Devon Energy Reports Record Earnings and Earnings Per Share for 2005; Adds 439 Million Barrels From Drilling and Performance Revisions

OKLAHOMA CITY, Feb. 1 /PRNewswire-FirstCall/ -- Devon Energy Corporation today reported record net earnings and earnings per share for the year ended December 31, 2005. Net earnings climbed 34 percent in 2005 to $2.9 billion while 2005 earnings per share climbed more that 40 percent to $6.38 per common share ($6.26 per diluted common share). Devon's 2004 net earnings were $2.2 billion, or $4.51 per common share ($4.38 per diluted common share).

For the quarter ended December 31, 2005, Devon reported net earnings of $970 million, or $2.18 per common share ($2.14 per diluted common share). The company earned $673 million or $1.38 per common share ($1.35 per diluted common share) in the fourth quarter of 2004. Fourth quarter 2005 net earnings of $970 million were reduced by $85 million, or 19 cents per diluted share, for items securities analyst typically exclude from their published estimates. The excluded items are described in detail in this news release.

"Devon's record 2005 earnings were accompanied by excellent drill-bit results," commented J. Larry Nichols, chairman and chief executive officer. "We added 439 million equivalent barrels of reserves through drilling and performance revisions, or almost double our 2005 production. These reserve additions were achieved with just over $4 billion of related capital. In 2006 we expect to increase capital and to deliver another year of strong reserve additions at very competitive unit costs."

Capital and Reserve Summary Year Ended December 31, 2005 2004 Drill-bit Capital (in millions) $ 4,013 $ 2,805 Reserve Data (MMBoe) Discoveries and extensions 401 268 Revisions other than price 38 45 Drill-bit and performance reserve additions 439 313 2005 Drilling Activity at Record Levels

Devon drilled 254 successful exploratory wells and 2,060 successful development wells in 2005. This activity resulted in many notable operational achievements in 2005:

* In the Barnett Shale in North Texas, Devon began producing its 2,000th operated well and also drilled its 300th horizontal well. Cumulative gross production from Devon-operated wells in the field surpassed one trillion cubic feet of natural gas in 2005. Devon is by far the largest producer in the Barnett Shale, the largest natural gas field in Texas. * Devon began drilling and construction activities on its 100 percent- owned Jackfish oil sands project in eastern Alberta. Jackfish will utilize steam assisted gravity drainage technology to achieve planned production of 35,000 barrels per day of oil in 2008. Jackfish is an estimated 300 million barrel resource. The company is considering expansions onto adjacent acreage that could at least double the size of the project. * Devon drilled 57 wells with 100 percent success in the Iron River area of eastern Alberta, Canada. During 2005, Devon acquired 165,000 net acres at Iron River adjacent to existing production in the company's Manatokan field. Based upon the success to date, Devon expects to drill 800 wells at Iron River over the next four years increasing field production to about 30,000 barrels of oil per day by 2010. * The company drilled successful delineation wells on two important deepwater Gulf of Mexico prospects in 2005. The follow-up wells to the Cascade and Jack discoveries in the lower Tertiary were drilled to better define reservoir size and characteristics. Devon and its partners expect to commence an extended production test of the Jack prospect later this month. Devon has a 25 percent working interest in Jack. * Devon sanctioned development and gained regulatory approval for its Polvo offshore oil project in Brazil's Campos Basin. During 2005 Devon also began construction of the Polvo facilities with capacity to handle 50,000 barrels of oil per day. First production is expected in the second half of 2007. Devon is the operator of Polvo and owns 60 percent of the working interest. * Offshore Equatorial Guinea, Devon drilled two discoveries in its high impact West African exploration program. The company plans to conduct additional seismic evaluation and drilling on the discovery blocks in 2006. Oil, Gas and NGL Sales Climb to Record Levels

Sales of oil, gas and natural gas liquids increased 20 percent to $8.9 billion in the year ended December 31, 2005, compared with the year ended December 31, 2004. Higher realized oil, gas and natural gas liquids prices more than offset a decrease in production attributable to properties divested in the first half of 2005.

Combined oil, gas and natural gas liquids production averaged 619 thousand barrels of oil equivalent (Boe) per day in 2005. This was 10 percent less than Devon's 2004 average daily production of 685 thousand Boe per day. The decrease in 2005 production was entirely attributable to property divestitures in the first half of 2005 and the impact of hurricanes in the Gulf of Mexico.

Devon's average realized natural gas price increased 32 percent to $6.99 per thousand cubic feet in 2005, compared with $5.32 per thousand cubic feet in 2004. The company's 2005 average realized oil price increased 36 percent to $38.44 per barrel compared with $28.18 per barrel in 2004. The average realized price for natural gas liquids in 2005 was $28.96 per barrel, a 26 percent increase over the $23.04 per barrel realized in 2004.

Marketing and midstream margins climbed 25 percent in 2005 to a record $450 million. Marketing and midstream revenues increased $91 million to almost $1.8 billion. Related expenses increased by only $3 million, reflecting refocused activity and the divestiture of some midstream assets.

