- Achieved record fourth-quarter oil
production exceeding company guidance
- Delivered 32 percent growth in
fourth-quarter U.S. oil production
- Increased fourth-quarter operating cash
flow by 26 percent
- Repatriated $4.3 billion of foreign
cash during 2013
- Increased proved oil reserves to
highest level in company history
Devon Energy Corporation (NYSE:DVN) today reported net earnings
of $207 million or $0.51 per common share ($0.51 per diluted share)
for the quarter ended December 31, 2013. This compares with a
fourth-quarter 2012 net loss of $357 million or $0.89 per common
share ($0.89 per diluted share).
Adjusting for items securities analysts typically exclude from
their published estimates, the company earned $447 million or $1.10
per diluted share in the fourth quarter. This represents a 49
percent increase in adjusted earnings compared to the fourth
quarter of 2012.
Operating cash flow in the fourth quarter of 2013 totaled $1.4
billion, a 26 percent increase compared to the year-ago period. For
the year ended December 31, 2013, Devon generated operating cash
flow of $5.4 billion. Including $419 million of cash received from
asset sales, the company’s total cash inflows reached $5.9 billion
for 2013.
“2013 was a year of strong execution and exciting change for
Devon,” said John Richels, president and chief executive officer.
“Our drilling programs not only drove impressive oil production
growth, but also expanded margins and improved operating cash flow.
Additionally, we high-graded our portfolio through an accretive
Eagle Ford Shale acquisition, an innovative midstream combination,
and initiated an asset divestiture program. These actions provide a
platform for Devon to achieve attractive high-margin growth in 2014
and for many years to come.”
Key Operating Highlights
Permian Basin – Production averaged a record 86,000
oil-equivalent barrels (Boe) per day in the fourth quarter, a 29
percent increase compared to the fourth quarter of 2012. Light oil
production accounted for approximately 60 percent of Devon’s total
Permian production.
The Bone Spring oil play in the Delaware Basin was a significant
contributor to the company’s growth in the Permian. Devon added 21
new Bone Spring wells to production in the fourth quarter, with
initial 30-day rates averaging 800 Boe per day, of which 70 percent
was light oil. These outstanding initial production rates exceeded
the company’s Bone Spring type curve by about 40 percent.
Also in the Delaware Basin, Devon commenced production on its
first horizontal Wolfcamp well in Ward County, Texas. Initial
30-day production from the Martinsville 120-4H averaged 950 Boe per
day, including 800 barrels of light oil per day. The company has
identified more than 100,000 net acres prospective for the Wolfcamp
within its Delaware Basin position and will continue to derisk this
emerging oil opportunity in 2014.
In the Southern Midland Basin, Devon delivered strong results
from its oil development program in the Wolfcamp Shale. During the
fourth quarter, the company brought 24 Wolfcamp Shale wells online
with initial 30-day rates averaging 410 Boe per day.
Canadian Thermal Oil – Gross production from Devon’s
Jackfish 1 and Jackfish 2 thermal oil projects averaged 58,000
barrels of oil per day in the fourth quarter, or 53,000 barrels per
day after royalties. This represents a 16 percent increase in net
production compared to the third quarter of 2013. The growth in
fourth-quarter production was attributable to the resumption of
operations at Jackfish 2 after scheduled maintenance downtime
during the third quarter.
Construction of the company’s Jackfish 3 thermal oil project is
now nearly complete. Plant startup at Jackfish 3 is expected in the
third quarter of this year. At peak production, Devon’s three 100
percent-owned Jackfish projects are expected to generate nearly $1
billion of free cash flow annually for the company.
Barnett Shale – Net production averaged 1.4 billion cubic
feet of natural gas equivalent per day in 2013. Barnett liquids
production increased to an average of 57,000 barrels per day in
2013, a 17 percent increase compared to 2012.
Anadarko Basin – Fourth-quarter Anadarko Basin production
averaged a record 85,000 Boe per day. Growth from Devon’s
Cana-Woodford Shale and Granite Wash plays drove a 10 percent
year-over-year increase in net production. With drilling focused in
the most liquids-prone acreage, oil and natural gas liquids
production increased to more than 40 percent of total production in
the Anadarko Basin.
