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DVN · DEVON ENERGY CORP/DE

50 filings

10-Q

DVN 10-Q Quarterly Reports

DEVON ENERGY CORP/DE - 50 quarterly reports

Filing record · 2016–202610-K1210-Q328-K123

DVN filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 123 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Deal closed8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Dec ’21Dec ’21
  4. Leadership change8-K · Oct ’25Oct ’25
  1. 2026-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2026

    Devon Energy Corporation (DVN) reported robust financial and operational results for the quarter and six months ended June 30, 2026, primarily driven by the successful completion of its merger of equals with Coterra. The company generated substantial revenues and net earnings, significantly higher than the prior year periods, reflecting strong production volumes and a favorable commodity price environment for oil and NGLs, despite a weaker natural gas market. Key strategic initiatives during the period included the integration of Coterra's assets, a significant acquisition of Permian Basin acreage, and a strong focus on returning capital to shareholders through dividends and share repurchases. The company also managed its capital structure effectively, repaying debt and maintaining a strong liquidity position. Investors should note the substantial increase in the company's asset base and liabilities due to the merger, along with ongoing efforts to realize significant merger synergies. Looking ahead, Devon is focused on optimizing its expanded asset base, driving operational efficiencies, and continuing to deliver shareholder returns. The company's outlook is influenced by volatile commodity prices and geopolitical factors, but its disciplined capital allocation strategy and scale position it to navigate these challenges.

    Aug 5, 2026
  2. 2026-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2026

    Devon Energy Corporation (DVN) reported financial results for the first quarter ended March 31, 2026. The company generated total revenues of $3.81 billion, a decrease from $4.45 billion in the prior year's comparable quarter. Net earnings attributable to Devon were $120 million ($0.19 per diluted share), significantly lower than $494 million ($0.77 per diluted share) in the first quarter of 2025. This decline was primarily driven by lower commodity prices and negative impacts from commodity derivative valuation changes, partially offset by increased production volumes from new well activity in the Delaware Basin. The company announced a significant development: the all-stock merger of equals with Coterra Energy Inc., expected to close on May 7, 2026. This merger is anticipated to create a leading large-cap shale operator and is projected to unlock substantial shareholder value through enhanced scale, improved margins, increased free cash flow, and an estimated $1.0 billion in annual synergies. Devon ended the quarter with robust liquidity, including $1.8 billion in cash.

    May 6, 2026
  3. 2025-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2025

    Devon Energy Corp. (DVN) reported solid financial results for the third quarter and the first nine months of 2025, demonstrating resilience amidst volatile commodity prices and global economic uncertainties. The company successfully integrated the Grayson Mill acquisition, which bolstered production and operational scale, particularly in the Rockies region. Despite a challenging pricing environment for oil and NGLs compared to the prior year, Devon maintained strong operating cash flow and executed on its capital discipline strategy. Management highlighted progress on a business optimization plan aimed at improving annual pre-tax cash flow by $1 billion, with significant savings expected by year-end 2025. Devon continues to prioritize shareholder returns through a combination of dividends and a substantial share repurchase program, underscoring its commitment to delivering value. The company's liquidity remains strong, supported by cash on hand and an undrawn credit facility. Looking ahead, Devon remains focused on operational efficiency, cost management, and adapting its capital deployment to market fluctuations, aiming to maximize free cash flow generation and maintain its investment-grade financial position.

    Nov 6, 2025
  4. 2025-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2025

    Devon Energy Corporation's (DVN) latest 10-Q filing for the period ending June 30, 2025, indicates a solid operational quarter with robust revenues driven by both oil, gas, and NGL sales, along with significant marketing and midstream revenues. The company reported net earnings attributable to Devon of $899 million for the quarter, a slight increase from the prior year's $844 million, though year-to-date net earnings show a slight decrease compared to the same period in 2024. The report highlights an increase in production volumes, largely attributable to the Grayson Mill acquisition and new well activity, particularly in the Delaware and Anadarko Basins. Despite a notable decrease in realized oil and gas prices, the company's hedging strategy provided some cushion. Significant strategic activities during the period include the sale of its Matterhorn investment, generating a substantial gain, and ongoing capital return initiatives through dividends and share repurchases. The company also noted a business optimization plan aimed at improving annual pre-tax cash flow by $1.0 billion. Liquidity remains strong, with substantial cash on hand and significant availability under its revolving credit facility. Devon continues to manage its debt effectively, maintaining a healthy debt-to-capitalization ratio. The company is also actively managing its asset portfolio, including the recent acquisition of noncontrolling interests in CDM. Investors should monitor commodity price volatility, the execution of the business optimization plan, and the company's continued commitment to capital discipline and shareholder returns.

    Aug 6, 2025
  5. 2025-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2025

    Devon Energy Corp. (DVN) reported its first quarter 2025 financial results, demonstrating resilience in a volatile commodity price environment. While net earnings attributable to Devon decreased to $494 million ($0.77 per diluted share) compared to $596 million ($0.94 per diluted share) in the first quarter of 2024, the company's operational performance remained strong, driven by increased production volumes, particularly in the Delaware Basin and Rockies, partly due to the acquisition of Grayson Mill. Despite lower realized oil prices year-over-year, higher gas and NGL prices, along with effective expense management, supported robust operating cash flow of $1.9 billion. The company continues to prioritize shareholder returns, repurchasing approximately $301 million of common stock and declaring a $0.24 per share dividend. Liquidity remains strong with $1.2 billion in cash and cash equivalents and $3.0 billion in available borrowing capacity under its revolving credit facility. Devon also announced a business optimization plan aimed at improving annual pre-tax cash flow by $1.0 billion, showcasing a commitment to efficiency and value creation amidst market uncertainties.

    May 7, 2025
  6. 2024-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2024

    Devon Energy Corporation (DVN) reported its third quarter and year-to-date results, highlighted by the significant acquisition of the Williston Basin business of Grayson Mill for approximately $5.0 billion. This strategic move, funded by a combination of cash and stock, is expected to bolster DVN's production and operating scale, particularly in oil production. Financially, the company demonstrated resilience in a dynamic market. While revenues saw a slight increase year-over-year for the nine months ended September 30, 2024, net earnings attributable to Devon were $2.25 billion, a decrease from $2.60 billion in the prior year, largely influenced by commodity price fluctuations and the accounting impact of derivatives. The company generated substantial operating cash flow, supporting capital expenditures, debt management, and significant returns to shareholders through dividends and share repurchases. Liquidity remains strong, with ample credit facilities available.

    Nov 6, 2024
  7. 2024-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2024

    Devon Energy Corporation (DVN) reported solid financial results for the second quarter and first half of 2024, demonstrating resilience in its operations despite commodity price fluctuations. The company's strategic focus on capital discipline, operational efficiencies, and maximizing free cash flow continues to drive shareholder value through a balanced approach of dividends and share repurchases. The announced acquisition of Grayson Mill Energy's Williston Basin business highlights DVN's commitment to strategic growth and expanding its oil production and operating scale, aiming to create long-term shareholder value. Financially, DVN reported net earnings of $844 million ($1.34 per diluted share) for Q2 2024, and $1.44 billion ($2.29 per diluted share) for the first six months of 2024. Operating cash flow remained robust, supporting capital expenditures and shareholder returns. The company maintained a strong liquidity position, underscoring its financial stability. The company's dividend policy, comprising a fixed and variable component, continues to be a key element of its shareholder return strategy, with a significant dividend declared for the third quarter of 2024. Investors should note the ongoing strategic initiatives, including the significant acquisition, which are expected to enhance future performance.

    Aug 7, 2024
  8. 2024-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2024

    Devon Energy Corporation's (DVN) first quarter 2024 report indicates a slight decrease in net earnings to $596 million ($0.94 per diluted share) from $995 million ($1.53 per diluted share) in the prior year's comparable period. This decline was primarily driven by lower realized natural gas and NGL prices, partially offset by an increase in oil prices and stronger hedging results for natural gas. Despite the dip in earnings, the company maintained a strong operational focus, exceeding oil production targets and generating substantial operating cash flow of $1.7 billion. The company continues to prioritize shareholder returns, raising its fixed dividend by 10% and actively engaging in share repurchases, having completed approximately 83% of its $3.0 billion repurchase program. Liquidity remains robust with $1.1 billion in cash and $4.1 billion in total liquidity at the end of the quarter. Capital expenditures for the quarter were $894 million, focused on exploration and development. The company's strategic priorities remain centered on moderating production growth, enhancing efficiencies, optimizing reinvestment rates to maximize free cash flow, maintaining low leverage, and delivering cash returns to shareholders, all while navigating a challenging cost inflation environment.

    May 2, 2024
  9. 2023-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2023

    Devon Energy Corporation (DVN) reported its third-quarter 2023 financial results, indicating a notable decrease in net earnings compared to the same period in the prior year, primarily driven by lower realized commodity prices. Despite the year-over-year decline in earnings, the company demonstrated resilience with strong operating cash flow, which funded capital expenditures and shareholder returns. Devon continued its commitment to returning capital to shareholders through dividends and share repurchases, while also managing its debt profile. The company's operational focus remains on disciplined capital allocation and optimizing efficiency across its core U.S. operating areas, particularly the Delaware Basin and Eagle Ford.

