- Produced Company record 282,000 barrels
of oil per day
- Exceeded oil production guidance for
fifth consecutive quarter
- Raised oil production growth for the
second time in 2015
- Reduced lease operating expenses 14
percent year over year
- Decreased G&A costs by 8 percent
from second quarter
- Improved 2015 capital and operating
cost outlook
Devon Energy Corp. (NYSE: DVN) today announced core earnings of
$316 million, or $0.76 per diluted share, for the third quarter of
2015. This level of earnings generated cash flow from operations of
$1.6 billion in the third quarter, a 41 percent increase compared
to the second quarter of 2015.
“Devon delivered another outstanding operational performance in
the third quarter,” said Dave Hager, president and CEO. “Our
strategy of operating in North America’s best resource plays,
coupled with a focus on delivering best-in-class execution,
continues to generate top-tier results. Across our asset portfolio,
well performance has consistently exceeded type curve expectations
through higher production rates, declining capital costs and lower
operating expenses.”
“Based on these strong results, we are raising our full-year oil
production outlook for the second time this year,” Hager said. “And
we are delivering this incremental production growth with
significantly lower costs. We are now on pace to save around $1
billion of capital and operating costs in 2015 versus original
expectations.”
“Looking ahead, we will continue to take the appropriate actions
to preserve operational momentum and protect our balance sheet,”
Hager said. “Our teams will maximize the value of production by
aggressively pursuing cost reductions and we will maintain the
flexibility of our capital programs. The advantage of having
minimal long-term commitments allows us to dynamically allocate
capital to our highest-returning areas while balancing investment
with cash flow.”
On a reported basis, due to non-cash, asset-impairment charges,
Devon had a net loss of $3.5 billion, or $8.64 per diluted share,
for the third quarter of 2015. This compares with third-quarter
2014 reported net earnings of $1.0 billion, or $2.47 per diluted
share.
Record Oil Production Exceeds Guidance for Fifth Consecutive
Quarter
Devon delivered record oil production of 282,000 barrels per
day, a 31 percent increase compared to the third quarter of 2014.
This result surpassed the top end of guidance by 2,000 barrels per
day, marking the fifth consecutive quarter the Company has exceeded
oil production expectations.
The majority of Devon’s record-setting oil production was
attributable to its U.S. resource plays, which are delivering the
Company’s highest margins. U.S. oil production averaged 161,000
barrels per day in the third quarter, an increase of 18 percent
compared to the third quarter of 2014. Growth in U.S. production
was largely attributable to the Company’s Eagle Ford, Delaware
Basin and Rockies assets. In the third quarter, Devon’s world-class
Eagle Ford assets continued to deliver prolific well results. Net
production in the Eagle Ford averaged 113,000 oil-equivalent
barrels (Boe) per day, a 43 percent increase year over year. The
Company also had another quarter of strong production results from
its stacked-pay position in the Delaware Basin, where net
production increased to 61,000 Boe per day in the third quarter, a
32 percent increase compared to the year-ago period. Another key
contributor to Devon’s growth for the quarter was a 61 percent
increase in oil production from its Rockies assets. Driven by
development drilling in the Power River Basin, oil production in
the Rockies averaged 16,000 barrels per day in the third
quarter.
In Canada, Devon’s heavy-oil operations also delivered
impressive production growth. In total, the Company’s heavy-oil
production increased to a record 121,000 barrels of oil per day in
the third quarter. Driven by the ramp-up of the Jackfish 3 facility
to nameplate capacity four months ahead of schedule, Canadian oil
production increased 52 percent compared to the third quarter of
2014.
Total production of oil, gas and natural gas liquids averaged
680,000 Boe per day during the third quarter. This result exceeded
the top end of the Company’s guidance by 4,000 Boe per day and
represents a 6 percent increase compared to the third quarter of
2014. With the strong growth in high-margin production, oil is now
the largest component of the Devon’s product mix at 41 percent of
total production.
Devon Raises Full-Year Production Outlook
Based on strong operating results year to date, Devon has raised
its 2015 oil production guidance by 2 percent to a mid-point of
276,000 barrels per day. This marks the second time in 2015 the
Company has increased its oil production outlook. Total oil
production growth in 2015 is now expected to range from 31 to 33
percent. Due to the improving outlook for oil production, the
Company has also raised its top-line production growth guidance for
2015 to a range of 8 to 10 percent.
