OKLAHOMA CITY--(BUSINESS WIRE)--Devon Energy Corporation (NYSE:DVN) today reported net earnings for the full-year 2014 of $1.6 billion, or $3.93 per common share ($3.91 per diluted share). This compares to a net loss of $20 million in 2013, or $0.06 per common share ($0.06 per diluted share).
Devon generated cash flow from operations of $6.0 billion in 2014, a 10 percent increase compared to 2013. Including $5.1 billion of cash received from the sale of non-core assets, the company’s total cash inflows for the year exceeded $11 billion.
For the fourth quarter of 2014, Devon’s core earnings totaled $343 million, or $0.84 per common share ($0.83 per diluted share). The company reported a net loss of $408 million, or $1.01 per common share ($1.01 per diluted share) in the fourth quarter.
“Devon delivered another exceptional performance in the fourth quarter, rounding out an outstanding year for the company, including a significant repositioning of the portfolio,” said John Richels, president and CEO. “Production from our top-tier asset portfolio exceeded guidance for all products, proved oil reserves reached a record level and our midstream business increased profitability to an all-time high.
“We expect to sustain operational momentum in 2015 with the significant improvements we have seen in our completion designs and a capital program focused on development drilling,” said Richels. “With strong results from our enhanced completions and a focus on core development areas, we expect growth in oil production to be between 20 and 25 percent in 2015, even with a projected reduction of approximately 20 percent in E&P capital spending compared to 2014.”
Repositioned Portfolio Exceeds Production Expectations
Total production from Devon’s retained assets averaged 664,000 oil-equivalent barrels (Boe) per day during the fourth quarter of 2014. This result exceeded the company’s guidance range by 9,000 Boe per day and represents a 20 percent increase compared to the fourth quarter of 2013. This high-margin growth increased liquids production to 57 percent of the company’s retained asset mix in the fourth quarter.
Devon also delivered record oil production of 239,000 barrels per day in the fourth quarter. This result exceeded the top end of the company’s guidance range and represents a 48 percent increase compared to the fourth quarter of 2013. The most significant growth came from the company’s U.S. operations, where oil production increased a substantial 82 percent for the quarter year over year.
The strong growth in U.S. oil production during the quarter was largely attributable to prolific well results from the company’s world-class Eagle Ford assets. Net production in the Eagle Ford averaged 98,000 Boe per day in the fourth quarter, a 100 percent increase compared to Devon’s first month of ownership in March 2014. The company also achieved another quarter of strong production growth in the Permian Basin. Led by outstanding results from Devon’s Delaware Basin assets, total Permian Basin production increased to 98,000 Boe per day in the fourth quarter, a 14 percent increase compared to the year-ago period.
In Canada, net oil production from the company’s heavy-oil projects increased to a record high of 93,000 barrels per day in the fourth quarter. This strong result exceeded the top end of Devon’s guidance range by 5,000 barrels per day and represents a 15 percent increase in production compared to the fourth quarter of 2013. This growth was driven by the continued ramp-up of the company’s newest heavy-oil facility, Jackfish 3, which exited the year averaging 13,000 barrels per day.
Reserves from Retained Assets Grow; Oil Reserves Climb to Record Levels
Devon’s estimated proved reserves totaled 2.8 billion oil-equivalent barrels on Dec. 31, 2014, a 7 percent increase in reserves compared to the company’s retained asset portfolio in 2013. At year-end, proved oil reserves reached a record 895 million barrels.
The most significant reserve growth came from Devon’s U.S. operations, where oil reserves from retained properties increased 65 percent year over year to 351 million barrels. The substantial growth in U.S. oil reserves is largely attributable to the company’s Eagle Ford acquisition and its Delaware Basin operations. During the year, the company’s U.S. drilling programs added 94 million barrels of light-oil reserves through successful drilling (extensions and discoveries). This represents a replacement rate of approximately 200 percent of the light oil produced during 2014.
Overall, the company’s reserve life index (proved reserves divided by annual production from retained properties) remained at approximately 12 years, and its proved undeveloped reserves accounted for only 25 percent of proved reserves.
Operations Report
For additional details on Devon’s core and emerging assets, please refer to the company’s fourth-quarter 2014 Operations Report at www.devonenergy.com. Highlights from the operations report include:
- Prolific Q4 results, increasing type curve for Eagle Ford
- Improved completion design delivers excellent results in Delaware Basin
- Ramp-up exceeds expectations at Jackfish 3
- High-rate development wells from Cana-Woodford
Upstream Revenue Increases 16 Percent; Midstream Profit Rises
Revenue from oil, natural gas and natural gas liquids sales totaled $9.9 billion in 2014, a 16 percent increase compared to 2013. The growth in revenue was attributable to the company’s significant increase in U.S. light-oil production. This high-margin growth increased oil sales to 60 percent of Devon’s total upstream revenues during the year.
In the fourth quarter, upstream revenue was $2.1 billion, a 3 percent decrease compared to the fourth quarter of 2013. Cash settlements related to the company’s oil and natural gas hedges increased revenue by $4.23 per Boe in the fourth quarter of 2014, partially offsetting lower realized oil and natural gas liquids prices. At Dec. 31, 2014, Devon’s attractive commodity hedges had a fair market value of nearly $2.0 billion.
The company’s marketing and midstream business also delivered excellent results in 2014, with operating profits reaching an all-time high of $852 million, a 66 percent increase compared to 2013. The year-over-year increase in operating profit was largely driven by growth from EnLink Midstream.
Cash Operating Costs Decline
The company’s successful cost containment efforts resulted in lease operating expenses (LOE), the largest cash cost, of $9.29 per Boe in the fourth quarter. LOE was 5 percent below the low end of Devon’s guidance range and 2 percent lower than the third quarter of 2014. The company’s significant scale in core plays coupled with a consistent focus on efficient operations continues to position Devon as a low-cost producer.
Production and property taxes were $108 million in the quarter, essentially flat compared to the fourth quarter of 2013. Compared to the previous quarter, lower commodity prices drove a decline in production and property taxes of 23 percent.
Net financing costs totaled $167 million in the fourth quarter of 2014, an increase of 50 percent compared to the year-ago quarter. The higher financing costs were due to a $48 million charge attributable to the early redemption of $1.9 billion in senior notes.
General and administrative expenses totaled $252 million in the fourth quarter of 2014. This compares with $157 million in the fourth quarter of 2013. The year-over-year increase resulted from the consolidation of EnLink Midstream and higher employee-related costs.