    Nov 8, 2023
  10. 2023-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2023

    Devon Energy Corporation (DVN) reported its second quarter and first half 2023 financial results, revealing a notable decrease in revenues and net earnings compared to the same periods in 2022, largely attributable to lower realized commodity prices. Despite this, the company maintained a strong operational performance, with production volumes increasing year-over-year, particularly in the Eagle Ford and Williston Basin regions following strategic acquisitions. Devon continued to prioritize capital discipline, returning significant capital to shareholders through dividends and share repurchases, while maintaining a robust liquidity position. The company's focus remains on optimizing capital efficiencies, maximizing free cash flow, and maintaining a low leverage profile. While commodity price volatility and inflationary pressures present ongoing challenges, Devon's diversified asset base and strategic hedging activities position it to navigate these complexities. Investors should note the company's commitment to a "fixed plus variable" dividend strategy and its ongoing share repurchase program as key components of its capital return strategy.

    Aug 2, 2023
  11. 2023-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2023

    Devon Energy Corporation (DVN) reported a slight increase in net earnings for the first quarter of 2023 compared to the same period in the prior year, reaching $995 million from $989 million. This stability in earnings was achieved despite a notable decrease in realized commodity prices, which was offset by a significant increase in production volumes, particularly driven by recent acquisitions in the Eagle Ford and Williston Basin. The company's financial position remains strong, with substantial operating cash flow and ample liquidity. Devon continues to prioritize returning capital to shareholders through dividends and share repurchases, further supported by an expanded share repurchase program. While facing inflationary pressures and commodity price volatility, Devon remains committed to capital discipline and generating free cash flow by spending within its cash flow.

    May 9, 2023
  12. 2022-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2022

    Devon Energy Corp./DE (DVN) reported strong financial performance for the third quarter and the first nine months of 2022, driven by higher commodity prices and increased production volumes, particularly from its Delaware Basin assets. The company generated substantial operating cash flow, exceeding previous periods significantly. Strategic acquisitions in the Eagle Ford and Williston Basins during 2022 have expanded its asset base and are expected to contribute positively to future production and cash flow. Devon continues to prioritize returning capital to shareholders through a combination of fixed and variable dividends, alongside an active share repurchase program. The company maintained a strong liquidity position and managed its debt levels prudently, with no significant debt maturities until late 2023. Management remains focused on capital discipline, operational efficiencies, and optimizing reinvestment rates to maximize free cash flow, while navigating a dynamic commodity price environment.

    Nov 2, 2022
  13. 2022-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2022

    Devon Energy Corporation reported a substantial increase in financial performance for the second quarter and the first six months of 2022, driven by strong commodity prices and increased production volumes. Total revenues surged to $5.6 billion for the quarter and $9.4 billion for the six-month period, significantly outperforming the prior year's results. Net earnings attributable to Devon reached $1.932 billion ($2.93 per diluted share) for the second quarter and $2.921 billion ($4.40 per diluted share) for the six-month period. This strong profitability underscores the company's successful execution of its strategy focused on moderating growth, capital efficiencies, and maximizing free cash flow, particularly in a favorable commodity price environment. The company continues to prioritize shareholder returns through its fixed-plus-variable dividend strategy and an active share repurchase program.

    Aug 2, 2022
  14. 2022-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2022

    Devon Energy Corp. reported strong financial performance for the first quarter of 2022, driven by significantly higher commodity prices and increased production volumes, particularly from the Delaware Basin. Total revenues reached $3.81 billion, a substantial increase from $2.05 billion in the same period last year, reflecting robust market conditions and the company's operational execution. Net earnings attributable to Devon surged to $989 million ($1.48 per diluted share) from $213 million ($0.32 per diluted share) in Q1 2021. The company demonstrated strong operational cash flow generation, amounting to $1.84 billion, enabling significant shareholder returns. Devon returned approximately $667 million to shareholders through dividends in Q1 2022, and continued its share repurchase program, buying back $230 million worth of stock. With ample liquidity and a strong balance sheet, including $2.6 billion in cash and no significant debt maturities until 2023, Devon is well-positioned to manage its capital and continue its cash return strategy.

    May 3, 2022
  15. 2021-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2021

    Devon Energy Corporation's (DVN) Q3 2021 10-Q filing reveals a significant turnaround and strong performance, largely driven by the successful integration of the WPX Energy merger earlier in the year and a favorable commodity price environment. The company reported substantial net earnings, a stark contrast to the previous year's losses, and robust operating cash flow. This financial strength has enabled Devon to significantly reduce debt, return capital to shareholders through dividends, and initiate a substantial share repurchase program. Key operational highlights include strong production volumes, particularly in the Delaware Basin, and improved realized prices for oil, gas, and NGLs. The company has also made progress on achieving merger-related cost synergies. Looking ahead, Devon remains focused on disciplined capital allocation, prioritizing free cash flow generation and shareholder returns while maintaining a strong balance sheet. The company's liquidity position is robust, with ample cash and an undrawn credit facility, positioning it well to navigate future market conditions.

    Nov 3, 2021
  16. 2021-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2021

    Devon Energy Corp. reported strong financial results for the second quarter and the first six months of 2021, largely driven by the successful completion of its merger with WPX Energy in January 2021. The company saw a significant increase in total revenues, primarily due to higher oil, gas, and NGL sales, reflecting improved commodity prices and increased production volumes, particularly from the Delaware Basin. Net earnings have swung from a substantial loss in the prior year period to a significant profit, demonstrating the positive impact of the merger and the recovery in energy markets. Cash flow from operations has also seen a dramatic improvement, enabling the company to repay debt and return capital to shareholders through dividends. Devon's liquidity remains strong, with substantial cash on hand and ample borrowing capacity.

    Aug 4, 2021
  17. 2021-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2021

    Devon Energy Corporation (DVN) reported a significant turnaround in its first quarter of 2021, a stark contrast to the same period in 2020. The company posted net earnings of $216 million, or $0.32 per diluted share, compared to a net loss of $1.8 billion, or $(4.82) per diluted share, in Q1 2020. This dramatic improvement is primarily attributable to the successful completion of the all-stock merger with WPX Energy on January 7, 2021, coupled with a strong recovery in commodity prices. The merger has created a leading oil producer with substantial assets in the Delaware Basin, and the company is already realizing synergies and benefits from this strategic combination. Financially, Devon ended the quarter with $1.88 billion in cash and cash equivalents and $3.0 billion in available credit under its Senior Credit Facility, with no significant debt maturities until 2023. The company's operational performance also showed improvements, with increased production volumes across key areas like the Delaware Basin. Devon is now executing on a returns-driven strategy, including a new fixed-plus-variable dividend policy, signaling a commitment to returning capital to shareholders.

    May 5, 2021
  18. 2020-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2020

    Devon Energy Corp./DE (DVN) filed its 10-Q for the period ending September 30, 2020, reporting a net loss attributable to Devon of $92 million for the third quarter of 2020, a significant improvement from the $109 million net loss in the same period last year. This turnaround, despite a challenging economic environment marked by the COVID-19 pandemic and volatile commodity prices, highlights the company's resilience and strategic adjustments. The company has been actively divesting non-core assets, notably completing the sale of its Barnett Shale assets on October 1, 2020, which is expected to improve its financial position and focus. Financially, the company experienced a substantial asset impairment charge of $2.7 billion in the first quarter of 2020, largely due to the commodity price downturn. However, for the nine months ended September 30, 2020, total revenues were $3.5 billion, down from $4.6 billion in the prior year, reflecting the impact of lower commodity prices. Despite these headwinds, Devon has maintained a strong liquidity position with $4.9 billion in liquidity at the end of the third quarter, including $1.9 billion in cash. The company also announced a significant strategic development: an all-stock merger of equals with WPX Energy, expected to close in the first quarter of 2021, aiming to create a leading unconventional oil producer with enhanced shareholder returns.

    Oct 30, 2020
  19. 2020-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2020

    Devon Energy's Q2 2020 10-Q shows a sharp deterioration in results driven by the COVID-19 demand shock and collapse in oil prices. Net loss attributable to Devon was $670 million in the second quarter (versus $495 million net earnings in Q2 2019), and the six-month net loss was $2.5 billion, which includes a $2.7 billion proved asset impairment recognized in Q1 2020. Oil, gas and NGL sales fell 55% year over year to $424 million in the quarter, and unhedged realized prices per Boe dropped 44% sequentially. Hedge valuation losses of $593 million were recorded in the quarter, though cash hedge settlements of $232 million cushioned realized revenue. Management's response has been to cut the 2020 capital budget about 45% (roughly $800 million), reduce production and G&A costs, and target $300 million of annualized cash cost savings by year-end. From a balance sheet and liquidity standpoint, Devon exited the quarter with $4.7 billion of liquidity, including $1.7 billion of cash and $3.0 billion of undrawn credit facility capacity, and has no significant debt maturities until 2025. Total debt was $4.3 billion, and the debt-to-capitalization ratio of 19.3% sits well inside the 65% covenant. Operating cash flow funded roughly 90% of capital expenditures in the first half. Management has also authorized a $1.5 billion debt repurchase plan, while the share buyback has been suspended to preserve liquidity. Shareholder returns continue in reduced form, with the quarterly dividend raised to $0.11 per share and a $0.26 special dividend approved for payment on October 1, 2020. Key near-term catalysts include the Barnett Shale sale to BKV, now scheduled to close October 1, 2020, for $570 million in cash plus up to $260 million in contingent earnouts, with a $170 million deposit already received. The company also remains in a full deferred tax asset valuation allowance and faces continued uncertainty from commodity prices, with management guiding Q3 2020 volumes to 301 to 318 MBoe/d.

