OKLAHOMA CITY--(BUSINESS WIRE)--
Devon Energy Corp. (NYSE: DVN) today reported operational and financial
results for the fourth quarter and full-year 2016. Also included within
the release is the company’s guidance outlook for the first quarter and
full-year 2017.
Highlights
-
Exceeded fourth-quarter production expectations
-
Achieved record-setting well productivity in 2016
-
Reduced operating expenses in U.S. by 42 percent from peak rates
-
Attained $1.3 billion in annual cost savings
-
Delivered proved reserves growth at attractive finding costs
-
Improved growth outlook driven by accelerated capital investment
“For Devon, 2016 was a transformational year,” said Dave Hager,
president and CEO. “We successfully reshaped our asset portfolio to
focus on our top two franchise assets, the STACK and Delaware Basin,
providing us a sustainable, multi-decade growth platform. With these
world-class assets, we delivered outstanding operational performance
throughout the year. Our drilling programs generated the best well
productivity in Devon’s 45-year history and we maximized the value of
every barrel produced with cost-reduction efforts that reached $1.3
billion of annual savings.”
“We also took important steps during the year to strengthen our
investment-grade financial position with the timely completion of our
$3.2 billion asset divestiture program,” Hager said. “These accretive
transactions provided us with the financial capacity to further
accelerate investment across our best-in-class U.S. resource plays in
2017 and beyond. This increased drilling activity will continue to
rapidly shift our production mix to higher-margin products, positioning
us to deliver peer-leading cash flow expansion at today’s market prices.”
Fourth-Quarter Production Exceeds Midpoint Guidance
Devon’s reported oil production averaged 244,000 barrels per day in the
fourth quarter of 2016. With the shift to higher-margin production, oil
accounted for the largest component of the company’s product mix at 45
percent of total volumes.
Total companywide production in the fourth quarter reached 537,000
oil-equivalent barrels (Boe) per day, exceeding the midpoint of guidance
by 2,000 Boe per day. In an effort to maximize profitability, Devon
chose to reject approximately 12,000 barrels per day of ethane in the
fourth quarter.
Record-Setting Well Productivity in U.S. Resource Plays
The majority of the company’s production was attributable to its U.S.
resource plays, which averaged 396,000 Boe per day during the fourth
quarter. Production within the U.S. during 2016 benefited from drilling
activity that achieved the best new well productivity in Devon’s 45-year
history. Led by results from the STACK, Delaware Basin and Eagle Ford
assets, the company’s initial 90-day production rates in the U.S.
increased for the fourth consecutive year, advancing more than 300
percent from 2012.
The substantial improvement in well productivity was driven by activity
focused in top resource plays, improved subsurface reservoir
characterization, leading-edge completion designs and improvements in
lateral placement.
In Canada, Devon’s heavy-oil operations also delivered impressive
results with net oil production averaging 139,000 barrels per day in the
fourth quarter. Driven by the industry-leading performance of the
Jackfish complex, Canadian oil production increased 14 percent compared
to the fourth quarter of 2015.
Reserve Report Highlights Operational Excellence
Devon’s estimated proved reserves were 2.1 billion Boe on Dec. 31, 2016,
a 3 percent increase compared to the company’s retained asset portfolio
in 2015. Proved developed reserves accounted for 80 percent of the
total. At year-end, higher-margin, liquids reserves totaled 1.1 billion
Boe, or approximately 55 percent of total reserves.
The most significant reserve growth came from the company’s U.S.
operations where proved reserves increased 7 percent to 1.6 billion Boe.
Devon’s capital programs within the U.S. added 275 million Boe of
reserves (extensions, discoveries and performance revisions) during
2016. This represents a replacement rate of approximately 175 percent
(on a retained asset basis). Excluding property acquisition costs, these
reserves were added at a finding cost of only $5 per Boe added during
the year. These attractive reserve results in the U.S. were driven by
new-well activity that achieved record-setting productivity, a
materially improved operating cost structure and successful base
production initiatives.
In Canada, the company’s heavy oil reserves amounted to 504 million Boe
at year end. Beyond proved reserves, tremendous upside exists with
Devon’s top-tier Canadian assets, with more than 1.4 billion Boe of
risked resource.
Lease Operating Costs Improve by 42 Percent in U.S. Resource Plays
Devon continued to make progress lowering operating costs in the fourth
quarter. Lease operating expenses (LOE) totaled $367 million for the
quarter and were 4 percent below the midpoint of guidance. The $1.1
billion sale of Access Pipeline in Canada added $28 million of
incremental LOE during the quarter. The strong fourth-quarter result was
driven by the company’s U.S. asset portfolio, where LOE costs improved
by 42 percent from peak rates in early 2015. The decrease in LOE was
primarily driven by improved power and water-handling infrastructure,
reduced labor expense and lower supply chain costs.
The company also maintained its significantly improved general and
administrative (G&A) cost structure in the fourth quarter. Including
capitalized costs, G&A expenses totaled $224 million, a nearly 40
percent improvement compared to peak costs in late 2014. The
significantly lower overhead costs were driven by lower personnel
expenses.
Cost Savings Reach $1.3 Billion in 2016
In aggregate, Devon’s cost-savings initiatives achieved $1.3 billion of
operating and G&A expense reductions in 2016 compared to peak levels in
2014.
The company expects these cost savings to be sustainable in 2017 due to
structural improvements and efficiency gains within its field operations
and corporate support groups.