Oil and Gas Reserves Climb to Record Levels

Devon ended 2005 with estimated proved reserves of 2,112 million Boe, setting an all-time record for proved reserves. The company increased proved reserves during 2005 in spite of producing 226 million Boe and divesting non- core oil and gas properties with reserves of 183 million Boe.

In total, through drilling, extensions and revisions, the company added 439 million Boe, or nearly double Devon's 2005 production. The 2005 drill-bit capital expenditures associated with these reserve additions totaled $4 billion, including $259 million of capitalized interest and administrative expenses. Reserves added through proved property acquisitions were just 4 million Boe, or less than one percent of total additions.

Devon ended 2005 with 1,599 million Boe, or 76 percent of proved reserves, classified as proved developed. Year-end reserves comprised 649 million barrels of crude oil, 7.3 trillion cubic feet of natural gas and 246 million barrels of natural gas liquids.

Cash Flow Before Balance Sheet Changes Increases 16 percent to $5.7 Billion; Share Repurchases and Debt Reduction Total $3.6 Billion

Cash flow before balance sheet changes in 2005 reached $5.7 billion, a 16 percent increase over 2004. During 2005 the company divested non-core oil and gas properties in the United States and Canada generating almost $2 billion of additional cash. These sources of cash allowed Devon to fund over $4 billion in capital expenditures, repurchase $2.3 billion of common stock, retire $1.3 billion of debt and end the year with cash and short-term investments of approximately $2.3 billion.

At December 31, 2005, net debt to adjusted capitalization was just 19 percent. Reconciliations of cash flow before balance sheet changes, net debt and adjusted capitalization, which are non-GAAP measures, are provided in this release.

Items Excluded from Published Earnings Estimates

Devon's reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates for the company's financial results. These items and their effects upon full year and fourth quarter 2005 reported earnings were as follows:

* A change in fair value of derivative financial instruments decreased full year earnings by $94 million pre-tax ($60 million after tax) and increased fourth quarter earnings by $74 million pre-tax ($47 million after tax). Of the full year pre-tax amount, $54 million was related to the Chevron exchangeable debentures and the remainder was primarily related to oil and gas hedges that no longer qualify for hedge accounting. Of the fourth quarter pre-tax amount, $66 million was related to the Chevron exchangeable debentures and the remainder was primarily related to oil and gas hedges that no longer qualify for hedge accounting. * Effects of changes in foreign currency exchange rates increased full year 2005 earnings by $2 million pre-tax ($3 million after tax) and decreased fourth quarter earnings by $2 million pre-tax ($2 million after tax). * Additional interest expense attributable to redemption of zero coupon convertible debentures and early redemption of 6.75 percent senior notes decreased full year earnings by $81 million pre-tax ($53 million after tax). * A loss on oil hedges associated with divestiture properties that no longer qualify for hedge accounting decreased full year earnings by $55 million pre-tax ($36 million after tax). * Current tax expense resulting from the repatriation of foreign earnings under The American Jobs Creation Act of 2004 decreased full year earnings by $28 million. * A reduction in the carrying value of oil and gas properties reduced full year and fourth quarter earnings by $212 million pre-tax ($161 million after tax). * Tax benefits related to property divestitures increased full year and fourth quarter net earnings by $17 million. * Tax benefits resulting from changes in Canadian tax law increased full year and fourth quarter net earnings by $14 million. * A gain on the sale of marketing and midstream assets increased full year earnings by $150 million pre-tax ($97 million after tax).

The following tables summarize the full year and fourth quarter effects of these items on 2005 earnings and income taxes. Included in the tables are the tax effects resulting from an income tax accrual adjustment and those oil and gas property divestitures that did not affect net earnings.

Summary of Items Typically Excluded by Securities Analysts - Full Year 2005 (in millions) Cash Flow Before Balance Pretax After-tax Sheet Earnings Income Tax Effect Earnings Changes Effect Current Deferred Total Effect Effect Change in fair value of financial instruments $ (94) (14) (20) (34) (60) (25) Foreign exchange effect 2 --- (1) (1) 3 --- Additional interest costs on debt retirement (81) (28) --- (28) (53) (47) Loss on hedges for divestiture properties (55) (19) --- (19) (36) (36) Repatriation of Canadian cash --- 28 --- 28 (28) (28) Change in Canadian tax law --- --- (14) (14) 14 --- Reduction in the carrying value of properties (212) --- (51) (51) (161) --- Income tax accrual adjustment --- (76) 76 --- --- 76 Gain on sale of certain non-oil and gas assets 150 53 --- 53 97 (53) Effects of oil and gas property divestitures --- 182 (199) (17) 17 (182) Totals $(290) 126 (209) (83) (207) (295)

In aggregate, these items decreased full year 2005 net earnings by $207 million, or 45 cents per common share (44 cents per diluted share). These items and their associated tax effects decreased full year 2005 cash flow before balance sheet changes by $295 million.

