come.

Recent drilling success in these formations has expanded our drilling inventory, and we expect further growth as we continue to de-risk this emerging light-oil opportunity.

In 2014, we brought the third phase of Jackfish into operation.

10-K 1 d656849d10k.htm FORM 10-K

(Do not check if a smaller reporting company)

| [PART I](#tx656849_1) | | | | |

| [PART II](#tx656849_7) | | | | |

| [PART IV](#tx656849_22) | | | | |

| [Signatures](#tx656849_24) | | | 113 | |

We produce about 2.4 billion cubic feet of natural gas a day – more than 3 percent of all the gas consumed in North America.

We also own natural gas pipelines, plants and treatment facilities in many of our producing areas, making us one of North America’s larger processors of natural gas.

Devon pioneered the commercial development of natural gas from shale and coalbed formations, and we are a proven leader in using steam to produce bitumen from the Canadian oil sands.

As of December 31, 2013, we had approximately 5,900 employees.

| | • | | exploring for undiscovered oil and natural gas reserves, |

| | • | | purchasing and developing oil and natural gas properties, |

| | • | | enhancing the value of production through marketing and midstream activities, |

| | • | | optimizing production operations to control costs, and |

We hold 14 million net acres, of which roughly 60 percent are undeveloped, providing us with a platform for future growth.

An important factor in determining the direction of our growth strategy, particularly our capital allocation, is the current and forecasted pricing applicable to our production.

Our industry had been operating in an environment that had involved depressed North American gas prices contrasted with more robust prices for oil

and NGLs.

Consequently, we have focused our recent capital programs on higher-margin oil and liquids-based resource capture and development.

With recent changes in market conditions that have led to challenged prices for NGLs and Canadian heavy oil, we are refining our capital allocations as needed and evaluating other investment opportunities to maximize and accelerate growth in cash flow per debt-adjusted share.

In pursuit of our goal to build value per share, we entered into two significant agreements near the end of 2013.

On November 20, 2013, we entered into an agreement with GeoSouthern Intermediate Holdings, LLC, to acquire certain oil and gas properties, leasehold mineral interests and related assets located in the Eagle Ford Shale in south Texas for $6 billion in cash.

The transaction is expected to close in the first quarter of 2014, and we have the necessary financing in place to fund the acquisition.

On October 21, 2013, Devon, Crosstex Energy, Inc. and Crosstex Energy, L.P. (collectively “Crosstex”) announced plans to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business.

The new business will consist of EnLink Midstream Partners, L.P. (the “Partnership”) and EnLink Midstream, LLC (“EnLink”), respectively, a master limited partnership and a general partner entity, which will both be publicly traded entities.

Belvieu, Texas.

The completion of these transactions is subject to Crosstex Energy, Inc. shareholder approval.

Devon expects Crosstex Energy, Inc. shareholders will approve the transaction, allowing Devon and Crosstex to complete the transaction near the end of the first quarter of 2014.

Upon closing of the transactions, the pro forma ownership of EnLink will be approximately:

| | • | | 70% – Devon Energy Corporation |

| | • | | 30% – Current Crosstex Energy, Inc. public stockholders |

Upon closing of the transactions, the pro forma ownership of the Partnership will be approximately:

| | • | | 53% – Devon Energy Corporation |

| | • | | 40% – Current Crosstex Energy, L.P. public unitholders |

| | • | | 7% – the General Partner |

In conjunction with the announcement of the GeoSouthern acquisition, we also announced plans to divest certain non-core properties located throughout Canada and the U. S. On February 19, 2014, we announced our first transaction as a part of this divestiture program, in which we agreed to sell the majority of our Canadian conventional assets to Canadian Natural Resources Limited for approximately $2.8 billion ($3.125 billion in Canadian dollars).

We expect this non-core divestiture program will generate organizational and operational efficiencies and will allow us to allocate capital and employee resources to higher-value properties and prospects.

We expect to complete the majority of the divestitures by the end of 2014.

Once the GeoSouthern acquisition and non-core divestitures are complete, we expect oil production will represent more than 30% of our production profile.

These properties include those that currently have significant proved reserves and production, as well as properties that do not currently have significant levels of proved reserves or production but are expected to be the source of significant future growth in proved reserves and production.

Not applicable.

We have no unresolved SEC Staff comments that have been outstanding greater than 180 days from December 31, 2013.

On February [removed: 5, 2014,] [added: 11, 2015,] there were [removed: 10,893] [added: 8,605] holders of record of our common stock.

The following table sets forth the quarterly high and low sales prices for our common stock as reported by the NYSE during [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] as well as the quarterly dividends per share paid during [removed: 2013] [added: 2014] and [removed: 2012.][added: 2013.]

The following performance graph compares the yearly percentage change in the cumulative total shareholder return on Devon’s common stock with the cumulative total returns of the Standard & Poor’s 500 index (“the S&P 500 [removed: Index”), the group of companies included in the Crude Petroleum and Natural Gas Standard Industrial Classification code (“the SIC Code”)] [added: Index”)] and a peer group of companies to which we compare our performance.

The peer group includes Anadarko Petroleum Corporation, Apache Corporation, Chesapeake Energy Corporation, ConocoPhillips, Encana Corporation, EOG Resources, Inc., Hess Corporation, Marathon Oil Corporation, Murphy Oil Corporation, Newfield Exploration Company, Noble Energy, Inc., Occidental Petroleum Corporation, Pioneer Natural Resources Company and Talisman Energy, Inc. The graph was prepared assuming $100 was invested on December 31, [removed: 2008] [added: 2009] in Devon’s common stock, the S&P 500 [removed: Index, the SIC Code] [added: Index] and the peer group and dividends have been reinvested subsequent to the initial investment.

[removed: ][added: ]

The following table provides information regarding purchases of our common stock that were made by us during the fourth quarter of [removed: 2013.][added: 2014.]

