Devon cites oil decline in 4Q losses

Oklahoma City-based Devon Energy Corp. Wednesday reported a record $6.8 billion loss for the fourth quarter of 2008 — a sudden reversal from the previous quarter when the company reported a record $2.6 billion profit.

The $6.8 billion quarterly loss amounted to $15.42 per common share. For the year, Devon lost $2.1 billion, or $4.85 a share. That was also a record. Devon stock dropped 6.17 percent Wednesday to close at $58.09 a share.

Despite the balance sheet losses, Devon executives were upbeat Wednesday, saying the losses were an accounting anomaly created by the sudden drop in oil prices last year.

The underlying performance of Devon was quite good, said J. Larry Nichols, Devon’s chairman and chief executive officer.

"Despite the effects of the sharp fourth-quarter declines in oil and natural gas prices, 2008 was a very successful year for the company,” Nichols said. "Cash flow reached an all-time record of nearly $10 billion. We increased oil and gas production by 6 percent and drilled 2,441 wells with a 98 percent success rate. In addition, we added 584 million barrels of proved reserves before price revisions at a very attractive cost per barrel.”

Vince White, Devon’s senior vice president of investor relations, said the loss does not alter Devon’s plans to build a new office skyscraper in downtown Oklahoma City.

The huge losses that Devon recorded on its balance sheet were a reflection of oil prices that plunged from about $140 a barrel in mid-2008 to about $40 a barrel at the end of the year.