Devon Energy Reports Third-Quarter 2015 Results
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Produced Company record 282,000 barrels of oil per day - Exceeded oil production guidance for fifth consecutive quarter
- Raised oil production growth for the second time in 2015
- Reduced lease operating expenses 14 percent year over year
- Decreased G&A costs by 8 percent from second quarter
- Improved 2015 capital and operating cost outlook
“Devon delivered another outstanding operational performance in the
third quarter,” said
“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
“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
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,
In
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
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
Operations Report Highlights
For additional details on Devon’s E&P operations, please refer to the Company’s third-quarter 2015 Operations Report at www.devonenergy.com. Highlights from the report include:
- Bone Spring basin type curve raised
-
Leonard Shale program delivers excellent results - Eagle Ford delivers record-setting well results
- Jackfish 3 reaches nameplate capacity ahead of schedule
- Meramec appraisal success expands potential
Hedges Increase Upstream Revenue; EnLink Profit Expands
Revenue from oil, natural gas and natural gas liquids sales totaled
Cash settlements related to oil and natural gas hedges increased revenue
by more than
Devon’s midstream business generated operating profits of
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
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
Devon also realized significant general and administrative (G&A) cost
savings in the third quarter. G&A expenses totaled
Based on year-to-date cost savings, Devon now anticipates its
field-level operating costs and G&A to decline to around
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
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
Forward-Looking Statements
This press release includes "forward-looking statements" as defined
by the
The
About
DEVON ENERGY CORPORATION | ||||||||||||||||
FINANCIAL AND OPERATIONAL INFORMATION | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
PRODUCTION NET OF ROYALTIES | September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Oil and bitumen (MBbls/d) | ||||||||||||||||
United States | 161 | 136 | 167 | 121 | ||||||||||||
Canada | 121 | 80 | 107 | 78 | ||||||||||||
Retained assets | 282 | 216 | 274 | 199 | ||||||||||||
Divested assets | - | 3 | - | 7 | ||||||||||||
Total | 282 | 219 | 274 | 206 | ||||||||||||
Natural gas liquids (MBbls/d) | ||||||||||||||||
United States | 134 | 138 | 136 | 129 | ||||||||||||
Divested assets | - | 5 | - | 9 | ||||||||||||
Total | 134 | 143 | 136 | 138 | ||||||||||||
Gas (MMcf/d) | ||||||||||||||||
United States | 1,570 | 1,690 | 1,598 | 1,656 | ||||||||||||
Canada | 16 | 26 | 21 | 24 | ||||||||||||
Retained assets | 1,586 | 1,716 | 1,619 | 1,680 | ||||||||||||
Divested assets | - | 138 | - | 311 | ||||||||||||
Total | 1,586 | 1,854 | 1,619 | 1,991 | ||||||||||||
Oil equivalent (MBoe/d) | ||||||||||||||||
United States | 556 | 556 | 569 | 526 | ||||||||||||
Canada | 124 | 84 | 111 | 82 | ||||||||||||