[removed: Such purchases] [added: | (1) | Share repurchases] represent shares received by us from employees and directors for the payment of personal income tax withholding on restricted stock vesting and stock option exercises. [added: |]

| Period | | Total Number of Shares [removed: Purchased] [added: Purchased (1)] | | | | Average Price Paid per Share | | |

Eligible employees purchased approximately [removed: 52,500] [added: 57,300] shares of our common stock in [removed: 2013,] [added: 2014,] at then-prevailing stock prices, that they held through their ownership in the Stock Fund.

Similarly, under the Devon Canada Corporation Savings Plan (the “Canadian Plan”), eligible Canadian employees may purchase shares of our common stock through an investment in the Canadian Plan, which is administered by an independent [removed: trustee.][added: trustee, Sun Life Assurance Company of Canada.]

[removed: We acquired the shares] [added: Shares] sold under the Canadian Plan [added: were acquired] through open-market purchases.

These shares and any interest in the Canadian Plan were offered and sold in reliance on the exemptions for offers and sales of securities made outside of the U.S., including under Regulation S for offers and sales of securities to employees pursuant to an employee benefit plan established and administered in accordance with the law of a country other than the U.S. [added: In 2014, there were no shares purchased by Canadian employees.]

| 2014: | | | | | | | | | | | | |

| Quarter Ended December 31, 2014 | | $ | 68.80 | | | $ | 51.76 | | | $ | 0.24 | |

| Quarter Ended September 30, 2014 | | $ | 80.01 | | | $ | 67.58 | | | $ | 0.24 | |

| Quarter Ended June 30, 2014 | | $ | 80.63 | | | $ | 66.75 | | | $ | 0.24 | |

| Quarter Ended March 31, 2014 | | $ | 66.95 | | | $ | 57.67 | | | $ | 0.22 | |

| October 1 – October 31 | | | 1,036 | | | $ | 60.00 | |

| November 1 – November 30 | | | 39 | | | $ | 57.07 | |

| December 1 – December 31 | | | 343,187 | | | $ | 59.94 | |

| Total | | | 344,262 | | | $ | 59.94 | |

| --- | --- |

| 2012: | | | | | | | | | | | | |

| Quarter Ended December 31, 2012 | | $ | 63.00 | | | $ | 50.89 | | | $ | 0.20 | |

| Quarter Ended September 30, 2012 | | $ | 63.95 | | | $ | 54.56 | | | $ | 0.20 | |

| Quarter Ended June 30, 2012 | | $ | 73.14 | | | $ | 54.01 | | | $ | 0.20 | |

| Quarter Ended March 31, 2012 | | $ | 76.34 | | | $ | 62.13 | | | $ | 0.20 | |

| October 1 – October 31 | | | 1,077 | | | $ | 63.22 | |

| November 1 – November 30 | | | 118,940 | | | $ | 60.62 | |

| December 1 – December 31 | | | 331,389 | | | $ | 60.59 | |

| Total | | | 451,406 | | | $ | 60.61 | |

Eligible Canadian employees purchased approximately 10,800 shares of our common stock in 2013, at then-prevailing stock prices, that they held through their ownership in the Canadian Plan.

| | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | | | [removed: 2010] [added: 2011] | | | | [removed: 2009] [added: 2010] | | |

| Operating revenues | | $ | [removed: 10,397] [added: 19,566] | | | $ | [removed: 9,501] [added: 10,397] | | | $ | [removed: 11,445] [added: 9,501] | | | $ | [removed: 9,935] [added: 11,445] | | | $ | [removed: 8,010] [added: 9,935] | |

| Earnings (loss) from continuing operations (1) | | $ | [removed: (20] [added: 1,691] | [removed: )] | | $ | [removed: (185] [added: (20] | ) | | $ | [removed: 2,134] [added: (185] | [added: )] | | $ | [removed: 2,333] [added: 2,134] | | | $ | [removed: (2,753] [added: 2,333] | [removed: )] |

| Earnings (loss) [removed: per share] from continuing operations [added: per share attributable to Devon] – Basic | | $ | [removed: (0.06] [added: 3.93] | [removed: )] | | $ | [removed: (0.47] [added: (0.06] | ) | | $ | [removed: 5.12] [added: (0.47] | [added: )] | | $ | [removed: 5.31] [added: 5.12] | | | $ | [removed: (6.20] [added: 5.31] | [removed: )] |

| Earnings (loss) [removed: per share] from continuing operations [added: per share attributable to Devon] – Diluted | | $ | [removed: (0.06] [added: 3.91] | [removed: )] | | $ | [removed: (0.47] [added: (0.06] | ) | | $ | [removed: 5.10] [added: (0.47] | [added: )] | | $ | [removed: 5.29] [added: 5.10] | | | $ | [removed: (6.20] [added: 5.29] | [removed: )] |

| Cash dividends per common share | | $ | [removed: 0.86] [added: 0.94] | | | $ | [removed: 0.80] [added: 0.86] | | | $ | [removed: 0.67] [added: 0.80] | | | $ | [removed: 0.64] [added: 0.67] | | | $ | 0.64 | |

| Weighted average common shares outstanding – Basic | | | [removed: 406] [added: 409] | | | | [removed: 404] [added: 406] | | | | [removed: 417] [added: 404] | | | | [removed: 440] [added: 417] | | | | [removed: 444] [added: 440] | |

| Weighted average common shares outstanding – Diluted | | | [removed: 406] [added: 411] | | | | [removed: 404] [added: 406] | | | | [removed: 418] [added: 404] | | | | [removed: 441] [added: 418] | | | | [removed: 444] [added: 441] | |

| Total assets (1) | | $ | [removed: 42,877] [added: 50,637] | | | $ | [removed: 43,326] [added: 42,877] | | | $ | [removed: 41,117] [added: 43,326] | | | $ | [removed: 32,927] [added: 41,117] | | | $ | [removed: 29,686] [added: 32,927] | |