Summary of Items Typically Excluded by Securities Analysts - Fourth Quarter 2005 (in millions) Cash Flow Before Balance Pretax After-tax Sheet Earnings Income Tax Effect Earnings Changes Effect Current Deferred Total Effect Effect Change in fair value of financial instruments $74 4 23 27 47 (18) Foreign exchange effect (2) --- --- --- (2) --- Change in Canadian tax law --- --- (14) (14) 14 --- Reduction in the carrying value of properties (212) --- (51) (51) (161) --- Effects of oil and gas property divestitures --- 49 (66) (17) 17 (49) Totals $(140) 53 (108) (55) (85) (67)

In aggregate, these items decreased fourth quarter 2005 net earnings by $85 million, or 20 cents per common share (19 cents per diluted share). These items and their associated tax effects decreased fourth quarter 2005 cash flow before balance sheet changes by $67 million.

Conference Call to be Webcast Today

Devon will discuss its 2005 financial and operating results in a conference call webcast today. The webcast will begin at 10 a.m. Central Time (11 a.m. Eastern Time). The webcast may be accessed from Devon's internet home page at http://www.devonenergy.com/

This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission. Such statements are those concerning strategic plans, expectations and objectives for future operations. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward- looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, inflation or lack of availability of goods and services, environmental risks, drilling risks and regulatory changes. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements.

Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration, production and property acquisitions. Devon is the largest U.S.-based independent oil and gas producer and is included in the S&P 500 Index. For more information about Devon, please visit our website at http://www.devonenergy.com/ .

DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION PRODUCTION DATA Year Ended Quarter Ended (net of royalties) December 31, December 31, 2005 2004 2005 2004 Total Period Production Natural Gas (Bcf) U.S. Onshore 462.7 480.5 119.1 120.8 U.S. Offshore 92.5 120.6 15.0 28.2 Total U.S. 555.2 601.1 134.1 149.0 Canada 261.0 279.1 61.3 70.7 International 10.8 10.2 3.2 3.0 Total Natural Gas 827.0 890.4 198.6 222.7 Oil (MMBbls) U.S. Onshore 12.1 13.9 2.9 3.3 U.S. Offshore 13.4 17.8 2.3 4.0 Total U.S. 25.5 31.7 5.2 7.3 Canada 13.1 13.9 3.3 3.5 International 25.8 32.6 5.9 8.0 Total Oil 64.4 78.2 14.4 18.8 Natural Gas Liquids (MMBbls) U.S. Onshore 17.3 17.7 4.3 4.3 U.S. Offshore 0.8 1.2 0.0 0.3 Total U.S. 18.1 18.9 4.3 4.6 Canada 5.3 4.9 1.4 1.3 International 0.3 0.3 0.1 0.1 Total Natural Gas Liquids 23.7 24.1 5.8 6.0 Oil Equivalent (MMBoe) U.S. Onshore 106.6 111.7 27.1 27.8 U.S. Offshore 29.6 39.1 4.8 9.0 Total U.S. 136.2 150.8 31.9 36.8 Canada 61.9 65.2 14.9 16.5 International 27.9 34.6 6.5 8.6 Total Oil Equivalent 226.0 250.6 53.3 61.9 Average Daily Production Natural Gas (MMcf) U.S. Onshore 1,267.6 1,312.9 1,295.0 1,312.8 U.S. Offshore 253.5 329.5 163.1 306.9 Total U.S. 1,521.1 1,642.4 1,458.1 1,619.7 Canada 715.1 762.5 665.9 768.3 International 29.5 27.8 34.3 32.7 Total Natural Gas 2,265.7 2,432.7 2,158.3 2,420.7 Oil (MBbls) U.S. Onshore 33.2 37.9 31.6 35.7 U.S. Offshore 36.6 48.6 25.0 43.6 Total U.S. 69.8 86.5 56.6 79.3 Canada 36.0 37.8 35.8 38.1 International 70.8 89.2 63.9 87.4 Total Oil 176.6 213.5 156.3 204.8 Natural Gas Liquids (MBbls) U.S. Onshore 47.5 48.4 46.9 46.7 U.S. Offshore 2.2 3.2 0.4 2.8 Total U.S. 49.7 51.6 47.3 49.5 Canada 14.5 13.3 15.3 14.2 International 0.9 0.8 0.8 0.8 Total Natural Gas Liquids 65.1 65.7 63.4 64.5 Oil Equivalent (MBoe) U.S. Onshore 292.0 305.1 294.3 301.3 U.S. Offshore 81.1 106.7 52.5 97.5 Total U.S. 373.1 411.8 346.8 398.8 Canada 169.7 178.3 162.1 180.3 International 76.5 94.6 70.5 93.7 Total Oil Equivalent 619.3 684.7 579.4 672.8 DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION FULL-YEAR PRODUCTION DATA - RETAINED PROPERTIES Both periods exclude properties divested in 2005 Year Ended December 31, YOY 2005 2004 % Change Total Period Production Natural Gas (Bcf) U.S. Onshore 455.2 449.6 1% U.S. Offshore 80.3 67.1 20% Total U.S. 535.5 516.7 4% Canada 246.6 239.7 3% International 10.8 10.2 6% Total Natural Gas 792.9 766.6 3% Oil (MMBbls) U.S. Onshore 11.6 11.6 0% U.S. Offshore 10.7 11.5 -7% Total U.S. 22.3 23.1 -3% Canada 12.4 11.5 8% International 25.8 32.6 -21% Total Oil 60.5 67.2 -10% Natural Gas Liquids (MMBbls) U.S. Onshore 17.1 16.5 4% U.S. Offshore 0.6 0.6 0% Total U.S. 17.7 17.1 4% Canada 5.1 4.6 11% International 0.3 0.3 -1% Total Natural Gas Liquids 23.1 22.0 5% Oil Equivalent (MMBoe) U.S. Onshore 104.5 103.1 1% U.S. Offshore 24.8 23.3 6% Total U.S. 129.3 126.4 2% Canada 58.6 56.0 5% International 27.9 34.6 -19% Total Oil Equivalent 215.8 217.0 -1% Average Daily Production Natural Gas (MMcf) U.S. Onshore 1,247.1 1,228.4 2% U.S. Offshore 220.1 183.5 20% Total U.S. 1,467.2 1,411.9 4% Canada 675.5 654.8 3% International 29.5 27.8 6% Total Natural Gas 2,172.2 2,094.5 4% Oil (MBbls) U.S. Onshore 31.8 31.8 0% U.S. Offshore 29.4 31.3 -6% Total U.S. 61.2 63.1 -3% Canada 33.9 31.4 8% International 70.8 89.2 -21% Total Oil 165.9 183.7 -10% Natural Gas Liquids (MBbls) U.S. Onshore 46.6 45.2 3% U.S. Offshore 1.7 1.6 6% Total U.S. 48.3 46.8 3% Canada 14.0 12.6 11% International 0.9 0.8 13% Total Natural Gas Liquids 63.2 60.2 5% Oil Equivalent (MBoe) U.S. Onshore 286.3 281.7 2% U.S. Offshore 67.7 63.5 7% Total U.S. 354.0 345.2 3% Canada 160.7 153.1 5% International 76.5 94.6 -19% Total Oil Equivalent 591.2 592.9 0% DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION QUARTERLY PRODUCTION DATA - RETAINED PROPERTIES All periods exclude properties divested in 2005 YOY Sequential Q4 2005 Q4 2004 Q3 2005 % Change % Change Total Period Production Natural Gas (Bcf) U.S. Onshore 119.1 113.8 113.9 5% 5% U.S. Offshore 15.0 17.9 22.0 -16% -32% Total U.S. 134.1 131.7 135.9 2% -1% Canada 61.2 60.6 66.6 1% -8% International 3.2 3.0 2.5 5% 28% Total Natural Gas 198.5 195.3 205.0 2% -3% Oil (MMBbls) U.S. Onshore 2.9 2.8 2.9 2% 1% U.S. Offshore 2.3 2.5 2.6 -7% -11% Total U.S. 5.2 5.3 5.5 -2% -5% Canada 3.2 3.0 3.1 11% 5% International 5.9 8.0 6.1 -27% -3% Total Oil 14.3 16.3 14.7 -12% -2% Natural Gas Liquids (MMBbls) U.S. Onshore 4.3 4.1 4.2 6% 3% U.S. Offshore 0.0 0.1 0.3 -74% -88% Total U.S. 4.3 4.2 4.5 4% -3% Canada 1.4 1.2 1.3 15% 8% International 0.1 0.1 0.1 1% -9% Total Natural Gas Liquids 5.8 5.5 5.9 6% -1% Oil Equivalent (MMBoe) U.S. Onshore 27.1 25.9 26.1 5% 4% U.S. Offshore 4.8 5.6 6.5 -13% -26% Total U.S. 31.9 31.5 32.6 2% -2% Canada 14.8 14.3 15.6 4% -4% International 6.5 8.6 6.5 -25% -1% Total Oil Equivalent 53.2 54.4 54.7 -2% -3% Average Daily Production Natural Gas (MMcf) U.S. Onshore 1,295.0 1,235.9 1,238.1 5% 5% U.S. Offshore 163.1 194.3 239.8 -16% -32% Total U.S. 1,458.1 1,430.2 1,477.9 2% -1% Canada 665.9 660.6 723.5 1% -8% International 34.3 32.7 26.8 5% 28% Total Natural Gas 2,158.3 2,123.5 2,228.2 2% -3% Oil (MBbls) U.S. Onshore 31.6 30.9 31.1 2% 1% U.S. Offshore 25.0 27.0 28.3 -7% -11% Total U.S. 56.6 57.9 59.4 -2% -5% Canada 35.8 32.2 34.2 11% 5% International 63.9 87.4 65.8 -27% -3% Total Oil 156.3 177.5 159.4 -12% -2% Natural Gas Liquids (MBbls) U.S. Onshore 46.9 44.1 45.7 6% 3% U.S. Offshore 0.3 1.4 3.0 -74% -88% Total U.S. 47.2 45.5 48.7 4% -3% Canada 15.3 13.3 14.2 15% 8% International 0.8 0.8 0.9 1% -9% Total Natural Gas Liquids 63.3 59.6 63.8 6% -1% Oil Equivalent (MBoe) U.S. Onshore 294.3 280.9 283.2 