EnLink Positioned to Deliver Double-Digit Growth in 2017
Devon’s midstream business generated $212 million of operating profit in
the fourth quarter, driven entirely by the company’s strategic
investment in EnLink Midstream. For the full-year 2016, EnLink-related
operating profit expanded to $879 million, a 6 percent improvement
compared to 2015.
In 2017, with strong growth expected from EnLink, Devon projects its
midstream operating profits will advance to a range of $900 million to
$950 million. Based on the midpoint of guidance, this estimate
represents approximately a 10 percent increase compared to 2016.
EnLink’s growth is derived from an asset base that is positioned in some
of the most attractive markets in North America, including the STACK,
Midland Basin, Delaware Basin and an NGL business that services end-user
demand along the Gulf Coast.
Devon has a 64 percent ownership in EnLink’s general partner (NYSE:
ENLC) and a 24 percent interest in the limited partner (NYSE: ENLK). In
aggregate, the company’s ownership in EnLink has a market value of
approximately $4 billion and is expected to generate cash distributions
of around $270 million annually.
Fourth-Quarter 2016 Operations Report
For additional details on Devon’s E&P operations, please refer to the
company’s fourth-quarter 2016 operations report at www.devonenergy.com.
Highlights from the report include:
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Meramec drilling inventory increases by 40 percent
-
Leonard Shale and Delaware Sands resource potential expands
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Staggered spacing tests successful in Eagle Ford
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Jackfish complex delivers record production
-
Barnett cash flow generation accelerates
Divestitures and Hedging Position Enhance Strong Financial Position
On Oct. 6, 2016, the company closed on the sale of its 50 percent
interest in the Access Pipeline for USD $1.1 billion. This accretive
transaction officially completed Devon’s $3.2 billion non-core asset
divestiture program.
The majority of divestiture proceeds were utilized to retire $2.5
billion of debt through tender offerings and repayments in the second
half of 2016. As a result of the debt-reduction efforts, the company
expects its recurring, go-forward financing costs to decline by around
$120 million annually, with no significant debt maturities until
mid-2021. Devon exited the fourth quarter with investment-grade credit
ratings and significant liquidity, which consisted of $2 billion of cash
on hand and an undrawn credit facility of $3 billion.
In addition to an investment-grade balance sheet, Devon’s financial
position is bolstered by a significantly increased commodity hedging
position in 2017. The company currently has approximately 50 percent of
its estimated oil and gas production hedged in the upcoming year and
will continue to build out its hedging position in the future.
Earnings Beat Wall Street Consensus by 20 Percent
Devon’s reported net earnings totaled $331 million or $0.63 per diluted
share in the fourth quarter. Adjusting for items securities analysts
typically exclude from their published estimates, the company’s core
earnings were $131 million or $0.25 per diluted share in the fourth
quarter. This strong earnings result exceeded analyst consensus
estimates by 20 percent.
The company’s significantly improved profitability in the fourth quarter
was attributable to higher commodity prices and an improved cost
structure. These factors also strengthened Devon’s operating cash flow
to $536 million in the fourth quarter. Combined with proceeds received
from asset sales, the company’s total cash inflows for the quarter
reached $1.8 billion.
Devon Positioned to Deliver Peer-Leading Cash Flow Expansion
Detailed forward-looking guidance for the first quarter and full-year
2017 is provided later in the release. In 2017, Devon expects to further
accelerate activity in its U.S. resource plays to as many as 20 operated
rigs by year end. With this level of planned activity, the company
expects to invest between $2.0 billion and $2.3 billion of E&P capital
in 2017, with nearly 90 percent of the capital devoted to U.S. resource
plays.
Devon’s upstream capital plans are expected to drive 13 to 17 percent
oil production growth in the U.S. during 2017 compared to the fourth
quarter of 2016, which marks the low point of Devon’s production
profile. This resumption of growth in high-margin production will begin
in the first quarter of 2017. The operational momentum created by
accelerated drilling activity in the STACK and Delaware Basin in the
upcoming year is expected to advance light-oil production in the U.S. by
approximately 20 percent in 2018 compared to 2017. This rapid growth in
high-margin production, combined with a significantly improved cost
structure, positions Devon to deliver peer-leading cash flow expansion
at today’s market prices.
Non-GAAP Reconciliations
Pursuant to regulatory disclosure requirements, Devon is required to
reconcile non-GAAP (generally accepted accounting principles) financial
measures to the related GAAP information. Finding cost, core earnings
and core earnings per share referenced within the commentary of this
release are non-GAAP financial measures. Reconciliations of these and
other non-GAAP measures are provided within the tables of this release.
Conference Call Webcast and Supplemental Earnings Materials
Please note that as soon as practicable today, Devon will post an
operations report to its website at www.devonenergy.com.
The company’s fourth-quarter conference call will be held at 10 a.m.
Central (11 a.m. Eastern) on Wednesday, Feb. 15, 2017, and will serve
primarily as a forum for analyst and investor questions and answers.
