---

Securities and Exchange CommissionWashington, D.C. 20549

# Form 10Q

(Mark One)

XQUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE             
            

SECURITIES EXCHANGE ACT OF 1934

For
the Quarter Ended March 31, 2003

OR

__TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE                        
SECURITIES EXCHANGE ACT OF 1934

Commission file number: 18094

Devon OEI Operating, Inc.(Exact name of registrant as specified in its charter)

Delaware              
        741764876(State or other jurisdiction of       
        (I.R.S. Employerincorporation or organization)      
      Identification No.)

1001 Fannin, Suite 1600, Houston, Texas
77002-6794(Address of principal executive offices)
                   
   (Zip code)(713) 2656000(Registrants telephone number, including area code)

Ocean Energy, Inc.(Former name, former address and former fiscal year, if changed since last report)

Indicate
by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes X . No .

Indicate by
check mark whether the registrant is an accelerated filer (as defined in Rule 12b2
of the Act). Yes X . No .

As
of May 13, 2003, 1,000 shares of Common Stock, par value $0.10 per share, were
outstanding.

---

Devon OEI Operating, Inc.

Index

|                                                                     | Page Number
|-------------------------------------------------------------------- | -----------
|Part I. Financial Information                                        |            
|                                                                    
|Item 1. Unaudited Consolidated Financial Statements                  |            
|                                                                    
|Consolidated Statements of Operations for the Three Months           |            
|Ended March 31, 2003 and 2002                                        |            
|                                                                    
|Consolidated Balance Sheets  March 31, 2003 and December 31, 2002   |            
|                                                                    
|Consolidated Statements of Cash Flows for the Three Months Ended     |            
|March 31, 2003 and 2002                                              |            
|                                                                    
|Consolidated Statements of Comprehensive Income (Loss) for the Three |            
|Months Ended March 31, 2003 and 2002                                 |            
|                                                                    
|Notes to Consolidated Financial Statements                           |            
|                                                                    
|Item 2. Managements Discussion and Analysis of Financial Condition  |            
|and Results of Operations                                            |            
|                                                                    
|Item 3. Quantitative and Qualitative Disclosures about Market Risks  |            
|                                                                    
|Item 4. Controls and Procedures                                      |            
|                                                                    
|Part II. Other Information                                           |            
|                                                                    
|Signatures                                                           |            
|                                                                    
|Certifications                                                       |            
|                                                                    
|Index to Exhibits                                                    |            

(i)

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Item
1.  Unaudited Consolidated Financial Statements

Devon OEI
Operating, Inc.Consolidated Statements of Operations(Amounts in Thousands Except Per Share Data)
(Unaudited)

|                                                                | Three Months Ended March 31,
|--------------------------------------------------------------- | ----------------------------
|                                                               
|                                                                |                             
|                                                               
|                                                                |                             
|Revenues                                                        |                             
|                                                                |                             
|Costs of Operations:                                            |                             
|Operating expenses                                              |                             
|Depreciation, depletion and amortization                        |                             
|General and administrative                                      |                             
|                                                               
|                                                                |                             
|                                                               
|Operating Profit                                                |                             
|                                                                |                             
|Other (Income) Expense:                                         |                             
|Interest expense                                                |                             
|Merger expense                                                  |                             
|Interest income and other                                       |                             
|                                                               
|Income Before Income Taxes                                      |                             
|Income Tax Expense                                              |                             
|                                                               
|Income Before Change in Accounting Principle                    |                             
|Cumulative Effect of Change in Accounting Principle, Net of Tax |                             
|                                                               
|Net Income                                                      |                             
|Preferred Stock Dividends                                       |                             
|                                                               
|Net Income Available to Common Stockholders                     |                             
|                                                               
|                                                                |                             
|Basic Earnings Per Common Share:                                |                             
|Income Before Cumulative Effect of Accounting Change            |                             
|Cumulative Effect of Accounting Change, Net of Tax              |                             
|                                                               
|Net Income to Common Stockholders                               |                             
|                                                               
|                                                                |                             
|Diluted Earnings Per Common Share:                              |                             
|Income Before Cumulative Effect of Accounting Change            |                             
|Cumulative Effect of Accounting Change, Net of Tax              |                             
|                                                               
|Net Income                                                      |                             
|                                                               
|                                                                |                             
|Cash Dividends Declared Per Common Share                        |                             
|                                                               
|                                                                |                             
|Weighted Average Number of Common Shares Outstanding:           |                             
|Basic                                                           |                             
|                                                               
|Diluted                                                         |                             
|                                                               

See
accompanying Notes to Consolidated Financial Statements.

1

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Devon OEI
Operating, Inc.Consolidated Balance Sheets(Amounts in Thousands Except Share Data)
(Unaudited)

|                                                                                     | March 31, | December 31,
|------------------------------------------------------------------------------------ | --------- | ------------
|                                                                                    
|                                                                                     |           |             
|                                                                                    
|Assets                                                                               |           |             
|Current Assets:                                                                      |           |             
|Cash and cash equivalents                                                            |           |             
|Accounts receivable, net                                                             |           |             
|Other current assets                                                                 |           |             
|                                                                                    
|Total Current Assets                                                                 |           |             
|                                                                                     |           |             
|Property, Plant and Equipment, at cost, full cost method for oil and gas properties: |           |             
|Proved oil and gas properties                                                        |           |             
|Oil and gas properties excluded from amortization                                    |           |             
|Other                                                                                |           |             
|                                                                                    
|                                                                                     |           |             
|Accumulated Depreciation, Depletion and Amortization                                 |           |             
|                                                                                    
|                                                                                     |           |             
|                                                                                     |           |             
|Other Assets                                                                         |           |             
|                                                                                    
|Total Assets                                                                         |           |             
|                                                                                    
|                                                                                     |           |             
|Liabilities and Stockholders Equity                                                 |           |             
|Current Liabilities:                                                                 |           |             
|Accounts and notes payable                                                           |           |             
|Accrued interest payable                                                             |           |             
|Accrued liabilities                                                                  |           |             
|Current portion of longterm debt                                                    |           |             
|                                                                                    
|Total Current Liabilities                                                            |           |             
|                                                                                     |           |             
|LongTerm Debt                                                                       |           |             
|Deferred Revenue                                                                     |           |             
|Asset Retirement Obligation                                                          |           |             
|Deferred Income Taxes                                                                |           |             
|Other Noncurrent Liabilities                                                         |           |             
|                                                                                     |           |             
|Stockholders Equity:                                                                |           |             
|Preferred stock, $1.00 par value; authorized 10,000,000 shares;                      |           |             
|issued 50,000 shares                                                                 |           |             
|Common stock, $0.10 par value; authorized 520,000,000 shares;                        |           |             
|issued 180,321,733 and 178,887,756 shares, respectively                              |           |             
|Additional paidin capital                                                           |           |             
|Retained earnings                                                                    |           |             
|Treasury stock, at cost; 2,503,191 and 2,562,430 shares,                             |           |             
|respectively                                                                         |           |             
|Deferred compensation and other                                                      |           |             
|Accumulated other comprehensive loss                                                 |           |             
|                                                                                    
|Total Stockholders Equity                                                           |           |             
|                                                                                    
|Total Liabilities and Stockholders Equity                                           |           |             
|                                                                                    

See
accompanying Notes to Consolidated Financial Statements.

