Devon Energy (DVN) 10-K risk factor changes: FY2018 vs FY2017

[removed: Volatile] [added: Volatile] Oil, Gas and NGL Prices Significantly Impact our [removed: Business][added: Business]

For example, [removed: in recent] [added: over the last five] years, NYMEX WTI oil and NYMEX Henry Hub prices ranged from a high of over $100 per Bbl and $6 per MMBtu, respectively, to a low of under $27 per Bbl and $1.70 per MMBtu, respectively.

| | • | [added: the domestic and worldwide] supply of and demand for oil, gas and [removed: NGLs, including consumer demand in emerging markets, such as China and India;] [added: NGLs;] |

| | • | the overall economic environment; [removed: and] |

| | • | [added: other] governmental regulations and taxes. |

[removed: A] [added: This negatively affected our results of operations in 2018, and a] sustained weakness or further deterioration in [added: differentials or] commodity prices could materially and adversely impact our business by resulting in, or exacerbating, the following effects:

| | • | reducing the amount of oil, [added: bitumen,] gas and NGLs that we can produce economically; |

| | • | reducing the carrying value of our properties, resulting in [removed: additional] noncash write-downs. |

[removed: Discoveries] [added: Discoveries] or Acquisitions of Reserves Are Needed to Avoid a Material Decline in Reserves and [removed: Production][added: Production]

[removed: Oil and Gas] [added: Our] Operations Are Uncertain and Involve Substantial Costs and Risks

[removed: Such] regulations include requirements for permits to drill and to conduct other operations and for provision of financial assurances (such as bonds) covering drilling, completion and well [removed: operations.][added: operations and decommissioning obligations.]

Regulatory [added: and public policy] developments could, among other things, restrict production levels, impose price controls, change environmental protection requirements and increase taxes, royalties and other amounts payable to governments or governmental agencies.

Although we are unable to predict changes to existing laws and regulations, such changes could significantly impact our profitability, financial condition and liquidity, particularly changes related to hydraulic fracturing, pipeline safety, seismic [removed: activity, income taxes] [added: activity] and [removed: climate change,] [added: income taxes,] as discussed below.

For example, the EPA has issued final regulations under the federal Clean Air Act establishing performance standards for oil and gas activities, including standards for the capture of air emissions released during hydraulic [removed: fracturing] [added: fracturing,] and finalized in 2016 regulations that prohibit the discharge of wastewater from hydraulic fracturing operations to publicly owned wastewater treatment plants.

Several states in which we operate have already adopted and more states are considering adopting laws [removed: and/or] [added: or] regulations that require disclosure of chemicals used in hydraulic fracturing and impose more stringent permitting, disclosure and well-construction requirements on hydraulic fracturing operations.

In addition, some states and municipalities have significantly limited drilling activities [removed: and/or] [added: or] hydraulic fracturing or are considering doing [removed: so.][added: so or banning the practice altogether.]

Pipeline Safety – The pipeline assets in which we own interests, [removed: through EnLink or otherwise,] are subject to stringent and complex regulations related to pipeline safety and integrity management.

Following the change in presidential administrations, implementation of this rule was delayed, but the final rule is expected to be published in the Federal Register and become effective during the first [removed: quarter] [added: half] of [removed: 2018.][added: 2019.]

[removed: Changes] [added: *Changes] to Tax [removed: Laws] [added: Laws*] – We are subject to U.S. federal income tax as well as income or capital taxes in various state and foreign jurisdictions, and our operating cash flow is sensitive to the amount of income taxes we must pay.

[removed: Climate Change –] Continuing [added: and increasing] political and social attention to the issue of climate change has resulted in legislative, regulatory and other [removed: initiatives] [added: initiatives, including international agreements,] to reduce greenhouse gas emissions, such as carbon dioxide and methane.

Policy makers at both the U.S. federal and state levels have introduced legislation and proposed new regulations designed to quantify and limit the emission of greenhouse [removed: gases through inventories, limitations and/or taxes on greenhouse gas emissions.][added: gases.]

For example, both the EPA and the BLM have issued regulations for the control of methane emissions, which also include leak detection and repair requirements, for the oil and gas [removed: industry; however, following the change in presidential administrations, both agencies have published proposed rules that seek to delay implementation of their previously issued methane standards while the agencies review and reconsider both rules.][added: industry.]

Nevertheless, several states where we operate, including Wyoming, have [added: already] imposed venting and flaring limitations designed to reduce methane emissions from oil and gas exploration and production activities.

[removed: Legislative] [added: With respect to more comprehensive regulation, federal] and state initiatives to date have generally focused on the development of cap-and-trade [removed: and/or] [added: or] carbon tax programs.

[removed: A] [added: As generally proposed, a] cap-and-trade program [removed: generally] would cap overall greenhouse gas emissions on an economy-wide basis and require major sources of greenhouse gas emissions or major fuel producers to acquire and surrender emission [removed: allowances.][added: allowances, while a carbon tax could impose taxes based on emissions from our operations and downstream uses of our products.]

[removed: Recent climate policies] [added: Those laws and regulations] include a legislated oil sands emission limit, [removed: and] [added: with] forthcoming [removed: policies include] [added: regulations involving] methane emissions reduction targets.

[removed: Beginning January 1, 2018,] [added: In Alberta,] large industrial emitters are subject to the Carbon Competitiveness Incentive Regulation (CCIR).

[removed: This regulation] [added: The CCIR] prices carbon, but provides cost protection to emission-intensive / trade-exposed industries, including Devon’s oil sands operations.

The impact to our operations from these [added: laws and] regulations is expected to be minimal in the near term.

Oil and gas facilities that are not subject to the CCIR are exempt from [removed: the] [added: its] economy-wide carbon levy until 2023.

We enter into [removed: hedging activities] [added: financial derivative instruments] with respect to a portion of our production to manage our exposure to oil, gas and NGL price volatility.

To the extent that we engage in price risk management activities to protect ourselves from commodity price declines, we [removed: may] [added: will] be prevented from fully realizing the benefits of commodity price increases above the prices established by our hedging contracts.

[removed: Although we cannot predict the ultimate impact of these laws] and [removed: the related rulemaking, some of which is ongoing, existing or future regulations may adversely affect the cost and] availability of our hedging arrangements, including by causing our contract counterparties, which are generally financial institutions and other market participants, to curtail or cease their derivatives activities.

As of December 31, [removed: 2017,] [added: 2018,] we had total [removed: consolidated] indebtedness of [removed: $10.4] [added: $5.9] billion.

| | • | requiring us to dedicate a [removed: significant] portion of our cash flows from operations to debt service payments, thereby limiting our ability to fund working capital, capital expenditures, investments or acquisitions and other general corporate purposes; |

Cyber attackers often attempt to gain unauthorized access to digital systems for purposes of misappropriating sensitive information, intellectual property or [removed: other] [added: financial] assets, [removed: corrupting data or causing operational disruptions.]

[removed: Regardless of who operates the midstream systems we rely upon,] [added: All or] a portion of our production in [removed: any region] [added: one or more regions] may be interrupted or shut in from time to time due to losing access to plants, pipelines or gathering systems.

Additionally, [removed: we and third parties] [added: the midstream operators] may be subject to constraints that limit [removed: our or] their ability to construct, maintain or repair midstream facilities needed to process and transport our production.

As discussed above, our business is hazardous and is subject to all of the operating risks normally associated with the exploration, [removed: development, production, processing] [added: development] and [removed: transportation] [added: production] of oil, gas and NGLs.

Additionally, [added: we have limited or no] insurance coverage [removed: is generally not available to us] for [added: a variety of other risks, including] pollution events that are considered gradual, [added: war] and [removed: we have limited or no insurance coverage for certain risks such as] political [removed: risk] [added: risks] and [removed: war.][added: fines or penalties assessed by governmental authorities.]

| | • | regional pricing differentials, including in Canada, the Delaware Basin and other areas of our operations; |

| | • | changes in trade relations and policies, including the imposition of tariffs by the U.S. or China; and |

The differential between WTI and Western Canadian Select, a benchmark for the Canadian oil market, recently expanded, widening to nearly $46 per barrel in November 2018.

As a result, our Canadian heavy oil unhedged realized price for the fourth quarter was near zero.

In addition, we rely on our employees, consultants and sub-contractors to conduct our operations in compliance with applicable laws and standards.

Any violation of such laws or standards by these individuals, whether through negligence, harassment, discrimination or other misconduct, could result in significant liability for us and adversely affect our business.

For example, negligent operations by employees could result in serious injury, death or property damage, and sexual harassment or racial and gender discrimination could result in legal claims and reputational harm.

Such

In addition, changes in public policy may indirectly impact our operations by, among other things, increasing the cost of supplies and equipment and fostering general economic uncertainty.

For example, changes in U.S. trade relations, particularly the imposition of tariffs by the U.S. and China, may increase the cost of materials we or our vendors use, thereby increasing our operating expense.

PHMSA has announced its intent to address the 2016 proposed rules for gas pipelines through three separate final rulemakings in 2019.

Concerns About Climate Change and Related Regulatory, Social and Market Actions May Adversely Affect Our Business

Following the change in presidential administrations, however, the agencies have attempted to revise or rescind their previously issued methane standards.

Litigation concerning these methane regulations and subsequent attempts to revise or rescind them is ongoing.

Devon will continue to be subject to Alberta’s climate change laws and regulations until at least 2021.

Beginning January 2019, the Greenhouse Gas Pollution Pricing Act subjects all of Canada to a federal price on greenhouse gas emissions unless a province or territory has implemented a compliant carbon pricing regime.

Litigation concerning the act is ongoing, and it is unclear how the act will ultimately treat provincial plans.

In addition to regulatory risk, other market and social initiatives resulting from the changing perception of climate change present risks for our business.

For example, in an effort to promote a lower-carbon economy, there are various public and private initiatives subsidizing the development of alternative energy sources, including by mandating the use of specific fuels or technologies.

These initiatives may reduce the competitiveness of carbon-based fuels, such as oil and gas.

Moreover, certain financial institutions, funds and other sources of capital have begun restricting or eliminating their investment in oil and natural gas activities due to their concern regarding climate change.

Such restrictions in capital could make it more difficult to secure funding to operate our business.

Finally, governmental entities and other plaintiffs have brought, and may continue to bring, claims against us and other oil and gas companies for purported damages caused by the alleged effects of climate change.

These and the other regulatory, social and market risks relating to climate change described above could result in unexpected costs, increase our operating expense and reduce the demand for our products, which in turn could lower the value of our reserves and have a material adverse effect on our profitability, financial condition and liquidity.

Although we cannot predict the ultimate impact of these laws and the related rulemaking, some of which is ongoing, existing or future regulations may adversely affect the cost

corrupting data or causing operational disruptions.

Certain of our competitors have financial and other resources substantially greater than ours and may have established superior strategic long-term positions and relationships, including with respect to midstream take-away capacity.

Our Business Could Be Adversely Impacted by Investors Attempting to Effect Change

Stockholder activism has been increasing in our industry, and investors may from time to time attempt to effect changes to our business or governance, whether by stockholder proposals, public campaigns, proxy solicitations or otherwise.

Such actions could adversely impact our business by distracting our board of directors and employees from core business operations, requiring us to incur increased advisory fees and related costs, interfering with our ability to successfully execute on strategic transactions and plans and provoking perceived uncertainty about the future direction of our business.

Such perceived uncertainty may, in turn, make it more difficult to retain employees and could result in significant fluctuation in the market price of our common stock.

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

| | • | regional pricing differentials; |

Commodity prices began to decline in the second half of 2014 and, despite a moderate recovery, have generally been pressured since then.

This commodity price decline adversely affected our business and results of operations and led to substantial impairments to our oil and gas properties during 2015.

Recently enacted legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Reform Legislation”) significantly affects U.S. tax law by changing how the U.S. imposes income tax on multinational corporations.

These changes include, among others, a permanent reduction to the corporate income tax offset by other items intended to broaden the tax base (for example, by imposing significant additional limitations on the deductibility of interest expense and limiting the ability to deduct net operating losses).

The U.S. Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how we will apply the law and impact our results of operations in the period issued.

Further, compliance with the Tax Reform Legislation and the accounting for such provisions require complex computations and accumulation of information not previously required or regularly produced.

As a result, we have provided a provisional estimate in our financial statements of the effect of the Tax Reform Legislation.

