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EXHIBIT 99.1


		20 North Broadway Oklahoma City, Oklahoma 73102-8260		Telephone: (405) 235-3611 Fax: (405) 552-4667

NEWS RELEASE


Investor contact:		Zack Hager
		(405) 552-4526

Media contact:		Brian Engel
		(405) 228-7750

DEVON ENERGY’S EARNINGS CLIMB TO $6.34 PER SHARE IN 2006; PROVED RESERVES REACH RECORD 2.4
BILLION BARRELS

OKLAHOMA CITY — February 7, 2007 — Devon Energy Corporation (NYSE:DVN) today reported net earnings of $2.8 billion for the year ended December 31, 2006. Earnings per share were $6.42 per common share ($6.34 per diluted common share). In 2005 the company earned $2.9 billion, or $6.38 per common share ($6.26 per diluted common share).

For the quarter ended December 31, 2006, Devon reported net earnings of $582 million, or $1.31 per common share ($1.29 per diluted common share). This compares to reported earnings of $970 million or $2.18 per common share ($2.14 per diluted common share) in the fourth quarter of 2005.

In aggregate, items securities analysts typically exclude from their published estimates reduced reported fourth-quarter 2006 net earnings by $28 million, or seven cents per diluted share. These items include non-cash charges, unrealized gains and other items discussed in detail later in this news release.

“From almost every perspective, 2006 was an outstanding year for Devon,” commented J. Larry Nichols, chairman and chief executive officer. “We invested over $5 billion in exploration and development projects adding more than 400 million barrels of proved reserves. These investments fortified our North American onshore production base and moved our major development projects toward completion in 2007. In addition, our successful production test in the Gulf of Mexico’s Lower Tertiary Trend validated our long-term growth strategy and set the stage to extend Devon’s growth trajectory well into the next decade.”

Oil and Gas Reserves Climb to Record Levels

Capital and Reserve Summary
(detailed tables on pages 12 and 13 and non-GAAP reconciliation on page 17)


	Year Ended December 31,
	2006			2005

Drill-bit Capital (in millions)	$	5,236		$	3,952


Reserve Data (MMBoe)

Discoveries and extensions		433			400
Revisions other than price		(6	)		37

Drill-bit and performance reserve additions		427			437

Devon’s estimated proved reserves at December 31, 2006, were a record 2,376 million oil-equivalent barrels (Boe). This is a 13 percent increase over year-end 2005 estimated proved reserves. Reserve additions from all sources before price revisions were 533 million Boe, more than double the company’s annual oil and gas production of 214 million Boe. During 2006, Devon’s reserve life index (proved reserves divided by annual production) increased from 9.4 years to 11.1 years.

Devon added 427 million Boe through successful drilling (discoveries, extensions and performance revisions) in 2006. The company also acquired 106 million Boe in 2006, primarily through the purchase of Chief’s Barnett Shale natural gas properties. Revisions, largely related to changes in year-end oil and gas prices, reduced 2006 proved reserves by 50 million Boe.

Proved developed reserves were 1,674 million Boe at December 31, 2006, or 70 percent of proved reserves. Year-end reserves comprised 708 million barrels of crude oil, 8.4 trillion cubic feet of natural gas and 275 million barrels of natural gas liquids.

Active Year Yields Many Exploration and Development Achievements

Devon drilled more than 2,400 wells in 2006, with a success rate of 98 percent. Following are highlights from the year’s operations activity.

•		Devon dramatically increased its presence in the Barnett Shale in north Texas in 2006 by completing the $2.2 billion acquisition of Chief. The acquired properties include estimated proved reserves of approximately 600 billion cubic feet of natural gas equivalent and leasehold totaling 169,000 net acres with some 2,000 additional drilling locations.

•		The company’s United States onshore properties, including the Barnett Shale and the Groesbeck and Carthage areas in east Texas, showed strong production growth in 2006. Total fourth-quarter production for the U.S. onshore increased seven percent in 2006 compared with 2005.

•		Devon and its co-owners conducted a successful production test of the deepwater Jack No. 2 well in the Gulf of Mexico’s Lower Tertiary Trend. During the test, the Jack No. 2 flowed at a sustained rate of 6,000 barrels of oil per day from approximately 40 percent of the total net pay measured in the well. The successful production test was an important milestone in moving the Jack project toward sanctioning and development. Devon has a 25 percent working interest in the Jack prospect.

•		Also in the Lower Tertiary Trend, the company increased its working interest in the Cascade project from 25 percent to 50 percent. Devon and equal-partner Petrobras plan to develop Cascade using a floating production, storage and offloading vessel. The partners anticipate first production from Cascade in late 2009.

•		Elsewhere in the Lower Tertiary Trend, Devon and its co-owners announced an oil discovery on the Kaskida prospect. Kaskida is Devon’s fourth discovery in the Lower Tertiary Trend and its first in the Keathley Canyon deepwater lease area. Devon has identified 12 additional exploratory prospects on its acreage in Keathley Canyon. The company believes that Kaskida, in which it has a 20 percent working interest, is the largest of its four Lower Tertiary discoveries to date.