Retained assets | 680 | 640 | 680 | 608 | ||||||||||||
Divested assets | - | 31 | - | 68 | ||||||||||||
Total | 680 | 671 | 680 | 676 |
KEY OPERATING STATISTICS BY REGION | ||||||||||||
Quarter Ended September 30, 2015 | ||||||||||||
Avg. Production | Gross Wells | Operated Rigs at | ||||||||||
(MBoe/d) | Drilled | September 30, 2015 | ||||||||||
Delaware Basin | 61 | 40 | 10 | |||||||||
Midland Basin | 48 | 2 | - | |||||||||
Eagle Ford | 113 | 74 | - | |||||||||
Canadian Heavy Oil | 124 | 7 | 1 | |||||||||
Anadarko Basin | 83 | 45 | 5 | |||||||||
Barnett Shale | 176 | - | - | |||||||||
Rockies | 28 | 14 | 2 | |||||||||
Other assets | 47 | - | - | |||||||||
Total | 680 | 182 | 18 |
PRODUCTION TREND | 2014 | 2014 | 2015 | 2015 | 2015 | |||||||||||||||
Quarter 3 | Quarter 4 | Quarter 1 | Quarter 2 | Quarter 3 | ||||||||||||||||
Oil (MBbls/d) | ||||||||||||||||||||
Delaware Basin | 27 | 27 | 33 | 41 | 41 | |||||||||||||||
Midland Basin | 29 | 28 | 27 | 26 | 23 | |||||||||||||||
Eagle Ford | 47 | 60 | 75 | 67 | 62 | |||||||||||||||
Canadian Heavy Oil | 80 | 93 | 104 | 98 | 121 | |||||||||||||||
Anadarko Basin | 10 | 10 | 9 | 10 | 9 | |||||||||||||||
Barnett Shale | 2 | 2 | 1 | 1 | 1 | |||||||||||||||
Rockies | 10 | 9 | 12 | 16 | 16 | |||||||||||||||
Other assets | 11 | 10 | 11 | 11 | 9 | |||||||||||||||
Retained assets | 216 | 239 | 272 | 270 | 282 | |||||||||||||||
Divested assets | 3 | - | - | - | - | |||||||||||||||
Total | 219 | 239 | 272 | 270 | 282 | |||||||||||||||
Natural gas liquids (MBbls/d) | ||||||||||||||||||||
Delaware Basin | 7 | 8 | 8 | 10 | 8 | |||||||||||||||
Midland Basin | 12 | 12 | 11 | 11 | 12 | |||||||||||||||
Eagle Ford | 14 | 18 | 23 | 24 | 26 | |||||||||||||||
Anadarko Basin | 34 | 34 | 30 | 24 | 27 | |||||||||||||||
Barnett Shale | 54 | 53 | 51 | 49 | 44 | |||||||||||||||
Rockies | 1 | 1 | 1 | 1 | 2 | |||||||||||||||
Other assets | 16 | 15 | 15 | 15 | 15 | |||||||||||||||
Retained assets | 138 | 141 | 139 | 134 | 134 | |||||||||||||||
Divested assets | 5 | - | - | - | - | |||||||||||||||
Total | 143 | 141 | 139 | 134 | 134 | |||||||||||||||
Gas (MMcf/d) | ||||||||||||||||||||
Delaware Basin | 68 | 66 | 66 | 75 | 70 | |||||||||||||||
Midland Basin | 68 | 71 | 71 | 77 | 76 | |||||||||||||||
Eagle Ford | 109 | 127 | 143 | 146 | 154 | |||||||||||||||
Canadian Heavy Oil | 26 | 23 | 28 | 20 | 16 | |||||||||||||||
Anadarko Basin | 323 | 329 | 297 | 290 | 278 | |||||||||||||||
Barnett Shale | 896 | 878 | 827 | 805 | 788 | |||||||||||||||
Rockies | 66 | 58 | 53 | 62 | 58 | |||||||||||||||
Other assets | 160 | 155 | 160 | 152 | 146 | |||||||||||||||
Retained assets | 1,716 | 1,707 | 1,645 | 1,627 | 1,586 | |||||||||||||||
Divested assets | 138 | 3 | - | - | - | |||||||||||||||
Total | 1,854 | 1,710 | 1,645 | 1,627 | 1,586 | |||||||||||||||
Oil equivalent (MBoe/d) | ||||||||||||||||||||
Delaware Basin | 46 | 46 | 52 | 64 | 61 | |||||||||||||||
Midland Basin | 52 | 52 | 50 | 49 | 48 | |||||||||||||||
Eagle Ford | 79 | 99 | 122 | 114 | 113 | |||||||||||||||
Canadian Heavy Oil | 84 | 97 | 109 | 101 | 124 | |||||||||||||||
Anadarko Basin | 98 | 100 | 88 | 82 | 83 | |||||||||||||||
Barnett Shale | 205 | 201 | 191 | 185 | 176 | |||||||||||||||
Rockies | 22 | 19 | 22 | 27 | 28 | |||||||||||||||
Other assets | 54 | 50 | 51 | 52 | 47 | |||||||||||||||