Forward-Looking Statements
This press release includes "forward-looking statements" as defined
by the Securities and Exchange Commission (SEC). Such statements include
those concerning strategic plans, expectations and objectives for future
operations, and are often identified by use of the words “expects,”
“believes,” “will,” “would,” “could,” “forecasts,” “projections,”
“estimates,” “plans,” “expectations,” “targets,” “opportunities,”
“potential,” “anticipates,” “outlook” and other similar terminology. All
statements, other than statements of historical facts, included in this
press release that address activities, events or developments that the
company expects, believes or anticipates will or may occur in the future
are forward-looking statements. Such statements are subject to a number
of assumptions, risks and uncertainties, many of which are beyond the
control of the company. Statements regarding our business and operations
are subject to all of the risks and uncertainties normally incident to
the exploration for and development and production of oil and gas. These
risks include, but are not limited to: the volatility of oil, gas and
NGL prices; uncertainties inherent in estimating oil, gas and NGL
reserves; the extent to which we are successful in acquiring and
discovering additional reserves; the uncertainties, costs and risks
involved in exploration and development activities; risks related to our
hedging activities; counterparty credit risks; regulatory restrictions,
compliance costs and other risks relating to governmental regulation,
including with respect to environmental matters; risks relating to our
indebtedness; our ability to successfully complete mergers, acquisitions
and divestitures; the extent to which insurance covers any losses we may
experience; our limited control over third parties who operate our oil
and gas properties; midstream capacity constraints and potential
interruptions in production; competition for leases, materials, people
and capital; cyberattacks targeting our systems and infrastructure; and
any of the other risks and uncertainties identified in our Form 10-K and
our other filings with the SEC. Investors are cautioned that any such
statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected in
the forward-looking statements. The forward-looking statements in this
press release are made as of the date of this press release, even if
subsequently made available by Devon on its website or otherwise. Devon
does not undertake any obligation to update the forward-looking
statements as a result of new information, future events or otherwise.
The SEC permits oil and gas companies, in their filings with the SEC,
to disclose only proved, probable and possible reserves that meet the
SEC's definitions for such terms, and price and cost sensitivities for
such reserves, and prohibits disclosure of resources that do not
constitute such reserves. This release may contain certain terms, such
as resource potential, potential locations, risked and unrisked
locations, estimated ultimate recovery (or EUR), exploration target size
and other similar terms. These estimates are by their nature more
speculative than estimates of proved, probable and possible reserves and
accordingly are subject to substantially greater risk of being actually
realized. The SEC guidelines strictly prohibit us from including
these estimates in filings with the SEC. Investors are urged to consider
closely the disclosure in our Form 10-K, available at www.devonenergy.com.
You can also obtain this form from the SEC by calling 1-800-SEC-0330 or
from the SEC’s website at www.sec.gov.
About Devon Energy
Devon Energy is a leading independent energy company engaged in finding
and producing oil and natural gas. Based in Oklahoma City and included
in the S&P 500, Devon operates in several of the most prolific oil and
natural gas plays in the U.S. and Canada with an emphasis on a balanced
portfolio. The company is the second-largest oil producer among North
American onshore independents. For more information, please visit www.devonenergy.com.
