2018 Devon Energy Sustainability Report · 2020-05-28 · 2 Materiality Assessment The contents of...

Devon EnergySustainability Report

2 0 1 8

Commitment Runs Deep

Includes updates since original publication.

2 0 1 8 S U S TA I N A B I L I T Y R E P O R T

CO N T E N T S

About this Report .......................................... 1

CEO Letter ........................................................3

Core Values: The Devon Way ..................... 4

Performance Highlights - UPDATED ..........5

Operations Overview ........................................ 7

The Future of Energy ................................. 10

Performance Metrics - UPDATED ............72

Recognition ....................................................74

ENVIRONMENT

Overview - UPDATED ..................................... 13

Air Quality .......................................................16

Greenhouse Gas Emissions - UPDATED ... 18

Climate Change - UPDATED ........................21

Water Management - UPDATED ...............22

Land Conservation .....................................24

Seismicity........................................................26

Waste Management .................................. 27

Spill Prevention ............................................ 28

Well Safety .....................................................29

HEALTH & SAFETY

Overview ......................................................... 31

Workforce Safety ........................................ 33

Employee Wellness .................................... 37

SOCIAL

Overview ........................................................54

Community Engagement ......................... 55

STEM ................................................................57

Volunteerism ................................................60

Philanthropy .................................................. 61

Human Rights ...............................................63

WORKFORCE

Overview ........................................................65

Talent Management ...................................67

Inclusion & Diversity ................................. 69

Innovation ..................................................... 70

GOVERNANCE

Overview - UPDATED ...................................40

Corporate Governance - UPDATED........ 42

Shareholder Engagement ........................45

Ethics and Integrity ................................... 46

Public Advocacy ..........................................47

Emergency Preparedness ....................... 49

Risk Management ........................................51

Cybersecurity ................................................52

D E V O N E N E R G Y 2018 S U S TA I N A B I L I T Y R E P O R T

1

Devon Energy is proud to present our 2018 Sustainability Report, highlighting our efforts to deliver industry-leading results and, in the areas where we operate, set the standard as a good neighbor, valued community partner, caring environmental steward and model employer.

We’re also proud to be a leader in an industry delivering products that are essential to lives and livelihoods around the world. We produce a valuable commodity that is fundamental to society, and we do so in a safe, environmentally responsible and ethical way, while striving to deliver strong returns to shareholders.

Based in Oklahoma City, we employ about 3,000 men and women, operating under the motto: Commitment Runs Deep. We take this to heart and apply it to everyone who has a stake in our success – investors, employees and neighbors alike.

This report marks an intentional step toward becoming more transparent and putting even stronger emphasis on reporting the impacts of our environmental, social and governance (ESG) programs.

The report covers the most material policies, programs and performance related to our corporate governance, environmental, health and safety, and social efforts, as determined in a thorough materiality assessment described within. The information presented applies to our operated assets in North America during 2017, unless otherwise noted.

About this Report

Devon Energy Center in Oklahoma City, certified LEED Gold by the U.S. Green Building Council.


2

Materiality Assessment

The contents of this report were determined through a professional materiality assessment, conducted in 2018, to identify the most relevant and impactful performance areas for Devon and our key stakeholders. Facilitated by a third-party sustainability consultant, the assessment followed a process as recommended by the Oil and Gas Industry Guidance on Voluntary Sustainability Reporting, published jointly by IPIECA, American Petroleum Institute (API) and the International Association of Oil & Gas Producers (IOGP). The process included in-depth, one-on-one interviews with Devon’s chief executive officer (CEO) and other executive committee members, and an in-person workshop with leaders of Devon’s operations, environmental, safety, corporate governance, investor relations, human resources, supply chain, legal, government affairs, corporate communications and community relations departments. Leaders identified key stakeholders and material areas for reporting, and mapped them on a materiality matrix. Devon also evaluated common reporting frameworks, including those of IPIECA and Global Reporting Initiative (GRI).

The materiality assessment included a third-party review of external stakeholder materials such as assessments from Institutional Shareholder Services, Sustainalytics, As You Sow and Great Place to Work, and a benchmarking study of peer-company sustainability reports.

As a result of this examination, this report is informed by common reporting frameworks and focuses on the top 12 material areas identified during the materiality assessment process.

• Safety

• Greenhouse gas emissions

• Land conservation

• Water use and recycling

• Shareholder engagement

• Political activity

• Climate change

• Talent management

• Employee wellness

• Inclusion and diversity

• Community engagement

• Business innovation

Note that the concept of materiality used in

the preparation of this report is not meant

to correspond to the concept of materiality

associated with disclosures required by the

U.S. Securities and Exchange Commission.

We’re committed to continuously improving

our environmental, social and governance

performance and communicating it

transparently. We invite you to give us

feedback on how we’re doing by using our

stakeholder contact portal:

http://www.devonenergy.com/about-us/

contact-us

1Identify

List all potential issues, both existing and emerging

List input sources

Gather company and stakeholder input

Update issue list based on input

2 Prioritize

Prioritize material issues

Determine prominence within the report

3 Check

Confirm adequacy:• balanced reporting • independent assurance • issue completeness

4Review

Seek immediate feedback

Identify improvement actions for next report

ANNUAL MATERIALITY CYCLE

A B O U T T H I S R E P O R T

HIGH

MEDIUM

LOW

PRIORITIZING MATERIAL ISSUES

Significance to the company

Sign

ific

ance

to s

take

hold

ers

Source: IPIECA/API/OGP 2015


3

At Devon, we’re driven by our core values and proud to be known for doing business with integrity. In everything we do, we’re accountable to our shareholders, policymakers and regulatory agencies, our neighbors where we live and work, and our employees.

As a leading independent oil and natural gas producer, we deliver an important commodity that’s essential to our modern way of life. Today and for decades to come, hydrocarbons will be the primary source of energy worldwide. Devon is doing the vital work of finding and producing this energy and, in the process, we’re safeguarding our workforce and our neighbors, protecting the environment and generating returns for our shareholders.

We’ve built a strong record of achievement, but are always striving to improve. This includes our performance and transparency related to environmental, social and governance issues. These are long-standing keys to our success at Devon, and now stakeholders are increasingly viewing them together under a single identifier, ESG.

CEO Letter

A fresh look

Devon’s leaders have undertaken a thorough examination of ESG performance in the context of the company’s long-term goals and investment value. To be sure we’re identifying and appropriately addressing the issues that could impact our sustainability, we have established an ESG Steering Committee. This committee has been given the authority to ensure that the appropriate level of attention is focused on ESG issues. With the committee’s guidance, we have produced this report highlighting the programs we’re working on today, the practices we’ve been cultivating since Devon was founded in 1971, and the performance we expect to achieve going forward.

We’re presenting more quantitative information than in previous reports, with easier access to ESG content. We’re also expanding our discussion to include topics such as inclusion and diversity, cybersecurity and climate change.

In addition, we describe how our investments in new technologies are leading our industry and building on our proud history of innovation. We explain how our tradition of good citizenship is paying dividends today in education, philanthropy, environmental stewardship, workforce safety and employee wellness, and how it all contributes to our sustainability.

Advancing our strategy

As we navigate a landscape of uncertainty, Devon is focused specifically in areas we can control, such as streamlining our business and improving operational and financial efficiencies. These steps have strengthened our ability to compete, regardless of fluctuations in commodity prices.

We’re simplifying our portfolio and concentrating our capital investments where we have the highest-quality resources. This has enabled us to deliver excellent results while building a reputation for good environmental stewardship and a strong track record of collaboration with our neighbors and other stakeholders.

As we move forward, we’ll continue to look for new opportunities within our business to place greater emphasis on ESG, which should help improve performance. We look forward to achieving the business benefits that result from actively engaging with our stakeholders on matters of importance to them.

On behalf of everyone at Devon Energy, I thank you for taking the time to learn more about our commitment to better ESG transparency and performance. This report was developed with the needs and interests of our stakeholders in mind, and we welcome your feedback to help us keep improving.

Sincerely,

Dave Hager President and CEO


4

The Devon Way promotes a culture of integrity and accountability. A large silver medallion with the word “Integrity” is inset in the center of the rotunda of our headquarters. It’s not only a visible reminder of our culture for employees, but also a tool to discuss our culture and attributes with candidates for job openings with Devon. Integrity enables us to work better, faster and more efficiently. It strengthens our relationships and establishes Devon as the partner of choice in our industry.

We seek to increase shareholder value while operating in an environmentally and socially responsible manner. We are driven to perform with a clear focus, a sense of urgency and a commitment to continuous improvement. By creating a feeling of personal ownership and a culture of hard work, innovation and productivity, Devon encourages an environment that brings out the best in each of us.

Hire the best people

Be a team player

Always do the right thing

Be a good neighbor

Deliver results

Because our people are the company’s most important resource, we develop employees’ knowledge and creativity, and we cultivate an atmosphere where anyone can share an idea and know that it will be heard.

In a competitive environment, this mantra too often gets pushed aside. At Devon, we refuse to succumb to ethical lapses. We embrace honesty and uncompromised integrity as our foremost core value.

In our commitment to increase shareholder value, we instill a desire for continuous improvement, both as individuals and as a company. We do this through hard work and individual ownership of Devon’s goals and objectives.

We foster teamwork and a culture of trust and goodwill, because a focused, fulfilled and engaged workforce brings more job satisfaction and ultimately yields a more successful company.

We share a fundamental respect for the environment and constantly strive to improve the overall quality of life in the communities where we operate. We do this at both the corporate and individual levels.

Core Values: The Devon Way

An atmosphere of teamwork, inclusion and trust inspires our employees to participate in the decision-making process. It encourages accountability and gives everyone an opportunity to develop as a leader.

A workforce that is truly engaged will derive greater satisfaction from our success and from our improved work performance.

Devon’s strength springs from employees who are committed to increasing shareholder value and who share in the satisfaction of our long-term success. Our corporate culture is one of fundamental respect for the environment and our neighbors. This respect makes Devon a good community partner and helps improve the quality of life where we live and work. By being a good neighbor, Devon enhances our ability to meet our corporate goals.

Trust is a key ingredient in Devon’s success. It is vital that our stakeholders trust us to deliver results the right way. The Devon Way.

Our Core Values


5

As we seek to be more transparent in communicating our performance, we see opportunities to illustrate the results of our work. Some examples:

Performance Highlights

Download performance metrics spreadsheet

GHG EMISSIONS INTENSITY(tCO2e/MBOE)

2015 2016 2017

11.77

56.30

10.96

56.0114.83

64.85

U.S. Canada

18

15

70

12

60

9

50

6

40

3

30

20

10

METHANE EMISSIONS INTENSITY(tCO2e/MBOE)

2015 2016 2017

4.17

8.75

4.33

10.96

4.5218.57

U.S. Canada

5 20

415

3

10

2

51

METHANE EMISSIONS(million tonnes CO2e)

1.30

1.50

2.16

2.5

2.0

1.5

1.02015 2016 2017


http://www.devonenergy.com/documents/Sustainability/Performance-Metrics/DVN-SR18-Performance-Metrics.xlsx

6P E R F O R M A N C E H I G H L I G H T S

SAFETY PERFORMANCETotal Recordable Incident Rate (TRIR)

Total Employee Contractor

2015 2016 2017

WOMEN BOARD MEMBERS22015, 2016, 2017

0.9

1.0

0.8

0.7

0.6

0.5

0.4

0.3

3.45

U.S. RECYCLED WATER(million bbl)

2015 2016 2017

CANADA SAGD WATER RECYCLE RATE1

86.2% 88.6% 90.7%

2015 2016 2017

3.45

2.24

5.50

1Refers to the volume of water reused in steam generation.

2In June 2019, our board composition changed. Three women (27%), including the chair of Devon’s Audit and Governance committees, currently serve on our board of directors.


7

Operations Overview

Devon Energy explores for, develops and produces oil, natural gas and natural gas liquids in areas where the oil and gas industry has long been active onshore in the United States and Canada. Founded in 1971, we have a formidable portfolio of exploration and production assets and operations that provide stable, environmentally responsible production and a platform for future growth.

Devon’s main objectives are to optimize returns and deliver capital-efficient cash-flow growth from our premier asset portfolio and deep inventory of opportunities. We seek to achieve this through our strategic priorities which include expanding high-margin production, employing capital discipline, simplifying our portfolio and maintaining significant financial strength. For more information on our progress, see our detailed quarterly updates.

A premier portfolio of assets with a deep inventory of opportunities

MAXIMIZE CASH FLOW

FOCUS ON CAPITAL EFFICIENCY

MAINTAIN STRONG BALANCE SHEET

PROACTIVELY HIGH-GRADE ASSET PORTFOLIO

STRATEGICALLY DEPLOY EXCESS CASH

STRATEGIC OBJECTIVE: CAPITAL-EFFICIENT CASH-FLOW GROWTH

Strategic Priorities

Quarterly Results (devonenergy.com)


https://investors.devonenergy.com/investors/quarterly-results/default.aspx

8

Focus on the Delaware Basin and the STACK Play

As part of a focused development program, our drilling activity is concentrated in the Delaware Basin of southeast New Mexico and the STACK play in west-central Oklahoma. These two highly desirable plays are top-tier in North America and franchise assets for Devon, creating a platform for long-term growth. Through a strategy of developing large-scale, multi-zone projects, we are improving operational efficiency, reducing costs and boosting recovery rates. All of this is driving higher rates of return for Devon.

The Delaware Basin exposes Devon to world-class oil opportunities across 1.3 million net acres by formation. We are ramping up multi-zone projects focused on the oil-rich Bone Spring, Leonard Shale and Wolfcamp formations. Among our recent achievements in the Delaware Basin are faster drill times and higher well productivity. To expedite future drilling and realize our immense resource potential, we are using a new permitting process in conjunction with the U.S. Bureau of Land Management for our multi-zone development plans in the Delaware Basin.

Devon has the industry’s premier position in the STACK, with more than 600,000 net acres by formation in the heart of the play. We have generated strong production growth, continually lowering our cost structure and improving drilling efficiencies.

Our full-field development in the STACK is accelerating, with multi-zone activity shifting to the oil window of the Meramec formation.

Our Rocky Mountain operations focus primarily on emerging oil opportunities in the Powder River basin. We are targeting the Turner, Parkman, Teapot and Niobrara formations, where we have expanded our drilling inventory, particularly in Converse County, Wyoming.

O P E R AT I O N S OV E R V I E W

Value Levers

• Long laterals

• Multi-zones

• Shared infrastructure

Benefits

• Lowers capital intensity

• Optimizes well performance

• Increases resource recovery

• Minimizes downtime

• Accelerates payout

• Increases NPV per drilling unit

Small-scale development Large-scale development

Diagrams for illustrative purposes only.

16 Wells / 8 Pads / 1 Zone

1 MILE

8 Wells / 2 Pads / 1 Zone 8 Wells / 2 Pads / 2 Zones

1 MILE

1 MILE


9

Cash-flow generating assets

In our top-tier cash flow-generating assets, Devon’s strategy is to efficiently manage base production, maintain a low cost structure, and redeploy cash flow mainly into our Delaware Basin and STACK growth opportunities.

In Alberta, Canada, Devon produces strong cash flow from our heavy oil operations in the Athabasca oil sands. We own a 100 percent working interest in the Jackfish complex, where we use the steam-assisted gravity drainage (SAGD) process to recover oil. In SAGD, heat from a steam-injection well liquefies the dense bitumen, allowing it to migrate to a production well located beneath. Devon uses only saline water to create steam in our SAGD operations. The mixture of bitumen and water is pumped to the surface, where the water is recovered and recycled.

Devon’s cold-flow heavy oil activities in the Bonnyville and Lloydminister areas of Alberta, use an extraction process called cold heavy oil production with sand (CHOPS). Gas that is entrained in the heavy oil solution is also produced.

O P E R AT I O N S OV E R V I E W

Devon’s Eagle Ford operations are located in the economic core of the play in DeWitt County in south Texas, where light-oil wells are delivering excellent rates of return. We benefit from Eagle Ford’s low-cost access to premium Gulf Coast pricing for our production.

Since 2002, Devon has drilled more than 5,000 wells in the Barnett Shale of North Texas, one of the top-producing natural gas fields in North America. We are focused on enhancing existing production in our Barnett Shale wells through refracturing, artificial lift and line-pressure reduction projects, as well as divesting select properties in the field.


10

In recent years, the oil and natural gas industry has positioned the U.S. to meet its current and future energy needs, making our country, economy and people more secure. Our industry is powering innovation and environmental and economic progress, and Devon is proud to be a part of it. With our vision to be the premier independent oil and natural gas company in North America, the work our employees do every day contributes to the local, national and global economies. We produce a valuable commodity that is fundamental to society, and we do it in a safe, environmentally responsible and ethical way, while striving to deliver strong returns to our shareholders.