Depreciation, depletion and amortization expense (DD&A) amounted to $14.89 per Boe in the fourth quarter. For the full-year, DD&A was $13.51 per Boe and compares to a rate of $10.99 in 2013. The increase in DD&A rate was primarily attributable to the company’s Eagle Ford acquisition and EnLink Midstream transaction.
Devon incurred a $1.9 billion non-cash impairment of goodwill in the fourth quarter of 2014. The goodwill was recorded more than a decade ago and was related to an acquisition comprised almost entirely of conventional gas assets in Canada that Devon no longer owns. This non-cash impairment was related to the recent drop in oil prices.
Full-year 2014 income tax expense was $2.4 billion, or 58 percent of pre-tax earnings. This unusually high tax rate resulted principally from the goodwill impairment charge that lowered pre-tax earnings but did not impact the company’s full-year tax obligations. Excluding this impairment charge and other non-recurring items, Devon’s income tax rate was 35 percent of adjusted pre-tax earnings for the full year.
Balance Sheet and Liquidity Remain Strong
Devon’s financial position remains exceptionally strong with investment-grade credit ratings and cash balances of $1.5 billion at the end of the fourth quarter. During the quarter, the company redeemed $1.9 billion in senior notes, completing the debt repayment plan associated with its portfolio transformation. At Dec. 31, the company’s net debt, excluding non-recourse EnLink obligations, totaled $7.8 billion.
2015 Outlook: Production Guidance Unchanged; E&P Capital Reduced 20 Percent
Detailed forward-looking guidance for the first quarter and full year of 2015 is provided later in the release. A notable component of this outlook is Devon’s 2015 E&P capital budget of $4.1 to $4.4 billion. This level of investment implies around a 20 percent decline in E&P spending compared to 2014 and is designed to better balance capital expenditures with expected cash inflows.
Even with reduced E&P capital investment in 2015, the company’s production growth outlook remains unchanged. With significant improvements in completion design and a capital program focused on development drilling, Devon expects to deliver oil production growth of 20 to 25 percent year over year on a retained property basis. This production outlook is driven by balanced oil growth in both the U.S. and Canada.
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 general 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 additional information, consisting of an operations report and management commentary with associated slides, to its website at www.devonenergy.com. The company’s fourth-quarter 2014 conference call will be held at 10 a.m. Central (11 a.m. Eastern) on Wednesday, Feb. 18, 2015, and will serve primarily as a forum for analyst and investor questions and answers.
Forward-Looking Statements
This press release includes "forward-looking statements" as defined by the Securities and Exchange Commission (SEC). Such statements are those concerning strategic plans, expectations and objectives for future operations. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the company expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Statements regarding future drilling and production are subject to all of the risks and uncertainties normally incident to the exploration for and development and production of oil and gas. These risks include, but are not limited to, the volatility of oil, natural gas and NGL prices; uncertainties inherent in estimating oil, natural gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; unforeseen changes in the rate of production from our oil and gas properties; uncertainties in future exploration and drilling results; uncertainties inherent in estimating the cost of drilling and completing wells; drilling risks; competition for leases, materials, people and capital; midstream capacity constraints and potential interruptions in production; risk related to our hedging activities; environmental risks; political changes; changes in laws or regulations; our limited control over third parties who operate our oil and gas properties; our ability to successfully complete mergers, acquisitions and divestitures; and other risks identified in our Form 10-K and our other filings with the SEC. Investors are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from those projected in the forward-looking statements. The forward-looking statements in this press release are made as of the date of this press release, even if subsequently made available by Devon on its website or otherwise. Devon does not undertake any obligation to update the forward-looking statements as a result of new information, future events or otherwise.
The SEC permits oil and gas companies, in their filings with the SEC, to disclose only proved, probable and possible reserves that meet the SEC's definitions for such terms, and price and cost sensitivities for such reserves, and prohibits disclosure of resources that do not constitute such reserves. This release may contain certain terms, such as resource potential and exploration target size. These estimates are by their nature more speculative than estimates of proved, probable and possible reserves and accordingly are subject to substantially greater risk of being actually realized. The SEC guidelines strictly prohibit us from including these estimates in filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K, available at www.devonenergy.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or from the SEC’s website at www.sec.gov.
About Devon Energy
Devon Energy Corp. (NYSE: DVN) is a leading independent energy company engaged in finding and producing oil and natural gas. Based in Oklahoma City and included in the S&P 500, Devon operates in several of the most prolific oil and natural gas plays in the U.S. and Canada with an emphasis on a balanced portfolio. The company is the second-largest oil producer among North American onshore independents. For more information, please visit www.devonenergy.com.