| Long-term debt | | $ | [removed: 7,956] [added: 9,830] | | | $ | [removed: 8,455] [added: 7,956] | | | $ | [removed: 5,969] [added: 8,455] | | | $ | [removed: 3,819] [added: 5,969] | | | $ | [removed: 5,847] [added: 3,819] | |

| Stockholders’ equity | | $ | [removed: 20,499] [added: 26,341] | | | $ | [removed: 21,278] [added: 20,499] | | | $ | [removed: 21,430] [added: 21,278] | | | $ | [removed: 19,253] [added: 21,430] | | | $ | [removed: 15,570] [added: 19,253] | |

| (1) | During [removed: 2013, 2012] [added: 2014, 2013] and [removed: 2009,] [added: 2012,] we recorded noncash asset impairments totaling $2.0 billion [removed: ($1.4] [added: ($1.9] billion after income taxes), $2.0 billion [removed: ($1.3] [added: ($1.4] billion after income taxes) and [removed: $6.4] [added: $2.0] billion [removed: ($4.1] [added: ($1.3] billion after income taxes), respectively. |

| Earnings (loss) from continuing operations attributable to Devon | | $ | 1,607 | | | $ | (20 | ) | | $ | (185 | ) | | $ | 2,134 | | | $ | 2,333 | |

| [Report of Independent Registered Public Accounting [removed: Firm](#tx656849_25)] [added: Firm](#tx859923_25)] | | | [removed: 50] [added: 53] | |

| [Consolidated Comprehensive Statements of [removed: Earnings](#tx656849_27)] [added: Earnings](#tx859923_26)] | | | [removed: 51] [added: 54] | |

| [Consolidated Statements of Cash [removed: Flows](#tx656849_28)] [added: Flows](#tx859923_27)] | | | [removed: 52] [added: 55] | |

| [Consolidated Balance [removed: Sheets](#tx656849_29)] [added: Sheets](#tx859923_28)] | | | [removed: 53] [added: 56] | |

| [Consolidated Statements of Stockholders’ [removed: Equity](#tx656849_30)] [added: Equity](#tx859923_29)] | | | [removed: 54] [added: 57] | |

| [Notes to Consolidated Financial [removed: Statements](#tx656849_31)] [added: Statements](#tx859923_30)] | | | [removed: 55] [added: 58] | |

We have audited the accompanying consolidated balance sheets of Devon Energy Corporation and subsidiaries as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the related consolidated comprehensive statements of earnings, cash flows, and stockholders’ equity for each of the years in the three-year period ended December 31, [removed: 2013.][added: 2014.]

We also have audited Devon Energy Corporation’s internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in _Internal Control – Integrated Framework_ [removed: (1992)] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Devon Energy Corporation and subsidiaries as of December 31, [removed: 2013] [added: 2014] and [removed: 2012,] [added: 2013,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2013,] [added: 2014,] in conformity with United States generally accepted accounting principles.

Also in our opinion, Devon Energy Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2013,] [added: 2014,] based on criteria established in _Internal Control – Integrated Framework_ [removed: (1992)] [added: (2013)] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

| | | Year Ended December [removed: 31, | | | |] [added: 31, 2014] | | | | | | |

| | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | | | [removed: 2011] [added: 2012] | | |

| Oil, gas and NGL sales | | $ | [removed: 8,522] [added: 9,910] | | | $ | [removed: 7,153] [added: 8,522] | | | $ | [removed: 8,315] [added: 7,153] | |

| Oil, gas and NGL derivatives | | | [removed: (191] [added: 1,989] | [removed: )] | | | [removed: 693] [added: (191] | [added: )] | | | [removed: 881] [added: 693] | |

| Marketing and midstream revenues | | | [removed: 2,066] [added: 7,667] | | | | [removed: 1,655] [added: 2,066] | | | | [removed: 2,249] [added: 1,655] | |

| Total operating revenues | | | [removed: 10,397] [added: 19,566] | | | | [removed: 9,501] [added: 10,397] | | | | [removed: 11,445] [added: 9,501] | |

| Lease operating expenses | | | [removed: 2,268] [added: 2,332] | | | | [removed: 2,074] [added: 2,268] | | | | [removed: 1,851] [added: 2,074] | |

| Marketing and midstream operating expenses | | | [removed: 1,553] [added: 6,815] | | | | [removed: 1,246] [added: 1,553] | | | | [removed: 1,716] [added: 1,246] | |

| General and administrative expenses | | | [removed: 617] [added: 847] | | | | [removed: 692] [added: 617] | | | | [removed: 585] [added: 692] | |

| Production and property taxes | | | [removed: 461] [added: 535] | | | | [removed: 414] [added: 461] | | | | [removed: 424] [added: 414] | |

| Depreciation, depletion and amortization | | | [removed: 2,780] [added: 3,319] | | | | [removed: 2,811] [added: 2,780] | | | | [removed: 2,248] [added: 2,811] | |

| Asset impairments | | | [removed: 1,976] [added: 1,953] | | | | [removed: 2,024] [added: 1,976] | | | | [removed: —] [added: 2,024] | |

| Other operating items | | | [removed: 121] [added: 93] | | | | [removed: 92] [added: 112] | | | | [removed: (11] [added: 105] | [removed: )] |

| Net financing costs | | | [removed: 417] [added: 526] | | | | [removed: 370] [added: 417] | | | | [removed: 331] [added: 370] | |

| Restructuring costs | | | [removed: 54] [added: 46] | | | | [removed: 74] [added: 54] | | | | [removed: (2] [added: 74] | [removed: )] |

| Other nonoperating items | | | [removed: 1] [added: 113] | | | | [removed: 21] [added: 1] | | | | [removed: 13] [added: 21] | |

