10-K/APeriod: FY2007

DEVON ENERGY CORP/DE Annual Report (Amendment), Year Ended Dec 31, 2007

Filed June 9, 2008For Securities:DVN

Summary

Devon Energy Corporation's 2008 10-K filing highlights a strong operational performance in 2007, marked by record earnings, production growth, and proved reserve additions. The company's strategy is focused on expanding reserves and production through disciplined capital investment in low-risk, North American development projects, while also pursuing high-impact, long-cycle projects for future growth. Key operational successes in 2007 included a high drilling success rate (98% with 2,440 wells), significant growth in the Barnett Shale, and advancements in deepwater Gulf of Mexico exploration and development. The company also made progress on its heavy oil project in Canada (Jackfish) and its oil development project offshore Brazil (Polvo). Devon is also actively divesting non-core international assets in West Africa and Egypt to sharpen its focus on core North American and select international growth opportunities. Financially, Devon reported record net earnings of $3.6 billion and a 12% increase in production to 224 million Boe. The company maintained a strong liquidity position with $1.7 billion in cash and short-term investments at year-end 2007. Looking ahead to 2008, Devon anticipates continued production growth and has hedged a significant portion of its expected production to mitigate commodity price volatility.

Financial Highlights

24 data points
Beta

Revenue

$9.97B

Net Income

$3.61B

36.2% Net Margin

EPS (Diluted)

$8.00

Cash & Equivalents

$1.37B

Free Cash Flow

$941.00M

Financial Statements
Beta
Revenue$9.97B
Operating Expenses$6.65B
Operating Income$2.48B
Net Income$3.61B
EPS (Basic)$8.08
EPS (Diluted)$8.00

Key Highlights

  • 1Record net earnings of $3.6 billion in 2007, a 27% increase from 2006.
  • 2Production increased by 12% to 224 million Boe in 2007.
  • 3Proved reserves reached a record 2.5 billion Boe at year-end 2007.
  • 4Drilled 2,440 wells in 2007 with a 98% success rate.
  • 5Strong growth in the Barnett Shale, with a 33% production increase in 2007.
  • 6Commenced production from the Merganser field in the Gulf of Mexico and began steam injection at the Jackfish heavy oil project in Canada.
  • 7Divesting non-core West African and Egyptian operations to focus on core assets.

Frequently Asked Questions

In 2007, Devon Energy achieved record net earnings of $3.6 billion, a 27% increase from 2006. Production grew by 12% to 224 million Boe, and proved reserves reached an all-time high of 2.5 billion Boe. The company also reported a 98% success rate in its drilling activities, completing 2,440 wells.

Devon Energy's two-pronged operating strategy involves investing the majority of its capital in low-risk exploitation and development projects on its extensive North American property base. This provides reliable production and reserve additions. The strategy is supplemented by measured capital investment in high-impact, long cycle-time projects to ensure future development inventory. Key objectives include increasing reserves and production per share, exercising capital discipline, preserving financial flexibility, maintaining a low unit-cost structure, and improving performance through marketing and midstream operations.

Devon Energy uses financial hedging arrangements, including price collars and swaps, to manage its exposure to oil and natural gas price volatility. As of February 15, 2008, a significant portion of its expected 2008 production was hedged, with approximately 64% of natural gas production and 12% of oil production subject to these arrangements.