As additional regulatory guidance is issued by the applicable taxing authorities, as accounting treatment is clarified, as we perform additional analysis on the application of the law, and as we refine estimates in calculating the effect, our final analysis, which will be recorded in the period completed, may be different from our current provisional amounts, which could materially affect our tax obligations and effective tax rate.

Carbon taxes could likewise affect us by being based on emissions from our equipment and/or emissions resulting from the use of our products by our customers.

In addition, activists concerned about the potential effects of climate change have directed their attention at sources of funding for fossil-fuel energy companies, which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their investment in oil and natural gas activities.

Ultimately, this could make it more difficult to secure funding for exploration and production activities.

These various legislative, regulatory and other activities addressing greenhouse gas emissions could adversely affect our business, including by imposing reporting obligations on, or limiting emissions of greenhouse gases from, our equipment and operations, which could require us to incur costs to reduce emissions of greenhouse gases associated with our operations.

Limitations on greenhouse gas emissions could also adversely affect demand for oil and gas, which could lower the value of our reserves and have a material adverse effect on our profitability, financial condition and liquidity.

Such midstream systems include EnLink’s systems, as well as other systems operated by us or third parties.

Our insurance does not cover penalties or fines assessed by governmental authorities.

Certain of our competitors have financial and other resources substantially greater than ours.

They also may have established strategic long-term positions and relationships in areas in which we may seek new entry.

Financial Statements and Supplementary Data” of this [added: report” of this] report.

Overview of [removed: 2017] [added: 2018] Results

[removed: We exited 2017] [added: | | • | Exited 2018] with [removed: liquidity comprised of $2.7] [added: $2.4] billion of cash and $2.9 billion of available credit under our Senior Credit [removed: Facility.][added: Facility and have no significant debt maturities until 2021. |]

| | | 2017 | | | | [removed: Change | | | | 2016*] [added: 2016] | | | | Change | | | | [removed: 2015* | | |]

| Net earnings (loss) attributable to Devon | | $ | [removed: 898] [added: 3,064] | | | | [removed: +185] [added: +241] | % | | $ | [removed: (1,056] [added: 898] | [removed: )] | | | [removed: +92] [added: +185] | % | | $ | [removed: (12,896] [added: (1,056] | ) |

| Net earnings (loss) per diluted share attributable to Devon | | $ | [removed: 1.70] [added: 6.10] | | | | [removed: +181] [added: +259] | % | | $ | [removed: (2.09] [added: 1.70] | [removed: )] | | | [removed: +93] [added: +181] | % | | $ | [removed: (31.72] [added: (2.09] | ) |

| Core earnings (loss) attributable to Devon (1) | | $ | [removed: 427] [added: 655] | | | | [removed: +217] [added: +53] | % | | $ | [removed: (367] [added: 427] | [removed: )] | | | [removed: \- 430] [added: +216] | % | | $ | [removed: 111] [added: (367] | [added: )] |

| Core earnings (loss) [removed: per diluted share] attributable to Devon [added: per diluted share] (1) | | $ | [removed: 0.81] [added: 1.30] | | | | [removed: +210] [added: +60] | % | | $ | [removed: (0.73] [added: 0.81] | [removed: )] | | | [removed: \- 382] [added: +212] | % | | $ | [removed: 0.26] [added: (0.73] | [added: )] |

| Total production (MBoe/d) | | | [removed: 543] [added: 535] | | | | \- [removed: 11] [added: 2] | % | | | [removed: 611] [added: 543] | | | | \- [removed: 10] [added: 11] | % | | | [removed: 680] [added: 611] | |

| Realized price per Boe (2) | | $ | [removed: 25.96] [added: 29.08] | | | | [removed: +39] [added: +12] | % | | $ | [removed: 18.72] [added: 25.96] | | | | [removed: \- 14] [added: +39] | % | | $ | [removed: 21.68] [added: 18.72] | |

| Capitalized expenditures, including acquisitions | | $ | [removed: 2,937] [added: 2,576] | | | | [removed: \- 25] [added: +19] | % | | $ | [removed: 3,908] [added: 2,169] | | | | \- [removed: 32] [added: 23] | % | | $ | [removed: 5,712] [added: 2,826] | |

| Reserves (MMBoe) | | | [removed: 2,152] [added: 1,927] | | | | [removed: +5] [added: \- 10] | % | | | [removed: 2,058] [added: 2,152] | | | | [removed: \- 6] [added: +5] | % | | | [removed: 2,182] [added: 2,058] | |

[added: In 2018,] Devon marked its [removed: 46th] [added: 30th year as a public company and 47th] anniversary in the oil and gas [removed: business and its 29th year as a public company during 2017.][added: business, so we are experienced in dealing with the volatile nature of commodity prices.]

[removed: Current market fundamentals indicate improved prices for crude oil in 2018; however, changes] [added: Changes] in OPEC production strategies, the macro-economic environment, geopolitical risks [removed: or] [added: and] other factors could impact [added: our] current forecasts.

[removed: Results] [added: Results] of Operations – 2017 vs. [removed: 2016][added: 2016]

[removed: Specifically, the] [added: The] graph below shows the change in net earnings from 2016 to 2017.

Additional information regarding [removed: noncontrolling interests] [added: the impairments] is discussed in [Note [removed: 20](#NCI)] [added: 5](#AssetImpairments)] in “Item 8.

[removed: ][added: ]

[removed: ][added: ]

| STACK | | | [removed: 26] [added: 32] | | | | [removed: 11] [added: 13] | % | | | [removed: 19] [added: 25] | | | | [removed: +38] [added: +28] | % |

| Delaware Basin | | | [removed: 31] [added: 42] | | | | [removed: 13] [added: 17] | % | | | [removed: 33] [added: 29] | | | | [removed: \- 7] [added: +42] | % |

| Rockies Oil | | | 14 | | | | 6 | % | | | [removed: 14] [added: 10] | | | | [removed: +1] [added: +37] | % |

| Barnett Shale | | | 1 | | | | [removed: 1] [added: 0] | % | | | 1 | | | | \- [removed: 25] [added: 7] | % |

| Other | | | [removed: 8] [added: 5] | | | | 2 | % | | | [removed: 11] [added: 5] | | | | \- [removed: 28] [added: 3] | % |

| Retained assets | | | [removed: 132] [added: 98] | | | | [removed: 54] [added: 93] | % | | | [removed: 139] [added: 86] | | | | [removed: \- 4] [added: +14] | % |

| [removed: Divested] [added: U.S. divested] assets | | | [removed: 2] [added: 9] | | | | [removed: 1] [added: 4] | % | | | 12 | | | | \- [removed: 87] [added: 23] | % |

| Total Oil and bitumen | | | 244 | | | | [added: 100] | [added: %] | | | 260 | | | | \- 6 | % |

| Delaware Basin | | | [removed: 90] [added: 16] | | | | [removed: 7] [added: 15] | % | | | [removed: 90] [added: 10] | | | | [removed: +1] [added: +53] | % |

| Rockies Oil | | | [removed: 15] [added: 16] | | | | 1 | % | | | [removed: 25] [added: 8] | | | | [removed: \- 39] [added: +85] | % |

| Barnett Shale | | | [removed: 667] [added: 30] | | | | [removed: 55] [added: 28] | % | | | [removed: 741] [added: 31] | | | | \- [removed: 10] [added: 4] | % |

| Other | | | [removed: 11] [added: 1] | | | | [removed: 1] [added: 0] | % | | | [removed: 13] [added: 1] | | | | [removed: \- 16] [added: +6] | % |

| Retained assets | | | [removed: 1,199] [added: 86] | | | | [removed: 99] [added: 87] | % | | | [removed: 1,283] [added: 88] | | | | \- [removed: 7] [added: 3] | % |

| [removed: Divested] [added: U.S. divested] assets | | | [removed: 4] [added: 8] | | | | [removed: 1] [added: 7] | % | | | [removed: 130] [added: 13] | | | | \- [removed: 97] [added: 40] | % |

| Total | | | 1,203 | | | | [added: 100] | [added: %] | | | 1,413 | | | | \- 15 | % |

| STACK | | | [removed: 31] [added: 37] | | | | [removed: 31] [added: 35] | % | | | [removed: 26] [added: 30] | | | | [removed: +18] [added: +24] | % |

| Delaware Basin | | | [removed: 11] [added: 75] | | | | [removed: 11] [added: 14] | % | | | [removed: 12] [added: 54] | | | | [removed: \- 9] [added: +39] | % |

| Rockies Oil | | | 1 | | | | [removed: 1] [added: 2] | % | | | 1 | | | | [removed: +2] [added: +75] | % |

| Barnett Shale | | | [removed: 41] [added: 1] | | | | [removed: 42] [added: 0] | % | | | [removed: 45] [added: 1] | | | | \- [removed: 8] [added: 25] | % |

| Other | | | [removed: 2] [added: 1] | | | | [removed: 2] [added: 1] | % | | | [removed: 2] [added: 1] | | | | [removed: +39] [added: \- 5] | % |

| [removed: Divested] [added: U.S. divested] assets | | | [removed: —] [added: 35] | | | | [removed: —] [added: 6] | [added: %] | | | [removed: 14] [added: 62] | | | | \- [removed: 100] [added: 44] | % |

2018 was a pivotal year for Devon as we took several significant steps toward achieving our long-term strategic goals.

Operationally, we successfully transitioned our U.S. oil business into full-field development, which resulted in high-return, light-oil production advancing 14 percent in 2018.

In addition to this strong operating performance, we made substantial progress high-grading our asset portfolio, building per-share value through our share-repurchase program and reducing our financial leverage by more than 40 percent.

| | • | Increased STACK and Delaware Basin production 27% in 2018 compared to 2017. |

| | • | Maintained our 2018 capital expenditure forecast. |

| | • | Substantially achieved $5.0 billion in asset sales, including the monetization of EnLink and the General Partner. |

| | • | Repurchased $3.0 billion of common stock, representing a 14% share count reduction since December 31, 2017. |

| | • | Reduced long-term debt by $922 million, which is expected to reduce annualized financing costs by $66 million. |

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

| | • | Completed workforce reduction and cost reduction initiatives expected to generate $150 million of annualized savings. |

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

| | • | Increased our quarterly common stock dividend 33% to $0.08 per share beginning in the second quarter of 2018. |

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

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

|  | | As presented in the graph at the left, our operating achievements are subject to the volatility of commodity prices. Over the last four years, NYMEX WTI oil and NYMEX Henry Hub prices ranged from an average high of $64.79 per Bbl and $3.11 per MMBtu, respectively, to an average low of $43.36 per Bbl and $2.46 per MMBtu, respectively. Widening Western Canadian Select differentials negatively impacted the prices we realized on our heavy oil production in the fourth quarter of 2018. In the first two months of 2019, Western Canadian Select differentials have improved significantly. |

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

| | Key measures of our financial performance in 2018 are summarized in the following table. Increased oil and natural gas liquids prices as well as continued focus cost management improved our 2018 financial performance as compared to 2017, as seen in the table below. Additionally, we recognized a gain of approximately $2.6 billion ($2.2 billion after-tax) related to the sale of EnLink and the General Partner during 2018. More details for these metrics are found within the “Results of Operations – 2018 vs. 2017” below. | |

| Total: | | | | | | | | | | | | | | | | | | | | |

| Continuing Operations: | | | | | | | | | | | | | | | | | | | | |

| Net earnings (loss) | | $ | 764 | | | | +1 | % | | $ | 758 | | | | +232 | % | | $ | (574 | ) |

| Net earnings (loss) per diluted share | | $ | 1.52 | | | | +6 | % | | $ | 1.43 | | | | +225 | % | | $ | (1.14 | ) |

| Core earnings (loss) (1) | | $ | 587 | | | | +48 | % | | $ | 397 | | | | +207 | % | | $ | (371 | ) |

| Core earnings (loss) per diluted share (1) | | $ | 1.17 | | | | +57 | % | | $ | 0.75 | | | | +202 | % | | $ | (0.73 | ) |

| Discontinued Operations: | | | | | | | | | | | | | | | | | | | | |

| Net earnings (loss) attributable to Devon | | $ | 2,300 | | | | +1543 | % | | $ | 140 | | | | +129 | % | | $ | (481 | ) |

| Net earnings (loss) per diluted share attributable to Devon | | $ | 4.58 | | | | +1596 | % | | $ | 0.27 | | | | +128 | % | | $ | (0.95 | ) |

| Core earnings attributable to Devon (1) | | $ | 68 | | | | +127 | % | | $ | 30 | | | | +580 | % | | $ | 4 | |

| Core earnings attributable to Devon per diluted share (1) | | $ | 0.13 | | | | +120 | % | | $ | 0.06 | | | | +1628 | % | | $ | 0.00 | |

| Other Metrics: | | | | | | | | | | | | | | | | | | | | |

| Retained production (MBoe/d) | | | 500 | | | | +4 | % | | | 481 | | | | \- 3 | % | | | 497 | |

| Operating cash flow from continuing operations | | $ | 2,228 | | | | +1 | % | | $ | 2,209 | | | | +165 | % | | $ | 834 | |

| Cash and cash equivalents | | $ | 2,414 | | | | \- 9 | % | | $ | 2,642 | | | | +36 | % | | $ | 1,947 | |

| Total debt | | $ | 5,947 | | | | \- 13 | % | | $ | 6,864 | | | | +0 | % | | $ | 6,859 | |

In 2018, WTI oil prices averaged approximately $67/Bbl through October, supported by stronger-than-expected oil demand, market management by both OPEC and non-OPEC partners and unplanned supply outages.