Full-Year Capital Savings to Reach $500 Million
In addition to higher production, Devon is also benefiting from
lower capital spending. The Company’s 2015 E&P capital program,
excluding acquisitions, is now expected to range from $3.8 to $4.0
billion, a $100 million decrease compared to previous guidance.
Combined with additional non-E&P capital savings, Devon’s total
2015 capital spending is expected to be $150 million lower than
previous guidance. As a result of these additional savings, Devon
has now reduced its 2015 capital spending guidance by $500 million
compared to its original expectations issued in February.
Operations Report Highlights
For additional details on Devon’s E&P operations, please
refer to the Company’s third-quarter 2015 Operations Report at
www.devonenergy.com. Highlights from the report include:
- Bone Spring basin type curve
raised
- Leonard Shale program delivers
excellent results
- Eagle Ford delivers record-setting well
results
- Jackfish 3 reaches nameplate capacity
ahead of schedule
- Meramec appraisal success expands
potential
Hedges Increase Upstream Revenue; EnLink Profit
Expands
Revenue from oil, natural gas and natural gas liquids sales
totaled $1.3 billion in the third quarter of 2015, with oil revenue
accounting for nearly 70 percent of total upstream revenues. This
increased oil sales weighting was attributable to the Company’s
substantial growth in both U.S. and Canadian oil production.
Cash settlements related to oil and natural gas hedges increased
revenue by more than $600 million, or approximately $10 per Boe, in
the third quarter. At the end of September, the Company’s remaining
commodity hedges had a fair-market value of approximately $650
million.
Devon’s midstream business generated operating profits of $212
million in the third quarter, bringing the year-to-date total to
$630 million. The majority of this profitability was attributable
to the Company’s investment in EnLink Midstream. Year-to-date,
EnLink-related operating profits have expanded by 15 percent
compared to the same period in 2014.
Lease Operating Expenses Decline 14 Percent; Lowering
Full-Year Cost Outlook
The Company has several cost-reduction initiatives under way
that positively impacted third-quarter results. Field-level
operating costs, which include both lease operating expenses (LOE)
and production taxes, declined 18 percent compared to the third
quarter of 2014 to $9.59 per Boe.
The most significant operating cost savings came from LOE, which
is Devon’s largest field-level cost. LOE declined 14 percent
compared to the year-ago period to $8.14 per Boe and was 9 percent
below the low end of Devon’s guidance range. These LOE cost savings
were realized across all regions of the Company’s portfolio.
Devon also realized significant general and administrative
(G&A) cost savings in the third quarter. G&A expenses
totaled $198 million, or $3.17 per Boe, an 8 percent improvement
compared to the second quarter of 2015, and this strong cost
performance was 7 percent below the low end of guidance.
Based on year-to-date cost savings, Devon now anticipates its
field-level operating costs and G&A to decline to around $13.80
per Boe for the full-year 2015. These declines represent
incremental savings of around $150 million based on the Company’s
most recent guidance. Compared to Devon’s original guidance in
February, this implies a full-year cash cost savings of around $550
million.
Balance Sheet and Liquidity Remain Strong
Devon’s financial position remains exceptionally strong with
investment-grade credit ratings and excellent liquidity. The
Company exited the quarter with net debt, excluding non-recourse
EnLink obligations, totaling just over $7 billion. Devon had cash
balances of $1.8 billion at quarter end, and has no borrowings
under its $3.0 billion senior credit facility.
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). Core earnings and net debt are non-GAAP financial
measures referenced within this release. Reconciliations of these
non-GAAP measures are provided later in this release.
Conference Call Webcast and Supplemental Earnings
Materials
Please note that as soon as practicable today, Devon will post
an operations report to its website at www.devonenergy.com. The
Company’s third-quarter conference call will be held at 10 a.m.
Central (11 a.m. Eastern) on Wednesday, Nov. 4, 2015, and will
serve primarily as a forum for analyst and investor questions and
answers.
Forward-Looking Statements
This press release includes "forward-looking statements" as
defined by the Securities and Exchange Commission (SEC). Such
statements include those concerning strategic plans, expectations
and objectives for future operations, and are often identified by
use of the words “expects,” “believes,” “will,” “would,” “could,”
“forecasts,” “projections,” “estimates,” “plans,” “expectations,”
“targets,” “opportunities,” “potential,” “anticipates,” “outlook”
and other similar terminology. 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. 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.