DEVON ENERGY CORPORATION
FINANCIAL AND OPERATIONAL INFORMATION
| Quarter Ended | Year Ended | |||||||||||||||
| PRODUCTION NET OF ROYALTIES | December 31, | December 31, | ||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||
| Oil / Bitumen (MBbls/d) | ||||||||||||||||
| United States | 146 | 80 | 127 | 73 | ||||||||||||
| Canada | 93 | 81 | 82 | 79 | ||||||||||||
| Retained assets | 239 | 161 | 209 | 152 | ||||||||||||
| Divested assets | - | 16 | 5 | 16 | ||||||||||||
| Total Oil / Bitumen | 239 | 177 | 214 | 168 | ||||||||||||
| Natural Gas (MMcf/d) | ||||||||||||||||
| United States | 1,684 | 1,639 | 1,662 | 1,658 | ||||||||||||
| Canada | 23 | 28 | 23 | 28 | ||||||||||||
| Retained assets | 1,707 | 1,667 | 1,685 | 1,686 | ||||||||||||
| Divested assets | 3 | 661 | 235 | 707 | ||||||||||||
| Total Natural Gas | 1,710 | 2,328 | 1,920 | 2,393 | ||||||||||||
| Natural Gas Liquids (MBbls/d) | ||||||||||||||||
| United States | 141 | 114 | 132 | 107 | ||||||||||||
| Divested assets | - | 18 | 7 | 19 | ||||||||||||
| Total Natural Gas Liquids | 141 | 132 | 139 | 126 | ||||||||||||
| Oil Equivalent (Mboe/d) | ||||||||||||||||
| United States | 567 | 467 | 536 | 456 | ||||||||||||
| Canada | 97 | 86 | 86 | 85 | ||||||||||||
| Retained assets | 664 | 553 | 622 | 541 | ||||||||||||
| Divested assets | 1 | 143 | 51 | 152 | ||||||||||||
| Total Oil Equivalent | 665 | 696 | 673 | 693 | ||||||||||||
| KEY OPERATING STATISTICS BY REGION | ||||||||||||
| Quarter Ended December 31, 2014 | ||||||||||||
| Avg. Production | Gross Wells | Operated Rigs at | ||||||||||
| (MBoe/d) | Drilled | December 31, 2014 | ||||||||||
| Permian Basin | 98 | 80 | 18 | |||||||||
| Eagle Ford | 98 | 78 | 3 | |||||||||
| Canadian Heavy Oil | 97 | 78 | 11 | |||||||||
| Barnett Shale | 201 | 14 | - | |||||||||
| Anadarko Basin | 100 | 30 | 5 | |||||||||
| Mississippian-Woodford Trend | 20 | 53 | 2 | |||||||||
| Rockies | 19 | 9 | 4 | |||||||||
| Other Assets | 31 | 4 | - | |||||||||
| Retained Assets - Total | 664 | 346 | 43 | |||||||||
| Divested assets | 1 | - | - | |||||||||
| Devon - Total | 665 | 346 | 43 | |||||||||
| Year Ended December 31, 2014 | ||||||||||||
| Avg. Production | Gross Wells | |||||||||||
| (MBoe/d) | Drilled | |||||||||||
| Permian Basin | 96 | 324 | ||||||||||
| Eagle Ford | 65 | 242 | ||||||||||
| Canadian Heavy Oil | 86 | 205 | ||||||||||
| Barnett Shale | 208 | 84 | ||||||||||
| Anadarko Basin | 94 | 130 | ||||||||||
| Mississippian-Woodford Trend | 20 | 236 | ||||||||||
| Rockies | 20 | 40 | ||||||||||
| Other Assets | 33 | 5 | ||||||||||
| Retained Assets - Total | 622 | 1,266 | ||||||||||
| Divested assets | 51 | - | ||||||||||
| Devon - Total | 673 | 1,266 | ||||||||||
| PRODUCTION TREND | 2013 | 2014 | ||||||||||||||||||
| Quarter 4 | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | ||||||||||||||||
| Oil (MBbls/d) | ||||||||||||||||||||
| Permian Basin | 50 | 55 | 55 | 56 | 55 | |||||||||||||||
| Eagle Ford | - | 11 | 40 | 46 | 60 | |||||||||||||||
| Canadian Heavy Oil | 81 | 78 | 77 | 80 | 93 | |||||||||||||||
| Barnett Shale | 2 | 2 | 2 | 2 | 2 | |||||||||||||||
| Anadarko Basin | 9 | 9 | 11 | 10 | 10 | |||||||||||||||
| Mississippian-Woodford Trend | 8 | 10 | 9 | 10 | 9 | |||||||||||||||
| Rockies | 8 | 8 | 8 | 10 | 9 | |||||||||||||||
| Other assets | 3 | 2 | 3 | 2 | 1 | |||||||||||||||
| Retained assets | 161 | 175 | 205 | 216 | 239 | |||||||||||||||
| Divested assets | 16 | 15 | 4 | 3 | - | |||||||||||||||
| Total | 177 | 190 | 209 | 219 | 239 | |||||||||||||||
| Gas (MMcf/d) | ||||||||||||||||||||
| Permian Basin | 116 | 121 | 134 | 136 | 137 | |||||||||||||||
| Eagle Ford | - | 22 | 86 | 107 | 126 | |||||||||||||||
| Canadian Heavy Oil | 28 | 19 | 23 | 26 | 23 | |||||||||||||||
| Barnett Shale | 995 | 931 | 932 | 896 | 878 | |||||||||||||||
| Anadarko Basin | 294 | 281 | 309 | 323 | 329 | |||||||||||||||
| Mississippian-Woodford Trend | 19 | 28 | 28 | 32 | 31 | |||||||||||||||
| Rockies | 75 | 65 | 67 | 66 | 58 | |||||||||||||||
| Other assets | 140 | 140 | 135 | 130 | 125 | |||||||||||||||
| Retained assets | 1,667 | 1,607 | 1,714 | 1,716 | 1,707 | |||||||||||||||
| Divested assets | 661 | 585 | 217 | 138 | 3 | |||||||||||||||
| Total | 2,328 | 2,192 | 1,931 | 1,854 | 1,710 | |||||||||||||||
| NGL (MBbls/d) | ||||||||||||||||||||
| Permian Basin | 16 | 16 | 18 | 19 | 20 | |||||||||||||||
| Eagle Ford | - | 3 | 10 | 14 | 18 | |||||||||||||||
| Canadian Heavy Oil | - | - | - | - | - | |||||||||||||||
| Barnett Shale | 56 | 55 | 55 | 54 | 53 | |||||||||||||||
| Anadarko Basin | 27 | 29 | 31 | 34 | 34 | |||||||||||||||
| Mississippian-Woodford Trend | 3 | 5 | 5 | 6 | 6 | |||||||||||||||
| Rockies | 1 | 1 | 1 | 1 | 1 | |||||||||||||||
| Other assets | 11 | 10 | 10 | 10 | 9 | |||||||||||||||
| Retained assets | 114 | 119 | 130 | 138 | 141 | |||||||||||||||
| Divested assets | 18 | 16 | 6 | 5 | - | |||||||||||||||
| Total | 132 | 135 | 136 | 143 | 141 | |||||||||||||||
| Combined (MBoe/d) | ||||||||||||||||||||
| Permian Basin | 86 | 91 | 95 | 98 | 98 | |||||||||||||||
| Eagle Ford | - | 17 | 65 | 78 | 98 | |||||||||||||||
| Canadian Heavy Oil | 86 | 81 | 81 | 84 | 97 | |||||||||||||||