    Aug 5, 2020
  20. 2020-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2020

    Devon Energy Corp. (DVN) reported a significant net loss of $1.816 billion for the first quarter of 2020, a substantial increase from the $317 million loss in the same period of 2019. This widened loss was primarily driven by a massive $2.67 billion asset impairment charge recognized in the current quarter, largely attributed to the severe downturn in commodity prices caused by the COVID-19 pandemic. Total revenues also saw a significant increase, more than doubling to $2.087 billion from $1.079 billion year-over-year, driven by higher upstream revenues. However, this was overshadowed by a surge in total expenses, which more than doubled to $4.194 billion due to the aforementioned impairments. In response to the unprecedented market volatility, Devon implemented significant cost-saving measures, including a 45% reduction in its 2020 capital expenditure outlook. The company also temporarily suspended its share repurchase program to preserve liquidity. Despite the challenging market conditions, Devon maintained substantial liquidity with $1.7 billion in cash and $3.0 billion in available credit, and no significant debt maturities until 2025. The company's strategic focus remains on protecting financial strength and delivering shareholder value amidst the ongoing economic uncertainty.

    May 6, 2020
  21. 2019-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2019

    Devon Energy's Q3 2019 10-Q shows a company in transition to what management calls "New Devon," a U.S.-focused upstream business after selling its Canadian operations for $2.6 billion in June 2019 and preparing to separate its Barnett Shale assets. Q3 2019 net earnings attributable to Devon were $109 million ($0.27 per diluted share), versus $2.5 billion in Q3 2018, which was inflated by the $2.6 billion EnLink gain. Excluding discontinued operations, hedge valuation changes and other items, management reports Q3 2019 core earnings of $139 million ($0.26 per share), and EBITDAX was $652 million. Unhedged realized prices fell sharply, with the NGL price down 51% year over year, but New Devon oil volumes grew about 19% over the first nine months of 2019 compared with 2018. Capital discipline and shareholder returns remained central. Devon repurchased $1.7 billion of stock in the first nine months of 2019, completing about $4.7 billion of its $5.0 billion authorization, and it raised the quarterly dividend 12.5% to $0.09. Operating cash flow from continuing operations was $1.56 billion year to date and funded capital expenditures of $1.53 billion. Balance sheet strength improved: the company retired $1.7 billion of senior notes, ended the quarter with $4.3 billion of fixed-rate debt (about 6.0% average rate) and no maturities until late 2025, and reported an 18.9% debt-to-capitalization ratio against a 65% covenant. Total liquidity was about $4.7 billion, including $1.7 billion of cash and $3.0 billion of undrawn credit. Key risks for investors include continued commodity price exposure, with about 75% of expected 2019 oil production hedged, a pending and still-undetermined Barnett Shale separation that could trigger impairments if sold below carrying value (about $1.4 billion), and ongoing Louisiana coastal litigation and royalty claims. Management also expects Q4 2019 exploration and development capital of $375 million to $420 million, excluding Barnett Shale.

    Nov 6, 2019
  22. 2019-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2019

    Devon Energy's Q2 2019 10-Q shows a company in the middle of a major portfolio transformation. Net earnings attributable to Devon for the quarter were $495 million ($1.19 per diluted share), versus a $425 million loss in Q2 2018. Continuing operations swung to $166 million of earnings ($0.40 per diluted share) from a $496 million loss a year earlier, largely because of a $627 million favorable swing in commodity derivative valuations and the absence of 2018's $154 million of impairments and $85 million of restructuring charges. Management's own non-GAAP core earnings from continuing operations were $97 million ($0.23 per diluted share), down 30% sequentially from Q1, which is a more useful gauge of underlying operating performance this quarter. The headline event was the June 27, 2019 sale of the Canadian business to Canadian Natural Resources for $2.6 billion ($3.4 billion CAD), which produced a $189 million pre-tax gain ($460 million after tax, mostly from a deferred tax benefit). Proceeds were used to retire $1.5 billion of senior notes in July 2019, so the company will have no debt maturities until 2025. Cash rose to $3.47 billion (about $3.8 billion including restricted cash), and total debt is now shown at $4.3 billion on the balance sheet, with the $1.5 billion of notes being retired reclassified to discontinued operations. Devon is also separating its Barnett Shale assets (carrying value about $1.4 billion), with an expected completion by year-end 2019. The company has repurchased $4.4 billion of its $5.0 billion buyback program, and the quarterly dividend was raised 12.5% to $0.09 per share. Operationally, New Devon production (excluding divested and Barnett assets) grew to 321 MBoe/d, up 4% sequentially, driven by the Delaware Basin. Realized prices fell about 5% sequentially, to $27.24 per Boe unhedged. Management is targeting $200 million of annualized cost savings by year-end 2019 and a total of $780 million over three years, and expects the remaining 2019 exploration and development budget to be $0.8 to $0.9 billion. Investors should note that the reported GAAP profit is heavily influenced by non-cash derivative gains and one-time divestiture gains, so the headline earnings figure overstates the recurring earning power of the business.

    Aug 7, 2019
  23. 2019-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2019

    Devon Energy Corp. reported a net loss of $317 million for the first quarter of 2019, a significant increase from the $153 million net loss in the same period of the prior year. This widened loss is largely attributable to derivative valuation changes and lower upstream revenues, despite a reduction in financing costs due to lower debt levels and the absence of significant debt retirement charges experienced in Q1 2018. The company is undergoing a strategic transformation, focusing on becoming a U.S. oil growth company and announcing its intention to separate its Canadian and Barnett Shale assets. This strategic shift is accompanied by significant cost-reduction initiatives and substantial share repurchases. Operationally, the company saw increased production in key U.S. oil plays like the Delaware Basin and Powder River Basin. However, total revenues decreased year-over-year, primarily impacted by unfavorable commodity derivative valuations. The company's balance sheet reflects a decrease in cash and an increase in accounts receivable. Despite the net loss, Devon emphasized its liquidity position, with ample credit availability and a focus on maintaining financial strength and returning capital to shareholders through dividends and share buybacks.

    May 1, 2019
  24. 2018-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2018

    Devon Energy's Q3 2018 10-Q shows a quarter transformed by portfolio monetization and capital return. The company sold its interests in EnLink and the General Partner for $3.125 billion, recognizing a roughly $2.6 billion pre-tax ($2.2 billion after-tax) gain that is reported within discontinued operations. As a result, Q3 2018 net earnings attributable to Devon were $2,537 million ($5.14 per diluted share), versus $193 million a year earlier. Excluding discontinued operations and other non-core items, Devon's core earnings were $324 million, or $0.65 per diluted share, up sharply from $0.21 in Q3 2017 and sequentially from $0.34 in Q2 2018. Upstream revenues rose to $1,332 million from $1,101 million, aided by a 45% increase in the WTI index and a 95% increase in the realized NGL price, though production declined 4% sequentially to 522 MBoe/d due to Jackfish 1 maintenance and divested U.S. assets. Note that the 2018 presentation changes under ASC 606 also grossed up upstream revenues and production expenses. Balance sheet and capital return are the other major themes. Cash rose to $3.1 billion and total debt was $6.0 billion, with long-term debt reduced by about $830 million through tender offers that produced a $312 million early-retirement loss. Devon repurchased $2.2 billion of its $4.0 billion buyback program in 2018 (54.5 million shares at an average of $40.94), including a $1.0 billion accelerated share repurchase, and increased the quarterly dividend 33% to $0.08. Asset divestitures totaled about $4.7 billion year to date against a $5 billion target, with additional Delaware Basin and Barnett Shale sales pending. Forward-looking risks include widening Canadian heavy oil differentials after quarter end, which prompted a Jackfish curtailment of roughly 8,000 Bbls/d in Q4 2018, and a 2018 hedge book covering about 75% of expected oil production for the remainder of the year. The Q3 quarter's GAAP profitability is largely a one-time gain, so investors should focus on core earnings, production trends, and the pace of buybacks and asset sales.