2

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Devon OEI
Operating, Inc.Consolidated Statements of Cash Flows(Amounts in Thousands)
(Unaudited)

|                                                                  | Three Months Ended March 31,
|----------------------------------------------------------------- | ----------------------------
|                                                                 
|                                                                  |                             
|                                                                 
|Operating Activities:                                             |                             
|Net income                                                        |                             
|Adjustments to reconcile net income to net cash                   |                             
|provided by operating activities:                                 |                             
|Depreciation, depletion and amortization                          |                             
|Cumulative effect of change in accounting principle               |                             
|Deferred income taxes                                             |                             
|Tax benefit from stock option exercises                           |                             
|Other                                                             |                             
|Changes in operating assets and liabilities, net of acquisitions: |                             
|Increase in accounts receivable                                   |                             
|Decrease (increase) in other current assets and other             |                             
|Decrease in accounts payable                                      |                             
|Amortization of deferred revenue                                  |                             
|Increase (decrease) in accrued expenses and other                 |                             
|                                                                 
|Net Cash Provided by Operating Activities                         |                             
|                                                                 
|Investing Activities:                                             |                             
|Oil and gas capital expenditures                                  |                             
|Acquisition costs, net of cash acquired                           |                             
|Corporate and other capital expenditures                          |                             
|Proceeds from sales of property, plant and equipment              |                             
|                                                                 
|Net Cash Used in Investing Activities                             |                             
|                                                                 
|Financing Activities:                                             |                             
|Proceeds from debt                                                |                             
|Principal payments on debt                                        |                             
|Proceeds from issuance of common stock                            |                             
|Dividends paid                                                    |                             
|Other                                                             |                             
|                                                                 
|Net Cash Provided by Financing Activities                         |                             
|                                                                 
|Increase (Decrease) in Cash and Cash Equivalents                  |                             
|                                                                  |                             
|Cash and Cash Equivalents at Beginning of Period                  |                             
|                                                                 
|Cash and Cash Equivalents at End of Period                        |                             
|                                                                 

See
accompanying Notes to Consolidated Financial Statements.

3

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Devon OEI
Operating, Inc.Consolidated Statements of Comprehensive Income (Loss)(Amounts in Thousands)
(Unaudited)

|                                                             | Three Months Ended March 31,
|------------------------------------------------------------ | ----------------------------
|                                                            
|                                                             |                             
|                                                            
|Net income                                                   |                             
|                                                             |                             
|Other comprehensive income (loss), net of tax:               |                             
|Net change in fair value of derivative financial instruments |                             
|Financial derivative settlements taken to income             |                             
|Other                                                        |                             
|                                                            
|                                                             |                             
|                                                            
|Comprehensive income (loss)                                  |                             
|                                                            

See
accompanying Notes to Consolidated Financial Statements.

4

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Devon OEI
Operating, Inc.Notes to Consolidated Financial Statements
(Unaudited)

Note 1.
Presentation of Financial Information

The
consolidated  financial  statements of Devon OEI Operating,  Inc., formerly Ocean Energy,
Inc. (Ocean or  the Company),  a Delaware corporation,  included
herein have been prepared,  without audit, pursuant to the rules  and regulations of the
Securities and Exchange Commission (SEC), and,  accordingly,  certain
information normally  included in financial  statements  prepared in accordance  with
accounting  principles  generally  accepted in the  United States has been condensed or
omitted.  The financial  statements  reflect all normal  recurring  adjustments  that, in
the opinion of management,  are necessary for a fair presentation.  Certain
reclassifications  of amounts  previously reported have been made to conform to current
year presentations.

On
February  23, 2003,  Ocean  entered  into an  Agreement  and Plan of Merger with Devon
Energy  Corporation  (Devon)  providing for the merger of Ocean with a
subsidiary of Devon with Ocean being the surviving  corporation  and becoming a
whollyowned  subsidiary of Devon. On April 25, 2003, the  stockholders of Ocean approved
the merger  and the  stockholders of Devon approved the issuance of the shares of Devon
common stock in the merger.  The merger  was thereafter  consummated  and Ocean was
renamed Devon OEI Operating,  Inc. In connection  with the merger,  each  Ocean
stockholder  received  0.414 shares of common stock of Devon for each share of Ocean
common stock they owned  as of the date of the  merger.  The merger is expected  to
qualify as a taxfree  transaction  with no gain or loss  recognized  for U.S.  Federal
income tax purposes by the Ocean  stockholders  upon receipt of Devon common stock in
exchange for shares of Ocean common stock except for cash received in exchange for
fractional shares. The amounts reported in the Companys accompanying consolidated financial statements do not give
 effect to the merger.

The
accompanying  consolidated  financial  statements of the Company should be read in
conjunction  with the  consolidated  financial  statements  and notes  included in the
Companys  Annual Report on Form 10K for the year  ended December 31, 2002.

Oil
and Gas Properties  The Company uses the full cost method to account for its oil and
gas exploration and production activities. Proved oil and gas properties include costs
accumulated on a countrybycountry basis. Oil and gas properties excluded from
amortization include costs for exploration activities occurring in areas where the
existence of proved reserves has not yet been determined, and portions of costs
associated with major development projects where quantities of proved reserves
attributable to these projects have not been ascertained. At March 31, 2003, oil
and gas properties excluded from amortization include: United States ($548
million), Equatorial Guinea ($67 million), Egypt ($31 million), Angola ($100
million), Nigeria ($93 million), Brazil ($41 million) and other international locations
($7 million).

The
Company  capitalizes  interest  and  certain  employeerelated  costs that are  directly
attributable  to  capital  expenditures  for exploration and  development  activities.
For the three months ended March 31, 2003 and  2002,  the Company  capitalized  interest
in the amount of $10 million and $13 million,  respectively,  and certain
employeerelated costs in the amount of $17 million for both periods.

The
Company has changed its method for estimating  proved reserves  effective first quarter
2003 to conform to  the SECs  interpretation  of its  guidelines  regarding the
recording of proved  reserve  estimates of oil and gas  deposits  located below the
lowest known hydrocarbon  identified by way of well penetration  where such reserves are
not supported by production  data.  Although the Company  believes that its method of
estimating and recording such  reserves has been technically  sound and consistent with
industry  standards,  the Company has decided to make this  change  to its  method,
after  SEC  review,  to be  consistent  with the SECs  interpretation  of its
applicable  regulations  and  guidelines.  This change of method does not apply to any of
the Companys  fiscal  periods ending  before January 1, 2003.

5

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Devon OEI
Operating, Inc.Notes to Consolidated Financial Statements
(Unaudited)

Revenue
Recognition  The Company records revenues from the sales of crude oil and natural gas
when delivery to the customer has occurred and title has transferred. This occurs
when production has been delivered to a pipeline or a tanker lifting has occurred.
The Company may have an interest with other producers in certain properties. The
Company uses the entitlements method to account for sales of production in these
instances. The Company may receive more or less than its entitled share of
production. Under the entitlements method, if the Company receives more than its
entitled share of production, the imbalance is treated as a liability. If the
Company receives less than its entitled share, the imbalance is recorded as an asset.