About Devon Energy
Devon Energy is a leading independent energy company engaged in
finding and producing oil and natural gas. Based in Oklahoma City
and included in the S&P 500, Devon operates in several of the
most prolific oil and natural gas plays in the U.S. and Canada with
an emphasis on a balanced portfolio. The Company is the
second-largest oil producer among North American onshore
independents. For more information, please visit
www.devonenergy.com.
DEVON ENERGY CORPORATION FINANCIAL AND
OPERATIONAL INFORMATION
Quarter Ended Nine Months
Ended PRODUCTION NET OF ROYALTIES September 30,
September 30, 2015 2014 2015
2014 Oil and bitumen (MBbls/d) United States
161 136 167 121 Canada 121 80 107 78 Retained assets 282 216 274
199 Divested assets - 3 - 7 Total 282 219 274 206
Natural gas
liquids (MBbls/d) United States 134 138 136 129 Divested assets
- 5 - 9 Total 134 143 136 138
Gas (MMcf/d) United States
1,570 1,690 1,598 1,656 Canada 16 26 21 24 Retained assets 1,586
1,716 1,619 1,680 Divested assets - 138 - 311 Total 1,586 1,854
1,619 1,991
Oil equivalent (MBoe/d) United States 556 556
569 526 Canada 124 84 111 82 Retained assets 680 640 680 608
Divested assets - 31 - 68 Total 680 671 680 676
KEY OPERATING
STATISTICS BY REGION Quarter Ended September 30, 2015
Avg. Production Gross Wells Operated Rigs at
(MBoe/d) Drilled September 30, 2015 Delaware
Basin 61 40 10 Midland Basin 48 2 - Eagle Ford 113 74 - Canadian
Heavy Oil 124 7 1 Anadarko Basin 83 45 5 Barnett Shale 176 - -
Rockies 28 14 2 Other assets 47 - -
Total 680 182 18
PRODUCTION TREND
2014 2014 2015 2015 2015
Quarter 3 Quarter 4 Quarter 1 Quarter 2
Quarter 3 Oil (MBbls/d) Delaware Basin 27 27
33 41 41 Midland Basin 29 28 27 26 23 Eagle Ford 47 60 75 67 62
Canadian Heavy Oil 80 93 104 98 121 Anadarko Basin 10 10 9 10 9
Barnett Shale 2 2 1 1 1 Rockies 10 9 12 16 16 Other assets 11 10 11
11 9 Retained assets 216 239 272 270 282 Divested assets 3 - - - -
Total 219 239 272 270 282
Natural gas liquids (MBbls/d)
Delaware Basin 7 8 8 10 8 Midland Basin 12 12 11 11 12 Eagle Ford
14 18 23 24 26 Anadarko Basin 34 34 30 24 27 Barnett Shale 54 53 51
49 44 Rockies 1 1 1 1 2 Other assets 16 15 15 15 15 Retained assets
138 141 139 134 134 Divested assets 5 - - - - Total 143 141 139 134
134
Gas (MMcf/d) Delaware Basin 68 66 66 75 70 Midland Basin
68 71 71 77 76 Eagle Ford 109 127 143 146 154 Canadian Heavy Oil 26
23 28 20 16 Anadarko Basin 323 329 297 290 278 Barnett Shale 896
878 827 805 788 Rockies 66 58 53 62 58 Other assets 160 155 160 152
146 Retained assets 1,716 1,707 1,645 1,627 1,586 Divested assets
138 3 - - - Total 1,854 1,710 1,645 1,627 1,586
Oil equivalent
(MBoe/d) Delaware Basin 46 46 52 64 61 Midland Basin 52 52 50
49 48 Eagle Ford 79 99 122 114 113 Canadian Heavy Oil 84 97 109 101
124 Anadarko Basin 98 100 88 82 83 Barnett Shale 205 201 191 185
176 Rockies 22 19 22 27 28 Other assets 54 50 51 52 47 Retained
assets 640 664 685 674 680 Divested assets 31 1
- - - Total
671 665 685 674 680
BENCHMARK PRICES
(average prices)
Quarter Ended September 30, Nine Months
Ended September 30, 2015 2014
2015 2014 Oil ($/Bbl) -
West Texas Intermediate (Cushing) $ 46.69 $ 97.26 $ 51.11 $ 99.67
Natural Gas ($/Mcf) - Henry Hub $ 2.77 $ 4.07 $ 2.80 $ 4.57
REALIZED PRICES Quarter Ended September 30, 2015
Oil /Bitumen NGL Gas Total (Per
Bbl) (Per Bbl) (Per Mcf) (Per Boe) United
States $ 42.09 $ 8.80 $ 2.26 $ 20.66 Canada (1) $ 25.10
