8-KOther Events

DEVON ENERGY CORP/DE 8-K Report (Feb 5, 2004)

Filed February 5, 2004For Securities:DVN

Summary

This SEC filing from Devon Energy Corporation, filed on February 5, 2004, provides forward-looking estimates for the year 2004 concerning production, pricing, capital expenditures, and financial performance. The company anticipates total oil, gas, and NGL production to be between 256 and 261 million barrels of oil equivalent (MMBoe), with approximately 95% expected to come from proved reserves. A significant portion of oil and gas production is subject to hedging strategies, including fixed-price swaps and costless price collars, to mitigate commodity price volatility. Devon plans substantial capital expenditures in 2004, estimated between $2.14 billion and $2.54 billion, primarily focused on drilling and development across its U.S. onshore, U.S. offshore, Canadian, and international segments. The company also detailed its projected interest expenses, foreign currency exchange rate impacts, and income tax estimates, anticipating a consolidated financial income tax rate between 25% and 45%. Liquidity is expected to be sufficient, funded by operating cash flow and working capital, with available credit facilities to support any unforeseen needs or strategic acquisitions.

Key Highlights

  • 1Devon Energy projects 2004 total production of 256-261 MMBoe, with 95% from proved reserves.
  • 2Significant portions of 2004 oil and gas production are hedged via fixed-price swaps and price collars to manage commodity price risk.
  • 3Capital expenditures for 2004 are budgeted between $2.14 billion and $2.54 billion, focusing on drilling and development across all geographic segments.
  • 4The company anticipates its consolidated financial income tax rate for 2004 to range between 25% and 45%.
  • 5Projected interest expense for 2004 is estimated to be between $510 million and $520 million.
  • 6Devon expects to fund its 2004 capital expenditures and cash uses primarily through operating cash flow and working capital.
  • 7Available credit facilities of $790 million (as of December 31, 2003) provide a liquidity backstop for unexpected needs or acquisitions.

Frequently Asked Questions

Devon Energy estimates its total oil, natural gas, and NGL production for 2004 to be between 256 and 261 million barrels of oil equivalent (MMBoe). Of this total, approximately 95% is expected to be produced from reserves classified as 'proved' as of December 31, 2003.

Devon Energy is utilizing price swaps and fixed-price physical delivery contracts to fix prices on a portion of its oil and natural gas production. Additionally, the company has entered into costless price collars for both oil and gas production that is subject to floating prices. These strategies aim to mitigate the impact of commodity price volatility on revenues.

Devon Energy's capital expenditures budget for 2004 for drilling and development efforts, including related facilities, is expected to be between $2.14 billion and $2.54 billion. This budget includes significant allocations for both lower and higher risk/reward projects across its operating regions.

Devon Energy anticipates that its estimated 2004 capital uses will be funded primarily through a combination of working capital and operating cash flow. The company also has approximately $790 million available under its credit facilities, which can be used for any remaining funding needs or potential acquisitions.