10-KPeriod: FY2011

DEVON ENERGY CORP/DE Annual Report, Year Ended Dec 31, 2011

Filed February 24, 2012For Securities:DVN

Summary

Devon Energy Corporation's (DVN) 2011 10-K filing highlights a pivotal year of strategic transformation, with the company largely completing its divestiture of offshore operations, generating approximately $8 billion in after-tax proceeds. These proceeds were strategically deployed towards significant share repurchases ($3.5 billion) and debt reduction, substantially strengthening the company's balance sheet. Financially, 2011 was a strong year, marked by record net earnings and an all-time high in proved reserves (3,005 MMBoe). The company experienced robust growth in North American onshore liquids production, up 15% year-over-year, and an overall 5% increase in combined production to 658 MBoe per day. This focus on liquids-rich assets is a core element of their strategy to maximize growth in cash flows, earnings, production, and reserves on a per debt-adjusted share basis, particularly in an environment of challenged natural gas prices. The company maintained capital discipline, investing $6.9 billion in oil and gas activities, including acreage acquisitions, and demonstrated a commitment to returning capital to shareholders through dividends.

Financial Highlights

46 data points
Beta

Revenue

$11.45B

Net Income

$4.70B

41.1% Net Margin

EPS (Diluted)

$11.25

Total Assets

$40.96B

Cash & Equivalents

$5.55B

Free Cash Flow

$6.22B

Financial Statements
Beta
Revenue$11.45B
Operating Expenses$7.16B
Operating Income$4.63B
Interest Expense$352.00M
Net Income$4.70B
EPS (Basic)$11.29
EPS (Diluted)$11.25
Shares Outstanding (Basic)412.00M
Shares Outstanding (Diluted)414.00M

Key Highlights

  • 1Completed significant offshore divestiture program, generating approximately $8 billion in after-tax proceeds.
  • 2Returned substantial capital to shareholders through a $3.5 billion share repurchase program completed in Q4 2011.
  • 3Achieved record net earnings and an all-time high in proved reserves of 3,005 MMBoe.
  • 4Increased North American onshore liquids production by 15% year-over-year, driven by assets like the Permian Basin and Canadian oil sands (Jackfish).
  • 5Focused capital allocation on liquids-rich opportunities within its North American onshore portfolio.
  • 6Maintained strong financial discipline, investing $6.9 billion in exploration, development, and acreage acquisitions.
  • 7Maintains a strong balance sheet with significant financial flexibility for future operations and investments.

Frequently Asked Questions

In 2011, Devon Energy's primary strategic focus was completing its transformation into a pure North American onshore energy company. This involved divesting its offshore operations and reinvesting the proceeds into its high-growth onshore assets, particularly those rich in liquids.

Devon Energy significantly strengthened its financial position by completing its offshore divestiture program, which generated approximately $8 billion in after-tax proceeds. A substantial portion of these proceeds, $3.5 billion, was used to repurchase the company's common stock, and the remainder was used for debt reduction, leading to a stronger balance sheet.

Devon Energy experienced strong production growth in 2011, with North American onshore liquids production increasing by 15% year-over-year. Overall combined production rose by 5% to 658 MBoe per day, driven by key plays such as the Permian Basin and Canadian oil sands projects like Jackfish.

Devon Energy actively managed commodity price volatility by utilizing derivative financial instruments, including price swaps and collars, to hedge a portion of its production. The company's strategy also involved focusing on liquids-rich assets, which generally offered more stable and higher prices compared to natural gas during that period.