$
N/M
$ 0.09 $ 24.55 Realized price without hedges $ 34.78
$ 8.80 $ 2.24 $ 21.37 Cash settlements $ 21.16 $ - $ 0.47
$ 9.86 Realized price, including cash settlements $
55.94 $ 8.80 $ 2.71 $ 31.23
Quarter
Ended September 30, 2014 Oil /Bitumen NGL
Gas Total (Per Bbl) (Per Bbl) (Per
Mcf) (Per Boe) United States $ 90.23 $ 25.82 $ 3.61 $
38.90 Canada (1) $ 65.88 $ 63.46 $ 0.76 $ 63.23
Realized price without hedges $ 81.37 $ 25.90 $ 3.57 $ 41.92
Cash settlements $ (1.06 ) $ 0.01 $ 0.15 $ 0.07
Realized price, including cash settlements $ 80.31 $ 25.91 $
3.72 $ 41.99
Nine Months Ended September
30, 2015 Oil NGL Gas Total (Per
Bbl) (Per Bbl) (Per Mcf) (Per Boe) United
States $ 45.91 $ 9.50 $ 2.30 $ 22.18 Canada (1) $ 27.84
$
N/M
$ 0.61 $ 27.06 Realized price without hedges $ 38.81
$ 9.50 $ 2.27 $ 22.98 Cash settlements $ 19.48 $ - $ 0.53
$ 9.11 Realized price, including cash settlements $
58.29 $ 9.50 $ 2.80 $ 32.09
Nine
Months Ended September 30, 2014 Oil NGL
Gas Total (Per Bbl) (Per Bbl) (Per
Mcf) (Per Boe) United States $ 92.55 $ 26.80 $ 4.04 $
39.81 Canada (1) $ 65.54 $ 50.57 $ 3.80 $ 55.85
Realized price without hedges $ 81.84 $ 27.34 $ 4.02 $ 42.38
Cash settlements $ (2.43 ) $ - $ (0.12 ) $ (1.11 ) Realized price,
including cash settlements $ 79.41 $ 27.34 $ 3.90 $
41.27
(1) The reported Canadian gas volumes include volumes that are
produced from certain of our leases and then transported to our
Jackfish operations where the gas is used as fuel. However, the
revenues and expenses related to this consumed gas are eliminated
in our consolidated financials.
CONSOLIDATED
STATEMENTS OF EARNINGS (in millions, except per share amounts)
Quarter Ended Nine Months Ended September 30,
September 30, 2015 2014
2015 2014 Oil, gas and
NGL sales $ 1,338 $ 2,588 $ 4,264 $ 7,824 Oil, gas and NGL
derivatives 414 748 426 29 Marketing and midstream revenues
1,849 2,000 5,569 5,718
Total operating revenues 3,601 5,336
10,259 13,571 Lease operating expenses 510 584
1,625 1,764 Marketing and midstream operating expenses 1,637 1,781
4,939 5,092 General and administrative expenses 198 195 661 595
Production and property taxes 91 140 315 427 Depreciation,
depletion and amortization 744 842 2,488 2,409 Asset impairments
5,851 - 15,479 - Restructuring costs - 2 - 44 Gains and losses on
asset sales 3 - 2 (1,072 ) Other operating items 11
18 52 74 Total operating
expenses 9,045 3,562 25,561
9,333 Operating income (loss) (5,444 ) 1,774 (15,302
) 4,238 Net financing costs 136 116 378 359 Other nonoperating
items 43 4 46 111
Earnings (loss) before income taxes (5,623 ) 1,654 (15,726 ) 3,768
Income tax expense (benefit) (1,714 ) 613
(5,435 ) 1,698 Net earnings (loss) (3,909 ) 1,041
(10,291 ) 2,070 Net earnings (loss) attributable to noncontrolling
interests (402 ) 25 (369 ) 55
Net earnings (loss) attributable to Devon $ (3,507 ) $ 1,016 $
(9,922 ) $ 2,015 Net earnings (loss) per share
attributable to Devon: Basic $ (8.64 ) $ 2.48 $ (24.45 ) $ 4.94
Diluted $ (8.64 ) $ 2.47 $ (24.45 ) $ 4.91 Weighted average
common shares outstanding: Basic 411 409 411 408 Diluted 411 411
411 410
CONSOLIDATED STATEMENTS OF CASH
FLOWS (in millions)
Quarter Ended Nine Months
Ended September 30, September 30,
2015 2014 2015
2014 Cash flows from operating
activities: Net earnings (loss) $ (3,909 ) $ 1,041 $ (10,291 ) $
2,070 Adjustments to reconcile net earnings (loss) to net cash from