Retained assets | 640 | 664 | 685 | 674 | 680 | |||||||||||||||
Divested assets | 31 | 1 | - | - | - | |||||||||||||||
Total | 671 | 665 | 685 | 674 | 680 |
BENCHMARK PRICES | |||||||||||||||||||||||
(average prices) | Quarter Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Oil ($/Bbl) - West Texas Intermediate (Cushing) | $ | 46.69 | $ | 97.26 | $ | 51.11 | $ | 99.67 | |||||||||||||||
Natural Gas ($/Mcf) - Henry Hub | $ | 2.77 | $ | 4.07 | $ | 2.80 | $ | 4.57 | |||||||||||||||
REALIZED PRICES | Quarter Ended September 30, 2015 | ||||||||||||||||||||||
Oil /Bitumen | NGL | Gas | Total | ||||||||||||||||||||
(Per Bbl) | (Per Bbl) | (Per Mcf) | (Per Boe) | ||||||||||||||||||||
United States | $ | 42.09 | $ | 8.80 | $ | 2.26 | $ | 20.66 | |||||||||||||||
Canada (1) | $ | 25.10 |
$ |
N/M |
$ | 0.09 | $ | 24.55 | |||||||||||||||
Realized price without hedges | $ | 34.78 | $ | 8.80 | $ | 2.24 | $ | 21.37 | |||||||||||||||
Cash settlements | $ | 21.16 | $ | - | $ | 0.47 | $ | 9.86 | |||||||||||||||
Realized price, including cash settlements | $ | 55.94 | $ | 8.80 | $ | 2.71 | $ | 31.23 | |||||||||||||||
Quarter Ended September 30, 2014 | |||||||||||||||||||||||
Oil /Bitumen | NGL | Gas | Total | ||||||||||||||||||||
(Per Bbl) | (Per Bbl) | (Per Mcf) | (Per Boe) | ||||||||||||||||||||
United States | $ | 90.23 | $ | 25.82 | $ | 3.61 | $ | 38.90 | |||||||||||||||
Canada (1) | $ | 65.88 | $ | 63.46 | $ | 0.76 | $ | 63.23 | |||||||||||||||
Realized price without hedges | $ | 81.37 | $ | 25.90 | $ | 3.57 | $ | 41.92 | |||||||||||||||
Cash settlements | $ | (1.06 | ) | $ | 0.01 | $ | 0.15 | $ | 0.07 | ||||||||||||||
Realized price, including cash settlements | $ | 80.31 | $ | 25.91 | $ | 3.72 | $ | 41.99 | |||||||||||||||
Nine Months Ended September 30, 2015 | |||||||||||||||||||||||
Oil | NGL | Gas | Total | ||||||||||||||||||||
(Per Bbl) | (Per Bbl) | (Per Mcf) | (Per Boe) | ||||||||||||||||||||
United States | $ | 45.91 | $ | 9.50 | $ | 2.30 | $ | 22.18 | |||||||||||||||
Canada (1) | $ | 27.84 |
$ |
N/M |
$ | 0.61 | $ | 27.06 | |||||||||||||||
Realized price without hedges | $ | 38.81 | $ | 9.50 | $ | 2.27 | $ | 22.98 | |||||||||||||||
Cash settlements | $ | 19.48 | $ | - | $ | 0.53 | $ | 9.11 | |||||||||||||||
Realized price, including cash settlements | $ | 58.29 | $ | 9.50 | $ | 2.80 | $ | 32.09 | |||||||||||||||
Nine Months Ended September 30, 2014 | |||||||||||||||||||||||
Oil | NGL | Gas | Total | ||||||||||||||||||||
(Per Bbl) | (Per Bbl) | (Per Mcf) | (Per Boe) | ||||||||||||||||||||
United States | $ | 92.55 | $ | 26.80 | $ | 4.04 | $ | 39.81 | |||||||||||||||
Canada (1) | $ | 65.54 | $ | 50.57 | $ | 3.80 | $ | 55.85 | |||||||||||||||
Realized price without hedges | $ | 81.84 | $ | 27.34 | $ | 4.02 | $ | 42.38 | |||||||||||||||
Cash settlements | $ | (2.43 | ) | $ | - | $ | (0.12 | ) | $ | (1.11 | ) | ||||||||||||
Realized price, including cash settlements | $ | 79.41 | $ | 27.34 | $ | 3.90 | $ | 41.27 | |||||||||||||||
|
(1) The reported Canadian gas volumes include volumes that are produced from certain of our leases and then transported to our Jackfish operations where the gas is used as fuel. However, the revenues and expenses related to this consumed gas are eliminated in our consolidated financials. |
