* CEO sees no point hedging natural gas at current prices

* Says natgas producers like kids who found a candy store

* CEO says not planning more M&A any time soon

SAN FRANCISCO, Oct 12 (Reuters) - Devon Energy Corp (DVN.N) wants to keep hedging half its oil production, but sees no need to do so for its natural gas output with prices depressed due to oversupply, its chief executive said on Tuesday.

"The kind of hedges you can do are just locking in the bottom. Why bother?" Devon CEO Larry Nichols said at a meeting with investors in San Francisco. Nichols had said earlier this year he aimed to hedge about50 percent of Devon's oil and gas production, but gas prices have steadily fallen as producers keep drilling to hold their leases and they ignore the price signals that tell them to stop bringing on new supply.

"They're more than signals, they're neon signs," Nichols quipped. He expects an eventual recovery in natural gas fundamentals once utilities start burning more in power plants, now that the vast potential of North American shale gas has been realized.

"We're like kids who suddenly found the candy store and are trying to eat everything at once," he said of the natural gas drilling industry in general.

Devon has had a busy year in deal-making, selling off its Gulf of Mexico assets and buying up acreage, and Nichols does not expect to do more deals soon.

"There are always investment bankers that come rolling through. (But) we've got the portfolio that we want," he said at the Independent Petroleum Association of America's Oil and Gas Investment Symposium. He did, however, flag the company's $3.5 billion share buyback program as one major investment.

"We are planning a $3.5 billion acquisition: us," he said. (Reporting by Braden Reddall; Editing by Leslie Adler)