| Barnett Shale | 224 | 213 | 212 | 205 | 201 | |||||||||||||||
| Anadarko Basin | 85 | 85 | 93 | 98 | 100 | |||||||||||||||
| Mississippian-Woodford Trend | 14 | 19 | 18 | 21 | 20 | |||||||||||||||
| Rockies | 21 | 20 | 21 | 22 | 19 | |||||||||||||||
| Other assets | 37 | 37 | 35 | 34 | 31 | |||||||||||||||
| Retained assets | 553 | 563 | 620 | 640 | 664 | |||||||||||||||
| Divested assets | 143 | 128 | 47 | 31 | 1 | |||||||||||||||
| Total | 696 | 691 | 667 | 671 | 665 | |||||||||||||||
| BENCHMARK PRICES | ||||||||||||||||||||||
| (average prices) | Quarter 4 | December YTD | ||||||||||||||||||||
| FY2014 | FY2013 | FY2014 | FY2013 | |||||||||||||||||||
| Natural Gas ($/Mcf) - Henry Hub | $ | 4.04 | $ | 3.60 | $ | 4.43 | $ | 3.65 | ||||||||||||||
| Oil ($/Bbl) - West Texas Intermediate (Cushing) | $ | 73.05 | $ | 97.53 | $ | 93.01 | $ | 98.02 | ||||||||||||||
| REALIZED PRICES | Quarter Ended December 31, 2014 | |||||||||||||||||||||
| Oil /Bitumen | Gas | NGL | Total | |||||||||||||||||||
| (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | |||||||||||||||||||
| United States | $ | 68.19 | $ | 3.53 | $ | 17.79 | $ | 32.45 | ||||||||||||||
| Canada (1) | $ | 45.71 | $ | 0.87 | $ | 54.32 | $ | 44.01 | ||||||||||||||
| Realized price without hedges | $ | 59.46 | $ | 3.49 | $ | 17.75 | $ | 34.14 | ||||||||||||||
| Cash settlements | $ | 10.34 | $ | 0.20 | $ | 0.04 | $ | 4.23 | ||||||||||||||
| Realized price, including cash settlements | $ | 69.80 | $ | 3.69 | $ | 17.79 | $ | 38.37 | ||||||||||||||
| Quarter Ended December 31, 2013 | ||||||||||||||||||||||
| Oil /Bitumen | Gas | NGL | Total | |||||||||||||||||||
| (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | |||||||||||||||||||
| United States | $ | 96.04 | $ | 3.01 | $ | 27.51 | $ | 32.96 | ||||||||||||||
| Canada (1) | $ | 48.50 | $ | 3.07 | $ | 45.00 | $ | 35.74 | ||||||||||||||
| Realized price without hedges | $ | 71.45 | $ | 3.02 | $ | 28.73 | $ | 33.65 | ||||||||||||||
| Cash settlements | $ | 3.33 | $ | 0.23 | $ | (0.19 | ) | $ | 1.59 | |||||||||||||
| Realized price, including cash settlements | $ | 74.78 | $ | 3.25 | $ | 28.54 | $ | 35.24 | ||||||||||||||
| Year Ended December 31, 2014 | ||||||||||||||||||||||
| Oil | Gas | NGL | Total | |||||||||||||||||||
| (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | |||||||||||||||||||
| United States | $ | 85.64 | $ | 3.92 | $ | 24.46 | $ | 37.96 | ||||||||||||||
| Canada (1) | $ | 60.05 | $ | 3.64 | $ | 50.52 | $ | 53.11 | ||||||||||||||
| Realized price without hedges | $ | 75.55 | $ | 3.90 | $ | 24.89 | $ | 40.33 | ||||||||||||||
| Cash settlements | $ | 1.16 | $ | (0.05 | ) | $ | 0.02 | $ | 0.22 | |||||||||||||
| Realized price, including cash settlements | $ | 76.71 | $ | 3.85 | $ | 24.91 | $ | 40.55 | ||||||||||||||
| Year Ended December 31, 2013 | ||||||||||||||||||||||
| Oil | Gas | NGL | Total | |||||||||||||||||||
| (Per Bbl) | (Per Mcf) | (Per Bbl) | (Per Boe) | |||||||||||||||||||
| United States | $ | 94.52 | $ | 3.10 | $ | 25.75 | $ | 31.59 | ||||||||||||||
| Canada (1) | $ | 57.18 | $ | 3.05 | $ | 46.17 | $ | 39.91 | ||||||||||||||
| Realized price without hedges | $ | 74.41 | $ | 3.09 | $ | 27.33 | $ | 33.70 | ||||||||||||||
| Cash settlements | $ | 0.90 | $ | 0.16 | $ | 0.01 | $ | 0.77 | ||||||||||||||
| Realized price, including cash settlements | $ | 75.31 | $ | 3.25 | $ | 27.34 | $ | 34.47 | ||||||||||||||
(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 OPERATIONS | ||||||||||||||||||||||||
| (in millions, except per share amounts) | Quarter Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
| Oil, gas and NGL sales | $ | 2,086 | $ | 2,155 | $ | 9,910 | $ | 8,522 | ||||||||||||||||
| Oil, gas and NGL derivatives | 1,960 | (96 | ) | 1,989 | (191 | ) | ||||||||||||||||||
| Marketing and midstream revenues | 1,949 | 565 | 7,667 | 2,066 | ||||||||||||||||||||
| Total operating revenues | 5,995 | 2,624 | 19,566 | 10,397 | ||||||||||||||||||||
| Lease operating expenses | 568 | 584 | 2,332 | 2,268 | ||||||||||||||||||||
| Marketing and midstream operating expenses | 1,723 | 425 | 6,815 | 1,553 | ||||||||||||||||||||
| General and administrative expenses | 252 | 157 | 847 | 617 | ||||||||||||||||||||
| Production and property taxes | 108 | 108 | 535 | 461 | ||||||||||||||||||||
| Depreciation, depletion and amortization | 910 | 711 | 3,319 | 2,780 | ||||||||||||||||||||
| Asset impairments | 1,953 | 16 | 1,953 | 1,976 | ||||||||||||||||||||
| Restructuring costs | 2 | 4 | 46 | 54 | ||||||||||||||||||||
| Gains and losses on asset sales | - | (2 | ) | (1,072 | ) | 9 | ||||||||||||||||||
| Other operating items | 19 | 30 | 93 | 112 | ||||||||||||||||||||
| Total operating expenses | 5,535 | 2,033 | 14,868 | 9,830 | ||||||||||||||||||||
| Operating income | 460 | 591 | 4,698 | 567 | ||||||||||||||||||||
| Net financing costs | 167 | 111 | 526 | 417 | ||||||||||||||||||||
| Other nonoperating items | 2 | 5 | 113 | 1 | ||||||||||||||||||||
| Earnings from continuing operations before income taxes | 291 | 475 | 4,059 | 149 | ||||||||||||||||||||
| Income tax expense | 670 | 268 | 2,368 | 169 | ||||||||||||||||||||
| Net earnings (loss) | (379 | ) | 207 | 1,691 | (20 | ) | ||||||||||||||||||