Reclassification
of General and Administrative Expense The Company expenses employee costs associated
with production and other operating activities and general corporate activities. In
prior years, a portion of costs related to certain administrative functions that
support the Companys ongoing operating activities were included in operating expense.
During 2002, the Company began classifying the costs of these administrative functions
as general and administrative expense. As a result, previous years have been
reclassified to conform to current year presentation. While this reclassification had
no effect on net income, it did decrease operating expense, and increase general and
administrative expense, by $6 million for first quarter 2002.

StockBased
Compensation  The Company currently has stock option plans and an employee stock
purchase plan. The Company accounts for stockbased compensation plans for employees
and directors using the intrinsic value method. Under this method, the Company
records no compensation expense for stock options granted when the exercise price
of options granted is equal to or greater than the fair market value of the Companys
common stock on the date of grant. The Company also records no compensation expense
for employee purchases of stock under its employee stock purchase plan because the plan
is considered noncompensatory under APB No. 25. The following table presents the
effect on net income and earnings per share if the Company had applied a fair value
recognition method, using the BlackScholes optionspricing model to determine the
fair value of each option grant on the date of grant:

|                                                            | Three Months Ended March 31,
|----------------------------------------------------------- | ----------------------------
|                                                           
|                                                            |                             
|                                                           
|Net income, as reported                                     |                             
|Add:  Stockbased employee compensation expense             |                             
|included in reported net income, net of related tax effects |                             
|Deduct:  Total stockbased employee compensation            |                             
|expense determined  under fair value based method           |                             
|for all awards, net of related tax effects                  |                             
|                                                           
|Pro forma                                                   |                             
|                                                           
|Earnings per share:                                         |                             
|Basic  as reported                                         |                             
|Basic  pro forma                                           |                             
|                                                            |                             
|Diluted  as reported                                       |                             
|Diluted  pro forma                                         |                             

6

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Devon OEI
Operating, Inc.Notes to Consolidated Financial Statements
(Unaudited)

Earnings
Per Share  The following table provides a
reconciliation between basic and diluted earnings per share (stated in thousands
except per share data):

|                                   | Net Income |  |  
|---------------------------------- | ---------- |  | -
|
|
|
|                                  
|Three Months Ended March 31, 2003: |            |  |  
|Basic                              |            |  | $
|Effect of dilutive securities:     |            | 
|Stock options                      |            |  |  
|Convertible preferred stock        |            |  |  
|                                  
|Diluted                            |            |  | $
|                                  
|Three Months Ended March 31, 2002: |            | 
|Basic                              |            |  | $
|Effect of dilutive securities:     |            | 
|Stock options                      |            |  |  
|Convertible preferred stock        |            |  |  
|                                  
|Diluted                            |            |  | $
|                                  

Basic
earnings per share is computed by dividing net income available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted earnings per share is determined on the assumption that
outstanding stock options have been converted using the average common stock
price for the period and that convertible preferred stock has been converted at
its stated conversion price.

Options
to purchase shares of common stock are excluded from the computation of diluted
earnings per share when their exercise prices are greater than the average
market price of the common shares during the period. The following options were
excluded from the computation of diluted earnings per share (options in
thousands):

|                                          | Three Months Ended March 31,
|----------------------------------------- | ----------------------------
|                                         
|                                          |                             
|                                         
|Weighted average options excluded from    |                             
|computation of diluted earnings per share |                             
|Option exercise price range               |                             

These
options expire at various dates through 2013.

As
of April 16, 2003, a preferred stockholder elected to convert 6,000 shares of
Series B preferred stock to 409,836 shares of Company common stock.

Treasury
Stock  The Company follows the average cost method of accounting for
treasury stock transactions.

Derivative
Instruments and Hedging Activities From time to time, the Company has
utilized and expects to continue to utilize derivative financial instruments to
hedge cash flow from operations or to hedge the fair value of financial
instruments. The Company accounts for its derivative instruments and hedging
activities in accordance with Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative Instruments and Hedging
Activities,as amended.

7

---

Devon OEI
Operating, Inc.Notes to Consolidated Financial Statements
(Unaudited)

The
Company uses derivative financial instruments with respect to a portion of its
oil and gas production to achieve a more predictable cash flow by reducing its
exposure to price fluctuations. These transactions generally are swaps, collars
or options, and are entered into with major financial institutions or
commodities trading institutions. These derivative financial instruments are
intended to reduce the Companys exposure to declines in the market prices
of natural gas and crude oil that the Company produces and sells, and to manage
cash flow in support of the Companys annual capital expenditure budget.

Derivative
instruments designated as cash flow hedges are reflected at fair value in the
Companys Consolidated Balance Sheets. Changes in fair value, to the extent
the hedge is effective, are recognized in other comprehensive income until the
forecasted transaction occurs. Hedge effectiveness is assessed at least
quarterly based on total changes in the derivatives fair value. Any
ineffective portion of the derivative instruments change in fair value is
recognized immediately in revenues.

The
Company may utilize derivative financial instruments that have not been
designated as hedges under SFAS No. 133 even though they protect the Company
from changes in commodity prices. These instruments are marked to market with
the resulting changes in fair value recorded in oil and gas revenues.

The
Company may also utilize derivative financial instruments to hedge exposure to
interest rates. Instruments may include contracts to convert the interest rate
on fixed-rate debt to floating, or contracts to convert the interest rate on
floatingrate debt to fixed. Both types of contracts are reflected at fair value
in the Companys Consolidated Balance Sheets. The Company currently only
has contracts that convert the interest rates on its fixedrate debt to
floating. These transactions qualify as fair value hedges. Therefore, the
related portion of fixedrate debt being hedged is reflected at an amount equal
to the sum of its carrying value plus an adjustment representing the change in
its fair value attributable to the interest rate risk being hedged. The gains or
losses on the derivative financial instrument and the hedged item, as well as
the settlements on the derivative financial instrument, are recognized currently
in interest expense. The net effect of this accounting on the Companys
operating results is that interest expense on the portion of fixedrate debt
being hedged is generally recorded based on variable interest rates.

Accounting
Pronouncements  Statement of Financial Accounting Standards No. 143,
Accounting for Asset Retirement Obligations(SFAS No. 143)
requires entities to record the liability for asset retirement obligation at
fair value in the period in which it is incurred and a corresponding increase in
the carrying amount of the related longlived asset. This statement is required
to be adopted for periods after December 31, 2002 using a cumulative effect
approach to recognize transition amounts for asset retirement obligations, asset
retirement costs and accumulated depreciation. The Company adopted SFAS No. 143
as of January 1, 2003. The adoption of this statement resulted in the
recognition of a liability for asset retirement obligations of $94 million, $1
million of which was included in accrued liabilities and $93 million of which
was included in other noncurrent liabilities, a corresponding increase in
property, plant and equipment of $116 million in the Companys Consolidated
Balance Sheets, and a cumulative accounting adjustment of $13 million, net of $9
million deferred tax expense, included in the Companys Consolidated
Statements of Operations as the effect of the change in accounting principle. As
of January 1, 2003, the capitalized costs related to asset retirement
obligations are being included in the full cost pool.

