10-Q/APeriod: Q1 FY2001

DEVON ENERGY CORP/DE Quarterly Report (Amendment) for Q1 Ended Mar 31, 2001

Filed December 18, 2001For Securities:DVN

Summary

Devon Energy Corporation's (DVN) Q1 2001 10-Q filing indicates a strong start to the year, marked by a significant increase in total revenues to $1,023.6 million, up from $560.4 million in the prior year period. This revenue surge was primarily driven by a substantial rise in gas sales, which more than tripled year-over-year. The company also saw a notable increase in its cash and cash equivalents, jumping from $228.1 million at the end of 2000 to $609.7 million by March 31, 2001. Operationally, Devon reported robust net earnings of $400.3 million, a significant improvement compared to $105.2 million in Q1 2000. This was reflected in a dramatic rise in earnings per share, with diluted EPS reaching $2.96 compared to $0.80 in the prior year. The company also made substantial capital expenditures in the quarter, totaling $345.9 million, primarily focused on property and equipment. Financially, total assets grew to $7.3 billion, supported by a healthy increase in stockholders' equity to $3.66 billion. While liabilities also increased, the company maintained a strong balance sheet. The adoption of SFAS No. 133 and 138 concerning derivative instruments had a notable impact, including a $49.5 million gain recognized in net earnings related to the fair value of certain derivative instruments, particularly an embedded option in convertible debentures.

Key Highlights

  • 1Total revenues more than doubled year-over-year, reaching $1.02 billion in Q1 2001, driven primarily by a significant increase in gas sales.
  • 2Net earnings saw a substantial increase to $400.3 million, a more than threefold increase from $105.2 million in Q1 2000.
  • 3Diluted earnings per share surged to $2.96 in Q1 2001, compared to $0.80 in the same period of the prior year.
  • 4Cash and cash equivalents increased significantly, ending the quarter at $609.7 million, up from $228.1 million at the end of 2000.
  • 5Capital expenditures for the quarter were $345.9 million, indicating continued investment in property and equipment.
  • 6The company adopted SFAS No. 133/138, resulting in a $49.5 million gain recognized in net earnings from the fair value of certain derivative instruments.
  • 7Total assets grew to $7.33 billion, with total stockholders' equity rising to $3.66 billion.

Frequently Asked Questions

The primary driver for the substantial revenue increase to $1,023.6 million in Q1 2001 was a significant surge in gas sales, which more than tripled compared to the same period in the prior year. This growth in natural gas revenue offset a slight decline in oil sales.

The adoption of SFAS No. 133 and 138 required derivative instruments to be recorded at fair value. This resulted in a cumulative-effect-type adjustment, including a $49.5 million gain recognized in net earnings, primarily related to the fair value of an option embedded in Devon's debentures exchangeable into Chevron Corporation common stock. Changes in the fair value of qualifying cash flow hedges were recorded in Accumulated Other Comprehensive Loss (AOCL).

Devon Energy reported capital expenditures of $345.9 million for Q1 2001, a decrease from $436.1 million in Q1 2000. The majority of these expenditures were directed towards property and equipment, particularly in the U.S. segment, suggesting continued investment in its core oil and gas producing assets.

Devon Energy's total assets increased to $7.33 billion as of March 31, 2001, from $6.86 billion at year-end 2000. Stockholders' equity also grew significantly to $3.66 billion from $3.28 billion, driven by retained earnings and additional paid-in capital, indicating a strengthening financial position.