However, oil prices markedly declined in November and December, averaging approximately $53/Bbl and reaching as low as $42.53/Bbl in December.

The deterioration of WTI was driven by OPEC and non-OPEC partners unwinding their production cut agreement, compounded by rising supply and concerns over slowing global economic growth.

Western Canadian Select basis differentials were challenged in the fourth quarter of 2018 due to robust production outpacing local demand, pipeline capacity and rail capacity out of the region.

Looking ahead, current market fundamentals indicate that 2019 crude pricing is expected to improve from its fourth quarter 2018 levels.

Additionally, Western Canadian Select differentials are also projected to improve, driven by provincially mandated production cuts combined with takeaway capacity additions expected in late 2019.

To mitigate our exposure to commodity market volatility and ensure our financial strength, we use a disciplined, risk-management hedging program.

During 2017, we generated solid operating results with our strategy of operating in North America’s best resource plays, delivering superior execution, continuing disciplined capital allocation and maintaining a high degree of financial strength.

Led by our development in the STACK and Delaware Basin, we continued to improve our 90-day initial production rates.

With investments in proprietary data tools, predictive analytics and artificial intelligence, we are delivering industry-leading, initial-rate well productivity performance and improving the performance of our established wells.

Compared to 2016, commodity prices increased significantly and were the primary driver for improvements in Devon’s earnings and cash flow during 2017.

We have no significant debt maturities until 2021.

We further enhanced our financial strength by completing approximately $415 million of our announced $1 billion asset divestiture program in 2017.

We anticipate closing the remaining divestitures in 2018.

In 2018 and beyond, we have the financial capacity to further accelerate investment across our best-in-class U.S. resource plays.

We are increasing drilling activity and will continue to shift our production mix to high-margin products.

We will continue our premier technical work to drive capital allocation and efficiency and industry-leading well productivity results.

We will continue to maximize the value of our base production by sustaining the operational efficiencies we have achieved.

Finally, we will continue to manage activity levels within our cash flows.

We expect this disciplined approach will position us to deliver capital-efficient, cash-flow expansion over the next two years.

Key measures of our financial performance in 2017 are summarized in the following table.

Increased commodity prices as well as continued focus on our production expenses improved our 2017 financial performance as compared to 2016, as seen in the table below.

More details for these metrics are found within the “Results of Operations – 2017 vs. 2016”, below.

| Retained production (MBoe/d) | | | 541 | | | | \- 4 | % | | | 563 | | | | \- 3 | % | | | 580 | |

| Operating cash flow | | $ | 2,909 | | | | +94 | % | | $ | 1,500 | | | | \- 69 | % | | $ | 4,898 | |

| Shareholder and noncontrolling interests distributions | | $ | 481 | | | | \- 8 | % | | $ | 525 | | | | \- 19 | % | | $ | 650 | |

| Cash and cash equivalents | | $ | 2,673 | | | | +36 | % | | $ | 1,959 | | | | \- 15 | % | | $ | 2,310 | |

| Total debt | | $ | 10,406 | | | | +2 | % | | $ | 10,154 | | | | \- 22 | % | | $ | 13,032 | |

| * | Prior year amounts have been recast due to change in accounting principle. See [Note 2](#Change_Acct_Princ) in “Item 8. Financial Statements and Supplementary Data” of this report. |

| --- | --- |

As an established company with a strong leadership team, we have experience operating in periods of challenged commodity prices.

With our focused strategy and portfolio of quality assets, we are focused on navigating the current environment while ensuring our long-term financial strength.

During 2017, WTI oil prices ranged from approximately $42.00/Bbl to $60.00/Bbl, supported by increasing global demand and historically high OPEC compliance with its oil production cuts that were put in place in 2016 for the first half of 2017.

Following the decision by both OPEC and non-OPEC producers to extend the agreement to reduce output by nearly 1.8 million barrels per day through the end of 2018, oil prices increased approximately 15% in the fourth quarter of 2017, averaging $55.49/Bbl.

As such, we anticipate continued volatility into 2018 and we continue to execute on our hedging strategy to mitigate such volatility.

Leveraging the success of our 2017 results, we have a solid financial condition and anticipate expanding our oil and gas investment by approximately 10% in 2018, while drilling and completing approximately 25% more wells.

Our 2018 outlook is focused on our high returning assets in the STACK and Delaware Basin and achieving top-line oil-equivalent production growth of 6%-9%, on a retained asset basis, through some of our best-in-class positions.

Additionally, we continued to execute our hedging program in 2017 and now have approximately 40% of our oil and 50% of our gas production hedged for 2018.

With our anticipated results and hedging program, we intend to fully fund our increased activity with our operating cash flow.

Additionally, we are targeting reducing our debt by approximately $1 billion.

Finally, EnLink continues to be a strategic advantage for us.

With annual distributions to us of approximately $270 million, EnLink provides a visible cash flow stream to be further invested in our upstream capital programs.

| * | Prior year amounts, including amounts in the following tables, have been recast due to change in accounting principle. See [Note 2](#Change_Acct_Princ) in “Item 8. Financial Statements and Supplementary Data” of this report. |

| STACK | | | 304 | | | | 25 | % | | | 293 | | | | +4 | % |

| Retained assets | | | 99 | | | | 100 | % | | | 102 | | | | \- 2 | % |

| Retained assets | | | 541 | | | | 99 | % | | | 563 | | | | \- 4 | % |

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

The term “market risk” refers to our risk of loss arising from adverse changes in oil, [added: bitumen,] gas and NGL prices, interest rates and foreign currency exchange rates.

Our major market risk exposure is the pricing applicable to our oil, [added: bitumen,] gas and NGL production.

The key terms to our oil and gas derivative financial instruments as of December 31, [removed: 2017] [added: 2018] are presented in [Note [removed: 4](#Derivatives)] [added: 3](#Derivatives)] in “Item 8.

At December 31, [removed: 2017,] [added: 2018,] a 10% change in the forward curves associated with our commodity derivative instruments would have changed our net asset positions by approximately [removed: $260] [added: $270] million.

At December 31, [removed: 2017,] [added: 2018,] we had total debt of [removed: $10.4] [added: $5.9] billion.

As of December 31, [removed: 2017,] [added: 2018,] we had [added: one] open interest rate swap [removed: positions] [added: position] that [removed: are] [added: is] presented in [Note [removed: 4](#Derivatives)] [added: 3](#Derivatives)] in “Item 8.

The fair [removed: values] [added: value] of our interest rate [removed: swaps are] [added: swap is] largely determined by estimates of the forward curves of the three month LIBOR rate.

A 10% change in these forward curves would not have materially impacted our balance sheet or liquidity at December 31, [removed: 2017.][added: 2018.]

A 10% unfavorable change in the Canadian-to-U.S. dollar exchange rate would not have materially impacted our December 31, [removed: 2017] [added: 2018] balance sheet.

The value of [removed: the Canadian-dollar cash and] [added: these foreign currency denominated] intercompany loans increases or decreases from the remeasurement [removed: of the cash and loans] into the [removed: U.S. dollar] [added: subsidiaries’] functional currency.

Based on the amount of the [removed: cash and] intercompany loans as of December 31, [removed: 2017,] [added: 2018,] a 10% change in the foreign currency exchange rates would not have materially impacted our balance sheet.

All of our debt is based on fixed interest rates averaging 5.4%.

Devon engages in intercompany loan activity between subsidiaries with different functional currencies.

Of this amount, $10.3 billion bears fixed interest rates averaging 5.3%, and approximately $74 million is comprised of floating rate debt with interest rates averaging 3.2%.

Our non-Canadian foreign subsidiaries have a U.S. dollar functional currency.

However, some of these subsidiaries hold Canadian-dollar cash and engage in intercompany loans with Canadian subsidiaries that are based in Canadian dollars.

Devon [removed: Gas Services,] [added: Energy Production Company,] L.P., a wholly-owned subsidiary of the Company, is currently in negotiations with the EPA with respect to alleged noncompliance with the leak detection and repair requirements of EPA regulations promulgated under the Clean Air Act at its Beaver Creek Gas Plant located near Riverton, Wyoming.

| [removed: ☒] [added: ☒] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the fiscal year ended December 31, [removed: 2017][added: 2018]

| [removed: ☐] [added: ☐] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

[removed: ][added: ]

[removed: DEVON] [added: DEVON] ENERGY [removed: CORPORATION][added: CORPORATION]

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: and posted] pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit [removed: and post] such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [added: a] smaller reporting company or an emerging growth company.

The aggregate market value of the voting common stock held by non-affiliates of the registrant as of June [removed: 30, 2017] [added: 29, 2018] was approximately [removed: $16.7] [added: $22.5] billion, based upon the closing price of [removed: $31.97] [added: $43.96] per share as reported by the New York Stock Exchange on such date.

On February [removed: 7, 2018, 526.1] [added: 6, 2019, 438.3] million shares of common stock were outstanding.

Portions of Registrant’s definitive Proxy Statement relating to Registrant’s [removed: 2018] [added: 2019] annual meeting of stockholders have been incorporated by reference in Part III of this Annual Report on Form 10-K.

| [Item 1A. Risk Factors](#ITEM_1A_RISK_FACTORS) | | [removed: 16] [added: 14] |

| [Item 1B. Unresolved Staff Comments](#ITEM_1B_UNRESOLVED_STAFF_COMMENTS) | | [removed: 23] [added: 21] |

| [Item 3. Legal Proceedings](#ITEM_3_LEGAL_PROCEEDINGS) | | [removed: 23] [added: 21] |

| [Item 4. Mine Safety Disclosures](#ITEM_4_MINE_SAFETY_DISCLOSURES) | | [removed: 23] [added: 21] |

| [PART II](#PART_II) | | [removed: 24] [added: 22] |

| [Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ITEM_5) | | [removed: 24] [added: 22] |

| [Item 6. Selected Financial Data](#ITEM_6_SELECTED_FINANCIAL_DATA) | | [removed: 26] [added: 24] |

| [Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ITEM_7) | | [removed: 27] [added: 25] |

| [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ITEM_9) | | [removed: 116] [added: 109] |

| [Item 9A. Controls and Procedures](#ITEM_9A_CONTROLS_PROCEDURE_S) | | [removed: 116] [added: 109] |

| [Item 9B. Other Information](#ITEM_9B_OR_INFORMATION) | | [removed: 116] [added: 109] |

| [PART III](#PART_III) | | [removed: 117] [added: 110] |

| [Item 10. Directors, Executive Officers and Corporate Governance](#ITEM_10) | | [removed: 117] [added: 110] |

| [Item 11. Executive Compensation](#ITEM_11_EXECUTIVE_COMPENSATION) | | [removed: 117] [added: 110] |

| [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM_12) | | [removed: 117] [added: 110] |

| [Item 13. Certain Relationships and Related Transactions, and Director Independence](#ITEM_13) | | [removed: 117] [added: 110] |

| [Item 14. Principal Accountant Fees and Services](#ITEM_14) | | [removed: 117] [added: 110] |

| [Item 15. Exhibits and Financial Statement Schedules](#ITEM_15_EXHIBITS_FINANCIAL_STMTS_SCHED) | | [removed: 118] [added: 111] |

| [Item 16. Form 10-K Summary](#ITEM_16_Form10K_Summary) | | [removed: 125] [added: 116] |

“2015 Plan” means the Devon Energy Corporation 2015 Long-Term Incentive [removed: Plan, as amended and restated.][added: Plan.]