•		In the fourth quarter of 2006, the company announced a Miocene-aged oil discovery on the Mission Deep prospect in the Gulf of Mexico. The well, in 7,300 feet of water, was drilled to 25,000 feet and encountered more than 250 feet of net oil pay. The company has 15 additional prospects in its deepwater Miocene inventory. Devon has a 50 percent working interest in Mission Deep, which is operated by Anadarko.

•		At the 100 percent-owned Jackfish thermal heavy oil project in Canada, facilities construction and drilling continued in 2006. Devon expects to commence steam injection at Jackfish in the second quarter of 2007, with full production of 35,000 barrels per day anticipated by the end of 2008.

•		Construction and fabrication for the 50 million barrel Polvo oil development project in Brazil continued on schedule throughout 2006. Devon expects first production from Polvo in mid-2007. Devon operates Polvo with a 60 percent working interest.

African Operations Designated for Divestiture

In the fourth quarter of 2006, Devon announced its intention to divest its assets and terminate operations in Egypt. In accordance with accounting standards, Devon reclassified the assets, liabilities and results of its operations in Egypt as discontinued operations for all accounting periods presented. Therefore, Devon’s annual and quarterly results from continuing operations for all periods presented in this release exclude results attributable to Egypt. Although revenues and expenses for prior periods were reclassified, there was no impact upon previously reported net earnings. Included with the financial information that follows is a table of revenues, expenses and production categories and the amounts reclassified as discontinued operations for each period presented.

Early in the first quarter of 2007, the company announced that it plans to divest its assets and terminate operations in West Africa. Therefore, commencing with reporting for the first quarter of 2007, Devon will also reclassify the assets, liabilities and results of its operations in West Africa as discontinued operations.

Oil, Gas and Liquids Sales Remain Steady

Sales of oil, gas and natural gas liquids increased less than one percent to $8.9 billion in the year ended December 31, 2006, compared with the year ended December 31, 2005. The positive effects of higher realized oil and natural gas liquids prices were largely offset by lower realized natural gas prices and a decline in oil and gas production.

Combined oil, gas and natural gas liquids production averaged 587 thousand Boe per day in 2006. This was four percent less than Devon’s 2005 average daily production of 613 thousand Boe per day. This decrease in 2006 production was driven by property divestitures completed during 2005, partially offset by growth in production from retained properties during 2006.

Devon’s combined production of oil, gas and natural gas liquids production increased throughout 2006. Fourth-quarter production climbed seven percent from 574 thousand Boe per day in 2005 to 613 thousand Boe per day in 2006.

Marketing and midstream operating profit totaled $448 million in 2006, some $2 million less than Devon’s marketing and midstream operating profit for 2005. Marketing and midstream revenues decreased by $100 million while related expenses decreased by $98 million.

Cash Flow Before Balance Sheet Changes Reaches Record Levels

Cash flow before balance sheet changes in 2006 climbed seven percent to a record $6.1 billion. With cash flow, cash on hand and short-term borrowings under the company’s commercial paper facility, Devon funded more than $8.0 billion of capital expenditures, including the $2.2 billion property acquisition of Chief, and repurchased $253 million of common stock. The company ended the year with cash and short-term investments of approximately $1.3 billion.

At December 31, 2006, net debt to adjusted capitalization was 24 percent. Reconciliations of cash flow before balance sheet changes, net debt and adjusted capitalization, which are non-GAAP measures, are provided in this release.

Items Excluded from Published Earnings Estimates

Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. These items and their effects upon reported earnings for the full year and fourth quarter of 2006 were as follows:

•		A change in fair value of derivative financial instruments decreased full-year earnings by $178 million pre-tax ($114 million after tax) and decreased fourth-quarter earnings by $97 million pre-tax ($62 million after tax).

•		An unrealized gain on natural gas derivative instruments increased full-year earnings by $37 million pre-tax ($24 million after tax) and increased fourth-quarter earnings by $32 million pre-tax ($21 million after tax).

•		A reduction in Canadian statutory income tax rates increased full-year after-tax earnings by $243 million.

•		A new income-based tax in the state of Texas decreased full-year after-tax earnings by $39 million.

•		A reduction in the carrying value of oil and gas properties reduced full-year earnings by $152 million pre-tax ($129 million after tax).

•		The decision to exit Egypt generated financial benefits that increased full-year and fourth-quarter earnings by $5 million pre-tax ($13 million after tax).

The following tables summarize the full-year and fourth-quarter effects of these items on 2006 earnings and income taxes. Included in the tables are the tax effects resulting from an income tax accrual adjustment that did not affect net earnings.

