Devon Energy Provides Hedge Position Update
March 19 2020 - 6:55AM
Devon Energy Corp. (NYSE: DVN) today provided an update regarding
its oil and natural gas hedge position. The company has
approximately 80 percent of its estimated oil production in 2020
protected at an average floor price of nearly $45 WTI.
Additionally, Devon has secured hedges on approximately 40 percent
of its estimated natural gas production in 2020 at an average Henry
Hub protected floor price of $2.35 per million cubic feet.
The company’s hedge position is composed of swaps and costless
collars, with no pricing downside from three-way collars. The
estimated market value of the company’s hedge position in 2020 is
approximately $800 million based on the current WTI and Henry Hub
strip price.
Devon continues to dynamically manage its hedge position to
provide additional protection against lower commodity prices
through 2021. This risk-management program consists of systematic
hedges added on a rolling six-quarter basis and discretionary
hedges that take advantage of market opportunities.
“Given the high degree of uncertainty associated with this
unprecedented pricing downturn, we have taken decisive actions
through our hedging program to protect our balance sheet, preserve
liquidity and support our dividend,” said Dave Hager, president and
CEO. “This advantaged hedge position, combined with our
high-quality asset base and excellent liquidity, positions Devon to
effectively navigate through this period of extreme commodity price
volatility.”
For details on Devon’s updated oil and gas hedge position,
please see the tables below:
|
|
WTI Oil Price Swaps |
|
|
WTI Oil Price Collars |
|
Period |
|
Volume (Bbls/d) |
|
|
Weighted Average Price ($/Bbl) |
|
|
Volume (Bbls/d) |
|
|
Weighted Average Floor Price ($/Bbl) |
|
|
Weighted Average Ceiling Price ($/Bbl) |
|
Q1-Q4 2020 |
|
|
66,625 |
|
|
$ |
38.57 |
|
|
|
54,750 |
|
|
$ |
51.47 |
|
|
$ |
61.52 |
|
Q1-Q4 2021 |
|
|
3,250 |
|
|
$ |
44.55 |
|
|
|
9,750 |
|
|
$ |
49.25 |
|
|
$ |
59.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Henry Hub Gas Price Swaps |
|
|
Henry Hub Gas Price Collars |
|
Period |
|
Volume (MMBtu/d) |
|
|
Weighted Average Price ($/MMBtu) |
|
|
Volume (MMBtu/d) |
|
|
Weighted Average Floor Price ($/MMBtu) |
|
|
Weighted Average Ceiling Price ($/MMBtu) |
|
Q1-Q4 2020 |
|
|
81,600 |
|
|
$ |
2.77 |
|
|
|
132,750 |
|
|
$ |
2.09 |
|
|
$ |
2.52 |
|
Q1-Q4 2021 |
|
|
— |
|
|
|
— |
|
|
|
15,000 |
|
|
$ |
2.09 |
|
|
$ |
2.59 |
|
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Such statements are
subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of the company. These risks
include, but are not limited to: the risk of continued or increased
commodity price volatility, which could cause reductions in our
estimated future production and otherwise adversely impact our
business; the risk that our hedging activities will limit our
participation in any commodity price increases; and the other risks
identified in the Company’s Annual Report on Form 10-K and its
other filings with the Securities and Exchange Commission.
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 hereof, and the company does not undertake
any obligation to update the forward-looking statements as a result
of new information, future events or otherwise.
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. with an
emphasis on achieving strong corporate-level returns and
capital-efficient cash-flow growth. For more information, please
visit www.devonenergy.com and see our related Form 10-K.
Investor Contacts |
Media Contact |
Scott Coody, 405-552-4735 |
John Porretto, 405-228-7506 |
Chris Carr, 405-228-2496 |
|
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