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8-K - FORM 8-K - DEVON ENERGY CORP/DE | d71095e8vk.htm |
Exhibit 99.1
News Release | Devon Energy Corporation 20 North Broadway Oklahoma City, OK 73102-8260 |
Investor Contact
|
Zack Hager | 405 552 4526 | ||||
Media Contact
|
Chip Minty | 405 228 8647 |
DEVON ENERGY REPORTS 2009 FINANCIAL RESULTS, RECORD PRODUCTION AND RECORD PROVED
RESERVES
OKLAHOMA CITY February 17, 2010 Devon Energy Corporation (NYSE:DVN) today reported
2009 full-year and fourth-quarter financial results. The company also reported that its 2009
full-year oil and gas production from continuing operations reached an all-time high. In
addition, Devon reported record-high proved oil and natural gas reserves at December 31,
2009. Production and changes to proved reserves are discussed in more detail later in this
report.
For the year ended December 31, 2009, Devon reported a net loss of $2.5 billion, or $5.58 per
common share ($5.58 per diluted common share). Devons 2009 financial results were impacted
by certain items securities analysts typically exclude from their published estimates. The
most significant of these items was a $4.2 billion after-tax reduction of the carrying value
of oil and gas properties recorded in the first quarter of 2009. This was the result of a
non-cash, full-cost ceiling adjustment. The charge resulted from application of the ceiling
test as prescribed by the Securities and Exchange Commission for companies that follow the
full-cost method of accounting.
Excluding the reduction of carrying value of oil and gas properties and other adjusting
items, Devon earned $1.8 billion or $4.03 per diluted common share in 2009. The adjusting
items are discussed in more detail later in this news release.
For the year ended December 31, 2008, Devon reported a net loss of $2.1 billion, or $4.85 per
common share ($4.85 per diluted common share). The companys 2008 financial results included
a $7.1 billion non-cash, after-tax reduction in the carrying value of oil and gas properties.
Devon reported net earnings of $667 million, or $1.50 per common share ($1.49 per diluted
common share), for the quarter ended December 31, 2009. Excluding adjusting items, the
company earned $713 million, or $1.60 per diluted common share in the fourth quarter of 2009.
For the quarter ended December 31, 2008, Devon reported a net loss of $6.8 billion or, $15.42
per common share ($15.42 per diluted common share).
North American Onshore Proved Reserves at Record 2.6 Billion Boe;
Drill-Bit Reserve Additions More than Double Record Production
2009 was a pivotal year for Devon as we began repositioning the company to focus entirely on
our high-return, North American onshore natural gas and oil portfolio, commented J. Larry
Nichols, chairman and chief executive officer. We grew North American onshore production by
more than six percent in 2009 and replaced more than twice our production with the drill bit
at very attractive costs. We expect to receive after-tax proceeds of $4.5 billion to $7.5
billion as we divest our offshore and international properties this year. This will further
strengthen our rock-solid balance sheet and enable us to accelerate growth across our U.S.
and Canadian asset base.
Page 1 of 18
In accordance with accounting standards, Devons year-end reserve reporting pertains to the
companys continuing operations, which include its Gulf of Mexico properties. Following is a
discussion of proved reserves pertaining only to Devons North American onshore assets.
Devon increased North American onshore estimated proved reserves by 20 percent to a record
2,641 million oil-equivalent barrels (Boe) at December 31, 2009. The company added 669
million Boe to its North American onshore proved reserves from all sources. Costs incurred
applicable to North American onshore properties were $3.3 billion.
Successful drilling (extensions, discoveries and performance revisions) accounted for 492
million Boe of North American onshore proved reserve additions. The company invested $3.2
billion of associated drill-bit capital during the year. Revisions related to changes in oil,
natural gas and natural gas liquids prices increased 2009 North American onshore proved
reserves by 176 million Boe.
North American onshore oil and gas production increased more than six percent to 220 million
Boe in 2009. The reserve life index (proved reserves divided by annual production) for the
North American onshore properties is approximately 12 years.
Proved developed reserves of 1,869 million Boe at December 31, 2009, represented 71 percent
of total North American onshore proved reserves. Proved undeveloped reserves were 29 percent
of the total. Year-end North American onshore proved reserves included 653 million barrels of
crude oil, 9.4 trillion cubic feet of natural gas and 419 million barrels of natural gas
liquids.
Costs
Incurred and Reserves Summary (1)
Year Ended December 31, | ||||||||
North American Onshore | ||||||||
2009 | 2008 | |||||||
Costs Incurred (in millions) |
$ | 3,279 | $ | 8,092 | ||||
Total Reserves Additions (MMBoe) |
669 | 139 |
(1) | Detailed tables are also provided in this release. |
Drill-bit
Capital and Reserves Summary (1)
Year Ended December 31, | ||||||||
North American Onshore | ||||||||
2009 | 2008 | |||||||
Drill-bit Capital (in millions) |
$ | 3,244 | $ | 7,270 | ||||
Reserves Data (MMBoe) |
||||||||
Extensions and discoveries |
446 | 536 | ||||||
Revisions other than price |
46 | 21 | ||||||
Drill-bit and performance reserve additions |
492 | 557 | ||||||
(1) | Detailed tables and non-GAAP reconciliations are also provided in this release. |
Divestitures Make Way for North American Onshore Growth
The company plans to direct the proceeds of the divestitures of its Gulf of Mexico and
international properties to its U.S. and Canadian onshore operations and to retire debt. In
accordance with accounting standards, Devon has reclassified the assets, liabilities and
results of its international operations as discontinued operations for all accounting periods
presented in this release. Although revenues and expenses for prior periods were
reclassified, there was no impact upon previously reported net earnings. Included with the
financial information that follows are tables of revenues, expenses, production, proved
reserves and costs incurred and the amounts reclassified as discontinued operations for each
period presented.
In spite of Devons plans to divest its Gulf of Mexico assets, these properties do not
qualify as discontinued operations under accounting standards. However, information is
provided in this release
Page 2 of 18
that will enable the reader to isolate certain results of the
companys North American onshore operations.