Summary of Items Typically Excluded by Securities Analysts — Full Year 2006
(in millions)


	Pretax												After-tax			Cash Flow Before
	Earnings			Income Tax Effect									Earnings			Balance Sheet
	Effect			Current			Deferred			Total			Effect			Changes Effect

Change in fair value of financial instruments	$	(178	)		—			(64	)		(64	)		(114	)		—
Unrealized gain on natural gas derivative instruments		37			—			13			13			24			—
Change in Canadian income tax rate		—			—			(243	)		(243	)		243			—
Texas income-based tax		—			—			39			39			(39	)		—
Reduction in the carrying value of properties		(152	)		—			(23	)		(23	)		(129	)		—
Financial benefits generated by decision to exit Egypt		5			—			(8	)		(8	)		13			—
Income tax accrual adjustment		—			(35	)		35			—			—			35

Totals	$	(288	)		(35	)		(251	)		(286	)		(2	)		35

In aggregate, these items decreased full-year 2006 net earnings by $2 million, or one cent per common share (no effect per diluted share). In addition, a reclassification of deferred tax benefits increased cash flow before balance sheet changes by $35 million.

Summary of Items Typically Excluded by Securities Analysts — Fourth Quarter 2006
(in millions)


	Pretax											After-tax			Cash Flow Before
	Earnings			Income Tax Effect								Earnings			Balance Sheet
	Effect			Current		Deferred			Total			Effect			Changes Effect

Change in fair value of financial instruments	$	(97	)		—		(35	)		(35	)		(62	)		—
Unrealized gain on natural gas derivatives		32			—		11			11			21			—
Financial benefits generated by decision to exit Egypt		5			—		(8	)		(8	)		13			—

Totals	$	(60	)		—		(32	)		(32	)		(28	)		—

In aggregate, these items decreased fourth-quarter 2006 net earnings by $28 million, or six cents per common share (seven cents per diluted share).

Conference Call to be Webcast Today

Devon will discuss its 2006 financial and operating results in a conference call webcast today. The webcast will begin at 10 a.m. Central Time (11 a.m. Eastern Time). The webcast may be accessed from Devon’s internet home page at www.devonenergy.com.

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

Devon Energy Corporation is an Oklahoma City-based independent energy company engaged in oil and gas exploration and production. Devon is one of the world’s leading independent oil and gas producers and is included in the S&P 500 Index. For more information about Devon, please visit our website at www.devonenergy.com.

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

PRODUCTION DATA (net of royalties)
All periods exclude properties discontinued in 2006


	Year Ended				Quarter Ended
	December 31,				December 31,
	2006		2005		2006		2005

Total Period Production

Natural Gas (Bcf)
U.S. Onshore		487.5		462.7		129.5		119.1
U.S. Offshore		78.6		92.5		21.4		15.0

Total U.S.		566.1		555.2		150.9		134.1
Canada		240.4		261.0		57.8		61.3
International		8.1		10.8		1.8		3.2

Total Natural Gas		814.6		827.0		210.5		198.6

Oil (MMBbls)
U.S. Onshore		11.1		12.1		2.7		2.9
U.S. Offshore		8.5		13.4		2.0		2.3

Total U.S.		19.6		25.5		4.7		5.2
Canada		12.8		13.1		3.4		3.3
International		22.6		23.4		7.2		5.4

Total Oil		55.0		62.0		15.3		13.9

Natural Gas Liquids (MMBbls)
U.S. Onshore		18.1		17.3		4.7		4.3
U.S. Offshore		0.5		0.8		0.1		0.0

Total U.S.		18.6		18.1		4.8		4.3
Canada		4.7		5.3		1.1		1.4
International		—		0.3		—		0.1

Total Natural Gas Liquids		23.3		23.7		5.9		5.8

Oil Equivalent (MMBoe)
U.S. Onshore		110.5		106.6		29.1		27.1
U.S. Offshore		22.0		29.6		5.6		4.8

Total U.S.		132.5		136.2		34.7		31.9
Canada		57.6		61.9		14.2		14.9
International		23.9		25.5		7.5		6.0

Total Oil Equivalent		214.0		223.6		56.4		52.8


Average Daily Production

Natural Gas (MMcf)
U.S. Onshore		1,335.6		1,267.6		1,407.5		1,295.0
U.S. Offshore		215.4		253.5		232.8		163.1

Total U.S.		1,551.0		1,521.1		1,640.3		1,458.1
Canada		658.7		715.1		627.9		665.9
International		22.1		29.5		19.5		34.2

Total Natural Gas		2,231.8		2,265.7		2,287.7		2,158.2

Oil (MBbls)
U.S. Onshore		30.5		33.2		29.9		31.6
U.S. Offshore		23.1		36.6		21.2		25.0

Total U.S.		53.6		69.8		51.1		56.6
Canada		35.2		36.0		37.1		35.8
International		61.8		64.3		78.2		58.2

Total Oil		150.6		170.1		166.4		150.6

Natural Gas Liquids (MBbls)
U.S. Onshore		49.6		47.5		51.4		46.9
U.S. Offshore		1.4		2.2		1.2		0.4

Total U.S.		51.0		49.7		52.6		47.3
Canada		12.9		14.5		12.2		15.3
International		—		0.9		—		0.8

Total Natural Gas Liquids		63.9		65.1		64.8		63.4

Oil Equivalent (MBoe)
U.S. Onshore		302.7		292.0		315.9		294.3
U.S. Offshore		60.4		81.0		61.2		52.5

Total U.S.		363.1		373.0		377.1		346.8
Canada		157.9		169.7		153.9		162.1
International		65.5		70.0		81.5		64.7