5% 4% U.S. Offshore 52.5 60.7 71.1 -13% -26% Total U.S. 346.8 341.6 354.3 2% -2% Canada 162.0 155.6 169.0 4% -4% International 70.5 93.7 71.2 -25% -1% Total Oil Equivalent 579.3 590.9 594.5 -2% -3% DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION REALIZED PRICE DATA Year Ended Quarter Ended (average realized prices) December 31, December 31, 2005 2004 2005 2004 Realized Prices Natural Gas ($/Mcf) U.S. Onshore $6.90 $5.20 $9.41 $5.69 U.S. Offshore $7.95 $6.31 $11.15 $7.00 Total U.S. $7.08 $5.43 $9.61 $5.94 Canada $6.95 $5.15 $9.36 $5.49 International $3.76 $3.33 $2.75 $3.23 Total Natural Gas $6.99 $5.32 $9.42 $5.76 Oil ($/Bbl) U.S. Onshore $51.23 $31.03 $55.58 $32.91 U.S. Offshore $32.96 $30.69 $31.08 $31.49 Total U.S. $41.64 $30.84 $44.75 $32.13 Canada $26.88 $21.60 $26.09 $18.18 International $41.16 $28.40 $42.65 $27.89 Total Oil $38.44 $28.18 $39.62 $27.72 Natural Gas Liquids ($/Bbl) U.S. Onshore $26.50 $21.12 $31.16 $24.88 U.S. Offshore $30.61 $26.78 $47.72 $30.43 Total U.S. $26.68 $21.47 $31.29 $25.20 Canada $37.19 $29.23 $41.13 $33.93 International $22.81 $21.12 $21.07 $21.14 Total Natural Gas Liquids $28.96 $23.04 $33.53 $27.06 Oil Equivalent ($/Boe) U.S. Onshore $40.10 $29.59 $52.34 $32.56 U.S. Offshore $40.58 $34.27 $49.73 $36.96 Total U.S. $40.21 $30.80 $51.94 $33.64 Canada $38.17 $28.80 $48.10 $29.88 International $39.76 $27.92 $40.28 $27.34 Total Oil Equivalent $39.59 $29.88 $49.45 $31.75 BENCHMARK PRICES Year Ended Quarter Ended (average prices) December 31, December 31, 2005 2004 2005 2004 Benchmark Prices Natural Gas ($/Mcf) - Henry Hub $8.64 $6.13 $13.00 $7.07 Oil ($/Bbl) - West Texas Intermediate (Cushing) $56.57 $41.38 $60.00 $48.34 PRICE DIFFERENTIALS, EXCLUDING EFFECTS OF HEDGES (average floating price differentials from Year Ended Quarter Ended benchmark prices) December 31, December 31, 2005 2004 2005 2004 Price Differentials Natural Gas ($/Mcf) U.S. Onshore $(1.71) $(0.88) $(3.54) $(1.25) U.S. Offshore $(0.42) $ 0.21 $(0.50) $ 0.05 Total U.S. $(1.50) $(0.66) $(3.20) $(1.00) Canada $(1.46) $(0.83) $(3.26) $(1.42) International $(3.88) $(2.80) $(9.92) $(3.84) Total Natural Gas $(1.50) $(0.74) $(3.29) $(1.17) Oil ($/Bbl) U.S. Onshore $(4.85) $(2.68) $(4.42) $(3.09) U.S. Offshore $(5.45) $(2.35) $(4.85) $(2.90) Total U.S. $(5.16) $(2.45) $(4.61) $(2.99) Canada $(15.48) $(9.40) $(19.64) $(14.45) International $(7.19) $(6.50) $(7.44) $(9.98) Total Oil $(8.08) $(5.39) $(9.21) $(8.10) DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except Year Ended Unaudited Quarter per share data) December 31, Ended December 31, 2005 2004 2005 2004 Revenues Oil sales $2,478 $2,202 $570 $523 Gas sales 5,784 4,732 1,871 1,282 Natural gas liquids sales 687 554 195 161 Marketing & midstream revenues 1,792 1,701 582 499 Total revenues 10,741 9,189 3,218 2,465 Expenses and Other Income, net Lease operating expenses 1,345 1,280 340 341 Production taxes 335 255 101 74 Marketing & midstream operating costs and expenses 1,342 1,339 421 390 Depreciation, depletion and amortization of oil and gas properties 2,031 2,141 503 554 Depreciation and amortization of non-oil and gas properties 160 149 41 39 Accretion of asset retirement obligation 44 44 9 11 General & administrative expenses 291 277 85 72 Interest expense 533 475 105 114 Effects of changes in foreign currency exchange rates (2) (23) 2 (17) Change in fair value of derivative financial instruments 94 62 (74) 8 Reduction of carrying value of oil and gas properties 212 --- 212 --- Other income, net (196) (103) (17) (49) Total expenses and other income, net 6,189 5,896 1,728 1,537 Earnings before income tax expense 4,552 3,293 1,490 928 Income Tax Expense Current 1,238 752 406 183 Deferred 384 355 114 72 Total income tax expense 1,622 1,107 520 255 Net earnings 2,930 2,186 970 673 Preferred stock dividends 10 10 3 3 Net earnings applicable to common stockholders 2,920 2,176 967 670 Net earnings per weighted average common shares outstanding Basic $6.38 $4.51 $2.18 $1.38 Diluted $6.26 $4.38 $2.14 $1.35 Basic weighted average shares outstanding 458 482 443 484 Diluted weighted average shares outstanding 470 499 451 500 DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION CONSOLIDATED BALANCE SHEETS (in millions) December 31, December 31, 2005 2004 Assets Current assets Cash and cash equivalents $1,606 $1,152 Short-term investments 680 967 Accounts receivable 1,601 1,320 Fair value of derivative financial instruments --- 1 Deferred income taxes 158 289 Other current assets 161 143 Total current assets 4,206 3,872 Property and equipment, at cost, based on the full cost method of accounting for oil and gas properties ($2,747 and $3,187 excluded from amortization in 2005 and 2004, respectively) 34,246 32,114 Less accumulated depreciation, depletion and amortization 15,114 12,768 Net property and equipment 19,132 19,346 Investment in Chevron Corporation common stock, at fair value 805 745 Fair value of derivative financial instruments --- 8 Goodwill 5,705 5,637 Other assets 425 417 Total Assets $30,273 $30,025 Liabilities and Stockholders' Equity Current liabilities Accounts payable: Trade $947 $715 Revenues and royalties due to others 666 487 Income taxes payable 293 223 Current portion of long-term debt 662 933 Accrued interest payable 127 139 Fair value of derivative financial instruments 18 399 Current portion of asset retirement obligation 50 46 Accrued expenses and other current liabilities 171 158 Total current liabilities 2,934 3,100 Debentures exchangeable into shares of Chevron Corporation common stock 709 692 Other long-term debt 5,248 6,339 Fair value of derivative financial instruments 125 72 