In a strong and growing economy, there’s a place for all forms of energy – carbon fuels, wind, solar, nuclear, biomass, hydro and others still to be developed. Today, we rely primarily on oil and natural gas to fuel the systems of our daily lives – transportation, heating and cooling, lighting, manufacturing, telecommunications and technology. Many of the products we use every day are made from plastics and compounds derived from oil and natural gas, which also fuel the machinery required to manufacture these materials.

Oil and natural gas are vital to our way of life. At Devon, we support a consistent, reliable regulatory framework for energy; society depends on sound measures that are both effective and economically viable to ensure there is adequate supply today and in future decades.

The Future of Energy

Oil and natural gas will fuel the world economy for decades to come.

10


11

Growing demand for all forms of energy

The U.S. Energy Information Administration (EIA) projects that between now and 2040, global demand for all forms of energy will grow. While demand for coal is expected to grow slowly, much faster growth is anticipated for renewables and natural gas. The changes should be most visible in electricity generation. Still, coal is expected to remain the world’s largest energy-related source of CO₂ emissions in 2040.

As demand grows for renewables in the coming years, natural gas is expected to overtake coal by around 2030 to become the No. 2 source of energy behind oil. And by 2040, oil and natural gas together will still account for 55 percent of worldwide energy consumption, according to EIA.

Natural gas is already assuming a larger role as a transportation fuel. It’s cleaner than coal, emitting less than half of the CO2 , and with virtually none of coal’s pollutants like mercury and

sulfur. Natural gas is plentiful, affordable and accessible in North America and around the world. At Devon, we are particularly well-positioned to help meet growing demand for natural gas.

Devon expects development of new energy sources to continue. Meanwhile, it’s our job to produce the energy the world needs now, and to do it thoughtfully and responsibly. We execute our plans based on rigorous analysis of the global outlook for energy and the potential for new regulations, while recognizing concerns about climate change.

We’re confident that oil and natural gas will remain the world’s most affordable and accessible forms of energy for many years to come. And Devon intends to be a sustainable provider of these essential resources over the long term.

Source: EIA, International Energy Outlook 2018

WORLD ENERGY CONSUMPTION BY ENERGY SOURCE(quadrillion Btu)

petroleum and other liquids

coal

natural gas

renewables

nuclear

2000 2010 2020 2030 20401990

250

200

150

100

50

0

History Projection

T H E F U T U R E O F E N E R G Y


E N V I R O N M E N T

Overview - UPDATED

Air Quality

Greenhouse Gas Emissions - UPDATED

Climate Change - UPDATED

Water Management - UPDATED

Land Conservation

Seismicity

Waste Management

Spill Prevention

Well Safety

The Environment section of our 2018 Sustainability Report includes:

D E V O N E N E R G Y 2018 S U S TA I N A B I L I T Y R E P O R T | E N V I R O N M E N T

13

Environment Overview

Our core values guide Devon’s approach to environmental stewardship: We are committed to preserving the quality of the environment for future generations as we find and produce oil and natural gas.

In practice, this means we’re proactive and action-oriented, incorporating environmental considerations into our activities, decisions and compensation, often going above and beyond what is required by law. We seek and apply economically feasible technologies to improve our environmental performance.

Because of our emphasis on air, land and water stewardship, we’ve established a positive record of performance recognized by our peers and regulators. Reducing emissions has been a long-standing focus at Devon, and we have documented our efforts and results in Carbon Disclosure Project (CDP) Climate Change Reports for 14 years.

Proactive Stewardship and Conservation

Maude Ramsay environment and regulatory manager

Maude leads a multi-disciplinary team for Devon Canada focused on air, water, land and regulatory management. “We are coming up with creative and innovative ideas to address the environmental and regulatory risks faced by the energy sector today. I’m inspired by the collaboration across the company to support the continuous improvement of our environmental performance.”

RESOURCES

To ensure employees and contractors share and participate in Devon’s environmental commitment, we make the following resources available:

2018 CDP Climate Change Response

2018 CDP Water Response

2018 Disclosing the Facts

Environment, Health and Safety (EHS) Philosophy

Describes the expectations and principles that guide the decisions that affect our operations.

Devon Canada’s Environment, Health and Safety Management System (EHSMS)

Describes our “plan-do-check-adjust” program to continuously drive innovation and improve performance. Our programs are designed to incorporate environmental considerations into all business activities and decisions. This includes identifying risks and taking proactive steps to reduce impacts, and measuring performance for continued improvement.

Environmental risk indicator Tracks leading and lagging indicators

of environmental performance every month. Indicators include regulatory NOVs (notices of violations), audit nonconformities, reportable spills, public complaints and voluntary self-disclosures.

(continued next page)


http://www.devonenergy.com/documents/Sustainability/Environment/DVNEnvironmentPhilosophy.pdf

https://www.devonenergy.com/documents/Sustainability/Environment/Disclosing-the-Facts-2018_FINAL.pdf

http://www.devonenergy.com/documents/Sustainability/Environment/DVN-2018-CDP-Water-Response.pdf

https://www.devonenergy.com/documents/Sustainability/Environment/DVN-2018-CDP-Climate-Response.pdf

14

Our land stewardship practices distinguish our work in environmentally sensitive areas. As an industry leader in water conservation for the past decade, Devon conserves and protects fresh water supplies and reports our progress in the CDP Water Report.

Devon engages with investors, communities and other stakeholders on climate change, water use, seismicity and other environmental issues. We’ll continue to listen and act on concerns to earn our stakeholders’ trust and protect the environment.

We track specific metrics for greenhouse gas (GHG) emissions, water use and disposal, and spills to the environment, and we share them in this report and other public disclosures. We recognize the importance of stakeholder feedback. We’re increasing our transparency in this report to make it easier for stakeholders to track our performance. For more detailed metrics, please refer to our 2017 CDP Climate Change Report and CDP Water Report.

Environmental performance management resources

Devon has a strong commitment to managing our environmental performance. In 2017, we chartered the Environmental, Social and Governance (ESG) Steering Committee to set strategy and monitor performance on environmental issues, ever mindful of stakeholder concerns.

Taking ownership of environmental performance is an important responsibility of every Devon employee. We expect employees to demonstrate environmental stewardship, be accountable for their actions, plan ahead, participate in environmental programs, recognize positive attitudes and behaviors, and communicate openly.

Devon is a member of Canada’s Oil Sands Innovation Alliance (COSIA), an alliance of oil sands producers focused on accelerating the pace of improvement in environmental performance through collaborative actions and innovation. COSIA was launched in 2012 and brings together world-class expertise from industry, government, academia and the wider public to improve measurement, accountability and environmental performance in greenhouse gases, land and water, and environmental monitoring. The intent of COSIA is to accelerate innovation and environmental performance in the oil sands through a continual focus on collaboration and transparent exchange, by setting environmental performance goals and reporting publicly on progress.

E N V I RO N M E N T OV E RV I E W

RESOURCES (continued)

Environmental compliance process Provides direction to our employees

on fundamental strategies, processes, procedures and communications we use to identify and comply with regulations and operate in an environmentally responsible way.

EHS protocols for business processes Required of employees and

contractors to ensure environmental, health and safety compliance. The protocols cover air quality; waste management; spill prevention, control and countermeasures; contractor EHS management; pre-construction environmental clearance; EHS training; event reporting; emergency preparedness; EHS risk management; and EHS audits.

EHS audits Conducted regularly in each operating

area to identify and mitigate environmental risk and improve performance.

Canada’s Oil Sands Innovation Alliance


https://www.devonenergy.com/operations/supply-chain/requirements

https://www.cosia.ca/

15E N V I RO N M E N T OV E RV I E W

ENVIRONMENT METRICS 2015 2016 2017

Direct GHG Emissions (million tonnes CO2e)1 7.28 5.27 5.37

U.S. 4.35 2.38 2.39

Canada 2.93 2.89 2.98

Direct and Indirect GHG Emissions (million tonnes CO2e)1 7.97 5.84 5.94

Less flaring and a ramp-up of LDAR helped reduce U.S. GHG emissions. Canada's minor fluctuations reflect our steam-to-oil ratio, reduced venting and increased oil production.

GHG Emissions Intensity (tCO2e/MBOE)1

U.S. 14.83 10.96 11.77

Canada 64.85 56.01 56.30

Despite nearly twice as many well completions in 2017, emissions intensity was held largely in check by better facility design and control technology.

Methane Emissions (million tonnes CO2e)1 2.16 1.50 1.30

Methane emissions have been decreasing due to improved emissions-control technologies, reduced venting and flaring and improved LDAR practices.

Methane Emissions Intensity (tCO2e/MBOE)1

U.S. 4.52 4.33 4.17

Canada 18.57 10.96 8.75

Lower methane emissions intensity is a result of concerted efforts to reduce venting and flaring and improve our LDAR practices.

U.S. Methane Emissions Intensity (% of natural gas produced)2 0.339% 0.315% 0.309%

Devon’s U.S. methane emissions intensity rate will be used to track progress towards Devon’s goal of achieving a methane intensity rate of 0.28% by 2025. In 2018, Devon's methane-intensity rate was estimated at 0.32%, pending EPA review and third-party verification.

Indirect Emissions - Electricity Use (million tonnes CO2e)1 0.69 0.57 0.57

Consumption of electricity represents a small portion of our overall emissions profile.

Energy Used - Fuel and Electricity Use (trillion BTU)1 82.35 84.22 88.87

As our Jackfish SAGD complex matures, greater production requires more fuel.

U.S. Water Usage (million bbl) 54.19 25.40 51.32

Water use varies with activity levels. However, in any year, Devon seeks alternatives to fresh water supplies.

U.S. Water Usage Intensity (million bbl/well completion) 0.17 0.16 0.22

Recycled (million bbl) 3.45 2.24 5.50

Sourced (million bbl) 50.74 23.16 45.82

Devon is an industry leader in developing recycled-water technologies and best practices.

Canada Water Usage (million bbl) 12.6 10.9 9.4

In Canada, we use surface water, saline and non-saline groundwater. Water use has decreased over time due to improved recycle rates.

Canada SAGD Water Recycle Rate3 86.2% 88.6% 90.7%

We recover and reuse most of the water used in the steam-injection process. Improved reservoir management has helped to increase our recycle rate.

Canada SAGD Non-Saline Water Usage (million bbl) 0.0 0.0 0.0

Our Jackfish project was the first commercial SAGD facility to use zero fresh water for steam generation.

Global Reportable Spill Events Released to the Environment (events) 111 159 170

As we seek to reverse the trend in spill events, we remediate, investigate the cause and take corrective action to prevent recurrence.

Global Reportable Spill Volumes Released to the Environment (barrels) 14,035 3,108 3,826

We had a sizable spill in 2015 in a water-recycling system. Results since then reflect new safeguards in all of our operating areas.

1Our emissions reporting methodology varies depending on the emissions source and the applicable regulatory requirements, which includes only emissions reportable under EPA's Greenhouse Gas Reporting Program (GHGRP) in the U.S.

2Our U.S. methane emissions intensity rate calculation includes all natural gas produced at Devon operated facilities and all methane emissions from Devon facilities associated with the production of oil and natural gas. Click here to see Devon’s calculation methodology for methane emissions intensity for U.S. operations.



https://www.devonenergy.com/documents/Sustainability/Performance-Metrics/DVN-methane-intensity-calc.pdf

16

Air Quality

Controlling and reducing emissions is of vital importance to our environment and our business. The more efficient and effective our operations, the better our environmental performance, risk management, regulatory compliance and shareholder returns.

Air emissions performance management

Devon’s Environmental, Social and Governance (ESG) Steering Committee reviews our air emissions performance and programs in the context of an evolving regulatory, legal and stakeholder landscape. Current and emerging issues are communicated to Devon’s senior leaders to inform their deliberations about managing risk and ensuring compliance with regulations and laws.

Devon’s environmental management program in the U.S. includes an air quality protocol that clearly defines responsibilities and requirements for communications, compliance, recordkeeping and training. In Canada, our Environment, Health and Safety (EHS) Management System is designed to manage and minimize environmental risks and liabilities.

Compliance with all applicable federal and state environmental laws and regulations is one of the guiding principles in Devon’s EHS Philosophy. We have an environmental compliance process to ensure our employees meet the requirements of Devon’s air permits in our operating areas. Our data management team created an innovative web-enabled database that summarizes requirements for new and modified air permits. Linked to our enterprise data system, it quickly distributes information to the people directly responsible for complying with various aspects of air permit requirements.

Vapor recovery equipment - Eagle Ford, Texas

Limiting VOCs and NOx emissions

Devon facilities and equipment that may emit gases known as volatile organic compounds (VOCs) or nitrogen oxides (NOx) are subject to state permits or emissions-authorization limits. Requirements are clearly communicated to operating facilities to ensure we maintain compliance with the relevant permits or limits. Some Devon facilities are subject to annual emissions inventories, which we submit to the appropriate regulatory agencies. In states that require these inventories, the information is publicly available.


17

2017 air emissions methodologies and performance

In Canada, we are involved in and fund a number of initiatives designed to address regional impacts associated with oil sands development, including regional air monitoring. Devon, along with other industry members, contributes to the funding of air-monitoring stations in the communities of Conklin and Janvier, near our Jackfish operations.

With our culture of continuous improvement, Devon consistently looks for ways to be more efficient and effective in everything we do.

We’re improving our air emissions performance companywide in a variety of ways. By visiting sites and using infrared camera technology, we continue to learn and incorporate best practices in facility design, equipment improvements and maintenance to further reduce emissions from our facilities.

Devon continuously evaluates new technologies to improve environmental performance. One of the novel technologies we’re using to reduce emissions is fuel cells, which provide an alternate electric energy power supply at some remote locations in the Jackfish project area. They’re paired with existing solar technology to provide power to our observation wells, replacing the use of diesel-powered generators.

Devon continuously monitors air quality near the Jackfish complex.

We have taken major steps to reduce emissions at existing facilities by identifying and fixing leaks, and in 2017 expanded our leak detection and repair program to include valves, pumps and other equipment. These ongoing efforts have largely resolved the highest-risk issues, enabling us to reduce our emissions intensity over time.

A I R Q UA L I T Y


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GHG emissions methodology and performance

Devon reports air emissions from fuel combustion, flaring, fugitive emissions, venting and storage losses (Scope 1) and electricity consumption (Scope 2) for assets under our operational control. In the U.S., we collect data and submit annual GHG emissions according to the requirements of the U.S. Environmental Protection Agency (EPA) Mandatory Greenhouse Gas Reporting Rule. In Canada, emissions are reported according to provincial and federal regulatory requirements.

Our commitment to environmental stewardship includes delivering visible, measurable results. For 15 years, Devon has voluntarily participated in the Carbon Disclosure Project (CDP), providing an annual look at what we’re doing to control and reduce emissions. Our CDP climate change disclosures are publicly available. Below are links to our previous responses:



2016 CDP Climate Change Response Devon’s response to the Disclosing the Facts survey, which is sponsored by As You Sow, a non-profit that works in the area of shareholder advocacy, is available below:



Greenhouse Gas Emissions

Devon takes a proactive approach to reducing carbon dioxide (CO2), methane and other greenhouse gases (GHG) that trap heat in the atmosphere. Reducing GHG emissions intensity is one of the guiding principles in our EHS Philosophy.


http://www.devonenergy.com/documents/Sustainability/Environment/DVN-CDP-response-2017.pdf

http://www.devonenergy.com/documents/Sustainability/Environment/DVN-CDP-response-2016.pdf


http://www.devonenergy.com/documents/Sustainability/Environment/DVN-2018-CDP-Climate-Response.pdf

http://www.devonenergy.com/documents/Sustainability/Environment/Disclosing-the-Facts-FINAL.pdf

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Methane capture

We apply industry-leading tools and techniques to capture methane in our well completions and production equipment. We perform frequent equipment inspections across our operating areas using optical gas-imaging cameras to detect leaks. We’ve invested more than $1 million in infrared cameras, a key tool in our LDAR (leak detection and repair) program. Our inspections are prioritized on our highest-volume facilities.

In the U.S., we have hired environmental operators whose primary focus is conducting infrared camera surveys and making sure that repairs are successful. Our surveys comply with the requirements for production sites under EPA regulations and Bureau of Land Management venting and flaring regulations.

We seek to avoid venting and limit flaring at all locations. It’s important that we capture and retain as much gas as possible by continually evaluating and optimizing facility design; installing and maintaining reliable pressure-relief valves to minimize tank release; installing vapor-recovery equipment to capture flash gas emissions and route them to a pipeline; and utilizing green completions during flowback operations. Where flaring is unavoidable, we install monitoring equipment to help ensure the gas is properly destroyed rather than vented.