| Net earnings attributable to noncontrolling interests | 29 | - | 84 | - | ||||||||||||||||||||
| Net earnings (loss) attributable to Devon | $ | (408 | ) | $ | 207 | $ | 1,607 | $ | (20 | ) | ||||||||||||||
| Net earnings (loss) per share attributable to Devon: | ||||||||||||||||||||||||
| Basic earnings (loss) from discontinued operations per share | $ | (1.01 | ) | $ | 0.51 | $ | 3.93 | $ | (0.06 | ) | ||||||||||||||
| Diluted earnings (loss) from continuing operations per share | $ | (1.01 | ) | $ | 0.51 | $ | 3.91 | $ | (0.06 | ) | ||||||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||||||
| Basic | 409 | 406 | 409 | 406 | ||||||||||||||||||||
| Diluted | 409 | 407 | 411 | 406 | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||
|
Quarter Ended December 31, 2014 |
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| Devon U.S. & | ||||||||||||||||||||||||
| Canada | EnLink | Eliminations | Total | |||||||||||||||||||||
| Oil, gas and NGL sales | $ | 2,086 | $ | - | $ | - | $ | 2,086 | ||||||||||||||||
| Oil, gas and NGL derivatives | 1,960 | - | - | 1,960 | ||||||||||||||||||||
| Marketing and midstream revenues | 1,141 | 995 | (187 | ) | 1,949 | |||||||||||||||||||
| Total operating revenues | 5,187 | 995 | (187 | ) | 5,995 | |||||||||||||||||||
| Lease operating expenses | 568 | - | - | 568 | ||||||||||||||||||||
| Marketing and midstream expenses | 1,139 | 771 | (187 | ) | 1,723 | |||||||||||||||||||
| General and administrative expenses | 222 | 30 | - | 252 | ||||||||||||||||||||
| Production and property taxes | 100 | 8 | - | 108 | ||||||||||||||||||||
| Depreciation, depletion and amortization | 826 | 84 | - | 910 | ||||||||||||||||||||
| Asset impairments | 1,953 | - | - | 1,953 | ||||||||||||||||||||
| Restructuring costs | 2 | - | - | 2 | ||||||||||||||||||||
| Other operating items | 19 | - | - | 19 | ||||||||||||||||||||
| Total operating expenses | 4,829 | 893 | (187 | ) | 5,535 | |||||||||||||||||||
| Operating income | 358 | 102 | - | 460 | ||||||||||||||||||||
| Net financing costs | 147 | 20 | - | 167 | ||||||||||||||||||||
| Other nonoperating items | 9 | (7 | ) | - | 2 | |||||||||||||||||||
| Earnings before income taxes | 202 | 89 | - | 291 | ||||||||||||||||||||
| Income tax expense | 654 | 16 | - | 670 | ||||||||||||||||||||
| Net earnings (loss) | (452 | ) | 73 | - | (379 | ) | ||||||||||||||||||
| Net earnings attributable to noncontrolling interests | - | 29 | - | 29 | ||||||||||||||||||||
| Net earnings (loss) attributable to Devon | $ | (452 | ) | $ | 44 | $ | - | $ | (408 | ) | ||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||||||
| (in millions) | Quarter Ended | Year Ended | ||||||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||||||
| 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||||
| Net earnings (loss) | $ | (379 | ) | $ | 207 | $ | 1,691 | $ | (20 | ) | ||||||||||||||
| Adjustments to reconcile earnings (loss) from continuing operations | ||||||||||||||||||||||||
| to net cash from operating activities: | ||||||||||||||||||||||||
| Depreciation, depletion and amortization | 910 | 711 | 3,319 | 2,780 | ||||||||||||||||||||
| Asset impairments | 1,953 | 16 | 1,953 | 1,976 | ||||||||||||||||||||
| Gains and losses on asset sales | - | (2 | ) | (1,072 | ) | 9 | ||||||||||||||||||
| Deferred income tax expense |
1,091 |
278 | 1,891 | 97 | ||||||||||||||||||||
| Derivatives and other financial instruments | (2,027 | ) | 70 | (2,070 | ) | 135 | ||||||||||||||||||
| Cash settlements on derivatives and financial instruments | 305 | 130 | 104 | 277 | ||||||||||||||||||||
| Other noncash charges | 100 | 114 | 457 | 309 | ||||||||||||||||||||
| Net change in working capital | (716 | ) | (194 | ) | 50 | (298 | ) | |||||||||||||||||
| Change in long-term other assets | (306 | ) | 38 | (421 | ) | 10 | ||||||||||||||||||
| Change in long-term other liabilities | 32 | 69 | 79 | 161 | ||||||||||||||||||||
| Net cash from operating activities |
963 |
1,437 | 5,981 | 5,436 | ||||||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||||||
| Capital expenditures | (1,975 | ) | (1,539 | ) | (6,988 | ) | (6,758 | ) | ||||||||||||||||
| Acquisitions of property, equipment and businesses | (207 | ) | - | (6,462 | ) | - | ||||||||||||||||||
| Proceeds from property and equipment divestitures | (82 | ) | 103 | 5,120 | 419 | |||||||||||||||||||
| Purchases of short-term investments | - | - | - | (1,076 | ) | |||||||||||||||||||
| Redemptions of short-term investments | - | - | - | 3,419 | ||||||||||||||||||||
| Redemptions of long-term investments | - | - | 57 | - | ||||||||||||||||||||
| Other | 2 | (86 | ) | 89 | (3 | ) | ||||||||||||||||||
| Net cash from investing activities | (2,262 | ) | (1,522 | ) | (8,184 | ) | (3,999 | ) | ||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||||
| Proceeds from borrowings of long-term debt, net of issuance costs | 1,182 | 2,233 | 5,340 | 2,233 | ||||||||||||||||||||
|
Net short-term debt borrowings (repayments) |
933 | (295 | ) | (385 | ) | (1,872 | ) | |||||||||||||||||
| Long-term debt repayments | (2,924 | ) | - | (7,189 | ) | - | ||||||||||||||||||
| Proceeds from stock option exercises | 1 | 2 | 93 | 3 | ||||||||||||||||||||
