Oil & gas company
Devon Energy Corp.
) reported second-quarter 2013 adjusted earnings per share of
$1.21, 28.7% higher than the Zacks Consensus Estimate of 94
cents. The results substantially surpassed the prior-year quarter
results of 55 cents by 120%.
The year-over-year growth was driven by higher production and
better realized price of its products sold compared to last year.
On a GAAP basis, the company reported earnings of $1.68 per share
versus $1.18 in the year-ago quarter. The difference of 47 cents
between the operating and GAAP number in the reported quarter was
due to a one-time gain of $232 million from oil, gas and NGL
derivatives, offset by charges worth $40 million.
Devon's quarterly revenues of $3.09 billion surpassed the Zacks
Consensus Estimate of $2.65 billion by 16.6% and year-ago
revenues by 20.8%.
Revenues improved year over year primarily due to higher revenues
from oil, gas and NGL sales and Marketing and Midstream segments.
Highlights of the Release
Total average daily production in second quarter 2013 was 698
thousand barrels of oil equivalents (Mboe), exceeding the top end
of the guidance by 8 thousand barrels of oil. Devon's oil and
natural gas liquids production improved 14% and 19.4% year over
year, respectively. However, a nearly 5% decline in natural gas
production from the year-ago quarter marginally offset the total
Total expenses in the reported quarter were $2.04 billion
(excluding asset impairments and restructuring costs), increasing
12.1% from the year-ago level. Devon experienced an 8.9% increase
in lease operating expenses, while its Marketing and Midstream
operating costs and expenses increased 82.8% from the year-ago
Realized oil prices in the quarter were $77.17 per barrel, up
7.4% from $71.84 per barrel in the year-ago quarter.
Natural gas price realization was up 28.2% year over year to
$3.41 per thousand cubic feet (Mcf) from $2.66 per Mcf in the
Realized prices for natural gas were down 16% to $26.39 per
barrel from $31.42 per barrel in the year-ago quarter.
Total realized prices in the second quarter were $35.23 per
barrel of oil equivalent (boe), up 15.5% year over year.
As of Jun 30, 2013, the company's cash balance totaled $3.36
billion versus $4.63 billion as of Dec 31, 2012.
Devon's cash flow from operating activities in second quarter
2013 was $1.39 billion, marginally lower than $1.42 billion
recorded in the year-ago quarter.
Capital expenditure in the reported quarter was $1.64 billion
versus $2.18 billion in the year-ago quarter.
Long-term debt as of Jun 30, 2013 was $7.9 billion, declining
$0.5 billion from $8.5 billion as of Dec 31, 2012.
Other Company Releases
) posted net earnings of 34 cents per share in second quarter
2013, beating the Zacks Consensus Estimate of 14 cents by 142.8%.
EXCO Resources Inc.
) posted net earnings of 10 cents per share in second quarter
2013, lagging the Zacks Consensus Estimate of 11 cents by 9.09%.
Noble Energy Inc.
) reported adjusted earnings per share of 69 cents for the second
quarter 2013, lagging the Zacks Consensus Estimate by 5.5%.
Devon Energy continues to focus on oil and liquid generation,
which is its highest margin product. Moreover, the solid
performance from its overseas operation enabled the company to
redirect $2.0 billion of foreign cash to the U.S. at an estimated
tax rate of 5%. This will in a way help the company to fund its
future development plans. The positive findings in new Woodford
Shale oil play could add more oil barrels to its generation
During the reported quarter, the company made some changes in its
leadership positions. We believe since both the corporate
officers promoted are seasoned campaigners at Devon the
performance of the company would get a boost.
Based in Oklahoma City, Okla., Devon Energy Corporation is an
independent energy company engaged primarily in exploration,
development and production of oil and natural gas. With a market
cap of $22.65 billion, the company has 5,700 full time employees.
Devon Energy currently retains a Zacks Rank #3 (Hold).
DEVON ENERGY (DVN): Free Stock Analysis
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