Devon Energy beats estimates despite impairment charge

Devon Energy Corp. reported a third-quarter loss of $719 million, or $1.80 a share, due to an impairment charge resulting from lower natural gas prices.
by Jay F. Marks Published: November 8, 2012
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Due to a $1.1 billion impairment charge because of lower natural gas prices, Devon Energy Corp. on Wednesday reported a net loss of $719 million, or $1.80 a share, for the third quarter. Devon earned $1 billion, or $2.51 a share, in the same period of 2011.

Excluding one-time accounting charges, Devon earned $355 million, or 88 cents a share for the quarter. That is well above analysts' estimates of 69 cents a share.

“Devon's capital program has delivered strong results this year with aggressive drilling programs in oil-focused basins,” CEO John Richels said.

The Oklahoma City-based energy company boosted its quarterly production to an average of 678,000 barrels of oil equivalent a day, a 3 percent increase over last year.

Richels said Devon increased its oil production by 14 percent, despite scheduled maintenance at its Jackfish operation in Canada's oil sands. That reduced third-quarter production by about 10,000 barrels a day.

“As we have pursued higher-returning oil projects, we also have de-emphasized natural gas drilling, limiting overall production growth,” Richels said. “This is exactly the right tactical decision for Devon in this environment and is consistent with our long-standing strategy to optimize returns as opposed to top-line production growth.”

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by Jay F. Marks
Energy Reporter
Jay F. Marks has been covering Oklahoma news since graduating from Oklahoma State University in 1996. He worked in Sulphur and Enid before joining The Oklahoman in 2005. Marks has been covering the energy industry since 2009.
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