| Earnings (loss) from continuing operations before income taxes | | | [removed: 149] [added: 4,059] | | | | [removed: (317] [added: 149] | [removed: )] | | | [removed: 4,290] [added: (317] | [added: )] |

| Income tax expense (benefit) | | | [removed: 169] [added: 2,368] | | | | [removed: (132] [added: 169] | [removed: )] | | | [removed: 2,156] [added: (132] | [added: )] |

| Earnings (loss) from continuing operations | | | [removed: (20] [added: 1,691] | [removed: )] | | | [removed: (185] [added: (20] | ) | | | [removed: 2,134] [added: (185] | [added: )] |

| Earnings (loss) from discontinued operations, net of tax | | | — | | | | [removed: (21] [added: —] | [removed: )] | | | [removed: 2,570] [added: (21] | [added: )] |

| Net earnings (loss) | | [removed: $] | [removed: (20] [added: 1,691] | [removed: )] | | [removed: $] | [removed: (206] [added: (20] | ) | | [removed: $] | [removed: 4,704] [added: (206] | [added: )] |

| Basic earnings (loss) from continuing operations per share | | $ | [removed: (0.06] [added: 3.93] | [removed: )] | | $ | [removed: (0.47] [added: (0.06] | ) | | $ | [removed: 5.12] [added: (0.47] | [added: )] |

| Basic earnings (loss) from discontinued operations per share | | | — | | | | [removed: (0.05] [added: —] | [removed: )] | | | [removed: 6.17] [added: (0.05] | [added: )] |

| Basic net earnings (loss) per [removed: share] [added: share:] | | $ | [removed: (0.06] [added: 3.93] | [removed: )] | | $ | [removed: (0.52] [added: (0.06] | ) | | $ | [removed: 11.29] [added: (0.52] | [added: )] |

| Diluted earnings (loss) from continuing operations per share | | $ | [removed: (0.06] [added: 3.91] | [removed: )] | | $ | [removed: (0.47] [added: (0.06] | ) | | $ | [removed: 5.10] [added: (0.47] | [added: )] |

| Diluted earnings (loss) from discontinued operations per share | | | — | | | | [removed: (0.05] [added: —] | [removed: )] | | | [removed: 6.15] [added: (0.05] | [added: )] |

| Diluted net earnings (loss) per share | | $ | [removed: (0.06] [added: 3.91] | [removed: )] | | $ | [removed: (0.52] [added: (0.06] | ) | | $ | [removed: 11.25] [added: (0.52] | [added: )] |

| Net earnings (loss) | | $ | [removed: (20] [added: 1,691] | [removed: )] | | $ | [removed: (206] [added: (20] | ) | | $ | [removed: 4,704] [added: (206] | [added: )] |

| Foreign currency translation | | | [removed: (548] [added: (465] | ) | | | [removed: 194] [added: (548] | [added: )] | | | [removed: (191] [added: 194] | [removed: )] |

| Pension and postretirement plans | | | [removed: 45] [added: (24] | [added: )] | | | [removed: 2] [added: 45] | | | | [removed: 6] [added: 2] | |

February 20, 2015

| Gains and losses on asset sales | | | (1,072 | ) | | | 9 | | | | (13 | ) |

| Total operating expenses | | | 14,868 | | | | 9,830 | | | | 9,427 | |

| Operating income | | | 4,698 | | | | 567 | | | | 74 | |

| Net earnings attributable to noncontrolling interests | | | 84 | | | | — | | | | — | |

| Net earnings (loss) attributable to Devon | | $ | 1,607 | | | $ | (20 | ) | | $ | (206 | ) |

| Comprehensive earnings attributable to noncontrolling interests | | | 84 | | | | — | | | | — | |

| Comprehensive earnings (loss) attributable to Devon | | $ | 1,118 | | | $ | (523 | ) | | $ | (10 | ) |

| Gains and losses on asset sales | | | (1,072 | ) | | | 9 | | | | (13 | ) |

| Other noncash charges | | | 457 | | | | 309 | | | | 253 | |

| Acquisitions of property, equipment and businesses | | | (6,462 | ) | | | — | | | | — | |

| Long-term debt repayments | | | (7,189 | ) | | | — | | | | (750 | ) |

| Proceeds from issuance of subsidiary units | | | 410 | | | | — | | | | — | |

| Distributions to noncontrolling interests | | | (235 | ) | | | — | | | | — | |

| Derivatives, at fair value | | | 1,993 | | | | 75 | |

| Income taxes receivable | | | 522 | | | | 89 | |

| Other current assets | | | 544 | | | | 255 | |

| Midstream and other | | | 9,695 | | | | 6,195 | |

| Deferred income taxes | | | 730 | | | | 19 | |

| Other current liabilities | | | 1,180 | | | | 555 | |

| Total stockholders’ equity attributable to Devon | | | 21,539 | | | | 20,499 | |

| Noncontrolling interests | | | 4,802 | | | | — | |

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| Net earnings | | | — | | | | — | | | | — | | | | 1,607 | | | | — | | | | — | | | | 84 | | | | 1,691 | |

| Acquisition of noncontrolling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,670 | | | | 4,670 | |

| Subsidiary equity transactions | | | — | | | | — | | | | 93 | | | | — | | | | — | | | | — | | | | 277 | | | | 370 | |

| Distributions to noncontrolling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (235 | ) | | | (235 | ) |

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| Balance as of December 31, 2014 | | | 409 | | | $ | 41 | | | $ | 4,088 | | | $ | 16,631 | | | $ | 779 | | | $ | — | | | $ | 4,802 | | | $ | 26,341 | |

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Devon also owns natural gas pipelines, plants and treatment facilities through its ownership in EnLink Midstream Partners, LP, a publicly traded MLP.

The accompanying consolidated financial statements include the accounts of Devon and entities in which it holds a controlling interest.

Undivided interests in oil and natural gas exploration and production joint ventures are consolidated on a proportionate basis.