Asset retirement obligation, long-term 618 693 Other liabilities 372 366 Deferred income taxes 5,405 5,089 Stockholders' equity Preferred stock 1 1 Common stock 44 48 Additional paid-in capital 7,066 9,087 Retained earnings 6,477 3,693 Accumulated other comprehensive income 1,414 930 Deferred compensation and other (138) (85) Treasury stock (2) --- Stockholders' Equity 14,862 13,674 Total Liabilities & Stockholders' Equity $30,273 $30,025 Common Shares Outstanding 443 484 DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2005 2004 Cash Flows From Operating Activities Net earnings $2,930 $2,186 Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, depletion and amortization 2,191 2,290 Accretion of asset retirement obligation 44 44 Amortization of premiums on long-term debt, net --- (5) Effects of changes in foreign currency exchange rates (2) (23) Non-cash change in fair value of derivative financial instruments 55 62 Deferred income tax expense 384 355 Net gain on sales of non-oil and gas properties (150) (34) Reduction of carrying value of oil and gas properties 212 --- Other 31 31 5,695 4,906 Changes in assets and liabilities: (Increase) decrease in: Accounts receivable (270) (345) Other current assets (16) (20) Long-term other assets 52 (91) Increase (decrease) in: Accounts payable 262 190 Income taxes payable 69 208 Accrued interest and expenses (41) (79) Long-term debt, including current maturities (67) 16 Long-term other liabilities (72) 31 Net cash provided by operating activities 5,612 4,816 Cash Flows From Investing Activities Proceeds from sales of property and equipment 2,151 95 Capital expenditures (4,090) (3,103) Purchases of short-term investments (4,020) (3,215) Sales of short-term investments 4,307 2,589 Net cash used in investing activities (1,652) (3,634) Cash Flows From Financing Activities Principal payments on long-term debt (1,258) (973) Issuance of common stock, net of issuance costs 124 268 Repurchase of common stock (2,263) (189) Dividends paid on common stock (136) (97) Dividends paid on preferred stock (10) (10) Net cash used in financing activities (3,543) (1,001) Effect of exchange rate changes on cash 37 39 Net increase in cash and cash equivalents 454 220 Cash and cash equivalents at beginning of period 1,152 932 Cash and cash equivalents at end of period $1,606 $1,152 DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION Total Total U.S. Oil Gas NGLs Total Oil Gas NGLs Total (MMBbls) (Bcf)(MMBbls)(MMboe)(MMBbls)(Bcf)(MMBbls)(MMboe) As of December 31, 2004: Proved developed 411 6,219 204 1,652 168 4,105 161 1,014 Proved undeveloped 185 1,275 28 425 35 831 21 194 Total proved 596 7,494 232 2,077 203 4,936 182 1,208 Production (64) (827) (24) (226) (25) (555) (18) (136) Discoveries and extensions 167 1,220 30 401 16 793 20 169 Divestitures (58) (676) (12) (183) (29) (306) (9) (89) Acquisitions 2 10 --- 4 --- --- --- --- Revisions due to prices (16) 78 4 1 6 58 3 19 Revisions other than price 22 (3) 16 38 2 238 19 61 As of December 31, 2005: Proved developed 363 6,111 216 1,599 149 4,343 175 1,049 Proved undeveloped 286 1,185 30 513 24 821 22 183 Total proved 649 7,296 246 2,112 173 5,164 197 1,232 U.S. Onshore U.S. Offshore Oil Gas NGLs Total Oil Gas NGLs Total (MMBbls) (Bcf)(MMBbls)(MMboe)(MMBbls)(Bcf)(MMBbls)(MMboe) As of December 31, 2004: Proved developed 126 3,751 158 909 42 354 3 105 Proved undeveloped 9 608 19 129 26 223 2 65 Total proved 135 4,359 177 1,038 68 577 5 170 Production (12) (463) (17) (106) (13) (92) (1) (30) Discoveries and extensions 15 771 20 164 1 22 --- 5 Divestitures (11) (197) (8) (51) (18) (109) (1) (38) Acquisitions --- --- --- --- --- --- --- --- Revisions due to prices 5 55 3 16 1 3 --- 3 Revisions other than price (3) 236 18 55 5 2 1 6 As of December 31, 2005: Proved developed 120 4,110 173 979 29 233 2 70 Proved undeveloped 9 651 20 137 15 170 2 46 Total proved 129 4,761 193 1,116 44 403 4 116 Canada International Oil Gas NGLs Total Oil Gas NGLs Total (MMBbls) (Bcf)(MMBbls)(MMboe)(MMBbls)(Bcf)(MMBbls)(MMboe) As of December 31, 2004: Proved developed 123 2,043 43 507 120 71 --- 131 Proved undeveloped 24 377 7 93 126 67 --- 138 Total proved 147 2,420 50 600 246 138 --- 269 Production (13) (261) (6) (62) (26) (11) --- (28) Discoveries and extensions 144 427 10 225 7 --- --- 7 Divestitures (29) (370) (3) (94) --- --- --- --- Acquisitions 2 10 --- 4 --- --- --- --- Revisions due to prices --- 22 1 4 (22) (2) --- (22) Revisions other than price 2 (242) (3) (41) 18 1 --- 18 As of December 31, 2005: Proved developed 103 1,708 41 429 111 60 --- 121 Proved undeveloped 150 298 8 207 112 66 --- 123 Total proved 253 2,006 49 636 223 126 --- 244 DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION COSTS INCURRED Total Total U.S. (in millions) Year Ended Year Ended December 31, December 31, 2005 2004 2005 2004 Property Acquisition Costs: Total proved $54 $38 $5 $27 Total unproved $349 $141 $106 $75 Exploration Costs $931 $735 $422 $335 Development Costs $2,805 $1,938 $1,597 $1,163 Costs Incurred $4,139 $2,852 $2,130 $1,600 U.S. Onshore U.S. Offshore Year Ended Year Ended December 31, December 31, 2005 2004 2005 2004 Property Acquisition Costs: Total proved $3 $24 $2 $3 Total unproved $86 $46 $20 $29 Exploration Costs $173 $92 $249 $243 Development Costs $1,381 $983 $216 $180 Costs Incurred $1,643 $1,145 $487 $455 Canada International Year Ended Year Ended December 31, December 31, 2005 2004 2005 2004 Property Acquisition Costs: Total proved $49 $11 $--- $--- Total unproved $239 $52 $4 $14 Exploration Costs $361 $272 $148 $128 Development Costs $1,020 $625 $188 $150 Costs Incurred $1,669 $960 $340 $292