8

---

Devon OEI
Operating, Inc.Notes to Consolidated Financial Statements
(Unaudited)

A
reconciliation of the Companys liability for the three months ended March
31, 2003, is as follows (in thousands):

|Balance upon adoption at January 1, 2003: |  |  | $ | 93,830 |  
|----------------------------------------- |  |  | - | ------ | -
|Liabilities incurred                      |  |  |   | --     |  
|Liabilities settled                       |  |  |   | (2,728 | )
|Accretion expense                         |  |  |   | 1,532  |  
|Revisions to estimate                     |  |  |   | --     |  
|                                         
|Balance at March 31, 2003                 |  |  | $ | 92,634 |  
|                                         

Pro
forma effects for the three months ended March 31, 2002, assuming the adoption
of SFAS No. 143 as of January 1, 2002, were not material to the Companys
results of operations. The associated pro forma asset retirement obligation on that date would have been approximately $82 million.

Note
2. Supplemental Disclosures of Cash Flow Information

Supplemental
disclosures of cash flow information (stated in thousands) are as follows:

|                                 | Three Months Ended March 31,
|-------------------------------- | ----------------------------
|                                
|                                 |                             
|                                
|Cash paid during the period for: |                             
|Interest                         |                             
|Income taxes                     |                             

Note
3. Financial Instruments

The Company
has the following volumes under derivative contracts related to its oil and gas
producing activities:

9

---

Devon OEI
Operating, Inc.Notes to Consolidated Financial Statements
(Unaudited)

|                    |  |  |             | Weighted
|------------------- |  |  | ----------- | --------
|
|
|                   
|Crude Oil:          |  |  |             |         
|04/01/03  12/31/03 |  |  | WTI         |         
|04/01/03  12/31/03 |  |  | Dated Brent |         
|04/01/03  12/31/03 |  |  | Dated Brent |         
|                    |  | 
|Natural Gas:        |  | 
|04/01/03  12/31/03 |  |  | NYMEX       |         
|04/01/03  12/31/03 |  |  | NYMEX       |         
|04/01/03  12/31/03 |  |  | NYMEX       |         
|04/01/03  06/30/03 |  |  | NYMEX       |         
|09/01/03  10/31/03 |  |  | NYMEX       |         
|                    |  | 
|Gas Swap of         |  | 
|Related Trust:      |  | 
|04/01/03  12/31/03 |  |  | NYMEX       |         
|01/01/04  12/31/04 |  |  | NYMEX       |         
|01/01/05  12/31/05 |  |  | NYMEX       |         

|(1) |  | A
3way collar combines a sold call, a purchased put and a sold put. The
purchased put and sold put  establish a floating minimum price (floating
floor) and the sold call establishes a maximum price  (ceiling price)
the Company will receive for the volumes under contract.
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The
change in fair value of derivative  financial  instruments  included in oil and gas
revenues comprises the  following (amounts in thousands):

|                                                  | Three Months Ended March 31,
|------------------------------------------------- | ----------------------------
|                                                 
|                                                  |                             
|                                                 
|Financial derivative settlements transferred from |                             
|other comprehensive income                        |                             
|Net change in fair market value of options        |                             
|Ineffective portion of derivative financial       |                             
|instruments                                       |                             
|                                                 
|Increase (decrease) in revenues from derivative   |                             
|financial instruments qualifying as cash          |                             
|flow hedges                                       |                             
|Decrease in revenues from other oil and gas       |                             
|derivative financial instruments                  |                             
|                                                 
|Increase (decrease) in revenues from oil and gas  |                             
|derivative financial instruments                  |                             
|                                                 

If commodity prices were to stay the same as they were at March 31, 2003,
approximately $38 million of net deferred losses related to these fair values
included in accumulated other comprehensive loss at March 31, 2003 would be
reversed during the next 12 months as the forecasted transactions actually
occur, and settlements would be recorded as a reduction in revenues. All
forecasted transactions currently being hedged are expected to occur by December
2005.

10

---

Devon OEI
Operating, Inc.Notes to Consolidated Financial Statements
(Unaudited)

The
Company has also entered into interest rate swap agreements relating to its 7
5/8% senior notes due July 2005 and its 7 7/8% senior notes due August 2003.
Under the terms of the agreements, the counterparties pay the Company a weighted
average fixed annual rate of 7.74% on total notional amounts of $225 million,
and the Company pays the counterparties a variable annual rate equal to the
sixmonth LIBOR rate on the respective settlement dates plus a weighted average
rate of 2.73%. At March 31, 2003, the sixmonth LIBOR rate was 1.26%. The swap
agreements remain in effect through the maturity dates of the respective notes.
The swap agreements have been designated as fair value hedges pursuant to SFAS
No. 133. Interest expense for the threemonth period ended March 31, 2003 and
2002 was reduced by $2 million and $1 million, respectively, as a result of the
interest rate swaps.

Note
4. Debt

The Companys
7 7/8% senior notes, in the amount of $100 million, are due in August 2003.
These notes are classified as a current liability in the Consolidated Balance
Sheets.

The
Companys 8 3/8% senior subordinated notes due July 2008, in the amount of
$200 million, are redeemable at a premium beginning in July 2003.

The
Companys credit facility was amended on April 17, 2003 to waive the change
of control provision, to reduce the aggregate commitments of the lenders, pro
rata among the lenders, from $1 billion to $300 million, and to provide that the
full amount of the $300 million commitment could be utilized for letters of
credit.

Note
5. Contingencies

The Company
is a party to ongoing litigation in the normal course of business. Management
regularly analyzes current information and, as necessary, provides accruals for
probable liabilities on the eventual disposition of these matters. While the
outcome of lawsuits or other proceedings against the Company cannot be predicted
with certainty, management believes that the effect on its financial condition,
results of operations and cash flows, if any, will not be material.

A
lawsuit captioned Breakwater Partners, LP v. James T. Hackett, et. al.
(Case No. 200310161) was filed on February 27, 2003 in the District Court of
Harris County, Texas, naming as defendants Ocean and all of the members of
Oceans board of directors. The complaint generally alleged that the 0.414
exchange ratio in the merger was inadequate and unfair to Ocean common
stockholders; and that the defendants breached their fiduciary duties to Ocean
stockholders, including the duty of care and the duty of loyalty, or aided and
abetted in the breach of those fiduciary duties. The District Court granted the Special
Exceptions filed by the defendants and the lawsuit was dismissed
without prejudice on April 1, 2003.

11

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

The
following discussion is intended to assist in understanding the financial
position, results of operations and cash flows for the quarters ended March 31,
2003 and 2002 of Devon OEI Operating, Inc., formerly Ocean Energy, Inc.
(Ocean or the Company).

On
February 23, 2003, Ocean entered into an Agreement and Plan of Merger with Devon
Energy Corporation (Devon) providing for the merger of Ocean with a
subsidiary of Devon with Ocean being the surviving corporation and becoming a
whollyowned subsidiary of Devon. On April 25, 2003, the stockholders of Ocean
approved the merger and the stockholders of Devon approved the issuance of the
shares of Devon common stock in the merger. The merger was thereafter
consummated and Ocean was renamed Devon OEI Operating, Inc. In connection with
the merger, Ocean stockholders received 0.414 shares of common stock of Devon
for each share of Ocean common stock they owned as of the date of the merger.
The merger is expected to qualify as a taxfree transaction with no gain or loss
recognized for U.S. Federal income tax purposes by the Ocean stockholders upon
receipt of Devon common stock in exchange for shares of Ocean common stock
except for cash received in exchange for fractional shares. The discussion included in this Item 2. Managements
Discussion and Analysis of Financial Condition and Results of Operations and in
Item 3. Quantitative and Qualitative Disclosures About Market Risks  do not give effect to the merger.