Mississippian-Woodford Trend – Net production from
Devon’s emerging Mississippian-Woodford Trend averaged 16,000 Boe
per day in December, representing a 47 percent increase from the
September average and exceeding the company’s projected exit
rate.
Record Oil Production Driven by Permian Basin
Devon delivered strong oil production growth in the fourth
quarter of 2013. Companywide oil production set a new quarterly
record averaging 177,000 barrels per day, exceeding the top end of
the company’s guidance range. This represents a 17 percent increase
in oil production compared to the fourth quarter of 2012 and a 7
percent increase over the third quarter of 2013. Led by the Permian
Basin, the most significant growth came from the company’s U.S.
operations, where oil production increased 32 percent year over
year. Total production increased to an average of 696,000 Boe per
day in the fourth quarter of 2013, surpassing the midpoint of the
company’s previous forecast by 6,000 Boe per day.
In November, the company announced an initiative to monetize
non-core assets in both the U.S. and Canada, sharpening its focus
on high-growth retained properties. The assets identified for
divestiture averaged 144,000 Boe per day in the fourth quarter, of
which almost 80 percent was natural gas. Excluding production
associated with these non-core assets, top-line production in the
fourth quarter from Devon’s retained asset base increased 7 percent
compared to the fourth quarter of 2012. Reconciliations of retained
and non-core asset production are provided later in this
release.
Upstream Revenue Increases 19 Percent; Cash Margins
Expand
Revenue from oil, natural gas and natural gas liquids sales
totaled $8.5 billion in 2013, a 19 percent increase compared to
2012. The significant growth in revenue was attributable to higher
oil production and improved natural gas realizations. In 2013, oil
sales accounted for more than 50 percent of Devon’s total upstream
revenues.
Devon’s marketing and midstream operating profit reached $513
million in 2013. This result represents a 25 percent increase
compared to the previous year. The increase in operating profit was
attributable to higher natural gas prices and strong cost
management.
The company’s pre-tax cash costs totaled $14.96 per Boe in 2013,
a 4 percent increase compared to 2012. The higher unit cost is
attributable to Devon’s dramatic increase in oil production. In
general, oil wells have higher operating costs than gas wells, but
also have higher margins in the current commodity price
environment. In the fourth quarter, the company’s cash margin per
Boe increased 15 percent year over year, reflecting the benefits of
the increase in higher-margin oil production.
Foreign Cash Repatriated; Balance Sheet Remains
Strong
During the fourth quarter, Devon repatriated $2.3 billion of
foreign cash to the U.S. For the full-year 2013, the company
repatriated $4.3 billion of foreign cash to the U.S. at an
estimated effective tax rate of 4 percent. At December 31, 2013,
the company’s cash balances totaled $6.1 billion, and its
investment-grade balance sheet had a net debt to adjusted
capitalization ratio of only 23 percent.
In December, Devon issued $2.25 billion of senior notes through
a combination of two-, three- and five-year offerings and entered
into an undrawn $2 billion senior term loan facility. Proceeds from
the senior notes, the term loan facility, and a portion of the
company’s cash on hand will fund Devon’s recently announced Eagle
Ford acquisition.
Oil Reserves Climb to Record Levels
At December 31, 2013, Devon increased its proved oil reserves to
a record 837 million barrels. During the year, the company’s
oil-focused drilling program added 112 million barrels of oil
reserves through successful drilling (extensions, discoveries and
revisions other than price). This represents a replacement rate of
approximately 180 percent of the oil produced during 2013.
In aggregate, Devon’s estimated proved reserves of oil, natural
gas and natural gas liquids were 3.0 billion oil-equivalent barrels
at year end. Extensions and discoveries through successful
drilling, combined with price revisions related to higher natural
gas prices, increased proved reserves by 355 million Boe compared
to year-end 2012. Divestitures and revisions other than price
decreased proved reserves by 103 million Boe in 2013. Revisions
other than price were primarily attributable to proved undeveloped
gas-weighted locations no longer expected to be drilled given the
commodity price environment.