Shale Gas Development and Jackfish Ramp-up Led 2009 Operating Highlights
Devon drilled 1,135 wells in 2009 applicable to its continuing operations with a 99
percent success rate. Following are operational highlights and updates for selected
exploration and development projects:
| The company drilled 336 wells in the Barnett Shale field in north Texas in 2009, bringing its total producing wells in the field to almost 4,200 at year end. Devon exited 2009 with net Barnett Shale production at just over 1 billion cubic feet of natural gas equivalent per day. The company drilled its 2,000th horizontal well in the field in early 2010 and is currently running 16 operated drilling rigs. Devon expects to drill 370 total Barnett Shale wells during the year. | |
| Devon drilled 47 successful wells in the Cana-Woodford Shale in western Oklahoma in 2009. During 2009 the company increased its net production from this important new shale-gas resource to an average of 39 million cubic feet of gas equivalent per day. Devon has increased its lease position in the Cana-Woodford Shale to 118,000 net acres and expects to drill approximately 85 wells in the field in 2010. | |
| The company drilled eight Haynesville Shale wells in the greater Carthage area of east Texas in 2009. These wells have significantly de-risked Devons 110,000 net Haynesville Shale acres in the Carthage area. The company expects to recover up to four trillion cubic feet equivalent of natural gas from its Carthage area Haynesville acreage. | |
| In Canada, Devons 100-percent owned Jackfish oil sands project in Alberta was operational throughout 2009. As measured by production per well and steam-oil ratio, Jackfish is one of Canadas most commercially successful steam-assisted gravity drainage (SAGD) projects. In late 2009, Jackfish production reached 33,700 barrels of oil per day. The addition of four more producing wells is expected to push production to the facilitys capacity of 35,000 barrels per day in early 2010. | |
| Construction continued throughout 2009 on a second phase of the Jackfish SAGD project. Jackfish 2 is also sized to produce 35,000 barrels of oil per day and will commence operations in 2011. Devon expects to file a regulatory application for a third phase of the project in the third quarter of 2010. | |
| Offshore Brazil, Devon participated in two significant deepwater discoveries in 2009. The Devon-operated Itaipu exploratory discovery followed a successful appraisal of the 2008 Wahoo discovery. Both Itaipu and Wahoo are pre-salt prospects located in the Campos Basin. Devon plans to divest its Brazilian assets along with all of its other international properties in 2010. The Itaipu and Wahoo discoveries significantly enhance the value of the companys international assets to prospective buyers. |
Continuing Operations Show Strong Production Growth
Combined oil, gas and natural gas liquids production from continuing operations averaged
639 thousand Boe per day in 2009. This compares with 2008 average daily production of 610
thousand Boe per day.
Sharp declines in the average prices of oil, gas and natural gas liquids led to a 48 percent
reduction in combined sales from continuing operations. Comparable sales for the years 2009
and 2008 were $6.1 billion and $11.7 billion, respectively. Furthermore, marketing and
midstream operating profit decreased 25 percent to $512 million in 2009, reflecting lower
prices for natural gas and natural gas liquids.
Cash Flow Totals $4.7 Billion
Cash flow before balance sheet changes decreased 50 percent to $4.7 billion in 2009.
During the year Devon funded $5.1 billion of capital expenditures and paid $284 million in
dividends utilizing cash flow and short-term borrowing. In spite of the increase in
short-term borrowing, Devons balance sheet remains strong with a ratio of net debt to
adjusted capitalization of 29 percent. Reconciliations of cash flow before balance sheet
changes, net debt and adjusted capitalization, which are non-GAAP measures, are provided in
this release.
Page 3 of 18
Items Excluded from Published Earnings Estimates
Devons reported net earnings include items of income and expense that are typically
excluded by securities analysts in their published estimates of the companys financial
results. These items and their effects upon reported earnings for the full year and fourth
quarter of 2009 were as follows:
Items affecting continuing operations:
| A change in the fair value of oil and natural gas derivative instruments decreased full-year earnings by $121 million pre-tax ($77 million after tax) and an unrealized gain increased fourth-quarter earnings by $48 million pre-tax ($31 million after tax). | |
| A change in fair value of other financial instruments increased full-year earnings by $66 million pre-tax ($42 million after tax) and increased fourth-quarter earnings by $81 million pre-tax ($52 million after tax). | |
| Severance and restructuring costs decreased full-year earnings by $128 million pre-tax ($82 million after tax) and decreased fourth-quarter earnings by $105 million pre-tax ($67 million after tax). | |
| A reduction of the carrying value of oil and gas properties decreased full-year earnings by $6.4 billion pre-tax ($4.1 billion after tax). | |
| U.S. income taxes on foreign earnings now expected to be repatriated to the U.S. decreased full-year and fourth-quarter earnings by $55 million. | |
| Income tax accrual adjustments increased full-year earnings by $59 million. |
Items affecting discontinued operations:
| A post-closing adjustment from the divestiture of West African assets in 2008 resulted in a full-year gain of $16 million pre-tax ($16 million after tax). | |
| Severance and restructuring costs decreased full-year earnings by $57 million pre-tax ($37 million after tax) and decreased fourth-quarter earnings by $48 million pre-tax ($31 million after tax). | |
| A reduction of the carrying value of oil and gas properties decreased full-year earnings by $108 million pre-tax ($105 million after tax). | |
| Income tax benefits related to unsuccessful international drilling increased full-year earnings by $22 million. | |
| The decision to divest all international assets generated financial benefits that increased full-year and fourth-quarter earnings by $37 million pre-tax ($24 million after tax). |
The following tables summarize the full-year and fourth-quarter effects of these items on
2009 earnings, income taxes and cash flow.
Summary of Items Typically Excluded by Securities Analysts (in millions)
Continuing Operations Full Year 2009
Pre-tax | After-tax | Cash Flow Before | ||||||||||||||||||||||
Earnings | Income Tax Effect | Earnings | Balance Sheet | |||||||||||||||||||||
Effect | Current | Deferred | Total | Effect | Changes Effect | |||||||||||||||||||
Change in fair value of oil and gas derivative instruments |
$ | (121 | ) | | (44 | ) | (44 | ) | (77 | ) | | |||||||||||||
Change in fair value of other financial instruments |
66 | | 24 | 24 | 42 | | ||||||||||||||||||
Severance and restructuring costs |
(128 | ) | (9 | ) | (37 | ) | (46 | ) | (82 | ) | (54 | ) | ||||||||||||
Reduction of the carrying value of oil and gas properties |
(6,408 | ) | | (2,323 | ) | (2,323 | ) | (4,085 | ) | | ||||||||||||||
U.S. income taxes on foreign earnings |
| | 55 | 55 | (55 | ) | | |||||||||||||||||
Income tax accrual adjustment |
| (9 | ) | (50 | ) | (59 | ) | 59 | 9 | |||||||||||||||
Totals |
$ | (6,591 | ) | (18 | ) | (2,375 | ) | (2,393 | ) | (4,198 | ) | (45 | ) | |||||||||||
Page 4 of 18
Discontinued Operations Full Year 2009
Pre-tax | After-tax | Cash Flow Before | ||||||||||||||||||||||
Earnings | Income Tax Effect | Earnings | Balance Sheet | |||||||||||||||||||||
Effect | Current | Deferred | Total | Effect | Changes Effect | |||||||||||||||||||
Post-closing adjustment on sale of West African assets |
$ | 16 | | | | 16 | | |||||||||||||||||
Severance and restructuring costs |
(57 | ) | (2 | ) | (18 | ) | (20 | ) | (37 | ) | (15 | ) | ||||||||||||
Reduction of the carrying value of oil and gas assets |
(108 | ) | | (3 | ) | (3 | ) | (105 | ) | | ||||||||||||||
Income tax benefit on international drilling |
| (22 | ) | | (22 | ) | 22 | 22 | ||||||||||||||||
Financial benefits of decision to divest assets |
37 | | 13 | 13 | 24 | | ||||||||||||||||||
Totals |
$ | (112 | ) | (24 | ) | (8 | ) | (32 | ) | (80 | ) | 7 | ||||||||||||
In aggregate, these items decreased full-year 2009 net earnings by $4.3 billion, or
$9.63 per common share ($9.61 per diluted share). These items and their associated tax
effects decreased full-year 2009 cash flow before balance sheet changes by $38 million.
