Oil & Gas company
Devon Energy Corp.
) reported first-quarter 2013 adjusted earnings per share of 66
cents, 10 cents higher than the Zacks Consensus Estimate.
However, the results were 37.1% lower than the prior-year
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On a GAAP basis, the company reported a loss $3.34 per share
versus earnings of 97 cents in the year-ago quarter. The
difference of $4.00 between the operating and GAAP number in the
reported quarter was due to a non-cash asset impairment charge of
Devon's quarterly revenues of $1,972 million lagged the Zacks
Consensus Estimate of $2,323 million by 15.1% and the year-ago
revenues by 21%.
Revenues declined year over year primarily due to lower average
realized prices of the products sold.
Highlights of the Release
Total average daily production in first quarter 2013 was 686.9
thousand barrel of oil equivalents (Mboe). Devon's Oil and
Natural gas liquids production improved 14.3% and 6.2% year over
year, respectively. However, nearly 8% decline in natural gas
production from the year-ago quarter resulted in a 1% decline in
total production from the year-ago quarter.
Total expenses in the reported quarter were $1.98 billion
(excluding asset impairments and restructuring costs), increasing
4.8% from the year-ago level. Devon experienced a 2% increase in
Lease operating expenses, while its Marketing and midstream
operating costs and expenses increased 11.7% from the year-ago
Taking advantage of the strong natural gas prices, the company
hedged 75% of its expected natural gas production for the
remaining three quarters of 2013.
Realized oil prices in the quarter were $62.32 per barrel, down
18.1% from $76.14 per barrel in the year-ago quarter. Realized
prices for natural gas liquids were down 20.6% to $28.17 per
barrel from $35.49 per barrel in the year-ago quarter.
Natural gas price realization was up 2.3% year over year to $3.09
per thousand cubic feet (Mcf) from $3.02 per Mcf in the year-ago
Total realized prices in the first quarter were $30.57 per barrel
of oil equivalent (boe), down 6.9% year over year.
As of Mar 31, 2013, the company's cash balance totaled $5.27
billion versus $4.6 billion as of Dec 31, 2012.
Devon's cash flow from operating activities in first quarter 2013
was $1.0 billion, same as the year-ago quarter level.
Capital expenditure in the reported quarter was $1.9 billion
versus $2.08 billion in the year-ago quarter.
Long-term debt as of Mar 31, 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 10 cents per share in first quarter
2013, beating the Zacks Consensus Estimate of 4 cents by 150%.
EXCO Resources Inc.
) posted net earnings of 13 cents per share in first quarter
2013, beating the Zacks Consensus Estimate of 8 cents by 62.5%.
McMoRan Exploration Co.
) posted loss of 3 cents per share in first quarter 2013, much
narrower than the Zacks Consensus Estimate loss of 12 cents.
Devon Energy continues to focus on oil and liquid generation,
which is its highest margin product. In addition, the company
also added to its hedging position to safeguard its oil and gas
production from price fluctuations.
However, the cyclical nature of demand for oil, natural gas and
NGL and volatility in prices could weigh on the profitability of
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 $22.35 billion, the company has 5,700 full time employees.
Devon Energy currently retains a Zacks Rank #3 (Hold).