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DEVON ENERGY CORPORATION
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FINANCIAL AND OPERATIONAL INFORMATION
|
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Quarter Ended
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Year Ended
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PRODUCTION NET OF ROYALTIES
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|
|
December 31,
|
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|
December 31,
|
|
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|
|
2016
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and bitumen (MBbls/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. - Core
|
|
|
|
105
|
|
|
|
139
|
|
|
|
119
|
|
|
|
142
|
Heavy Oil
|
|
|
|
139
|
|
|
|
121
|
|
|
|
131
|
|
|
|
111
|
Retained assets
|
|
|
|
244
|
|
|
|
260
|
|
|
|
250
|
|
|
|
253
|
Divested assets
|
|
|
|
—
|
|
|
|
18
|
|
|
|
10
|
|
|
|
22
|
Total
|
|
|
|
244
|
|
|
|
278
|
|
|
|
260
|
|
|
|
275
|
Natural gas liquids (MBbls/d)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. - Core
|
|
|
|
90
|
|
|
|
115
|
|
|
|
103
|
|
|
|
110
|
Divested assets
|
|
|
|
—
|
|
|
|
24
|
|
|
|
13
|
|
|
|
26
|
Total
|
|
|
|
90
|
|
|
|
139
|
|
|
|
116
|
|
|
|
136
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Gas (MMcf/d)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. - Core
|
|
|
|
1,203
|
|
|
|
1,327
|
|
|
|
1,270
|
|
|
|
1,333
|
Heavy Oil
|
|
|
|
18
|
|
|
|
24
|
|
|
|
20
|
|
|
|
22
|
Retained assets
|
|
|
|
1,221
|
|
|
|
1,351
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|
|
|
1,290
|
|
|
|
1,355
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Divested assets
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|
|
|
—
|
|
|
|
232
|
|
|
|
123
|
|
|
|
255
|
Total
|
|
|
|
1,221
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|
|
|
1,583
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|
|
|
1,413
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|
|
|
1,610
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Oil equivalent (MBoe/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U. S. - Core
|
|
|
|
396
|
|
|
|
475
|
|
|
|
434
|
|
|
|
474
|
Heavy Oil
|
|
|
|
141
|
|
|
|
126
|
|
|
|
134
|
|
|
|
115
|
Retained assets
|
|
|
|
537
|
|
|
|
601
|
|
|
|
568
|
|
|
|
589
|
Divested assets
|
|
|
|
—
|
|
|
|
80
|
|
|
|
43
|
|
|
|
91
|
Total
|
|
|
|
537
|
|
|
|
681
|
|
|
|
611
|
|
|
|
680
|
|
|
|
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|
KEY OPERATING STATISTICS BY REGION
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|
Quarter Ended December 31, 2016
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|
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|
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Avg. Production
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|
|
|
Gross Wells
|
|
|
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Operated Rigs at
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|
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(MBoe/d)
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Drilled
|
|
|
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December 31, 2016
|
STACK
|
|
|
|
88
|
|
|
|
55
|
|
|
|
6
|
Delaware Basin
|
|
|
|
54
|
|
|
|
15
|
|
|
|
3
|
Eagle Ford
|
|
|
|
60
|
|
|
|
29
|
|
|
|
—
|
Heavy Oil
|
|
|
|
141
|
|
|
|
12
|
|
|
|
3
|
Barnett Shale
|
|
|
|
163
|
|
|
|
—
|
|
|
|
—
|
Rockies Oil
|
|
|
|
15
|
|
|
|
11
|
|
|
|
1
|
Other assets
|
|
|
|
16
|
|
|
|
11
|
|
|
|
—
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Total
|
|
|
|
537
|
|
|
|
133
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Year Ended December 31, 2016
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Avg. Production
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|
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|
Gross Wells
|
|
|
|
|
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(MBoe/d)
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Drilled
|
|
|
|
|
STACK
|
|
|
|
93
|