    Nov 7, 2018
  25. 2018-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2018

    Devon Energy's Q2 2018 10-Q shows a company in the middle of a major portfolio reshaping. Net loss from continuing operations was $474 million ($0.92 per diluted share) in the quarter versus earnings of $0.40 per share a year earlier, driven mainly by $623 million of commodity derivative valuation changes and cash settlements, $154 million of asset impairments, and $94 million of restructuring charges tied to an April 2018 workforce reduction. Total revenues were $2.2 billion for the quarter, and net loss attributable to Devon was $425 million. Results were pressured by hedging losses in a rising oil price environment, though realized prices improved sharply (WTI averaged $67.83/Bbl versus $48.32 a year earlier). The more important story for investors is the balance sheet and capital return program. Devon sold its Johnson County Barnett Shale assets for $481 million net and agreed to sell its interests in EnLink and the General Partner for about $3.1 billion, closing July 18, 2018, with an expected third-quarter gain of roughly $2.5 billion. Those proceeds funded an expansion of the share repurchase authorization from $1 billion to $4 billion, running through December 31, 2019. Total debt was reduced by about $800 million through tender offers, leaving $6.1 billion of debt with a 26.1% debt-to-capitalization ratio and no significant maturities until 2021. The quarterly dividend was raised 33% to $0.08 per share. Operationally, production from the STACK and Delaware Basin grew about 30% year over year, and management is pursuing its "2020 Vision" of simplifying the portfolio, cutting costs, and concentrating capital in its best resource plays. Investors should note the large expected gain on the EnLink sale, the still-full U.S. deferred tax valuation allowance that the gain is expected to reduce, and the substantial hedging book that dampens exposure to commodity price moves in both directions.

    Aug 1, 2018
  26. 2018-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2018

    Devon Energy Corporation (DVN) reported a net loss of $197 million for the first quarter of 2018, a significant shift from the $303 million net profit in the same period of 2017. This loss was largely driven by a substantial increase in financing costs, specifically related to the early retirement of debt, which added $312 million to expenses. Revenue also saw a slight decrease to $3.81 billion from $3.55 billion year-over-year, impacted by changes in revenue recognition accounting standards for marketing and midstream operations. Despite the net loss, the company's operational performance showed resilience. Upstream revenues were impacted by production declines, particularly in the Eagle Ford shale, and by challenging Canadian market conditions. However, strong performance in the STACK and Delaware Basin, coupled with higher realized prices for oil and NGLs, provided some offset. The company also continued its strategic focus on portfolio simplification, debt reduction, and returning cash to shareholders, evidenced by progress in asset divestitures and the authorization of a significant share repurchase program.

    May 2, 2018
  27. 2017-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2017

    Devon Energy's Q3 2017 10-Q shows a sharp recovery in earnings and cash generation versus the depressed 2016 comparison period. Net earnings attributable to Devon were $228 million ($0.43 per diluted share) in the third quarter, down from $993 million in Q3 2016, which had included a $1.35 billion gain on divestitures. On a non-GAAP basis, core earnings were $242 million ($0.46 per diluted share) versus $47 million a year earlier. For the first nine months of 2017, GAAP earnings attributable to Devon were $1.22 billion, compared with a $3.6 billion loss in the prior-year period driven by $4.9 billion of asset impairments. Oil, gas and NGL sales rose 23% in Q3 to $1.245 billion, driven by realized price increases of 22% per Boe, partly offset by a 9% decline in total production to 527 MBoe/d. Operating cash flow nearly doubled for the nine months, rising 96% to $2.42 billion, which fully funded $2.2 billion of consolidated capital expenditures. Management ended the quarter with $2.8 billion of cash and roughly $2.9 billion of available credit under its $3.0 billion Senior Credit Facility. Total debt declined 8% year over year to $10.4 billion, and the debt-to-capitalization ratio stood at 18.9% against a 65% covenant. Management reported that about 65% of remaining 2017 oil production and 66% of remaining gas production is hedged, and that the $1 billion non-core divestiture program has closed roughly $400 million of transactions so far, with the main remaining asset being select Barnett Shale leasehold. The filing also introduces Devon's "2020 Vision" strategic plan, which focuses on STACK and Delaware Basin growth, higher-value liquids, debt reduction and shareholder returns. Key risks include continued commodity price volatility, the EnLink midstream segment's contribution (Devon owns about 23% of EnLink), hedging counterparty exposure, and Hurricane Harvey's disruption to Eagle Ford production in Q3. Investors should weigh the improved balance sheet and cash flow against declining production volumes and the upcoming $250 million EnLink installment payment due in January 2018.

    Nov 1, 2017
  28. 2017-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2017

    Devon Energy's Q2 2017 10-Q shows a sharp recovery in results versus the depressed Q2 2016 period. Net earnings attributable to Devon were $425 million ($0.80 diluted EPS) for the quarter, compared with a $1.57 billion loss in Q2 2016 that was driven by full-cost ceiling impairments. For the first six months, net earnings were $990 million ($1.87 diluted EPS). Management's non-GAAP core earnings were $177 million ($0.34 per diluted share) for the quarter and $394 million ($0.75) for the six months, versus a core loss in the prior-year period. Total revenues and other rose 32% year over year in the quarter to $3.27 billion, largely on higher realized prices: the realized price per Boe rose 34% to $24.72, while production fell 17% to 536 MBoe/d as capital was cut and assets were divested. Cash generation improved significantly. Operating cash flow was $810 million in the quarter and $1.64 billion for the half, up about 135% and 222%, and management states that operating cash flow funded 100% of Devon's capital expenditures in the first half. Liquidity at June 30 was $2.4 billion of cash plus about $3 billion of undrawn credit, with no significant debt maturities until 2021. Total debt fell to $10.6 billion, down from $12.7 billion a year earlier, and the Senior Credit Facility's debt-to-capitalization ratio was 19.3% against a 65% covenant. Management is executing a roughly $1 billion non-core upstream divestiture program, with $340 million sold to date, and is directing proceeds toward the STACK and Delaware plays and balance sheet strengthening. Key risks remain. Devon still carries a 100% valuation allowance against U.S. deferred tax assets, so its current U.S. tax expense stays low. Its marketing and midstream margins are expected to be pressured through 2017 by downstream marketing commitments. The company also has a meaningful hedge book: about 55% of remaining 2017 oil and gas volumes are hedged at floors of roughly $50/Bbl and $3.10/MMBtu. Investors will weigh these factors against the company's shift toward growth in its higher-margin U.S. resource plays, with management guiding that retained U.S. oil production will exit 2017 18-23% above year-end 2016 levels.

    Aug 2, 2017
  29. 2017-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2017

    Devon Energy Corporation's Q1 2017 filing shows a significant financial recovery compared to the prior year, driven by a substantial increase in commodity prices and improved operational efficiency. The company reported net earnings of $565 million, a stark contrast to the $3.06 billion loss in Q1 2016. This turnaround was supported by a nearly 95% increase in realized prices per barrel of oil equivalent (Boe), coupled with a 18% reduction in total production volumes, indicating a strategic focus on higher-margin assets and cost control. Operational highlights include a 17% sequential quarter growth in U.S. oil production, particularly in the STACK and Delaware Basin areas. The company also continues to refine its strategy by announcing its intent to divest approximately $1 billion in non-core upstream assets, aiming to accelerate the transition to higher-margin production and strengthen its financial position. Devon's liquidity remains strong, supported by a healthy cash balance and credit facility, with no significant debt maturities until 2021. Management expresses confidence in its financial capacity to invest in its core resource plays and maintain its investment-grade credit ratings.

    May 3, 2017
  30. 2016-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2016

    Devon Energy's Q3 2016 10-Q shows a company in transition. Reported net earnings attributable to Devon were $993 million for the quarter, but this was driven almost entirely by a $1.4 billion pre-tax gain on the non-core upstream divestitures (about $1.9 billion of consideration). Excluding the gain, impairments, valuation allowance and other items, core earnings were only $47 million ($0.09 per share) versus $316 million a year earlier. For the first nine months, GAAP results were a loss of $3.6 billion ($7.22 per share), with $4.9 billion of noncash asset impairments, while core results were a loss of $169 million. Operating fundamentals remain under pressure. Total production fell 15% year over year to 577 MBoe/d in the quarter, and realized prices fell 2% to $20.98/Boe, though the nine-month realized price fell 24%. Management has cut costs substantially: LOE fell 30% in the quarter, gross G&A fell 33%, and the 2016 operating cost savings target was raised to $1 billion. Capital spending was cut sharply, with Devon's nine-month capital expenditures down about 67% in exploration and development, and operating cash flow fell 72% over the nine months to $1.2 billion, funding roughly 73% of capital spending before acquisitions. Balance sheet actions were a key focus. Devon used divestiture proceeds to reduce long-term debt by $1.2 billion through tender offers, ended the quarter with $2.4 billion of cash and about $2.9 billion of Senior Credit Facility availability, and noted no significant long-term debt maturities until July 2021. The debt-to-capitalization ratio was 20.6% against a 65% covenant. Management also flagged further expected fourth-quarter impairments, including roughly $500 million in Canada, and an October 2016 sale of the Access Pipeline interest for $1.1 billion, with a gain of about $540 million expected in the fourth quarter.

