Devon Energy (DVN) investor relations material

Cost and business optimization

• Set an ambitious free cash flow target of $1 billion by year-end 2026, focusing the entire organization on this North Star.

• Optimization efforts include cost reduction, production efficiency, and leveraging technology across all departments.

• Promoted the CTO to the executive committee to drive technology-led business optimization.

• Business optimization is also seen as an inventory enhancer, reducing maintenance capital needs over time.

• Credibility and consistent value creation are emphasized as key to unlocking further opportunities.

Technology and AI integration

• Rapid adoption of AI, with a proprietary internal platform (ChatDVN) now in its third iteration and near-universal employee training.

• AI is used for data analysis, drilling optimization, production management, and geologic exploration, leading to significant efficiency gains.

• AI applications have shifted time from data gathering to analysis, tripling productivity in some areas.

• Technology is viewed through the lens of value creation, not just efficiency.

• AI-driven production optimization directly supports cost reduction and resource recovery.

Free cash flow and capital allocation

• Free cash flow is projected at $3 billion for the current year, with expectations for continued growth.

• Capital allocation priorities include maintaining and growing the base dividend, methodical share buybacks, and significant debt reduction.

• Debt reduction target of $2.5 billion is halfway complete, with plans to pay down callable debt and term loans.

• Cash is also being stockpiled on the balance sheet as a defensive measure.

• Capital efficiency and technology are expected to offset portfolio maturation and sustain free cash flow.