Overall, the company’s reserve life index (proved reserves
divided by annual production) remained at approximately 12 years,
and its proved undeveloped reserves accounted for only 24 percent
of proved reserves. Proved reserves associated with assets
identified for divestiture totaled 381 million Boe at December 31,
2013, of which approximately 70 percent were natural gas.
Eagle Ford and EnLink Midstream Update
In November, Devon announced the acquisition of GeoSouthern
Energy’s assets in the Eagle Ford oil play. The acquired Eagle Ford
acreage includes 82,000 net acres located in DeWitt and Lavaca
counties. This acreage is located in the best part of the Eagle
Ford, consistently yielding some of the highest initial production
rates and estimated ultimate recoveries in the entire play.
The Eagle Ford transaction is on track to close by the end of
the first quarter of 2014. Net production is expected to grow at a
compound annual growth rate of 25 percent over the next several
years, reaching a peak production rate of approximately 140,000 Boe
per day. Devon’s development program in 2014 is self-funding and
expected to generate significant free cash flow beginning in 2015.
The risked recoverable resource associated with this position is
estimated at 400 million barrels of oil equivalent, of which more
than 60 percent is classified as proved reserves.
Also in 2013, Devon announced the strategic combination of its
U.S. midstream assets with Crosstex to form EnLink Midstream.
EnLink Midstream will consist of two publicly traded entities: the
master limited partnership, EnLink Midstream Partners LP, and a
publicly traded general partner entity, EnLink Midstream LLC. This
transaction is expected to close in the first quarter of 2014. The
common units of both EnLink Midstream Partners LP and EnLink
Midstream LLC will trade on the New York Stock Exchange under the
symbols “ENLK” and “ENLC”, respectively.
Non-GAAP Reconciliations
Pursuant to regulatory disclosure requirements, Devon is
required to reconcile non-GAAP financial measures to the related
GAAP information (GAAP refers to generally accepted accounting
principles). Adjusted earnings, net debt and adjusted
capitalization are non-GAAP financial measures referenced within
this release. Reconciliations of these non-GAAP measures are
provided later in this release.
Conference Call to be Webcast Today
Devon will discuss its fourth-quarter and full-year 2013
financial and operating results in a conference call webcast today.
The webcast will begin at 10 a.m. Central (11 a.m. Eastern ) and
may be accessed from Devon’s home page at www.devonenergy.com.
This press release includes "forward-looking statements" as
defined by the Securities and Exchange Commission (SEC). Such
statements are those concerning strategic plans, expectations and
objectives for future operations. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that the company
expects, believes or anticipates will or may occur in the future
are forward-looking statements. Such statements are subject to a
number of assumptions, risks and uncertainties, many of which are
beyond the control of the company. Statements regarding future
drilling and production are subject to all of the risks and
uncertainties normally incident to the exploration for and
development and production of oil and gas. These risks include, but
are not limited to, the volatility of oil, natural gas and NGL
prices; uncertainties inherent in estimating oil, natural gas and
NGL reserves; the extent to which we are successful in acquiring
and discovering additional reserves; unforeseen changes in the rate
of production from our oil and gas properties; uncertainties in
future exploration and drilling results; uncertainties inherent in
estimating the cost of drilling and completing wells; drilling
risks; competition for leases, materials, people and capital;
midstream capacity constraints and potential interruptions in
production; risk related to our hedging activities; environmental
risks; political changes; changes in laws or regulations; our
limited control over third parties who operate our oil and gas
properties; our ability to successfully complete mergers,
acquisitions and divestitures; and other risks identified in our
Form 10-K and our other filings with the SEC. Investors are
cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.
The forward-looking statements in this press release are made as of
the date of this press release, even if subsequently made available
by Devon on its website or otherwise. Devon does not undertake any
obligation to update the forward-looking statements as a result of
new information, future events or otherwise.
