Devon Energy Increases Share of Lower Tertiary Cascade Unit; First Production Expected in 2009

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Aug. 15 2006

Devon Energy Corporation (NYSE: DVN) today announced that it has increased its ownership in a discovery in the deepwater Gulf of Mexico. On August 9, 2006, Devon and its partner, Petrobras America Inc., completed the purchase of BHP Billiton's working interest in the Cascade Unit. Devon increased its working interest from 25 percent to 50 percent in the unit.

The Federal Minerals Management Service approved the Cascade Unit Agreement and a Suspension of Production (SOP) for the unit on July 31, 2006. The 23,000-acre Cascade Unit covers Walker Ridge blocks 205, 206, 249 and 250. The SOP protects the unit from lease expiration and authorizes commercial development of Cascade.

Cascade was the first of three discoveries to date by Devon in the Gulf's emerging lower Tertiary trend. The 2002 Cascade discovery encountered more than 450 net feet of pay and was followed by two delineation wells in 2005. The two wells drilled in 2005 encountered 200 net feet and 500 net feet of pay, respectively.

Future plans for Cascade include drilling a fourth well as part of a phased-development plan. Devon anticipates utilizing a floating production, storage and offloading unit (FPSO). First production from two wells is anticipated in late 2009.

"Our extensive knowledge of the lower Tertiary play, growing confidence in the performance of the reservoir and our partnership with one of the leading producers in deepwater developments encouraged us to increase our share of Cascade and move the project ahead quickly," said Stephen J. Hadden, senior vice president, exploration and production. "We plan to fast-track development and see first production into an FPSO before the end of the decade."


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