Total Oil Equivalent		586.5		612.7		612.5		573.6

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

FULL-YEAR PRODUCTION DATA — RETAINED PROPERTIES
Both periods exclude properties divested in 2005 and discontinued in 2006


	Year Ended
	December 31,				YOY
	2006		2005		% Change

Total Period Production
Natural Gas (Bcf)
U.S. Onshore		487.5		455.2		7	%
U.S. Offshore		78.6		80.3		-2	%

Total U.S.		566.1		535.5		6	%
Canada		240.4		246.6		-3	%
International		8.1		10.8		-25	%

Total Natural Gas		814.6		792.9		3	%

Oil (MMBbls)
U.S. Onshore		11.1		11.6		-4	%
U.S. Offshore		8.5		10.7		-21	%

Total U.S.		19.6		22.3		-12	%
Canada		12.8		12.4		3	%
International		22.6		23.4		-3	%

Total Oil		55.0		58.1		-5	%

Natural Gas Liquids (MMBbls)
U.S. Onshore		18.1		17.1		6	%
U.S. Offshore		0.5		0.6		-17	%

Total U.S.		18.6		17.7		5	%
Canada		4.7		5.1		-8	%
International		—		0.3		-100	%

Total Natural Gas Liquids		23.3		23.1		1	%

Oil Equivalent (MMBoe)
U.S. Onshore		110.5		104.5		6	%
U.S. Offshore		22.0		24.8		-11	%

Total U.S.		132.5		129.3		2	%
Canada		57.6		58.6		-2	%
International		23.9		25.5		-6	%

Total Oil Equivalent		214.0		213.4		0	%


Average Daily Production
Natural Gas (MMcf)
U.S. Onshore		1,335.6		1,247.1		7	%
U.S. Offshore		215.4		220.1		-2	%

Total U.S.		1,551.0		1,467.2		6	%
Canada		658.7		675.5		-2	%
International		22.1		29.5		-25	%

Total Natural Gas		2,231.8		2,172.2		3	%

Oil (MBbls)
U.S. Onshore		30.5		31.8		-4	%
U.S. Offshore		23.1		29.4		-21	%

Total U.S.		53.6		61.2		-12	%
Canada		35.2		33.9		4	%
International		61.8		64.3		-4	%

Total Oil		150.6		159.4		-6	%

Natural Gas Liquids (MBbls)
U.S. Onshore		49.6		46.6		6	%
U.S. Offshore		1.4		1.7		-18	%

Total U.S.		51.0		48.3		6	%
Canada		12.9		14.0		-8	%
International		—		0.9		-100	%

Total Natural Gas Liquids		63.9		63.2		1	%

Oil Equivalent (MBoe)
U.S. Onshore		302.7		286.3		6	%
U.S. Offshore		60.4		67.6		-11	%

Total U.S.		363.1		353.9		3	%
Canada		157.9		160.7		-2	%
International		65.5		70.0		-6	%

Total Oil Equivalent		586.5		584.6		0	%

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

REALIZED PRICE DATA
(average realized prices)


	Year Ended				Quarter Ended
	December 31,				December 31,
	2006		2005		2006		2005

Realized Prices

Natural Gas ($/Mcf)
U.S. Onshore	$	5.90	$	6.90	$	5.59	$	9.41
U.S. Offshore	$	7.24	$	7.95	$	6.72	$	11.15
Total U.S.	$	6.09	$	7.08	$	5.75	$	9.61
Canada	$	6.05	$	6.95	$	5.78	$	9.36
International	$	3.95	$	3.75	$	3.11	$	2.74

Total Natural Gas	$	6.06	$	6.99	$	5.74	$	9.42

Oil ($/Bbl)
U.S. Onshore	$	60.70	$	51.23	$	54.50	$	55.58
U.S. Offshore	$	64.24	$	32.96	$	57.35	$	31.08
Total U.S.	$	62.23	$	41.64	$	55.68	$	44.75
Canada	$	46.94	$	26.88	$	41.08	$	26.09
International	$	61.36	$	40.26	$	56.58	$	41.25

Total Oil	$	58.30	$	38.00	$	52.85	$	38.96

Natural Gas Liquids ($/Bbl)
U.S. Onshore	$	29.26	$	26.50	$	27.57	$	31.16
U.S. Offshore	$	35.43	$	30.61	$	28.38	$	47.72
Total U.S.	$	29.42	$	26.68	$	27.59	$	31.29
Canada	$	42.67	$	37.19	$	37.78	$	41.13
International	$	—	$	22.81	$	—	$	21.07

Total Natural Gas Liquids	$	32.10	$	28.96	$	29.51	$	33.53

Oil Equivalent ($/Boe)
U.S. Onshore	$	36.94	$	40.10	$	34.57	$	52.34
U.S. Offshore	$	51.23	$	40.58	$	45.96	$	49.73
Total U.S.	$	39.31	$	40.21	$	36.42	$	51.94
Canada	$	39.21	$	38.17	$	36.45	$	48.10
International	$	59.24	$	38.80	$	55.07	$	38.81

Total Oil Equivalent	$	41.51	$	39.48	$	38.91	$	49.38

BENCHMARK PRICES
(average prices)