operating activities: Depreciation, depletion and amortization 744
842 2,488 2,409 Asset impairments 5,851 - 15,479 - Gains and losses
on asset sales 3 - 2 (1,072 ) Deferred income tax expense (benefit)
(1,708 ) 23 (5,348 ) 800 Derivatives and other financial
instruments (481 ) (804 ) (606 ) (43 ) Cash settlements on
derivatives and financial instruments 730 44 1,913 (201 ) Other
noncash charges 168 128 435 357 Net change in working capital 67
296 93 766 Change in long-term other assets 52 (38 ) 211 (115 )
Change in long-term other liabilities 36 27
(74 ) 47 Net cash from operating
activities 1,553 1,559 4,302
5,018 Cash flows from investing
activities: Capital expenditures (1,080 ) (1,672 ) (4,229 ) (5,013
) Acquisitions of property, equipment and businesses (113 ) (31 )
(530 ) (6,255 ) Divestitures of property and equipment 27 2,260 35
5,202 Redemptions of long-term investments - - - 57 Other (3
) 3 (8 ) 87 Net cash from
investing activities (1,169 ) 560
(4,732 ) (5,922 ) Cash flows from financing
activities: Borrowings of long-term debt, net of issuance costs 277
438 3,328 4,158 Repayments of long-term debt (252 ) (275 ) (1,773 )
(4,265 ) Net short-term debt repayments (169 ) (456 ) (932 ) (1,318
) Stock option exercises - 9 4 92 Sale of subsidiary units - - 654
- Issuance of subsidiary units 9 52 13 72 Dividends paid on common
stock (99 ) (98 ) (296 ) (287 ) Distributions to noncontrolling
interests (68 ) (46 ) (186 ) (187 ) Other 2
(13 ) (10 ) (4 ) Net cash from financing activities
(300 ) (389 ) 802 (1,739 )
Effect of exchange rate changes on cash (22 ) (28 )
(65 ) (15 ) Net change in cash and cash equivalents
62 1,702 307 (2,658 ) Cash and cash equivalents at beginning
of period 1,725 1,706 1,480
6,066 Cash and cash equivalents at end
of period $ 1,787 $ 3,408 $ 1,787 $ 3,408
CONSOLIDATED
BALANCE SHEETS (in millions)
September 30, December
31, Current assets:
2015
2014 Cash and cash equivalents $ 1,787 $ 1,480
Accounts receivable 1,318 1,959 Derivatives, at fair value 690
1,993 Income taxes receivable 8 522 Other current assets 495
544 Total current assets 4,298
6,498 Property and equipment, at cost: Oil and gas,
based on full cost accounting: Subject to amortization 77,093
75,738 Not subject to amortization 2,688 2,752
Total oil and gas 79,781 78,490 Midstream and other
10,410 9,695 Total property and equipment, at
cost 90,191 88,185 Less accumulated depreciation, depletion and
amortization (67,416 ) (51,889 ) Property and
equipment, net 22,775 36,296 Goodwill
5,775 6,303 Other long-term assets 1,503 1,540
Total assets $ 34,351 $ 50,637 Current
liabilities: Accounts payable $ 940 $ 1,400 Revenues and royalties
payable 985 1,193 Short-term debt 500 1,432 Deferred income taxes
261 730 Other current liabilities 815 1,180
Total current liabilities 3,501 5,935
Long-term debt 11,400 9,830 Asset retirement obligations
1,377 1,339 Other long-term liabilities 818 948 Deferred income
taxes 1,333 6,244 Stockholders' equity: Common stock 41 41
Additional paid-in capital 4,773 4,088 Retained earnings 6,413
16,631 Accumulated other comprehensive earnings 321
779 Total stockholders' equity attributable to Devon
11,548 21,539 Noncontrolling interests 4,374
4,802 Total stockholders' equity 15,922
26,341 Total liabilities and stockholders' equity $ 34,351
$ 50,637 Common shares outstanding 411 409
CONSOLIDATING STATEMENTS OF OPERATIONS (in
millions)
Quarter Ended September 30, 2015 Devon U.S.
