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Permalink Reply by DJG on February 17, 2010 at 4:55

Full press release at this link:
http://phx.corporate-ir.net/phoenix.zhtml?c=67097&p=irol-newsAr...


PDF of SEC filing:
http://ccbn.10kwizard.com/xml/download.php?repo=tenk&ipage=6769...


Excerpt:
=================

Devon Energy Reports 2009 Financial Results, Record Production and Record Proved Reserves
OKLAHOMA CITY, Feb 17, 2010 /PRNewswire via COMTEX/ -- Devon Energy Corporation (NYSE: DVN) today reported 2009 full-year and fourth-quarter financial results. The company also reported that its 2009 full-year oil and gas production from continuing operations reached an all-time high. In addition, Devon reported record-high proved oil and natural gas reserves at December 31, 2009. Production and changes to proved reserves are discussed in more detail later in this report.
For the year ended December 31, 2009, Devon reported a net loss of $2.5 billion, or $5.58 per common share ($5.58 per diluted common share). Devon's 2009 financial results were impacted by certain items securities analysts typically exclude from their published estimates. The most significant of these items was a $4.2 billion after-tax reduction of the carrying value of oil and gas properties recorded in the first quarter of 2009. This was the result of a non-cash, full-cost ceiling adjustment. The charge resulted from application of the ceiling test as prescribed by the Securities and Exchange Commission for companies that follow the full-cost method of accounting.

Excluding the reduction of carrying value of oil and gas properties and other adjusting items, Devon earned $1.8 billion or $4.03 per diluted common share in 2009. The adjusting items are discussed in more detail later in this news release.

For the year ended December 31, 2008, Devon reported a net loss of $2.1 billion, or $4.85 per common share ($4.85 per diluted common share). The company's 2008 financial results included a $7.1 billion non-cash, after-tax reduction in the carrying value of oil and gas properties.

Devon reported net earnings of $667 million, or $1.50 per common share ($1.49 per diluted common share), for the quarter ended December 31, 2009. Excluding adjusting items, the company earned $713 million, or $1.60 per diluted common share in the fourth quarter of 2009.

For the quarter ended December 31, 2008, Devon reported a net loss of $6.8 billion or, $15.42 per common share ($15.42 per diluted common share).

North American Onshore Proved Reserves at Record 2.6 Billion Boe;

Drill-Bit Reserve Additions More than Double Record Production

"2009 was a pivotal year for Devon as we began repositioning the company to focus entirely on our high-return, North American onshore natural gas and oil portfolio," commented J. Larry Nichols, chairman and chief executive officer. "We grew North American onshore production by more than six percent in 2009 and replaced more than twice our production with the drill bit at very attractive costs. We expect to receive after-tax proceeds of $4.5 billion to $7.5 billion as we divest our offshore and international properties this year. This will further strengthen our rock-solid balance sheet and enable us to accelerate growth across our U.S. and Canadian asset base."

In accordance with accounting standards, Devon's year-end reserve reporting pertains to the company's continuing operations, which include its Gulf of Mexico properties. Following is a discussion of proved reserves pertaining only to Devon's North American onshore assets.

Devon increased North American onshore estimated proved reserves by 20 percent to a record 2,641 million oil-equivalent barrels (Boe) at December 31, 2009. The company added 669 million Boe to its North American onshore proved reserves from all sources. Costs incurred applicable to North American onshore properties were $3.3 billion.

Successful drilling (extensions, discoveries and performance revisions) accounted for 492 million Boe of North American onshore proved reserve additions. The company invested $3.2 billion of associated drill-bit capital during the year. Revisions related to changes in oil, natural gas and natural gas liquids prices increased 2009 North American onshore proved reserves by 176 million Boe.

North American onshore oil and gas production increased more than six percent to 220 million Boe in 2009. The reserve life index (proved reserves divided by annual production) for the North American onshore properties is approximately 12 years.