The
Companys accompanying unaudited consolidated financial statements and the
notes thereto and the consolidated financial statements and notes thereto
included in the Annual Report on Form 10K for the year ended December 31, 2002
contain detailed information that should be referred to in conjunction with the
following discussion. The Annual Report on Form 10K for the year ended December
31, 2002 also includes a discussion of the Companys critical accounting
policies and contractual obligations.

# Results
of Operations

During first
quarter 2003, the Company continued to experience the effects of higher
commodity prices. Average realized prices, excluding the impact of financial
derivatives, have increased approximately 19% for crude oil and 52% for natural
gas from fourth quarter 2002.

Oil and Gas
Operations(Amounts in Thousands)

|                                         | Three Months Ended March 31,
|---------------------------------------- | ----------------------------
|                                        
|                                         |                             
|                                        
|Oil and Gas Operations:                  |                             
|Revenues:                                |                             
|Crude oil                                |                             
|Natural gas                              |                             
|                                        
|                                         |                             
|                                        
|Operating expenses                       |                             
|Depreciation, depletion and amortization |                             
|                                        
|Operating profit                         |                             
|Corporate                                |                             
|                                        
|Total operating profit                   |                             
|                                        

Oil
Revenues  Revenues from sales of crude oil increased $84 million, or 66%, to $212
million for first quarter 2003 compared to $128 million for first quarter 2002. The
change in revenues included:

12

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

- An increase in revenues  of $86  million  due to the  increase in crude oil prices.  The average  realized
         price for oil,  excluding the impact of financial  derivatives,  increased 56% to $28.58 for first quarter
         2003 compared to $18.32 for first quarter 2002.
- An  increase in revenues of $26 million due to  increases  in  production.  Average  daily oil  production
         increased  21% to 93 MBbl for first  quarter  2003  compared  to 77 MBbl for first  quarter  2002.  Higher
         production  volumes were  primarily  attributable  to new  deepwater  production in the Gulf of Mexico and
         continued success of Zafiro field exploitation initiatives in Equatorial Guinea.
- A negative net  quarteroverprioryear  quarter  change of $28 million  relating to the  Companys use of
         crude oil  derivative  financial  instruments.  The  effect of  derivative  financial  instruments  on oil
         revenues  was a decrease of $27 million  for first  quarter  2003 as compared to an increase of $1 million
         for first quarter 2002.

Gas
Revenues  Revenues from sales of natural gas have increased $117
million, or 127%, to $209 million for first quarter 2003 compared to $92 million
for first quarter 2002. The change in revenues included:

- An increase in revenues of $145  million due to the  increase in gas prices.  The average  realized  price
         for natural  gas,  excluding  the impact of  financial  derivatives,  increased  152% to $6.05 per Mcf for
         first quarter 2003 as compared to $2.40 for first quarter 2002.
- An increase in revenues of $10 million due to  increases  in  production.  Average  daily  production  for
         first  quarter  2003  increased  12% to 441 MMcf,  as compared to first  quarter 2002 volumes of 393 MMcf.
         Higher production volumes were primarily attributable to new deepwater production in the Gulf of Mexico.
- A negative net  quarteroverprioryear  quarter  change of $38 million  relating to the  Companys use of
         natural gas derivative financial  instruments.  The effect of derivative financial  instruments on natural
         gas  revenues  was a decrease  of $31  million  for first  quarter  2003 as  compared to an increase of $7
         million for first quarter 2002.

Commodity
prices fluctuate significantly in response to numerous factors such as supply
and demand. Since most of the Companys gas reserves and production are in
the United States, future natural gas prices will be dependent primarily on the
U. S. economic environment, North American weather patterns, other factors
affecting demand such as substitute fuels, the impact of drilling levels on
natural gas supply and environmental and access issues that limit future
drilling activities for the industry. The Company expects that oil prices will
fluctuate significantly in the future as a result of ongoing tensions in the
Middle East, including the aftermath of the conflict in Iraq, actions of OPEC
and its maintenance of production constraints, as well as other economic,
political and environmental factors.

13

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

Operating
Data

|                                                | Three Months Ended March 31,
|----------------------------------------------- | ----------------------------
|                                               
|                                                |                             
|                                               
|Net Daily Oil and NGL Production (Bbl):         |                             
|Domestic                                        |                             
|Equatorial Guinea                               |                             
|Egypt                                           |                             
|Other International                             |                             
|                                               
|Total                                           |                             
|                                               
|Average Oil and NGL Prices ($ per Bbl):         |                             
|Domestic                                        |                             
|Equatorial Guinea                               |                             
|Egypt                                           |                             
|Other International                             |                             
|Weighted Average                                |                             
|Average Oil and NGL Prices Including the Impact |                             
|of Financial Derivatives ($ per Bbl)            |                             
|                                                |                             
|Net Daily Natural Gas Production (Mcf):         |                             
|Domestic                                        |                             
|International                                   |                             
|                                               
|Total                                           |                             
|                                               
|Average Natural Gas Prices ($ per Mcf):         |                             
|Domestic                                        |                             
|International                                   |                             
|Weighted Average                                |                             
|Average Natural Gas Prices Including the Impact |                             
|of Financial Derivatives ($ per Mcf)            |                             
|                                                |                             
|Wells Drilled:                                  |                             
|Gross                                           |                             
|Net                                             |                             
|Success Rate                                    |                             

All
price information excludes the impact of financial derivatives, unless otherwise
stated.

For
first quarter 2003, average daily production was 166 MBOE per day, an increase
of 16% over first quarter 2002 average daily production of 143 MBOE per day. The
Company expects its production to continue to increase during 2003 as a result
of increased production from the deepwater Gulf of Mexico, Equatorial Guinea and
Egypt, net of anticipated declines in onshore and Gulf of Mexico shelf areas
including the impact of asset sales that occurred in late 2002.

Operating
Expenses  Total operating expenses increased $19 million, or 28%, to
$88 million for first quarter 2003 as compared to $69 million for first quarter
2002 primarily due to the 16% increase in production. Increasing deepwater
production has resulted in higher transportation and lease operating expenses
(including lease expense related to the Nansen and Boomvang spars). In addition,
higher commodity prices resulted in an increase in production taxes. Operating
expenses were $5.85 per BOE and $5.40 per BOE for first quarter 2003 and 2002,
respectively.

14

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

Depreciation,
Depletion and Amortization Expense  Total depreciation, depletion and
amortization (DD&A) expense for oil and gas operations increased 27%, or $22
million, to $103 million for first quarter 2003 as compared to $81 million for
first quarter 2002. This increase was primarily due to an increase in
production. DD&A expense per BOE related to oil and gas operations increased
10% to $6.89 per BOE for first quarter 2003 as compared to $6.26 per BOE for
first quarter 2002 due to higher estimated future development costs and 2002
finding and development cost of $12.11 per BOE.

# Corporate

Corporate
expenditures are comprised of general and administrative expenses and the
DD&A expense for nonoil and gas assets.

General
and Administrative Expenses General and administrative expenses
increased $3 million, or 19%, to $19 million for first quarter 2003 compared to
$16 million for first quarter 2002. The difference was due primarily to the
increase in employee related costs and transportation expenses.

Merger
Expense  Merger expense of $327,000 associated with the merger of
Ocean and Devon was recorded in first quarter 2003 and consisted primarily of
professional fees and transportation expenses.