Summary of Items Typically Excluded by Securities Analysts (in millions)
Continuing Operations Fourth Quarter 2009
Pre-tax | After-tax | Cash Flow Before | ||||||||||||||||||||||
Earnings | Income Tax Effect | Earnings | Balance Sheet | |||||||||||||||||||||
Effect | Current | Deferred | Total | Effect | Changes Effect | |||||||||||||||||||
Change in fair value of oil and gas derivative instruments |
$ | 48 | | 17 | 17 | 31 | | |||||||||||||||||
Change in fair value of other financial instruments |
81 | | 29 | 29 | 52 | | ||||||||||||||||||
Restructuring costs |
(105 | ) | | (38 | ) | (38 | ) | (67 | ) | (42 | ) | |||||||||||||
U.S. income taxes on foreign earnings |
| | 55 | 55 | (55 | ) | | |||||||||||||||||
Totals |
$ | 24 | | 63 | 63 | (39 | ) | (42 | ) | |||||||||||||||
Discontinued Operations Fourth Quarter 2009
Pre-tax | After-tax | Cash Flow Before | ||||||||||||||||||||||
Earnings | Income Tax Effect | Earnings | Balance Sheet | |||||||||||||||||||||
Effect | Current | Deferred | Total | Effect | Changes Effect | |||||||||||||||||||
Restructuring costs |
$ | (48 | ) | | (17 | ) | (17 | ) | (31 | ) | (15 | ) | ||||||||||||
Financial benefits of decision to divest assets |
37 | | 13 | 13 | 24 | | ||||||||||||||||||
Totals |
$ | (11 | ) | | (4 | ) | (4 | ) | (7 | ) | (15 | ) | ||||||||||||
In aggregate, these items decreased fourth-quarter 2009 net earnings by $46 million, or
10 cents per common share (11 cents per diluted share). These items and their
associated tax effects decreased fourth-quarter 2009 cash flow before balance sheet changes
by $57 million.
Conference Call to be Webcast Today
Devon will discuss its 2009 financial and operating results in a
conference call webcast today. The webcast will begin at 10 a.m. Central Time (11 a.m. Eastern
Time). The webcast may be accessed from Devons internet home page at www.devonenergy.com.
This press release includes forward-looking statements as defined by the Securities and
Exchange Commission. 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;
drilling risks; environmental risks; and political or regulatory changes. 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.
Effective January 1, 2010, the United States Securities and Exchange Commission permits oil
and gas companies, in their filings with the SEC, to disclose only proved, probable and possible
reserves that meet the SECs definitions for such terms, and price and cost sensitivities for such
reserves, and prohibits disclosure of resources that do not
constitute
Page 5 of 18
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
for the fiscal year ended December 31, 2009, available from us at Devon Energy Corporation, Attn.
Investor Relations, 20 North Broadway, Oklahoma City, OK 73102. You can also obtain this form from
the SEC by calling 1-800-SEC-0330 or from the SECs 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.
Page 6 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
PRODUCTION (net of royalties)
Excludes discontinued operations
Excludes discontinued operations
Year Ended | Quarter Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Total Period Production |
||||||||||||||||
Natural Gas (Bcf) |
||||||||||||||||
U.S. Onshore |
698.7 | 668.1 | 162.8 | 181.2 | ||||||||||||
Canada |
222.8 | 212.1 | 51.6 | 53.6 | ||||||||||||
North American Onshore |
921.5 | 880.2 | 214.4 | 234.8 | ||||||||||||
U.S. Offshore |
44.9 | 57.6 | 11.4 | 12.6 | ||||||||||||
Total Natural Gas |
966.4 | 937.8 | 225.8 | 247.4 | ||||||||||||
Oil (MMBbls) |
||||||||||||||||
U.S. Onshore |
11.6 | 11.3 | 2.9 | 3.0 | ||||||||||||
Canada |
25.3 | 21.6 | 6.6 | 6.2 | ||||||||||||
North American Onshore |
36.9 | 32.9 | 9.5 | 9.2 | ||||||||||||
U.S. Offshore |
5.0 | 5.9 | 1.3 | 1.0 | ||||||||||||
Total Oil |
41.9 | 38.8 | 10.8 | 10.2 | ||||||||||||
Natural Gas Liquids (MMBbls) |
||||||||||||||||
U.S. Onshore |
25.7 | 23.6 | 6.5 | 6.5 | ||||||||||||
Canada |
3.8 | 4.0 | 1.0 | 1.0 | ||||||||||||
North American Onshore |
29.5 | 27.6 | 7.5 | 7.5 | ||||||||||||
U.S. Offshore |
0.7 | 0.6 | 0.2 | 0.1 | ||||||||||||
Total Natural Gas Liquids |
30.2 | 28.2 | 7.7 | 7.6 | ||||||||||||
Oil Equivalent (MMBoe) |
||||||||||||||||
U.S. Onshore |
153.7 | 146.2 | 36.5 | 39.7 | ||||||||||||
Canada |
66.3 | 60.9 | 16.2 | 16.1 | ||||||||||||
North American Onshore |
220.0 | 207.1 | 52.7 | 55.8 | ||||||||||||
U.S. Offshore |
13.2 | 16.1 | 3.4 | 3.2 | ||||||||||||
Total Oil Equivalent |
233.2 | 223.2 | 56.1 | 59.0 | ||||||||||||
Average Daily Production |
||||||||||||||||
Natural Gas (MMcf) |
||||||||||||||||
U.S. Onshore |
1,914.3 | 1,825.5 | 1,769.7 | 1,969.6 | ||||||||||||
Canada |
610.5 | 579.4 | 560.5 | 582.7 | ||||||||||||
North American Onshore |
2,524.8 | 2,404.9 | 2,330.2 | 2,552.3 | ||||||||||||
U.S. Offshore |
123.0 | 157.3 | 123.8 | 136.3 | ||||||||||||
Total Natural Gas |
2,647.8 | 2,562.2 | 2,454.0 | 2,688.6 | ||||||||||||
Oil (MBbls) |
||||||||||||||||
U.S. Onshore |
31.6 | 30.7 | 31.3 | 32.1 | ||||||||||||
Canada |
69.3 | 59.0 | 72.0 | 67.4 | ||||||||||||
North American Onshore |
100.9 | 89.7 | 103.3 | 99.5 | ||||||||||||
U.S. Offshore |
13.8 | 16.2 | 13.7 | 11.3 | ||||||||||||
Total Oil |
114.7 | 105.9 | 117.0 | 110.8 | ||||||||||||
Natural Gas Liquids (MBbls) |
||||||||||||||||
U.S. Onshore |
70.4 | 64.6 | 71.1 | 71.2 | ||||||||||||
Canada |
10.4 | 10.9 | 10.2 | 10.9 | ||||||||||||
North American Onshore |
80.8 | 75.5 | 81.3 | 82.1 | ||||||||||||
U.S. Offshore |
2.0 | 1.5 | 2.2 | 1.1 | ||||||||||||
Total Natural Gas Liquids |
