Devon Energy Corp at Goldman Sachs Energy, CleanTech & Utilities Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : So maybe we start with you, Shane, and talk about the benefits of operating a diversified upstream portfolio and how do you think the -- what's needed to get the market to better appreciate operating in multiple place?

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Thanks, Shane. I mean, Cory, your perspective from Ovintiv is also this is something that we've talked about for the last decade. What is the optimal portfolio and really over the last five years you have transformed, you and Brendan have transformed the business to core up to two key places, the Montney and the Permian. Talk about that transformation. Why did you elect to shrink the portfolio to those two places? And one of the key catalysts that we'll be watching for this year is the monetization of the midcom to really now get you into those two key basins. So talk about the portfolio transformation.

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Cory, on the end of Darko or the mid-com, can you just talk about where we stand in that process that? I'll be instrumental in getting you to your $4 billion net debt target.

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Yeah, thanks, Cory. Nick, you just announced an important acquisition in the gas landscape in the Utica. Can you talk a little bit about how that came together, and what do you want to drive out of that basin? Unidentified Company Representative Sure, we are a little bit different than the rest of the folks here. We're a 100% non-operator. But increasingly over the last five years, we have been partnering with our operating partners to acquire assets, so taking an undivided stake, think of us as a passive partner, and then signing contemporaneous contracts to help develop those assets and exploit them over time. This transaction in particular was very complicated in the sense that you had a selling party that was selling, that was actually two parties. It was both a public upstream company, a public midstream company that was affiliated with it, and it was also acquiring another private business of substantial scale with both of those entities. And we were partnering as a 49% partner with another public company. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JANUARY 06, 2026 / 8:00PM, DVN.N - Devon Energy Corp at Goldman Sachs Energy, CleanTech & Utilities Conference And so what we have been doing as of late is we evaluate these properties, both non-operated and operated assets on what we call an heyday basis, meaning we look at the asset as if we were going to buy 100% of it and we spend that time. Now that evaluation can be very different if Clay is operating it or if Coterra is operating it.

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Clay, we'll round out this conversation about portfolio optimization with you and we were -- you were remarking before, you said, hey, look, there's a lot of conversation about the long-term, and I think that part at this conference, and I think part of that is we're entering into a maturity phase for Shale, whether it's peak or not, I think most of us are skeptical of the peak argument, but I think we're getting to a more mature, flatter profile. So what does Devon look like in 2030 to 2035? It's become a topic and if to the extent we're in a period of cyclical weakness, how can the company position itself organically or inorganically to make sure that it's the best version of Devon when we get into the next decade? Does that make sense? LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JANUARY 06, 2026 / 8:00PM, DVN.N - Devon Energy Corp at Goldman Sachs Energy, CleanTech & Utilities Conference

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Can you talk about -- you've talked about concentric circles of competency. What are things that could be part of what that profile does offshore come back again? We've talked about Fervo, for example, being an area of interest in growth in geothermal long-term. Where could you see Devon evolving to?

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Last one for you, Clay. You are an AI evangelizer. He had an intervention with me when he, I honestly did -- when he found out that I didn't use it. He's going to get fired and so --

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : So talk about how important that is to you achieving your $1 billion free cash flow target and just. How much confidence you have in your ability to exceed it?

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Awesome. Let's pivot over to the assets. And Cory, why don't we start with you? Last year was a very important year for your Montney business. You showcased more of what you're looking to do in the Montney, and you announced the acquisition of NVista. So do you think the market is starting to better appreciate the upside from the Montney as an asset and what are your key objectives in that basin this year?

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Shane, let's talk about the Marcellus and also the Permian, but on the Marcellus, maybe you can address directly kind of the question in the room about there are some who want you to monetize your Marcellus position and what are in your minds, the pluses and minuses of doing so and what's -- if there is a financial constraint that you want the market to know about, maybe you can share that. And then in the Permian, overall, [X] of the year very strong, but it was a choppy middle with some of the water issues and so talk about lessons learned and confidence you have around operational momentum in 2026. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JANUARY 06, 2026 / 8:00PM, DVN.N - Devon Energy Corp at Goldman Sachs Energy, CleanTech & Utilities Conference