| Proceeds from issuance of subsidiary units | 338 | - | 410 | - | ||||||||||||||||||||
| Dividends paid on common stock | (99 | ) | (89 | ) | (386 | ) | (348 | ) | ||||||||||||||||
| Distributions to noncontrolling interests | (48 | ) | - | (235 | ) | - | ||||||||||||||||||
| Other |
2 |
(1 | ) | (2 | ) | 4 | ||||||||||||||||||
| Net cash from financing activities |
(615 |
) | 1,850 | (2,354 | ) | 20 | ||||||||||||||||||
| Effect of exchange rate changes on cash | (14 | ) | (19 | ) | (29 | ) | (28 | ) | ||||||||||||||||
| Net change in cash and cash equivalents | (1,928 | ) | 1,746 | (4,586 | ) | 1,429 | ||||||||||||||||||
| Cash and cash equivalents at beginning of period | 3,408 | 4,320 | 6,066 | 4,637 | ||||||||||||||||||||
| Cash and cash equivalents at end of period | $ | 1,480 | $ | 6,066 | $ | 1,480 | $ | 6,066 | ||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (in millions) | ||||||||||||
| December 31, | December 31, | |||||||||||
| Current assets: | 2014 | 2013 | ||||||||||
| Cash and cash equivalents | $ | 1,480 | $ | 6,066 | ||||||||
| Accounts receivable | 1,959 | 1,520 | ||||||||||
| Derivatives, at fair value | 1,993 | 75 | ||||||||||
| Income taxes receivable | 522 | 89 | ||||||||||
| Other current assets | 544 | 255 | ||||||||||
| Total current assets | 6,498 | 8,005 | ||||||||||
| Property and equipment, at cost: | ||||||||||||
| Oil and gas, based on full cost accounting: | ||||||||||||
| Subject to amortization | 75,738 | 73,995 | ||||||||||
| Not subject to amortization | 2,752 | 2,791 | ||||||||||
| Total oil and gas | 78,490 | 76,786 | ||||||||||
| Midstream and other | 9,695 | 6,195 | ||||||||||
| Total property and equipment, at cost | 88,185 | 82,981 | ||||||||||
| Less accumulated depreciation, depletion and amortization | (51,889 | ) | (54,534 | ) | ||||||||
| Property and equipment, net | 36,296 | 28,447 | ||||||||||
| Goodwill | 6,303 | 5,858 | ||||||||||
| Other long-term assets | 1,540 | 567 | ||||||||||
| Total assets | $ | 50,637 | $ | 42,877 | ||||||||
| Current liabilities: | ||||||||||||
| Accounts payable | 1,400 | 1,229 | ||||||||||
| Revenues and royalties payable | 1,193 | 786 | ||||||||||
| Short-term debt | 1,432 | 4,066 | ||||||||||
| Deferred income taxes | 730 | 19 | ||||||||||
| Other current liabilities | 1,180 | 555 | ||||||||||
| Total current liabilities | 5,935 | 6,655 | ||||||||||
| Long-term debt | 9,830 | 7,956 | ||||||||||
| Asset retirement obligations | 1,339 | 2,140 | ||||||||||
| Other long-term liabilities | 948 | 834 | ||||||||||
| Deferred income taxes | 6,244 | 4,793 | ||||||||||
| Stockholders' equity: | ||||||||||||
| Common Stock | 41 | 41 | ||||||||||
| Additional paid-in capital | 4,088 | 3,780 | ||||||||||
| Retained earnings | 16,631 | 15,410 | ||||||||||
| Accumulated other comprehensive earnings | 779 | 1,268 | ||||||||||
| Total stockholders' equity attributable to Devon | 21,539 | 20,499 | ||||||||||
| Noncontrolling interests | 4,802 | - | ||||||||||
| Total stockholders' equity | 26,341 | 20,499 | ||||||||||
| Total liabilities and stockholders' equity | $ | 50,637 | $ | 42,877 | ||||||||
| Common shares outstanding | 409 | 406 | ||||||||||
| CAPITAL EXPENDITURES | |||||||||||||||
| (in millions) | Quarter Ended December 31, 2014 | ||||||||||||||
| U.S. | Canada | Total | |||||||||||||
| Exploration | $ | 105 | $ | 6 | $ | 111 | |||||||||
| Development | 1,243 | 224 | 1,467 | ||||||||||||
| Exploration and development capital | $ | 1,348 | $ | 230 | $ | 1,578 | |||||||||
| Capitalized G&A | 108 | ||||||||||||||
| Capitalized interest | 13 | ||||||||||||||
| Acquisitions | 10 | ||||||||||||||
| Devon midstream capital | 37 | ||||||||||||||
| Other capital | 40 | ||||||||||||||
| Total (1) | $ | 1,786 | |||||||||||||
| (1) Excludes $479 million attributable to EnLink. | |||||||||||||||
| Year Ended December 31, 2014 | |||||||||||||||
| U.S. | Canada | Total | |||||||||||||
| Exploration | $ | 292 | $ | 40 | $ | 332 | |||||||||
| Development | 4,115 | 908 | 5,023 | ||||||||||||
| Exploration and development capital | $ | 4,407 | $ | 948 | $ | 5,355 | |||||||||
| Capitalized G&A | 376 | ||||||||||||||
| Capitalized interest | 45 | ||||||||||||||
| Eagle Ford, Cana and other acquisitions | 6,376 | ||||||||||||||
| Devon midstream capital | 312 | ||||||||||||||
| Other capital | 125 | ||||||||||||||
| Total (1) | $ | 12,589 | |||||||||||||
| (1) Excludes $970 million attributable to EnLink. | |||||||||||||||
| COSTS INCURRED | Total | |||||||||
| (in millions) | Year Ended December 31, | |||||||||
| 2014 | 2013 | |||||||||
| Property acquisition costs: | ||||||||||
| Proved properties | $ | 5,210 | $ | 22 | ||||||
| Unproved properties | 1,177 | 216 | ||||||||
| Exploration costs | 322 | 595 | ||||||||
| Development costs | 5,463 | 5,089 | ||||||||
| Costs Incurred | $ | 12,172 | $ | 5,922 | ||||||
| United States | ||||||||||
| Year Ended December 31, | ||||||||||
| 2014 | 2013 | |||||||||
| Property acquisition costs: | ||||||||||
| Proved properties | $ | 5,210 | $ | 19 | ||||||
| Unproved properties | 1,176 | 213 | ||||||||
| Exploration costs | 270 | 443 | ||||||||
| Development costs | 4,400 | 3,838 | ||||||||