DD&A
 DD&A expense for nonoil and gas assets was approximately $4
million and $2 million for first quarter 2003 and 2002, respectively.

# Other

Interest
Expense  Interest expense for first quarter 2003 increased $2 million,
or 14%, to $16 million from $14 million for first quarter 2002. This increase
was due to an increase in fixedrate debt. Settlements on interest rate swaps
reduced interest expense by $2 million for first quarter 2003 and $1 million for
first quarter 2002.

Income
Tax Expense Income tax expense of $82 million was recognized for
first quarter 2003 compared to $17 million for first quarter 2002. The effective
income tax rate was 43% for first quarter 2003 and 45% for first quarter 2002.

# Liquidity
and Capital Resources

Liquidity  The Companys primary sources of liquidity are its cash on hand,
cash flows from operations and available borrowing capacity under its credit
facility. The Companys credit facility provides borrowing capacity and has
a maturity date of May 2006. The Companys obligations under the credit
facility are unsecured and guaranteed by Ocean Energy, Inc., a Louisiana
corporation. The credit facility bears interest, at the Companys option,
at LIBOR or prime rates plus applicable margins ranging from zero to 1.7% or at
a competitive bid. As of March 31, 2003, the Companys outstanding
borrowings under the credit facility totaled $90 million, and letters of credit
totaled $129 million. The Companys longterm debt totaled $1.4 billion and
its debt to capitalization ratio was 46% at March 31, 2003 compared to longterm
debt of $1.4 billion and debt to capitalization ratio of 48% at December 31,
2002.

15

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

The
credit facility was amended on April 17, 2003 to waive the change of control
provision, to reduce the aggregate commitments of the lenders, pro rata among
the lenders, from $1 billion to $300 million, and to provide that the full
amount of the $300 million commitment could be utilized for letters of credit.

Senior
Notes  The Companys 7 7/8% senior notes, in the amount of $100
million, are due in August 2003. The Companys 8 3/8% senior subordinated
notes, in the amount of $200 million, due July 2008 are redeemable at a premium
beginning in July 2003. These notes may be called if market conditions warrant.

Prepaid
Commodity Transactions  In 1999 and 2000, the Company entered into two
standard prepaid commodity transactions, one for crude oil in 1999 and one for
natural gas in 2000. The prepaid crude oil sales contract provides that the
Company deliver approximately 5.6 MBbl per day of crude oil for the period
February 2000 through May 2003. In exchange for the crude oil to be provided,
the Company received an advance payment of approximately $100 million. The
prepaid natural gas sales contract is a marketsensitive contract which, as
amended, provides that the Company deliver 53,500 MMBtu per day of natural gas
for 2003 and 55,600 MMBtu per day for 2004. In exchange for the natural gas to
be provided, the Company received an advance payment of approximately $75
million.

The
obligations associated with the future delivery of the crude oil and natural gas
have been recorded as deferred revenue in the Companys Consolidated
Balance Sheets, and the remaining unamortized balance was approximately $70
million as of March 31, 2003. The prepaid proceeds were shown as a component of
cash flows from financing activities in the Companys Consolidated
Statements of Cash Flows in the years in which they were received. The prepaid
proceeds are being amortized into revenue as scheduled deliveries of crude oil
and natural gas are made. This amortization is deducted from net income when
computing Net Cash Provided by Operating Activities in the Companys
Consolidated Statements of Cash Flows as scheduled delivery occurs.

These
transactions are described in Note 11 to the Companys Consolidated
Financial Statements, as well as in Managements Discussion and Analysis,
included in the Companys Annual Report on Form 10K for the year ended
December 31, 2002.

16

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

Capital
Expenditures(Amounts in Thousands)

|                                         | Three Months Ended March 31,
|---------------------------------------- | ----------------------------
|                                        
|                                         |                             
|                                        
|Leasehold acquisitions                   |                             
|Exploration costs                        |                             
|Development costs                        |                             
|Acquisitions                             |                             
|                                        
|Total oil and gas capital expenditures   |                             
|Corporate and other capital expenditures |                             
|                                        
|Total capital expenditures               |                             
|                                        

The
Company makes, and will continue to make, substantial capital expenditures for
the acquisition, exploration, development, production and abandonment of its
crude oil and natural gas reserves and continues to look for opportunities to
strengthen and diversify its domestic and international position. The Company
has historically funded its expenditures through cash flows from operating
activities, bank borrowings, sales of equity and debt securities, sales of
nonstrategic crude oil and natural gas properties, sales of partial interests
in exploration concessions and project finance borrowings.

The
Companys capital expenditure budget for the year 2003 is approximately $1
billion, a 30% increase over 2002. A significant portion of the 2003 capital
program is dedicated to development of the Companys exploration successes
in West Africa and the deepwater Gulf of Mexico. The Company expects to fund its
expenditures from cash flows from operations based on anticipated commodity
prices subject to change if market conditions shift or new opportunities are
identified. The 2003 capital expenditure budget was developed using certain
assumed price levels for the sales of crude oil and natural gas and forecasted
production growth. Changes in commodity prices or variances from forecasted
production growth could impact the Companys cash flows from operations and
funds available for reinvestment. For example, shortfalls in budgeted cash flows
from operations could result in the reduction of the Companys capital
spending program, increases in borrowing under the credit facility, issuance of
additional equity or debt securities or divestments of properties. The Company
will evaluate its level of capital spending throughout the year based upon
drilling results, commodity prices, cash flows from operations and property
acquisitions. In addition, the capital expenditure budget may be adjusted as a
result of the Companys merger with Devon.

Dividends   On March 17, 2003, the Companys Board of Directors declared a
quarterly common stock dividend of four cents per share payable on April 24,
2003, to stockholders of record at the close of business on April 10, 2003.

Accounting
Pronouncement

During
April 2003, the Financial Accounting Standards Board (FASB) issued Statement No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities
(SFAS No. 149). SFAS No. 149 amends and clarifies accounting for
derivative instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under SFAS No. 133. SFAS No. 149 is generally
effective for contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The guidance should be applied
prospectively. The Company will follow the guidance of SFAS No. 149 and expects that
it will have no impact on its financial statements.

17

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

Environmental

Compliance
with applicable environmental and safety regulations by the Company has not
required any significant capital expenditures or materially affected its
business or earnings. The Company believes it is in substantial compliance with
environmental and safety regulations and foresees no material expenditures in
the future; however, the Company is unable to predict the impact that compliance
with future regulations may have on capital expenditures, earnings and
competitive position.

Defined
Terms

Oil,
condensate and natural gas liquids (NGL) are stated herein in
barrels (Bbl) or thousand barrels (MBbl). Natural gas is
stated herein in billion cubic feet (Bcf), million cubic feet
(MMcf) or thousand cubic feet (Mcf). MMBOE, MBOE and BOE
represent one million barrels, one thousand barrels and one barrel of oil
equivalent, respectively, with six Mcf of gas converted to one barrel of liquid.
MMBtu represents one million British Thermal Units.

18

---

Devon OEI
Operating, Inc.