CONSOLIDATED STATEMENTS OF EARNINGS | |||||||||||||||||||||||
(in millions, except per share amounts) | Quarter Ended | Nine Months Ended | |||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||
Oil, gas and NGL sales | $ | 1,338 | $ | 2,588 | $ | 4,264 | $ | 7,824 | |||||||||||||||
Oil, gas and NGL derivatives | 414 | 748 | 426 | 29 | |||||||||||||||||||
Marketing and midstream revenues | 1,849 | 2,000 | 5,569 | 5,718 | |||||||||||||||||||
Total operating revenues | 3,601 | 5,336 | 10,259 | 13,571 | |||||||||||||||||||
Lease operating expenses | 510 | 584 | 1,625 | 1,764 | |||||||||||||||||||
Marketing and midstream operating expenses | 1,637 | 1,781 | 4,939 | 5,092 | |||||||||||||||||||
General and administrative expenses | 198 | 195 | 661 | 595 | |||||||||||||||||||
Production and property taxes | 91 | 140 | 315 | 427 | |||||||||||||||||||
Depreciation, depletion and amortization | 744 | 842 | 2,488 | 2,409 | |||||||||||||||||||
Asset impairments | 5,851 | - | 15,479 | - | |||||||||||||||||||
Restructuring costs | - | 2 | - | 44 | |||||||||||||||||||
Gains and losses on asset sales | 3 | - | 2 | (1,072 | ) | ||||||||||||||||||
Other operating items | 11 | 18 | 52 | 74 | |||||||||||||||||||
Total operating expenses | 9,045 | 3,562 | 25,561 | 9,333 | |||||||||||||||||||
Operating income (loss) | (5,444 | ) | 1,774 | (15,302 | ) | 4,238 | |||||||||||||||||
Net financing costs | 136 | 116 | 378 | 359 | |||||||||||||||||||
Other nonoperating items | 43 | 4 | 46 | 111 | |||||||||||||||||||
Earnings (loss) before income taxes | (5,623 | ) | 1,654 | (15,726 | ) | 3,768 | |||||||||||||||||
Income tax expense (benefit) | (1,714 | ) | 613 | (5,435 | ) | 1,698 | |||||||||||||||||
Net earnings (loss) | (3,909 | ) | 1,041 | (10,291 | ) | 2,070 | |||||||||||||||||
Net earnings (loss) attributable to noncontrolling interests | (402 | ) | 25 | (369 | ) | 55 | |||||||||||||||||
Net earnings (loss) attributable to Devon | $ | (3,507 | ) | $ | 1,016 | $ | (9,922 | ) | $ | 2,015 | |||||||||||||
Net earnings (loss) per share attributable to Devon: | |||||||||||||||||||||||
Basic | $ | (8.64 | ) | $ | 2.48 | $ | (24.45 | ) | $ | 4.94 | |||||||||||||
Diluted | $ | (8.64 | ) | $ | 2.47 | $ | (24.45 | ) | $ | 4.91 | |||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 411 | 409 | 411 | 408 | |||||||||||||||||||
Diluted | 411 | 411 | 411 | 410 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||||
(in millions) | Quarter Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | |||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||||||
Net earnings (loss) | $ | (3,909 | ) | $ | 1,041 | $ | (10,291 | ) | $ | 2,070 | ||||||||||||||
Adjustments to reconcile net earnings (loss) | ||||||||||||||||||||||||
to net cash from operating activities: | ||||||||||||||||||||||||
Depreciation, depletion and amortization | 744 | 842 | 2,488 | 2,409 | ||||||||||||||||||||
Asset impairments | 5,851 | - | 15,479 | - | ||||||||||||||||||||
Gains and losses on asset sales | 3 | - | 2 | (1,072 | ) | |||||||||||||||||||
Deferred income tax expense (benefit) | (1,708 | ) | 23 | (5,348 | ) | 800 | ||||||||||||||||||
Derivatives and other financial instruments | (481 | ) | (804 | ) | (606 | ) | (43 | ) | ||||||||||||||||