Investments in non-controlled entities, over which Devon has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method.

February 28, 2014

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| Total operating expenses | | | 9,776 | | | | 9,353 | | | | 6,813 | |

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| Operating income | | | 621 | | | | 148 | | | | 4,632 | |

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| Other noncash charges | | | 318 | | | | 240 | | | | 241 | |

| Debt repayments | | | — | | | | — | | | | (1,760 | ) |

| Credit facility borrowings | | | — | | | | 750 | | | | — | |

| Credit facility repayments | | | — | | | | (750 | ) | | | — | |

| Other | | | 6,195 | | | | 5,630 | |

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| Balance as of December 31, 2010 | | | 432 | | | $ | 43 | | | $ | 5,601 | | | $ | 11,882 | | | $ | 1,760 | | | $ | (33 | ) | | $ | 19,253 | |

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| Common stock dividends | | | — | | | | — | | | | — | | | | (348 | ) | | | — | | | | — | | | | (348 | ) |

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Devon also owns natural gas pipelines, plants and treatment facilities in many of its producing areas, making it one of North America’s larger processors of natural gas.

The accounts of Devon and its wholly owned and controlled subsidiaries are included in the accompanying financial statements.

These differences

a number of counterparties whom Devon believes are acceptable credit risks.

of being realized upon ultimate settlement with a taxing authority.

Based on their evaluation, our principal executive and principal financial officers have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of December 31, [removed: 2013] [added: 2014] to ensure that the information required to be disclosed by Devon in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.

Under the supervision and with the participation of Devon’s management, including our principal executive and principal financial officers, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in _Internal Control [removed: —] [added: –] Integrated Framework_ issued in [removed: 1992] [added: 2013] by the Committee of Sponsoring Organizations of the Treadway Commission (the [removed: “1992] [added: “2013] COSO Framework”).

Based on this evaluation under the [removed: 1992] [added: 2013] COSO Framework, which was completed on February [removed: 19, 2014,] [added: 18, 2015,] management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2013.][added: 2014.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2013] [added: 2014] has been audited by KPMG LLP, an independent registered public accounting firm who audited our consolidated financial statements as of and for the year ended December 31, [removed: 2013,] [added: 2014,] as stated in their report, which is included under “Item 8.

There was no change in our internal control over financial reporting during the fourth quarter of [removed: 2013] [added: 2014] that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

The information called for by this Item 10 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 not later than April 30, [removed: 2014.][added: 2015.]

The information called for by this Item 11 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 not later than April 30, [removed: 2014.][added: 2015.]

The information called for by this Item 12 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 not later than April 30, [removed: 2014.][added: 2015.]

The information called for by this Item 13 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 not later than April 30, [removed: 2014.][added: 2015.]

The information called for by this Item 14 is incorporated herein by reference to the definitive Proxy Statement to be filed by Devon pursuant to Regulation 14A of the General Rules and Regulations under the Securities Exchange Act of 1934 not later than April 30, [removed: 2014.][added: 2015.]

| 2.1 | | Agreement and Plan of Merger dated October 21, 2013, by and among Registrant, Devon Gas Services, L.P., Acacia Natural Gas Corp I, Inc., Crosstex Energy, Inc., New Public Rangers L.L.C., Boomer Merger Sub, Inc. and Rangers Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to Registrant’s Form 8-K filed October 22, [removed: 2013).] [added: 2013; File No. 001-32318).] |

| 2.2 | | Contribution Agreement dated October 21, 2013, by and among Registrant, Devon Gas Corporation, Devon Gas Services, L.P., Southwestern Gas Pipeline, Inc., Crosstex Energy, L.P. and Crosstex Energy Services, L.P. (incorporated by reference to Exhibit 2.2 to Registrant’s Form 8-K filed October 22, [removed: 2013).] [added: 2013; File No. 001-32318).] |

| 2.3 | | Purchase and Sale Agreement dated November 20, 2013, among GeoSouthern Intermediate Holdings, LLC, GeoSouthern Energy Corporation (solely with respect to certain sections specified therein), and Devon Energy Production Company, L.P. (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K/A filed [removed: February 18, 2014).] [added: May 19, 2014; File No. 001-32318).] |

| 3.1 | | Registrant’s Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 of Registrant’s 10-K for the fiscal year ending December 31, [removed: 2012).] [added: 2012; File No. 001-32318).] |

| 3.2 | | Registrant’s Bylaws (incorporated by reference to Exhibit 3.2 of Registrant’s Form 8-K filed June 8, [removed: 2012).] [added: 2012; File No. 001-32318).] |

| 3.3 | | Amendment No. 1 to Registrant’s Bylaws (incorporated by reference to Exhibit 3.2 to Registrant’s Form 8-K filed September 16, [removed: 2013).] [added: 2013; File No. 001-32318).] |

| [removed: 4.1] [added: 4.2] | | [removed: Indenture,] [added: Supplemental Indenture No. 1,] dated as of July 12, 2011, [added: to Indenture dated as of July 12, 2011,] between Registrant and UMB Bank, National Association, as Trustee, relating to the [removed: 2.40% Senior Notes due 2016, the] 4.00% Senior Notes due 2021 and the 5.60% Senior Notes due 2041 (incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to Registrant’s Form 8-K filed July 12, [removed: 2011).] [added: 2011; File No. 001-32318).] |

| [removed: 4.2] [added: 4.4] | | Supplemental Indenture No. [removed: 1,] [added: 3,] dated as of [removed: July 12, 2011,] [added: December 19, 2013,] to Indenture dated as of July 12, 2011, between Registrant and UMB Bank, National Association, as Trustee, relating to the [removed: 2.40%] [added: Floating Rate] Senior Notes due [removed: 2016,] [added: 2015,] the [removed: 4.00%] [added: Floating Rate] Senior Notes due [removed: 2021] [added: 2016] and the [removed: 5.60%] [added: 2.25%] Senior Notes due [removed: 2041] [added: 2018] (incorporated by reference to Exhibit [removed: 4.2] [added: 4.1] to Registrant’s Form 8-K filed [removed: July 12, 2011).] [added: December 19, 2013; File No. 001-32318).] |