The SEC permits oil and gas companies, in their filings with the
SEC, to disclose only proved, probable and possible reserves that
meet the SEC's definitions for such terms, and price and cost
sensitivities for such reserves, and prohibits disclosure of
resources that do not constitute such reserves. This release
may contain certain terms, such as resource potential
and exploration target size. These estimates are by their
nature more speculative than estimates of proved, probable and
possible reserves and accordingly are subject to substantially
greater risk of being actually realized. The SEC guidelines
strictly prohibit us from including these estimates in filings with
the SEC. U.S. investors are urged to consider closely the
disclosure in our Form 10-K, available at www.devonenergy.com. You
can also obtain this form from the SEC by calling 1-800-SEC-0330 or
from the SEC’s website at www.sec.gov.
Devon Energy Corporation is an Oklahoma City-based independent
energy company engaged in oil and gas exploration and production.
Devon is a leading U.S.-based independent oil and gas producer and
is included in the S&P 500 Index. For more information about
Devon, please visit our website at www.devonenergy.com.
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
PRODUCTION (net of royalties) Quarter Ended
Year Ended December 31, December 31,
Total Period
Production:
2013 2012 2013
2012 Natural Gas (Bcf) United States 174.3
186.7 708.7 751.9 Canada 39.9 43.3 164.9 186.1 Total Natural Gas
214.2 230.0 873.6 938.0 Oil / Bitumen (MMBbls)
United States 7.9 6.0 28.3 21.5
Canada 8.4 7.9 33.1 32.0 Total Oil / Bitumen 16.3 13.9 61.4 53.5
Natural Gas Liquids (MMBbls)
United States 11.3 9.3 42.3 36.1
Canada 0.8 0.9 3.6 3.8 Total Natural Gas Liquids 12.1 10.2 45.9
39.9 Oil Equivalent (MMBoe)
United States 48.2 46.4 188.8 182.9
Canada 15.9 16.0 64.1 66.8 Total Oil Equivalent 64.1 62.4 252.9
249.7
Quarter Ended Year Ended
December 31, December 31,
Average Daily
Production:
2013 2012 2013 2012 Natural Gas (MMcf)
United States 1,894.7 2,029.0 1,941.8 2,054.5 Canada 433.3 471.2
451.6 508.3 Total Natural Gas 2,328.0 2,500.2 2,393.4 2,562.8 Oil /
Bitumen (MBbls) United States 85.3 64.8 77.7 58.7 Canada 91.4 86.2
90.6 87.4 Total Oil / Bitumen 176.7 151.0 168.3 146.1 Natural Gas
Liquids (MBbls) United States 122.4 101.4 116.0 98.6 Canada 9.1 9.5
9.7 10.5 Total Natural Gas Liquids 131.5 110.9 125.7 109.1 Oil
Equivalent (MBoe) United States 523.4 504.4 517.3 499.7 Canada
172.8 174.2 175.6 182.6 Total Oil Equivalent 696.2 678.6 692.9
682.3
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
KEY OPERATING STATISTICS BY REGION Quarter Ended
December 31, 2013 Avg. Production Gross Wells
Operated Rigs at (MBOED) Drilled December
31, 2013 Permian Basin 85.7 73 24 Canadian Heavy Oil 84.5 58 2
Barnett Shale 223.9 31 5 Anadarko Basin 85.3 22 11
Mississippian-Woodford Trend 14.1 88 15 Rockies 21.2 8 3 Other
Assets 37.3 5 -
Core & Emerging Assets - Total 552.0 285
60 Canadian Conventional (Non-Core) 88.2 31 4 Rockies (None-Core)