Cash settlements on derivatives and financial instruments | 730 | 44 | 1,913 | (201 | ) | |||||||||||||||||||
Other noncash charges | 168 | 128 | 435 | 357 | ||||||||||||||||||||
Net change in working capital | 67 | 296 | 93 | 766 | ||||||||||||||||||||
Change in long-term other assets | 52 | (38 | ) | 211 | (115 | ) | ||||||||||||||||||
Change in long-term other liabilities | 36 | 27 | (74 | ) | 47 | |||||||||||||||||||
Net cash from operating activities | 1,553 | 1,559 | 4,302 | 5,018 | ||||||||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Capital expenditures | (1,080 | ) | (1,672 | ) | (4,229 | ) | (5,013 | ) | ||||||||||||||||
Acquisitions of property, equipment and businesses | (113 | ) | (31 | ) | (530 | ) | (6,255 | ) | ||||||||||||||||
Divestitures of property and equipment | 27 | 2,260 | 35 | 5,202 | ||||||||||||||||||||
Redemptions of long-term investments | - | - | - | 57 | ||||||||||||||||||||
Other | (3 | ) | 3 | (8 | ) | 87 | ||||||||||||||||||
Net cash from investing activities | (1,169 | ) | 560 | (4,732 | ) | (5,922 | ) | |||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Borrowings of long-term debt, net of issuance costs | 277 | 438 | 3,328 | 4,158 | ||||||||||||||||||||
Repayments of long-term debt | (252 | ) | (275 | ) | (1,773 | ) | (4,265 | ) | ||||||||||||||||
Net short-term debt repayments | (169 | ) | (456 | ) | (932 | ) | (1,318 | ) | ||||||||||||||||
Stock option exercises | - | 9 | 4 | 92 | ||||||||||||||||||||
Sale of subsidiary units | - | - | 654 | - | ||||||||||||||||||||
Issuance of subsidiary units | 9 | 52 | 13 | 72 | ||||||||||||||||||||
Dividends paid on common stock | (99 | ) | (98 | ) | (296 | ) | (287 | ) | ||||||||||||||||
Distributions to noncontrolling interests | (68 | ) | (46 | ) | (186 | ) | (187 | ) | ||||||||||||||||
Other | 2 | (13 | ) | (10 | ) | (4 | ) | |||||||||||||||||
Net cash from financing activities | (300 | ) | (389 | ) | 802 | (1,739 | ) | |||||||||||||||||
Effect of exchange rate changes on cash | (22 | ) | (28 | ) | (65 | ) | (15 | ) | ||||||||||||||||
Net change in cash and cash equivalents | 62 | 1,702 | 307 | (2,658 | ) | |||||||||||||||||||
Cash and cash equivalents at beginning of period | 1,725 | 1,706 | 1,480 | 6,066 | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | 1,787 | $ | 3,408 | $ | 1,787 | $ | 3,408 |
CONSOLIDATED BALANCE SHEETS | ||||||||||||
(in millions) | ||||||||||||
September 30, | December 31, | |||||||||||
Current assets: | 2015 | 2014 | ||||||||||
Cash and cash equivalents | $ | 1,787 | $ | 1,480 | ||||||||
Accounts receivable | 1,318 | 1,959 | ||||||||||
Derivatives, at fair value | 690 | 1,993 | ||||||||||
Income taxes receivable | 8 | 522 | ||||||||||
Other current assets | 495 | 544 | ||||||||||
Total current assets | 4,298 | 6,498 | ||||||||||
Property and equipment, at cost: | ||||||||||||
Oil and gas, based on full cost accounting: | ||||||||||||
Subject to amortization | 77,093 | 75,738 | ||||||||||
Not subject to amortization | 2,688 | 2,752 | ||||||||||
Total oil and gas | 79,781 | 78,490 | ||||||||||
Midstream and other | 10,410 | 9,695 | ||||||||||
Total property and equipment, at cost | 90,191 | 88,185 | ||||||||||
Less accumulated depreciation, depletion and amortization | (67,416 | ) | (51,889 | ) | ||||||||