	Year Ended				Quarter Ended
	December 31,				December 31,
	2006		2005		2006		2005

Benchmark Prices

Natural Gas ($/Mcf) — Henry Hub	$	7.24	$	8.64	$	6.56	$	13.00
Oil ($/Bbl) — West Texas Intermediate (Cushing)	$	66.22	$	56.57	$	60.19	$	60.00

PRICE DIFFERENTIALS, EXCLUDING EFFECTS OF HEDGES
(average floating price differentials from benchmark prices)


	Year Ended						Quarter Ended
	December 31,						December 31,
	2006			2005			2006			2005

Price Differentials

Natural Gas ($/Mcf)
U.S. Onshore	$	(1.41	)	$	(1.71	)	$	(1.21	)	$	(3.54	)
U.S. Offshore	$	0.00		$	(0.42	)	$	0.16		$	(0.50	)
Total U.S.	$	(1.22	)	$	(1.50	)	$	(1.02	)	$	(3.20	)
Canada	$	(1.02	)	$	(1.46	)	$	(0.61	)	$	(3.26	)
International	$	(1.15	)	$	(3.90	)	$	(1.90	)	$	(9.94	)

Total Natural Gas	$	(1.16	)	$	(1.50	)	$	(0.91	)	$	(3.29	)

Oil ($/Bbl)
U.S. Onshore	$	(5.52	)	$	(4.85	)	$	(5.69	)	$	(4.42	)
U.S. Offshore	$	(1.96	)	$	(5.45	)	$	(2.84	)	$	(4.85	)
Total U.S.	$	(3.99	)	$	(5.16	)	$	(4.51	)	$	(4.61	)
Canada	$	(19.28	)	$	(15.48	)	$	(19.11	)	$	(19.64	)
International	$	(4.86	)	$	(7.27	)	$	(3.61	)	$	(7.87	)

Total Oil	$	(7.92	)	$	(8.14	)	$	(7.34	)	$	(9.44	)

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)


	Year Ended						Quarter Ended
	December 31,						December 31,
	2006			2005			2006			2005

Revenues

Oil sales	$	3,205		$	2,359		$	809		$	540
Gas sales		4,932			5,784			1,207			1,871
Natural gas liquids sales		749			687			177			195
Marketing & midstream revenues		1,692			1,792			416			582

Total revenues		10,578			10,622			2,609			3,188

Expenses and other income, net

Lease operating expenses		1,488			1,324			412			334
Production taxes		341			335			80			101
Marketing & midstream operating costs and expenses		1,244			1,342			314			421
Depreciation, depletion and amortization of oil and gas properties		2,266			1,981			634			492
Depreciation and amortization of non-oil and gas properties		176			160			47			41
Accretion of asset retirement obligation		49			43			13			9
General & administrative expenses		397			291			113			85
Interest expense		421			533			106			105
Effects of changes in foreign currency exchange rates		—			(2	)		1			2
Change in fair value of derivative financial instruments		178			94			97			(74	)
Reduction of carrying value of oil and gas properties		121			212			—			212
Other income, net		(115	)		(196	)		(30	)		(17	)

Total expenses and other income, net		6,566			6,117			1,787			1,711

Earnings from continuing operations before income tax expense		4,012			4,505			822			1,477

Income tax expense

Current		819			1,218			104			397
Deferred		370			388			159			117

Total income tax expense		1,189			1,606			263			514

Earnings from continuing operations		2,823			2,899			559			963

Discontinued operations

Results of discontinued operations before income taxes		22			46			19			12
Income tax (benefit) expense		(1	)		15			(4	)		5

Net results of discontinued operations		23			31			23			7

Net earnings		2,846			2,930			582			970
Preferred stock dividends		10			10			3			3

Net earnings applicable to common stockholders	$	2,836		$	2,920		$	579		$	967

Net earnings per weighted average common shares outstanding
Basic	$	6.42		$	6.38		$	1.31		$	2.18
Diluted	$	6.34		$	6.26		$	1.29		$	2.14
Basic weighted average shares outstanding		442			458			443			443
Diluted weighted average shares outstanding		448			470			448			451

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED BALANCE SHEETS
(in millions)


	December 31,			December 31,
	2006			2005

Assets

Current assets

Cash and cash equivalents	$	739		$	1,593
Short-term investments		574			680
Accounts receivable		1,393			1,565
Deferred income taxes		102			158
Current assets held for sale		81			66
Other current assets		323			144

Total current assets		3,212			4,206

Property and equipment, at cost, based on the full cost method of accounting for oil and gas properties ($3,674 and $2,704 excluded from amortization in 2006 and 2005, respectively)		41,889			33,824
Less accumulated depreciation, depletion and amortization		17,294			14,913

Net property and equipment		24,595			18,911

Investment in Chevron Corporation common stock, at fair value		1,043			805
Goodwill		5,706			5,705
Assets of held for sale		185			217
Other assets		322			429