82.8 | 77.0 | 83.5 | 83.2 | ||||||||||||
Oil Equivalent (MBoe) |
||||||||||||||||
U.S. Onshore |
421.1 | 399.5 | 397.4 | 431.5 | ||||||||||||
Canada |
181.5 | 166.5 | 175.6 | 175.4 | ||||||||||||
North American Onshore |
602.6 | 566.0 | 573.0 | 606.9 | ||||||||||||
U.S. Offshore |
36.3 | 44.0 | 36.5 | 35.1 | ||||||||||||
Total Oil Equivalent |
638.9 | 610.0 | 609.5 | 642.0 | ||||||||||||
Page 7 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
BENCHMARK PRICES
(average prices)
(average prices)
Year Ended | Quarter Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Natural Gas ($/Mcf) Henry Hub |
$ | 3.99 | $ | 9.04 | $ | 4.16 | $ | 6.95 | ||||||||
Oil ($/Bbl) West Texas Intermediate (Cushing) |
$ | 61.82 | $ | 99.75 | $ | 76.00 | $ | 58.51 | ||||||||
REALIZED PRICES
(excludes the effects of unrealized gains and losses from hedging)
(excludes the effects of unrealized gains and losses from hedging)
Oil | Gas | NGLs | Total | |||||||||||||
Quarter Ended December 31, 2009 | (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | ||||||||||||
U.S. Onshore |
$ | 71.62 | $ | 3.65 | $ | 30.48 | $ | 27.35 | ||||||||
Canada |
$ | 58.43 | $ | 4.13 | $ | 41.88 | $ | 39.58 | ||||||||
North American Onshore |
$ | 62.43 | $ | 3.77 | $ | 31.92 | $ | 31.10 | ||||||||
U.S. Offshore |
$ | 74.45 | $ | 4.45 | $ | 37.59 | $ | 45.26 | ||||||||
Realized price without hedges |
$ | 63.84 | $ | 3.80 | $ | 32.07 | $ | 31.95 | ||||||||
Cash settlements |
$ | | $ | 0.65 | $ | | $ | 2.60 | ||||||||
Realized price, including cash settlements |
$ | 63.84 | $ | 4.45 | $ | 32.07 | $ | 34.55 | ||||||||
Oil | Gas | NGLs | Total | |||||||||||||
Quarter Ended December 31, 2008 | (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | ||||||||||||
U.S. Onshore |
$ | 55.11 | $ | 4.98 | $ | 20.52 | $ | 30.21 | ||||||||
Canada |
$ | 30.67 | $ | 6.02 | $ | 35.95 | $ | 34.02 | ||||||||
North American Onshore |
$ | 38.56 | $ | 5.22 | $ | 22.57 | $ | 31.31 | ||||||||
U.S. Offshore |
$ | 56.80 | $ | 6.95 | $ | 34.28 | $ | 46.31 | ||||||||
Realized price without hedges |
$ | 40.42 | $ | 5.30 | $ | 22.73 | $ | 32.13 | ||||||||
Cash settlements |
$ | 2.69 | $ | 0.52 | $ | | $ | 2.62 | ||||||||
Realized price, including cash settlements |
$ | 43.11 | $ | 5.82 | $ | 22.73 | $ | 34.75 | ||||||||
Oil | Gas | NGLs | Total | |||||||||||||
Year Ended December 31, 2009 | (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | ||||||||||||
U.S. Onshore |
$ | 56.17 | $ | 3.14 | $ | 23.40 | $ | 22.41 | ||||||||
Canada |
$ | 47.35 | $ | 3.66 | $ | 33.09 | $ | 32.29 | ||||||||
North American Onshore |
$ | 50.11 | $ | 3.27 | $ | 24.65 | $ | 25.38 | ||||||||
U.S. Offshore |
$ | 60.75 | $ | 4.20 | $ | 27.42 | $ | 38.83 | ||||||||
Realized price without hedges |
$ | 51.39 | $ | 3.31 | $ | 24.71 | $ | 26.15 | ||||||||
Cash settlements |
$ | | $ | 0.52 | $ | | $ | 2.16 | ||||||||
Realized price, including cash settlements |
$ | 51.39 | $ | 3.83 | $ | 24.71 | $ | 28.31 | ||||||||
Oil | Gas | NGLs | Total | |||||||||||||
Year Ended December 31, 2008 | (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | ||||||||||||
U.S. Onshore |
$ | 95.63 | $ | 7.43 | $ | 40.97 | $ | 47.91 | ||||||||
Canada |
$ | 71.04 | $ | 8.17 | $ | 61.45 | $ | 57.65 | ||||||||
North American Onshore |
$ | 79.45 | $ | 7.61 | $ | 43.94 | $ | 50.78 | ||||||||
U.S. Offshore |
$ | 104.90 | $ | 9.53 | $ | 51.11 | $ | 74.55 | ||||||||
Realized price without hedges |
$ | 83.35 | $ | 7.73 | $ | 44.08 | $ | 52.49 | ||||||||
Cash settlements |
$ | 0.70 | $ | (0.46 | ) | $ | | $ | (1.78 | ) | ||||||
Realized price, including cash settlements |
$ | 84.05 | $ | 7.27 | $ | 44.08 | $ | 50.71 | ||||||||
Page 8 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(in millions, except per share amounts)
Year Ended | Quarter Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenues |
||||||||||||||||
Oil, gas, and NGL sales |
$ | 6,097 | $ | 11,720 | $ | 1,791 | $ | 1,898 | ||||||||
Net gain (loss) on oil and gas derivative financial instruments |
384 | (154 | ) | 194 | 257 | |||||||||||
Marketing and midstream revenues |
1,534 | 2,292 | 460 | 397 | ||||||||||||
Total revenues |
8,015 | 13,858 | 2,445 | 2,552 | ||||||||||||
Expenses and other income, net |
||||||||||||||||
Lease operating expenses |
1,670 | 1,851 | 404 | 486 | ||||||||||||
Taxes other than income taxes |
314 | 476 | 65 | 69 | ||||||||||||
Marketing and midstream operating costs and expenses |
1,022 | 1,611 | 327 | 272 | ||||||||||||
Depreciation, depletion and amortization of oil and gas properties |
1,832 | 2,948 | 418 | 840 | ||||||||||||
Depreciation and amortization of non-oil and gas properties |
276 | 255 | 68 | 70 | ||||||||||||
Accretion of asset retirement obligation |
91 | 80 | 23 | 18 | ||||||||||||
General and administrative expenses |
648 | 645 | 176 | 177 | ||||||||||||
Restructuring costs |
105 | | 105 | | ||||||||||||
Interest expense |
349 | 329 | 86 | 68 | ||||||||||||
Change in fair value of other financial instruments |
(106 | ) | 149 | (86 | ) | 127 | ||||||||||
Reduction of carrying value of oil and gas properties |
6,408 | 9,891 | | 9,891 | ||||||||||||
Other income, net |
(68 | ) | (217 | ) | (7 | ) | (113 | ) | ||||||||
Total expenses and other income, net |
12,541 | 18,018 | 1,579 | 11,905 | ||||||||||||
(Loss) earnings from continuing operations before income tax expense |
(4,526 | ) | (4,160 | ) | 866 | (9,353 | ) | |||||||||
Income tax (benefit) expense |
||||||||||||||||
Current |
241 | 441 | 106 | (136 | ) | |||||||||||
Deferred |