29.7 - 2 Gulf Coast (Non-Core) 18.6 3 1 Mid-Continent (Non-Core)
7.7 - -
Devon - Total 696.2 319 67
Year
Ended December 31, 2013 Avg. Production Gross
Wells (MBOED) Drilled Permian Basin 78.0 348
Canadian Heavy Oil 83.1 186 Barnett Shale 227.7 172 Anadarko Basin
81.7 184 Mississippian-Woodford Trend 7.9 232 Rockies 21.5 37 Other
Assets 39.6 5
Core & Emerging Assets - Total 539.5 1,164
Canadian Conventional (Non-Core) 92.5 82 Rockies (None-Core) 32.1
13 Gulf Coast (Non-Core) 20.4 16 Mid-Continent (Non-Core) 8.4
- Devon - Total 692.9 1,275
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
BENCHMARK PRICES Quarter Ended Year
Ended (average prices)
December 31, December 31,
2013 2012 2013 2012 Natural Gas ($/Mcf)
– Henry Hub $ 3.60 $ 3.41 $ 3.65 $ 2.79 Oil ($/Bbl) – West Texas
Intermediate (Cushing) $ 97.53 $ 88.16 $ 98.02 $ 94.21
REALIZED PRICES Quarter Ended December 31,
2013 Oil / Bitumen Gas NGLs Total
(Per Bbl) (Per Mcf) (Per Bbl) (Per Boe)
United States $ 96.04 $ 3.01 $ 27.51 $ 32.96 Canada $ 48.50 $ 3.07
$ 45.00 $ 35.74 Realized price without hedges $ 71.45 $ 3.02
$ 28.73 $ 33.65 Cash settlements $ 3.33 $ 0.23 $ (0.19 ) $ 1.59
Realized price, including cash settlements $ 74.78 $ 3.25 $ 28.54
$ 35.24
Quarter Ended December 31, 2012
Oil / Bitumen Gas NGLs Total (Per
Bbl) (Per Mcf) (Per Bbl) (Per Boe) United
States $ 83.18 $ 2.93 $ 26.12 $ 27.72 Canada $ 52.31 $ 3.26 $ 47.64
$ 37.28 Realized price without hedges $ 65.56 $ 2.99 $ 27.96
$ 30.17 Cash settlements $ 8.76 $ 0.34 $ 0.07 $ 3.24
Realized price, including cash settlements $ 74.32 $ 3.33 $ 28.03
$ 33.41
Year Ended December 31, 2013
Oil / Bitumen Gas NGLs Total (Per
Bbl) (Per Mcf) (Per Bbl) (Per Boe) United
States $ 94.52 $ 3.10 $ 25.75 $ 31.59 Canada $ 57.18 $ 3.05 $ 46.17
$ 39.91 Realized price without hedges $ 74.41 $ 3.09 $ 27.33
$ 33.70 Cash settlements $ 0.90 $ 0.16 $ 0.01 $ 0.77
Realized price, including cash settlements $ 75.31 $ 3.25 $ 27.34
$ 34.47
Year Ended December 31, 2012
Oil / Bitumen Gas NGLs Total (Per
Bbl) (Per Mcf) (Per Bbl) (Per Boe) United
States $ 88.68 $ 2.32 $ 28.49 $ 25.59 Canada $ 57.01 $ 2.49 $ 48.63
$ 37.01 Realized price without hedges $ 69.73 $ 2.36 $ 30.42
$ 28.65 Cash settlements $ 4.84 $ 0.65 $ 0.04 $ 3.48
Realized price, including cash settlements $ 74.57 $ 3.01 $ 30.46
$ 32.13
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS Quarter
Ended Year Ended (in millions, except per share amounts)
December 31, December 31, 2013
2012 2013 2012 Revenues: Oil, gas and
NGL sales $ 2,155 $ 1,883 $ 8,522 $ 7,153 Oil, gas and NGL
derivatives (96 ) 178 (191 ) 693 Marketing and midstream revenues
565 519 2,066
1,655 Total operating revenues 2,624
2,580 10,397 9,501 Expenses and
other: Lease operating expenses 584 534 2,268 2,074 Marketing and
midstream operating expenses 425 399 1,553 1,246 General and
administrative expenses 157 198 617 692 Production and property
taxes 108 108 461 414 Depreciation, depletion and amortization 711
731 2,780 2,811 Asset impairments 16 896 1,976 2,024 Other