Property and equipment, net | 22,775 | 36,296 | ||||||||||
Goodwill | 5,775 | 6,303 | ||||||||||
Other long-term assets | 1,503 | 1,540 | ||||||||||
Total assets | $ | 34,351 | $ | 50,637 | ||||||||
Current liabilities: | ||||||||||||
Accounts payable | $ | 940 | $ | 1,400 | ||||||||
Revenues and royalties payable | 985 | 1,193 | ||||||||||
Short-term debt | 500 | 1,432 | ||||||||||
Deferred income taxes | 261 | 730 | ||||||||||
Other current liabilities | 815 | 1,180 | ||||||||||
Total current liabilities | 3,501 | 5,935 | ||||||||||
Long-term debt | 11,400 | 9,830 | ||||||||||
Asset retirement obligations | 1,377 | 1,339 | ||||||||||
Other long-term liabilities | 818 | 948 | ||||||||||
Deferred income taxes | 1,333 | 6,244 | ||||||||||
Stockholders' equity: | ||||||||||||
Common stock | 41 | 41 | ||||||||||
Additional paid-in capital | 4,773 | 4,088 | ||||||||||
Retained earnings | 6,413 | 16,631 | ||||||||||
Accumulated other comprehensive earnings | 321 | 779 | ||||||||||
Total stockholders' equity attributable to Devon | 11,548 | 21,539 | ||||||||||
Noncontrolling interests | 4,374 | 4,802 | ||||||||||
Total stockholders' equity | 15,922 | 26,341 | ||||||||||
Total liabilities and stockholders' equity | $ | 34,351 | $ | 50,637 | ||||||||
Common shares outstanding | 411 | 409 |
CONSOLIDATING STATEMENTS OF OPERATIONS | |||||||||||||||||||||||||
(in millions) | |||||||||||||||||||||||||
Quarter Ended September 30, 2015 | |||||||||||||||||||||||||
Devon U.S. & Canada | EnLink | Eliminations | Total | ||||||||||||||||||||||
Oil, gas and NGL sales | $ | 1,338 | $ | - | $ | - | $ | 1,338 | |||||||||||||||||
Oil, gas and NGL derivatives | 414 | - | - | 414 | |||||||||||||||||||||
Marketing and midstream revenues | 850 | 1,171 | (172 | ) | 1,849 | ||||||||||||||||||||
Total operating revenues | 2,602 | 1,171 | (172 | ) | 3,601 | ||||||||||||||||||||
Lease operating expenses | 510 | - | - | 510 | |||||||||||||||||||||
Marketing and midstream operating expenses | 849 | 960 | (172 | ) | 1,637 | ||||||||||||||||||||
General and administrative expenses | 163 | 35 | - | 198 | |||||||||||||||||||||
Production and property taxes | 84 | 7 | - | 91 | |||||||||||||||||||||
Depreciation, depletion and amortization | 644 | 100 | - | 744 | |||||||||||||||||||||
Asset impairments | 5,052 | 799 | - | 5,851 | |||||||||||||||||||||
Gains and losses on asset sales | - | 3 | - | 3 | |||||||||||||||||||||
Other operating items | 11 | - | - | 11 | |||||||||||||||||||||
Total operating expenses | 7,313 | 1,904 | (172 | ) | 9,045 | ||||||||||||||||||||
Operating loss | (4,711 | ) | (733 | ) | - | (5,444 | ) | ||||||||||||||||||
Net financing costs | 106 | 30 | - | 136 | |||||||||||||||||||||
Other nonoperating items | 48 | (5 | ) | - | 43 | ||||||||||||||||||||
Loss before income taxes | (4,865 | ) | (758 | ) | - | (5,623 | ) | ||||||||||||||||||
Income tax expense (benefit) | (1,721 | ) | 7 | - | (1,714 | ) | |||||||||||||||||||
Net loss | (3,144 | ) | (765 | ) | - | (3,909 | ) | ||||||||||||||||||
Net loss attributable to noncontrolling interests | - | (402 | ) | - | (402 | ) | |||||||||||||||||||
Net loss attributable to Devon | $ | (3,144 | ) | $ | (363 | ) | $ | - | $ | (3,507 | ) |
OTHER KEY STATISTICS |
|||||||||||||||||||||||