“EnLink” means EnLink Midstream Partners, [removed: L.P.,] [added: LP,] a master limited partnership.

“General Partner” means EnLink Midstream, LLC, the indirect general partner entity of [removed: EnLink.][added: EnLink, and, unless the context otherwise indicates, EnLink Midstream Manager, LLC, the managing member of EnLink Midstream, LLC.]

“Inside FERC” refers to the publication [removed: Inside] [added: *Inside] F.E.R.C.’s Gas Market [removed: Report.][added: Report.*]

[removed: “Senior] [added: “2012 Senior] Credit Facility” means Devon’s syndicated unsecured revolving line of [removed: credit.][added: credit, effective as of October 24, 2012.]

[removed: INFORMATION] [added: INFORMATION] REGARDING FORWARD-LOOKING [removed: STATEMENTS][added: STATEMENTS]

Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words [added: and phrases] “expects,” “believes,” “will,” “would,” “could,” [added: “continue,” “may,” “aims,” “likely to be,” “intends,”] “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology.

| | • | the uncertainties, costs and risks involved in [removed: oil and gas operations;] [added: our operations, including as a result of employee misconduct;] |

| | • | competition for [removed: leases,] [added: assets,] materials, people and capital; |

[removed: Business] [added: *Business] and [removed: Properties][added: Properties*]

A Delaware corporation formed in [removed: 1971,] [added: 1971] and publicly held since 1988, Devon (NYSE: DVN) is an independent energy company engaged primarily in the exploration, development and production of oil, natural gas and NGLs.

| [PART IV](#PART_IV) | | 111 |

| [Signatures](#SIGNATURES) | | 117 |

“2018 Senior Credit Facility” means Devon’s syndicated unsecured revolving line of credit, effective as of October 5, 2018.

“ASR” means an accelerated share-repurchase transaction with a financial institution to repurchase Devon’s common stock.

“/Bbl” means per barrel.

“/MMBtu” means per MMBtu.

All statements, other than statements of historical facts, included in this report that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward-looking statements.

| | • | risks related to regulatory, social and market efforts to address climate change; |

In July 2018, we exited the midstream business by divesting our aggregate ownership interests in EnLink and the General Partner.

Our Strategy

Our business strategy is focused on delivering a consistently competitive shareholder return among our peer group.

Because the business of exploring for, developing and producing oil and natural gas is capital intensive, delivering sustainable capital efficient cash flow growth is a key tenant to our success.

While our cash flow is highly dependent on volatile and uncertain commodity prices, we pursue our strategy throughout all commodity price cycles with three fundamental principles.

A premier, sustainable portfolio of assets – As discussed in the next section of this Annual Report, we own a portfolio of assets located in the United States and Alberta, Canada.

We strive to own premier assets capable of generating cash flows in excess of our capital and operating requirements, as well as competitive rates of return.

We also desire to own a portfolio of assets that can provide a production growth platform extending many years into the future.

Because of the strength of oil prices relative to natural gas, we have been positioning our portfolio to be more heavily weighted to U.S. oil assets in recent years.

During 2018, we made significant progress in our transition to a U.S. oil company.

We sold our midstream business and certain non-core upstream assets, generating nearly $5 billion in proceeds.

In February 2019, we announced our intent to separate our Canadian business and our Barnett Shale assets from the Company.

After these separations, we expect our oil production growth, price realizations and field-level margins will all improve, as we sharpen our focus on four core U.S. oil plays located in the Delaware Basin, STACK, Eagle Ford and Rockies.

Superior execution – As we pursue cash flow growth, we continually work to optimize the efficiency of our capital programs and production operations, with an underlying objective of reducing absolute and per unit costs and enhancing our returns.

We also strive to leverage our culture of health, safety and environmental stewardship in all aspects of our business.

Throughout 2018, we continued to achieve efficiency gains in various aspects of our business.

Our initial production rates from new wells continued to improve in our four core U.S. oil plays and have exceeded the average of the top 40 U.S. producers since 2015 by more than 40%.

We continued to improve cycle times, incorporate production optimization strategies and other cost reduction initiatives, driving down breakeven costs across our portfolio of assets.

As we focus on a more streamlined portfolio of U.S. oil assets, we are aggressively pursuing an improved cost structure with $780 million of annual costs savings expected by 2021.

We expect to realize about 70% of the annualized savings by the end of 2019.

Our retained U.S. oil business is expected to realize $300 million of annual well cost savings by 2021, as we increase our focus on development drilling, reduce our facility costs and optimize well spacing in the STACK.

Additionally, we will streamline and align our workforce with our go-forward business, which should result in $300 million of annual cost savings by the end of the three-year period.

As we continue deleveraging, we expect to reduce annual interest costs by $130 million.

Finally, we have plans to reduce our annual production expenses by $50 million over the next three years.

Financial strength and flexibility – Commodity prices are uncertain and volatile, so we strive to maintain a strong balance sheet, as well as adequate liquidity and financial flexibility, in order to operate competitively in all commodity price cycles.

Our capital allocation decisions are made with attention to these financial stewardship principles, as well as the priorities of funding our core operations, protecting our investment-grade credit ratings, and paying and growing our shareholder dividend.

During 2018, we reduced our consolidated debt by 40%, primarily from our divestitures.

We also raised our quarterly dividend 33% and began a $4 billion share repurchase program.

As we dispose of our Canadian and Barnett Shale assets in 2019, we expect to use the proceeds to reduce debt further and repurchase additional common shares.

As a result of our planned dispositions, our Board of Directors has increased our share repurchase program to $5 billion in February 2019 and raised our quarterly dividend 12.5% to $0.09 per share.

In 2019, we plan to invest approximately $900 million of capital in the Delaware Basin, making it the top-funded asset in the portfolio.

The STACK is Devon’s second highest funded asset in the portfolio for 2019.

10-K 1 dvn-10k_20171231.htm 10-K

[Index to Financial Statements](#IndexToFinancialStatements)

| --- | --- |

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

| [PART IV](#Part_IV) | | 118 |

| [Signatures](#SIGNATURES) | | 126 |

“EMH” means EnLink Midstream Holdings, LP.

“GeoSouthern” means GeoSouthern Energy Corporation.

“MLP” means master limited partnership.

“M&M operations” means marketing and midstream revenues minus marketing and midstream expenses.

“VEX” means Victoria Express Pipeline and related truck terminal and storage assets.

“/gal” means per gallon.

Such forward-looking statements are based on our examination of historical operating trends, the information used to prepare our December 31, 2017 reserve reports and other data in our possession or available from third parties.

Additionally, we control EnLink, a publicly traded MLP with an integrated midstream business with significant size and scale in key operating regions in the U.S. For additional information regarding our control of, and ownership interest in, EnLink and its indirect general partner, the General Partner, see [Note 20](#NCI) in “Item 8.

Financial Statements and Supplementary Data” of this report.

Devon Strategy

Devon is committed to delivering consistent top-quartile shareholder return among its peer group through a highly engaged culture focused on innovation, safety, operational excellence, environmental stewardship and social responsibility.

We also maintain a strong commitment to financial strength and flexibility through all commodity price cycles, as reflected in the company’s investment grade credit ratings.

Devon’s “2020 Vision” is our plan through the end of the decade intended to optimize returns and deliver top-tier capital-efficient, cash-flow growth.

Our 2020 Vision is focused on the following strategic priorities:

| | • | Maximize cash flow by optimizing base production and reducing per-unit cash costs; |

| | • | Improve capital efficiency with a concentration of investment on highest-returning development projects in the Delaware Basin and STACK; |

| | • | Simplify our portfolio by monetizing non-core assets; |

| | • | Improve financial strength by reducing debt; and |

| | • | Return cash to shareholders. |

Our portfolio of exploration and production assets and operations provides stable, environmentally responsible production and a platform for future growth.

In 2017, we continued the development of our world-class operations in the STACK and Delaware Basin.

These assets provide us with a sustainable, multi-decade growth platform that continues to improve with our successful drilling programs.

During 2017, we delivered the best well productivity in Devon’s 46-year history and continued a five-year streak of increasing Devon’s initial 90-day production rates.

With investments in proprietary data tools, predictive analytics and artificial intelligence, we are delivering industry-leading, initial-rate well productivity and improving the performance of our established wells.

Devon has more than doubled its onshore North American oil production since 2012 and has a deep inventory of development opportunities to deliver future oil growth.

As we enter 2018 and look toward the future, we expect to achieve additional efficiencies across our portfolio.

We expect to fund activity within our cash flow, and remain committed to allocating capital in a disciplined manner to maximize value and return.

We believe we capture the full value of our assets and improve returns through maximizing our base production and optimizing our capital program.

The activities that support this strategy include minimizing controllable downtime, enhancing well productivity, ensuring disciplined project execution, performing premier technical work, focusing on developmental drilling and reducing our operating and capital costs.

We also continue to implement new shareholder-friendly initiatives, which include new returns-based metrics aligned to employee compensation and the conversion to successful efforts accounting which provides greater transparency into our financial performance.

EnLink Strategy

EnLink focuses on providing gathering, transmission, processing, storage, fractionation and marketing to upstream oil and natural gas producers, including Devon.

EnLink connects the wells of natural gas producers in its market areas to its gathering systems, processes natural gas for the removal of NGLs, fractionates NGLs into purity products and markets those products for a fee, transports natural gas and ultimately provides natural gas to a variety of markets.

Furthermore, EnLink purchases natural gas from natural gas producers and other supply sources and sells that natural gas to utilities, industrial consumers, other marketers and pipelines.

Our common stock is traded on the [removed: NYSE.][added: NYSE under the “DVN” ticker symbol.]

On February [removed: 7, 2018,] [added: 6, 2019,] there were [removed: 7,466] [added: 7,094] holders of record of our common stock.

The declaration of future dividends is a business decision made by our Board of [removed: Directors from time to time,] [added: Directors,] and will depend on Devon’s financial condition and other relevant factors.

The graph was prepared assuming $100 was invested on December 31, [removed: 2012] [added: 2013] in Devon’s common stock, the S&P 500 Index and the peer group, and dividends have been reinvested subsequent to the initial investment.

[removed: ][added: ]

[removed: Issuer] [added: Issuer] Purchases of Equity [removed: Securities][added: Securities]

The following table [removed: details] [added: provides information regarding] purchases of our common stock that were made by us during the fourth quarter of [removed: 2017.][added: 2018 (shares in thousands).]

| Period | | Total Number of Shares Purchased (1) | | | | Average Price Paid per Share | | | [added: | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs (2) | | | | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2) | | |]

[added: Eligible employees purchased approximately 39,000 shares of our common] stock in [removed: 2017,] [added: 2018,] at then-prevailing stock prices, that they held through their ownership in the Devon Stock Fund.

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 2018, there were no shares purchased by Canadian employees under the plan.]

Additional information on our dividends can be found in [Note 18](#StockholdersEquity) in “Item 8.

Financial Statements and Supplementary Data” of this report.