To help our field offices meet the regulatory requirements for inspections, our environmental and operations teams developed a mobile app to capture, enter, track and document LDAR survey findings. The app automatically syncs with our enterprise data system, schedules any needed repairs, creates work orders and documents them, all of which are required for compliance. It’s made our LDAR program more efficient,

Over the past several years, we have implemented new technologies and upgraded our existing operations to reduce methane emissions from production sites. Since 2011, we’ve replaced high-bleed controllers on hundreds of wells in Wyoming, Oklahoma, New Mexico and Texas, and we no longer use them on new wells. We’re also investigating other new ways to reduce methane emissions from our operations.

G R E E N H O U S E G A S E M I S S I O N S

consistent and systematic. It also has enabled us to track and trend our repairs so that we can further refine our proactive maintenance programs.

More details about our LDAR program are available in our Disclosing the Facts survey response and our CDP Climate Change Report.

A target to limit emissions

We announced in June 2019 that we’re establishing a target to limit methane emissions for U.S. oil and natural gas production operations. By 2025, we believe we can achieve a methane-intensity rate of 0.28 percent or lower. This methane intensity rate will be calculated based on emissions from Devon-operated oil and natural gas production facilities as a percentage of natural gas produced.

By continuing to operate responsibly and increasing our focus on leak detection and repair, we’re confident we can meet this ambitious target. The actions we’re taking affirm our commitment to responsible production operations, going beyond what is required by law in pursuit of continuous improvement in environmental performance.

We expect the data collected through our LDAR program to help us establish best management practices and identify technology, equipment and materials that are more reliable in limiting emissions.

We already incorporate short-term emissions performance as a factor in executive and employee compensation. Setting a longer-term target signals the next step forward in our proactive pursuit of environmental protection and lower greenhouse gas emissions.


20G R E E N H O U S E G A S E M I S S I O N S

Canada’s Oil Sands Innovation Alliance

Devon is a founding member in Canada’s Oil Sands Innovation Alliance (COSIA), whose members collaborate on innovations for finding ways to reduce the need for steam during heavy oil extraction – increasing energy efficiency and reducing emissions.

Devon Canada also is supporting the NRG COSIA Carbon XPRIZE, a global competition encouraging development of new technologies that convert CO2 into valuable products. Prize finalists announced in April 2018 are working on technologies that could reduce the cost of managing CO2.

As a member of COSIA, Devon funded the Alberta Carbon Conversion Technology Centre (ACCTC) where half of the XPRIZE finalists will test their technologies. ACCTC is the first of its kind in Canada and provides innovators with the ability to test and refine their technologies for years to come using flue gas emissions from a natural gas-fired power plant.

THE NEW FACE OF CO2The $20M NRG COSIA Carbon XPRIZE will drive innovation for a positive energy future by incentivizing the development of technology that can convert CO2 into valuable products.

carbon.xprize.org

With support from Devon, the NRG COSIA Carbon XPRIZE competition is encouraging development of breakthrough technologies to convert CO 2 emissions into new materials and everyday products, as seen in this promotion of the program.

CANADA GHGEMISSIONS INTENSITY(tCO2e/MBOE)

2015 2016 2017

64.8556.01 56.30

Devon Canada GHG emissions performance

In steam-assisted gravity drainage (SAGD) production, the primary source of GHG emissions is steam generation. Emissions intensity performance is heavily correlated to the amount of steam used to produce oil, also known as the steam-to-oil ratio (SOR). Devon’s Jackfish complex in northeastern Alberta has a competitive SOR compared to peer facilities. The Jackfish complex also is designed to capture and use the gas that is produced on-site.

In Alberta, GHG emissions are regulated under Alberta’s Carbon Competitiveness Incentive Regulation. This regulation puts a price on carbon and requires facilities to meet a product-based performance standard. There has been a price on carbon in Alberta since 2007.

Devon also has Canadian heavy oil production that does not use steam. At Bonnyville, we capture gas produced with our cold-flow oil production. We use it as fuel, and when economically feasible, we route it via pipeline to be sold. Our focus on reducing vented emissions has allowed us to increase the amount of gas that we conserve from 78 percent in 2015 to almost 90 percent in 2017.

Details about the sources, reduction programs and metrics for our GHG emissions are available in our CDP Climate Change Report, which is also publicly available at www.cdp.net.


21

Climate Change

To be an industry leader, we must be good stewards as we pursue innovation and operational excellence in our exploration and production activities. In the process, we will continually seek to minimize and mitigate the impact of climate change.

Listening to our stakeholders

Devon assesses climate change as part of our companywide risk management process, and our Environmental, Social and Governance (ESG) Steering Committee monitors emerging, related public policy, legislation and regulations. We’re already seeing legislative and regulatory initiatives seeking to reduce greenhouse gas emissions, and we are preparing for more changes in the future. We continue to comply with applicable laws and regulations promoting energy efficiency and reducing emissions. We encourage conservation and the advancement of emission-reduction technologies.

Our stakeholders have made known their concerns about the impacts that climate change could have on our long-range business plans, and we’re listening. As a direct result of shareholder engagement, and to better understand the potential long-term impacts of a possible carbon-constrained future, Devon retained an outside consulting firm to help assess the company’s oil and natural gas portfolio in relation to these potential impacts. Details of the analytical approach and results of the assessment are available in Devon’s Climate Change Assessment Report.

Climate Change Assessment Report


http://www.devonenergy.com/documents/Sustainability/Environment/DVN_Climate-Change-Assessment-Report.pdf

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Leading New Mexico in reusing water

Our history of leadership in water conservation includes being the first company to recycle flowback and produced water from natural gas wells in North Texas and becoming the largest user of treated produced water in New Mexico, where we led the effort to establish state rules to encourage the practice.

Today, reused water accounts for more than 80 percent of the company’s needs in arid southeastern New Mexico’s Delaware Basin, where we have constructed eight impoundment basins – each 15-feet deep and covering four acres. They’re integral to our operations and to saving water, connected by a local pipeline network without which we’d be hauling water that would fill about 500 trucks per day. We use fresh water in the Delaware only for blending, and only when reused water isn’t available in sufficient quantities.

Our history of leadership in water conservation includes local efforts in Texas, Oklahoma, New Mexico and Alberta.

A commitment to reuse water

Water is an essential resource for our neighboring communities and for Devon’s business. We’ve been building a track record in water conservation since 2004, when we set out to recycle water in the first U.S. shale play, the Barnett Shale in North Texas. Since then, we have collaborated with stakeholders in government, industry and communities to find ways to conserve water in our drilling and completions operations. Above all, we are committed to the principles of water conservation and reuse in our operations and to our core value to be a good neighbor.

Water-use performance management

Guided by the environmental stewardship principle in our EHS Philosophy, we continually seek to understand our relationship to the environment and adopt technically sound and economically feasible controls that will minimize our environmental impact. Devon’s water principles – stakeholder engagement, water management planning, technology evaluation and deployment, and best-practices development – aid us in executing a sustainable water management strategy that balances ecological, economic, operational and social criteria.

Devon’s EHS professionals and our Environmental, Social and Governance (ESG) Steering Committee monitor laws, regulations and stakeholder concerns related to water, and then share them with our leadership team. We have a staff of water experts in the U.S. that focuses on planning, technology and best practices, including evaluation of potential risks to our operations and the needs of surrounding communities. The plans are updated periodically, based on business needs and local environmental considerations.

Devon’s reused water volumes in New Mexico, by year:

21 millionBARRELS OF REUSED WATER OVER THE LAST 4 YEARS

2018

2017

2016

2015 2.9 million barrels

2.2 million barrels

5.5 million barrels

11 million barrels (estimate)

WaterManagement


23WAT E R M A N AG E M E N T

Jackfish is an industry model for water conservation.

ZEROFRESH WATER USEDFOR STEAM GENERATION

Conservation in Canada

In our oil sands operations in Alberta, Devon Canada’s Jackfish project was the first commercial steam-assisted gravity drainage (SAGD) facility to use no fresh water in its operations. Instead, we use only saline water to create the steam required to produce heavy oil, and more than 85 percent of this water is recycled.

Our water specialists use a regional numerical groundwater model to assess water-related risks; regular monitoring of surface water, wetlands and ground water is a routine part of business. As a member of Canada’s Oil Sands Innovation Alliance (COSIA), we collaborate on the development of innovative and sustainable solutions to reduce water use and increase water-recycling rates.

CANADA SAGD WATER RECYCLE RATE

86.2% 88.6% 90.7%

2015 2016 2017

The Oklahoma Plan

Devon takes a local approach to developing water-management plans, which consider the availability and quality of water, local ecosystems and habitats, regulations and other factors. In our home state of Oklahoma, where demand for water is growing, Devon is evaluating a water-management strategy based on the Oklahoma Comprehensive Water Plan. The goal of the state water plan is to consume no more fresh water in 2060 than was consumed in 2010.

Given our strong desire to be good environmental stewards, we have actively sought alternatives to fresh water. We are exploring how to further incorporate marginal-quality, non-potable water into our STACK operations. When feasible, we use brackish water, flowback and produced water as sources for well completions. In addition, we’ve built local pipelines connecting well sites to central water reuse and storage facilities that have conserved millions of barrels of water.

In Wyoming, our Rockies business unit is working to establish a water-recycling program as we prepare to increase our activity level there. We plan to begin recycling water in Wyoming in 2019.

Each year, we voluntarily report information about our water-management program and water-use metrics in the Carbon Disclosure Project (CDP) Water Report. Below are links to previous responses:



U.S. WATER USAGE BY OPERATING AREA (million bbl)

OPERATING AREA 2017

STACK 35.71

Delaware Basin 9.94

Rockies 2.65

Texas 3.02

Total U.S. 51.32

Disclosing the Facts Responses



http://www.devonenergy.com/documents/Sustainability/Environment/Devon-CDP-Water-2017.pdf


http://www.devonenergy.com/documents/Sustainability/Environment/DVN-2018-CDP-Water-Response.pdf

http://www.devonenergy.com/documents/Sustainability/Environment/Devon-CDP-Water-2017.pdf

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Land Conservation

Our EHS Philosophy sets the expectation that we will achieve excellence while working to protect our ecosystem. Protocols such as pre-construction environmental clearance guide our stewardship and regulatory compliance.

Good steward of the environment

Devon operates in prairies, grasslands, boreal forests and deserts, working with various stakeholders including public and private landowners. The industrial processes we use to produce oil and natural gas begin and end at ground level. We take great care to be good stewards of the land, wildlife and habitat, and we seek to minimize the surface disturbance we make.

Devon has a strong record of minimizing surface disturbance wherever we operate.


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Conservation and biodiversity projects

Our effort to protect the environment involves partners, including our neighbors, state and federal agencies such as the U.S. Bureau of Land Management (BLM), and industry groups including Canada’s Oil Sands Innovation Alliance (COSIA). Our perspectives are diverse, yet we all share an interest in preserving our shared landscapes for future generations.

To help sustainably manage our developments, we integrate land use and biodiversity considerations into early planning as we work to optimize surface land use. In Canada, Devon led a COSIA study of wetland reclamation specific to the steam-assisted gravity drainage (SAGD) recovery process we use in the Alberta oil sands. Wetlands cover roughly half of the Canadian boreal forest landscape, so protecting them is vital. The study produced industry guides for planning and executing boreal wetland reclamation, based on the latest science and best practices compiled by Devon Canada and our fellow COSIA members. The guides will be used across the Canadian energy industry.

Devon led the Regional Industry Caribou Collaboration (RICC), designed to protect woodland caribou populations through habitat reclamation and improved monitoring. RICC was an Alberta Emerald Foundation award finalist in 2017 and 2018. These awards recognized RICC and Devon for excellence in environmental achievement by our collaborative industry project which is coordinating habitat restoration and conducting research for this threatened species.

Devon has also taken care to conserve plant and wildlife habitat when making temporary access roads and drilling sites for our oil exploration in Canada. When our work is finished, the land is restored as soon as possible. We accomplish this using innovative techniques and equipment such as amphibious or floating excavators that allow year-round reclamation work on challenging sites within areas of important and biodiverse habitat.

In conjunction with the BLM and the University of Wyoming, we sponsor the Wyoming Conservation Corps, coordinating habitat restoration projects that protect wildlife and improve federal lands.

Devon served as an industry leader in conserving Dunes Sagebrush Lizard habitat in west Texas and southeast New Mexico. Our work with the BLM and the U.S. Fish and Wildlife Service produced public-private conservation agreements requiring companies to avoid certain areas and reclaim lizard habitat that may have been affected by oilfield activities in the past.

To earn and maintain the trust of our neighbors and stakeholders, Devon will continue to collaborate with partners to preserve the landscape and protect wildlife habitat in areas surrounding our operations.

Devon leads a collaborative industry working group focused on woodland caribou protection.

L A N D C O N S E R VAT I O N


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Seismicity

Devon has long supported the scientific community in examining possible links between oil and natural gas activity and seismic events.

Developing a scientific framework

Seismicity associated with oil and natural gas activities has emerged as an important phenomenon in recent years, and Devon shares our neighbors’ concerns. There is considerable research under way to study whether, and how, wastewater disposal wells and other activities relate to seismic activity. Devon has long supported the scientific community in examining possible links between oil and natural gas activity and seismic events.

Devon is an original member of the Stanford Center for Induced and Triggered Seismicity, which was founded in 2013 to undertake fundamental research on the physical processes responsible for certain seismic activity. Stanford has taken the lead in developing a scientific framework for assessing the risk of earthquakes. Devon, among other things, has contributed data generated

during our drilling and production activities to aid Stanford’s research into the stresses that exist in the earth’s crust.

Using three-dimensional imaging derived through oil and natural gas exploration activities, we have contributed information to the Oklahoma Geological Survey to advance efforts by state geologists to map previously undocumented faults. Devon also has supported directives and other work by the Oklahoma Corporation Commission to address seismicity, which have corresponded with a significant reduction in seismic activity in Oklahoma.

We continue to monitor and support the ongoing research to better understand the causes of seismic activity, as well as potential mitigation steps.

250

200

150

100

50

0

JAN

FEB

MA

R

AP

R

MA

Y

JUN

JUL

AU

G

SEP

OC

T

NO

V

DEC

2015

JAN

FEB

MA

R

AP

R

MA

Y

JUN

JUL

AU

G

SEP

OC

T

NO

V

DEC

2016

JAN

FEB

MA

R

AP

R

MA

Y

JUN

JUL

AU

G

SEP

OC

T

NO

V

DEC

2017

JAN

FEB

MA

R

AP

R

MA

Y

2018

EARTHQUAKE COUNT 2.7 MAGNITUDE OR HIGHER

Oklahoma Statewide EQ/day

Year to Year as of May, 2018

2018: 1.19

2017: 1.68

2016: 3.62

2015: 5.41

Source: Oklahoma Corporation Commission


27

Waste Management

As an oil and natural gas operator, being a good steward of the environment includes properly managing the waste generated in the field and in the office. We encourage employees and contractors to reduce the amount of waste for disposal through reuse, recycling and source reduction wherever possible.

Protocols ensure compliance

Our work can generate both hazardous and non-hazardous waste from our drilling and production processes, as well as office waste, such as packaging and bottles, wherever our staff works. Waste management protocols in our U.S. and Canadian operating areas ensure compliance with applicable regulatory requirements and our own corporate policies.

At Devon, all employees and contractors share responsibility for waste management, with clearly defined roles and requirements for waste management plans and for handling, shipping, disposal, training and minimization programs. We hold contractors responsible for managing the waste they generate and for complying with all local regulations. For employees and contractors who may come into contact with chemicals used or stored in the workplace, Safety Data Sheets summarizing hazard information are readily available.

To reinforce our commitment to compliance, Devon employees and contractors receive training specific to their job duties related to waste management and for chemicals used or stored in the workplace.

From waste stream to usable product

An example of a waste stream being recycled is found at our Jackfish complex, which includes an on-site waste landfill. We collect leachate fluid from the landfill and divert it to the Jackfish central processing facility, where it is processed and incorporated into the steam-generation process required for oil production.

We’ll continue to manage waste to safeguard our workforce, work locations and the environment.

Devon’s Jackfish complex features an innovative solution that combines responsible waste management with careful water conservation.


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Spill Prevention

To live out our core value to be a good neighbor and continue to earn our good reputation for land stewardship, Devon is sharply focused on preventing spills in our operations.

Seeking to stop spills before they happen

In keeping with the pollution prevention principle in our EHS Philosophy, we employ the appropriate tools and techniques to minimize discharges of oil, produced water and other materials from equipment and facilities. Examples of our preventive measures include secondary containment, nearly full tank alarms and offsite equipment monitoring with the ability to shut in facilities remotely. In Canada, Devon has spill-response equipment that includes helicopter-portable containers, mobile Western Canadian Spill Services (WCSS) trailers, as well as a mobile well-head deflector shield. Devon has loaned this equipment to nearby operating facilities.