Item 2.  Managements
Discussion and Analysis of Financial Condition and Results of Operations

ForwardLooking
Statements May Prove Inaccurate

This
document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and information that is based on managements belief
and assumptions based on currently available information. All statements other
than statements of historical fact included in this document are forwardlooking
statements. When used in this document, words such as anticipate,
believe, estimate, expect,
forecast, intend, project and similar
expressions serve to identify forwardlooking statements. Although we believe
that the expectations reflected in our forwardlooking statements are
reasonable, we can give no assurance that these expectations will prove correct.
Our forwardlooking statements are subject to risks, uncertainties and
assumptions. Should one of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, our actual results may vary materially
from those expected. Among the key factors that may have a direct bearing on our
results of operations and financial condition are:

- competitive practices in the oil and gas industry;
- geological,  mechanical  and  economic  risk  inherent in the drilling and  operation of  exploratory  and
              development wells;
- risk of  impairment  of unproved  property  costs in  countries  where proved  reserves  have not yet been
              established;
- risk of impairment of proved property costs due to declines in prices,  downward  revisions in reserves or
              significant increases in finding and development costs;
- volatility of energy commodity prices,  generally,  and fluctuations in the commodity prices for crude oil
              and natural gas that have not been properly hedged;
- general economic and capital markets conditions, including fluctuations in interest rates;
- the  impact  of  current  and  future  laws  and  governmental  regulations,   particularly  environmental
              regulations,  affecting  the energy  industry in  general,  and our oil and gas  operations,  in
              particular;
- environmental liabilities that are not covered by insurance or indemnity;
- the political and economic  climate in the foreign or domestic  jurisdictions  in which we conduct oil and
              gas  operations,  including  risk of war or potential  adverse  results of military or terrorist
              actions in those areas; and
- the effect on our results of operations  and financial  condition  associated  with  implementing  various
              accounting rules and regulations.

19

---

Devon OEI
Operating, Inc.

Item
3.  Quantitative and Qualitative Disclosures About Market Risks

The Company
experiences market risk primarily in the area of commodity prices. To mitigate a
portion of its exposure to fluctuations in commodity prices, the Company has
entered into various oil and gas derivative financial instruments for its oil
and gas production. See Notes 1 and 3 to the Companys Consolidated
Financial Statements for a discussion of activities involving derivative
financial instruments during first quarter 2003. To calculate the potential
effect of the derivative contracts on future revenues, the Company applied the
average New York Mercantile Exchange (NYMEX) or Brent, as
applicable, oil and gas strip prices as of March 31, 2003 to the quantity of the
Companys oil and gas production covered by those derivative contracts as
of that date. The following table shows the estimated potential effects of the
derivative financial instruments on future revenues (in millions):

|                          | Estimated Increase | Estimated Increase | Estimated Decrease
|------------------------- | ------------------ | ------------------ | ------------------
|
|
|
|                         
|Oil collars               |                    |                    | $                 
|Oil swaps                 |                    |                    | $                 
|Gas collars               |                    |                    | $                 
|Gas swaps                 |                    |                    | $                 
|Gas swap of related trust |                    |                    | $                 

Item
4.  Controls and Procedures

Within
90 days prior to the filing date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the
Companys management, including the Companys Chief Executive Officer
and Chief Financial Officer, of the Companys disclosure controls and
procedures (as defined in Rules 13a14(c) and 15d14(c) of the Securities
Exchange Act of 1934). Based upon that evaluation, the Chief Executive Officer
and Chief Financial Officer have concluded that the Companys disclosure
controls and procedures are effective.

There
have been no significant changes in the Companys internal controls or in
other factors that could significantly affect these controls subsequent to the
date of their evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Part
II.  Other Information

Item 1.  
Legal Proceedings

For
a discussion of the legal proceedings to which the Company is a party see Note 5
to the Consolidated Financial Statements on page 11.

20

---

Devon OEI
Operating, Inc.

Item 4.  
Submission of Matters to a Vote of Security Holders

On
April 25, 2003 at a special meeting, the stockholders approved a merger of Ocean
Energy, Inc. with and into a subsidiary of Devon Energy Corporation. Votes were
cast as follows:

|                                          | For | Against | Abstained
|----------------------------------------- | --- | ------- | ---------
|                                         
|Ratification of the Agreement and Plan of |     |         |          
|Merger between Ocean and Devon            |     |         |          

Item 6.
Exhibits and Reports on Form 8K

(a)  Exhibits:

|*3.1 |  | Certificate
of Amendment of Certificate of Incorporation of Ocean Energy, Inc.
|---- |  | ------------------------------------------------------------------------------

|*4.1 |  | First
Amendment to Revolving Credit Agreement among Ocean Energy, Inc. and the agents and
lenders  signatory thereto effective as of April 17, 2003, filed herewith.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.1 |  | Third
Amendment to Executive Supplemental Retirement Plan Membership Agreement by and  between
the Company and James T. Hackett effective as of April 25, 2003.
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.2 |  | First
Amendment to Executive Supplemental Retirement Plan Membership Agreement by and  between
the Company and Robert K. Reeves effective as of April 29, 2003.
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.3 |  | First
Amendment to Executive Supplemental Retirement Plan Membership Agreement by and  between
the Company and William L. Transier effective as of April 29, 2003.
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.4 |  | Second
Amendment to Ocean Energy, Inc. Executive Supplemental Retirement Plan effective as of
April 25, 2003.
|------ |  | -------------------------------------------------------------------------------------------------------------

|*#10.5 |  | Third
Amendment to Devon OEI Operating, Inc. Executive Supplemental Retirement Plan effective
as  of April 29, 2003.
|------ |  | --------------------------------------------------------------------------------------------------------------------

|*99.1 |  | Certification
of Chief Executive Officer of Devon OEI Operating, Inc. pursuant to 18 U.S.C.  Section
1350 as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002.
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*99.2 |  | Certification
of Chief Financial Officer of Devon OEI Operating, Inc. pursuant to 18 U.S.C.  Section
1350 as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002.
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

*  Filed
herewith.

#  Identifies
management contracts and compensatory plans or arrangements.

(b) Reports on
Form 8K:

On
February 25, 2003, the Company filed a Current Report on Form 8K containing the
Agreement and Plan of Merger, dated as of February 23, 2003, among Ocean, Devon
Energy Corporation (Devon) and Devon Newco Corporation, a wholly
owned subsidiary of Devon. The item reported in such Current Report was Item 5
(Other Events).

21

---

Devon OEI
Operating, Inc.

On
April 2, 2003, the Company filed a Current Report on Form 8K concerning the
letter agreement (the Letter Agreement) entered into by Devon Energy
Corporation, Devon NewCo Corporation and Ocean on April 1, 2003 to amend the
Agreement and Plan of Merger, dated February 23, 2003, by and among the parties,
as amended March 19, 2003 (the Merger Agreement). The Letter
Agreement amends the Merger Agreement concerning the voting rights of Ocean
preferred stock that will remain outstanding following the merger. The items
reported in such Current Report were Item 5 (Other Events) and Item 7 (Financial
Statements, Pro Forma Financial Information and Exhibits).

On
April 14, 2003, the Company filed a Current Report on Form 8K concerning the
issuance by Devon and Ocean of a supplement to the proxy statement/prospectus,
dated March 20, 2003, relating to the special meetings of the stockholders of
both Devon and Ocean on April 25, 2003 to vote on the merger. The supplement
states that Ocean has determined to change its method for estimating proved
reserves for periods ending after December 31, 2002 to conform to the Securities
and Exchange Commissions interpretation of its guidelines regarding the
recording of proved reserve estimates of oil and gas deposits. The items
reported in such Current Report were Item 5 (Other Events) and Item 7 (Financial
Statements, Pro Forma Financial Information and Exhibits).