Proved developed reserves of 1,869 million Boe at December 31, 2009, represented 71 percent of total North American onshore proved reserves. Proved undeveloped reserves were 29 percent of the total. Year-end North American onshore proved reserves included 653 million barrels of crude oil, 9.4 trillion cubic feet of natural gas and 419 million barrels of natural gas liquids.




DRILLING ACTIVITY Year Ended
December 31,
------------
2009 2008
---- ----
Exploration Wells Drilled
-------------------------
U.S. Onshore 11 22
Canada 42 90
------ --- ---
North American Onshore 53 112
U.S. Offshore 1 6
------------- --- ---
Total 54 118
----- --- ---
Exploration Wells Success Rate
------------------------------
U.S. Onshore 82% 91%
Canada 100% 96%
------ --- ---
North American Onshore 96% 95%
U.S. Offshore 0% 17%
------------- --- ---
Total 94% 91%
----- --- ---
Development Wells Drilled
-------------------------
U.S. Onshore 734 1,622
Canada 343 631
------ --- ---
North American Onshore 1,077 2,253
U.S. Offshore 4 17
------------- --- ---
Total 1,081 2,270
----- ----- -----
Development Wells Success Rate
------------------------------
U.S. Onshore 100% 98%
Canada 100% 99%
------ --- ---
North American Onshore 100% 99%
U.S. Offshore 50% 94%
------------- --- ---
Total 99% 99%
----- --- ---
Total Wells Drilled
-------------------
U.S. Onshore 745 1,644
Canada 385 721
------ --- ---
North American Onshore 1,130 2,365
U.S. Offshore 5 23
------------- --- ---
Total 1,135 2,388
----- ----- -----
Total Wells Success Rate
------------------------
U.S. Onshore 99% 98%
Canada 100% 99%
------ --- ---
North American Onshore 99% 98%
U.S. Offshore 40% 74%
------------- --- ---
Total 99% 98%
----- --- ---


COMPANY OPERATED RIGS Year Ended
December 31,
------------
2009 2008
---- ----
Number of Company Operated Rigs Running
---------------------------------------
U.S. Onshore 46 78
Canada 17 13
------ --- ---
North American Onshore 63 91
U.S. Offshore 1 4
------------- --- ---
Total 64 95
----- --- ---

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Permalink Reply by om28v on February 17, 2010 at 6:42

After listening to the call it sounded to me like Devon was less bullish on the Southern Area of the HS play and more bullish on the Shelby and Panola areas. They also placed more emphasis on the Barnett and all of the de-risking they have to do there. There was also a lot of talk about the Cana-Woodford on Ok and how economical it was. They said they are looking to more balance their portfolio with oil/gas. The call was good for the HS, but not as positive as the call they had as little as just a month ago. Not really what I wanted to hear, buts that how I heard it, IMO. Anyone else listen and have any thoughts?

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Permalink Reply by RBH on February 17, 2010 at 8:41

om28v..pretty much agree with your take and concerned about long term well performance..Kardell #1H down to 3 MMCF/day quickly. A lot of what Devon has in their "northern Area" Panola/Shelby is HBP and more derisked and they hold contiguous BIG positions Also, gas prices are at their winter high..so the balanced portfolio oil/gas seems to be a common theme in some of the Big companies presentations

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Permalink Reply by jffree1 on February 17, 2010 at 9:21

I'm not too worried about it yet. They also said that, with just one well, it was way to early to say much and that they had to drill a lot more wells before they could say what they think of the prospects.

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Permalink Reply by DJG on February 17, 2010 at 9:34

From the Call:

Re: Southern Acreage/San Augustine Co/Kardell 1-H
a. Initial IP at >30.7 mmcfd
b. After initial 90 days of production, "almost" 1 BCF has been recovered.
c. Currently producing "a little over" 3 mmcfd
d. "Although the Kardell is experiancing high decline, keep in mind it is our first well in our Southern portion of the play"


Re: Greater Carthage/HS & Bossier in Shelby, Panola & Nacadoches Counties
a. Mentioned 3 wells drilled and currently being completed with results to be released in early Q1 2010 (These would be the Warr Unit/Shelby , Whitton 1-H/Shelby and the Barton 2-H/Nacodoches) (Note: They did not mention this but they also have a 4th well currently drilling in that region Adams 1-H, and have quite a few new permits for others to begin drilling soon...)