(in millions) | Quarter Ended September 30, 2015 | ||||||||||||||||||||||
Devon U.S. |
EnLink | Eliminations | Total | ||||||||||||||||||||
Cash flow statement related items: | |||||||||||||||||||||||
Operating cash flow | $ | 1,337 | $ | 216 | $ | - | $ | 1,553 | |||||||||||||||
Capital expenditures | $ | (979 | ) | $ | (101 | ) | $ | - | $ | (1,080 | ) | ||||||||||||
Acquisitions of property, equipment and businesses | $ | (107 | ) | $ | (6 | ) | $ | - | $ | (113 | ) | ||||||||||||
EnLink distributions received (paid) | $ | 65 | $ | (133 | ) | $ | - | $ | (68 | ) | |||||||||||||
Balance sheet statement items: | |||||||||||||||||||||||
Net debt(1) | $ | 7,344 | $ | 2,769 | $ | - | $ | 10,113 | |||||||||||||||
(1) Net debt is a Non-GAAP measure. For a reconciliation of the comparable GAAP measure, see "Non-GAAP Financial Measures" later in this release. |
CAPITAL EXPENDITURES | ||||||||||
(in millions) | ||||||||||
Quarter Ended September 30, 2015 | Nine Months Ended September 30, 2015 | |||||||||
Exploration and development capital | $ | 834 | $ | 3,043 | ||||||
Capitalized G&A and interest | 105 | 327 | ||||||||
Acquisitions | 113 | 199 | ||||||||
Midstream (1) | 12 | 48 | ||||||||
Corporate and other | 18 | 66 | ||||||||
Devon capital expenditures | $ | 1,082 | $ | 3,683 | ||||||
(1) Excludes $105 and $777 million attributable to EnLink for the third quarter and first nine months of 2015, respectively. |
NON-GAAP FINANCIAL MEASURES |
The United States Securities and Exchange Commission has adopted disclosure requirements for public companies such as Devon concerning non-GAAP financial measures (GAAP refers to generally accepted accounting principles). The Company must reconcile the non-GAAP financial measure to related GAAP information. |
CORE EARNINGS |
(in millions) |
Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the Company’s financial results. Accordingly, the Company also uses the measures of core earnings and core earnings per diluted share. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on third-quarter 2015 earnings. |
Quarter Ended September 30, 2015 | ||||||||||
Before-Tax |
After-Tax and |
|||||||||
Net loss attributable to Devon (GAAP) | $ | (3,507 | ) | |||||||
Asset impairments | 5,851 | 3,622 | ||||||||
Fair value changes in financial instruments and foreign currency | 254 | 201 | ||||||||
Core earnings attributable to Devon (non-GAAP) | $ | 316 | ||||||||
Diluted share count | 414 | |||||||||
Core diluted earnings per share attributable to Devon (non-GAAP) | $ | 0.76 | ||||||||
NET DEBT |
(in millions) |
Devon defines net debt as debt less cash and cash equivalents and net debt attributable to the consolidation of EnLink Midstream as presented in the following table. Devon believes that netting these sources of cash against debt and adjusting for EnLink net debt provides a clearer picture of the future demands on cash from Devon to repay debt. |
September 30, 2015 | ||||||||||||||||||
Devon U.S. & Canada | EnLink | Devon Consolidated | ||||||||||||||||
Total debt (GAAP) | $ | 9,048 | $ | 2,852 | $ | 11,900 | ||||||||||||
Less cash and cash equivalents | (1,704 | ) | (83 | ) | (1,787 | ) | ||||||||||||
Net debt (non-GAAP) | $ | 7,344 | $ | 2,769 | $ | 10,113 |
DEVON ENERGY CORPORATION | ||||||||||||