To ensure compliance with environmental rules and regulations, Devon’s environmental management program includes a comprehensive Spill Prevention Countermeasure and Control (SPCC) protocol that details the responsibilities, equipment, procedures and steps to prevent, control and provide adequate countermeasures to a discharge.

One of the important steps we take to prevent spills is making employees and contractors aware of their responsibility to immediately report near misses, such as a storage tank approaching full volume or signs of wear that may result in a leak. We respond and make repairs as needed to stop any potential spill.

When a spill occurs, we remediate, investigate the cause and take corrective action to prevent recurrence. Our environmental risk indicator tracks spills and near-misses so we can identify trends and address the root causes of spills.

Tracking, reporting and targeting

Devon has a robust spill-reporting and tracking system that requires reporting unintentional releases of any material associated with our operations, such as oil, produced water and chemicals. We hold ourselves accountable for improving our performance by setting an annual corporate target for the lost-spill rate.

We’ll continue to invest in equipment, train our workforce and track progress to ensure we prevent spills and mitigate their impacts.

Monitors, alarms and remote communications are key tools in preventing spills.

FEWER BARRELS SPILLED from 2015 to 201773%


29

Well Safety

In every phase of the life of an oil and natural gas well, we’re safeguarding the people involved – workers and neighbors alike – with planning, design, drilling, completion and production operations using proven best practices, technologies, tools and materials.

Ensuring well integrity

At Devon, we’re focused on protecting the safety and health of our workers involved in drilling operations and committed to protecting the environment and neighboring communities.

Safety and environmental stewardship start with the planning and design of the wellbore, including the selection of equipment, materials and drilling techniques. We design our wells to meet high standards for the strength of the steel pipes that form the well, known as casing, and the quality and quantity of cement we use to separate and protect the multiple layers of casing. This attention to well construction keeps fluids in their proper place and protects groundwater zones for the life of the well.

During drilling operations, casing integrity is confirmed through pressure tests. Acoustic measurements let us know that the cement is properly bonded to the casing and to the surrounding rock formation.

During production operations, we continue to verify the well’s integrity by monitoring tubing and casing pressures, and by analyzing gas and water produced by the well. We also conduct periodic pressure tests and casing inspections.

Proper well construction keeps fluids in their place and protects groundwater zones.

Safe fluids management

In the design phase before we drill a well, we determine the drilling fluids that will be used. Devon prefers to use water-based fluids, but some rock formations require us to use oil-based fluids. When we use oil-based fluids, we employ a closed-loop system for safety and environmental protection. In keeping with the EPA Spill Prevention, Control and Countermeasure (SPCC) Rule, we maintain plans at drilling locations to minimize the impact of potential spills. We follow local, state and federal guidelines when handling drilling fluid and mud systems.

After a well is drilled, the next step is to complete it using a process known as hydraulic fracturing. Water, sand and additives are pumped into the wellbore to create or restore small fractures in the rock to stimulate production from

new or existing oil and gas wells. Water and sand make up 98 to 99.5 percent of the mixture. A full registry of wells and chemical additives, along with much more information about hydraulic fracturing, is available at fracfocus.org. Devon played a leading role in the creation of fracfocus in 2011, and continues to be a leading contributor of information to the site.

Devon’s EHS policies, protocols and operational expectations for well safety are clearly communicated in safety tailgate meetings at field locations. We pride ourselves on worker safety and empowerment; all of our crews have Stop Work Authority. Anyone may stop a job at any time if the person notices a potential hazard or is unsure about a task. This workplace culture helps keep people safe and protects the environment by reducing the risk of spills or emissions.


Overview

Workforce Safety

Employee Wellness

The Health & Safety section of our 2018 Sustainability Report includes:

HE ALTH & S AFE T Y

D E V O N E N E R G Y 2018 S U S TA I N A B I L I T Y R E P O R T | H E A LT H & S A F E T Y

31

Health & Safety Overview

RESOURCES

The following resources and processes are available to ensure employees and contractors understand Devon’s safety programs:

EHS Philosophy Describes the expectations and

principles that guide the decisions that affect our operations.

EHS audits Conducted regularly in each operating

area by auditors to find, mitigate and reduce safety risk and improve performance.

Behavioral safety vision Lists the actions that employees and

contractors should focus on daily to support a safe work environment and culture at Devon.

Annual field EHS orientation Covers work practices for all

contractors and employees who work in or visit field locations.

Additional safety orientation For oil haulers and workers involved in

seismic operations and transportation operations.

Watching Out for Ourselves and OthersSending Devon employees and contractors home safely to their friends and family after work each day is vital to our success. Part of our mission is to create an atmosphere of optimism, teamwork, creativity and resourcefulness, and that’s only possible if our workforce is safe.

Devon also is committed to a healthy workplace culture, so we offer employees a variety of wellness programs and amenities to address their physical, mental and financial well-being. We’ve seen a positive shift in our overall workplace health culture since stepping up these efforts almost 10 years ago, and we’re proud to play a role in the well-being of our employees and their families.

Colleen Dame benefits and wellness manager

In her career as a corporate wellness expert, Colleen has seen her field expand to address total well-being, including nutrition, financial health and stress management. More than ever, coworkers’ lives are full and busy. “My passion is to create programs and look for ways to help them plug into wellness where it fits best for them and improves their overall well-being.”


http://www.devonenergy.com/documents/Sustainability/Environment/DVNEnvironmentPhilosophy.pdf


32


Safety orientation video Devon President and CEO Dave Hager

introduces safety expectations and requirements.

Contractor safety requirements Contractors are provided Devon’s

EHS protocols and practices and are expected to meet or exceed them.

Safety communication Includes regularly scheduled safety

meetings in all field locations, pre-task tailgates at field job sites and town hall discussions. Our web-enabled exposure reduction app gives visibility to some of these engagements.

Safety Data Sheets Provides critical information on

chemicals and toxic materials stored and handled at Devon work sites.

Before you dig or do any type of excavation or construction work, call your state underground utilities locating service or One Call Center. Below is a list of One Call Centers in areas where Devon has pipelines.

New Mexico ...... 1-800-321-2537

Oklahoma ......... 1-800-522-6543

Texas ................. 1-800-344-8377

Wyoming............ 1-800-849-2476

In the case of a pipeline emergency, immediately seek a safe location and call 911.

Pipeline safety

Pipelines are essential for Devon to deliver oil and natural gas into the marketplace. To ensure our pipelines are in excellent condition, we test and maintain them using cleaning devices, diagnostic tools and corrosion control procedures. For more information on Devon’s pipeline maintenance program, you may email us at [email protected].

We want people to be aware of our pipelines and where they are located. We ask for help in preventing accidental damage to pipelines, and encourage immediate reporting of any suspicious persons or activities near a pipeline. Call your local law enforcement authorities by dialing 911.

Devon Energy Corporation subsidiaries that operate pipelines include:

Devon Energy Production Company, L.P.

Devon Gas Services, L.P.

Southwestern Gas Pipeline, L.L.C.

Health and safety performance management resources

Devon maintains safety protocols and provides comprehensive orientation and training to employees and contractors. We have an Environmental, Social and Governance (ESG) Committee, chartered in 2017, to help Devon senior leaders set strategy on safety performance, monitor safety issues and address stakeholder concerns.

We expect our employees and contractors to comply with safety rules and regulations and actively participate in efforts to improve safety. Our workforce is accountable for immediately reporting incidents and near-miss events, stopping at-risk work, working in a safe manner and informing visitors of emergency alarms and evacuation plans.

H E A LT H & S A F E T Y OV E R V I E W

HEALTH & SAFETY METRICS 2015 2016 2017

Fatalities (Employee and contractor workforce) 0 0 1

Safety Performance - Total Recordable Incident Rate (TRIR) 0.43 0.41 0.60

Employee TRIR 0.42 0.36 0.57

Employee Hours (million) 11.6 8.9 6.7

Contractor TRIR 0.45 0.44 0.63

Contractor Hours (million) 40.6 16.2 20.8

The increase in TRIR in 2017 was due primarily to increased industry activity and the associated influx of workers new to our industry.


mailto:[email protected]

https://vimeo.com/169907282


https://www.devonenergy.com/operations/supply-chain/material-data

33

Workforce Safety

No job is so important and no task so urgent that the necessary steps cannot be taken to perform it safely and maintain the health of our employees, contractors and the public.

Fulfilling our business goals

We take the necessary time and steps to perform work safely and maintain the health and safety of our employees, contractors and the public. We want everyone who works for Devon to go home safely to their friends and family after work each day.

Devon believes exemplary safety performance is essential to fulfilling our business goals and stakeholder expectations. We expect the active participation and support of Devon’s leaders, employees and contractors to achieve our safety goals. Our

A strategy for continuous improvement

Our safety governance structure includes Devon’s Environmental, Social and Governance (ESG) Steering Committee, which closely monitors safety performance and reports on progress to the executive committee as needed.

Our Senior Safety Leadership Team is responsible for setting Devon’s goals and strategy to continuously improve our safety systems. These senior leaders of operations and business units meet multiple times each year to review safety performance and identify opportunities to improve. For example, after the team

Environmental, Health and Safety (EHS) Philosophy outlines 10 guiding principles that we integrate into decisions influencing our operations. We hold ourselves and contractors accountable for fully implementing this philosophy and encouraging all stakeholders to express any concerns that may arise.

Everyone who works for Devon is expected to comply with applicable safety laws, regulations, policies and protocols, and apply sound professional judgment at all times.

identified distracted driving as a prevailing risk among Devon employees, in February 2017 we barred the use of electronic devices while driving on company business. Our vehicle policy now requires that employees safely park their vehicle when using a mobile phone, tablet, laptop or other electronic device, except in emergency situations. Following this change, Devon recorded zero vehicle-related significant incidents or fatalities (SIF) in 2017 for the first year ever. The company began 2018 with employees driving 41 million miles without an on-the-job vehicle SIF.

At Devon, safety performance is integral to business performance.


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Holding our contractors to high safety standards

Contractors perform about 80 percent of Devon’s work in the field; they’re vital to our operations. Our EHS Philosophy is clear: we expect our contractors to do high-quality work with personnel trained to work safely. We continually seek to raise the level of contractor safety performance through training and engagement, and we make every effort to utilize contractors that have the most robust safety programs and track records. In 2017, over 91 percent of our operational spending was with contractors that earned our three highest safety ratings.

Devon’s policy is to work only with approved contractors and vendors who complete our supplier qualification process and agree to an extensive set of policy, insurance and EHS requirements. Our contractors are responsible for having EHS programs that meet or exceed all federal, state/provincial and local laws, rules and regulations, as well as Devon’s standards and protocols.

To ensure contractors have the information they need to work safely, we make our safety requirements, expectations, protocols, Safety Data Sheets (SDS), forms and tools readily available on our company website.

We seek to raise the level of contractor safety performance through training and engagement.

W O R K F O R C E S A F E T Y


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Training, tools, knowledge and skills

Safety is part of the Devon culture that is reinforced throughout each employee’s career, starting on Day 1. New-hire orientation includes a presentation that describes the action-oriented behaviors Devon expects from employees to demonstrate workplace safety: visible commitment, accountability, anticipation, participation, recognition and communication. These attributes are also incorporated into our employee appraisal process.

One of our guiding principles is to give employees training and tools to ensure they have the knowledge and skills needed to implement our EHS philosophy and perform their jobs competently. Each year, Devon employees complete a survey that assigns safety training based on their job tasks. We offer more than 100 safety-related training topics online or on-site for office and field employees, as well as a presentation on leading with safety during new-leader orientation. Employees who work in or visit field locations complete a field safety briefing or orientation.

All of this training emphasizes our requirement to immediately report any incident or near-miss event and to be accountable for our own and others’ safety.

We also survey employees to gauge their knowledge of Devon’s safety programs.

In the U.S., contract workers are required to complete SafeLand or RigPass training, highly regarded industry safety programs, and a separate Devon orientation available through our online contractor portal. The field orientation describes our requirements while working on Devon locations, such as handling chemicals, housekeeping, waste management and communications. Additional briefings are required for oil haulers and contractors who work in seismic operations and transportation.

One of the most important points covered in safety orientation and at our work sites is Stop Work Authority. At Devon, contractors and employees have an obligation to stop the job and call for a safety meeting if they see an unsafe condition.

Communicating about safety is a way of life at Devon, from scheduled safety meetings in field locations to town hall discussions and supervisor ride-alongs.

Before work is performed, crews complete a pre-task tailgate conference to ensure they are aware of the potential risks and exposures, notifications, required personal protective equipment and other aspects of the job. Certain tasks, such as those performed infrequently or that involve elevated risk, may also require a job hazard analysis.

Devon encourages leadership engagements in the field

because they’re an important factor in safety performance and operational excellence. For example, in the Delaware Basin, leaders

from senior supervisors to assistant foremen are

required to spend one day each week in the field getting to

know our contractors. The engagements focus on building personal rapport and remind workers that Devon is concerned for their well-being. In addition, Devon provides our employees a web-enabled application that collects data from pre-task tailgates and supervisor ride-alongs, providing visibility to safety leadership engagements.



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Embracing change

As part of our continuous improvement efforts, employee-led teams perform EHS audits of our operations to proactively identify and reduce risk. Business units are responsible for developing and implementing corrective actions to address audit findings. Audits and corrective-action plans are recorded and tracked in the Devon Incident Management System. Audit findings often lead to operational changes to improve safety. For example, a 2017 audit resulted in an increased emphasis on training and field verification to ensure proper energy isolation during equipment maintenance activities. ZERO SAFETY AND

ENVIRONMENTAL INCIDENTS

TARGET

AT WORK AT HOM

E

BEHIND THE WHEEL

2018 safety focus

Devon remains committed to Target Zero, an incident-free workplace, by emphasizing personal and process safety. In addition, we’ll continue to hire the most qualified contractors and engage with them to improve their safety performance. Devon believes that keeping people safe is our moral obligation and, on this front, our work is never done.

When you’re tending to the details of working safely, you’re also tending to the details of operating successfully.

2017 safety performance

Devon sets corporate goals each year to drive safety performance improvements. We track the total recordable incident rate (TRIR) per 200,000 hours worked and SIFs. Devon’s TRIR increased to 0.60 in 2017 from 0.41 in 2016. We believe this was due primarily to increased activity in the oil and gas industry and the associated increase in workers new to our industry, which makes us more determined to improve our safety performance going forward. Through mandatory annual safety orientation, pre-task tailgate meetings and other means, we make our workforce aware of ways to prevent the most common causes of incidents and injuries, which range from mechanical lifting and rigging to hydrogen sulfide exposure. We believe if we can prevent life-altering and life-threatening injuries and illnesses, we will make significant progress in safety and health.



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Employee Wellness

We believe that if our employees are healthy and happy, we’ll have a more focused, productive and satisfied workforce, as well as higher retention rates and lower health care costs. To achieve these objectives, we provide generous health care benefits and a comprehensive wellness program with incentives for employees to address their physical, mental and financial well-being.

Through our online wellness portal, employees and their spouses can accumulate points for activities such as getting a physical exam, attending a safety meeting or taking a financial fitness assessment. Our U.S. employees who reach 1,000 points annually receive up to $2,500 in contributions to their health savings account. In 2017, 96 percent of Devon employees were registered on the portal (the highest of all the third-party provider’s clients), 84 percent completed their well-being assessment and 79 percent earned at least 1,000 points.

Devon’s commitment to being a responsible employer and community member starts and ends with the people who work here.

The Well, Devon’s on-site fitness center, is a welcoming place for employees to get some physical exercise.

84%2017 COMPLETED THEIR WELL-BEING ASSESSMENT


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Providing an excellent standard of care

In an effort to prevent health problems, our wellness program promotes healthy living. Our employees can exercise, attend workshops and learn from experts about fitness, nutrition, smoking cessation and other topics at our wellness centers in Oklahoma City, Calgary and in certain field offices.

In the U.S., from July 2016 through June 2017, 52 percent of Devon employees received an annual physical exam, up 15 percent from the prior year. More than 1,000 physicals were completed at The Doc, a medical clinic we established for employees and their families near our corporate headquarters in Oklahoma City. Operated by the University of Oklahoma Physicians Group, The Doc provides an excellent standard of care through short wait times and a high level of personal attention for each patient.

We also offer weight-loss programs. Of our U.S. employees who participated for at least 12 weeks in 2017, 94 percent lost weight and 65 percent lost at least 5 percent of their initial body weight. These programs contributed to improved biometrics in 2017, including overall decreases in blood glucose, body mass index (BMI) and blood pressure.