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

| October 1 - October 31 | | | 10,532 | | | $ | 36.01 | | | | 10,529 | | | $ | 2,388 | |

| November 1 - November 30 | | | 7,079 | | | $ | 31.55 | | | | 7,068 | | | $ | 2,165 | |

| December 1 - December 31 | | | 6,020 | | | $ | 23.82 | | | | 6,015 | | | $ | 2,022 | |

| Total | | | 23,631 | | | $ | 31.57 | | | | 23,612 | | | | | |

| | (1) | In addition to shares purchased under the share repurchase program described below, these amounts also included approximately 19,000 shares received by us from employees for the payment of personal income tax withholding on vesting transactions. |

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

| | (2) | On March 7, 2018, we announced a $1.0 billion share repurchase program. On June 6, 2018, we announced the expansion of this program to $4.0 billion. On February 19, 2019, we announced a further expansion to $5.0 billion with a December 31, 2019 expiration date. During 2018, we repurchased 78.1 million shares of common stock for $3.0 billion, or $38.11 per share. Future purchases under the program will be made in the open market, private transactions or through the use of ASR programs. |

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

The following table sets forth the quarterly high and low prices for our common stock during 2017 and 2016, as well as the quarterly dividends per share.

| | | | | | | | | | | | | |

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

| | | Price Range of Common Stock | | | | | | | | Dividends | | |

| | | High | | | | Low | | | | Per Share | | |

| Quarter Ended 2017: | | | | | | | | | | | | |

| December 31, 2017 | | $ | 42.60 | | | $ | 33.98 | | | $ | 0.06 | |

| September 30, 2017 | | $ | 37.44 | | | $ | 28.80 | | | $ | 0.06 | |

| June 30, 2017 | | $ | 43.50 | | | $ | 29.89 | | | $ | 0.06 | |

| March 31, 2017 | | $ | 49.45 | | | $ | 38.02 | | | $ | 0.06 | |

| Quarter Ended 2016: | | | | | | | | | | | | |

| December 31, 2016 | | $ | 50.66 | | | $ | 36.64 | | | $ | 0.06 | |

| September 30, 2016 | | $ | 45.62 | | | $ | 35.01 | | | $ | 0.06 | |

| June 30, 2016 | | $ | 39.47 | | | $ | 25.55 | | | $ | 0.06 | |

| March 31, 2016 | | $ | 32.93 | | | $ | 18.07 | | | $ | 0.24 | |

During 2017, we did not repurchase any shares that were a part of a publicly announced program.

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

| October 1 - October 31 | | | 9,768 | | | $ | 35.27 | |

| November 1 - November 30 | | | 29,160 | | | $ | 38.68 | |

| December 1 - December 31 | | | 2,321 | | | $ | 39.06 | |

| Total | | | 41,249 | | | $ | 37.89 | |

| (1) | Share repurchases represent shares received by us from employees for the payment of personal income tax withholding on share-based compensation vesting. |

| --- | --- |

Eligible employees purchased approximately 46,000 shares of our common

Eligible employees purchased approximately 6,200 shares of our common stock in 2017.

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016*] [added: 2017] | | | | [removed: 2015*] [added: 2016] | | | | [removed: 2014*] [added: 2015] | | | | [removed: 2013*] [added: 2014] | | |

| Upstream revenues [added: (1)] | | $ | [removed: 5,307] [added: 6,285] | | | $ | [removed: 3,981] [added: 5,307] | | | $ | [removed: 5,885] [added: 3,981] | | | $ | [removed: 11,619] [added: 5,885] | | | $ | [removed: 7,296] [added: 11,619] | |

| [removed: Earnings] [added: Net earnings] (loss) from continuing operations per [removed: share attributable to Devon:] [added: share:] | | | | | | | | | | | | | | | | | | | | |

| Cash dividends per common share | | $ | [removed: 0.24] [added: 0.30] | | | $ | [removed: 0.42] [added: 0.24] | | | $ | [removed: 0.96] [added: 0.42] | | | $ | [removed: 0.94] [added: 0.96] | | | $ | [removed: 0.86] [added: 0.94] | |

| Total assets [removed: (1)] [added: (2)(3)] | | $ | [removed: 30,241] [added: 19,566] | | | $ | [removed: 28,675] [added: 30,241] | | | $ | [removed: 29,673] [added: 28,675] | | | $ | [removed: 49,253] [added: 29,673] | | | $ | [removed: 44,390] [added: 49,253] | |

| Stockholders' equity | | $ | [removed: 14,104] [added: 9,186] | | | $ | [removed: 12,722] [added: 14,104] | | | $ | [removed: 11,111] [added: 12,722] | | | $ | [removed: 24,789] [added: 11,111] | | | $ | [removed: 20,729] [added: 24,789] | |

| Common shares outstanding | | | [removed: 525] [added: 450] | | | | [removed: 523] [added: 525] | | | | [removed: 418] [added: 523] | | | | [removed: 409] [added: 418] | | | | [removed: 406] [added: 409] | |

| [removed: (1)] | [added: (2) |] Material asset impairments and acquisition and divestiture activity [removed: have] had significant impacts on operating results and the carrying value of our oil and gas assets. [added: Specifically, there were asset impairments of $0.4 billion, $16.1 billion and $3.4 billion in 2016, 2015 and 2014, respectively.] More discussion on these items can be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in [Note [removed: 3](#AcquisitionsAndDivestitures)] [added: 2](#Acquisitions_Divestitures)] and [removed: [](#AcquisitionsAndDivestitures)[Note 6](#AssetImpairments)] [added: [Note 5](#AssetImpairments)] of “Item 8. Financial Statements and Supplementary Data” of this report. |

| Total revenues (1) | | $ | 10,734 | | | $ | 8,878 | | | $ | 6,753 | | | $ | 9,372 | | | $ | 16,636 | |

| Net earnings (loss) from continuing operations (2) | | $ | 764 | | | $ | 758 | | | $ | (574 | ) | | $ | (12,231 | ) | | $ | (1,004 | ) |

| Basic (2) | | $ | 1.53 | | | $ | 1.44 | | | $ | (1.14 | ) | | $ | (30.09 | ) | | $ | (2.49 | ) |

| Diluted (2) | | $ | 1.52 | | | $ | 1.43 | | | $ | (1.14 | ) | | $ | (30.09 | ) | | $ | (2.49 | ) |

| Long-term debt | | $ | 5,785 | | | $ | 6,749 | | | $ | 6,859 | | | $ | 8,990 | | | $ | 7,738 | |

| | (1) | In January 2018, Devon adopted ASC 606 – *Revenue from Contracts with Customers* using the modified retrospective method and has applied the standard to all existing contracts. The impact of adoption for 2018 is further discussed in [Note 1](#SummaryOfSignificantAccountingPolicies) of “Item 8. Financial Statements and Supplementary Data” of this report. Prior periods have not been restated. |

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

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

| | (3) | Amounts in 2014 through 2017 include assets related to our aggregate ownership interest in EnLink and the General Partner. As discussed further in [Note 19](#Discops) of “Item 8. Financial Statements and Supplementary Data” of this report, the 2018 divestment of our aggregate ownership interests in EnLink and the General Partner resulted in the reclassification of EnLink and the General Partners’ assets to assets held for sale, which are included within this amount. |

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

| Total revenues | | $ | 13,949 | | | $ | 10,304 | | | $ | 13,145 | | | $ | 19,285 | | | $ | 9,362 | |

| Earnings (loss) from continuing operations (1) | | $ | 1,078 | | | $ | (1,458 | ) | | $ | (13,645 | ) | | $ | (753 | ) | | $ | (938 | ) |

| Earnings (loss) from continuing operations attributable to Devon (1) | | $ | 898 | | | $ | (1,056 | ) | | $ | (12,896 | ) | | $ | (837 | ) | | $ | (938 | ) |

| Basic (1) | | $ | 1.71 | | | $ | (2.09 | ) | | $ | (31.72 | ) | | $ | (2.08 | ) | | $ | (2.34 | ) |

| Diluted (1) | | $ | 1.70 | | | $ | (2.09 | ) | | $ | (31.72 | ) | | $ | (2.08 | ) | | $ | (2.34 | ) |

| Long-term debt (2) | | $ | 10,291 | | | $ | 10,154 | | | $ | 12,056 | | | $ | 9,761 | | | $ | 7,888 | |

| * | Prior year amounts have been recast due to change in accounting principle. See [Note 2](#Change_Acct_Princ) in “Item 8. Financial Statements and Supplementary Data” of this report. |

| --- | --- |

| (2) | Debt balances at December 31, 2017, 2016, 2015 and 2014 include $3.5 billion, $3.3 billion, $3.1 billion and $2.0 billion, respectively, of EnLink and the General Partner debt that is non-recourse to Devon. |

| [Note [removed: 3] [added: 2] – Acquisitions and [removed: Divestitures](#AcquisitionsAndDivestitures)] [added: Divestitures](#Acquisitions_Divestitures)] | | [removed: 71] [added: 67] |

| [Note [removed: 4] [added: 3] – Derivative Financial Instruments](#Derivatives) | | [removed: 73] [added: 69] |

| [Note [removed: 5] [added: 4] – Share-Based Compensation](#ShareBasedComp) | | [removed: 75] [added: 71] |

| [Note [removed: 6] [added: 5] – Asset Impairments](#AssetImpairments) | | [removed: 79] [added: 74] |

| [Note 7 – Other Expenses](#OtherExpenses) | | [removed: 80] [added: 75] |

| [Note 8 – Income Taxes](#Income_Taxes) | | [removed: 81] [added: 76] |

| [Note 9 – Net Earnings (Loss) Per Share [removed: Attributable to Devon](#EPS)] [added: From Continuing Operations](#EPS)] | | [removed: 85] [added: 81] |

| [Note 10 – Other Comprehensive [removed: Earnings](#OCI)] [added: Earnings](#N10_OR_COMPREHENSIVE_EARNINGS)] | | [removed: 86] [added: 81] |

| [Note 11 – Supplemental Information to Statements of Cash Flows](#SupplementalCashFlow) | | [removed: 86] [added: 82] |

| [Note 12 – Accounts Receivable](#AccountsReceivable) | | [removed: 87] [added: 82] |

| [Note 13 – Property, Plant and [removed: Equipment](#PPandE)] [added: Equipment](#N13_PROPERTY_PLANT_EQUIPMENT)] | | [removed: 87] [added: 83] |

| [Note [removed: 15] [added: 14] – Other Current [removed: Liabilities](#OtherCurrentLiabilities)] [added: Liabilities](#N14_OR_CURRENT_LIABILITIES)] | | [removed: 90] [added: 84] |

| [Note [removed: 16] [added: 15] – Debt and Related Expenses](#Debt) | | [removed: 91] [added: 85] |

| [Note [removed: 17] [added: 16] – Asset Retirement Obligations](#ARO) | | [removed: 94] [added: 87] |

| [Note [removed: 18] [added: 17] – Retirement Plans](#RetirementPlans) | | [removed: 94] [added: 87] |

| [Note [removed: 19] [added: 18] – Stockholders’ Equity](#StockholdersEquity) | | [removed: 98] [added: 91] |

| [removed: [Note 20 –] Noncontrolling [removed: Interests](#NCI)] [added: interests] | | [removed: 98] | [added: — | | | | 4,850 | |]

| [Note [removed: 21] [added: 20] – Commitments and Contingencies](#Commitments) | | [removed: 99] [added: 95] |

| [Note [removed: 22] [added: 21] – Fair Value Measurements](#FairValue) | | [removed: 101] [added: 97] |

| [Note [removed: 23] [added: 22] – Segment Information](#SegmentInfo) | | [removed: 102] [added: 98] |

| [Note [removed: 24] [added: 23] – Supplemental Information on Oil and Gas Operations (Unaudited)](#SupplementalOilAndGas) | | [removed: 104] [added: 100] |

| [Note [removed: 25] [added: 24] – Supplemental Quarterly Financial Information (Unaudited)](#QuarterlyFinancialInfo) | | [removed: 112] [added: 107] |

We have audited the accompanying consolidated balance sheets of Devon Energy Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] the related consolidated statements of comprehensive earnings, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, [removed: 2017,] [added: 2018,] and the related notes (collectively, the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in [removed: Internal] [added: *Internal] Control – Integrated [removed: Framework (2013)] [added: Framework* *(2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of [added: the Company] as of December 31, [removed: 2017] [added: 2018] and [removed: 2016,] [added: 2017,] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2017,] [added: 2018,] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2017,] [added: 2018,] based on criteria established in [removed: Internal] [added: *Internal] Control – Integrated Framework [removed: (2013)] [added: (2013)*] issued by the Committee of Sponsoring Organizations of the Treadway Commission.