operating items 28 39 121
92 Total operating expenses 2,029
2,905 9,776 9,353
Operating income 595 (325 ) 621 148 Net financing costs 111 98 417
370 Restructuring costs 4 74 54 74 Other nonoperating items
4 4 1 21 Earnings
(loss) from continuing operations before income taxes 475 (501 )
149 (317 ) Income tax expense (benefit) 268
(144 ) 169 (132 ) Earnings (loss) from
continuing operations 207 (357 ) (20 ) (185 ) Earnings (loss) from
discontinued operations, net of tax - -
- (21 ) Net earnings (loss) $ 207 $
(357 ) $ (20 ) $ (206 ) Basic net earnings (loss) per share
Basic earnings (loss) from continuing operations per share $ 0.51 $
(0.89 ) $ (0.06 ) $ (0.47 ) Basic loss from discontinued operations
per share - - -
(0.05 ) Basic net earnings (loss) per share $ 0.51 $ (0.89 )
$ (0.06 ) $ (0.52 ) Diluted net earnings (loss) per share
Diluted earnings (loss) from continuing operations per share $ 0.51
$ (0.89 ) $ (0.06 ) $ (0.47 ) Diluted loss from discontinued
operations per share - - -
(0.05 ) Diluted net earnings (loss) per share $ 0.51
$ (0.89 ) $ (0.06 ) $ (0.52 ) Weighted average common
shares outstanding: Basic 406 405 406 404 Diluted 407 405 406 404
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)
Quarter Ended Year Ended
December 31, December 31, 2013 2012
2013 2012 Cash flows from operating activities: Net
earnings (loss) $ 207 $ (357 ) $ (20 ) $ (206 ) Loss from
discontinued operations, net of tax - - - 21
Adjustments to reconcile earnings (loss)
from continuing operations to net cash from operating
activities:
Depreciation, depletion and amortization 711 731 2,780 2,811 Asset
impairments 16 896 1,976 2,024 Deferred income tax expense
(benefit) 278 (188 ) 97 (184 ) Derivatives and other financial
instruments 70 (185 ) 135 (660 ) Cash settlements on derivatives
and financial instruments 130 217 277 865 Other noncash charges
112 104 318 240
Net cash from operating activities before
balance sheet changes
1,524 1,218 5,563 4,911 Net change in working capital (194 ) (98 )
(298 ) (50 ) Change in long-term other assets 38 (14 ) 10 (36 )
Change in long-term other liabilities 69 37
161 105 Cash from operating
activities - continuing operations 1,437 1,143 5,436 4,930 Cash
from operating activities - discontinued operations -
- - 26 Net cash from
operating activities 1,437 1,143
5,436 4,956 Cash flows from investing
activities: Capital expenditures (1,539 ) (1,997 ) (6,758 ) (8,225
) Proceeds from property and equipment divestitures 103 71 419
1,468 Purchases of short-term investments - (1,137 ) (1,076 )
(4,106 ) Redemptions of short-term investments - 958 3,419 3,266
Other (86 ) (4 ) (3 ) 14 Cash
from investing activities - continuing operations (1,522 ) (2,109 )
(3,999 ) (7,583 ) Cash from investing activities - discontinued
operations - (1 ) - 57
Net cash from investing activities (1,522 )
(2,110 ) (3,999 ) (7,526 ) Cash flows from
financing activities: Proceeds from borrowings of long-term debt,
net of issuance costs 2,233 (7 ) 2,233 2,458 Net short-term debt