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Thank you, Shane. Nick, you've got a unique perspective of what's happening across the United States, given that you're an investor in a number of these different assets. We're in a period of commodity softness. There's an argument to say that we go even lower. Are we at these breakeven levels where some of these basins might shift into decline as we think about 2026? Unidentified Company Representative Yeah, I mean, I don't want to sound sorry. I don't want to sound pessimistic or anything like that towards asset base, but we see it all. We're in four basins, six distinct plays. We evaluate almost every M&A process that comes across the table every single year, and we evaluate over 400 ground game deals a year. So we see the gamut. We own over a million gross acres. We've spent over $20 million on the penalty back system. So I put our data against anyone's in the country. And what I would tell you is that this is a cyclical industry, and I think you know I'm actually a little bit interested when I speak with investors. I spent, 18 years as a buy side investor so I know how you guys think and I spent a lot of time doing it. And I look at what's happened to the equities over the last year. What I've seen is oil prices have gone down, and the stocks have gone down, and so have the multiples, right? And that's not typical, right? If you go back to 2024, right, gas prices went to $2 and what happened LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. JANUARY 06, 2026 / 8:00PM, DVN.N - Devon Energy Corp at Goldman Sachs Energy, CleanTech & Utilities Conference with gas stocks was the multiples expanded, and that's what happens at trough because everybody knows that the marginal cost of production and for natural gas in this country is about $350. Well, the marginal cost for production in the United States in my opinion and based on what we see, and we evaluate every AFE individually in our business and we'll use the Williston Basin, which is our legacy basin is about $70 maybe $65 and costs are not going down. In fact, we're budgeting actually this year for inflation because now it may or may not happen. Maybe we'll see some deflation. We'll see, but the bulk of the cost savings we've seen in the US over the last couple of years has been folks like these guys going faster, and they've been shaving days, and that's how they've been saving money. And so the -- and the average well we're going to cube development, so the average well is actually getting worse. It doesn't mean that the well itself is getting worse, but it means that we're not just cherry picking and drilling the best zones, the Wolfcamp Bay or what have you. Now we're drilling a full cube, right, and so what that means is that the average well in the Permian will appear to you to be worse and certainly as we drill longer laterals in the Williston as an example, we get better wells, but they're also much longer laterals. That's why they're better wells. And so what I would tell you is that if you look at last year's 9/14 data, the US production is up about 600,000 or 700,000 barrels a day and the entirety of that is New Mexico and the Gulf of Mexico -- sorry, Gulf of America, excuse me, sorry, apologize. And that is a handful of projects. I'm not an expert on the Gulf of the Gulf, but that's a handful of projects, as I understand from the majors offshore and New Mexico, which has been really the sole growth engine in the Permian. The Eagle Ford is in decline. The Bakken is largely in decline, and the rest of the conventional basins in the US are in either flat or in decline. I mean, California, as an example, is down over 50% over the last six years. And so what I would tell you is that this is a cyclical business. And what I find interesting is that, the pessimism that happens. Yeah, oil could go anywhere, and certainly we are in a period of oversupply today, but the cure for low prices is low prices, and so if we have a period where oil prices go to $40 they could go anywhere. I mean, I've learned this the hard way in my career, which is that, prices can go anywhere. They can go to $120 they can go to zero or negative $37, I believe, which is the bottom. That was fun, but what I would tell you is that we are below the price in which it will keep US production at its current levels, really low cost of capital. Big public companies can sustain their volumes for a long time, but private companies can't. We have a good portion of private companies and they're already cutting their capital. And so it might not happen today or tomorrow, but this is a cyclical business, and I believe strongly that we're at the bottom of the cycle, and I don't think the equity markets are prepared for that, and I don't think oil prices are there, so Venezuela would be damned at the end of the day. 65% of every incremental barrel produced in the world for growth over the last 10 years has come from the United States, so you can crowd out those barrels, but you still need the price to be at a level that keeps US production flat. 40% of every barrel produced in this country a year is drilled in this year. And so it's going to need at the end of the day to be at a price that can sustain that, and on the data we see, it doesn't do it, and people are willing in our industry to drill a marginal barrel for a while, but they can only do that for so long.

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Clay, do you have a different perspective? You may be more inframarginal, but your perspective, because you operate in a number of these bases too.

Question: Neil Mehta - Goldman Sachs Group Inc - Analyst : Thank you, Clay. Thank you all. It's a great conversation. We appreciate investors taking the time as well. Thank you.