| Costs Incurred | $ | 11,056 | $ | 4,513 | ||||||
| Canada | ||||||||||
| Year Ended December 31, | ||||||||||
| 2014 | 2013 | |||||||||
| Property acquisition costs: | ||||||||||
| Proved properties | $ | — | $ | 3 | ||||||
| Unproved properties | 1 | 3 | ||||||||
| Exploration costs | 52 | 152 | ||||||||
| Development costs | 1,063 | 1,251 | ||||||||
| Costs Incurred | $ | 1,116 | $ | 1,409 | ||||||
| RESERVES RECONCILIATION | ||||||||||||||||
| Total | ||||||||||||||||
| Oil / Bitumen | Gas | NGL | Total | |||||||||||||
| (MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | |||||||||||||
| As of December 31, 2013: | ||||||||||||||||
| Proved developed | 361 | 8,459 | 491 | 2,262 | ||||||||||||
| Proved undeveloped | 476 | 849 | 84 | 701 | ||||||||||||
| Total Proved | 837 | 9,308 | 575 | 2,963 | ||||||||||||
| Revisions due to prices | (38) | 236 | 8 | 9 | ||||||||||||
| Revisions other than price | (19) | (295) | 2 | (65) | ||||||||||||
| Extensions and discoveries | 107 | 343 | 47 | 211 | ||||||||||||
| Purchase of reserves | 132 | 457 | 57 | 265 | ||||||||||||
| Production | (78) | (701) | (51) | (246) | ||||||||||||
| Sale of reserves | (46) | (1,661) | (60) | (383) | ||||||||||||
| As of December 31, 2014: | ||||||||||||||||
| Proved developed | 415 | 6,984 | 486 | 2,065 | ||||||||||||
| Proved undeveloped | 480 | 703 | 92 | 689 | ||||||||||||
| Total Proved | 895 | 7,687 | 578 | 2,754 | ||||||||||||
| United States | ||||||||||||||||
| Oil / Bitumen | Gas | NGL | Total | |||||||||||||
| (MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | |||||||||||||
| As of December 31, 2013: | ||||||||||||||||
| Proved developed | 194 | 7,707 | 468 | 1,947 | ||||||||||||
| Proved undeveloped | 35 | 843 | 84 | 258 | ||||||||||||
| Total Proved | 229 | 8,550 | 552 | 2,205 | ||||||||||||
| Revisions due to prices | (1) | 191 | 7 | 38 | ||||||||||||
| Revisions other than price | (38) | (299) | 2 | (86) | ||||||||||||
| Extensions and discoveries | 94 | 335 | 47 | 197 | ||||||||||||
| Purchase of reserves | 132 | 457 | 57 | 265 | ||||||||||||
| Production | (48) | (660) | (50) | (207) | ||||||||||||
| Sale of reserves | (17) | (923) | (37) | (207) | ||||||||||||
| As of December 31, 2014: | ||||||||||||||||
| Proved developed | 255 | 6,948 | 486 | 1,900 | ||||||||||||
| Proved undeveloped | 96 | 703 | 92 | 305 | ||||||||||||
| Total Proved | 351 | 7,651 | 578 | 2,205 | ||||||||||||
| Canada | ||||||||||||||||
| Oil / Bitumen | Gas | NGL | Total | |||||||||||||
| (MMBbls) | (Bcf) | (MMBbls) | (MMBoe) | |||||||||||||
| As of December 31, 2013: | ||||||||||||||||
| Proved developed | 167 | 752 | 23 | 315 | ||||||||||||
| Proved undeveloped | 441 | 6 | — | 443 | ||||||||||||
| Total Proved | 608 | 758 | 23 | 758 | ||||||||||||
| Revisions due to prices | (37) | 45 | 1 | (29) | ||||||||||||
| Revisions other than price | 19 | 4 | — | 21 | ||||||||||||
| Extensions and discoveries | 13 | 8 | — | 14 | ||||||||||||
| Purchase of reserves | — | — | — | — | ||||||||||||
| Production | (30) | (41) | (1) | (39) | ||||||||||||
| Sale of reserves | (29) | (738) | (23) | (176) | ||||||||||||
| As of December 31, 2014: | ||||||||||||||||
| Proved developed | 160 | 36 | — | 165 | ||||||||||||
| Proved undeveloped | 384 | — | — | 384 | ||||||||||||
| Total Proved | 544 | 36 | — | 549 | ||||||||||||
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 analyst in their published estimates of the company’s financial results. 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 tables summarize the effects of these items on fourth-quarter and total-year 2014 earnings.
| Quarter Ended December 31, 2014 | |||||||||||
| Before-Tax | After-Tax | ||||||||||
| Net loss attributable to Devon (GAAP) | $ | (408 | ) | ||||||||
| Asset impairments | 1,953 | 1,948 | |||||||||
| Fair value changes in financial instruments and foreign currency | (1,721 | ) | (1,086 | ) | |||||||
| Gain on asset sales and related repatriation | - | (143 | ) | ||||||||
| Early retirement of debt | 48 | 31 | |||||||||
| Restructuring costs | 2 | 1 | |||||||||
| Core earnings attributable to Devon (Non-GAAP) | $ | 343 | |||||||||
| Diluted share count | 411 | ||||||||||
| Core diluted earnings per share attributable to Devon (Non-GAAP) | $ | 0.83 | |||||||||
| Year Ended December 31, 2014 | |||||||||||
| Before-Tax | After-Tax | ||||||||||
| Net earnings attributable to Devon (GAAP) | $ | 1,607 | |||||||||
| Asset impairments | 1,953 | 1,948 | |||||||||
| Fair value changes in financial instruments and foreign currency | (1,945 | ) | (1,231 | ) | |||||||
| Gain on asset sales and related repatriation | (955 | ) | (421 | ) | |||||||
| Investment in EnLink deferred income tax | - | 48 | |||||||||
| Restructuring costs | 46 | 35 | |||||||||
| Early retirement of debt | 48 | 31 | |||||||||
| Core earnings attributable to Devon (Non-GAAP) | $ | 2,017 | |||||||||
| Diluted share count | 411 | ||||||||||
| Core diluted earnings per share attributable to Devon (Non-GAAP) | $ | 4.91 | |||||||||
NET DEBT
(in millions)
Devon defines net debt as debt less cash and cash equivalents as presented in the following table. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash to repay debt.