Total Assets	$	35,063		$	30,273

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable:
Trade	$	1,190		$	928
Revenues and royalties due to others		529			666
Income taxes payable		197			293
Current portion of long-term debt		2,205			662
Accrued interest payable		114			127
Fair value of derivative financial instruments		6			18
Current portion of asset retirement obligation		61			50
Current liabilities associated with assets held for sale		5			19
Accrued expenses and other current liabilities		338			171

Total current liabilities		4,645			2,934

Debentures exchangeable into shares of Chevron Corporation common stock		727			709
Other long-term debt		4,841			5,248
Fair value of derivative financial instruments		302			125
Asset retirement obligation, long-term		833			610
Liabilities associated with assets held for sale		25			40
Other liabilities		598			371
Deferred income taxes		5,650			5,374

Stockholders’ equity

Preferred stock		1			1
Common stock		44			44
Additional paid-in capital		6,840			6,928
Retained earnings		9,114			6,477
Accumulated other comprehensive income		1,444			1,414
Treasury stock		(1	)		(2	)

Stockholders’ Equity		17,442			14,862

Total Liabilities & Stockholders’ Equity	$	35,063		$	30,273

Common Shares Outstanding		444			443

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)


	Year Ended December 31,
	2006			2005

Cash Flows From Operating Activities

Net earnings	$	2,846		$	2,930
Less income from discontinued operations, net of tax		(23	)		(31	)
Adjustments to reconcile net earnings to net cash provided by operating activities
Depreciation, depletion and amortization		2,442			2,141
Deferred income tax expense		370			388
Net gain on sales of non-oil and gas property and equipment		(5	)		(150	)
Reduction of carrying value of oil and gas properties		121			212
Other non-cash charges		270			128

		6,021			5,618

Changes in assets and liabilities:
(Increase) decrease in:
Accounts receivable		212			(279	)
Other current assets		(37	)		(17	)
Long-term other assets		(66	)		48
Increase (decrease) in:
Accounts payable		(183	)		255
Income taxes payable		(231	)		69
Debt, including current maturities		—			(67	)
Accrued interest and expenses		78			(34	)
Long-term other liabilities		142			(79	)

Cash provided by operating activities — continuing operations		5,936			5,514
Cash provided by operating activities — discontinued operations		57			98

Net cash provided by operating activities	$	5,993		$	5,612


Cash Flows From Investing Activities

Proceeds from sales of property and equipment	$	40		$	2,151
Capital expenditures		(7,551	)		(4,026	)
Purchases of short-term investments		(2,395	)		(4,020	)
Sales of short-term investments		2,501			4,307

Cash used in investing activities — continuing operations		(7,405	)		(1,588	)
Cash used in investing activities — discontinued operations		(44	)		(64	)

Net cash used in investing activities	$	(7,449	)	$	(1,652	)


Cash Flows From Financing Activities

Proceeds from borrowings of debt, net of issuance costs	$	1,808		$	—
Principal payments on debt, including current maturities		(862	)		(1,258	)
Proceeds from exercise of stock options		73			124
Repurchase of common stock		(253	)		(2,263	)
Excess tax benefits related to share-based compensation		36			—
Dividends paid on common stock		(199	)		(136	)
Dividends paid on preferred stock		(10	)		(10	)

Net cash provided by (used in) financing activities	$	593		$	(3,543	)


Effect of exchange rate changes on cash	$	13		$	37
Net (decrease) increase in cash and cash equivalents		(850	)		454
Cash and cash equivalents at beginning of year (including discontinued operations)		1,606			1,152

Cash and cash equivalents at end of year (including discontinued operations)	$	756		$	1,606

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

RESERVE RECONCILIATION


	Total												Total U.S.
	Oil			Gas			NGLs			Total			Oil			Gas			NGLs			Total
	(MMBbls)			(Bcf)			(MMBbls)			(MMBoe)			(MMBbls)			(Bcf)			(MMBbls)			(MMBoe)

As of December 31, 2005:

Proved developed		355			6,111			216			1,589			150			4,343			175			1,049
Proved undeveloped		285			1,185			30			513			23			821			22			183

Total proved		640			7,296			246			2,102			173			5,164			197			1,232

Production		(55	)		(815	)		(23	)		(214	)		(19	)		(566	)		(19	)		(132	)
Discoveries and extensions		139			1,491			45			433			16			1,298			43			274
Divestitures		—			(5	)		—			(1	)		—			—			—			—
Acquisitions		—			584			9			106			—			580			9			105
Revisions due to prices		(21	)		(89	)		(7	)		(44	)		—			(110	)		(3	)		(22	)
Revisions other than price		5			(106	)		5			(6	)		—			(11	)		6			5
As of December 31, 2006:

Proved developed		358			6,518			229			1,674			147			4,916			196			1,163
Proved undeveloped		350			1,838			46			702			23			1,439			37			299

Total proved		708			8,356			275			2,376			170			6,355			233			1,462


	U.S. Onshore												U.S. Offshore
	Oil			Gas			NGLs			Total			Oil			Gas			NGLs			Total
	(MMBbls)			(Bcf)			(MMBbls)			(MMBoe)			(MMBbls)			(Bcf)			(MMBbls)			(MMBoe)

As of December 31, 2005:

