Summary
Devon Energy Corporation's (DVN) Q2 2013 10-Q filing indicates a strong operational performance, particularly in oil and gas sales, driven by increased production volumes and higher realized prices, especially in the U.S. While total revenues saw a significant increase year-over-year, the company reported a net loss for the six months ended June 30, 2013, primarily due to substantial non-cash asset impairments totaling $1.95 billion, largely resulting from decreased commodity price forecasts impacting the full cost ceiling. Despite the reported net loss for the year-to-date, adjusted earnings and adjusted operating cash flow showed considerable improvement compared to the prior year, highlighting the underlying operational strength. The company has also managed its capital expenditures effectively, with a notable decrease in spending compared to the previous year, partly due to joint venture agreements and a focus on core development areas. Liquidity remains robust, supported by operating cash flow, significant cash balances held by foreign subsidiaries, and available credit facilities, with the company repatriating a portion of foreign cash to the U.S. at a favorable tax rate.
Financial Highlights
42 data points| Revenue | $3.09B |
| Operating Expenses | $2.09B |
| Operating Income | $1.10B |
| Interest Expense | $108.00M |
| Net Income | $683.00M |
| EPS (Basic) | $1.69 |
| EPS (Diluted) | $1.68 |
| Shares Outstanding (Basic) | 402.00M |
| Shares Outstanding (Diluted) | 403.00M |
Key Highlights
- 1Total revenues increased to $3.09 billion for Q2 2013 from $2.56 billion in Q2 2012, driven by higher oil, gas, NGL sales, and marketing/midstream revenues.
- 2A significant net loss of $656 million was reported for the six months ended June 30, 2013, a sharp decline from a net earning of $870 million in the same period of 2012, largely attributable to $1.95 billion in asset impairments.
- 3Adjusted earnings (a non-GAAP measure) showed a positive trend, increasing by 119% to $491 million for Q2 2013 compared to $224 million in Q2 2012, and for the six-month period, adjusted earnings rose by 17% to $761 million.
- 4Production increased by 3% to 697.6 MBoe/d for Q2 2013 compared to 678.9 MBoe/d in Q2 2012, with notable growth in U.S. oil and NGL production.
- 5Realized commodity prices (excluding derivatives) improved significantly, with the combined Boe price increasing by 34% to $35.00 in Q2 2013 from $26.18 in Q2 2012.
- 6Capital expenditures decreased by 37% to $1.50 billion in Q2 2013 from $2.37 billion in Q2 2012, reflecting strategic shifts and joint venture impacts.
- 7The company repatriated $2.0 billion of foreign earnings to the U.S. in Q2 2013, which was largely offset by deferred tax benefits, and maintained a strong liquidity position with $4.2 billion in cash and short-term investments as of June 30, 2013.