Devon Energy Announces Positive Results From Production Test of Jack Well

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Sept. 5 2006

Devon Energy Corporation (NYSE: DVN) today announced the successful completion of an extended production test on the Jack #2 well on Walker Ridge block 758 in the Gulf of Mexico. Although complete details of this deepwater lower Tertiary well test remain confidential, the results fully met Devon's expectations.

The Jack test was designed to evaluate only a portion of the total pay interval. The well sustained flow rates of more than 6,000 barrels of oil per day. The tested interval was approximately 40 percent of the total net pay measured in the Jack #2 well. Devon and its co-owners plan to drill an additional appraisal well in 2007.

"The results of the Jack test are very encouraging. They further support our positive view of the lower Tertiary trend and demonstrate the growth potential of our high-impact exploration strategy on long-term production, reserves and value," said Stephen J. Hadden, senior vice president, exploration and production. "With 273 blocks under lease and 19 exploratory prospects already identified, Devon's lower Tertiary position could more than double our current reserve base of about two billion equivalent barrels in the coming years."

The Jack discovery on Walker Ridge block 759 was drilled in 2004. The discovery well encountered more than 350 net feet of pay. The Jack #2 well was drilled to delineate the discovery. Devon has a 25 percent working interest in Jack. Chevron Corporation (NYSE: CVX) is the operator with a 50 percent working interest and Statoil (OSE: STL) has the remaining 25 percent working interest.

Four Lower Tertiary Discoveries

Jack is one of four discoveries by Devon in the lower Tertiary trend of the deepwater Gulf of Mexico. The others are St. Malo drilled in 2003, Cascade drilled in 2002 and the 2006 Kaskida discovery.

On August 15, 2006, Devon announced that it had doubled its working interest in Cascade to 50 percent. Devon also announced plans for first production from Cascade in late 2009.

Kaskida, which was announced as a discovery on August 31, 2006, encountered approximately 800 net feet of hydrocarbon-bearing sands. Devon believes Kaskida is its largest lower Tertiary discovery to date. Kaskida, about 80 miles northwest of Jack, is the company's first discovery in the Keathley Canyon lease area where Devon has identified 12 additional exploratory prospects.

Federal Lease Sale Increases Lower Tertiary Inventory

Devon added to its inventory of deepwater lease blocks in the August 16, 2006, federal lease sale. The company was the apparent high bidder on nine deepwater blocks, including five blocks in Keathley Canyon. The bids are subject to approval by the U.S. Department of the Interior's Minerals Management Service.

In addition to its four discoveries in the lower Tertiary, Devon currently has an inventory of 19 exploratory prospects in the trend. The company expects to drill one to three exploratory wells from this inventory in each of the next several years. Based on its experience to date, Devon estimates that the combined unrisked resource potential of its lower Tertiary discoveries and prospects could approach six billion barrels of oil equivalent.

Deepwater Rig Committed for Four Years

Devon has a four-year contract on Diamond Offshore's Ocean Endeavor deepwater drilling rig. The rig is being refurbished in Singapore and is scheduled to arrive in the Gulf of Mexico in the second quarter of 2007. Long-term availability of the Ocean Endeavor will allow Devon to more aggressively pursue its high-impact deepwater strategy.

"We believe that our results to date confirm the viability of the Gulf's lower Tertiary trend," said J. Larry Nichols, chairman and chief executive officer. "Our demonstrated track record and multi-year prospect inventory position Devon to be one of the most significant beneficiaries of this important emerging oil resource."

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