|
|
|
133
|
|
|
|
|
Delaware Basin
|
|
|
|
60
|
|
|
|
58
|
|
|
|
|
Eagle Ford
|
|
|
|
76
|
|
|
|
63
|
|
|
|
|
Heavy Oil
|
|
|
|
134
|
|
|
|
25
|
|
|
|
|
Barnett Shale
|
|
|
|
169
|
|
|
|
—
|
|
|
|
|
Rockies Oil
|
|
|
|
19
|
|
|
|
19
|
|
|
|
|
Other assets
|
|
|
|
17
|
|
|
|
28
|
|
|
|
|
Retained assets
|
|
|
|
568
|
|
|
|
326
|
|
|
|
|
Divested assets
|
|
|
|
43
|
|
|
|
14
|
|
|
|
|
Total
|
|
|
|
611
|
|
|
|
340
|
|
|
|
|
|
|
|
|
|
|
|
|
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PRODUCTION TREND
|
|
|
|
2015
|
|
|
|
2016
|
|
|
|
|
Quarter 4
|
|
|
|
Quarter 1
|
|
|
|
Quarter 2
|
|
|
|
Quarter 3
|
|
|
|
Quarter 4
|
Oil and bitumen (MBbls/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STACK
|
|
|
|
9
|
|
|
|
15
|
|
|
|
19
|
|
|
|
21
|
|
|
|
19
|
Delaware Basin
|
|
|
|
42
|
|
|
|
38
|
|
|
|
36
|
|
|
|
31
|
|
|
|
29
|
Eagle Ford
|
|
|
|
60
|
|
|
|
59
|
|
|
|
41
|
|
|
|
33
|
|
|
|
34
|
Heavy Oil
|
|
|
|
121
|
|
|
|
126
|
|
|
|
121
|
|
|
|
137
|
|
|
|
139
|
Barnett Shale
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
Rockies Oil
|
|
|
|
15
|
|
|
|
17
|
|
|
|
15
|
|
|
|
11
|
|
|
|
11
|
Other assets
|
|
|
|
12
|
|
|
|
12
|
|
|
|
11
|
|
|
|
11
|
|
|
|
11
|
Retained assets
|
|
|
|
260
|
|
|
|
268
|
|
|
|
244
|
|
|
|
245
|
|
|
|
244
|
Divested assets
|
|
|
|
18
|
|
|
|
17
|
|
|
|
15
|
|
|
|
6
|
|
|
|
—
|
Total
|
|
|
|
278
|
|
|
|
285
|
|
|
|
259
|
|
|
|
251
|
|
|
|
244
|
Natural gas liquids (MBbls/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STACK
|
|
|
|
24
|
|
|
|
30
|
|
|
|
30
|
|
|
|
23
|
|
|
|
21
|
Delaware Basin
|
|
|
|
11
|
|
|
|
12
|
|
|
|
13
|
|
|
|
12
|
|
|
|
10
|
Eagle Ford
|
|
|
|
27
|
|
|
|
24
|
|
|
|
17
|
|
|
|
13
|
|
|
|
11
|
Barnett Shale
|
|
|
|
49
|
|
|
|
46
|
|
|
|
46
|
|
|
|
44
|
|
|
|
43
|
Rockies Oil
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
|
|
|
1
|
Other assets
|
|
|
|
3
|
|
|
|
2
|
|
|
|
3
|
|
|
|
3
|
|
|
|
4
|
Retained assets
|
|
|
|
115
|
|
|
|
115
|
|
|
|
110
|
|
|
|
96
|
|
|
|
90
|
Divested assets
|
|
|
|
24
|
|
|
|
22
|
|
|
|
21
|
|
|
|
8
|
|
|
|
—
|
Total
|
|
|
|
139
|
|
|
|
137
|
|
|
|
131
|
|
|
|
104
|
|
|
|
90
|
Gas (MMcf/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STACK
|
|
|
|
253
|
|
|
|
306
|
|
|
|
289
|
|
|
|
292
|
|
|
|
284
|
Delaware Basin
|
|
|
|
82
|
|
|
|
84
|
|
|
|
99
|
|
|
|
92
|
|
|
|
89
|
Eagle Ford
|
|
|
|
152
|
|
|
|
144
|
|
|
|
103
|
|
|
|
85
|
|
|
|
90
|
Heavy Oil
|
|
|
|
24
|
|
|
|
15
|
|
|
|
28
|
|
|
|
18
|
|
|
|
18
|
Barnett Shale
|
|
|
|
786
|
|
|
|
768
|
|
|
|
757
|
|
|
|
730
|
|
|
|
710
|
Rockies Oil
|
|
|
|
38
|
|
|
|
32
|
|
|
|
31
|
|
|
|
19
|
|
|
|
17
|
Other assets
|
|
|
|
16
|
|
|
|
17
|
|
|
|
14
|
|
|
|
13
|
|
|
|
13
|
Retained assets
|
|
|
|
1,351
|
|
|
|
1,366
|
|
|
|
1,321
|
|
|
|
1,249
|
|
|
|
1,221
|
Divested assets
|
|
|
|
232
|
|
|
|
215
|
|
|
|
206
|
|
|
|
75
|
|
|
|
—
|
Total
|
|
|
|
1,583
|
|
|
|
1,581
|
|
|
|
1,527
|
|
|
|
1,324
|
|
|
|
1,221
|
Oil equivalent (MBoe/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STACK
|
|
|
|
75
|
|
|
|
96
|
|
|
|
97
|
|
|
|
92
|
|
|
|
88
|
Delaware Basin
|
|
|
|
66
|
|
|
|
63
|
|
|
|
65
|
|
|
|
59
|
|
|
|
54
|
Eagle Ford
|
|
|
|
113
|
|
|
|
107
|
|
|
|
76
|
|
|
|
61
|
|
|
|
60
|
Heavy Oil
|
|
|
|
126
|
|
|
|
129
|
|
|
|
126
|
|
|
|
140
|
|
|
|
141
|
Barnett Shale
|
|
|
|
181
|
|
|
|
175
|
|
|
|
173
|
|
|
|
166
|
|
|
|
163
|
Rockies Oil
|
|
|
|
23
|
|
|
|
23
|
|
|
|
21
|
|
|
|
16
|
|
|
|
15
|
Other assets
|
|
|
|
17
|
|
|
|
18
|
|
|
|
16
|
|
|
|
16
|
|
|
|
16
|
Retained assets
|
|
|
|
601
|
|
|
|
611
|
|
|
|
574
|
|
|
|
550
|
|
|
|
537
|
Divested assets
|
|
|
|
80
|
|
|
|
74
|
|
|
|
70
|
|
|
|
27
|
|
|
|
—
|
Total
|
|
|
|
681
|
|
|
|
685
|
|
|
|
644
|
|
|
|
577
|
|
|
|
537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BENCHMARK PRICES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(average prices)
|
|
|
|
Quarter 4
|
|
|
|
December YTD
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
Oil ($/Bbl) - West Texas Intermediate (Cushing)
|
|
|
|
$
|
49.21
|
|
|
|
|
$
|
42.15
|
|
|
|
|
$
|
43.36
|
|
|
|
|
$
|
48.87
|
|
Natural Gas ($/Mcf) - Henry Hub