| 4.3 | | Supplemental Indenture No. 2, dated as of May 14, 2012, to Indenture dated as of July 12, 2011, between Registrant and UMB Bank, National Association, as Trustee, relating to the [removed: 1.875% Senior Notes due 2017, the] 3.250% Senior Notes due 2022 and the 4.750% Senior Notes due 2042 (incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed May 14, [removed: 2012).] [added: 2012; File No. 001-32318).] |

| [removed: 4.4] [added: 4.1] | | [removed: Supplemental Indenture No. 3, dated as of December 19, 2013, to Indenture] [added: Indenture,] dated as of July 12, 2011, between Registrant and UMB Bank, National Association, as [removed: Trustee, relating to the Floating Rate Senior Notes due 2015, the Floating Rate Senior Notes due 2016, the 1.200% Senior Notes due 2016 and the 2.50% Senior Notes due 2018] [added: Trustee] (incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed [removed: December 19, 2013).] [added: July 12, 2011; File No. 001-32318).] |

| 4.5 | | Indenture, dated as of March 1, 2002, between Registrant and The Bank of New York Mellon Trust Company, N.A., as [removed: Trustee, relating to the 7.95% Senior Debentures due 2032] [added: Trustee] (incorporated by reference to Exhibit 4.1 of Registrant’s Form 8-K filed April 9, 2002; File No. 000-30176). |

| 4.16 | | Third Supplemental Indenture, dated December 31, 2005 to Senior Indenture dated as of September 1, 1997, among Devon OEI Operating, Inc. as Issuer, Devon Energy Production Company, L.P. as Successor Guarantor, and The Bank of New York Mellon Trust Company, [removed: N.A..,] [added: N.A.,] as Trustee, relating to the 7.50% Senior Notes Due 2027 (incorporated by reference to Exhibit 4.27 of Registrant’s Form 10-K for the year ended December 31, 2005; File No. 001-32318). |

| 10.1 | | Credit Agreement dated October 24, 2012, among Registrant, as U.S. Borrower, Devon NEC Corporation and Devon Canada Corporation, as Canadian Borrowers, each lender from time to time party thereto, each L/C Issuer from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Canadian Swing Line Lender and U.S. Swing Line Lender (incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K filed October 29, [removed: 2012).] [added: 2012; File No. 001-32318).] |

| 10.2 | | Extension Agreement dated September 3, 2013 to the Credit Agreement dated October 24, 2012, among Registrant, as U.S. Borrower, Devon NEC Corporation and Devon Canada Corporation, as Canadian Borrowers, Devon Financing Company, L.L.C., the consenting lenders, and Bank of America, N.A., as Administrative Agent, Canadian Swing Line Lender and U.S. Swing Line Lender, with respect to Borrower’s extension of the Maturity Date from October 24, 2017 to October 24, 2018 (incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed November 6, [removed: 2013).] [added: 2013; File No. 001-32318).] |

| 10.3 | | First Amendment to Credit Agreement dated February 3, 2014, to the Credit Agreement dated October 24, 2012, among Registrant, as U.S. Borrower, Devon NEC Corporation and Devon Canada Corporation, as Canadian Borrowers, each lender from time to time party thereto, each L/C Issuer from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Canadian Swing Line Lender and U.S. Swing Line Lender (incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K filed February 7, [removed: 2014).] [added: 2014; File No. 001-32318).] |

| 10.5 | | Devon Energy Corporation 2009 Long-Term Incentive Plan (as amended and restated effective June 6, [removed: 2012) (incorporated] [added: 2012)(incorporated] by reference to Registrant’s Form S-8 Registration [removed: No.333-182198,] [added: No. 333-182198,] filed June 18, 2012).* |

| 10.6 | | Devon Energy Corporation 2013 Amendment (effective as of March 6, 2013) to the Devon Energy Corporation 2009 Long-Term Plan (as amended and restated effective June 6, 2012) (incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed May 1, [removed: 2013).*] [added: 2013; File No. 001-32318).*] |

| 10.8 | | First Amendment to Devon Energy Corporation 2005 Long-Term Incentive Plan (incorporated by reference to Appendix A to Registrant’s Proxy Statement for the 2006 Annual Meeting of Stockholders filed on April 28, [removed: 2006).*] [added: 2006; File No. 001-32318).*] |

| 10.9 | | Devon Energy Corporation Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K, filed June 8, [removed: 2012)*] [added: 2012; File No. 001-32318).*] |

| 10.10 | | Devon Energy Corporation Non-Qualified Deferred Compensation Plan [removed: (as] Amended and Restated Effective [removed: January 1, 2013)] [added: as of April 15, 2014] (incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed August [removed: 7, 2013).*] [added: 6, 2014; File No. 001-32318).*] |

| 10.11 | | Devon Energy Corporation Amendment [removed: No. 1, dated July 19, 2013,] [added: 2014-2, executed May 9, 2014,] to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan [removed: (as Amended and Restated Effective January 1, 2013).*] [added: as amended effective April 15, 2014.*] |

| [removed: 10.12] [added: 10.11] | | Devon Energy Corporation Amendment [removed: No. 2, dated July 26, 2013,] [added: 2014-2, executed May 9, 2014,] to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan [removed: (as Amended and Restated Effective January 1, 2013).*] [added: as amended effective April 15, 2014.*] |

| [removed: 10.14] [added: 10.12] | | Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.15 to Registrant’s Form 10-K, filed February 24, [removed: 2012).*] [added: 2012; File No. 001-32318).*] |