Proved developed		121			4,110			173			979			29			233			2			70
Proved undeveloped		8			651			20			137			15			170			2			46

Total proved		129			4,761			193			1,116			44			403			4			116

Production		(11	)		(487	)		(18	)		(110	)		(8	)		(79	)		(1	)		(22	)
Discoveries and extensions		11			1,270			43			265			5			28			—			9
Divestitures		—			—			—			—			—			—			—			—
Acquisitions		—			580			9			105			—			—			—			—
Revisions due to prices		—			(107	)		(3	)		(21	)		—			(3	)		—			(1	)
Revisions other than price		(2	)		(38	)		6			(2	)		2			27			—			7
As of December 31, 2006:

Proved developed		116			4,672			194			1,089			31			244			2			74
Proved undeveloped		11			1,307			36			264			12			132			1			35

Total proved		127			5,979			230			1,353			43			376			3			109


	Canada												International
	Oil			Gas			NGLs			Total			Oil			Gas			NGLs		Total
	(MMBbls)			(Bcf)			(MMBbls)			(MMBoe)			(MMBbls)			(Bcf)			(MMBbls)		(MMBoe)

As of December 31, 2005:

Proved developed		103			1,708			41			429			102			60			—		111
Proved undeveloped		150			298			8			207			112			66			—		123

Total proved		253			2,006			49			636			214			126			—		234

Production		(13	)		(241	)		(4	)		(58	)		(23	)		(8	)		—		(24	)
Discoveries and extensions		109			193			2			145			14			—			—		14
Divestitures		—			(5	)		—			(1	)		—			—			—		—
Acquisitions		—			4			—			1			—			—			—		—
Revisions due to prices		(19	)		23			(4	)		(20	)		(2	)		(2	)		—		(2	)
Revisions other than price		(1	)		(84	)		(1	)		(16	)		6			(11	)		—		5
As of December 31, 2006:

Proved developed		112			1,560			33			405			99			42			—		106
Proved undeveloped		217			336			9			282			110			63			—		121

Total proved		329			1,896			42			687			209			105			—		227

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

COSTS INCURRED
(in millions)


	Total				Total U.S.
	Year Ended December 31,				Year Ended December 31,
	2006		2005		2006		2005

Property Acquisition Costs:

Total proved	$	1,113	$	54	$	1,066	$	5

Total unproved	$	1,485	$	347	$	1,366	$	106

Exploration and Development Costs	$	5,124	$	3,677	$	3,105	$	2,019

Costs Incurred	$	7,722	$	4,078	$	5,537	$	2,130


	U.S. Onshore				U.S. Offshore
	Year Ended December 31,				Year Ended December 31,
	2006		2005		2006		2005

Property Acquisition Costs:

Total proved	$	1,066	$	3	$	—	$	2

Total unproved	$	1,311	$	86	$	55	$	20

Exploration and Development Costs	$	2,479	$	1,554	$	626	$	465

Costs Incurred	$	4,856	$	1,643	$	681	$	487


	Canada				International
	Year Ended December 31,				Year Ended December 31,
	2006		2005		2006		2005

Property Acquisition Costs:

Total proved	$	23	$	49	$	24	$	—

Total unproved	$	70	$	239	$	49	$	2

Exploration and Development Costs	$	1,461	$	1,381	$	558	$	277

Costs Incurred	$	1,554	$	1,669	$	631	$	279

Devon capitalizes certain general and administrative expenses which are related to property acquisition, exploration and development activities. Such capitalized expenses, which are included in the costs shown in the preceding tables, were $269 million and $188 million in the years 2006 and 2005, respectively. In addition, Devon capitalizes certain interest expenses which are related to property development activities. Such capitalized expenses, which are also included in the costs shown in the preceding tables, were $70 million in each of the years 2006 and 2005.

CAPITAL EXPENDITURES DATA
(in millions)


	Year Ended		Quarter Ended
	December 31, 2006		December 31, 2006

Capital Expenditures

Drill-bit capital ⁽¹⁾	$	5,236	$	1,433
Chief acquisition		2,210		2
Other acquisitions of proved properties		88		33
Marketing & midstream		376		129
Other		183		60

Total	$	8,093	$	1,657


⁽¹⁾		Drill-bit capital, a Non-GAAP measure, is defined on page 17.

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

DETAIL OF RECLASSIFICATION FOR DISCONTINUED
OPERATIONS IN EGYPT


	Year Ended				Quarter Ended
	December 31,				December 31,
	2006		2005		2006		2005

Production from Discontinued Operations

Oil (MMBbls)		1.9		2.4		0.6		0.5
Natural Gas (Bcf)		—		—		—		—
Natural Gas Liquids (MMBbls)		—		—		—		—

Total Oil Equivalent (MMBoe)		1.9		2.4		0.6		0.5

STATEMENT OF DISCONTINUED OPERATIONS DATA
(US$ in millions)


	Year Ended						Quarter Ended
	December 31,						December 31,
	2006			2005			2006			2005