Devon capitalizes certain general and administrative expenses which are related to property acquisition, exploration and development activities. Such capitalized expenses, which are included in the costs shown in the preceding tables, were $189 million and $172 million in the years 2005 and 2004, respectively. In addition, Devon capitalizes certain interest expenses which are related to property development activities. Such capitalized expenses, which are also included in the costs shown in the preceding tables, were $70 million and $70 million in the years 2005 and 2004, respectively.

DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION DRILLING ACTIVITY Year Ended December 31, 2005 2004 Exploration Wells Drilled U.S. 49 40 Canada 234 228 International 13 6 Total 296 274 Exploration Wells Success Rate U.S. 69% 58% Canada 93% 90% International 23% 33% Total 86% 84% Development Wells Drilled U.S. 1,249 1,217 Canada 786 621 International 44 66 Total 2,079 1,904 Development Wells Success Rate U.S. 99% 99% Canada 99% 96% International 100% 100% Total 99% 98% Total Wells Drilled U.S. 1,298 1,257 Canada 1,020 849 International 57 72 Total 2,375 2,178 Total Wells Success Rate U.S. 98% 97% Canada 98% 95% International 82% 94% Total 97% 96% COMPANY OPERATED RIGS December 31, 2005 2004 Number of Company Operated Rigs Running U.S. 53 54 Canada 16 26 International 3 3 Total 72 83 CAPITAL EXPENDITURES DATA Year Ended Quarter Ended (in millions) December 31, 2005 December 31, 2005 Capital Expenditures U.S. Onshore $1,550 $456 U.S. Offshore 391 97 Total U.S. 1,941 553 Canada 1,607 285 International 263 157 Marketing & midstream 121 49 Capitalized general & administrative costs 189 54 Capitalized interest costs 70 17 Other 84 51 Total $4,275 $1,166 DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION Non-GAAP Financial Measures