| [removed: 10.15] [added: 10.14] | | Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.16 to Registrant’s Form 10-K, filed February 24, [removed: 2012).*] [added: 2012; File No. 001-32318).*] |

| 10.16 | | Devon Energy Corporation Supplemental Contribution Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.17 to Registrant’s Form 10-K, filed February 24, [removed: 2012).*] [added: 2012; File No. 001-32318).*] |

| [removed: 10.17] [added: 10.18] | | Devon Energy Corporation Supplemental Executive Retirement Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.18 to Registrant’s Form 10-K, filed February 24, [removed: 2012).*] [added: 2012; File No. 001-32318).*] |

| [removed: 10.18] [added: 10.19] | | Devon Energy Corporation Supplemental Retirement Income Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.19 to Registrant’s Form 10-K, filed February 24, [removed: 2012).*] [added: 2012; File No. 001-32318).*] |

| [removed: 10.20] [added: 10.22] | | Amended and Restated Form of Employment Agreement between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, John Richels, Frank W. Rudolph, Darryl G. Smette and Lyndon C. Taylor dated December 15, 2008 (incorporated by reference to Exhibit 10.19 to Registrant’s Form 10-K filed February 27, [removed: 2009).*] [added: 2009; File No. 001-32318).*] |

| [removed: 10.21] [added: 10.23] | | Form of Amendment No. 1 to the Amended and Restated Employment Agreement, [removed: incorporated by reference to Exhibit 10.19 to Registrant’s Form 10-K filed February 27, 2009,] between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, John Richels, Frank W. Rudolph, Darryl G. Smette and Lyndon C. Taylor dated April 19, 2011. (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed April 25, [removed: 2011).*] [added: 2011; File No. 001-32318).*] |

| [removed: 10.22] [added: 10.24] | | Form of Employment Agreement between Registrant and Tony D. Vaughn [added: and Thomas L. Mitchell] dated June 10, 2013 (Amended and Restated Form of Employment Agreement dated December 15, [removed: 2008,] [added: 2008] (Exhibit [removed: 10.20] [added: 10.22] above), as amended by Amendment No. 1 thereto dated April 19, [removed: 2011,] [added: 2011] (Exhibit [removed: 10.21 above)).*] [added: 10.23 above)) (incorporated by reference to Exhibit 10.22 to Registrant’s Form 10-K filed February 28, 2014; File No. 001-32318).*] |

| [removed: 10.23] [added: 10.25] | | Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, J. Larry Nichols, John Richels, Frank W. Rudolph, Darryl G. Smette and Lyndon C. Taylor for performance based restricted stock awarded (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed December 7, [removed: 2011).*] [added: 2011; File No. 001-32318).*] |

| [removed: 10.24] [added: 10.26] | | Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for performance based restricted stock awarded (incorporated by reference to Exhibit 10.16 to Registrant’s Form 10-K filed February 21, [removed: 2013).*] [added: 2013; File No. 001-32318).*] |

| [removed: 10.25] [added: 10.29] | | Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and David A. Hager, R. Alan Marcum, [added: Thomas L. Mitchell,] John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for performance based restricted stock awarded.* |

| [removed: 10.26] [added: 10.28] | | Form of Notice of Grant of Performance Share Unit Award and Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, John Richels, Frank W. Rudolph, Darryl G. Smette and Lyndon C. Taylor for performance based restricted share units awarded (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed December 7, [removed: 2011).*] [added: 2011); File No. 001-32318*] |

| [removed: 10.27] [added: 10.30] | | Form of Notice of Grant of Performance Share Unit Award and Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for performance based restricted share units awarded (incorporated by reference to Exhibit 10.17 to Registrant’s Form 10-K filed February 21, [removed: 2013).*] [added: 2013; File No. 001-32318).*] |

| [removed: 10.28] [added: 10.32] | | Form of Notice of Grant of Performance Share Unit Award and Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and David A. Hager, R. Alan Marcum, [added: Thomas L. Mitchell,] John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for performance based restricted share units awarded.* |

| [removed: 10.29] [added: 10.33] | | Form of Incentive Stock Option Award Agreement under the 2009 Long-Term Incentive Plan between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, J. Larry Nichols, John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for incentive stock options granted (incorporated by reference to Exhibit 10.15 to Registrant’s Form 10-K filed February 25, [removed: 2011).*] [added: 2011; File No. 001-32318).*] |

| [removed: 10.30] [added: 10.34] | | Form of Employee Nonqualified Stock Option Award Agreement under the 2009 Long-Term Incentive Plan between Registrant and Jeffrey A. Agosta, David A. Hager, R. Alan Marcum, J. Larry Nichols, John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for nonqualified stock options granted (incorporated by reference to Exhibit 10.16 to Registrant’s Form 10-K filed February 25, [removed: 2011).*] [added: 2011; File No. 001-32318).*] |

| [removed: 10.31] [added: 10.35] | | Form of Non-Management Director Nonqualified Stock Option Award Agreement under the Devon Energy Corporation 2009 Long-Term Incentive Plan between Registrant and all Non-Management Directors for nonqualified stock options granted (incorporated by reference to Exhibit 10.20 to Registrant’s Form 10-K filed on February 25, [removed: 2010).*] [added: 2010; File No. 001-32318).*] |

| [removed: 10.32] [added: 10.27] | | Form of [added: Notice of Grant of Performance] Restricted Stock Award [added: and Award] Agreement under the 2009 Long-Term Incentive Plan [added: (as amended and restated June 6, 2012)] between Registrant and [removed: Jeffrey A. Agosta,] David A. Hager, R. Alan Marcum, [removed: J. Larry Nichols,] [added: Thomas L. Mitchell,] John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for [added: performance based] restricted stock [removed: awards] [added: awarded] (incorporated by reference to Exhibit [removed: 10.18] [added: 10.25] to Registrant’s Form 10-K filed February [removed: 25, 2011).*] [added: 28, 2014; File No. 001-32318).*] |