In Canada, Devon’s wellness programs focus on physical activity, nutrition, sleep, mental wellness and other health-related issues. Our Calgary on-site fitness facility enjoys more than 80 percent employee membership, with nearly 60 percent of members using the facility five or more times a month. At the Jackfish Lodge, Devon introduced the Choose Well menu in 2017 to

encourage employees and contractors to choose healthy menu items. In addition, 43 percent of Calgary employees and 34 percent of field employees participated in the Blood Pressure Bowl, a day-long event to promote blood pressure awareness.

Devon is proud to play a role in the improving well-being and health of our employees and their families.

Financial fitness good as gold

We recognize that financial issues also can affect our employees’ sense of well-being. Devon’s financial wellness program assists employees in mastering personal finance issues such as saving for retirement and managing debt. Our U.S. program includes third-party financial assessments and follow-up consultations with experts, access to a third-party website, a dedicated help line for Devon employees and on-site and web-based workshops. In 2017, 77 percent of employees took advantage of these offerings, and 45 percent of eligible employees completed their financial fitness assessment, up from 38 percent in 2016. About 88 percent of employees who completed the assessment also completed a review call with a third-party consultant, compared to 80 percent in 2016. As a result of this program, our employees’ average financial wellness and retirement readiness has increased from 62 percent in 2015 to 69 percent in 2017. We’re honored that Workforce magazine recognized these efforts and outcomes with its Optimas Award Gold in 2016.

In Canada, we offer financial wellness sessions; this program assists employees in basic to advanced financial planning. Our administration vendor provides online planning tools for our employees’ pension and savings programs, providing them with tools to achieve financial wellness.

More than 1,000 employees had their physical exams done at The Doc.

E M P LOY E E W E L L N E S S


G O V E R N A N C E

Overview - UPDATED

Corporate Governance - UPDATED

Shareholder Engagement

Ethics and Integrity

Public Advocacy

Emergency Preparedness

Risk Management

Cybersecurity

The Governance section of our 2018 Sustainability Report includes:

D E V O N E N E R G Y 2018 S U S TA I N A B I L I T Y R E P O R T | G O V E R N A N C E

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Devon is accountable to our stakeholders as we operate in a culture of integrity, guided by our core values. Our corporate governance policies and practices direct our decision-making, risk-management and relationship-building activities as we seek to deliver results in a financially, environmentally and socially responsible way.

We’re focused on innovation and operational excellence in our business and a high quality of life in our communities. In our work, we seek to demonstrate leadership in environmental, social and governance (ESG) performance and transparency.

Our investors, employees and neighbors, along with others who have an interest in our progress, are counting on Devon to meet our obligations, and we embrace the challenge.

RESOURCES

The following resources drive our efforts to be responsible stewards of our financial and operational assets, the environment, workforce and community safety, and stakeholder trust:

Corporate Governance Guidelines Define how our board of directors monitors the effectiveness of Devon policies and decision-making, while enhancing stockholder value and considering the long-term interests of other stakeholders.

Code of Business Conduct and Ethics Sets out the basic principles of

conduct for all Devon directors, officers, employees and, in Canada, contractors. ( Code for Canada)

Ethics and Compliance Helpline Available at all times to confidentially

report potential violations of the aforementioned code, ask an ethics-related question, get guidance on our ethics policy and follow up on a reported issue.

Code of Ethics for the Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer

Supplement to the Code of Business Conduct and Ethics reinforcing our expectation of ethical and legal behavior from our top executives.

Anti-Corruption Policy Explain the specific requirements

and prohibitions of applicable laws, especially the U.S. Foreign Corrupt Practices Act (FCPA).

GovernanceOverview

Setting the Tone for Performance

Chris Kirt

Data shows a correlation between stock performance and a company’s performance on Environmental, Social and Governance (ESG) issues. Chris leads Devon’s engagement efforts with stakeholders on ESG issues. His mantra: “We can’t be all things to all people, but we can be responsive and assure our stakeholders that they’re being heard.”


vice president corporate governance and secretary


http://www.devonenergy.com/documents/Sustainability/Governance/Corporate-Governance-Guidelines-with-Exhibits-Final-06-06-2018.pdf

http://www.devonenergy.com/documents/Sustainability/Governance/Code-of-Business-Conduct-and-Ethics-Policy.pdf

https://secure.ethicspoint.com/domain/media/en/gui/26645/index.html

https://www.devonenergy.com/documents/Sustainability/Governance/2019-Code-of-Ethics-for-the-CEO-CFO-and-CAO-04-18-2019.pdf



http://www.devonenergy.com/documents/Sustainability/Governance/Anti-Corruption-Policy-070518.pdf

http://www.devonenergy.com/documents/Sustainability/Governance/Code-of-Business-Conduct-and-Ethics-and-Code-Policies_Canada.pdf

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Bylaws

Certificate of Incorporation

Privacy Policy

Investor communications

Updated regularly to provide information on Devon’s progress to investors, analysts and other stakeholders.

Operations updates Inform investors, analysts and other

stakeholders about our exploration and production activities.

Annual proxy statements Describe matters of interest to our

shareholders, including director and executive compensation and shareholder proposals.

Annual Political Activity and Lobbying Report

Discloses Devon’s expenditures for corporate political and 527 contributions and federal and state lobbying.

Devon Energy Corporation Political Action Committee (DECPAC) Annual Report

Discloses PAC disbursements to candidates for state and federal office and to political parties.

Emergency Preparedness Protocol Defines the roles, processes and

activities we have in place to respond effectively and timely to natural disasters, operational disruptions, security incidents and other events.

We want everyone who works for Devon to know what we expect as we bolster our reputation for integrity and accountability. In 2017, we took an important step, forming an ESG Steering Committee focused on environmental, social and governance issues. The committee ensures our company’s senior leaders are focused, informed and engaged on ESG matters that influence our business planning, strategy and operations.

ESG Committee Charter

G OV E R N A N C E OV E R V I E W

GOVERNANCE METRICS 2015 2016 2017

Independent Board Members 78% 78% 78%

In June 2019, our board composition changed. Currently, 10 of our 11 board members (91%) qualify as independent under NYSE standards and SEC regulations.

Women Board Members 22% 22% 22%

In June 2019, our board composition changed. Three women (27%), including the chair of Devon's Audit and Governance committees, currently serve on our board of directors.

Political Contributions (thousands) – – $1,199

Devon's lobbying and political activity has traditionally been disclosed via public agencies. In 2018, we began publishing a Political Activity and Lobbying Report on our website.


http://www.devonenergy.com/documents/Sustainability/Governance/Bylaws-01-26-2016-Final.pdf

http://www.devonenergy.com/documents/Sustainability/Governance/2012-COI-Restated-Including-Amendment-from-06-06-2012-Final.pdf

http://www.devonenergy.com/documents/Sustainability/Governance/Privacy-Policy-11-4-15.pdf

https://investors.devonenergy.com/investors/default.aspx

https://investors.devonenergy.com/investors/events-presentations/default.aspx

https://investors.devonenergy.com/investors/annual-reports-proxy-statements/default.aspx

https://www.devonenergy.com/documents/Sustainability/Governance/DVN-2018_PoliticalActivityReport.pdf

https://www.devonenergy.com/documents/Sustainability/Governance/DVN-2018_PoliticalActivityReport.pdf

https://www.devonenergy.com/documents/Sustainability/Governance/DVN-2018_DECPAC_PoliticalActivityReport.pdf



http://www.devonenergy.com/documents/Supply-Chain/EHS-Requirements/Emergency-Preparedness-Protocol-Final-Update-R1.pdf

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Corporate Governance

Board balances stakeholder interests

The board follows our Corporate Governance Guidelines with the aim of enhancing shareholder value, while considering the interests of other stakeholders over the long term. Our directors also have primary responsibility for risk oversight for the company.

As required by the Corporate Governance Guidelines, a majority of our board members qualify as independent, based on New York Stock Exchange (NYSE) listing standards and Securities and Exchange Commission (SEC) regulations. As of June 2019, we met these requirements, with 10 of our 11 board members,

all committee members and the chairman who oversees board executive sessions all qualified as independent. Our president and chief executive officer (CEO) is the only non-independent director.

The charters of the board’s four committees – Audit, Compensation, Governance and Reserves – require all committee members to be independent. Following are brief descriptions of each committee’s purpose and responsibilities along with links to their charters.

The Devon board of directors mandates our commitment to strong corporate governance and accountability, and our core values to do the right thing and deliver results.


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Three of Devon's directors are women. In June 2019, when the board expanded from 10 members to 11, all were under the mandatory retirement age of 73.

Each director is expected to own a specific quantity of Devon stock in order to further align his or her interests and actions with the interests of Devon shareholders. While Devon executives receive no additional compensation for serving on our board, independent directors are compensated based on current market norms and receive a combination of retainers, meeting fees and equity awards.

Directors are elected at the annual meeting of shareholders for a one-year term. If a director does not receive the required plurality of votes in an uncontested election, our bylaws require the director to offer to resign. This has not happened in Devon’s history. In fact, our directors received an average approval of 98 percent at our 2019 meeting of shareholders.

CHARTERS

Audit Committee Charter The Audit Committee assists the

board in ensuring the integrity of Devon’s financial statements and reporting system, the compliance with legal and regulatory requirements and the performance of internal and external audit functions.

Compensation Committee Charter The Compensation Committee

assists the board in determining the compensation for Devon’s senior executives and provides oversight of the company’s employee benefit programs.

Governance Committee Charter The Governance Committee assists

the board in identifying qualified individuals for board membership and oversees the company’s corporate governance practices.

Reserves Committee Charter The Reserves Committee assists the

board with oversight of the annual review and evaluation of Devon’s consolidated petroleum and natural gas reserves, reporting system, compliance, regulatory requirements and related disclosures.

Audit Committee

Compensation Committee

Governance Committee

Reserves Committee

Independent Directors

Barbara Baumann M C

John E. Bethancourt M M

Ann G. Fox

Robert H. Henry M M

Michael M. Kanovsky M C

John Krenicki Jr. M M

Robert A. Mosbacher Jr. C M

Duane C. Radtke, Chairman M

Keith O. Rattie M M

Mary P. Ricciardello C M

Management Director

David A. Hager

C | Chairperson M | Member

C O R P O R AT E G OV E R N A N C E

Devon non-management director access information

Issues or concerns related to Devon’s accounting, internal accounting controls or auditing practices may be reported to the Audit Committee of the board of directors. To do so, or to make any report to Devon’s non-management directors, please call Devon’s Non-Management Director Access Line at (866) 888-6179 or email to [email protected]. All calls or correspondence may be submitted anonymously and are treated as confidential.


https://www.devonenergy.com/documents/Sustainability/Governance/Audit-Committee-Charter-Final-06.05.2019.pdf

https://www.devonenergy.com/documents/Sustainability/Governance/Compensation-Charter-Final-06-05-2019.pdf

https://www.devonenergy.com/documents/Sustainability/Governance/Governance-Charter-Final-06.05.2019.pdf

http://www.devonenergy.com/documents/Sustainability/Governance/Reserves-Committee-Charter.pdf

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Management incentivized by long-term value

Devon’s senior leaders are accountable for the company’s operational and financial results, asset portfolio management and shareholder returns. The leadership team provides the board with regular updates and assessments of the economic and operational risks and opportunities facing the company, with increasing emphasis on environmental, social and governance (ESG) matters.

Our executive compensation philosophy recognizes near-term operational and financial success and encourages decision-making that supports long-term value creation. Approximately 89 percent of the value of total direct compensation awarded to the chief executive, and an average of approximately 83 percent for other executive officers was delivered through performance bonuses and long-term incentives aligned with total shareholder return, dependent on 2018 performance, or both.

Each year, the company sets challenging performance goals designed to drive continuous improvement. Devon is committed to delivering strong returns on our investments through a highly engaged culture focused on innovation, safety, operational excellence, environmental stewardship and social responsibility. Despite commodity price challenges, Devon met many of its 2018 corporate goals, resulting in a company performance bonus score of 90 percent of target. Details about Devon’s executive compensation, philosophy, practices and decisions are available in our 2019 proxy statement.

Devon reached out to shareholders in 2017 and engaged with many of them on a variety of issues. In response to their feedback suggesting Devon and others in our industry should increase the emphasis on returns, we removed the reserves-addition metric and added new measures for cash return on capital employed and all-in rate of return to determine cash bonuses in 2018. We seek ongoing dialogue with shareholders to understand the executive compensation incentives they see as most appropriate.

C O R P O R AT E G OV E R N A N C E


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We view meaningful shareholder engagement as an important component of our success, so we involve Devon subject-matter experts as necessary to address the issues of concern to our shareholders. Through our engagements, we’ve learned that our performance on environmental, social and governance (ESG) matters is increasingly a factor in investment decisions. As a result, we are taking action and working to share our results more effectively.

Devon shareholders voted on four ESG-related shareholder proposals at our annual shareholders meeting in 2017. While none of the proposals received a majority vote, we took action to increase transparency and disclosures on our activities and performance. One of these steps was to form the ESG Steering Committee to improve and ensure the company’s responsiveness to ESG matters. The committee supports Devon’s commitment to transparency and assists the management team in setting ESG

Shareholder Engagement

Devon’s ESG Committee guides engagements and activities that will deliver on our commitments to various stakeholder groups.

strategy and overseeing communications with stakeholders. Employees on the committee come from disciplines ranging from environmental management and legal to operations, human resources and investor relations.

As part of its role, the committee has overseen a number of activities aimed at increasing transparency. For example, it was instrumental in making

our commitment to complete a climate change assessment by year-end 2018 on the impact of various scenarios informed by global climate change policies. The ESG Committee also recommended publishing the 2017 Political Activity and Lobbying Report and adding disclosures to our website. To further

improve transparency and make it easier for stakeholders to benchmark our performance, we added Sustainalytics and Institutional Shareholder Services’ (ISS) first environmental and social scoring system to the ESG-focused surveys and assessments in which we concentrate our efforts.

Devon received proposals for shareholder consideration and voting at the 2018 annual meeting. After company leaders engaged in dialogue with the proponents, all but one of the proposals was withdrawn. In some cases, proposals converged with our existing activities or a shift in approach, which helped satisfy a proponent’s request.

Devon’s ESG Committee continues to guide engagements and activities that will deliver on our commitments to various stakeholder groups.

Our management and board of directors seek to be transparent and responsive to shareholders’ concerns and to deliver competitive returns.

ESG Committee Charter


http://www.devonenergy.com/documents/Sustainability/Environment/DVN-ESG-Committee-Charter-FINAL-APPROVED-12042017.pdf

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We are committed to high ethical, moral, professional and legal standards in all of our business practices and relationships. Our Code of Business Conduct and Ethics describes the responsibilities all Devon directors, officers and employees have to our shareholders, governmental and regulatory authorities, our business partners, and to each other. We have an additional Code of Ethics for the Devon president and chief executive officer (CEO), chief financial officer and chief accounting officer requiring that their ethical and legal behavior is at the highest level. Our directors, officers and employees also are obligated to comply with our Anti-Corruption Policy, all other Devon policies and all applicable laws.

All Devon employees complete ethics training when they are hired and annually thereafter to ensure our high standards for conducting business remain top-of-mind.

Devon employees are also obligated to help enforce

the Code. Potential violations of the Code must be reported to our executive vice president and general counsel or to our Ethics & Compliance Helpline. The Helpline is available at all times to report harassment, inappropriate behavior, discrimination, fraud, unsafe acts, accounting irregularities or any other potential violation of the Code. It can also be used to ask an ethics-related question, request guidance on Devon’s ethics policy or follow up on a reported issue.

Employees and members of the public can make a Helpline report anonymously and confidentially. Devon does not tolerate retaliation against anyone who makes a good-faith report of an actual or suspected violation of the law or our Code. Devon investigates reports promptly and treats them as confidential to the extent possible. In late 2017, Devon upgraded the functionality and visibility of the Helpline, affirming our commitment to ethics and non-retaliatory, confidential reporting. Early metrics showed a modest increase in reporting that suggested higher awareness of the Helpline following the upgrade, without creating concern that there may have been under-reporting previously.

Ethics and Integrity

The Ethics & Compliance Helpline is available at any time.

At Devon, we embrace honesty and integrity, and one of our core values is to do the right thing.


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Our economy runs on energy and depends on consumer products made of plastics, fabrics and other compounds derived from oil and natural gas. As a leading U.S. independent oil and natural gas producer, Devon is keenly aware of our place in this economy.

Public Advocacy

We actively advocate on matters of public interest and are committed to doing so in compliance with all applicable laws, regulations and rules. In addition to making all required financial disclosures, we responded to shareholder feedback by publishing our first comprehensive Political Activity and Lobbying Report in March 2018. We will publish such a report annually to make it easier for stakeholders to see our expenditures for corporate political contributions, 527 contributions, federal and state lobbying, and the Devon Energy Corporation Political Action Committee (DECPAC).