    Nov 2, 2016
  31. 2016-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2016

    Devon Energy's Q2 2016 10-Q shows a deeply loss-making quarter driven by commodity price weakness and non-cash charges. Net loss attributable to Devon was $1.57 billion ($3.04 per share) for the three months ended June 30, 2016, versus a $2.82 billion loss in Q2 2015. Total operating revenues fell 27% to $2.49 billion, and asset impairments of $1.5 billion (primarily U.S. and Canadian full cost ceiling writedowns) drove most of the loss. Excluding derivative fair value changes, impairments, restructuring costs and a deferred tax valuation allowance, core earnings were $33 million, or $0.06 per share, versus $320 million a year earlier. Production was 644 MBoe/d, down 4% year over year, with core production flat at 545 MBoe/d. Cash generation weakened sharply. Operating cash flow for the quarter was $335 million, down 70%, and for the first six months it was $484 million, down 82%. Capital spending was reduced substantially, with Devon's oil and gas exploration and development costs down 69% year to date. Management's liquidity position at quarter-end was $4.6 billion, comprising $1.7 billion of cash and $2.9 billion of available capacity under the $3.0 billion Senior Credit Facility. Total debt was $12.7 billion, and the Senior Credit Facility debt-to-capitalization covenant stood at 23.1% against a 65% limit. The key near-term driver is the divestiture program. Devon has closed roughly $1.2 billion of its approximately $1.8 billion in announced U.S. non-core sales, with the remainder expected in Q3 2016, and has agreed to sell its Access Pipeline interest for $1.1 billion. Management expects total divestiture proceeds of about $3.2 billion and plans to use a portion for debt repayment. Investors should also note that the company expects further Canadian full cost impairments in Q3 2016, the quarterly dividend was cut to $0.06 per share, and the company carries a 100% valuation allowance against U.S. deferred tax assets.

    Aug 3, 2016
  32. 2016-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2016

    Devon Energy's first-quarter 2016 results reflect the severe commodity price downturn, with a net loss attributable to Devon of $3.06 billion ($6.44 per share), compared with a $3.60 billion loss a year earlier. The loss was driven by $3.0 billion of asset impairments (including $1.6 billion on U.S. full cost ceilings, $554 million in Canada, and $873 million of EnLink goodwill), a $808 million deferred tax valuation allowance, and $247 million of restructuring and transaction costs tied to a February 2016 workforce reduction. Excluding these and derivative items, core earnings were a loss of $249 million, or $(0.53) per share, versus core earnings of $89 million ($0.22 per share) in Q1 2015. Total revenues fell 35% to $2.1 billion, and realized oil prices dropped 35% to $26.58 per barrel, while production held flat at 685 MBoe/d. Operating cash flow collapsed 91% to $149 million, down from $1.6 billion, which management attributed to lower prices and 2015 derivative cash settlements. Devon's capital spending was cut sharply, with exploration and development costs down 60% year over year. Liquidity was bolstered by a $1.5 billion common stock offering in February and a $3.0 billion revolver, leaving $4.6 billion of total liquidity at quarter-end. Total debt stood at $12.5 billion, and the company reduced commercial paper by $626 million. Management also announced a program to divest $2 to $3 billion of non-core assets, agreed to sell Mississippian assets for $200 million, and cut the quarterly dividend from $0.24 to $0.06 per share beginning in the second quarter. Looking ahead, management guided to additional U.S. and Canadian full cost impairments of roughly $2 to $3 billion in the second quarter of 2016, and the company's credit ratings were downgraded by S&P and Moody's during the quarter. Investors should weigh the depressed earnings and cash flow against the liquidity position, the divestiture program, and the reduced capital budget.

    May 4, 2016
  33. 2015-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2015

    Devon Energy's third-quarter 2015 10-Q shows a deeply loss-making quarter driven by non-cash charges, while underlying operating cash flow remained the company's main source of funding. For the quarter ended September 30, 2015, Devon reported a net loss attributable to Devon of $3.5 billion (-$8.64 per share), versus net earnings of $1.0 billion a year earlier. Total operating revenues fell 33% to $3.6 billion, and oil, gas and NGL sales dropped 48% to $1.3 billion, reflecting WTI prices roughly 52% lower year over year. The loss was primarily caused by $5.9 billion of asset impairments, including $4.7 billion of U.S. full-cost ceiling writedowns and $0.9 billion related to EnLink goodwill and intangibles. Management stresses these impairments had no effect on operating cash flow, which funded all third-quarter capital requirements. For investors, the more useful measure is core earnings, which excludes derivative fair-value swings and impairments. Core earnings attributable to Devon fell 43% to $316 million ($0.76 per share) for the quarter and 57% to $725 million for the first nine months. Production was resilient: total output held flat at 680 MBoe/d, and retained production rose 6% year over year, while lease operating expense per Boe declined 14%. Hedging has been a key cushion, with roughly half of 2015 oil and gas output hedged at about $90/Bbl and $4/Mcf, generating $1.7 billion of cash flow through nine months. However, management warned that most 2016 production is unhedged and that a flat-price scenario could reduce 2016 operating cash flow by about $2 billion, with a 2016 E&P capital budget of $2.0 to $2.5 billion. Balance sheet and liquidity remain comparatively solid. Total debt was $11.9 billion, the debt-to-capitalization ratio was 21.9% against a 65% covenant limit, and $3.0 billion of revolver capacity was available with no commercial paper outstanding. Management also guided to an expected fourth-quarter 2015 impairment of roughly $5 billion. Stockholders' equity fell to $15.9 billion from $26.3 billion at year-end 2014, and EnLink ownership by Devon dropped from 49% to 29%, which reduced noncontrolling interests and generated cash through unit sales and dropdowns.

    Nov 4, 2015
  34. 2015-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2015

    Devon Energy's Q2 2015 10-Q shows a severe downturn in earnings driven by commodity prices and non-cash impairments. Q2 2015 total operating revenues fell 25% to $3.39 billion from $4.51 billion, and the company recorded a net loss attributable to Devon of $2.82 billion ($6.94 per share), versus net earnings of $675 million in Q2 2014. For the first half, the net loss was $6.42 billion, driven mainly by $9.6 billion of pre-tax U.S. full cost ceiling impairments. Realized prices fell about 41% in the quarter (WTI down 44% year over year), and the company's non-GAAP core earnings fell 44% to $320 million ($0.78 per share). Management signaled that more pain is coming. Devon expects additional U.S. full cost impairments in both Q3 and Q4 2015, which it says will be material but smaller than the first-half charges, and it may also record material Canadian impairments. These are non-cash and do not affect liquidity, but they will keep reported GAAP earnings volatile. Operating cash flow fell 21% in the first half to $2.75 billion, and capital spending was cut, with Devon's own capex down sharply from the prior year. Balance sheet and liquidity remain solid. Debt-to-capitalization was 22.1% against a 65% covenant, with $3.0 billion of undrawn capacity on the senior credit facility and $1.7 billion of cash. Total debt rose to $12.0 billion, largely from EnLink borrowings, and Devon's ownership of EnLink fell from 49% to 29% after unit sales that raised about $654 million. Devon also issued $750 million of 5.0% notes in June 2015 to refinance floating-rate notes due December 2015. Hedging covers over half of projected 2015 oil production at about $88 per barrel.

    Aug 5, 2015
  35. 2015-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2015

    Devon Energy's first quarter 2015 10-Q shows a sharp deterioration in reported results driven by the collapse in oil prices. The company posted a GAAP net loss attributable to Devon of $3.6 billion ($8.88 per share), compared with net earnings of $324 million ($0.79 per diluted share) in the first quarter of 2014. The loss was driven primarily by a $5.46 billion pre-tax impairment of U.S. oil and gas assets under the full cost ceiling test, which reduced net earnings by roughly $3.5 billion after tax. Total operating revenues fell 12% to $3.27 billion, and realized oil prices without hedges dropped 53% year over year to $40.87 per barrel. Management's non-GAAP core earnings fell 84% to $89 million, or $0.22 per share, after excluding derivative fair value changes and impairments. Production held up better than the price decline. Total production was 685 MBoe/d, down only 1% from a year earlier, while retained production (excluding divested Canadian conventional assets) rose 21%, led by Eagle Ford growth and the Permian Basin. Operating cash flow rose 17% to $1.65 billion, though that figure was flattered by the collection of $425 million in income taxes receivable; excluding that item, operating cash flow fell 13%. Capital expenditures of $2.1 billion were funded at roughly 96% by operating cash flow, and the company remains well within its covenant, with a debt-to-capitalization ratio of 21.6% against a 65% limit. The filing also highlights the continued role of EnLink Midstream, in which Devon's ownership fell from 49% to 34% after a $569 million secondary offering and unit issuances tied to acquisitions. Management warned that additional full cost ceiling write-downs are expected in future quarters of 2015, though it cannot yet estimate their size, and that these charges will not affect cash flow or liquidity. Hedging provides partial protection: over half of projected 2015 oil production is hedged at about $91 per barrel and roughly 40% of projected gas production at about $4 per Mcf.

