On May 29, 2014, the shares of
Devon Energy Corp.
) touched a 52-week high of $73.98, thanks to its acquisition of
high-quality properties, robust performances by its core assets and
attractive dividend growth. The share price finally closed at
$73.89, up 27.8% from the year-ago closing price.
The combination of non-core asset divestments and prime U.S. asset
purchases is the key factor working in favor of Devon Energy. The
company's steady expansion of its U.S. operations as is evident
from the Eagleford and Cana Woodford shale acquisitions is creating
new avenues for growth.
Devon Energy's assets are positioned in some of the most critical
development plays. This enabled the company to clock in impressive
oil production margin in the first quarter of 2014, which helped to
keep the positive earnings streak alive. To transform itself into a
pure upstream player, the company in May 2014 announced its
General Electric Co.
) to improve production efficiency and lower drilling cost for
unconventional resource projects.
Furthermore, upbeat operational performance prompted Devon Energy
to offer a 9% hike in quarterly dividend to 24 cents per share in
the first quarter that will certainly retain investors' attention
to the stock.
Devon Energy is poised to benefit from the encouraging prospects
offered by the Eagleford shale and the Delaware basin. Accelerated
drilling activity in these two basins will be the highlight of
output growth in 2015. These two assets are set to be the
cornerstone for Devon Energy's future production potential.
The company plans to increase its domestic oil production by a
mammoth 70% or more to 124-136 thousand barrels of oil per day
(MBOD) in 2014 compared to 2013 and overall oil production by at
least 30% to 198-216 MBOD.
Currently, Devon Energy carries a Zacks Rank #3 (Hold). Other
well-placed oil and gas operators include
Athlon Energy Inc.
). Both the stocks hold a Zacks Rank #1 (Strong Buy).
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DEVON ENERGY (DVN): Free Stock Analysis Report
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