& Canada EnLink Eliminations Total
Oil, gas and NGL sales $ 1,338 $ - $ - $ 1,338 Oil, gas and NGL
derivatives 414 - - 414 Marketing and midstream revenues 850
1,171 (172 ) 1,849 Total
operating revenues 2,602 1,171
(172 ) 3,601 Lease operating expenses 510 - - 510
Marketing and midstream operating expenses 849 960 (172 ) 1,637
General and administrative expenses 163 35 - 198 Production and
property taxes 84 7 - 91 Depreciation, depletion and amortization
644 100 - 744 Asset impairments 5,052 799 - 5,851 Gains and losses
on asset sales - 3 - 3 Other operating items 11
- - 11 Total operating
expenses 7,313 1,904 (172 )
9,045 Operating loss (4,711 ) (733 ) - (5,444 ) Net
financing costs 106 30 - 136 Other nonoperating items 48
(5 ) - 43 Loss before
income taxes (4,865 ) (758 ) - (5,623 ) Income tax expense
(benefit) (1,721 ) 7 -
(1,714 ) Net loss (3,144 ) (765 ) - (3,909 ) Net loss attributable
to noncontrolling interests - (402 ) -
(402 ) Net loss attributable to Devon $ (3,144 ) $
(363 ) $ - $ (3,507 )
OTHER KEY STATISTICS
(in millions)
Quarter Ended September 30, 2015
Devon U.S.& Canada
EnLink Eliminations Total Cash flow
statement related items: Operating cash flow $ 1,337 $ 216 $ -
$ 1,553 Capital expenditures $ (979 ) $ (101 ) $ - $ (1,080 )
Acquisitions of property, equipment and businesses $ (107 ) $ (6 )
$ - $ (113 ) EnLink distributions received (paid) $ 65 $ (133 ) $ -
$ (68 )
Balance sheet statement items: Net debt(1) $
7,344 $ 2,769 $ - $ 10,113 (1) Net debt is a Non-GAAP
measure. For a reconciliation of the comparable GAAP measure, see
"Non-GAAP Financial Measures" later in this release.
CAPITAL EXPENDITURES (in
millions)
Quarter Ended September 30, 2015 Nine Months
Ended September 30, 2015 Exploration and development capital $
834 $ 3,043 Capitalized G&A and interest 105 327 Acquisitions
113 199 Midstream (1) 12 48 Corporate and other 18 66
Devon capital expenditures $ 1,082 $ 3,683 (1) Excludes $105
and $777 million attributable to EnLink for the third quarter and
first nine months of 2015, respectively.
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.
CORE EARNINGS
(in millions) 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. Accordingly, the Company also uses the measures of core
earnings and core earnings per diluted share. Devon believes these
non-GAAP measures facilitate comparisons of its performance to
earnings estimates published by securities analysts. Devon also
believes these non-GAAP measures can facilitate comparisons of its
performance between periods and to the performance of its peers.
The following table summarizes the effects of these items on
third-quarter 2015 earnings.
Quarter Ended September 30, 2015 Before-Tax
After-Tax andNoncontrolling
Interests
Net loss attributable to Devon (GAAP) $ (3,507 ) Asset
impairments 5,851 3,622 Fair value changes in financial instruments
and foreign currency 254 201 Core earnings
attributable to Devon (non-GAAP) $ 316 Diluted share count
414 Core diluted earnings per share attributable to Devon
(non-GAAP) $ 0.76
NET DEBT
(in millions) Devon defines net debt as debt less cash and
cash equivalents and net debt attributable to the consolidation of
EnLink Midstream as presented in the following table. Devon
believes that netting these sources of cash against debt and
adjusting for EnLink net debt provides a clearer picture of the
future demands on cash from Devon to repay debt.