| December 31, | ||||||||||
| 2014 | 2013 | |||||||||
| Total debt (GAAP) | $ | 11,262 | $ | 12,022 | ||||||
| Adjustments: | ||||||||||
| Cash and cash equivalents | 1,480 | 6,066 | ||||||||
| Net debt (Non-GAAP) | $ | 9,782 | $ | 5,956 | ||||||
| PRODUCTION GUIDANCE | Quarter 1 | Full Year | ||||||||||||||
| Low | High | Low | High | |||||||||||||
| Oil and bitumen (MBbls/d) | ||||||||||||||||
| United States | 150 | 155 | 150 | 155 | ||||||||||||
| Canada | 100 | 105 | 100 | 105 | ||||||||||||
| Total | 250 | 260 | 250 | 260 | ||||||||||||
| Natural gas (MMcf/d) | ||||||||||||||||
| United States | 1,600 | 1,650 | 1,550 | 1,600 | ||||||||||||
| Canada | 20 | 20 | 20 | 20 | ||||||||||||
| Total | 1,620 | 1,670 | 1,570 | 1,620 | ||||||||||||
| Natural gas liquids (MBbls/d) | ||||||||||||||||
| United States | 130 | 135 | 126 | 132 | ||||||||||||
| Total Boe (MBoe/d) | ||||||||||||||||
| United States | 547 | 565 | 534 | 554 | ||||||||||||
| Canada | 103 | 108 | 103 | 108 | ||||||||||||
| Total | 650 | 673 | 637 | 662 | ||||||||||||
| PRICE REALIZATIONS GUIDANCE | Quarter 1 | Full Year | ||||||||||||||||||||||
| Low | High | Low | High | |||||||||||||||||||||
| Oil and bitumen - % of WTI | ||||||||||||||||||||||||
| United States | 83 | % | 93 | % | 85 | % | 95 | % | ||||||||||||||||
| Canada | 46 | % | 56 | % | 55 | % | 65 | % | ||||||||||||||||
| Natural gas - % of Henry Hub | 83 | % | 93 | % | 83 | % | 93 | % | ||||||||||||||||
| NGL - realized price | $ | 9 | $ | 14 | $ | 8 | $ | 18 | ||||||||||||||||
| OTHER GUIDANCE ITEMS | Quarter 1 | Full Year | ||||||||||||||||||||||
| ($ millions, except Boe) | Low | High | Low | High | ||||||||||||||||||||
| Marketing & midstream operating profit | $ | 180 | $ | 210 | $ | 860 | $ | 920 | ||||||||||||||||
| Lease operating expenses per Boe | $ | 9.60 | $ | 10.20 | $ | 9.70 | $ | 10.30 | ||||||||||||||||
| General & administrative expenses per Boe | $ | 4.00 | $ | 4.30 | $ | 3.75 | $ | 4.25 | ||||||||||||||||
| Production and property taxes as % of upstream sales | 7.1 | % | 8.1 | % | 6.7 | % | 7.7 | % | ||||||||||||||||
| Depreciation, depletion and amortization per Boe | $ | 14.75 | $ | 15.75 | $ | 15.25 | $ | 16.25 | ||||||||||||||||
|
Other operating items |
$ |
20 |
$ |
25 |
$ |
80 |
$ |
100 |
||||||||||||||||
| Net financing costs | $ | 110 | $ | 130 | $ | 440 | $ | 500 | ||||||||||||||||
| Current income tax rate |
5.0 |
% | 10.0 | % |
5.0 |
% | 10.0 | % | ||||||||||||||||
| Deferred income tax rate |
25.0 |
% |
30.0 |
% |
25.0 |
% |
30.0 |
% | ||||||||||||||||
| Total income tax rate |
30.0 |
% |
40.0 |
% |
30.0 |
% |
40.0 |
% | ||||||||||||||||
| Net earnings attributable to noncontrolling interests | $ | — | $ | 20 | $ | 50 | $ | 100 | ||||||||||||||||
| CAPITAL EXPENDITURES GUIDANCE | Quarter 1 | Full Year | ||||||||||||||||||
| (in millions) | Low | High | Low | High | ||||||||||||||||
| Exploration and development | $ |
1,300 |
$ |
1,400 |
$ | 4,100 | $ | 4,400 | ||||||||||||
| Capitalized G&A and interest | 100 | 120 | 400 | 500 | ||||||||||||||||
| Total oil and gas |
1,400 |
1,520 |
4,500 | 4,900 | ||||||||||||||||
| Midstream (1) | 50 | 70 | 110 | 160 | ||||||||||||||||
| Corporate and other | 30 | 40 | 100 | 150 | ||||||||||||||||
| Devon capital expenditures | $ |
1,480 |
$ |
1,630 |
$ | 4,710 | $ | 5,210 | ||||||||||||
| (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 |
||||||||||||||||||||||||||
| Q1-Q4 2015 | 107,203 | $ | 91.07 | 31,500 | $ | 89.67 | $ | 97.84 | 28,000 | $ | 116.43 | ||||||||||||||||||||||
| Q1-Q4 2016 | - | $ | - | - | $ | - | $ | - | 18,500 |
$ |
103.11 | ||||||||||||||||||||||
| Oil Basis Swaps | |||||||||||||||||||||||||||||||||
| Period | Index | Volume (Bbls/d) |
Weighted Average Differential to |
||||||||||||||||||||||||||||||
| Q1-Q4 2015 | Western Canadian Select | 31,682 | $(17.42) | ||||||||||||||||||||||||||||||
| Natural Gas Commodity Hedges | |||||||||||||||||||||||||||||||||
| Price Swaps | Price Collars | Call Options Sold | |||||||||||||||||||||||||||||||
| Period |
Volume |
Weighted |
Volume |
Weighted |
Weighted |
Volume |
Weighted |
||||||||||||||||||||||||||
| Q1-Q4 2015 | 250,000 | $ | 4.32 | 328,452 | $ | 4.05 | $ | 4.36 | 550,000 | $ | 5.09 | ||||||||||||||||||||||
| Q1-Q4 2016 | - | $ | - | - | $ | - | $ | - | 400,000 | $ | 5.00 | ||||||||||||||||||||||
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.