Revenues

Oil sales	$	118		$	119		$	32		$	30

Expenses and other income, net

Lease operating expenses		23			21			7			6
Depreciation, depletion and amortization of oil and gas properties		41			50			6			12
Depreciation and amortization of non-oil and gas properties		1			1			—			—
Accretion of asset retirement obligation		—			1			—			—
Reduction of carrying value of oil and gas properties		31			—			—			—

Total expenses and other income, net		96			73			13			18

Earnings before income tax expense		22			46			19			12

Income tax (benefit) expense

Current		15			20			(4	)		9
Deferred		(16	)		(5	)		—			(4	)

Total income tax (benefit) expense		(1	)		15			(4	)		5

Earnings from discontinued operations	$	23		$	31		$	23		$	7

RESERVE DATA FOR EGYPT


	Oil		Gas		NGLs		Total
	(MMBbls)		(Bcf)		(MMBbls)		(MMboe)

As of December 31, 2005:

Proved developed		10		—		—		10
Proved undeveloped		—		—		—		—

Total proved		10		—		—		10

As of December 31, 2006:

Proved developed		8		—		—		8
Proved undeveloped		—		—		—		—

Total proved		8		—		—		8

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

Non-GAAP Financial Measures

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

RECONCILIATION TO GAAP INFORMATION
(in millions)


	Year Ended					Quarter Ended
	December 31,					December 31,
	2006		2005			2006			2005

Net Cash Provided By Operating Activities (GAAP)	$	5,993	$	5,612		$	1,111		$	1,960
Changes in assets and liabilities — continuing operations		84		103			423			(202	)
Changes in assets and liabilities — discontinued operations		14		(20	)		(5	)		(19	)

Cash flow before balance sheet changes (Non-GAAP)	$	6,091	$	5,695		$	1,529		$	1,739

Devon believes that using net debt, defined as debt less cash, short-term investments and the market value of Chevron common stock, for the calculation of “net debt to adjusted capitalization” provides a better measure than using debt. Devon believes that because cash and short-term investments can be used to repay indebtedness, netting cash and short-term investments against debt provides a clearer picture of the future demands on cash to repay debt. Included in Devon’s indebtedness are $727 million of debentures exchangeable into 14.2 million shares of Chevron common stock owned outright by Devon. As of December 31, 2006, the market value of the shares ($1.0 billion) exceeded the related debt obligation. Devon believes deducting the market value of the stock provides a clearer picture of future demands on cash to repay debt. This methodology is also utilized by various lenders, rating agencies and securities analysts as a measure of Devon’s indebtedness.

RECONCILIATION TO GAAP INFORMATION
(in millions)


	December 31,
	2006			2005

Total debt (GAAP)	$	7,773			6,619
Adjustments:
Cash and short-term investments		(1,313	)		(2,273	)
Market value of Chevron Corporation common stock		(1,043	)		(805	)

Net Debt (Non-GAAP)	$	5,417			3,541


Total Capitalization

Total debt	$	7,773			6,619
Stockholders’ equity		17,442			14,862

Total Capitalization (GAAP)	$	25,215			21,481


Adjusted Capitalization
Net debt	$	5,417			3,541
Stockholders’ equity		17,442			14,862

Adjusted Capitalization (Non-GAAP)	$	22,859			18,403

DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION

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

RECONCILIATION TO GAAP INFORMATION
(in millions)


	Total				Total U.S.
	Year Ended December 31,				Year Ended December 31,
	2006		2005		2006		2005

Costs Incurred (GAAP)	$	7,722	$	4,078	$	5,537	$	2,130

Less:
Proved acquisition costs		1,113		54		1,066		5
Unproved portion of Chief acquisition		1,185		—		1,185		—
Accrued asset retirement costs		250		113		78		70
Plus: Actual retirement expenditures		62		41		41		22

Drill-bit capital (Non-GAAP)	$	5,236	$	3,952	$	3,249	$	2,077


	U.S. Onshore				U.S. Offshore
	Year Ended December 31,				Year Ended December 31,
	2006		2005		2006		2005

Costs Incurred (GAAP)	$	4,856	$	1,643	$	681	$	487

Less:
Proved acquisition costs		1,066		3		—		2
Unproved portion of Chief acquisition		1,185		—		—		—
Accrued asset retirement costs		36		23		42		47
Plus: Actual retirement expenditures		6		5		35		17

Drill-bit capital (Non-GAAP)	$	2,575	$	1,622	$	674	$	455


	Canada				International
	Year Ended December 31,				Year Ended December 31,
	2006		2005		2006		2005

Costs Incurred (GAAP)	$	1,554	$	1,669	$	631	$	279

Less:
Proved acquisition costs		23		49		24		—
Unproved portion of Chief acquisition		—		—		—		—
Accrued asset retirement costs		107		37		65		6
Plus: Actual retirement expenditures		18		16		3		3

Drill-bit capital (Non-GAAP)	$	1,442	$	1,599	$	545	$	276


DELAWARE	001-32318	73-1567067
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification Number)


	DEVON ENERGY CORPORATION
	By:	/s/ Danny J. Heatly
		Danny J. Heatly
		Vice President — Accounting


20 NORTH BROADWAY, OKLAHOMA CITY, OK (Address of Principal Executive Offices)		73102 (Zip Code)