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Devon reports net loss in quarterMay 1, 2013
A. Lee Graham
Devon Energy Corp. has reported a net loss of $1.3 billion, or $3.34 per common share ($3.34 per diluted share), for the quarter ended March 31, 2013.
Triggering the loss was a $1.9 billion non-cash asset impairment charge primarily related to lower oil and natural gas liquids pricing, the company said.
Adjusting for the non-cash charge and other items securities analysts often exclude from estimates, the company reported earning $270 million, or $0.66 per diluted share in the quarter.
“Our continued focus on oil production growth is successfully transitioning Devon’s production mix to a higher oil weighting, as evidenced by our first-quarter results,” said president and CEO John Richels, commenting in a news release.
“Oil and liquids production, our highest margin products, now account for 41 percent of our total production. Driven by our success in the Permian, we are on track to grow our U.S. oil production by almost 40 percent in 2013,” Richels said.
Oil production averaged 162,000 barrels per day for the quarter, a 14 percent increase compared to the first quarter of 2012 and an 8 percent increase over fourth-quarter 2012. Driven by Permian Basin activity, the greatest growth came from the company’s U.S. operations, where oil production increased 23 percent year over year.
Total oil, natural gas and natural gas liquids production surged to an average of 687,000 oil-equivalent barrels per day in the first quarter. That surpassed the top end of the company’s guidance by 2,000 barrels per day.
Devon’s marketing and midstream operating profit reached $125 million in the first quarter of 2013, exceeding the company’s guidance and representing a 12 percent increase compared with the first quarter of 2012.
Devon increased its natural gas hedging position as natural gas pricing has risen. For the remaining three quarters of 2013, the company has protected 1.7 billion cubic feet per day, representing about 75 percent of its expected natural gas production.
The company also raised its oil hedging position for the year. For the balance of 2013, Devon has entered into contracts to hedge 135,000 barrels per day of oil production.
Devon Energy Corp., based in Oklahoma City, is an independent oil and gas exploration and production company. More information is available at www.devonenergy.com.