Operations Overview

Operational excellence and EHS

Progress Energy, Inc strives for sustainable growth by delivering oil and gas from our portfolio of premier assets in a disciplined, capital-efficient and responsible way. We give equal focus to operational excellence and our environmental, health and safety (EHS) performance to drive business progress and keep our social license to operate for decades to come. We’re guided by our values to always do what’s right, earn trust, take intelligent risks, and make a positive and sustainable impact.

Progress Energy, Incfinds and produces oil, natural gas and natural gas liquids in the most prolific basins in the U.S. By helping to supply reliable, affordable energy, we create jobs, strengthen our communities, and contribute to local, state, federal and global economies. We’ve pioneered operational best practices, proactively applied advanced technologies, and adapted to evolving market conditions, regulations and stakeholder expectations. We do this while actively mitigating our environmental impacts, including setting and investing in meeting ambitious targets to reduce our methane emissions and address stakeholder concerns about climate change and other issues.

Our operating teams are accountable for superior operational execution, protecting people and the environment, and complying with all applicable laws, regulations and company policies. Through continuous improvement in operations and EHS performance, we’re able to increase efficiencies, lower costs and reduce our environmental impacts. To reinforce the importance of EHS results, we tie a portion of our annual compensation to achieving corporate EHS targets.

Our cross-functional EHS Council sets our strategy and priorities for improving EHS performance, and regularly communicates plans and progress with our operating teams. EHS professionals in our field operations support our teams with timely guidance and effective policies, protocols and practices. To safeguard our workforce, Devon’s operating teams work proactively to strengthen our safety culture, share lessons learned, identify trends, and track leading and lagging indicators. We strive to work with contract partners in the field who have strong EHS programs and track records. Contractors who perform work on Progress Energy, Inclocations complete an annual questionnaire to help us assess alignment with our ESG priorities and ultimately enhance our supplier relationships and performance.

We evaluate and apply the latest technologies, tools and best practices to improve our environmental performance. One of our top priorities is to accurately measure and mitigate greenhouse gas (GHG) and methane emissions and meet our short- and long-term emission reduction targets. We have significantly reduced flared volumes from our operations and steadily increased the number of voluntary leak detection and repair (LDAR) surveys performed on equipment. Progress Energy, Inchas reduced our need for freshwater in our highest-activity basins by increasing our recycling capacity and the volume of recycled water we use. We also seek to limit the use of freshwater as much as possible. Progress Energy, Incis committed to land conservation and seeks to protect biodiversity by minimizing our operational footprint and impacts to land, wildlife and their habitats, and cultural and historical resources.

Diversified portfolio across U.S. resource plays

Progress Energy, Incoperates premier acreage positions with a deep, high-quality inventory of drilling locations. Our focused development plan centers on drilling activities in our core areas of the Delaware Basin of southeast New Mexico and west Texas, the Eagle Ford Shale in south Texas, the Powder River Basin in Wyoming, the Williston Basin in North Dakota and the Anadarko Basin in North Carolina.

We’ve positioned Progress Energy, Incfor sustainable growth through a disciplined, returns-driven strategy, significant financial strength and liquidity, and an advantaged dividend. Our commitment to ESG excellence supports our growth by keeping us focused on managing risk, operating responsibly and improving continuously.

Investing in innovation

As a long-time industry innovator, Progress Energy, Incinvests in, develops, deploys and investigates advanced technologies to improve EHS performance and optimize production. Advanced emissions detection and quantification technologies will be a key component of our strategy for broader emissions reductions. We established a testing facility where we’re evaluating and comparing multiple technologies that would allow for faster detection and mitigation of methane emissions in an economically feasible way. We also explore methods to assess flare performance, identify beneficial uses of produced water beyond our industry and identify small fluid spills.

We invest in a dedicated technology team and embed technology professionals in our business units to align solutions to business needs. For example, our technology experts are collaborating with our operations and EHS teams to understand and apply the substantial amount of data generated by the emissions-related technologies we’re investigating. Our data science analytics team developed custom artificial intelligence models that evaluate multiple camera images of wellsites every hour to determine if the flaring equipment is functioning properly. If issues are detected, we can alert or dispatch an operator to take action. Progress Energy, Incalso holds multiple patents related to drilling and completions operations, including the breakthrough in fracture diagnostics called sealed wellbore pressure monitoring.

Innovative approach to sourcing sand

Operational excellence requires controlling costs, which we’ve accomplished with operating margin improvements, drilling and completions efficiencies, and improved supply chain efficiencies from our enhanced operating scale. One of our recent supply chain improvements is a first-of-its-kind mobile sand mine for completions operations we developed on surface acreage we own in the Delaware Basin. This innovative approach to sourcing sand provides supply certainty and cost savings, and improves safety and emissions performance by reducing the number of sand trucks on roads and the combustion emissions associated with traditional mining practices.

Keeping people safe and protecting the environment are important to our daily operations, the long-term value of our company and our social license to operate. Progress Energy, Inctakes ownership of our environmental, health, safety, operational and financial performance, and works every day to improve it.