| 2.4 | | Letter Agreement dated February 28, 2014 amending certain provisions of the Purchase and Sale Agreement dated November 20, 2013 among GeoSouthern Intermediate Holdings, LLC, GeoSouthern Energy Corporation and Devon Energy Production Company, L.P. |

| 4.17 | | Registrant has not filed instruments defining the rights of holders of long-term indebtedness of Registrant’s majority owned subsidiary, EnLink Midstream Partners, LP, none of which exceeds ten percent of the total assets of Registrant and its subsidiaries on a consolidated basis. Registrant hereby agrees to furnish a copy of any such agreements to the Commission upon request. |

| 10.4 | | Extension Agreement dated as of October 17, 2014, to the Credit Agreement dated October 24, 2012, among Registrant, as U.S. Borrower, Devon NEC Corporation and Devon Canada Corporation, as Canadian Borrowers, Devon Financing Company, L.L.C., the consenting lenders, and Bank of America, N.A., as Administrative Agent, Canadian Swing Line Lender and U.S. Swing Line Lender with respect to the extension of the maturity date from October 24, 2018 to October 24, 2019 (incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed November 5, 2014; File No. 001-32318). |

| 10.13 | | Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.6 to Registrant’s Form 10-Q filed May 9, 2014; File No. 001-32318).* |

| 10.15 | | Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.7 to Registrant’s Form 10-Q filed May 9, 2014; File No. 001-32318).* |

| 10.17 | | Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Contribution Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.8 to Registrant’s Form 10-Q filed May 9, 2014; File No. 001-32318).* |

| 10.20 | | Devon Energy Corporation Amendment 2014-1, executed March 7, 2014, to the Devon Energy Corporation Supplemental Retirement Income Plan (amended and restated effective January 1, 2012) (incorporated by reference to Exhibit 10.9 to Registrant’s Form 10-Q filed May 9, 2014; File No. 001-32318).* |

| 10.21 | | Devon Energy Corporation Incentive Savings Plan, as amended and restated effective January 1, 2014, executed September 22, 2014.* |

| 10.31 | | Form of Notice of Grant of Performance Share Unit Award and Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and David A. Hager, R. Alan Marcum, John Richels, Frank W. Rudolph, Darryl G. Smette, Lyndon C. Taylor and Tony D. Vaughn for performance based restricted share units awarded (incorporated by reference to Exhibit 10.28 to Registrant’s Form 10-K filed February 28, 2014; File No. 001-32318).* |

| 10.36 | | Form of Restricted Stock Award Agreement under the 2009 Long-Term Incentive Plan (as amended and restated June 6, 2012) between Registrant and Thomas L. Mitchell for restricted stock awarded (incorporated by reference to Exhibit 10.18 to Registrant’s Form 10-K filed February 25, 2011; File No. 001-32318).* |

February 20, 2015

| | | /s/ JEREMY D. HUMPHERS | | Senior Vice President and Chief | | February 20, 2015 |

| | | Jeremy D. Humphers | | Accounting Officer (Principal accounting officer) | | |

| | | | | | | |

| 2.4 | | Letter Agreement dated February 28, 2014 amending certain provisions of the Purchase and Sale Agreement dated November 20, 2013 among GeoSouthern Intermediate Holdings, LLC, GeoSouthern Energy Corporation and Devon Energy Production Company, L.P. |

| 10.21 | | Devon Energy Corporation Incentive Savings Plan, as amended and restated effective January 1, 2014, executed September 22, 2014.* |

| | | |

| | | |

| --- | --- | --- |

| 1.1 | | Underwriting Agreement, dated December 11, 2013, by and among Registrant and Morgan Stanley & Co. LLC, Barclays Capital Inc. and Goldman, Sachs & Co., as representatives of the several underwriters named therein (incorporated by reference to Exhibit 1.1 to Registrant’s Form 8-K filed December 16, 2013). |

##### [Table of Contents](#toc)

| 9.1 | | Voting Agreement dated October 21, 2013, by and among Registrant, Blackstone/GSO Capital Solutions Overseas Master Fund L.P. and Blackstone/GSO Capital Solutions Fund LP (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed October 22, 2013). |

| 10.4 | | Credit Agreement dated as of December 16, 2013, among Devon Energy Corporation, as Borrower, Morgan Stanley Senior Funding, Inc., as Administrative Agent, and the other lenders party thereto (incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed December 20, 2013). |

| 10.13 | | Devon Energy Corporation Amendment No. 3, dated December 16, 2013, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (as Amended and Restated Effective January 1, 2013).* |

| 10.19 | | Devon Energy Corporation Incentive Savings Plan (incorporated by reference to Registrant’s Form S-8 Registration No. 333-179181, filed January 26, 2012).* |

February 28, 2014

| | | | | (Principal executive officer) | | |

| 10.11 | | Devon Energy Corporation Amendment No. 1, dated July 19, 2013, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (as Amended and Restated Effective January 1, 2013).* |

| 10.12 | | Devon Energy Corporation Amendment No. 2, dated July 26, 2013, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (as Amended and Restated Effective January 1, 2013).* |

| 10.13 | | Devon Energy Corporation Amendment No. 3, dated December 16, 2013, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (as Amended and Restated Effective January 1, 2013).* |

| 10.22 | | Form of Employment Agreement between Registrant and Tony D. Vaughn dated June 10, 2013 (Amended and Restated Form of Employment Agreement dated December 15, 2008, (Exhibit 10.20 above), as amended by Amendment No. 1 thereto dated April 19, 2011, (Exhibit 10.21 above)).* |

| 10.33 | | Form of Notice of Grant of Restricted Stock Award Agreement under the 2009 Long-Term Incentive Plan between Registrant and all Non-Management Directors for restricted stock awards.* |