|
|
|
|
$
|
2.98
|
|
|
|
|
$
|
2.27
|
|
|
|
|
$
|
2.46
|
|
|
|
|
$
|
2.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REALIZED PRICES
|
|
|
|
Quarter Ended December 31, 2016
|
|
|
|
|
Oil /Bitumen
|
|
|
|
NGL
|
|
|
|
Gas
|
|
|
|
|
Total
|
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Mcf)
|
|
|
|
|
(Per Boe)
|
United States
|
|
|
|
$
|
46.74
|
|
|
|
|
$
|
13.81
|
|
|
|
|
$
|
2.37
|
|
|
|
|
$
|
22.78
|
|
Canada
|
|
|
|
$
|
25.90
|
|
|
|
|
|
N/M
|
|
|
|
|
|
N/M
|
|
|
|
|
$
|
25.39
|
|
Realized price without hedges
|
|
|
|
$
|
34.90
|
|
|
|
|
$
|
13.81
|
|
|
|
|
$
|
2.34
|
|
|
|
|
$
|
23.47
|
|
Cash settlements
|
|
|
|
$
|
—
|
|
|
|
|
$
|
(0.31
|
)
|
|
|
|
$
|
(0.11
|
)
|
|
|
|
$
|
(0.30
|
)
|
Realized price, including cash settlements
|
|
|
|
$
|
34.90
|
|
|
|
|
$
|
13.50
|
|
|
|
|
$
|
2.23
|
|
|
|
|
$
|
23.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2015
|
|
|
|
|
Oil /Bitumen
|
|
|
|
NGL
|
|
|
|
Gas
|
|
|
|
|
Total
|
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Mcf)
|
|
|
|
|
(Per Boe)
|
United States
|
|
|
|
$
|
38.04
|
|
|
|
|
$
|
8.81
|
|
|
|
|
$
|
1.76
|
|
|
|
|
$
|
17.90
|
|
Canada
|
|
|
|
$
|
18.03
|
|
|
|
|
|
N/M
|
|
|
|
|
|
N/M
|
|
|
|
|
$
|
17.62
|
|
Realized price without hedges
|
|
|
|
$
|
29.31
|
|
|
|
|
$
|
8.81
|
|
|
|
|
$
|
1.75
|
|
|
|
|
$
|
17.85
|
|
Cash settlements
|
|
|
|
$
|
24.36
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.70
|
|
|
|
|
$
|
11.59
|
|
Realized price, including cash settlements
|
|
|
|
$
|
53.67
|
|
|
|
|
$
|
8.81
|
|
|
|
|
$
|
2.45
|
|
|
|
|
$
|
29.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
|
|
|
|
Oil /Bitumen
|
|
|
|
NGL
|
|
|
|
Gas
|
|
|
|
|
Total
|
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Mcf)
|
|
|
|
|
(Per Boe)
|
United States
|
|
|
|
$
|
38.92
|
|
|
|
|
$
|
9.81
|
|
|
|
|
$
|
1.84
|
|
|
|
|
$
|
18.34
|
|
Canada
|
|
|
|
$
|
20.53
|
|
|
|
|
|
N/M
|
|
|
|
|
|
N/M
|
|
|
|
|
$
|
20.07
|
|
Realized price without hedges
|
|
|
|
$
|
29.65
|
|
|
|
|
$
|
9.81
|
|
|
|
|
$
|
1.84
|
|
|
|
|
$
|
18.72
|
|
Cash settlements
|
|
|
|
$
|
(0.43
|
)
|
|
|
|
$
|
(0.11
|
)
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
(0.05
|
)
|
Realized price, including cash settlements
|
|
|
|
$
|
29.22
|
|
|
|
|
$
|
9.70
|
|
|
|
|
$
|
1.91
|
|
|
|
|
$
|
18.67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
|
|
|
|
Oil /Bitumen
|
|
|
|
NGL
|
|
|
|
Gas
|
|
|
|
|
|
Total
|
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Bbl)
|
|
|
|
(Per Mcf)
|
|
|
|
|
|
(Per Boe)
|
United States
|
|
|
|
$
|
44.01
|
|
|
|
|
$
|
9.32
|
|
|
|
|
$
|
2.17
|
|
|
|
|
$
|
21.12
|
|
Canada
|
|
|
|
$
|
25.14
|
|
|
|
|
|
N/M
|
|
|
|
|
|
N/M
|
|
|
|
|
$
|
24.46
|
|
Realized price without hedges
|
|
|
|
$
|
36.39
|
|
|
|
|
$
|
9.32
|
|
|
|
|
$
|
2.14
|
|
|
|
|
$
|
21.68
|
|
Cash settlements
|
|
|
|
$
|
20.72
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.57
|
|
|
|
|
$
|
9.74
|
|
Realized price, including cash settlements
|
|
|
|
$
|
57.11
|
|
|
|
|
$
|
9.32
|
|
|
|
|
$
|
2.71
|
|
|
|
|
$
|
31.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF EARNINGS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
Quarter Ended
|
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
Oil, gas and NGL sales
|
|
|
|
$
|
1,159
|
|
|
|
|
$
|
1,118
|
|
|
|
|
$
|
4,182
|
|
|
|
|
$
|
5,382
|
|
Oil, gas and NGL derivatives
|
|
|
|
|
(171
|
)
|
|
|
|
|
77
|
|
|
|
|
|
(201
|
)
|
|
|
|
|
503
|
|
Marketing and midstream revenues
|
|
|
|
|
1,820
|
|
|
|
|
|
1,691
|
|
|
|
|
|
6,323
|
|
|
|
|
|
7,260
|
|
Asset dispositions and other
|
|
|
|
|
542
|
|
|
|
|
|
—
|
|
|
|
|
|
1,893
|
|
|
|
|
|
—
|
|
Total revenues and other
|
|
|
|
|
3,350
|
|
|
|
|
|
2,886
|
|
|
|
|
|
12,197
|
|
|
|
|
|
13,145
|
|
Lease operating expenses
|
|
|
|
|
367
|
|
|
|
|
|
479
|
|
|
|
|
|
1,582
|
|
|
|
|
|
2,104
|
|
Marketing and midstream operating expenses
|
|
|
|
|
1,608
|
|
|
|
|
|
1,481
|
|
|
|
|
|
5,492
|
|
|
|
|
|
6,420
|
|
General and administrative expenses
|
|
|
|
|
163
|
|
|
|
|
|
194
|
|
|
|
|
|
645
|
|
|
|
|
|
855
|
|
Production and property taxes
|
|
|
|
|
55
|
|
|
|
|