- Plan to invest about $250 million in capitol to further de-risk their Greater Carthage and Southern Area holdings.

- 2010 5 Rig Program with about 24 operated wells targeting both the HS and BO

- Currently drilling their first 2 Bossier Shale wells. 1 in Carthage acreage (this would be the Adams 1-H/Shelby) and one in the Souther Area (likely referring to the Skillern GU 1-H/San Augustine)

- Many "additional" non-operated wells to be drilled mostly in the Southern Area of the play with other JV partners.

---------------
Also mentioned two high IP (18mmcfd and 12mmcfd) rate Bossier Sand wells in the Groesbeck area in Central Tex (Robertson, Leon, Freestone Counties)

---------------
From the Q&A session during call:


Cana-Woodford:- Estimates of 8BCF per well and 11BCF per well in the core area of that play. No wonder they are excited about that play.


Re: Kardell decline
a. Haynesville thinner in this region
b. Overall EUR may not be as substantial as expected from IP rate
c. Still very optimistic about the overall area.
d. Still learning on the Southern Area, more will be known after they drill additional wells in the area.


Greater Carthage/Shelby, Panola:
a. "Very postive story that we are very confident in Northern Shelby and Panola areas that we'll have EURs of 6 BCF equivalent per well".
c. Thicker Bossier in this region
d. Drill and complete cost at around 8 million per well and expect this region to be very economic.
e. Net resource of about 4TCF in that area with over 1000 targeted well sites ( mostly HBP at this point)
f. We are VERY encouraged about the Greater Carthage up in Panola and Shelby Counties.


Interestingly one of the investor questions was about whether they are still have any long-term intentions to re-frac any of their current wells to stimulate greater EURs which they discussed at one time in the Barnett. That question was interupted and they moved on to the next caller - not certain whether that was due to time constraints or whether they didn't want to divulge any info.....????

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Permalink Reply by DJG on February 17, 2010 at 9:48

Yeah, since it was at the end of the allotted 60 minutes it is hard to read as to whether it was due to the time crunch or whether there is some double-top secret trade info that they did not want to chat about?????

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Permalink Reply by Don Graves on February 21, 2010 at 6:44

This sounds very encouraging. However, could it be the reason they are bullish on the Greater Carthage play in Panola and Shelby Counties is that their lease holdings are located in the area? Or could it be vice versa - the bullish stance is the reason they have significiant lease rights in the area?

Either way, let's hope their analysis is correct and their projections are accurate!

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Permalink Reply by DJG on February 18, 2010 at 9:05

Here's a few more related links...


Full transcript of the broadcast:
http://seekingalpha.com/article/189130-devon-energy-corporation-q4-...

Cramer/Mad Money interview with Devon's CEO J. Larry Nichols:
http://www.cnbc.com/id/35439657/

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Permalink Reply by RBH on February 18, 2010 at 9:09

D GAAR--AS FAR AS I CAN FIND..STILL NO INFO TO REPORT ON THE WARR #1h--NO COMPLETION REPORT, NOT IN ANY "PENDING" PRODUCTION REPORTS THRU 12-2009...I WILL KEEP CHECKING

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Permalink Reply by DJG on February 18, 2010 at 9:49

Thanks.

Incidently, Devon has just put in a new unit declaration in their filings at the County Clerks office for some acreage that is directly next to the Warr Unit. So, even though there is not yet any reports from that Warr 1-H well - the fact that they are working on putting together additional adjacent units would seem to be a good indication that they like the prospects for the area...

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Permalink Reply by RBH on February 18, 2010 at 10:12

GREAT!!

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