[removed: DEVON] [added: DEVON] ENERGY CORPORATION AND [removed: SUBSIDIARIES][added: SUBSIDIARIES]

| | | [removed: 2017] [added: 2018] | | | | [removed: 2016*] [added: 2017] | | | | [removed: 2015*] [added: 2016] | | |

| Upstream revenues | | $ | [removed: 5,307] [added: 6,285] | | | $ | [removed: 3,981] [added: 5,307] | | | $ | [removed: 5,885] [added: 3,981] | |

| Marketing and midstream revenues | | [added: $] | [removed: 8,642] [added: 3,567] | | | [added: $] | [removed: 6,323] [added: 5,071] | | | [added: $] | [removed: 7,260] [added: 3,551] | |

| Production expenses | | | [removed: 1,823] [added: 2,225] | | | | [removed: 1,803] [added: 1,823] | | | | [removed: 2,439] [added: 1,805] | |

| Exploration expenses | | | [removed: 380] [added: 177] | | | | [removed: 215] [added: 380] | | | | [removed: 451] [added: 215] | |

| Marketing and midstream expenses | | | [removed: 7,730] [added: 2,912] | | | | [removed: 5,533] [added: 4,111] | | | | [removed: 6,461] [added: 2,712] | |

| Depreciation, depletion and amortization | | | [removed: 2,074] [added: 1,658] | | | | [removed: 2,096] [added: 1,529] | | | | [removed: 4,022] [added: 1,592] | |

| [removed: Asset impairments | | | 17 | | | | 1,310 | | | | 17,647] [added: 5.] | [added: Asset Impairments] |

| Asset dispositions | | [added: $] | [removed: (217] [added: (218] | ) | | [added: $] | [removed: (1,483] [added: 1] | [removed: )] | | [added: $] | [removed: 7] [added: (217] | [added: )] |

| General and administrative expenses | | | [removed: 872] [added: 65] | | | | [removed: 865] [added: 128] | | | | [removed: 1,193] [added: 118] | |

[removed: | Financing costs, net | | | 498 | | | | 907 | | | | 519 | |][added: Financing Costs, Net]

| Other expenses | | | [removed: (124] [added: 65] | [removed: )] | | | [removed: 375] [added: (22] | [added: )] | | | [removed: 264] [added: (19] | [added: )] |

| Income tax expense (benefit) | | [added: $] | [removed: (182] [added: (8] | ) | | [added: $] | [removed: 141] [added: 149] | | | [added: $] | [removed: (6,213] [added: 141] | [removed: )] |

| [Note 19 – Discontinued Operations and Assets Held For Sale](#Discops) | | 93 |

Adoption of New Accounting Standard

As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for revenue from contracts with customers in 2018 due to the adoption of Accounting Standards Update 2014-09, *Revenue from Contracts with Customers (ASC 606)*.

February 20, 2019

| Marketing revenues | | | 4,449 | | | | 3,571 | | | | 2,772 | |

| Total revenues | | | 10,734 | | | | 8,878 | | | | 6,753 | |

| Marketing expenses | | | 4,363 | | | | 3,619 | | | | 2,821 | |

| Restructuring and transaction costs | | | 114 | | | | — | | | | 261 | |

| Total expenses | | | 9,814 | | | | 8,105 | | | | 7,186 | |

| Earnings (loss) from continuing operations before income taxes | | | 920 | | | | 773 | | | | (433 | ) |

| Net earnings (loss) from continuing operations | | | 764 | | | | 758 | | | | (574 | ) |

| Net earnings (loss) from discontinued operations, net of income tax expense | | | 2,460 | | | | 320 | | | | (884 | ) |

| Basic earnings (loss) from continuing operations per share | | $ | 1.53 | | | $ | 1.44 | | | $ | (1.14 | ) |

| Basic earnings (loss) from discontinued operations per share | | | 4.61 | | | | 0.27 | | | | (0.95 | ) |

| Diluted earnings (loss) from continuing operations per share | | $ | 1.52 | | | $ | 1.43 | | | $ | (1.14 | ) |

| Diluted earnings (loss) from discontinued operations per share | | | 4.58 | | | | 0.27 | | | | (0.95 | ) |

| Net (earnings) loss from discontinued operations, net of income tax expense | | | (2,460 | ) | | | (320 | ) | | | 884 | |

| Asset impairments | | | 156 | | | | — | | | | 437 | |

| Leasehold impairments | | | 95 | | | | 219 | | | | 113 | |

| Accretion on discounted liabilities | | | 61 | | | | 63 | | | | 75 | |

| Total (gains) losses on foreign exchange | | | 139 | | | | (132 | ) | | | (121 | ) |

| Settlements of intercompany foreign denominated assets/liabilities | | | (241 | ) | | | 9 | | | | 63 | |

| Changes in assets and liabilities, net | | | (143 | ) | | | 32 | | | | 24 | |

| Capital expenditures | | | (2,451 | ) | | | (1,968 | ) | | | (1,384 | ) |

| Repayments of long-term debt principal | | | (922 | ) | | | — | | | | (2,492 | ) |

| Repurchases of common stock | | | (2,956 | ) | | | — | | | | — | |

| Settlements of intercompany foreign denominated assets/liabilities | | | 241 | | | | (9 | ) | | | (63 | ) |

| Net change in cash, cash equivalents and restricted cash of continuing operations | | | (3,445 | ) | | | 441 | | | | (610 | ) |

| Cash flows from discontinued operations: | | | | | | | | | | | | |

| Operating activities | | | 476 | | | | 700 | | | | 666 | |

| Investing activities | | | 2,548 | | | | (611 | ) | | | (1,381 | ) |

| Financing activities | | | 183 | | | | 195 | | | | 974 | |

| Net change in cash, cash equivalents and restricted cash of discontinued operations | | | 3,207 | | | | 284 | | | | 259 | |

| Reconciliation of cash, cash equivalents and restricted cash: | | | | | | | | | | | | |

| Cash and cash equivalents | | $ | 2,414 | | | $ | 2,642 | | | $ | 1,947 | |

| Restricted cash included in other current assets | | | 32 | | | | 11 | | | | — | |

| Cash and cash equivalents included in current assets held for sale | | | — | | | | 31 | | | | 12 | |

| Total cash, cash equivalents and restricted cash | | $ | 2,446 | | | $ | 2,684 | | | $ | 1,959 | |

DEVON ENERGY CORPORATION AND SUBSIDIARIES

| Cash and cash equivalents | | $ | 2,414 | | | $ | 2,642 | |

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

| [Note 2 – Change in Accounting Principle](#Change_Acct_Princ) | | 67 |

| [Note 14 – Goodwill and Other Intangible Assets](#Goodwill) | | 89 |

[Index to Financial Statements](#IndexToFinancialStatements)

Change in Accounting Principle

As discussed in [Note 1](#SummaryOfSignificantAccountingPolicies) to the consolidated financial statements, the Company has elected to change its method of accounting for oil and gas exploration and development activities from the full cost method of accounting to the successful efforts method of accounting in 2017.

February 21, 2018

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

| Total revenues | | | 13,949 | | | | 10,304 | | | | 13,145 | |

| Total expenses | | | 13,053 | | | | 11,621 | | | | 33,003 | |

| Earnings (loss) before income taxes | | | 896 | | | | (1,317 | ) | | | (19,858 | ) |

| Basic | | $ | 1.71 | | | $ | (2.09 | ) | | $ | (31.72 | ) |

| Diluted | | $ | 1.70 | | | $ | (2.09 | ) | | $ | (31.72 | ) |

| * | Prior year amounts have been recast due to change in accounting principle. See [Note 2](#Change_Acct_Princ) in “Item 8. Financial Statements and Supplementary Data” of this report. |

| --- | --- |

| Exploratory dry hole expense and unproved leasehold impairments | | | 219 | | | | 113 | | | | 248 | |

| Gains and losses on asset sales | | | (217 | ) | | | (1,483 | ) | | | 7 | |

| Other derivatives and financial instruments | | | 23 | | | | 185 | | | | (235 | ) |

| Cash settlements on other derivatives and financial instruments | | | (6 | ) | | | (143 | ) | | | 272 | |

| Other | | | (122 | ) | | | 270 | | | | 312 | |

| Net change in working capital | | | 21 | | | | 24 | | | | (265 | ) |

| Net cash from operating activities | | | 2,909 | | | | 1,500 | | | | 4,898 | |

| Capital expenditures | | | (2,759 | ) | | | (2,047 | ) | | | (4,787 | ) |

| Proceeds from sale of investment | | | 190 | | | | — | | | | — | |

| Net cash from investing activities | | | (2,210 | ) | | | (594 | ) | | | (5,803 | ) |

| Borrowings of long-term debt, net of issuance costs | | | 2,376 | | | | 2,145 | | | | 4,772 | |

| Payment of installment payable | | | (250 | ) | | | — | | | | — | |

| Sale of subsidiary units | | | — | | | | — | | | | 654 | |

| Issuance of subsidiary units | | | 501 | | | | 892 | | | | 25 | |

| Contributions from noncontrolling interests | | | 57 | | | | 168 | | | | 16 | |

| Goodwill | | | 2,383 | | | | 2,383 | |

| Noncontrolling interests | | | 4,850 | | | | 4,448 | |

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

| Effect of change in accounting principle | | | — | | | | — | | | | — | | | | (2,227 | ) | | | 675 | | | | — | | | | — | | | | (1,552 | ) |

| Balance as of December 31, 2014 as recast* | | | 409 | | | $ | 41 | | | $ | 4,088 | | | $ | 14,404 | | | $ | 1,454 | | | $ | — | | | $ | 4,802 | | | $ | 24,789 | |

| Net loss | | | — | | | | — | | | | — | | | | (12,896 | ) | | | — | | | | — | | | | (749 | ) | | | (13,645 | ) |

| Stock option exercises | | | — | | | | — | | | | 4 | | | | — | | | | — | | | | — | | | | — | | | | 4 | |

| Common stock issued | | | 7 | | | | 1 | | | | 198 | | | | — | | | | — | | | | — | | | | — | | | | 199 | |

| Share-based compensation tax expense | | | — | | | | — | | | | (9 | ) | | | — | | | | — | | | | — | | | | — | | | | (9 | ) |

| Distributions to noncontrolling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (254 | ) | | | (254 | ) |

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: 2017] [added: 2018] 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 [removed: Internal] [added: *Internal] Control – Integrated [removed: Framework] [added: Framework*] issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (the “2013 COSO Framework”).

Based on this evaluation under the 2013 COSO Framework, which was completed on February [removed: 21, 2018,] [added: 20, 2019,] management concluded that its internal control over financial reporting was effective as of December 31, [removed: 2017.][added: 2018.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2017] [added: 2018] 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: 2017,] [added: 2018,] as stated in their report, which is included under “Item 8.

There [removed: were] [added: was] no [removed: other changes] [added: change] in our internal control over financial reporting during the fourth quarter of [removed: 2017] [added: 2018] that [added: has] materially affected, or [removed: are] [added: is] reasonably likely to materially affect, our internal control over financial reporting.

In the fourth quarter of 2017, we added and modified certain internal control processes as a result of changing our method of accounting for oil and gas exploration and development activities from the full cost method to the successful efforts method.

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 no later than 120 days following the fiscal year ended December 31, [removed: 2017.][added: 2018.]

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 no later than 120 days following the fiscal year ended December 31, [removed: 2017.][added: 2018.]

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 no later than 120 days following the fiscal year ended December 31, [removed: 2017.][added: 2018.]

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 no later than 120 days following the fiscal year ended December 31, [removed: 2017.][added: 2018.]