On
April 25, 2003, the Company filed a Current Report on Form 8K concerning a
change in control of the registrant due to the merger of Devon NewCo Corporation
with and into the Company. The items reported in such Current Report were Item 1
(Changes in Control of Registrant) and Item 7 (Financial Statements, Pro Forma
Financial Information and Exhibits).

# Signatures

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

| | Devon OEI Operating, Inc.
| | -------------------------

| | By: 
/s/ James T. Hackett       James T. Hackett 
       Chief Executive Officer
| | --------------------------------------------------------------------------------

| | Date: May 13, 2003
| | ------------------

| | By: 
/s/ William L. Transier       William L. Transier 
       Chief Financial Officer
| | --------------------------------------------------------------------------------------

| | Date: May 13, 2003
| | ------------------

22

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Devon OEI
Operating, Inc.

# Certifications

I, James T.
Hackett, certify that:

|1. |  | I
have reviewed this quarterly report on Form 10Q of Devon OEI Operating, Inc.;
|-- |  | --------------------------------------------------------------------------------

|2. |  | Based
on my knowledge, this quarterly report does not contain any untrue  statement of a
material fact or omit to state a material fact necessary to make  the statements made, in
light of the circumstances under which such statements  were made, not misleading with
respect to the period covered by this quarterly  report;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Based
on my knowledge, the financial statements, and other financial information  included in
this quarterly report, fairly present in all material respects the  financial condition,
results of operations and cash flows of the registrant as  of, and for, the periods
presented in this quarterly report;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | The
registrants other certifying officer and I are responsible for  establishing and
maintaining disclosure controls and procedures (as defined in  Exchange Act Rules 13a14
and 15d14) for the registrant and we have:
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | designed
such disclosure controls and procedures to ensure that material  information relating to
the registrant, including its consolidated subsidiaries,  is made known to us by others
within those entities, particularly during the  period in which this quarterly report is
being prepared;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | evaluated
the effectiveness of the registrants disclosure controls and  procedures as of a
date within 90 days prior to the filing date of this  quarterly report (the Evaluation
Date); and
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c) |  | presented
in this quarterly report our conclusions about the effectiveness of  the disclosure
controls and procedures based on our evaluation of the Evaluation  Date;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | The
registrants other certifying officer and I have disclosed, based on  our most
recent evaluation, to the registrants auditors and the audit  committee of
registrants board of directors (or persons performing the  equivalent function):
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | all
significant deficiencies in the design or operation of internal controls  which could
adversely affect the registrants ability to record, process,  summarize and report
financial data and have identified for the  registrants auditors any material
weaknesses in internal controls; and
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | any
fraud, whether or not material, that involves management or other employees  who have a
significant role in the registrants internal controls; and
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | The
registrants other certifying officer and I have indicated in this  quarterly report
whether or not there were significant changes in internal  controls or in other factors
that could significantly affect internal controls  subsequent to the date of our most
recent evaluation, including any corrective  actions with regard to significant
deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: May 13, 2003 | By: /s/ James T. Hackett
      James T. Hackett,
      Chief Executive Officer
|------------------ | ------------------------------------------------------------------------------

23

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Devon OEI
Operating, Inc.

# Certifications

I, William L.
Transier, certify that:

|1. |  | I
have  reviewed this quarterly report on Form 10Q of Devon OEI Operating, Inc.;
|-- |  | ---------------------------------------------------------------------------------

|2. |  | Based
on my knowledge, this quarterly report does not contain any untrue  statement of a
material fact or omit to state a material fact necessary to make  the statements made, in
light of the circumstances under which such statements  were made, not misleading with
respect to the period covered by this quarterly  report;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. |  | Based
on my knowledge, the financial statements, and other financial information  included in
this quarterly report, fairly present in all material respects the  financial condition,
results of operations and cash flows of the registrant as  of, and for, the periods
presented in this quarterly report;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. |  | The
registrants other certifying officer and I are responsible for  establishing and
maintaining disclosure controls and procedures (as defined in  Exchange Act Rules 13a14
and 15d14) for the registrant and we have:
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | designed
such disclosure controls and procedures to ensure that material  information relating to
the registrant, including its consolidated subsidiaries,  is made known to us by others
within those entities, particularly during the  period in which this quarterly report is
being prepared;
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | evaluated
the effectiveness of the registrants disclosure controls and  procedures as of a
date within 90 days prior to the filing date of this  quarterly report (the Evaluation
Date); and
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|c) |  | presented
in this quarterly report our conclusions about the effectiveness of  the disclosure
controls and procedures based on our evaluation of the Evaluation  Date;
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5. |  | The
registrants other certifying officer and I have disclosed, based on  our most
recent evaluation, to the registrants auditors and the audit  committee of
registrants board of directors (or persons performing the  equivalent function):
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|a) |  | all
significant deficiencies in the design or operation of internal controls  which could
adversely affect the registrants ability to record, process,  summarize and report
financial data and have identified for the  registrants auditors any material
weaknesses in internal controls; and
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|b) |  | any
fraud, whether or not material, that involves management or other employees  who have a
significant role in the registrants internal controls; and
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

|6. |  | The
registrants other certifying officer and I have indicated in this  quarterly report
whether or not there were significant changes in internal  controls or in other factors
that could significantly affect internal controls  subsequent to the date of our most
recent evaluation, including any corrective  actions with regard to significant
deficiencies and material weaknesses.
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Date: May 13, 2003 | By: /s/ William L. Transier
       William L. Transier
       Chief Financial Officer
|------------------ | -------------------------------------------------------------------------------------

24

---

Devon OEI
Operating, Inc.

# Index
To Exhibits

|*3.1 |  | Certificate
of Amendment of Certificate of Incorporation of Ocean Energy, Inc.
|---- |  | ------------------------------------------------------------------------------

|*4.1 |  | First
Amendment to Revolving Credit Agreement among Ocean Energy, Inc. and the agents and
lenders  signatory thereto effective as of April 17, 2003, filed herewith.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.1 |  | Third
Amendment to Executive Supplemental Retirement Plan Membership Agreement by and  between
the Company and James T. Hackett effective as of April 25, 2003.
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.2 |  | First
Amendment to Executive Supplemental Retirement Plan Membership Agreement by and  between
the Company and Robert K. Reeves effective as of April 29, 2003.
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.3 |  | First
Amendment to Executive Supplemental Retirement Plan Membership Agreement by and  between
the Company and William L. Transier effective as of April 29, 2003.
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*#10.4 |  | Second
Amendment to Ocean Energy, Inc. Executive Supplemental Retirement Plan effective as of
April 25, 2003.
|------ |  | -------------------------------------------------------------------------------------------------------------

|*#10.5 |  | Third
Amendment to Devon OEI Operating, Inc. Executive Supplemental Retirement Plan effective
as  of April 29, 2003.
|------ |  | --------------------------------------------------------------------------------------------------------------------

|*99.1 |  | Certification
of Chief Executive Officer of Devon OEI Operating, Inc. pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002.
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|*99.2 |  | Certification
of Chief Financial Officer of Devon OEI Operating, Inc. pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the SarbanesOxley Act of 2002.
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

*  Filed
herewith.

#  Identifies
management contracts and compensatory plans or arrangements.

25

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