borrowings (repayments) (295 ) 361 (1,872 ) (537 ) Credit facility
borrowings - - - 750 Credit facility repayments - - - (750 )
Proceeds from stock option exercises 2 2 3 27 Dividends paid on
common stock (89 ) (82 ) (348 ) (324 ) Excess tax benefits related
to share-based compensation (1 ) - 4
5 Net cash from financing activities
1,850 274 20 1,629
Effect of exchange rate changes on cash (19 ) (8 )
(28 ) 23 Net change in cash and cash
equivalents 1,746 (701 ) 1,429 (918 ) Cash and cash
equivalents at beginning of period 4,320 5,338
4,637 5,555 Cash and cash
equivalents at end of period $ 6,066 $ 4,637 $ 6,066
$ 4,637
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED BALANCE SHEETS (in millions)
December
31, December 31, 2013
2012 Current assets: Cash and cash equivalents $ 6,066 $
4,637 Short-term investments - 2,343 Accounts receivable 1,520
1,245 Other current assets 419 746
Total current assets 8,005 8,971
Property and equipment, at cost: Oil and gas, based on full cost
accounting: Subject to amortization 73,995 69,410 Not subject to
amortization 2,791 3,308 Total oil and
gas 76,786 72,718 Other 6,195 5,630
Total property and equipment, at cost 82,981 78,348 Less
accumulated depreciation, depletion and amortization (54,534
) (51,032 ) Property and equipment, net 28,447
27,316 Goodwill 5,858 6,079 Other long-term assets
567 960 Total assets $ 42,877 $
43,326 Current liabilities: Accounts payable $ 1,229
$ 1,451 Revenues and royalties payable 786 750 Short-term debt
4,066 3,189 Other current liabilities 574 613
Total current liabilities 6,655 6,003
Long-term debt 7,956 8,455 Asset retirement obligations
2,140 1,996 Other long-term liabilities 834 901 Deferred income
taxes 4,793 4,693 Stockholders' equity: Common stock 41 41
Additional paid-in capital 3,780 3,688 Retained earnings 15,410
15,778 Accumulated other comprehensive earnings 1,268
1,771 Total stockholders' equity 20,499
21,278 Total liabilities and stockholders' equity $
42,877 $ 43,326 Common shares outstanding 406 406
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
CAPITAL EXPENDITURES (in millions)
Quarter Ended
December 31, 2013 United States Canada
Total Exploration $ 158 $ 13 $ 171 Development 816
296 1,112 Exploration and development capital (1) $
974 $ 309 $ 1,283 Capitalized G&A 96 Capitalized interest 12
Midstream capital (2) 174 Other capital 51
Total
Operations $ 1,616 (1) Includes $124 million
attributable to assets identified for divestiture. (2) Includes $42
million attributable to assets that will reside within EnLink
Midstream.
Year Ended December 31, 2013
United States Canada Total Exploration $ 626 $
128 $ 754 Development 3,541 1,114 4,655
Exploration and development capital (1) $ 4,167 $ 1,242 $ 5,409
Capitalized G&A 368 Capitalized interest 42 Midstream capital
(2) 703 Other capital 121
Total Operations $ 6,643
(1) Includes $483 million attributable to assets identified
for divestiture. (2) Includes $215 million attributable to assets
that will reside within EnLink Midstream.