(2,014 | ) | (1,562 | ) | 203 | (2,947 | ) | |||||||||
Total income tax (benefit) expense |
(1,773 | ) | (1,121 | ) | 309 | (3,083 | ) | |||||||||
(Loss) earnings from continuing operations |
(2,753 | ) | (3,039 | ) | 557 | (6,270 | ) | |||||||||
Discontinued operations |
||||||||||||||||
Earnings (loss) from discontinued operations before income taxes |
322 | 1,258 | 124 | (570 | ) | |||||||||||
Discontinued operations income tax expense (benefit) |
48 | 367 | 14 | (24 | ) | |||||||||||
Earnings (loss) from discontinued operations |
274 | 891 | 110 | (546 | ) | |||||||||||
Net (loss) earnings |
(2,479 | ) | (2,148 | ) | 667 | (6,816 | ) | |||||||||
Preferred stock dividends |
| 5 | | | ||||||||||||
Net (loss) earnings applicable to common stockholders |
$ | (2,479 | ) | $ | (2,153 | ) | $ | 667 | $ | (6,816 | ) | |||||
Basic net (loss) earnings per share |
||||||||||||||||
(Loss) earnings from continuing operations per share |
$ | (6.20 | ) | $ | (6.86 | ) | $ | 1.25 | $ | (14.19 | ) | |||||
Earnings (loss) from discontinued operations per share |
0.62 | 2.01 | 0.25 | (1.23 | ) | |||||||||||
Net (loss) earnings per share |
$ | (5.58 | ) | $ | (4.85 | ) | $ | 1.50 | $ | (15.42 | ) | |||||
Diluted net earnings (loss) per share |
||||||||||||||||
(Loss) earnings from continuing operations per share |
$ | (6.20 | ) | $ | (6.86 | ) | $ | 1.25 | $ | (14.19 | ) | |||||
Earnings (loss) from discontinued operations per share |
0.62 | 2.01 | 0.24 | (1.23 | ) | |||||||||||
Net (loss) earnings per share |
$ | (5.58 | ) | $ | (4.85 | ) | $ | 1.49 | $ | (15.42 | ) | |||||
Weighted average common shares outstanding |
||||||||||||||||
Basic |
444 | 444 | 445 | 442 | ||||||||||||
Diluted |
446 | 447 | 447 | 444 |
Page 9 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED BALANCE SHEETS
(in millions)
(in millions)
December 31, | ||||||||
2009 | 2008 | |||||||
Assets |
||||||||
Current assets |
||||||||
Cash and cash equivalents |
$ | 646 | $ | 195 | ||||
Accounts receivable |
1,208 | 1,300 | ||||||
Derivative financial instruments, at fair value |
211 | 282 | ||||||
Current assets held for sale |
657 | 392 | ||||||
Other current assets |
270 | 515 | ||||||
Total current assets |
2,992 | 2,684 | ||||||
Property and equipment, at cost, based on the full cost method of accounting for oil and gas
properties ($4,078 and $4,248 excluded from amortization in 2009 and 2008, respectively) |
60,475 | 53,391 | ||||||
Less accumulated depreciation, depletion and amortization |
41,708 | 31,360 | ||||||
Property and equipment, net |
18,767 | 22,031 | ||||||
Goodwill |
5,930 | 5,511 | ||||||
Long-term assets held for sale |
1,250 | 1,128 | ||||||
Other long-term assets |
747 | 554 | ||||||
Total Assets |
$ | 29,686 | $ | 31,908 | ||||
Liabilities and Stockholders Equity |
||||||||
Current liabilities |
||||||||
Accounts payable trade |
$ | 1,137 | $ | 1,612 | ||||
Revenues and royalties due to others |
486 | 490 | ||||||
Short-term debt |
1,432 | 180 | ||||||
Current portion of asset retirement obligation, at fair value |
95 | 138 | ||||||
Current liabilities associated with assets held for sale |
234 | 365 | ||||||
Other current liabilities |
418 | 350 | ||||||
Total current liabilities |
3,802 | 3,135 | ||||||
Long-term debt |
5,847 | 5,661 | ||||||
Asset retirement obligation, at fair value |
1,418 | 1,249 | ||||||
Liabilities associated with assets held for sale |
213 | 166 | ||||||
Other long-term liabilities |
937 | 1,023 | ||||||
Deferred income taxes |
1,899 | 3,614 | ||||||
Stockholders equity |
||||||||
Common stock |
45 | 44 | ||||||
Additional paid-in capital |
6,527 | 6,257 | ||||||
Retained earnings |
7,613 | 10,376 | ||||||
Accumulated other comprehensive income |
1,385 | 383 | ||||||
Total Stockholders Equity |
15,570 | 17,060 | ||||||
Total Liabilities and Stockholders Equity |
$ | 29,686 | $ | 31,908 | ||||
Common Shares Outstanding |
447 | 444 | ||||||
Page 10 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(in millions)
Year Ended | ||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Cash Flows From Operating Activities |
||||||||
Net loss |
$ | (2,479 | ) | $ | (2,148 | ) | ||
Net earnings from discontinued operations |
(274 | ) | (891 | ) | ||||
Adjustments to reconcile loss from continuing operations
to net cash provided by operating activities: |
||||||||
Depreciation, depletion and amortization |
2,108 | 3,203 | ||||||
Deferred income tax benefit |
(2,014 | ) | (1,562 | ) | ||||
Reduction of carrying value of oil and gas properties |
6,408 | 9,891 | ||||||
Net unrealized loss (gain) on oil and gas derivative financial instruments |
121 | (243 | ) | |||||
Other noncash charges |
222 | 410 | ||||||
Net decrease (increase) in working capital |
149 | (207 | ) | |||||
Increase in long-term other assets |
(6 | ) | (53 | ) | ||||
(Decrease) increase in long-term other liabilities |
(3 | ) | 48 | |||||
Cash provided by operating activities continuing operations |
4,232 | 8,448 | ||||||
Cash provided by operating activities discontinued operations |
505 | 960 | ||||||
Net cash provided by operating activities |
4,737 | 9,408 | ||||||
Cash Flows From Investing Activities |
||||||||
Proceeds from sales of property and equipment |
34 | 117 | ||||||
Capital expenditures |
(4,879 | ) | (8,843 | ) | ||||
Proceeds from exchange of investment in Chevron Corporation common stock |
| 280 | ||||||
Purchases of short-term investments |
| (50 | ) | |||||
Sales of long-term investments |
7 | 300 | ||||||
Other |
(17 | ) | | |||||