    May 6, 2015
  36. 2014-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2014

    Devon Energy's Q3 2014 10-Q shows a company in the middle of a major portfolio transformation. Net earnings attributable to Devon were $1,016 million ($2.47 diluted EPS) for the quarter, up from $429 million ($1.05) a year earlier, but this figure is inflated by $543 million of current tax offset by deferred tax and a large $748 million derivative gain. Management's non-GAAP adjusted earnings were $552 million ($1.34 per share), up 5% year over year, a more representative gauge of core operating performance. For the nine months, GAAP earnings were $2,015 million ($4.91 per share), while adjusted EPS rose 29% to $4.08, helped by the Eagle Ford acquisition, higher realized prices (up 26% per Boe), and liquids growth. The balance sheet changed substantially during the period. Devon closed the approximately $6.0 billion GeoSouthern Eagle Ford acquisition and the EnLink midstream business combination, which created a publicly traded partnership in which Devon holds a controlling interest and which brought roughly $4.6 billion of noncontrolling interests onto the balance sheet. Divestitures of Canadian conventional assets ($2.8 billion) and U.S. non-core assets to LINN Energy ($2.3 billion) generated $5.2 billion of proceeds, which were used to pay down commercial paper and term loans. Total debt stands at $12.1 billion, and the debt-to-capitalization ratio is a conservative 22.7% against a 65% covenant. Management plans to redeem $1.9 billion of senior notes in Q4 2014, which would complete its debt repayment plan tied to the portfolio transformation. Key watch items for investors include production that declined 2% year over year to 676 MBoe/d on a total basis (reflecting divested volumes, even as core and emerging production grew 13%), rising unit operating costs in Canada and the U.S., a sizable goodwill balance of $8.3 billion (with the Canadian reporting unit only about 11% above carrying value), and substantial hedge positions for Q4 2014 through 2016. Cash-flow fundamentals appear healthy, with operating cash flow up 25% to $5.0 billion in the first nine months.

    Nov 5, 2014
  37. 2014-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2014

    Devon Energy's Q2 2014 10-Q shows a quarter reshaped by portfolio transactions rather than pure operations. Net earnings attributable to Devon were $675 million ($1.64 per diluted share), roughly flat versus $683 million a year earlier. Adjusted earnings, which strip out derivative mark-to-market, a $286 million gain on asset sales and related repatriation, and restructuring items, rose 17% to $574 million ($1.40 per share). Production averaged 667 MBoe/d, down 4% year over year, but the mix shifted toward liquids: U.S. core and emerging oil output rose 79% to 128 MBbls/d, largely from the Eagle Ford. Realized prices without hedges rose 26% to $44.12 per Boe, and operating cash flow climbed 47% to $2.0 billion in the quarter. The balance sheet changed substantially in the first half of 2014. Devon closed the roughly $6.0 billion GeoSouthern (Eagle Ford) acquisition in February and formed EnLink Midstream with Crosstex on March 7, which added $4.7 billion of noncontrolling interests. It also sold Canadian conventional assets to Canadian Natural Resources for $2.8 billion (C$3.125 billion) and agreed on June 30 to sell U.S. non-core assets to Linn Energy for $2.3 billion, with closing expected in Q3 2014. Proceeds were used to repay $3.2 billion of debt, including the $2.0 billion term loans. Total debt was $12.4 billion at quarter end, and the debt-to-capitalization ratio was 23.4%, well inside the 65% covenant. The main risks flagged are a $719 million first-half derivative loss on commodity hedges, a higher effective tax rate of 55% in Q2 driven by $247 million of repatriation tax, and a Canadian goodwill balance of $2.1 billion whose fair value previously exceeded carrying value by only about 11%. The 10-Q also shows that the Linn sale closing and continued EnLink integration will shape the second half of 2014.

    Aug 6, 2014
  38. 2014-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2014

    Devon Energy's first-quarter 2014 10-Q shows a company in transition. Net earnings attributable to Devon were $324 million, or $0.79 per diluted share, versus a $1.34 billion loss in Q1 2013, which included a $1.9 billion pre-tax impairment. Adjusted earnings attributable to Devon rose 103% to $547 million ($1.34 per share), and realized oil, gas and NGL prices rose 41% to $41.13 per Boe. Operating cash flow increased 41% to $1.41 billion and covered roughly 90% of cash-based capital spending excluding the GeoSouthern acquisition, compared with about 50% a year earlier. Production was essentially flat at 690.9 MBoe/d, with oil volumes up 28%, which reflects the mix shift toward liquids. The balance sheet changed significantly during the quarter. Devon closed the approximately $6.0 billion GeoSouthern Eagle Ford acquisition on February 28, 2014, adding roughly 250 MMBoe of proved reserves, and formed EnLink Midstream, which it now consolidates. Total debt rose to $15.5 billion, including $1.7 billion of non-recourse EnLink debt, and cash fell to $2.0 billion from $6.1 billion. Noncontrolling interests of $4.6 billion now sit within equity. Management plans to repatriate about $2.7 billion of after-tax proceeds from the April 1, 2014 sale of most Canadian conventional assets and use them to repay the $2.0 billion GeoSouthern term loan in the second quarter. Investors should weigh the strong price-driven earnings recovery against higher leverage, rising unit operating costs (LOE up 13% per Boe, largely from Canadian royalties), and the pending execution of the Canadian divestiture and the preliminary, subject-to-change purchase price allocations for GeoSouthern and EnLink. The debt-to-capitalization ratio of 28.3% remains well within the 65% covenant.

    May 9, 2014
  39. 2013-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2013

    Devon Energy's Q3 2013 10-Q shows a sharp swing in GAAP results driven by non-cash charges, while underlying operating performance improved. For the nine months ended September 30, 2013, Devon reported a net loss of $227 million ($0.57 per share), compared with net earnings of $151 million in the prior-year period. The decline reflects $1.96 billion of pre-tax asset impairments, mostly U.S. and Canadian full-cost ceiling write-downs, plus $50 million of office-consolidation restructuring costs. In the third quarter alone, Devon earned $429 million ($1.05 per share) against a $719 million loss a year earlier, which had included a $1.13 billion impairment. Excluding impairments, derivative mark-to-market effects, restructuring and certain financial-instrument items, adjusted earnings rose 48% year over year to $526 million ($1.29 per share) in Q3 and 28% to $1.29 billion ($3.16 per share) for the nine months. Operating momentum was strong. Realized prices without hedges rose 32% in the quarter to $36.84 per Boe, and production grew 2% to 690.8 MBoe/d, led by a 38% increase in U.S. oil volumes, mainly in the Permian Basin. Operating cash flow increased 18% in the quarter and 6% for the nine months to $4.0 billion. Capital spending fell 20% year to date to $5.2 billion, so operating cash flow funded roughly 80% of capital expenditures, up from 60%. Net debt was reduced: short-term debt fell by $1.6 billion after Devon repatriated $2.0 billion from Canada, and the balance sheet ended the quarter with $4.3 billion of cash, $10.1 billion of total debt and a 22.4% debt-to-capitalization ratio. Looking ahead, Devon announced on October 21, 2013 a plan to combine most of its U.S. midstream assets with Crosstex Energy into a publicly traded MLP structure, in which Devon would hold a controlling interest. Devon also plans to repatriate an additional $2.0 billion around year-end 2013. Commodity hedges cover a portion of 2013 through 2015 production, and a 10% change in forward curves would move the net derivative position by several hundred million dollars. Investors should weigh the improving cash generation and lower capital intensity against the recurring risk of further full-cost ceiling impairments if commodity prices fall.

    Nov 6, 2013
  40. 2013-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2013

    Devon Energy's second-quarter 2013 results were mixed on the surface but improved underneath. GAAP net earnings swung to a loss of $656 million for the six months ended June 30, 2013, versus $870 million in the prior-year period, driven by $1.95 billion of pre-tax noncash full-cost ceiling impairments taken in the first quarter ($1.34 billion after tax) on U.S. and Canadian oil and gas assets. Excluding impairments, derivative mark-to-market gains and restructuring costs, adjusted earnings rose 17% year-over-year for the six months to $761 million ($1.87 per share), and second-quarter adjusted earnings more than doubled to $491 million ($1.21 per share) from $224 million a year earlier. Second-quarter GAAP net earnings were $683 million ($1.68 per diluted share), boosted by $366 million of derivative gains. Operationally, production was 697.6 MBoe/d in the quarter, up 3% year-over-year, led by a 19% increase in oil volumes that was driven by the Permian Basin, where production rose 30%. Realized prices without hedges climbed 34% to $35.00 per Boe in the quarter, reflecting a sharp rebound in U.S. natural gas prices (up 103% to $3.49/Mcf). Operating cash flow was flat at $2.4 billion for the first half, but capital spending declined 16% to $3.6 billion, so operating cash flow funded about 70% of capital expenditures versus 60% a year earlier, narrowing the cash flow deficit considerably. Balance sheet actions were significant. Devon repatriated $2.0 billion of foreign cash from Canada at a reduced tax rate, using it to repay commercial paper, which cut short-term debt to $2.2 billion from $3.2 billion at year-end. Total debt stood at about $10.2 billion, and the debt-to-capitalization ratio was 22.8%, well inside the 65% covenant. The company also raised its quarterly dividend to $0.22 per share from $0.20. Management noted that the full-cost ceiling test remains sensitive to commodity price declines, so further impairments are possible if prices weaken.

