A series of bold steps has allowed Devon Energy Corp. to transition into one of the country's largest independent oil producers while keeping debt levels low, CEO John Richels told shareholders at the company's annual meeting Wednesday.
“In 2011, we completed our strategic positioning,” he said. “We sold our international and Gulf of Mexico assets, creating a balance sheet that is one of the best in the country and allowing us to focus on areas we thought would generate the best results for the company.”
A strong balance sheet will allow the company to remain competitive in the future, Richels said.
“Particularly today, when you look at the uncertainties in the financial markets and the world economy and our own economy and in the industry, having that strong balance sheet coupled with a very deep opportunity of inventories is a very strategic advantage because it gives us the financial flexibility to develop our properties on a pace where we want to develop them,” Richels said.
8 directors re-elected
Shareholders re-elected all eight directors and approved all proposals sponsored by the company: executive compensation, appointment of the company's auditors, allowing stockholders to call a special meeting, and approving the company's incentive compensation plan and the long-term incentive plan.
The measures each passed with at least 86 percent of the vote except for the vote for executive compensation, which had 59 percent of the vote.
Shareholder Julie Skye, of Tulsa, spoke before the vote was announced, urging shareholders to withhold their vote.
“The issue of executive compensation is a hot button,” said Skye, portfolio manager for Tulsa-based Pinnacle Investment Advisors. She pointed out that Devon stock is worth slightly less today than it was in 1997.
Richels said he was not surprised by the vote.
“I think we have put ourselves in a position to have outstanding results in the future,” he said. “We haven't seen all the results we want to so far as we are going through that repositioning, but whenever you reposition and refocus a company as significantly as we did, you go through a period of reorganization before you get to the point where you can really develop the asset base you've put together. I think we're going to see very good results in the future that will bear all of our efforts out.”
Shareholders voted down a shareholder proposal that would have required Devon to disclose more information about its lobbying efforts. The motion received 28 percent of the vote.
“We believe disclosure of political and lobbying spending is in our interest as stockholders,” Skye said.
Devon Executive Chairman Larry Nichols said the board unanimously opposed the proposal.
“We have supported with pride trade associations that represent our company specifically to make sure the best interests of all shareholders are furthered,” Nichols said.