Cash used in investing activities continuing operations |
(4,855 | ) | (8,196 | ) | ||||
Cash (used in) provided by investing activities discontinued operations |
(499 | ) | 1,323 | |||||
Net cash used in investing activities |
(5,354 | ) | (6,873 | ) | ||||
Cash Flows From Financing Activities |
||||||||
Proceeds from borrowings of long term debt, net of issuance costs |
1,187 | | ||||||
Credit facility repayments |
| (3,191 | ) | |||||
Credit facility borrowings |
| 1,741 | ||||||
Net commercial paper borrowings |
426 | 1 | ||||||
Debt repayments |
(178 | ) | (1,031 | ) | ||||
Redemption of preferred stock |
| (150 | ) | |||||
Proceeds from stock option exercises |
42 | 116 | ||||||
Repurchases of common stock |
| (665 | ) | |||||
Dividends paid on common and preferred stock |
(284 | ) | (289 | ) | ||||
Excess tax benefits related to share-based compensation |
8 | 60 | ||||||
Net cash provided by (used in) financing activities |
1,201 | (3,408 | ) | |||||
Effect of exchange rate changes on cash |
43 | (116 | ) | |||||
Net increase (decrease) in cash and cash equivalents |
627 | (989 | ) | |||||
Cash and cash equivalents at beginning of period (including assets held for sale) |
384 | 1,373 | ||||||
Cash and cash equivalents at end of period (including assets held for sale) |
$ | 1,011 | $ | 384 | ||||
Page 11 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
RESERVES RECONCILIATION
Total | North American Onshore | |||||||||||||||||||||||||||||||
Oil | Gas | NGLs | Total | Oil | Gas | NGLs | Total | |||||||||||||||||||||||||
(MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | (MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | |||||||||||||||||||||||||
As of December 31, 2008: |
||||||||||||||||||||||||||||||||
Proved developed |
243 | 8,038 | 292 | 1,875 | 221 | 7,826 | 291 | 1,816 | ||||||||||||||||||||||||
Proved undeveloped |
58 | 1,841 | 60 | 424 | 46 | 1,663 | 59 | 382 | ||||||||||||||||||||||||
Total proved |
301 | 9,879 | 352 | 2,299 | 267 | 9,489 | 350 | 2,198 | ||||||||||||||||||||||||
Revisions due to prices |
302 | (694 | ) | (9 | ) | 177 | 300 | (690 | ) | (9 | ) | 176 | ||||||||||||||||||||
Revisions other than price |
(7 | ) | 43 | 37 | 38 | (8 | ) | 105 | 36 | 46 | ||||||||||||||||||||||
Extensions and discoveries |
133 | 1,518 | 71 | 458 | 131 | 1,454 | 71 | 446 | ||||||||||||||||||||||||
Purchase of reserves |
| 7 | | 1 | | 7 | | 1 | ||||||||||||||||||||||||
Production |
(42 | ) | (966 | ) | (30 | ) | (233 | ) | (37 | ) | (921 | ) | (29 | ) | (220 | ) | ||||||||||||||||
Sale of reserves |
(1 | ) | (30 | ) | | (7 | ) | | (29 | ) | | (6 | ) | |||||||||||||||||||
As of December 31, 2009: |
||||||||||||||||||||||||||||||||
Proved developed |
289 | 7,845 | 326 | 1,922 | 268 | 7,660 | 325 | 1,869 | ||||||||||||||||||||||||
Proved undeveloped |
397 | 1,912 | 95 | 811 | 385 | 1,755 | 94 | 772 | ||||||||||||||||||||||||
Total Proved |
686 | 9,757 | 421 | 2,733 | 653 | 9,415 | 419 | 2,641 | ||||||||||||||||||||||||
U.S. Onshore | Canada | |||||||||||||||||||||||||||||||
Oil | Gas | NGLs | Total | Oil | Gas | NGLs | Total | |||||||||||||||||||||||||
(MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | (MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | |||||||||||||||||||||||||
As of December 31, 2008: |
||||||||||||||||||||||||||||||||
Proved developed |
111 | 6,469 | 260 | 1,449 | 110 | 1,357 | 31 | 367 | ||||||||||||||||||||||||
Proved undeveloped |
22 | 1,510 | 55 | 328 | 24 | 153 | 4 | 54 | ||||||||||||||||||||||||
Total proved |
133 | 7,979 | 315 | 1,777 | 134 | 1,510 | 35 | 421 | ||||||||||||||||||||||||
Revisions due to prices |
9 | (661 | ) | (11 | ) | (113 | ) | 291 | (29 | ) | 2 | 289 | ||||||||||||||||||||
Revisions other than price |
| 119 | 36 | 57 | (8 | ) | (14 | ) | | (11 | ) | |||||||||||||||||||||
Extensions and discoveries |
9 | 1,387 | 70 | 311 | 122 | 67 | 1 | 135 | ||||||||||||||||||||||||
Purchase of reserves |
| 1 | | | | 6 | | 1 | ||||||||||||||||||||||||
Production |
(12 | ) | (698 | ) | (25 | ) | (154 | ) | (25 | ) | (223 | ) | (4 | ) | (66 | ) | ||||||||||||||||
Sale of reserves |
| | | | | (29 | ) | | (6 | ) | ||||||||||||||||||||||
As of December 31, 2009: |
||||||||||||||||||||||||||||||||
Proved developed |
119 | 6,447 | 293 | 1,486 | 149 | 1,213 | 32 | 383 | ||||||||||||||||||||||||
Proved undeveloped |
20 | 1,680 | 92 | 392 | 365 | 75 | 2 | 380 | ||||||||||||||||||||||||
Total Proved |
139 | 8,127 | 385 | 1,878 | 514 | 1,288 | 34 | 763 | ||||||||||||||||||||||||
U.S. Offshore | ||||||||||||||||
Oil | Gas | NGLs | Total | |||||||||||||
(MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | |||||||||||||
As of December 31, 2008: |
||||||||||||||||
Proved developed |
22 | 212 | 1 | 59 | ||||||||||||
Proved undeveloped |
12 | 178 | 1 | 42 | ||||||||||||
Total proved |
34 | 390 | 2 | 101 | ||||||||||||
Revisions due to prices |
2 | (4 | ) | | 1 | |||||||||||
Revisions other than price |
1 | (62 | ) | 1 | (8 | ) | ||||||||||
Extensions and discoveries |
2 | 64 | | 12 | ||||||||||||
Purchase of reserves |
| | | | ||||||||||||
Production |
(5 | ) | (45 | ) | (1 | ) | (13 | ) | ||||||||
Sale of reserves |
(1 | ) | (1 | ) | | (1 | ) | |||||||||
As of December 31, 2009: |
||||||||||||||||
Proved developed |
21 | 185 | 1 | 53 | ||||||||||||
Proved undeveloped |
12 | 157 | 1 | 39 | ||||||||||||
Total Proved |
33 | 342 | 2 | 92 | ||||||||||||
Page 12 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
COSTS INCURRED
(in millions)
(in millions)