|
73
|
|
|
|
|
|
275
|
|
|
|
|
|
388
|
|
Depreciation, depletion and amortization
|
|
|
|
|
372
|
|
|
|
|
|
641
|
|
|
|
|
|
1,792
|
|
|
|
|
|
3,129
|
|
Asset impairments
|
|
|
|
|
124
|
|
|
|
|
|
5,341
|
|
|
|
|
|
4,975
|
|
|
|
|
|
20,820
|
|
Restructuring and transaction costs
|
|
|
|
|
1
|
|
|
|
|
|
78
|
|
|
|
|
|
267
|
|
|
|
|
|
78
|
|
Other operating items
|
|
|
|
|
23
|
|
|
|
|
|
24
|
|
|
|
|
|
64
|
|
|
|
|
|
78
|
|
Total operating expenses
|
|
|
|
|
2,713
|
|
|
|
|
|
8,311
|
|
|
|
|
|
15,092
|
|
|
|
|
|
33,872
|
|
Operating income (loss)
|
|
|
|
|
637
|
|
|
|
|
|
(5,425
|
)
|
|
|
|
|
(2,895
|
)
|
|
|
|
|
(20,727
|
)
|
Net financing costs
|
|
|
|
|
334
|
|
|
|
|
|
139
|
|
|
|
|
|
904
|
|
|
|
|
|
517
|
|
Other nonoperating items
|
|
|
|
|
(72
|
)
|
|
|
|
|
(22
|
)
|
|
|
|
|
78
|
|
|
|
|
|
24
|
|
Earnings (loss) before income taxes
|
|
|
|
|
375
|
|
|
|
|
|
(5,542
|
)
|
|
|
|
|
(3,877
|
)
|
|
|
|
|
(21,268
|
)
|
Income tax expense (benefit)
|
|
|
|
|
55
|
|
|
|
|
|
(630
|
)
|
|
|
|
|
(173
|
)
|
|
|
|
|
(6,065
|
)
|
Net earnings (loss)
|
|
|
|
|
320
|
|
|
|
|
|
(4,912
|
)
|
|
|
|
|
(3,704
|
)
|
|
|
|
|
(15,203
|
)
|
Net earnings (loss) attributable to noncontrolling interests
|
|
|
|
|
(11
|
)
|
|
|
|
|
(380
|
)
|
|
|
|
|
(402
|
)
|
|
|
|
|
(749
|
)
|
Net earnings (loss) attributable to Devon
|
|
|
|
$
|
331
|
|
|
|
|
$
|
(4,532
|
)
|
|
|
|
$
|
(3,302
|
)
|
|
|
|
$
|
(14,454
|
)
|
Net earnings (loss) per share attributable to Devon:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
0.63
|
|
|
|
|
$
|
(11.12
|
)
|
|
|
|
$
|
(6.52
|
)
|
|
|
|
$
|
(35.55
|
)
|
Diluted
|
|
|
|
$
|
0.63
|
|
|
|
|
$
|
(11.12
|
)
|
|
|
|
$
|
(6.52
|
)
|
|
|
|
$
|
(35.55
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
524
|
|
|
|
|
|
413
|
|
|
|
|
|
513
|
|
|
|
|
|
412
|
|
Diluted
|
|
|
|
|
527
|
|
|
|
|
|
413
|
|
|
|
|
|
513
|
|
|
|
|
|
412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
|
|
$
|
320
|
|
|
|
|
$
|
(4,912
|
)
|
|
|
|
$
|
(3,704
|
)
|
|
|
|
$
|
(15,203
|
)
|
Adjustments to reconcile net earnings (loss) to net cash
from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
|
|
372
|
|
|
|
|
|
641
|
|
|
|
|
|
1,792
|
|
|
|
|
|
3,129
|
|
Asset impairments
|
|
|
|
|
124
|
|
|
|
|
|
5,341
|
|
|
|
|
|
4,975
|
|
|
|
|
|
20,820
|
|
Gains and losses on asset sales
|
|
|
|
|
(536
|
)
|
|
|
|
|
—
|
|
|
|
|
|
(1,887
|
)
|
|
|
|
|
—
|
|
Deferred income tax expense (benefit)
|
|
|
|
|
27
|
|
|
|
|
|
(480
|
)
|
|
|
|
|
(273
|
)
|
|
|
|
|
(5,828
|
)
|
Derivatives and other financial instruments
|
|
|
|
|
27
|
|
|
|
|
|
(132
|
)
|
|
|
|
|
386
|
|
|
|
|
|
(738
|
)
|
Cash settlements on derivatives and financial instruments
|
|
|
|
|
(9
|
)
|
|
|
|
|
775
|
|
|
|
|
|
(142
|
)
|
|
|
|
|
2,688
|
|
Asset retirement obligation accretion
|
|
|
|
|
17
|
|
|
|
|
|
19
|
|
|
|
|
|
75
|
|
|
|
|
|
75
|
|
Amortization of stock-based compensation
|
|
|
|
|
31
|
|
|
|
|
|
44
|
|
|
|
|
|
194
|
|
|
|
|
|
181
|
|
Other
|
|
|
|
|
334
|
|
|
|
|
|
37
|
|
|
|
|
|
303
|
|
|
|
|
|
281
|
|
Net change in working capital
|
|
|
|
|
(189
|
)
|
|
|
|
|
(404
|
)
|
|
|
|
|
(8
|
)
|
|
|
|
|
(311
|
)
|
Change in long-term other assets
|
|
|
|
|
26
|
|
|
|
|
|
74
|
|
|
|
|
|
36
|
|
|
|
|
|
285
|
|
Change in long-term other liabilities
|
|
|
|
|
(8
|
)
|
|
|
|
|
68
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
(6
|
)
|
Net cash from operating activities
|
|
|
|
|
536
|
|
|
|
|
|
1,071
|
|
|
|
|
|
1,746
|
|
|
|
|
|
5,373
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
(671
|
)
|
|
|
|
|
(1,079
|
)
|
|
|
|
|
(2,330
|
)
|
|
|
|
|
(5,308
|
)
|
Acquisitions of property, equipment and businesses
|
|
|
|
|
—
|
|
|
|
|
|
(577
|
)
|
|
|
|
|
(1,641
|
)
|
|
|
|
|
(1,107
|
)
|
Divestitures of property and equipment
|
|
|
|
|
1,229
|
|
|
|
|
|
72
|
|
|
|
|
|
3,118
|
|
|
|
|
|
107
|
|
Other
|
|
|
|
|
(26
|
)
|
|
|
|
|
(8
|
)
|
|
|
|
|
(19
|
)
|
|
|
|
|
(16
|
)
|
Net cash from investing activities
|
|
|
|
|
532
|
|
|
|
|
|
(1,592
|
)
|
|
|
|
|
(872
|
)
|
|
|
|
|
(6,324
|
)
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings of long-term debt, net of issuance costs