    Aug 7, 2013
  41. 2013-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2013

    Devon Energy's first quarter 2013 results were dominated by a large non-cash charge. The company recorded $1.9 billion of pre-tax asset impairments (about $1.3 billion after tax) from full-cost ceiling write-downs in the U.S. ($1.1 billion) and Canada ($803 million), driven by lower trailing 12-month oil, bitumen and NGL prices. As a result, GAAP net loss was $1.34 billion, or $(3.34) per diluted share, versus net earnings of $393 million ($0.97 per share) a year earlier. Excluding impairments and other items typically removed by analysts, adjusted earnings were $270 million, or $0.66 per share, down 37% from $1.05 per share in Q1 2012. Total revenues fell 21% to $1.97 billion, largely because oil, gas and NGL sales declined 6% and hedging produced a $320 million derivative loss, compared with a $145 million gain a year earlier. Operating fundamentals were mixed. Total production was roughly flat at 686.9 MBoe/d, with oil up 13% to 108.0 MBbl/d, driven by the Permian Basin, and Jackfish bitumen up 18%. Gas production fell 8%, and realized prices without hedges declined 4% to $29.18 per Boe, with liquids prices weaker and gas prices higher. Operating cash flow was flat at $1.0 billion but covered only about half of capital expenditures of $1.9 billion, so the gap was funded with $508 million of net commercial paper borrowings. Total debt was $12.2 billion, with a debt-to-capitalization ratio of 26.3% against a 65% covenant. Management also flagged that further full-cost ceiling impairments are possible in 2013 if prices do not improve. For investors, the key takeaways are the impairment-driven loss, the reliance on short-term borrowing to fund the capital program, and the planned repatriation of about $2 billion of Canadian cash to reduce commercial paper. The quarterly dividend will rise 10% to $0.22 per share starting in Q2 2013.

    May 1, 2013
  42. 2012-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2012

    Devon Energy's Q3 2012 10-Q shows a sharply weaker quarter driven by non-cash charges and hedging losses. Continuing operations posted a net loss of $719 million, or $1.80 per diluted share, in the third quarter, compared with earnings of $1.0 billion ($2.50 per share) a year earlier. The loss was driven by a $1.1 billion pre-tax ($719 million after-tax) asset impairment, mainly on U.S. oil and gas properties after the full-cost ceiling fell on lower trailing 12-month natural gas and NGL prices, plus a $295 million loss on oil, gas and NGL derivatives as forward prices rose. For the first nine months, continuing operations earned $172 million ($0.42 per diluted share), versus $1.6 billion a year earlier. Total revenues fell 47% in the quarter to $1.865 billion, as realized gas prices dropped 37% and NGL prices fell 37%, while oil production rose 14%. Operationally, growth came from oil. Total production rose 3% in the quarter to 678 MBoe/d, led by oil, which climbed 14% to 143 MBbl/d on Permian Basin development and the Jackfish oil sands projects. Operating cash flow from continuing operations fell about 10% to $3.8 billion for the nine months, and capital spending of $6.2 billion (about 80% covered by operating cash flow, net of divestitures) was funded partly with debt. Devon raised $2.5 billion of senior notes in May, and total debt reached $11.2 billion. Balance sheet strength remains, with $7.5 billion of cash and short-term investments at quarter end, although most of it is held offshore and is not expected to be repatriated. Management also warned that a further full-cost ceiling impairment is possible in Q4 2012 if gas and NGL prices stay depressed. Joint ventures are a key part of the funding strategy. Sinopec (33.3% of five new U.S. exploration plays, about $900 million paid at closing) and Sumitomo (30% of the Cline and Midland-Wolfcamp shale plays, about $400 million paid at closing) together provide roughly $2.6 billion of future carried drilling capital. Devon has also divested all of its offshore assets, which generated $10.1 billion of gross proceeds, and it plans to consolidate U.S. operations into Oklahoma City, closing its Houston office by early 2013.

    Nov 7, 2012
  43. 2012-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2012

    Devon Energy's second quarter 2012 results show a company in transition: continuing-operations earnings rose sharply year over year, but that improvement was driven by hedging gains and the absence of the prior year's tax charges rather than by stronger underlying operations. For Q2 2012, net earnings from continuing operations were $477 million, or $1.18 per diluted share, versus $184 million, or $0.43, a year earlier. For the first six months, earnings were $891 million, or $2.20 per diluted share, compared with $573 million, or $1.34. Oil, gas and NGL derivatives contributed a $665 million gain in the quarter. Total production rose 3% in Q2 and 6% year to date, led by oil, which grew 26% to 149 MBbls per day. Realized prices without hedges fell 29% in the quarter, to $26.18 per Boe, as natural gas prices collapsed (down 54%) and the Canadian oil differential widened. Cash flow and capital spending are the main investor concerns. Operating cash flow from continuing operations fell 14% to $2.4 billion, and it funded only about 60% of capital expenditures of roughly $4.3 billion in the first half. Devon closed the year's offshore divestiture program and sold a 33.3% stake in five new-venture U.S. plays to Sinopec for about $900 million in cash, with a further $1.6 billion of drilling carry. Debt rose to $10.6 billion, including a $2.5 billion senior notes issuance in May. Cash and short-term investments totaled about $7.0 billion at quarter-end, but most of it sits offshore and is not expected to be repatriated, so U.S. liquidity depends on commercial paper and the credit facility. The company also flagged likely full-cost ceiling write-downs or additional DD&A in the third quarter if natural gas prices stay depressed. Looking ahead, the August 2012 Sumitomo transaction (a 30% interest in the Cline and Midland-Wolfcamp shale plays for $1.365 billion, expected to close in Q3 2012) is a notable subsequent event. It would further fund the company's shift toward liquids-rich and oil growth, but it also highlights continued reliance on partner capital to offset a heavy 2012 capital program that was raised by $1.0 billion. Investors will be watching whether the liquids mix and Jackfish oil sands growth can offset weak gas prices and rising unit operating costs, which increased 10% to $8.30 per Boe in the quarter.

    Aug 1, 2012
  44. 2012-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2012

    Devon Energy's first-quarter 2012 results show continuing-operations net earnings of $414 million, or $1.03 per diluted share, up from $389 million ($0.91) a year earlier. Total revenues rose 16% to $2.497 billion, helped by a $145 million gain on oil, gas and NGL derivatives versus a $168 million loss in Q1 2011. Production grew 10% to 694 MBoe/d, driven by oil and NGL growth of 26% and 21%, respectively, from Jackfish, the Permian Basin and the liquids-rich Barnett and Cana-Woodford shales. Offsetting this, realized gas prices fell 35%, the combined realized price without hedges dropped 8% to $30.33 per Boe, and per-unit operating costs rose 9% to $8.15 per Boe. Operating cash flow fell 19% to $1.0 billion, and Devon funded only about half of its $2.1 billion in capital expenditures from operations. The balance sheet and liquidity picture is more mixed. Debt rose to roughly $10.8 billion, with $4.1 billion of commercial paper and $750 million drawn on the credit facility, though the debt-to-capitalization ratio stands at a comfortable 24.4%. Devon ended the quarter with about $7.1 billion of cash and short-term investments, but most of it consists of offshore divestiture proceeds held by foreign subsidiaries that management does not expect to repatriate, which limits its near-term U.S. availability. A $399 million upward revision to asset retirement obligations, driven by higher abandonment cost estimates, depressed the quarter's book value and was recorded as capital expenditures. Management raised 2012 capital spending guidance by $1.0 billion, and the April closing of the Sinopec joint venture provides about $900 million in cash plus an estimated $1.6 billion in future carried drilling costs.

    May 2, 2012
  45. 2011-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2011

    Devon Energy's Q3 2011 10-Q shows a company in transition after completing its planned offshore divestitures. Net earnings were $1.04 billion ($2.50 per diluted share) for the third quarter, versus $2.09 billion ($4.79) a year earlier, and $4.20 billion ($9.93) for the first nine months of 2011. The year-over-year comparison is distorted by International divestiture gains: the nine-month 2011 results include an after-tax gain of about $1.8 billion, and the Brazil sale alone produced a $2.5 billion after-tax gain. Excluding these one-time items, the core North American onshore business is growing, with oil and NGL production up 17% and 13% in Q3 and the first nine months, while realized prices rose 16% and 7% per Boe. Operating cash flow was roughly flat at $4.2 billion for the nine months, and capital spending rose to $5.5 billion (with full-year 2011 guidance raised to about $7.3 billion from $5.4-6.0 billion). The balance sheet is much stronger on a cash basis but carries new complexity. Devon ended the quarter with about $6.8 billion of cash and short-term investments, most of it from International divestitures and held by foreign subsidiaries. Repatriating it would trigger U.S. taxes, which led Devon to take a $744 million tax charge in Q2 2011 and to fund U.S. needs with commercial paper ($3.2 billion outstanding at a 0.27% average rate). Total debt rose to $9.3 billion, and the debt-to-capitalization ratio was 22%, well inside the 65% covenant. Management continued repurchasing shares under the $3.5 billion program (44.3 million shares bought through September for $3.2 billion) and paid $0.17 quarterly dividends. Investors should weigh the strong liquidity and buybacks against the rising capital intensity and the sizable tax cost of accessing the offshore proceeds. The filing reports no material changes to legal proceedings or risk factors from the 2010 10-K. The main contingent items are a $133 million judgment related to the Chief Holdings matter, which Devon has recorded with an offsetting indemnification receivable and which management says will not create net exposure, and royalty litigation that management does not expect to be material.