Total | North American Onshore | |||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Property Acquisition Costs: |
||||||||||||||||
Total proved |
$ | 35 | $ | 822 | $ | 35 | $ | 822 | ||||||||
Total unproved |
135 | 1,763 | 124 | 1,578 | ||||||||||||
Exploration and development costs |
3,917 | 6,881 | 3,120 | 5,692 | ||||||||||||
Costs Incurred |
$ | 4,087 | $ | 9,466 | $ | 3,279 | $ | 8,092 | ||||||||
U.S. Onshore | Canada | |||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Property Acquisition Costs: |
||||||||||||||||
Total proved |
$ | 17 | $ | 822 | $ | 18 | $ | | ||||||||
Total unproved |
52 | 1,226 | 72 | 352 | ||||||||||||
Exploration and development costs |
2,133 | 4,388 | 987 | 1,304 | ||||||||||||
Costs Incurred |
$ | 2,202 | $ | 6,436 | $ | 1,077 | $ | 1,656 | ||||||||
U.S. Offshore | ||||||||
Year Ended December 31, | ||||||||
2009 | 2008 | |||||||
Property Acquisition Costs: |
||||||||
Total proved |
$ | | $ | | ||||
Total unproved |
11 | 185 | ||||||
Exploration and development costs |
797 | 1,189 | ||||||
Costs Incurred |
$ | 808 | $ | 1,374 | ||||
Devon capitalizes certain general and administrative expenses related to property
acquisition, exploration and development activities. These capitalized expenses were $332 million
and $337 million in 2009 and 2008, respectively. Devon also capitalizes certain interest expenses
related to property acquisition, exploration and development activities. These capitalized
expenses were $74 million and $71 million in 2009 and 2008, respectively. These capitalized
general and administrative expenses and interest expenses are included in the costs shown in the
preceding tables.
Page 13 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
DRILLING ACTIVITY
Year Ended | ||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Exploration Wells Drilled |
||||||||
U.S. Onshore |
11 | 22 | ||||||
Canada |
42 | 90 | ||||||
North American Onshore |
53 | 112 | ||||||
U.S. Offshore |
1 | 6 | ||||||
Total |
54 | 118 | ||||||
Exploration Wells Success Rate |
||||||||
U.S. Onshore |
82 | % | 91 | % | ||||
Canada |
100 | % | 96 | % | ||||
North American Onshore |
96 | % | 95 | % | ||||
U.S. Offshore |
0 | % | 17 | % | ||||
Total |
94 | % | 91 | % | ||||
Development Wells Drilled |
||||||||
U.S. Onshore |
734 | 1,622 | ||||||
Canada |
343 | 631 | ||||||
North American Onshore |
1,077 | 2,253 | ||||||
U.S. Offshore |
4 | 17 | ||||||
Total |
1,081 | 2,270 | ||||||
Development Wells Success Rate |
||||||||
U.S. Onshore |
100 | % | 98 | % | ||||
Canada |
100 | % | 99 | % | ||||
North American Onshore |
100 | % | 99 | % | ||||
U.S. Offshore |
50 | % | 94 | % | ||||
Total |
99 | % | 99 | % | ||||
Total Wells Drilled |
||||||||
U.S. Onshore |
745 | 1,644 | ||||||
Canada |
385 | 721 | ||||||
North American Onshore |
1,130 | 2,365 | ||||||
U.S. Offshore |
5 | 23 | ||||||
Total |
1,135 | 2,388 | ||||||
Total Wells Success Rate |
||||||||
U.S. Onshore |
99 | % | 98 | % | ||||
Canada |
100 | % | 99 | % | ||||
North American Onshore |
99 | % | 98 | % | ||||
U.S. Offshore |
40 | % | 74 | % | ||||
Total |
99 | % | 98 | % | ||||
COMPANY OPERATED RIGS
Year Ended | ||||||||
December 31, | ||||||||
2009 | 2008 | |||||||
Number of Company Operated Rigs Running |
||||||||
U.S. Onshore |
46 | 78 | ||||||
Canada |
17 | 13 | ||||||
North American Onshore |
63 | 91 | ||||||
U.S. Offshore |
1 | 4 | ||||||
Total |
64 | 95 | ||||||
Page 14 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
CAPITAL EXPENDITURES (in millions)
Quarter Ended December 31, 2009
Quarter Ended December 31, 2009
U.S. Onshore | Canada | U.S. Offshore | Total | |||||||||||||
Capital Expenditures |
||||||||||||||||
Exploration |
$ | 82 | $ | 139 | $ | 29 | $ | 250 | ||||||||
Development |
397 | 222 | 133 | 752 | ||||||||||||
Exploration and development capital |
$ | 479 | $ | 361 | $ | 162 | $ | 1,002 | ||||||||
Capitalized G&A |
80 | |||||||||||||||
Capitalized interest |
18 | |||||||||||||||
Discontinued operations |
139 | |||||||||||||||
Midstream capital |
98 | |||||||||||||||
Other capital |
121 | |||||||||||||||
Total Capital Expenditures |
$ | 1,458 | ||||||||||||||
CAPITAL EXPENDITURES (in millions)
Year Ended December 31, 2009
Year Ended December 31, 2009
U.S. Onshore | Canada | U.S. Offshore | Total | |||||||||||||
Capital Expenditures |
||||||||||||||||
Exploration |
$ | 157 | $ | 215 | $ | 182 | $ | 554 | ||||||||
Development |
1,835 | 819 | 534 | 3,188 | ||||||||||||
Exploration and development capital |
$ | 1,992 | $ | 1,034 | $ | 716 | $ | 3,742 | ||||||||
Capitalized G&A |
332 | |||||||||||||||
Capitalized interest |
74 | |||||||||||||||
Discontinued operations |
446 | |||||||||||||||
Midstream capital |
305 | |||||||||||||||
Other capital |
197 | |||||||||||||||
Total Capital Expenditures |
$ | 5,096 | ||||||||||||||
Page 15 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
PRODUCTION FROM DISCONTINUED OPERATIONS
Year Ended | Quarter Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Production from Discontinued Operations |
||||||||||||||||
Oil (MMBbls) |
15.7 | 17.4 | 4.1 | 3.4 | ||||||||||||
Natural Gas (Bcf) |
1.5 | 4.8 | 0.5 | 0.7 | ||||||||||||
Total Oil Equivalent (MMBoe) |
16.0 | 18.2 | 4.2 | 3.5 | ||||||||||||
STATEMENTS OF DISCONTINUED OPERATIONS
(in millions)
(in millions)
Year Ended | Quarter Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenues |
||||||||||||||||
Total operating revenues |
$ | 945 | $ | 1,702 | $ | 299 | $ | 158 | ||||||||
Expenses and other income, net |
||||||||||||||||
Operating expenses |