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 no later than 120 days following the fiscal year ended December 31, [removed: 2017.][added: 2018.]

| 2.1 | | [removed: Agreement and Plan of Merger] [added: Purchase Agreement,] dated [removed: October 21, 2013,] [added: June 7, 2018,] by and among [removed: Registrant,] Devon Gas Services, [removed: L.P., Acacia Natural] [added: L.P. and Southwestern] Gas [removed: Corp I, Inc., Crosstex Energy, Inc., New Public Rangers] [added: Pipeline,] L.L.C., [removed: Boomer Merger Sub, Inc.] [added: as sellers,] and [removed: Rangers Merger Sub, Inc.] [added: Enlink Midstream Manager, LLC, Registrant, and GIP III Stetson I, L.P. and GIP III Stetson II, L.P., as acquirors] ([incorporated by reference to Exhibit 2.1 to Registrant’s Form 8-K filed [removed: October 22, 2013;] [added: June 7, 2018;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513405678/d615009dex21.htm)).] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312518186899/d603494dex21.htm)).] |

| [removed: 2.2] [added: 10.19] | | [removed: Contribution Agreement dated October 21, 2013, by and among Registrant,] Devon [removed: Gas Corporation, Devon Gas Services, L.P., Southwestern Gas Pipeline, Inc., Crosstex Energy, L.P. and Crosstex] Energy [removed: Services, L.P.] [added: Corporation Supplemental Contribution Plan (amended and restated effective January 1, 2012)] ([incorporated by reference to Exhibit [removed: 2.2] [added: 10.17] to Registrant’s Form [removed: 8-K] [added: 10-K] filed [removed: October 22, 2013;] [added: February 24, 2012;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513405678/d615009dex22.htm)).] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1017.htm)).*] |

| 4.4 | | Supplemental Indenture No. [removed: 3,] [added: 4,] dated as of [removed: December 19, 2013,] [added: June 16, 2015,] to Indenture dated as of July 12, 2011, between Registrant and UMB Bank, National Association, as Trustee, relating to the [removed: 2.25%] [added: 5.000%] Senior Notes due [removed: 2018] [added: 2045] ([incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed [removed: December 19, 2013;] [added: June 16, 2015;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513478895/d647568dex41.htm)).] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515224683/d943351dex41.htm)).] |

| 4.5 | | Supplemental Indenture No. [removed: 4,] [added: 5,] dated as of [removed: June 16,] [added: December 15,] 2015, to Indenture dated as of July 12, 2011, between Registrant and UMB Bank, National Association, as Trustee, relating to the [removed: 5.000%] [added: 5.850%] Senior Notes due [removed: 2045] [added: 2025] ([incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed [removed: June 16,] [added: December 15,] 2015; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515224683/d943351dex41.htm)).] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515403754/d105477dex41.htm)).] |

| [removed: 4.6] [added: 4.9] | | Supplemental Indenture No. [removed: 5,] [added: 4,] dated as of [removed: December 15, 2015,] [added: March 22, 2018,] to Indenture dated as of [removed: July 12, 2011,] [added: March 1, 2002,] between Registrant and [removed: UMB Bank, National Association,] [added: The Bank of New York Mellon Trust Company, N.A.,] as Trustee, relating to the [removed: 5.850%] [added: 7.95%] Senior Notes due [removed: 2025] [added: 2032] ([incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed [removed: December 15, 2015;] [added: March 22, 2018;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515403754/d105477dex41.htm)).] [added: 000-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312518092146/d551370dex41.htm)).] |

| [removed: 4.7] [added: 4.6] | | Indenture, dated as of March 1, 2002, between Registrant and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York), as Trustee ([incorporated by reference to Exhibit 4.1 of Registrant’s Form 8-K filed April 9, 2002; File No. 000-30176](http://www.sec.gov/Archives/edgar/data/1090012/000095013402003504/d95919ex4-1.txt)). |

| [removed: 4.8] [added: 4.7] | | Supplemental Indenture No. 1, dated as of March 25, 2002, to Indenture dated as of March 1, 2002, between Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 7.95% Senior Debentures due 2032 ([incorporated by reference to Exhibit 4.2 to Registrant’s Form 8-K filed April 9, 2002; File No. 000-30176](http://www.sec.gov/Archives/edgar/data/1090012/000095013402003504/d95919ex4-2.txt)). |

| [removed: 4.9] [added: 4.8] | | Supplemental Indenture No. 3, dated as of January 9, 2009, to Indenture dated as of March 1, 2002, between Registrant and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 6.30% Senior Notes due 2019 ([incorporated by reference to Exhibit 4.1 to Registrant’s Form 8-K filed January 9, 2009; File No. 000-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095013409000361/d65819exv4w1.htm)). |

| [removed: 4.11] [added: 4.12] | | [added: First Supplemental] Indenture, dated as of [removed: July 8, 1998,] [added: March 30, 1999, to Senior Indenture dated as of September 1, 1997, by and] among Devon OEI Operating, [removed: L.L.C. (as successor to Ocean Energy, Inc.),] [added: L.L.C.,] its Subsidiary [removed: Guarantors,] [added: Guarantor,] and [removed: Wells Fargo Bank, N.A. (as successor to Norwest] [added: The] Bank [removed: Minnesota, National Association),] [added: of New York Mellon Trust Company, N.A.,] as Trustee, relating to the [removed: 8.25%] [added: 7.50%] Senior Notes due [removed: 2018] [added: 2027] ([incorporated by reference to Exhibit [removed: 10.24] [added: 4.10] to Ocean Energy, Inc.’s Form 10-Q filed [removed: August 14, 1998;] [added: May 17, 1999;] File No. [removed: 001-14252](http://www.sec.gov/Archives/edgar/data/930550/0000899243-98-001593.txt)).] [added: 001-08094](http://www.sec.gov/Archives/edgar/data/320321/0000320321-99-000064.txt)).] |

| [removed: 4.12] [added: 4.13] | | [removed: First] [added: Second] Supplemental Indenture, dated [removed: March 30, 1999,] [added: as of May 9, 2001,] to [added: Senior] Indenture dated as of [removed: July 8, 1998,] [added: September 1, 1997,] by and among Devon OEI Operating, L.L.C., its Subsidiary Guarantor, and [removed: Wells Fargo Bank,] [added: The Bank of New York Mellon Trust Company,] N.A., as Trustee, relating to the [removed: 8.25%] [added: 7.50%] Senior Notes due [removed: 2018] [added: 2027] ([incorporated by reference to Exhibit [removed: 4.5] [added: 99.4] to Ocean Energy, Inc.’s Form [removed: 10-Q] [added: 8-K] filed May [removed: 17, 1999;] [added: 14, 2001;] File No. [removed: 001-08094](http://www.sec.gov/Archives/edgar/data/320321/0000320321-99-000064.txt)).] [added: 033-06444](http://www.sec.gov/Archives/edgar/data/320321/000095012901500636/h87040ex99-4.txt)).] |

| [removed: 4.13] [added: 4.11] | | [removed: Second Supplemental] [added: Senior] Indenture, dated as of [removed: May 9, 2001, to Indenture dated as of July 8, 1998, by and among] [added: September 1, 1997, between] Devon OEI Operating, [removed: L.L.C., its Subsidiary Guarantor,] [added: L.L.C. (as successor to Seagull Energy Corporation)] and [removed: Wells Fargo Bank, N.A.,] [added: The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York),] as Trustee, [removed: relating to the 8.25%] [added: and related Specimen of 7.50%] Senior Notes due [removed: 2018] [added: 2027] ([incorporated by reference to Exhibit [removed: 99.2] [added: 4.4] to Ocean [removed: Energy,] [added: Energy] Inc.’s Form [removed: 8-K] [added: 10-K] filed [removed: May 14, 2001;] [added: March 23, 1998;] File No. [removed: 033-06444](http://www.sec.gov/Archives/edgar/data/320321/000095012901500636/h87040ex99-2.txt)).] [added: 001-08094](http://www.sec.gov/Archives/edgar/data/320321/0000320321-98-000034.txt)).] |

| 4.14 | | Third Supplemental Indenture, dated [removed: January 23, 2006,] [added: as of December 31, 2005,] to [added: Senior] Indenture dated as of [removed: July 8, 1998,] [added: September 1, 1997,] by and among Devon OEI Operating, L.L.C., as Issuer, Devon Energy Production Company, L.P., as Successor Guarantor, and [removed: Wells Fargo Bank,] [added: The Bank of New York Mellon Trust Company,] N.A., as Trustee, relating to the [removed: 8.25%] [added: 7.50%] Senior Notes due [removed: 2018] [added: 2027] ([incorporated by reference to Exhibit [removed: 4.23] [added: 4.27] of Registrant’s Form 10-K filed March 3, 2006; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095013406004215/d33154exv4w23.htm)).] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095013406004215/d33154exv4w27.htm)).] |

| 10.1 | | Credit Agreement, dated as of October [removed: 24, 2012,] [added: 5, 2018,] among Registrant, as U.S. Borrower, Devon Canada Corporation, as Canadian Borrower, [removed: 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, [removed: Canadian] Swing Line Lender and [removed: U.S. Swing Line] [added: an L/C Issuer, and each] Lender [added: and L/C Issuer from time to time party thereto] ([incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K filed October [removed: 29, 2012;] [added: 9, 2018;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512439617/d428590dex101.htm)).] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312518296030/d616755dex101.htm)).] |

| [removed: 10.5] [added: 10.4] | | Devon Energy Corporation 2017 Long-Term Incentive Plan ([incorporated by reference to Exhibit 99.1 to Registrant’s Form S-8 filed June 7, 2017; File No. 333-218561](http://www.sec.gov/Archives/edgar/data/1090012/000119312517197005/d260413dex991.htm)).* |

| [removed: 10.6] [added: 10.3] | | Devon Energy Corporation 2015 Long-Term Incentive Plan ([incorporated by reference to Exhibit 99.1 to Registrant’s Form S-8 filed June 3, 2015; File No. 333-204666](http://www.sec.gov/Archives/edgar/data/1090012/000119312515211541/d934016dex991.htm)).* |

| [removed: 10.7] [added: 10.2] | | Devon Energy Corporation 2009 Long-Term Incentive Plan (as amended and restated effective June 6, 2012) ([incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed June 8, 2012; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512265062/d366787dex102.htm)).* |

| [removed: 10.8] [added: 10.5] | | 2013 Amendment (effective as of March 6, 2013) to the Devon Energy Corporation 2009 Long-Term Incentive 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, 2013; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513192272/d524180dex101.htm)).* |

| [removed: 10.9] [added: 10.6] | | Devon Energy Corporation Annual Incentive Compensation Plan (amended and restated effective as of January 1, 2017) ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed June 12, 2017; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312517201470/d391476dex101.htm)).* |

| [removed: 10.10] [added: 10.7] | | Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective as of April 15, 2014) ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed August 6, 2014; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514298369/d761940dex101.htm)).* |

| [removed: 10.11] [added: 10.8] | | Amendment 2014-2, executed May 9, 2014, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective April 15, 2014) ([incorporated by reference to Exhibit 10.11 to Registrant’s Form 10-K filed February 20, 2015; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515056497/d859923dex1011.htm)).* |

| [removed: 10.12] [added: 10.9] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective April 15, 2014) ([incorporated by reference to Exhibit 10.13 to Registrant’s Form 10-K filed February 15, 2017; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1013_1996.htm)).* |

| [removed: 10.13] [added: 10.11] | | 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, 2012; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1015.htm)).* |

| [removed: 10.14] [added: 10.12] | | 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](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex106.htm)).* |

| [removed: 10.15] [added: 10.13] | | Amendment 2015-1, executed April 15, 2015, to the Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed May 6, 2015; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515174003/d913733dex101.htm)).* |

| [removed: 10.16] [added: 10.14] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Benefit Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.17 to Registrant’s Form 10-K filed February 15, 2017; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1017_1995.htm)).* |

| [removed: 10.17] [added: 10.15] | | 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, 2012; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1016.htm)).* |

| [removed: 10.18] [added: 10.16] | | 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](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex107.htm)).* |

| [removed: 10.19] [added: 10.17] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.20 to Registrant’s Form 10-K filed February 15, 2017; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1020_1994.htm)).* |

| [removed: 10.20] [added: 10.22] | | Devon Energy Corporation Supplemental [removed: Contribution] [added: Executive Retirement] Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit [removed: 10.17] [added: 10.18] to Registrant’s Form 10-K filed February 24, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1017.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1018.htm)).*] |

| [removed: 10.21] [added: 10.20] | | 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](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex108.htm)).* |

| [removed: 10.22] [added: 10.21] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Supplemental Contribution Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.23 to Registrant’s Form 10-K filed February 15, 2017; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1023_1993.htm)).* |

| [removed: 10.23] [added: 10.24] | | Devon Energy Corporation Supplemental [removed: Executive] Retirement [added: Income] Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit [removed: 10.18] [added: 10.19] to Registrant’s Form 10-K filed February 24, 2012; File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1018.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1019.htm)).*] |

| [removed: 10.24] [added: 10.23] | | Amendment 2016-1, executed October 20, 2016, to the Devon Energy Corporation Supplemental Executive Retirement Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit 10.25 to Registrant’s Form 10-K filed February 15, 2017; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1025_1991.htm)).* |

| 10.25 | | [added: 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 [removed: 10.19] [added: 10.9] to Registrant’s Form [removed: 10-K] [added: 10-Q] filed [removed: February 24, 2012;] [added: May 9, 2014;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312512077085/d298761dex1019.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex109.htm)).*] |