The United States Securities and Exchange Commission has adopted disclosure requirements for public companies such as Devon concerning Non-GAAP financial measures. (GAAP refers to generally accepted accounting principles.) The company must reconcile the Non-GAAP financial measure to related GAAP information. Cash flow before balance sheet changes is a Non-GAAP financial measure. Devon believes cash flow before balance sheet changes is relevant because it is a measure of cash available to fund the company's capital expenditures, dividends and to service its debt. Cash flow before balance sheet changes is also used by certain securities analysts as a measure of Devon's financial results.

RECONCILIATION TO GAAP INFORMATION Year Ended Quarter Ended (in millions) December 31, December 31, 2005 2004 2005 2004 Net Cash Provided By Operating Activities (GAAP) $5,612 $4,816 $1,960 $1,124 Changes in assets and liabilities, net of effects of acquisitions of businesses 83 90 (221) 172 Cash flow before balance sheet changes (Non-GAAP) $5,695 $4,906 $1,739 $1,296

Devon believes that using net debt, defined as debt less cash and the market value of Chevron common stock, for the calculation of "net debt to adjusted capitalization" provides a better measure than using debt. Devon believes that because cash can be used to repay indebtedness, netting cash against debt provides a clearer picture of the future demands on cash to repay debt. Included in Devon's indebtedness are $709 million of debentures exchangeable into 14.2 million shares of Chevron common stock owned outright by Devon. As of December 31, 2005, the market value of the shares ($805 million) exceeded the related debt obligation of $709 million. Since the value of Chevron common stock held by Devon is higher than the debt obligation, Devon believes deducting the market value of the stock provides a clearer picture of future demands on cash to repay debt. This methodology is also utilized by various lenders, rating agencies and securities analysts as a measure of Devon's indebtedness.

RECONCILIATION TO GAAP INFORMATION (in millions) December 31, 2005 2004 Total debt (GAAP) $6,619 7,964 Adjustments: Cash and short-term investments (2,286) (2,119) Market value of Chevron Corporation common stock (805) (745) Net Debt (Non-GAAP) $3,528 5,100 Total Capitalization Total debt $6,619 7,964 Stockholders' equity 14,862 13,674 Total Capitalization (GAAP) $21,481 21,638 Adjusted Capitalization Net debt $3,528 5,100 Stockholders' equity 14,862 13,674 Adjusted Capitalization (Non-GAAP) $18,390 18,774 DEVON ENERGY CORPORATION FINANCIAL AND OPERATIONAL INFORMATION

Drill-bit capital is defined as costs incurred less proved acquisition costs, unproved acquisition costs resulting from business combinations, and the net difference of accrued future asset retirement costs less actual cash retirement expenditures. Drill-bit capital is a non-GAAP measure. Management believes drill-bit capital is relevant because it provides additional insight into costs associated with current year drilling, facilities and unproved acreage acquisitions unrelated to business combinations. It should be noted that the actual costs of reserves added through the company's drilling program will differ, sometimes significantly, from the direct comparison of capital spent and reserves added in any given period due to the timing of capital expenditures and reserve bookings. This methodology is also utilized by certain securities analysts as a measure of Devon's performance.

RECONCILIATION TO GAAP INFORMATION (in millions) Total Total U.S. Year Ended December 31, Year Ended December 31, 2005 2004 2005 2004 Costs Incurred (GAAP) $4,139 $2,852 $2,130 $1,600 Less: Proved acquisition costs 54 38 5 27 Accrued asset retirement costs 113 51 70 28 Plus: Actual retirement expenditures 41 42 22 27 Drill-bit capital (Non-GAAP) $4,013 $2,805 $2,077 $1,572 U.S. Onshore U.S. Offshore Year Ended December 31, Year Ended December 31, 2005 2004 2005 2004 Costs Incurred (GAAP) $1,643 $1,145 $487 $455 Less: Proved acquisition costs 3 24 2 3 Accrued asset retirement costs 23 14 47 14 Plus: Actual retirement expenditures 5 5 17 22 Drill-bit capital (Non-GAAP) $1,622 $1,112 $455 $460 Canada International Year Ended December 31, Year Ended December 31, 2005 2004 2005 2004 Costs Incurred (GAAP) $1,669 $960 $340 $292 Less: Proved acquisition costs 49 11 --- --- Accrued asset retirement costs 37 18 6 5 Plus: Actual retirement expenditures 16 14 3 1 Drill-bit capital (Non-GAAP) $1,599 $945 $337 $288

FCMN Contact: zack.hager@dvn.com