September 30,
2015 Devon U.S. & Canada EnLink Devon
Consolidated Total debt (GAAP) $ 9,048 $ 2,852 $ 11,900
Less cash and cash equivalents (1,704 ) (83 )
(1,787 ) Net debt (non-GAAP) $ 7,344 $ 2,769 $ 10,113
DEVON ENERGY
CORPORATION
FORWARD LOOKING GUIDANCE
PRODUCTION GUIDANCE Quarter 4
Low High Oil and bitumen (MBbls/d)
United States 158 163 Canada 118 123
Total 276 286
Natural gas liquids
(MBbls/d) United States 130 135
Gas (MMcf/d) United
States 1,520 1,550 Canada 15 15 Total
1,535 1,565
Oil equivalent
(MBoe/d) United States 541 556 Canada 121
126 Total 662 682
PRICE REALIZATIONS GUIDANCE Quarter 4
Low High Oil and bitumen - % of WTI United
States 87 % 97 % Canada 44 % 54 % NGL - realized price $ 7 $ 12
Natural gas - % of Henry Hub 78 % 88 %
OTHER GUIDANCE ITEMS Quarter 4 ($ millions, except
Boe)
Low High Marketing
& midstream operating profit $ 195 $ 225 Lease operating
expenses per Boe $ 8.00 $ 8.50 General & administrative
expenses per Boe $ 3.00 $ 3.30 Production and property taxes as %
of upstream sales 6.3 % 7.3 % Depreciation, depletion and
amortization per Boe $ 10.50 $ 11.50 Other operating items $ 15 $
20 Net financing costs $ 130 $ 140 Current income tax rate 0.0 %
5.0 % Deferred income tax rate 30.0 % 35.0 % Total
income tax rate 30.0 % 40.0 % Net earnings
attributable to noncontrolling interests $ 10 $ 30
CAPITAL EXPENDITURES GUIDANCE Quarter 4 (in millions)
Low High Exploration and development $ 800 $
900 Capitalized G&A and interest 95 115 Midstream (1) 5 15
Corporate and other 15 25 Devon capital
expenditures $ 915 $ 1,055
(1) Excludes capital expenditures related to EnLink.
COMMODITY HEDGES Oil Commodity
Hedges Price Swaps Price
Collars Call Options Sold Period
Volume(Bbls/d)
WeightedAveragePrice ($/Bbl)
Volume(Bbls/d)
WeightedAverage FloorPrice($/Bbl)
WeightedAverageCeiling Price($/Bbl)
Volume(Bbls/d)
WeightedAverage Price($/Bbl)
Q4 2015 107,000 $ 90.61 44,000 $ 81.36 $ 88.63 28,000 $ 116.43
Oil Basis Swaps Period Index Volume (Bbls/d)
Weighted Average Differential toWTI
($/Bbl)
Q4 2015 Western Canadian Select 40,000 $ (15.58 )
Natural Gas Commodity Hedges Price Swaps
Price Collars Call Options Sold Period
Volume(MMBtu/d)
WeightedAverage Price($/MMBtu)
Volume(MMBtu/d)
WeightedAverage FloorPrice($/MMBtu)
WeightedAverageCeiling Price($/MMBtu)
Volume(MMBtu/d)
WeightedAverage Price($/MMBtu)
Q4 2015 250,000 $ 4.32 480,000 $ 3.52 $ 3.83 550,000 $ 5.09
Devon’s oil derivatives settle against the average of the prompt
month NYMEX West Texas Intermediate futures price. Devon’s natural
gas derivatives settle against the Inside FERC first of the month
Henry Hub index.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151103006768/en/
Devon Energy CorporationInvestor ContactsHoward Thill,
405-552-3693Scott Coody, 405-552-4735Shea Snyder,
405-552-4782Media ContactJohn Porretto, 405-228-7506
Devon Energy (NYSE:DVN)
Historical Stock Chart
From Mar 2024 to Apr 2024
Devon Energy (NYSE:DVN)
Historical Stock Chart
From Apr 2023 to Apr 2024