| 10.26 | | Amendment [removed: 2014-1,] [added: 2016-1,] executed [removed: March 7, 2014,] [added: October 20, 2016,] to the Devon Energy Corporation Supplemental Retirement Income Plan (amended and restated effective January 1, 2012) ([incorporated by reference to Exhibit [removed: 10.9] [added: 10.28] to Registrant’s Form [removed: 10-Q] [added: 10-K] filed [removed: May 9, 2014;] [added: February 15, 2017;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514192498/d718246dex109.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1028_1992.htm)).*] |

| 10.27 | | [removed: Amendment 2016-1, executed October 20, 2016, to the] Devon Energy Corporation [removed: Supplemental Retirement Income] [added: Incentive Savings] Plan (amended and restated effective January 1, [removed: 2012)] [added: 2018)] ([incorporated by reference to Exhibit 10.28 to Registrant’s Form 10-K filed February [removed: 15, 2017;] [added: 21, 2018;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017001607/dvn-ex1028_1992.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459018002582/dvn-ex1028_300.htm)).*] |

| 10.28 | | [removed: [Devon] [added: [Amendment 2018-1, executed December 14, 2018, to the Devon] Energy Corporation Incentive Savings Plan (amended and restated effective January 1, [removed: 2018), executed December 18, 2017.*](https://www.sec.gov/Archives/edgar/data/1090012/000156459018002582/dvn-ex1028_300.htm)] [added: 2018).](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1028_983.htm)*] |

| 10.33 | | 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 executive officers for performance based restricted stock awarded ([incorporated by reference to Exhibit [removed: 10.25] [added: 10.29] to Registrant’s Form 10-K filed February [removed: 28, 2014;] [added: 20, 2015;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514076267/d656849dex1025.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515056497/d859923dex1029.htm)).*] |

| [removed: 10.34] [added: 10.35] | | Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the [removed: 2009] [added: 2015] Long-Term Incentive Plan [removed: (as amended and restated June 6, 2012)] between Registrant and executive officers for performance based restricted stock awarded ([incorporated by reference to Exhibit [removed: 10.29] [added: 10.2] to Registrant’s Form [removed: 10-K] [added: 10-Q] filed [removed: February 20, 2015;] [added: May 4, 2016;] File No. [removed: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515056497/d859923dex1029.htm)).*] [added: 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312516577021/d172210dex102.htm)).*] |

| [removed: 10.35] [added: 10.34] | | Form of Notice of Grant of Performance Restricted Stock Award and Award Agreement under the 2015 Long-Term Incentive Plan between Registrant and David A. Hager for performance based restricted stock awarded ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed November 4, 2015; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312515365650/d23744dex101.htm)).* |

| 10.10 | | [Amendment 2018-1, executed August 21, 2018, to the Devon Energy Corporation Non-Qualified Deferred Compensation Plan (amended and restated effective April 15, 2014).](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1010_985.htm)* |

| 10.18 | | [Amendment 2018-1, executed August 21, 2018, to the Devon Energy Corporation Defined Contribution Restoration Plan (amended and restated effective January 1, 2012).](https://www.sec.gov/Archives/edgar/data/1090012/000156459019003382/dvn-ex1018_984.htm)* |

| 101.INS | | XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |

| Exhibit No. | | Description |

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

| | | |

[Index to Financial Statements](#IndexToFinancialStatements)

| 4.15 | | Senior Indenture, dated as of September 1, 1997, between Devon OEI Operating, L.L.C. (as successor to Seagull Energy Corporation) and The Bank of New York Mellon Trust Company, N.A. (as successor to The Bank of New York), as Trustee, and related Specimen of 7.50% Senior Notes due 2027 ([incorporated by reference to Exhibit 4.4 to Ocean Energy Inc.’s Form 10-K filed March 23, 1998; File No. 001-08094](http://www.sec.gov/Archives/edgar/data/320321/0000320321-98-000034.txt)). |

| 4.16 | | First Supplemental Indenture, dated as of March 30, 1999, to Senior Indenture dated as of September 1, 1997, by and among Devon OEI Operating, L.L.C., its Subsidiary Guarantor, and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 7.50% Senior Notes due 2027 ([incorporated by reference to Exhibit 4.10 to Ocean Energy, Inc.’s Form 10-Q filed May 17, 1999; File No. 001-08094](http://www.sec.gov/Archives/edgar/data/320321/0000320321-99-000064.txt)). |

| 4.17 | | Second Supplemental Indenture, dated as of May 9, 2001, to Senior Indenture dated as of September 1, 1997, by and among Devon OEI Operating, L.L.C., its Subsidiary Guarantor, and The Bank of New York Mellon Trust Company, N.A., as Trustee, relating to the 7.50% Senior Notes due 2027 ([incorporated by reference to Exhibit 99.4 to Ocean Energy, Inc.’s Form 8-K filed May 14, 2001; File No. 033-06444](http://www.sec.gov/Archives/edgar/data/320321/000095012901500636/h87040ex99-4.txt)). |

| 4.18 | | Third Supplemental Indenture, dated as of December 31, 2005, to Senior Indenture dated as of September 1, 1997, by and among Devon OEI Operating, L.L.C., as Issuer, Devon Energy Production Company, L.P., as Successor Guarantor, and The Bank of New York Mellon Trust Company, 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 filed March 3, 2006; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000095013406004215/d33154exv4w27.htm)). |

| 4.19 | | Indenture, dated as of March 19, 2014, by and between EnLink Midstream Partners, LP and Wells Fargo Bank, National Association, as Trustee (the “EnLink Indenture”) ([incorporated by reference to Exhibit 4.2 to EnLink Midstream Partners, LP’s Form 8-K filed March 21, 2014; File No. 001-36340](http://www.sec.gov/Archives/edgar/data/1179060/000110465914021826/a14-8535_1ex4d2.htm)).† |

| 4.20 | | First Supplemental Indenture, dated as of March 19, 2014, to the EnLink Indenture, by and between EnLink Midstream Partners, LP and Wells Fargo Bank, National Association, as Trustee ([incorporated by reference to Exhibit 4.3 to EnLink Midstream Partners, LP’s Form 8-K filed March 21, 2014; File No. 001-36340](http://www.sec.gov/Archives/edgar/data/1179060/000110465914021826/a14-8535_1ex4d3.htm)).† |

| 4.21 | | Second Supplemental Indenture, dated as of November 12, 2014, to the EnLink Indenture, by and between EnLink Midstream Partners, LP and Wells Fargo Bank, National Association, as Trustee ([incorporated by reference to Exhibit 4.3 to EnLink Midstream Partners, LP’s Form 8-K filed November 12, 2014; File No. 001-36340](http://www.sec.gov/Archives/edgar/data/1179060/000110465914079851/a14-24212_1ex4d3.htm)).† |

| 4.22 | | Third Supplemental Indenture, dated as of May 12, 2015, to the EnLink Indenture, by and between EnLink Midstream Partners, LP and Wells Fargo Bank, National Association, as Trustee ([incorporated by reference to Exhibit 4.3 to EnLink Midstream Partners, LP’s Form 8-K filed May 12, 2015; File No. 001-36340](http://www.sec.gov/Archives/edgar/data/1179060/000110465915037304/a15-11321_1ex4d3.htm)).† |

| 4.23 | | Fourth Supplemental Indenture, dated as of July 14, 2016, to the EnLink Indenture, by and between EnLink Midstream Partners, LP and Wells Fargo Bank, National Association, as Trustee ([incorporated by reference to Exhibit 4.2 to EnLink Midstream Partners, LP’s Form 8-K filed July 14, 2016; File No. 001-36340](http://www.sec.gov/Archives/edgar/data/1179060/000110465916132675/a16-14714_4ex4d2.htm)).† |

| 4.24 | | Fifth Supplemental Indenture, dated as May 11, 2017, to the EnLink Indenture, by and between EnLink Midstream Partners, LP and Wells Fargo Bank, National Association, as Trustee ([incorporated by reference to Exhibit 4.2 to EnLink Midstream Partners, LP’s Form 8-K filed May 11, 2017; File No. 001-36340](http://www.sec.gov/Archives/edgar/data/1179060/000110465917031897/a17-12963_1ex4d2.htm)).† |

| 10.2 | | Extension Agreement, dated as of September 3, 2013, to the Credit Agreement dated October 24, 2012, among Registrant, as U.S. Borrower, Devon Canada Corporation, as Canadian Borrower, 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, 2017 to October 24, 2018 ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed November 6, 2013; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513429977/d620405dex101.htm)). |

| 10.3 | | First Amendment to Credit Agreement, dated as of February 3, 2014, to the Credit Agreement dated October 24, 2012, among Registrant, as U.S. Borrower, Devon Canada Corporation, as Canadian Borrower, 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, 2014; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312514040134/d672228dex101.htm)). |

| 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 Canada Corporation, as Canadian Borrower, 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](http://www.sec.gov/Archives/edgar/data/1090012/000119312514397861/d808328dex101.htm)). |

| 10.46 | | 2017 Form of Notice of Grant of Restricted Stock Award and Award Agreement under the 2017 Long-Term Incentive Plan between Devon and all non-management directors for restricted stock awarded ([incorporated by reference to Exhibit 10.1 to Registrant’s Form 10-Q filed August 2, 2017; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000156459017014800/dvn-ex101_290.htm)).* |

| 10.48 | | Form of Amendment to Incentive Stock Option Award Agreements between Registrant and post-retirement eligible executives relating to incentive stock options under the 2009 Long-Term Incentive Plan ([incorporated by reference to Exhibit 10.24 to Registrant’s Form 10-K filed February 21, 2013; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312513068817/d477194dex1024.htm)).* |

| 10.49 | | Amendment to Performance Share Unit Award Agreement dated effective September 16, 2015, between Registrant and John Richels to Performance Share Unit Award Agreement dated February 10, 2015 ([incorporated by reference to Exhibit 10.43 to Registrant’s Form 10-K filed February 17, 2016; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312516466687/d109858dex1043.htm)).* |

| 10.50 | | Amendment to Performance Restricted Stock Award Agreement dated effective September 16, 2015, between Registrant and John Richels to Performance Restricted Stock Award Agreement dated February 10, 2015 ([incorporated by reference to Exhibit 10.44 to Registrant’s Form 10-K filed February 17, 2016; File No. 001-32318](http://www.sec.gov/Archives/edgar/data/1090012/000119312516466687/d109858dex1044.htm)).* |

| 12 | | [Statement of computations of ratios of earnings to fixed charges.](https://www.sec.gov/Archives/edgar/data/1090012/000156459018002582/dvn-ex12_11.htm) |

| 101.INS | | [XBRL Instance Document.](http://www.sec.gov/Archives/edgar/data/1090012/000156459016026889/dvn-20160930.xml) |

| † | As of December 31, 2017, the aggregate amount of debt issued under the EnLink Indenture, as supplemented, exceeded ten percent of Devon’s consolidated total assets. Devon has not filed any other instruments defining the rights of holders of long-term indebtedness of EnLink, as such instruments do not represent debt exceeding ten percent of the total assets of Devon and its subsidiaries on a consolidated basis. Devon hereby agrees to furnish a copy of any such agreements to the SEC upon request. |

| --- | --- |

| /s/ DAVID A. HAGER | | President, Chief Executive Officer and | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ JEFFREY L. RITENOUR | | Executive Vice President | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ JEREMY D. HUMPHERS | | Senior Vice President | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ JOHN RICHELS | | Chairman of the Board | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ BARBARA M. BAUMANN | | Director | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ JOHN E. BETHANCOURT | | Director | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ ROBERT H. HENRY | | Director | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ MICHAEL M. KANOVSKY | | Director | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ ROBERT A. MOSBACHER, JR. | | Director | February [removed: 21, 2018] [added: 20, 2019] |

| /s/ MARY P. RICCIARDELLO | | Director | February [removed: 21, 2018] [added: 20, 2019] |

SIGNATURES

February 20, 2019

| /s/ DUANE C. RADTKE | | Vice Chairman of the Board | February 20, 2019 |

| /s/ JOHN KRENICKI JR. | | Director | February 20, 2019 |

| John Krenicki Jr. | | | |

| | | | |

SIGNATURES

February 21, 2018

| /s/ DUANE C. RADTKE | | Director | February 21, 2018 |