UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2015
DEVON ENERGY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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| DELAWARE |
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001-32318 |
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73-1567067 |
| (State or Other Jurisdiction of
Incorporation or Organization) |
|
(Commission
File Number) |
|
(IRS Employer
Identification Number) |
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|
|
| 333 W. SHERIDAN AVE., OKLAHOMA CITY, OK |
|
73102 |
| (Address of Principal Executive Offices) |
|
(Zip Code) |
Registrant’s telephone number, including area code: (405) 235-3611
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
| |
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 |
Results of Operations and Financial Condition |
Devon Energy Corporation hereby furnishes
the information set forth in its news release dated November 3, 2015 announcing third quarter 2015 financial results, a copy of which is attached as Exhibit 99.1.
| Item 9.01 |
Financial Statements and Exhibits |
(d) Exhibits
|
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|
| 99.1 |
|
Devon Energy Corporation news release dated November 3, 2015. |
Page 2 of 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereto duly authorized.
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| DEVON ENERGY CORPORATION |
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|
| By: |
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/s/ Thomas L. Mitchell |
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|
Thomas L. Mitchell |
|
|
Executive Vice President and |
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|
Chief Financial Officer |
Date: November 3, 2015
Page 3 of 3
Exhibit 99.1
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Devon Energy Corporation |
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333 West Sheridan Avenue |
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Oklahoma City, OK 73102-5015 |
NEWS RELEASE
Devon
Energy Reports Third-Quarter 2015 Results
| • |
|
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 |
OKLAHOMA CITY - Nov.3, 2015 - 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
Page 1 of 16
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 |
| |
• |
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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.
Page 2 of 16
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
Page 3 of 16
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.
Investor Contacts
Howard Thill, 405-552-3693
Scott Coody, 405-552-4735
Shea Snyder, 405-552-4782
Media Contact
John Porretto, 405-228-7506
Page 4 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| PRODUCTION NET OF ROYALTIES |
|
Quarter Ended
September 30, |
|
|
Nine Months Ended
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
(MBoe/d) |
|
|
Gross Wells
Drilled |
|
|
Operated Rigs at
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 5 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 6 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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
(Per Bbl) |
|
|
NGL
(Per Bbl) |
|
|
Gas
(Per Mcf) |
|
|
Total
(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
(Per Bbl) |
|
|
NGL
(Per Bbl) |
|
|
Gas
(Per Mcf) |
|
|
Total
(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
(Per Bbl) |
|
|
NGL
(Per Bbl) |
|
|
Gas
(Per Mcf) |
|
|
Total
(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
(Per Bbl) |
|
|
NGL
(Per Bbl) |
|
|
Gas
(Per Mcf) |
|
|
Total
(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. |
Page 7 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
Page 8 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 9 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
| CONSOLIDATED BALANCE SHEETS (in
millions) |
|
|
|
|
|
|
| |
|
September 30, |
|
|
December 31, |
|
| |
|
2015 |
|
|
2014 |
|
| Current assets: |
|
|
|
|
|
|
|
|
| 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 |
|
Page 10 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 STATISITICS |
|
|
|
|
|
|
|
|
|
|
|
|
| (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. |
Page 11 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
|
|
|
|
|
|
|
|
|
| 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. |
Page 12 of 16
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
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 and
Noncontrolling 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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Page 13 of 16
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 |
% |
Page 14 of 16
DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
|
|
|
|
|
|
|
|
|
| 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. |
Page 15 of 16
DEVON ENERGY CORPORATION
FORWARD LOOKING GUIDANCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| COMMODITY HEDGES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Oil Commodity Hedges |
|
| |
|
Price Swaps |
|
|
Price Collars |
|
|
Call Options Sold |
|
| Period |
|
Volume
(Bbls/d) |
|
|
Weighted
Average
Price ($/Bbl) |
|
|
Volume
(Bbls/d) |
|
|
Weighted
Average Floor
Price ($/Bbl) |
|
|
Weighted
Average
Ceiling Price
($/Bbl) |
|
|
Volume
(Bbls/d) |
|
|
Weighted
Average Price
($/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 to
WTI ($/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) |
|
|
Weighted
Average Price
($/MMBtu) |
|
|
Volume
(MMBtu/d) |
|
|
Weighted
Average Floor
Price
($/MMBtu) |
|
|
Weighted
Average
Ceiling Price
($/MMBtu) |
|
|
Volume
(MMBtu/d) |
|
|
Weighted
Average Price
($/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.
Page 16 of 16
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