484 | 769 | 127 | 234 | ||||||||||||
Restructuring costs |
48 | | 48 | | ||||||||||||
Reduction of carrying value of oil and gas properties |
108 | 494 | | 494 | ||||||||||||
Gain on sale of oil and gas properties |
(17 | ) | (819 | ) | | | ||||||||||
Total expenses and other income, net |
623 | 444 | 175 | 728 | ||||||||||||
Earnings (loss) before income tax expense |
322 | 1,258 | 124 | (570 | ) | |||||||||||
Income tax expense (benefit) |
||||||||||||||||
Current |
44 | 755 | 24 | (54 | ) | |||||||||||
Deferred |
4 | (388 | ) | (10 | ) | 30 | ||||||||||
Total income tax expense (benefit) |
48 | 367 | 14 | (24 | ) | |||||||||||
Earnings (loss) from discontinued operations |
$ | 274 | $ | 891 | $ | 110 | $ | (546 | ) | |||||||
RESERVES DATA FOR DISCONTINUED OPERATIONS
Oil | Gas | NGLs | Total | |||||||||||||
(MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | |||||||||||||
As of December 31, 2008: |
||||||||||||||||
Proved developed |
58 | 6 | | 59 | ||||||||||||
Proved undeveloped |
70 | | | 70 | ||||||||||||
Total proved |
128 | 6 | | 129 | ||||||||||||
Revisions due to prices |
(6 | ) | | | (6 | ) | ||||||||||
Revisions other than price |
| 3 | | | ||||||||||||
Extensions and discoveries |
1 | | | 1 | ||||||||||||
Production |
(16 | ) | (1 | ) | | (16 | ) | |||||||||
As of December 31, 2009: |
||||||||||||||||
Proved developed |
54 | 8 | | 55 | ||||||||||||
Proved undeveloped |
53 | | | 53 | ||||||||||||
Total proved |
107 | 8 | | 108 | ||||||||||||
COSTS INCURRED FOR DISCONTINUED OPERATIONS
(in millions)
(in millions)
Year Ended December 31, | ||||||||
2009 | 2008 | |||||||
Costs Incurred |
$ | 450 | $ | 617 | ||||
Page 16 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
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. Cash flow before balance sheet changes is a Non-GAAP financial measure. Devon believes
cash flow before balance sheet changes is relevant because it is a measure of cash available to
fund the companys capital expenditures, dividends and to service its debt. Cash flow before
balance sheet changes is also used by certain securities analysts as a measure of Devons financial
results.
RECONCILIATION TO GAAP INFORMATION
(in millions)
(in millions)
Year Ended | Quarter Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net Cash Provided By Operating Activities (GAAP) |
$ | 4,737 | $ | 9,408 | $ | 1,445 | $ | 1,227 | ||||||||
Changes in assets and liabilities continuing operations |
(140 | ) | 212 | (74 | ) | 496 | ||||||||||
Changes in assets and liabilities discontinued operations |
90 | (6 | ) | 15 | 13 | |||||||||||
Cash flow before balance sheet changes (Non-GAAP) |
$ | 4,687 | $ | 9,614 | $ | 1,386 | $ | 1,736 | ||||||||
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
and cash equivalents. Devon believes that because cash and cash equivalents can be used to repay
indebtedness, netting cash and cash equivalents against debt provides a clearer picture of the
future demands on cash to repay debt.
RECONCILIATION TO GAAP INFORMATION
(in millions)
(in millions)
December 31, | ||||||||
2009 | 2008 | |||||||
Total debt (GAAP) |
$ | 7,279 | $ | 5,841 | ||||
Adjustments: |
||||||||
Cash and cash equivalents (inclduing cash from discontinued operations) |
1,011 | 384 | ||||||
Net debt (Non-GAAP) |
$ | 6,268 | $ | 5,457 | ||||
Total debt |
$ | 7,279 | $ | 5,841 | ||||
Stockholders equity |
15,570 | 17,060 | ||||||
Total capitalization (GAAP) |
$ | 22,849 | $ | 22,901 | ||||
Net debt |
$ | 6,268 | $ | 5,457 | ||||
Stockholders equity |
15,570 | 17,060 | ||||||
Adjusted capitalization (Non-GAAP) |
$ | 21,838 | $ | 22,517 | ||||
Page 17 of 18
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
FINANCIAL AND OPERATIONAL INFORMATION
Drill-bit capital is defined as costs incurred less proved acquisition costs, unproved
acquisition costs resulting from business combinations and other significant similar transactions.
Drill-bit capital is a Non-GAAP measure. Devon believes drill-bit capital is relevant because it
provides additional insight into costs associated with current year exploration and development
activities. It should be noted that the actual costs of reserves added through Devons drilling
program will differ, sometimes significantly, from the direct comparison of capital spent and
reserves added in any given period due to the timing of capital expenditures and reserve bookings.
Certain securities analysts also use this methodology to measure Devons performance.
RECONCILIATION TO GAAP INFORMATION
(in millions)
(in millions)
Total | North America Onshore | |||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Costs Incurred (GAAP) |
$ | 4,087 | $ | 9,466 | $ | 3,279 | $ | 8,092 | ||||||||
Less: |
||||||||||||||||
Proved acquisition costs |
35 | 822 | 35 | 822 | ||||||||||||
Drill-bit capital (Non-GAAP) |
$ | 4,052 | $ | 8,644 | $ | 3,244 | $ | 7,270 | ||||||||
U.S. Onshore | Canada | |||||||||||||||
Year Ended December 31, | Year Ended December 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Costs Incurred (GAAP) |
$ | 2,202 | $ | 6,436 | $ | 1,077 | $ | 1,656 | ||||||||
Less: |
||||||||||||||||
Proved acquisition costs |
17 | 822 | 18 | | ||||||||||||
Drill-bit capital (Non-GAAP) |
$ | 2,185 | $ | 5,614 | $ | 1,059 | $ | 1,656 | ||||||||
U.S. Offshore | ||||||||
Year Ended December 31, | ||||||||
2009 | 2008 | |||||||
Costs Incurred (GAAP) |
$ | 808 | $ | 1,374 | ||||
Less: |
||||||||
Proved acquisition costs |
| | ||||||
Drill-bit capital (Non-GAAP) |
$ | 808 | $ | 1,374 | ||||
Page 18 of 18