FORWARD LOOKING GUIDANCE |
||||||||||||
PRODUCTION GUIDANCE | Quarter 4 | |||||||||||
Low | High | |||||||||||
Oil and bitumen (MBbls/d) | ||||||||||||
United States | 158 | 163 | ||||||||||
Canada | 118 | 123 | ||||||||||
Total | 276 | 286 | ||||||||||
Natural gas liquids (MBbls/d) | ||||||||||||
United States | 130 | 135 | ||||||||||
Gas (MMcf/d) | ||||||||||||
United States | 1,520 | 1,550 | ||||||||||
Canada | 15 | 15 | ||||||||||
Total | 1,535 | 1,565 | ||||||||||
Oil equivalent (MBoe/d) | ||||||||||||
United States | 541 | 556 | ||||||||||
Canada | 121 | 126 | ||||||||||
Total | 662 | 682 | ||||||||||
PRICE REALIZATIONS GUIDANCE | Quarter 4 | |||||||||||
Low | High | |||||||||||
Oil and bitumen - % of WTI | ||||||||||||
United States | 87 | % | 97 | % | ||||||||
Canada | 44 | % | 54 | % | ||||||||
NGL - realized price | $ | 7 | $ | 12 | ||||||||
Natural gas - % of Henry Hub | 78 | % | 88 | % |
OTHER GUIDANCE ITEMS | Quarter 4 | |||||||||||
($ millions, except Boe) | Low | High | ||||||||||
Marketing & midstream operating profit | $ | 195 | $ | 225 | ||||||||
Lease operating expenses per Boe | $ | 8.00 | $ | 8.50 | ||||||||
General & administrative expenses per Boe | $ | 3.00 | $ | 3.30 | ||||||||
Production and property taxes as % of upstream sales | 6.3 | % | 7.3 | % | ||||||||
Depreciation, depletion and amortization per Boe | $ | 10.50 | $ | 11.50 | ||||||||
Other operating items | $ | 15 | $ | 20 | ||||||||
Net financing costs | $ | 130 | $ | 140 | ||||||||
Current income tax rate | 0.0 | % | 5.0 | % | ||||||||
Deferred income tax rate | 30.0 | % | 35.0 | % | ||||||||
Total income tax rate | 30.0 | % | 40.0 | % | ||||||||
Net earnings attributable to noncontrolling interests | $ | 10 | $ | 30 | ||||||||
CAPITAL EXPENDITURES GUIDANCE | Quarter 4 | |||||||||||
(in millions) | Low | High | ||||||||||
Exploration and development | $ | 800 | $ | 900 | ||||||||
Capitalized G&A and interest | 95 | 115 | ||||||||||
Midstream (1) | 5 | 15 | ||||||||||
Corporate and other | 15 | 25 | ||||||||||
Devon capital expenditures | $ | 915 | $ | 1,055 | ||||||||
|
(1) Excludes capital expenditures related to EnLink. |
COMMODITY HEDGES | ||||||||||||||||||||||||||||||||
Oil Commodity Hedges | ||||||||||||||||||||||||||||||||
Price Swaps | Price Collars | Call Options Sold | ||||||||||||||||||||||||||||||
Period |
Volume |
Weighted |
Volume |
Weighted |
Weighted |
Volume |
Weighted |
|||||||||||||||||||||||||
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 |
|||||||||||
Q4 2015 | Western Canadian Select | 40,000 | $ | (15.58 | ) |
Natural Gas Commodity Hedges | ||||||||||||||||||||||||||||||||
Price Swaps | Price Collars | Call Options Sold | ||||||||||||||||||||||||||||||
Period |
Volume |
Weighted |
Volume |
Weighted |
Weighted |
Volume |
Weighted |
|||||||||||||||||||||||||
Q4 2015 | 250,000 | $ | 4.32 | 480,000 | $ | 3.52 | $ | 3.83 | 550,000 | $ | 5.09 | |||||||||||||||||||||
Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC first of the month Henry Hub index.
View source version on businesswire.com: http://www.businesswire.com/news/home/20151103006768/en/
Source:
Devon Energy Corporation
Investor Contacts
Howard
Thill, 405-552-3693
Scott Coody, 405-552-4735
Shea Snyder,
405-552-4782
Media Contact
John Porretto, 405-228-7506