At all levels of government, important decisions about energy and the economy require good information and honest consideration. We inform and engage policymakers, the public and our employees as we advocate for principles and positions in the legislative and regulatory process. Devon participates in business and industry associations,

trade groups and advocacy organizations to make our views known on a variety of proposed rules and laws. We also provide our employees with information and perspective to discuss industry issues with their friends and neighbors, and encourage them to participate in the electoral process.

Devon is active in the development of public policy. In 2017, we engaged with the federal Bureau of Land Management on its methane rule, with the Oklahoma Governor’s Coordinating Council on Seismic Activity, and with the state of New Mexico on its methane emissions regulatory framework.

We have a responsibility to our diverse stakeholder groups to participate in public policy discussions about issues that affect our business and the economy, such as taxation, regulation, trade and jobs.


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Project 180

We’re also proud that the construction of our corporate headquarters, Devon Energy Center, was the catalyst in a downtown Oklahoma City modernization and improvement initiative now nearing completion. In Project 180, we encouraged city leaders to reinvest the proceeds from the tax-increment finance district created through the construction of our 50-story tower to improve downtown public space. We’re getting new streets, walkways, bike lanes, parks and plazas encompassing eight miles of roadway and 220 acres of the city’s central business district. The streets’ clean appearance and functional nature are attracting new economic development and vitality to the center of the city. More than 2,500 new shade trees, high-efficiency LED lights, site furnishings and underground utilities are installed in an amenity zone behind the curb, buffering sidewalks from traffic and making downtown a welcoming space for residents and visitors alike.

Step Up Oklahoma

Perhaps our most important political activity is focused not on business, but on our community and our neighbors. For example, in 2017 Devon participated with business, civic and community leaders that formed Step Up Oklahoma, a nonpartisan group seeking to resolve the state’s short-term budget crisis and achieve long-term reforms of government operations. The bold proposal would generate $800 million in new revenue in the first full year to fund teacher pay increases, statewide health care programs and other core state services. More than $130 million of the new revenue would come from higher oil and natural gas production taxes. We supported the reforms and revenue measures, and as we encouraged our peers, neighbors, families and friends to do the same, we heard new conversations about our state’s financial and operational problems and how best to fix them.

MAPS

Another example of our commitment to our community is our active support of Metropolitan Area Projects (MAPS), a visionary capital improvement program that has sparked the revitalization of our hometown, Oklahoma City. Devon was among the first local businesses to support sales tax-funded construction and upgrades to the city’s cultural, sports, recreation, entertainment, education and convention facilities. Since the first MAPS election in 1993, Oklahoma City has seen more than $5 billion in new public and private investment throughout the city. And 25 years later, the projects keep coming, with MAPS 3 bringing a new 70-acre downtown park, new convention center and hotel complex, modern transit, and more than 50 miles of biking and walking trails.

Devon supports public policy initiatives that enhance quality of life.

P O L I T I C A L AC T I V I T Y


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Ensuring timely, effective response

Devon follows the FEMA (Federal Emergency Management Agency) National Incident Management System (NIMS), a common, nationwide approach to enable the whole community to work together to manage threats and hazards. In 2017, we provided in-house training on the NIMS Incident Command System (ICS) to about 600 employees throughout Devon to ensure a timely, effective response.

Emergency Preparedness

Each year, Devon conducts at least one functional, corporate-level training exercise and one full-scale exercise in a major operating area with community responders and simulated business interruptions. We also rotate aviation and digital security exercises every other year. Site-specific drills and annual OSHA-mandated drills in our field locations typically are conducted by Devon’s Environmental, Health and Safety (EHS) group.

Our operating area exercise in 2017 was a simulated direct tornado strike that trapped employees in our Bridgeport field office building in North Texas. Law enforcement officers, firefighters, emergency medical personnel, emergency management personnel and others from city, county and state agencies tested their skills with us. The scenario included a full search-and-rescue operation, triage and on-site treatment of employees. Several workers were transported to a local hospital, where medical staff tested their mass-casualty plan.

To ensure that our community partners benefit from these exercises, Devon follows the U.S. Department of Homeland Security Exercise and Evaluation Program. This allows us to provide community partners with documentation that validates their participation for federal funding and medical facility accreditation requirements.

Our training continued in early 2018 with an aviation exercise that tested our corporate incident command center, management team and response activation. We’ve also held full-scale exercises in Artesia, New Mexico, and Cuero, Texas, in 2018.

Devon advocates for strong emergency management capabilities at the federal level. The head of our emergency management team, a certified FEMA ICS instructor, leads the Emergency Management Working Group for the Oil and Natural Gas Subsector Coordinating Council associated with the U.S. Department of Energy.

We take a corporate-level and all-hazards approach to emergency response and recovery that focuses on business continuity, starting with a corporate emergency management function that reports to Devon’s security department. This ensures we can manage a wide variety of incidents that could affect our employees, communities, assets, business and the environment.

Devon's incident command center operates in accordance with the U.S. National Incident Management System.

Devon is fully prepared to respond to natural disasters, operational incidents, supply disruptions and other emergencies.


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Dealing with Hurricane Harvey

Our training paid off in 2017 when Hurricane Harvey hit the Texas Gulf Coast, curtailing our Eagle Ford operations in south Texas. Devon activated the Incident Management Team (IMT) in our Cuero field office and the corporate incident command center in our Oklahoma City headquarters. From Aug. 23-Sept. 8, the IMT secured our facilities and assets to prevent oil spills and gas leaks in the event of flooding and coordinated the shut-in and protection of field equipment. The team also communicated across the organization with frequent updates on the production curtailment and transportation of oil, natural gas and related liquids to Gulf Coast refining and petrochemical terminals, and mobilized humanitarian assistance for our employees and neighbors in the affected areas. As a result of using the ICS process, Devon had no injuries and operations were only minimally impacted.

Learning from experience

After every exercise and real response, we hold briefings and write a report outlining areas for improvement, best practices and strengths. Corrective actions are incorporated into Devon’s EHS incident tracking system, assigned accountability and tracked to completion.

One of our emergency response practices that has proven to be effective, including during Hurricane Harvey, is involving finance and budgeting professionals on the IMT. Their expertise at tracking costs and inventory ensures Devon is fiscally responsible and doesn’t waste resources, even in emergencies. As a result of the Hurricane Harvey response, we’re focusing on better coordination with first responders, landowners, operators, news media and other stakeholders. We are including new Devon groups on the IMT whose expertise could be valuable during an incident and holding more exercises with community partners. Harvey also reinforced our commitment to clear, concise and timely communications and effective use of social media during an incident.

Sharing best practices, along with training, helps Devon continuously improve our ability to protect our workforce, assets, neighbors, business and corporate reputation in the event of incidents and emergencies.

Emergency preparedness is a corporate-level function at Devon.

Our emergency management supervisor oversees a drill in Devon's incident command center.

E M E R G E N C Y P R E PA R E D N E S S


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Our board of directors has primary responsibility for risk oversight, with the four board committees monitoring risks relevant to their specific areas. Devon has a multidisciplinary, companywide risk-management process that considers risks as far into the future as possible, given evolving economic, regulatory and technological circumstances.

We use a corporate risk matrix to identify and evaluate business risk categories and individual risks based on criteria such as the likelihood of the risk occurring and economic and non-economic impacts. Devon leaders, managers and subject-matter experts use the matrix to determine and prioritize the material risks in our business.

The risk factors are shared internally and incorporated into our business strategy and planning processes. Externally, risks are formally communicated through our annual Form 10-K. We’ll continue to monitor our business risks with a sharp focus on Devon’s long-term sustainability.

Risk Management

Assessing and managing risk is essential to delivering results.


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Devon is a data-driven company. We see our use of advanced technologies in operations and corporate functions – in a culture of creativity and innovation – as a competitive advantage.

Cybersecurity

We have a responsibility to protect the information and systems that underpin our technology advantage. In the interest of sustainability, we ensure that proper consideration is given to information and cybersecurity risks in our enterprise risk management program. Devon’s senior leaders regularly update our board of directors on our information security programs and on potential threats.

Our information security program, which uses industry-leading technology and processes, is aligned with the National Institute of Standards and Technology Cybersecurity Framework for risk management and is assessed by third-party experts. We are guided by our corporate information security policy, and we exercise and test our incident response and disaster recovery plans. A senior leader and a team of highly trained information-security professionals manage information systems, risk and security. As a proactive measure, our team develops, uses and shares cyber-threat intelligence.

Devon encourages a culture of prevention to protect our data and systems, including cybersecurity awareness training for all employees and contractors, and specific training for teams that have access to sensitive data. We recognize employees who help us avoid potential cybersecurity events, and enforce a Code of Business Conduct for the proper use of the company’s information systems.

As technology evolves over time, we will continue to prioritize the protection of our data and systems to give our employees the tools they need to deliver results and create value.


S O C I A L

Overview

Community Engagement

STEM

Volunteerism

Philanthropy

Human Rights

The Social section of our 2018 Sustainability Report includes:

D E V O N E N E R G Y 2018 S U S TA I N A B I L I T Y R E P O R T | S O C I A L

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Devon has a proud tradition of investing to sustain the safety, education and vibrancy of the communities neighboring our operations, particularly the underserved. We make substantial grants to schools, STEM (science, technology, engineering and math) programs and nonprofit organizations, and our employees generously volunteer their time to ensure their neighbors have access to basic necessities and enrichment opportunities.

Before we take action, we seek to understand our stakeholders’ concerns. As we engage with our neighbors, we’re mindful of our commitment to work with integrity, earn their trust and be held accountable for our actions and results.

Taking Action in Our Communities

Social Overview

Macay Brummal community relations specialist

Consider your job description, as told by a child. Macay’s kids nailed it. “They say mom helps her coworkers volunteer to make the community a better place. I see myself as the broker between our community partners’ needs and our employees’ passion for serving. Those relationships strengthen both our city and the Devon brand.”

RESOURCES

To help organizations and communities tap into Devon’s social programs and policies, we are pleased to make these resources available:

Ingenuity STEM grant applications For education, designed to help

educators provide strategic, inventive and hands-on instruction to spark students’ interests in these subjects.

Devon Canada grant applications For Safe & Healthy Communities,

Investing in People and STEM programs.

Volunteer request form Find Devon volunteers for a nonprofit

organization or specific activity.

Aboriginal Relations Policy Provides goals and principles for

Devon Canada employees, consultants and contractors to interact with Aboriginal peoples and Devon Canada’s operations.

SOCIAL METRIC 2015 2016 2017

Social Investments (thousands) $12,025 $5,290 $8,652

A steep industry downturn necessitated cost-cutting in all areas in recent years. Looking ahead, we’re sharpening our focus to STEM funding, particularly for underserved populations.


https://www.devonenergy.com/sustainability/social/stem/stem-grants

https://www.devonenergy.com/sustainability/community-relations/communities/heavy-oil-canada/devon-canada-grants

https://www.devonenergy.com/sustainability/social/volunteerism

http://www.devonenergy.com/documents/Sustainability/Social/Aboriginal_Relations.pdf

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Building relationships, building trust

Whether talking to a landowner on his front porch, explaining our strategy to investment analysts at an industry conference or discussing road safety with county commissioners, Devon employees engage stakeholders every day to build relationships of trust and cooperation. Through formal meetings and informal conversations, we engage regularly with shareholders, neighbors, landowners, mineral-rights holders, policymakers, legislators, suppliers, vendors, service companies, our employees and their families.

Our strong relationships help us avoid potential problems and address issues in ways that benefit our stakeholders. For example, in the 15 years since we drilled our first natural gas well in the North Texas countryside, residential and commercial areas have expanded close to our existing production sites. Our local land team has worked proactively with housing developers to ensure their plans safeguard residents while still allowing Devon future access to those sites. The results have been so positive that developers now seek us out for help and suggestions.

We recognize that our actions can affect our neighbors, and we are dedicated to improving the compatibility of our operations within the communities where we do business. Our core values include

Our culture of integrity and accountability extends to a variety of stakeholders that have an interest in Devon’s business activities.

Community Engagement

In this era of digital communication, there’s still no substitute for personal interaction.

being a good neighbor, because we all share a fundamental respect for the environment. We strive to improve the overall quality of life in the communities where we live and work.

Finding and producing oil and natural gas involve industrial processes that sometimes occur near residences. The most common complaints are noise and traffic, and related industry impacts to local roads – dust, ruts or other damage. We occasionally receive reports or complaints about emissions or spills.

We have a strong record and have earned a good reputation for repairing our share of damage caused by industry activity to local land or infrastructure. We proactively seek opportunities to put equipment and systems in place to minimize the likelihood of problems occurring.

We have formal processes to receive complaints in person, by phone or online, and for responding with the appropriate level of urgency, depending on the situation. Our land, community relations, field operations, corporate communications and related teams are trained, experienced and prepared to respond to complaints, and to forge relationships with our neighbors that can avoid problems before they happen.


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Aboriginal Relations

We recognize that Aboriginal peoples are key stakeholders in many of our business activities, and we seek to maintain positive and productive relationships with these communities. Our relationships are guided by Devon Canada’s Aboriginal Relations policy, underpinned by a long-standing commitment to face-to-face engagement and doing the right thing. We strive to maintain relationships with the Chief and Council, as well as family members, and a large cross-section of people in the communities that are interested in our operations.

Where feasible, we help build capacity in the communities that are in and around our operating areas. Members of the Devon Canada Aboriginal Relations team visit these communities regularly to discuss education/training initiatives and business development opportunities and to provide regular updates on operational activities. We have honest and transparent communications about our business and ensure that employees and contractors are aware of our expectations.

Over the years, the Aboriginal Relations team has helped to develop more than 25 local businesses, many of which have provided services not only to Devon, but to other industry peers in the region. One of the most recent accomplishments was a collaboration with the Chipewyan Prairie Dene First Nation for a laundry business to service the needs of our Jackfish Lodge and other large camps in the region. Our seed money attracted additional funding from the government, launching a new business that has become a source of jobs and pride for the community.

Our respect and acknowledgement of Aboriginal heritage and culture is engrained in our facilities and practices. For example, four regional artists were commissioned to create original artwork for our Jackfish Lodge that symbolized a number of important concepts to Devon and the communities. We also conduct blessing ceremonies before beginning large construction projects to participate respectfully in the traditions of our Aboriginal neighbors and colleagues.

CO M M U N I T Y E N G AG E M E N T

Maintaining positive Aboriginal relations is a key part of our business.


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STEM

More than 88,000 students in the Oklahoma City area will have better access to educational opportunities because of Devon’s investment in STEM education, and Oklahoma teachers have benefitted from more than 30 Devon grant programs designed to enhance their instructional time with students.

Supporting underserved populations

In recent years we’ve strengthened our STEM philanthropic focus on underserved populations to support Devon’s technology leadership goals and our inclusion and diversity vision. In partnership with qualified organizations that have a track record in STEM, we provide resources and materials, and implement programs to empower women, rural communities and minorities.

Devon and our communities need an educated and innovative workforce to grow and prosper. We help our communities by partnering with schools and educational programs to encourage student interest in science, technology, engineering and math (STEM).

Partnering with FFA, Devon helps students in rural communities understand connections between the agriculture and energy industries.

Devon has a long history of promoting STEM education. Through our signature Ingenuity STEM Grant program, we have made more than $1 million in grants to educators in our operating areas in the U.S. and Canada in the past eight years. This included grants to five schools in 2017 and 15 schools in 2018.

88,000STUDENTS ARE BENEFITING


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FIRST Robotics

Devon also provided funding for the Oklahoma regional finals of the 2017 FIRST Robotics competition in Oklahoma City, where teams had six weeks to plan and build a robot to compete in a themed challenge. FIRST Robotics is a nonprofit founded in 1989 to inspire young adults to join the field of science and technology. Additionally, Devon provided seed money to expand the FIRST Lego League to several rural schools across western Oklahoma.

SAGE STEM Camp

The Southwestern Alliance for Girls’ Enrichment (SAGE) STEM camp is a week-long residential program hosted by Southwestern Oklahoma State University for girls entering eighth grade. Campers spend a day of exploration in Oklahoma City, including a visit to Devon to explore virtual reality with a Microsoft HoloLens, a computer headset which integrates holograms into the real world. Campers also participate in hands-on activities such as speaking with talking robots known as chatbots, examining fossils and learning about life as a geologist from female scientists.

MESA

Devon has supported the Math Engineering and Science Achievement (MESA) Inc. program of enriched STEM activities for junior high and high school students in New Mexico since 2014. We sponsor MESA’s Energy and Education Fair, which hosts more than 600 students in Artesia to learn about our equipment, safety programs and environmental focus. We also have presented four $20,000 Devon Achievement Award Scholarships to students in southeastern New Mexico to help them pursue oil and gas careers.