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
COSTS INCURRED (in millions)
Total
Year Ended December 31, 2013
2012 Property acquisition costs: Proved properties $
22 $ 73 Unproved properties 216 1,167 Exploration costs 595 666
Development costs 5,089 6,099
Costs Incurred
$ 5,922 $ 8,005 United
States Year Ended December 31, 2013
2012 Property acquisition costs: Proved properties $ 19 $ 2
Unproved properties 213 1,135 Exploration costs 443 351 Development
costs 3,838 4,408
Costs Incurred $
4,513 $ 5,896 Canada Year
Ended December 31, 2013 2012
Property acquisition costs: Proved properties $ 3 $ 71 Unproved
properties 3 32 Exploration costs 152 315 Development costs
1,251 1,691
Costs Incurred $ 1,409
$ 2,109
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
RESERVES RECONCILIATION
Total Oil / Bitumen Gas NGLs
Total (MMBbls) (Bcf)
(MMBbls)
(MMBoe) As of December 31, 2012:
Proved developed 327 8,070 451 2,123 Proved undeveloped 471
1,376 140
840
Total Proved
798 9,446
591 2,963
Revisions due to prices (11 ) 566 11 94 Revisions other than
price (2 ) (232 ) (47 ) (88 ) Extensions and discoveries 114 490 65
261 Purchase of reserves 1 1 - 1 Production (62 ) (874 ) (45 ) (253
) Sale of reserves (1 ) (89 ) - (15 )
As of December 31,
2013:
Proved developed 361 8,459 491
2,262 Proved undeveloped 476 849
84 701
Total Proved 837
9,308 575
2,963 United
States Oil Gas NGLs Total
(MMBbls) (Bcf)
(MMBbls) (MMBoe) As of
December 31, 2012:
Proved developed
166 7,391 431 1,829 Proved undeveloped 39
1,371 140
407
Total Proved 205
8,762 571
2,236 Revisions due to
prices 1 405 8 76 Revisions other than price (18 ) (299 ) (50 )
(117 ) Extensions and discoveries 69 471 64 212 Purchase of
reserves 1 1 - 1 Production (28 ) (709 ) (41 ) (189 ) Sale of
reserves (1 ) (81 ) - (14 )
As of December 31, 2013:
Proved developed 194 7,707 468 1,947 Proved
undeveloped 35 843
84 258
Total
Proved 229 8,550
552
2,205 Canada Oil /
Bitumen Gas NGLs Total (MMBbls)
(Bcf)
(MMBbls) (MMBoe) As of
December 31, 2012:
Proved developed
161 679 20 294 Proved undeveloped 432 5
- 433
Total Proved 593
684 20
727 Revisions due to prices (12 ) 161 3
18 Revisions other than price 16 67 3 29 Extensions and discoveries
45 19 1 49 Purchase of reserves - - - - Production (34 ) (165 ) (4
) (64 ) Sale of reserves - (8 ) - (1 )
As of December 31,
2013:
Proved developed 167 752 23 315
Proved undeveloped 441 6
- 443
Total
Proved 608 758
23
758
NON-GAAP FINANCIAL MEASURES
The United States Securities and Exchange Commission has adopted
disclosure requirements for public companies such as Devon
concerning Non-GAAP financial measures. (GAAP refers to generally
accepted accounting principles). The company must reconcile the
Non-GAAP financial measure to related GAAP information. Devon's
reported net earnings include items of income and expense that are
typically excluded by securities analysts in their published
estimates of the company's financial results. The following tables
summarize the effects of these items on fourth-quarter 2013
earnings.
RECONCILIATION TO GAAP
INFORMATION (in millions) Quarter Ended December 31,
2013 Before-Tax After-Tax Net earnings (GAAP) $
207 Derivatives and other financial instruments 105 67 Cash
settlements on derivatives and financial instruments 101 64 Cash
repatriation - 97 Asset impairments 16 10 Restructuring costs 4
2 Adjusted earnings (Non-GAAP) $ 447 Diluted share count 407
Adjusted diluted earnings per share (Non-GAAP) $ 1.10
NON-GAAP FINANCIAL MEASURES
Devon believes that using net debt for the calculation of “net
debt to adjusted capitalization” provides a better measure than
using debt. Devon defines net debt as debt less cash, cash
equivalents and short-term investments. Devon believes that netting
these sources of cash against debt provides a clearer picture of
the future demands on cash to repay debt.
RECONCILIATION TO GAAP
INFORMATION (in millions) December 31,
2013 2012 Total debt (GAAP) $ 12,022 $ 11,644
Adjustments: Cash and short-term investments 6,066
6,980 Net debt (Non-GAAP) $ 5,956 $ 4,664 Total debt $
12,022 $ 11,644 Stockholders' equity 20,499 21,278
Total capitalization (GAAP) $ 32,521 $ 32,922 Net debt $
5,956 $ 4,664 Stockholders' equity 20,499 21,278
Adjusted capitalization (Non-GAAP) $ 26,455 $ 25,942
Devon Energy CorporationInvestor Contacts:Scott Coody,
405-552-4735orShea Snyder, 405-552-4782orMedia Contact:Chip Minty,
405-228-8647
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