Devon Energy Corporation
) has announced its intension to merge its U.S. personnel into a
single operations group. Per the plan, the company will close its
office in Houston and relocate operational tasks as well as quite a
few numbers of employees from South Texas, East Texas and Louisiana
to its corporate headquarters in Oklahoma City. Devon Energy
expects the entire integration process to be completed by the first
quarter of 2013.
The consolidation process will benefit Devon Energy in both ways --
financially as well as operationally. Initially, the company is
expected to spend about $125 million in fourth-quarter 2012 and the
first half of 2013 for this restructuring purpose. In the long run,
the company will be saving $80 million per year due to reduction in
general and administrative expenses, and lower personnel costs.
The company will benefit from economies of scale. As far as
operational benefits are concerned, when all segments of Devon
Energy will work under one roof, then automatically the overall
operational efficiency will improve, which in turn, will enhance
employee synergy and best practices.
From the last couple of quarters, we have observed that Devon
Energy has been changing its capital investment strategy.
Currently, the company has deployed a considerable portion of its
capital expenditure budget to low-risk development projects in its
vast North American assets.
Per the last few quarters' financial numbers, it is evident that
the company's capital expenditure, long-term debt and lease
operating expenses continue to follow upward trend. In the present
scenario, we believe this cost-curtailment initiative will enable
Devon Energy to minimize its cost burden and the company can
comfortably save substantial amount of money in the near future.
Oklahoma City-based Devon Energy Corporation is an independent
energy company. The company engages primarily in exploration,
development and production of oil and natural gas. The company
EOG Resources, Inc.
Chesapeake Energy Corporation
). Devon Energy Corporation currently retains a short-term Zacks #3
Rank (Hold Rating). With a market capitalization of $24.91 billion,
the company has 5,200 full time employees.
CHESAPEAKE ENGY (CHK): Free Stock Analysis
DEVON ENERGY (DVN): Free Stock Analysis Report
EOG RES INC (EOG): Free Stock Analysis Report
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