Design + Do

At the University of Oklahoma Tom Love Innovation Hub, we sponsored the 2017 Design + Do challenge that gave fifth-graders a chance to design and build prototypes of their ideas for playgrounds of the future. With mentoring from Devon employees, students from eight elementary schools created prototypes using 3D printers, laser cutters and other materials, and presented their creations to a panel of judges. The event encouraged STEM skills, creativity and collaboration.

FFA & Agriscience

Our sponsorship of the Oklahoma FFA Agriscience Fair helps students in rural communities understand the connections between the agriculture and oil and gas industries, which work on the same ground. In 2017, 225 students participated in 157 projects that encouraged critical thinking to solve problems related to our industry. Of the participants, 64 percent were female and 77 percent reported that their experience with the fair contributed to a favorable view of the oil and gas industry.

S T E M


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Girl Scouts

We’ve teamed up with the Girl Scouts since 2015 to offer the Terra Trooper badge for young scouts. Female geologists from Devon designed activity kits and leader guides to help girls gain industry-specific skills and knowledge of fossils and physical principles of rocks. Over the life of the program, the scouts have earned 461 Terra Trooper badges, 42 of them in 2017. Approximately 60 percent of the girls served by the Girl Scouts of Western Oklahoma come from low-income families.

BADGES EARNED

Carlsbad Science Camp

In southeastern New Mexico, Devon supported the Carlsbad Community Foundation’s Inspired by Science Camp for the first time in 2017 to expose children in third through fifth grade to STEM fields. Students attended the one-week camp free of charge. It was also our second year to be the presenting sponsor of the Balloon Explorium program for fifth-graders enrolled in Artesia public schools. The children worked in teams on a fun, hands-on activity that expanded their classroom curriculum. These two programs served about 450 children and engaged about 20 Devon volunteers in 2017.

Encouraging Ingenuity

Devon will continue to underwrite STEM programs that inspire children to think creatively and empower the next generation of problem solvers who will shape the future of our industry. We hope the programs we support will encourage students to pursue the STEM education that prepares them for technology, technical and operational careers.

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S T E M

Calgary Youth Science Fair

More than 100 employees used their STEM expertise to judge student projects at the Calgary Youth Science Fair and Northern Lights School Division Science Fair in rural Alberta. Our employee judges inspire students to discover their potential in STEM fields and to grow their great ideas into real-world initiatives.

Chic Geek

Devon Canada partners with Chic Geek, a nonprofit that seeks to build a supportive community for women at the intersection of technology and entrepreneurship. Devon’s partnership is focused on removing financial barriers for women to participate in Geeky Summit, a conference that provides professional development and inspiration for those who are underrepresented in the technology sector.


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Volunteerism

Our employees also contribute to the Devon Energy Charitable Foundation, which provides financial relief to employees who encounter hardships or damages in unforeseen circumstances.

Since the foundation was established in 2001, more than $365,500 has been donated to about 180 employees experiencing severe, unexpected financial need.

Devon has partnered with Mark Twain Elementary, an inner-city school in Oklahoma City, for more than 15 years. The partnership provides funding and resources to enhance the school’s quality of education. Employees volunteer in fourth- and fifth-grade classrooms, serving as mentors for the students and as teachers for STEM-related exercises. We often donate benefits from our corporate sponsorships to Mark Twain students and their families, providing cultural and social experiences such as theater performances, ice skating and visits from the Oklahoma City Thunder bookmobile.

Devon leaders serve in a variety of ways to positively impact the community where they live, work and play, including 49 employees serving as directors on more than 70 nonprofit boards. We provide ongoing communication and resources to support employees serving in these important leadership positions.

Volunteering is a way to put our good neighbor values into action, and we’re proud to dedicate our time and resources to our communities.

A long record of stepping up

One of the most popular activities for our employees, drawing 460 participants, was our seventh annual “Stuff the Truck” event benefiting the Regional Food Bank of Oklahoma. Our volunteers support the food bank’s mission to fight hunger and invested their sweat equity to measure, box and wrap enough food for 227,200 meals.

Devon and our employees have a long record of stepping up to help our neighbors when disaster strikes. Moved by the destruction caused by Hurricane Harvey on the Texas Gulf Coast in 2017, we helped our coworkers and others affected in the Eagle Ford area. We donated $50,000 to the Victoria County United Way for repairs to the Boys & Girls Club of Cuero, along with other community clean-up and repairs.

After a series of devastating wildfires in western Oklahoma, we partnered with the American Red Cross and the Oklahoma Oil and Gas Association to collect bottled water, packaged foods and other supplies for those in need. In addition, we donated two vehicles and supplies to two families who lost everything during the wildfires.

Devon’s involvement in the communities where we live and work relies on the active engagement of our employees. In 2017, employees in the U.S. and Canada contributed nearly 6,400 hours to STEM initiatives, the Oklahoma City Memorial Marathon and numerous other activities.

6,400 HOURS

Devon is proud to dedicate our time and resources to our communities, as a way to put our good neighbor values into action.


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Devon invests in the communities where we operate because it’s the right thing to do for our neighbors, our employees and our business. We focus our giving in areas where we can have the greatest impact on quality of life, improve goodwill in communities and make Devon a stronger company.

Philanthropy

$25,000to the American Indian College Fund

The gift to the Indian Clinic improves access to lifesaving breast cancer and colorectal cancer screenings for American Indian women, and the college fund contribution helps support more than 6,500 scholarships for Native American students each year.

Our partnership with the Wyoming Conservation Corps (WCC) celebrated its 10th year of engagement on energy production, environmental stewardship and land management in 2017. Each year, WCC students complete a 10-day project involving habitat restoration and other land-stewardship activities. Devon employees join the students for a day to share insights about the oil and gas industry, including a visit to active operations. In 2017, WCC, Devon and the Bureau of Land Management (BLM) removed, replaced or repaired 4.5 miles of wildlife-friendly fencing and made other improvements. Over the past decade, our WCC projects have created lasting benefits for public lands in Wyoming.

Environment and conservation

In 2017, we agreed to cancel federal leases near sacred tribal land in Montana, and then we donated the proceeds to conservation and tribal programs. We donated $100,000 to The Nature Conservancy, $40,000 to the Oklahoma City Indian Clinic and $25,000 to the American Indian College Fund.

The donation to The Nature Conservancy supports the Chickasaw Nation’s efforts to protect the Blue River in the Oka’ Yanahli Preserve, safeguarding its cultural heritage and encouraging biodiversity in the area.

Photo courtesy of U.S. Dept. of Interior. (L-R) Harry Barnes, Chairman, Blackfeet Tribal Business Council; Sally Jewell, U.S. Secretary of Interior; Dave Hager, Devon Energy President and CEO.


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Local emergency response and preparedness

We support emergency responders who protect our communities. In 2017, we invested approximately $200,000 in local emergency response groups in our U.S. operating areas for equipment purchases, training and other needs, and donated six vehicles to law enforcement agencies in Oklahoma, Texas and New Mexico.

To strengthen our relationships with local emergency responders, Devon hosted appreciation events for fire departments in our Oklahoma and New Mexico operating areas and quarterly roundtables for emergency responders in south Texas. We also organized the first full-scale emergency response exercise at our field office in Bridgeport, Texas. The simulated tornado strike was an opportunity for representatives of 14 state and local agencies in Wise County to practice their response procedures.

We are proud to be a leading contributor to campaigns for local nonprofit agencies. Through a one-to-one match for employee donations, our 2017 Give for Good campaign raised nearly $2.6 million for the United Way of Central Oklahoma and the Regional Food Bank of Oklahoma.

Devon hosts an annual employee fundraising campaign for Allied Arts, and provides grants to the Oklahoma

City Museum of Art, the Oklahoma City Ballet, the Arts Council of Oklahoma, Lyric Theatre and other arts and culture organizations that contribute to a vibrant quality of life in our community.

Devon Canada offers grant programs to schools and community organizations in Alberta, including “Investing in People,” supporting programs that create healthy and respectful workplaces in the

nonprofit sector, and “Safe & Healthy Communities,” for programming and organizations that promote a safe and healthy lifestyle for individuals, youth and families. In 2017, Devon Canada awarded grants to 22 organizations and an additional 10 schools received Ingenuity STEM Grants.

Community development, social services, arts and culture

Devon’s annual employee fundraising campaigns have provided millions to local nonprofits.

P H I L A N T H RO PY


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Human Rights

Recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world.

- The Universal Declaration of Human Rights, 1948.

All people are created equal

At Devon, we are committed to the philosophy expressed in the Universal Declaration of Human Rights, as proclaimed by the United Nations General Assembly 70 years ago. Our core values embrace social progress and economic growth, consistent with the Guiding Principles on Business and Human Rights, endorsed by the UN Human Rights Council in 2011.

We also are guided by the principles articulated in the Declaration of Fundamental Principles and Rights at Work, adopted 20 years ago by the International Labor Organization. These principles include prohibition on child labor, forced labor and discrimination in the workplace.

We participate in the lives of the communities where we live and operate, and we actively engage with our neighbors to understand the environmental and human impacts of our operations. When assessing and addressing these impacts, we consult with those who may be affected, including indigenous peoples, where possible and appropriate.

We continuously evaluate ways to enhance awareness of human rights issues and engage with our stakeholders, vendors and suppliers to continue to improve our approach.

Devon Human Rights Statement


http://www.devonenergy.com/documents/Sustainability/Social/Human-Rights/DVN_Statement-on-Human-Rights_092518.pdf

Overview

Talent Management

Inclusion & Diversity

Innovation

The Workforce section of our 2018 Sustainability Report includes:

W O R K F O R C E

D E V O N E N E R G Y 2018 S U S TA I N A B I L I T Y R E P O R T | W O R K F O R C E

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Bringing Out the Best in Our PeopleDevon lives by our core values when it comes to our employees: We hire the best people and expect them to always do the right thing, deliver results, be a team player and be a good neighbor.

We work in a challenging and highly competitive business, and we need a workforce dedicated to creating value for all of our stakeholders. This means focusing on results, bringing innovation to the decision-making process, and working with a sense of urgency and a commitment to continuous improvement.

Workforce Overview

Kyle Haustveit completions engineer

Growing up, Kyle was fascinated with how things worked. Among his childhood experiments: repairing broken equipment on the family farm. Today, Kyle focuses on far more complex projects, such as developing sensors to take real-time readings from rock fractures deep underground. One question is constant: “How can I fix something that’s broken or improve something that’s not?”

RESOURCES

These resources are essential to the results-oriented work environment that’s moving Devon forward:

Code of Business Conduct and Ethics Sets out the basic principles of

conduct for all Devon employees, officers and directors.

Mission Statement, Vision Statement and Core Values

Guide what we do and how we do it.

Inclusion and Diversity vision Unleashes the power of our people to

realize the Devon vision.

Leadership and Employee Attributes Articulate behaviors expected of Devon employees.

Training and development opportunities Help employees realize their potential.

Employee communications Includes our Strata intranet, small-group meetings with executives and town hall meetings that keep our workforce informed and prepared to meet our objectives.



http://www.devonenergy.com/documents/Sustainability/Governance/Code-of-Business-Conduct-and-Ethics-Policy.pdf

https://www.devonenergy.com/about-us

https://www.devonenergy.com/about-us

https://www.devonenergy.com/sustainability/workforce/inclusion-diversity

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Devon cultivates an atmosphere of trust and goodwill that brings out the best in our people. We’re a forward-focused employer, committed to inclusion and diversity, making Devon a place where differences are embraced and every voice is heard. Our training and development programs are designed to help achieve these goals.

At Devon, we share our strategy and reinforce our core values and culture of integrity to engage our employees in improving the company’s performance.

W O R K FO R C E OV E RV I E W

3As defined by the U.S. Equal Employment Opportunity Commission.

WORKFORCE METRICS 2015 2016 2017

Headcount (total company) 5,167 3,545 3,414

U.S. 80% 75% 75%

Canada 20% 25% 25%

Headcount was significantly impacted by a companywide staff reduction in February 2016 during a steep industry downturn.

Minorities as a Percentage of Workforce (U.S. only)3 18% 17% 17%

Women as a Percentage of Workforce 27% 27% 27%

Years of Service

Less than 5 years 62% 55% 46%

5-9 years 19% 23% 29%

10-14 years 9% 12% 15%

15-19 years 4% 5% 5%

20-24 years 2% 2% 2%

25+ years 4% 3% 3%

Median Age

U.S. & Canada 39 38 39

Attrition Rate 3% 4% 5%


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We seek out people who embody our values and exhibit attributes including integrity and accountability, passion for improvement, adaptiveness to change, energetic perseverance and open communication.

People: Where strategy and values unite

Hiring the best people is both a core value and a strategic objective to enable Devon to realize our vision to be North America’s premier independent oil and natural gas company. Devon is building an inclusive and diverse workforce to accelerate our performance. We value the unique identities, backgrounds, perspectives, experiences and abilities of our employees, and we are committed to equality of opportunity in all aspects of employment.

Talent Management

Workplace practices

Out of concern for our employees’ health and happiness, Devon offers wellness programs, amenities and inclusive benefits that clear the path for them to concentrate on our shared mission.

Devon has employee-friendly practices for flexible hours, maternity and parental leave for the birth or adoption of a child, part-time work and telecommuting. We seek to boost workplace flexibility, innovation and creativity and to help employees give their best effort while enjoying a healthy work-life balance. We continue to monitor our workplace practices to ensure they meet our business needs and support our employees.

To attract and retain the best people, Devon recognizes the importance of work-life balance.


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Encouraging everyone to learn and grow

We provide career development opportunities for all employees, which enables us to build technical expertise and fill up to 90 percent of leadership positions from within our organization. Employee learning at Devon encompasses new employee curriculum; targeted and technical development for all employees; and specific orientation, toolkits, information and corporate development for leaders. We offer individual development and learning in many forms, from formal classroom instruction, assessments and coaching, to interactive seminars and custom training.

We make a point to know our employees’ career aspirations, accomplishments, education, training and job preferences. This helps us identify technical experts and future leaders and support them in reaching their development goals, making Devon a great place for a fulfilling career. Additionally, annual succession planning ensures our overall depth of talent and organizational leadership readiness.

We encourage our employees to create individual development plans with career goals in mind. Plans typically include two or three key development areas such as training, practice with coaching and feedback, special on-the-job assignments and new job assignments.

Our corporate goal is to strengthen individual, team and organizational capabilities to achieve sustained top-tier performance. We made progress in 2017, enhancing our leadership development programs, launching career paths for technical professionals, updating critical skills per discipline and significantly increasing utilization of our online learning modules.

Devon will continue to give our employees training and development to drive the technical and operational performance we need to realize our corporate vision.

TA LE N T M A N AG E M E N T


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Building our workforce for diversity of thought

We strive to create a workplace where each Devon employee contributes toward strong shareholder returns as we produce energy in an environmentally and socially responsible way. As we seek to develop innovative solutions to the challenges we face, we expect that diversity of thought, broad experiences, openness to new ideas and strong technical skills will give us a competitive advantage.

To build the workforce we need, our inclusion and diversity (I&D) vision is to unleash the power of our people. We are strongly committed to being a progressive employer with a focus on nurturing a culture that embraces differences and allows every voice to be heard.

Devon has a track record for offering inclusive benefits that support I&D. We recently strengthened our efforts by forming an Executive Inclusion Council to help shape and guide our organizational-learning opportunities, pay practices, promotions, succession planning and other programs that support I&D. To meet our corporate goal of advancing inclusion, we are raising awareness of bias and inclusive behaviors through training and follow-up work. We’ve also formed an Employee Inclusion Action Team to work alongside the Executive Inclusion Council to further advance I&D strategies.

We believe that an inclusive, diverse workforce produces superior financial results. Our I&D strategy is intended to improve our bottom line and further differentiate Devon from our peers.

People drive Devon’s success by living out our core values: doing the right thing, delivering results, being good neighbors and team players.

Inclusion and Diversity

We’re proud to highlight our focus on hiring former members of the U.S. military, whose experience in organizations that value integrity and doing the right thing aligns with Devon’s values. We have a recruiting team dedicated to identifying veterans, active military members nearing discharge, and military spouses who have experience and transferable skills that fit well with our business needs. In 2017, about 6 percent of total employees and 6 percent of new U.S. hires had military experience.


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Innovation

We promote innovation by encouraging and celebrating a willingness to take risks and advance novel ideas.

