Devon Energy Corp. on Wednesday reported a fourth-quarter loss of $357 million, or 89 cents a share, due to low natural gas prices. The company earned $507 million, or $1.25 a share, in the same period of last year.
Setting aside a nearly $900 million asset impairment charge and other items typically not considered by analysts, Devon posted earnings of $316 million, or 78 cents a share, for the quarter. That beat analysts' estimates of 75 cents a share.
“In spite of a challenging commodity price environment that impacted our financial results, Devon delivered solid operating results in 2012,” CEO John Richels said.
“During the year, we continued to make significant progress toward the conversion of our asset portfolio to a higher oil weighting.
“This is evident through the strong oil production growth we delivered during the year and the impressive growth in oil reserves.”
Richels said oil and other liquids now account for nearly 40 percent of Devon's overall production, which increased to 250 million barrels of oil equivalent in 2012. That is an increase of 10 million barrels.
Devon also boosted its oil production by 20 percent over 2011, offsetting a drop in natural gas production due to reduced activity.
Dave Hager, Devon's executive vice president of exploration and production, said the company's largest growth came from its core plays in Oklahoma, Texas and Canada without significantly increasing its pad count.
Devon intends to focus its resources on oil projects this year, Richels said, with an eye toward increasing production by about 15 percent.
Richels said Devon also will look into the possibility of creating a midstream master limited partnership to unlock the value of the company's assets.
Devon opted not to proceed with a midstream partnership in 2007, but Richels said market conditions are more favorable now.