    Nov 2, 2011
  46. 2011-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2011

    Devon Energy's second-quarter 2011 10-Q shows a company in transition after completing its planned divestiture of offshore assets. Net earnings were $2.7 billion ($6.48 per diluted share) for the quarter and $3.2 billion ($7.41 per diluted share) for the first six months, versus $706 million ($1.58) and $1.9 billion ($4.24) a year earlier. These results are inflated by discontinued-operations gains, chiefly the $2.5 billion Brazil gain, and by a one-time $744 million tax charge on assumed repatriation of International earnings. Excluding that charge, the effective tax rate was 33%. Earnings from continuing operations were much weaker, at $0.43 per diluted share for the quarter versus $0.79 a year earlier, so investors should look past the headline EPS. Operationally, North America Onshore oil and NGL production rose 7% in the quarter, driven by the Permian Basin, Jackfish 2 oil sands, the Cana-Woodford Shale and the Barnett Shale. Realized prices without hedges rose 20% to $36.63 per Boe. Management raised its 2011 capital expenditure guidance to $6.7–7.3 billion from $5.4–6.0 billion, citing industry cost inflation and a weaker U.S. dollar against the Canadian dollar. The balance sheet is liquid, with about $6.7 billion of cash and short-term investments, but most of that sits outside the United States. Devon has funded U.S. needs with $2.3 billion of commercial paper, which it is refinancing with $2.25 billion of long-term notes issued in July 2011. Debt-to-capitalization was 19.3%, well inside the 65% covenant. The dividend was raised to $0.17 per share, and the $3.5 billion buyback program was 33.5 million shares complete at June 30.

    Aug 4, 2011
  47. 2011-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2011

    Devon Energy's first-quarter 2011 10-Q shows a company in transition. Net earnings were $416 million, or $0.97 per diluted share, versus $1.2 billion ($2.66) a year earlier. The decline was driven mainly by a $168 million net loss on oil, gas and NGL derivatives (compared with a $620 million gain in Q1 2010), lower natural gas prices (realized gas price down 25%), and the absence of earnings from offshore assets divested in 2010. Total revenues fell to $2.15 billion from $3.22 billion. Operating performance was mixed: North American onshore oil and NGL production rose 11%, gas production rose 5%, and Cana-Woodford and Permian volumes grew strongly, though realized prices without hedges fell 11% to $32.86 per Boe and operating cash flow fell 16% to $1.3 billion. The balance sheet is liquid but has shifted toward debt. Cash and short-term investments totaled $3.4 billion, but most of it is proceeds from international divestitures held outside the U.S. Devon borrowed $1.2 billion of commercial paper to fund capital spending of about $1.8 billion, share buybacks and dividends, because operating cash flow covered only about 70% of cash capital expenditures. Short-term debt rose to $3.0 billion, and the debt-to-capitalization ratio was 17.7%, well under the 65% covenant. Management raised the commercial paper program to $5.0 billion, raised the quarterly dividend to $0.17 from $0.16, and has repurchased $2.1 billion of its $3.5 billion buyback program through April 25, 2011. Looking ahead, Devon is directing growth toward liquids, including the Jackfish 2 thermal heavy oil project (first production expected by year-end 2011) and the Pike oil sands lease. Its hedge book covers a large share of 2011 volumes, with oil collars and swaps for 2011-2013. Remaining offshore sales in Brazil and Angola are pending government approval and are expected to be a further source of liquidity. Investors should watch whether cash flow keeps pace with the company's capital program and buybacks, and how the company handles the unhedged gas price exposure and the large pool of offshore proceeds held outside the U.S.

    May 4, 2011
  48. 2010-Q3

    DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2010

    Devon Energy's Q3 2010 10-Q shows a company in transition. Net earnings were $2.1 billion ($4.79 per diluted share) for the quarter and $4.0 billion ($8.99 per diluted share) for the first nine months, compared with a nine-month net loss of $3.1 billion in 2009 that was driven by a $6.4 billion full cost ceiling writedown. Results were boosted by after-tax divestiture gains of $1.5 billion in Azerbaijan (Q3) and $0.2 billion in China Panyu (Q2). Continuing-operations earnings are the more telling measure of the core business: $1.9 billion for the nine months versus a $3.3 billion loss a year earlier. Revenue rose to $7.8 billion for the nine months from $5.6 billion, mainly on a 33% increase in realized prices, while production fell about 4%. The balance sheet strengthened markedly. Cash rose to $3.6 billion ($4.0 billion including cash tied to held-for-sale assets), commercial paper was fully repaid, $350 million of 7.25% notes were retired early, and total debt fell to roughly $5.6 billion. The debt-to-capitalization ratio was 15.3% against a 65% covenant. Management has committed to a $3.5 billion share repurchase program, of which $936 million had been used by quarter end. Offshore divestitures produced about $5.6 billion in after-tax proceeds year to date, and the company expects roughly $10 billion pre-tax and $8 billion after-tax once all assets are sold, including a pending $3.2 billion Brazil sale expected to close around year-end 2010. The strategic message is a pivot to North America onshore. Management is directing divestiture proceeds toward liquids-rich drilling in the Permian, Barnett, Cana-Woodford and Granite Wash, and toward oil sands at Jackfish and Pike. Investors should weigh the strong liquidity and reduced leverage against several watch items: higher lease operating costs, the Jackfish steam release, $858 million of current tax on divestiture gains, and the execution risk of a large onshore capital program.

    Nov 4, 2010
  49. 2010-Q2

    DEVON ENERGY CORP/DE Quarterly Report for Q2 Ended Jun 30, 2010

    Devon Energy's second-quarter 2010 10-Q shows a company in transition. Net earnings were $706 million ($1.58 per diluted share) for the quarter and $1.9 billion ($4.24 per diluted share) for the first six months, compared with a first-half 2009 net loss of $3.6 billion that included a $6.4 billion pre-tax (about $4.1 billion after-tax) full-cost ceiling writedown. Revenue rose to $2.2 billion in the quarter (up 22%) and $5.45 billion in the half (up 46%), driven mainly by a 57% increase in realized oil prices and a 27% increase in realized gas prices. Production fell 3% in the quarter and 4% in the first half, to 58 MMBoe and 114 MMBoe respectively, largely reflecting reduced 2009 drilling and the offshore divestitures. The balance sheet and liquidity improved sharply. Cash rose to $2.2 billion on the consolidated balance sheet (about $2.9 billion including cash held for sale), and total debt fell to roughly $5.6 billion. Devon repaid all $1.4 billion of commercial paper, redeemed $350 million of 7.25% notes early, and launched a $3.5 billion share repurchase program, buying 7.6 million shares for $495 million in the quarter. Debt-to-capitalization was 16.1% against a 65% covenant, and about $2.6 billion of credit capacity was available. The strategic story is the repositioning toward North America Onshore. Gulf of Mexico exit closed in Q2 2010, and the Panyu (China) sale generated a $235 million after-tax gain. Pending sales of Azerbaijan and Brazil assets for $5.2 billion, plus remaining China and Angola assets, could bring total divestiture proceeds to roughly $10 billion pre-tax (about $8 billion after-tax). Management is directing that capital toward onshore drilling, buybacks and debt reduction, and it entered the Pike oil sands joint venture in Alberta. Results remain sensitive to commodity prices, hedging coverage (about 58% of 2010 gas and 70% of oil production), and the timing of the pending transactions.

    Aug 6, 2010
  50. 2010-Q1

    DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2010

    Devon Energy's first-quarter 2010 10-Q shows a sharp recovery from the prior-year period. Net earnings were $1.19 billion, or $2.66 per diluted share, versus a net loss of $3.96 billion in Q1 2009, which included a $6.4 billion pre-tax (about $4.1 billion after-tax) full cost ceiling writedown. Excluding that charge, earnings rose on higher commodity prices: the realized price without hedges increased 58% to $37.07 per Boe, while production fell 5% to 56 million Boe. Derivative gains of $620 million, including $524 million of unrealized gains, also boosted reported results. Operating cash flow rose about 43% to $1.5 billion, and capital expenditures were roughly $1.25 billion in cash terms. The central investor story is Devon's offshore divestiture program, which is reshaping the company into a North American onshore producer. In Q1 2010 it closed the sale of Jack, St. Malo and Cascade interests for $1.3 billion and used the proceeds to repay $1.2 billion of commercial paper. Subsequent agreements, including a $7.0 billion sale of remaining deepwater Gulf of Mexico, Brazil and Azerbaijan assets to BP, a $1.05 billion shallow-water Gulf of Mexico sale and a $515 million Panyu sale, bring announced pre-tax proceeds to $9.9 billion. Management estimates total pre-tax proceeds will exceed $10 billion and after-tax proceeds will be about $8 billion. In early May 2010 the company also announced a share repurchase program of up to $3.5 billion. Balance sheet leverage is modest. Total debt is about $6.1 billion, the debt-to-capitalization ratio under the credit agreement is 17.1% against a 65% covenant, and available credit capacity is about $3.0 billion at quarter end. Risks that remain include commodity price exposure, with a meaningful share of 2010 gas and oil production hedged, execution risk on the pending divestitures, and the sensitivity of earnings to unrealized derivative mark-to-market swings.

    May 6, 2010