Innovation Differentiates Devon

At Devon, creativity and technology enable and drive innovation to help us deliver results. Many of the traits we look for in our employees – such as a passion for improving the business, creative problem-solving and eagerness to challenge the status quo – create an environment where technology and innovation thrive. We promote innovation by encouraging and celebrating a willingness to take risks and advance novel ideas, while collaboration, individual initiative and recognition support our commitment to innovation.

Innovation at Devon encompasses both game-changing technologies and incremental improvements that, over time, lead to transformation. We’ve always been open to trying new ideas to enhance performance, such as when Devon was among the first to produce natural gas from coal seams and the first to drill horizontal wells with hydraulic fracturing in shale.

In recent years, we’ve been ramping up our investments in technology to become a leader among our peers. We’ve integrated advanced analytics, artificial intelligence (AI), machine learning and robotic process automation into our operations. Leveraging technology is essential to our “2020 Vision,” and to our plan to thrive and outperform our peers in any commodity price environment.

Teamwork and technology are powerful forces helping Devon to improve performance in many areas.

Data-driven results

Every day, Devon acquires, analyzes and uses billions of data points, which taken together have significant value in our planning and decision-making. Our recent focus has been on technologies to improve results for the subsurface (drilling and completions), production operations and water management.

Based on our operational results, we believe that our technology strategy, investments and innovations are improving the economics, production rates and lifespans of our oil and natural gas wells. Our improved completion designs have contributed to a 40 percent reduction in drilling and completion costs since 2014, and the initial 90-day production rate from our wells has increased 450 percent since 2012.


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A systematic approach to innovation

In 2017 and early 2018, Devon evaluated our technology efforts to ensure they support our strategy. This led to scaling back some projects and establishing new governance to ensure we focus on projects that have the greatest impact to Devon’s business. Our governance structure includes the Enterprise Project Planning team that oversees the allocation of capital for technology projects and the Innovation Action Council that monitors our projects and strategic partnerships. These groups have broad membership from all levels of the organization.

We developed and introduced a variety of technology tools in 2017 and early 2018 to save time, reduce costs and improve efficiency. For example, we rolled out an advanced data analytics tool that helps estimate reservoir depletion in minutes instead of days. As Devon’s first “big data” application that incorporates geospatial mapping, it will give us a time advantage when we’re competing with other companies to acquire properties.

We also cut completion times and costs with a new data-driven best practice for removing fracturing plugs before flowback. The technical and process changes allow staff in our Well Construction (WellCon) Center and at the well site to monitor real-time data and make adjustments to avoid stuck pipe that can add significantly to well-completion costs.

Culture of Innovation

In 2018, Devon has a corporate goal to advance our culture of innovation, technology, automation and continuous improvement. We plan to identify and execute priority initiatives related to automation, and to establish innovation-guiding principles and opportunities for employee involvement.

E-ticketing

We have developed a cost-effective, time-saving “e-ticketing” system for oil hauling, an activity that occurs hundreds of times daily throughout our U.S. field operations. The electronic process replaces paper tickets, reducing time spent on the task and eliminating data-entry errors.

I N N OVAT I O N


Performance Metrics Download spreadsheet

ENVIRONMENT METRICS 2015 2016 2017

Direct GHG Emissions (million tonnes CO2e)1 7.28 5.27 5.37

U.S. 4.35 2.38 2.39

Canada 2.93 2.89 2.98

Direct and Indirect GHG Emissions (million tonnes CO2e)1 7.97 5.84 5.94

Less flaring and a ramp-up of LDAR helped reduce U.S. GHG emissions. Canada's minor fluctuations reflect our steam-to-oil ratio, reduced venting and increased oil production.

GHG Emissions Intensity (tCO2e/MBOE)1

U.S. 14.83 10.96 11.77

Canada 64.85 56.01 56.30

Despite nearly twice as many well completions in 2017, emissions intensity was held largely in check by better facility design and control technology.

Methane Emissions (million tonnes CO2e)1 2.16 1.50 1.30

Methane emissions have been decreasing due to improved emissions-control technologies, reduced venting and flaring and improved LDAR practices.

Methane Emissions Intensity (tCO2e/MBOE)1

U.S. 4.52 4.33 4.17

Canada 18.57 10.96 8.75

Lower methane emissions intensity is a result of concerted efforts to reduce venting and flaring and improve our LDAR practices.

U.S. Methane Emissions Intensity (% of natural gas produced)2 0.339% 0.315% 0.309%

Devon’s U.S. methane emissions intensity rate will be used to track progress towards Devon’s goal of achieving a methane intensity rate of 0.28% by 2025. In 2018, Devon's methane-intensity rate was estimated at 0.32%, pending EPA review and third-party verification.

Indirect Emissions - Electricity Use (million tonnes CO2e)1 0.69 0.57 0.57

Consumption of electricity represents a small portion of our overall emissions profile.

Energy Used - Fuel and Electricity Use (trillion BTU)1 82.35 84.22 88.87

As our Jackfish SAGD complex matures, greater production requires more fuel.

U.S. Water Usage (million bbl) 54.19 25.40 51.32

Water use varies with activity levels. However, in any year, Devon seeks alternatives to fresh water supplies.

U.S. Water Usage Intensity (million bbl/well completion) 0.17 0.16 0.22

Recycled (million bbl) 3.45 2.24 5.50

Sourced (million bbl) 50.74 23.16 45.82

Devon is an industry leader in developing recycled-water technologies and best practices.

Canada Water Usage (million bbl) 12.6 10.9 9.4

In Canada, we use surface water, saline and non-saline groundwater. Water use has decreased over time due to improved recycle rates.

Canada SAGD Water Recycle Rate3 86.2% 88.6% 90.7%

We recover and reuse most of the water used in the steam-injection process. Improved reservoir management has helped to increase our recycle rate.

Canada SAGD Non-Saline Water Usage (million bbl) 0.0 0.0 0.0

Our Jackfish project was the first commercial SAGD facility to use zero fresh water for steam generation.

Global Reportable Spill Events Released to the Environment (events) 111 159 170

As we seek to reverse the trend in spill events, we remediate, investigate the cause and take corrective action to prevent recurrence.

Global Reportable Spill Volumes Released to the Environment (barrels) 14,035 3,108 3,826

We had a sizable spill in 2015 in a water-recycling system. Results since then reflect new safeguards in all of our operating areas.

1Our emissions reporting methodology varies depending on the emissions source and the applicable regulatory requirements, which includes only emissions reportable under EPA's Greenhouse Gas Reporting Program (GHGRP) in the U.S.

2Our U.S. methane emissions intensity rate calculation includes all natural gas produced at Devon operated facilities and all methane emissions from Devon facilities associated with the production of oil and natural gas. Click here to see Devon’s calculation methodology for methane emissions intensity for U.S. operations.



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https://www.devonenergy.com/documents/Sustainability/Performance-Metrics/DVN-methane-intensity-calc.pdf

http://www.devonenergy.com/documents/Sustainability/Performance-Metrics/DVN-SR18-Performance-Metrics.xlsx

WORKFORCE METRICS 2015 2016 2017

Headcount (total company) 5,167 3,545 3,414

U.S. 80% 75% 75%

Canada 20% 25% 25%

Headcount was significantly impacted by a companywide staff reduction in February 2016 during a steep industry downturn.

Minorities as a Percentage of Workforce (U.S. only)3 18% 17% 17%

Women as a Percentage of Workforce 27% 27% 27%

Years of Service

Less than 5 years 62% 55% 46%

5-9 years 19% 23% 29%

10-14 years 9% 12% 15%

15-19 years 4% 5% 5%

20-24 years 2% 2% 2%

25+ years 4% 3% 3%

Median Age

U.S. & Canada 39 38 39

Attrition Rate 3% 4% 5%

HEALTH & SAFETY METRICS 2015 2016 2017

Fatalities (Employee and contractor workforce) 0 0 1

Safety Performance - Total Recordable Incident Rate (TRIR) 0.43 0.41 0.60

Employee TRIR 0.42 0.36 0.57

Employee Hours (million) 11.6 8.9 6.7

Contractor TRIR 0.45 0.44 0.63

Contractor Hours (million) 40.6 16.2 20.8

The increase in TRIR in 2017 was due primarily to increased industry activity and the associated influx of workers new to our industry.

GOVERNANCE METRICS 2015 2016 2017

Independent Board Members 78% 78% 78%

In June 2019, our board composition changed. Currently, 10 of our 11 board members (91%) qualify as independent under NYSE standards and SEC regulations.

Women Board Members 22% 22% 22%

In June 2019, our board composition changed. Three women (27%), including the chair of Devon's Audit and Governance committees, currently serve on our board of directors.

Political Contributions (thousands) – – $1,199

Devon's lobbying and political activity has traditionally been disclosed via public agencies. In 2018, we began publishing a Political Activity and Lobbying Report on our website.

SOCIAL METRIC 2015 2016 2017

Social Investments (thousands) $12,025 $5,290 $8,652

A steep industry downturn necessitated cost-cutting in all areas in recent years. Looking ahead, we’re sharpening our focus to STEM funding, particularly for underserved populations.

P E R F O R M A N C E M E T R I C S

3As defined by the U.S. Equal Employment Opportunity Commission.


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Recognition

We believe exemplary performance in the areas of environmental, health and safety, and corporate governance is essential to fulfill our business goals and meet the expectations of our many stakeholders.

2018 Great Place to Work Institute — Canada's Best Workplaces

Devon has been named to the Globe & Mail's list of the Best Workplaces in Canada for 2018. The company ranked No. 31 in the Large and Multinational category.

State Partner in 4-H Award

Devon's long-standing commitment to Oklahoma 4-H was memorialized through formal designation of Devon being a State Partner, recognizing the company's significant support to Oklahoma 4-H through contributions of time and or financial support.

2017 Emerald Awards

Devon’s commitment to exceptional biodiversity and land management was recognized at the 26th annual Alberta Emerald Awards.

The Regional Industry Caribou Collaboration (RICC), a COSIA joint industry project led by Devon, placed top three in the Shared Footprints Award category.

2018 Corporate Governance

Devon has been nationally recognized by the organization 2020 Women on Boards by having at least 20% of the company’s board of director seats filled by women.

2018 FORTUNE Magazine "Great Places to Work"

Devon was placed on the FORTUNE Magazine annual list based largely on an anonymous survey of all U.S. employees conducted by the Great Place to Work Institute. Employees overwhelmingly responded that Devon offers a welcoming environment, meaningful work, a commitment to work-life balance and leaders who are approachable, honest and ethical. Notably, 94 percent said they are proud to tell others they work at Devon.

2018 Military Friendly Award

For the sixth straight year, G.I. Jobs and Military Spouse magazine named Devon to its top military-friendly employers list. The company received praise for our generous military leave of absence policy and outreach and professional development opportunities for employees with military backgrounds.

2018 American Hero Company

Devon has earned the American Hero Company designation for 2018 from American Values Investments and will be included in the American Hero Index portfolio of public companies. Devon earned the designation by obtaining 438 out of a possible 500 points in American Values Investments’ proprietary scoring system that considers three American values – Integrity, Caring and Courage.


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R E C O G N I T I O N

The Shared Footprints award is unique in that it recognizes and celebrates projects that go beyond normal land management practices and bring multiple partners together to demonstrate land and water stewardship, build shared knowledge, improve air quality and reduce land disturbances.

2017 Military Friendly Award

For the fifth straight year, G.I. Jobs and Military Spouse magazine named Devon to its top military-friendly employers list. The list includes companies with more than $1 billion in revenue that exhibit leading practices for military recruitment and retention. Criteria include the strength of company military recruiting efforts, the percentage of new hires with prior military service, retention efforts and company policies for National Guard and Reserve service.

2017 Fit Friendly Business

The American Heart Association awarded Devon with bronze level recognition in the Workplace Health Achievement Index. The program recognizes employers that champion the health of their employees and work to create a culture of physical activity and health in the workplace.

2017 Carlsbad, New Mexico Business of the Year

Devon was recognized as the Business of the Year by the Carlsbad Chamber of Commerce for contributions to southeast New Mexico --- from both a business and a community involvement standpoint. Specific programs that were highlighted include financial investment and operational presence in the region, employee involvement in the community and continued philanthropic efforts.

2016 Newsweek Green Rankings

Newsweek magazine named Devon to its list of the most environmentally conscious U.S. energy companies. Among the top 500 publicly traded U.S. companies, Devon ranked eighth among 41 companies listed in the energy sector. The magazine considered factors such as the company's environmental impact, its environmental policies and initiatives and its transparency in reporting environmental performance.

2016 Most Valuable Employers for Military

For the third straight year, Devon was named one of the Most Valuable Employers (MVE) for Military by CivilianJobs.com. The MVE recognition serves to help military-experienced job seekers and veterans identify the top employers to target for civilian careers.

2016 Employee Benefits Award

Workforce Magazine named Devon a recipient of the publisher's Optimas Gold award for workplace benefits. Workforce cited our employees' participation in the company's 401(k) matching benefit program as a leading reason.

2016 SPE Diamond Award

The Society of Petroleum Engineers (SPE) honored Devon as a Diamond-level contributor, recognizing the company's technical papers, volunteer speakers, committee memberships and other contributions.

2015 Global Award for Excellence

The Urban Land Institute, an international advocate for responsible land use, awarded Devon Energy Center its 2015 Global Award for Excellence in recognition of the development’s transformative impact on downtown Oklahoma City. Devon was chosen from 22 finalists from Asia, Europe and North America. The ULI promotes responsible use of land to create sustainable, healthy communities around the world. Through its award, the institute credits Devon for inspiring new construction of high-rise buildings and for paving the way for businesses to relocate their operations and employees downtown.


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R E C O G N I T I O N

2015 Secretary of Defense Employer Support Freedom Award

Devon is a recipient of the Secretary of Defense Employer Support Freedom Award. The Freedom Award is the highest recognition given by the U.S. government to employers for their support of their employees who serve in the Guard and Reserve. Devon is among 15 recipients nationwide of this prestigious award.

In 2012, Devon created a goal that 6 percent of all new hires would have a military background. By 2014, 10 percent of all new hires had served their country.

2015 100 Best Workplaces for Millennials — Fortune Magazine

Fortune magazine named Devon to its inaugural list of the best workplaces for millennials, based on anonymous surveys of 90,000 U.S. workers under age 35.

Devon was the only Oklahoma-based company and one of two oil and natural gas producers to make the list.

2015 Chairman's Stewardship Award

The Interstate Oil and Gas Compact Commission honored Devon with its 2015 Chairman’s Stewardship Award for the company’s support for the Wyoming Conservation Corps. The University of Wyoming-based WCC is dedicated to assisting government agencies in the management of public lands across Wyoming. Since the organization was established in 2006, Devon has provided funding, vehicles, equipment and employee volunteers to help curtail erosion, improve habitat, prevent forest fires and protect wildlife in Wyoming’s wilderness areas.

2015 Excellence for Student Achievement Award

The Carlsbad, New Mexico Municipal Schools recognized Devon with the Excellence for Student Achievement Award for our role in improving student achievement at the local district level.


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NYSE: DVNwww.devonenergy.com

Corporate Headquarters Devon Energy333 W. Sheridan Ave.Oklahoma City, OK 73102-5015405-235-3611

Canadian Operations Devon Canada2000, 400 Third Ave. S.W.Calgary, Alberta T2P 4H2403-232-7100

Sustainability Report ContactJohn [email protected]

Media RelationsTim Hartley405-552-4994 [email protected]

Safe Harbor

Some of the information provided in this report includes “forward-looking statements” as defined by the United States Securities and Exchange Commission (SEC). Forward-looking statements are often identified by use of the words “forecasts,” “projections,” “estimates,” “plans,” “expectations, “targets,” “opportunities,” “potential,” “outlook” and other similar terminology. Such statements concerning future performance are subject to a variety of risks and uncertainties that could cause Devon’s actual results to differ materially from the forward-looking statements contained herein. Risks and uncertainties are described in more detail in the “Risk Factors” section of our most recent Form 10-K and in our other filings with the SEC.

The forward-looking statements provided in this report are based on management’s examination of historical operating trends, the information which was used to prepare reserve reports and other data in Devon’s possession or available from third parties. Devon cautions that its future oil, natural gas and NGL production, revenues and expenses are subject to all of the risks and uncertainties normally incident to the exploration for and development, production and sale of oil, natural gas and NGLs. These risks include, but are not limited to, price volatility, inflation or lack of availability of goods and services, environmental risks, drilling risks, political changes, changes in laws or regulations, the uncertainty inherent in estimating future oil and gas production or reserves and, as noted above, other risks identified in our Form 10-K and our other filings with the SEC.

2018 Devon Energy Sustainability Report · 2020-05-28 · 2 Materiality Assessment The contents of...

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Transcript of 2018 Devon Energy Sustainability Report · 2020-05-28 · 2 Materiality Assessment The contents of...