|
|
|
|
|
483
|
|
|
|
|
|
1,444
|
|
|
|
|
|
2,145
|
|
|
|
|
|
4,772
|
|
Repayments of long-term debt
|
|
|
|
|
(1,687
|
)
|
|
|
|
|
(861
|
)
|
|
|
|
|
(4,409
|
)
|
|
|
|
|
(2,634
|
)
|
Net short-term debt repayments
|
|
|
|
|
—
|
|
|
|
|
|
625
|
|
|
|
|
|
(626
|
)
|
|
|
|
|
(307
|
)
|
Early retirement of debt
|
|
|
|
|
(183
|
)
|
|
|
|
|
—
|
|
|
|
|
|
(265
|
)
|
|
|
|
|
—
|
|
Issuance of common stock
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1,469
|
|
|
|
|
|
—
|
|
Sale of subsidiary units
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
654
|
|
Issuance of subsidiary units
|
|
|
|
|
57
|
|
|
|
|
|
12
|
|
|
|
|
|
892
|
|
|
|
|
|
25
|
|
Dividends paid on common stock
|
|
|
|
|
(31
|
)
|
|
|
|
|
(100
|
)
|
|
|
|
|
(221
|
)
|
|
|
|
|
(396
|
)
|
Contributions from noncontrolling interests
|
|
|
|
|
17
|
|
|
|
|
|
4
|
|
|
|
|
|
168
|
|
|
|
|
|
16
|
|
Distributions to noncontrolling interests
|
|
|
|
|
(80
|
)
|
|
|
|
|
(68
|
)
|
|
|
|
|
(304
|
)
|
|
|
|
|
(254
|
)
|
Other
|
|
|
|
|
(4
|
)
|
|
|
|
|
—
|
|
|
|
|
|
(13
|
)
|
|
|
|
|
(18
|
)
|
Net cash from financing activities
|
|
|
|
|
(1,428
|
)
|
|
|
|
|
1,056
|
|
|
|
|
|
(1,164
|
)
|
|
|
|
|
1,858
|
|
Effect of exchange rate changes on cash
|
|
|
|
|
(66
|
)
|
|
|
|
|
(12
|
)
|
|
|
|
|
(61
|
)
|
|
|
|
|
(77
|
)
|
Net change in cash and cash equivalents
|
|
|
|
|
(426
|
)
|
|
|
|
|
523
|
|
|
|
|
|
(351
|
)
|
|
|
|
|
830
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
2,385
|
|
|
|
|
|
1,787
|
|
|
|
|
|
2,310
|
|
|
|
|
|
1,480
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
1,959
|
|
|
|
|
$
|
2,310
|
|
|
|
|
$
|
1,959
|
|
|
|
|
$
|
2,310
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
2016
|
|
|
|
|
|
2015
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
1,959
|
|
|
|
|
$
|
2,310
|
|
Accounts receivable
|
|
|
|
|
1,356
|
|
|
|
|
|
1,105
|
|
Assets held for sale
|
|
|
|
|
193
|
|
|
|
|
|
—
|
|
Other current assets
|
|
|
|
|
264
|
|
|
|
|
|
606
|
|
Total current assets
|
|
|
|
|
3,772
|
|
|
|
|
|
4,021
|
|
Property and equipment, at cost:
|
|
|
|
|
|
|
|
|
Oil and gas, based on full cost accounting:
|
|
|
|
|
|
|
|
|
Subject to amortization
|
|
|
|
|
75,648
|
|
|
|
|
|
78,190
|
|
Not subject to amortization
|
|
|
|
|
3,437
|
|
|
|
|
|
2,584
|
|
Total oil and gas
|
|
|
|
|
79,085
|
|
|
|
|
|
80,774
|
|
Midstream and other
|
|
|
|
|
10,455
|
|
|
|
|
|
10,380
|
|
Total property and equipment, at cost
|
|
|
|
|
89,540
|
|
|
|
|
|
91,154
|
|
Less accumulated depreciation, depletion and amortization
|
|
|
|
|
(73,350
|
)
|
|
|
|
|
(72,086
|
)
|
Property and equipment, net
|
|
|
|
|
16,190
|
|
|
|
|
|
19,068
|
|
Goodwill
|
|
|
|
|
3,964
|
|
|
|
|
|
5,032
|
|
Other long-term assets
|
|
|
|
|
1,987
|
|
|
|
|
|
1,330
|
|
Total assets
|
|
|
|
$
|
25,913
|
|
|
|
|
$
|
29,451
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
642
|
|
|
|
|
$
|
906
|
|
Revenues and royalties payable
|
|
|
|
|
908
|
|
|
|
|
|
763
|
|
Short-term debt
|
|
|
|
|
—
|
|
|
|
|
|
976
|
|
Other current liabilities
|
|
|
|
|
1,066
|
|
|
|
|
|
650
|
|
Total current liabilities
|
|
|
|
|
2,616
|
|
|
|
|
|
3,295
|
|
Long-term debt
|
|
|
|
|
10,154
|
|
|
|
|
|
12,056
|
|
Asset retirement obligations
|
|
|
|
|
1,226
|
|
|
|
|
|
1,370
|
|
Other long-term liabilities
|
|
|
|
|
894
|
|
|
|
|
|
853
|
|
Deferred income taxes
|
|
|
|
|
648
|
|
|
|
|
|
888
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
52
|
|
|
|
|
|
42
|
|
Additional paid-in capital
|
|
|
|
|
7,237
|
|
|
|
|
|
4,996
|
|
Retained earnings (accumulated deficit)
|
|
|
|
|
(1,646
|
)
|
|
|
|
|
1,781
|
|
Accumulated other comprehensive earnings
|
|
|
|
|
284
|
|
|
|
|
|
230
|
|
Total stockholders’ equity attributable to Devon
|
|
|
|
|
5,927
|
|
|
|
|
|
7,049
|
|
Noncontrolling interests
|
|
|
|
|
4,448
|
|
|
|
|
|
3,940
|
|
Total stockholders’ equity
|
|
|
|
|
10,375
|
|
|
|
|
|
10,989
|
|
Total liabilities and stockholders’ equity
|
|
|
|
$
|
25,913
|
|
|
|
|
$
|
29,451
|
|
Common shares outstanding
|
|
|
|
|
523
|
|
|
|
|
|
418
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATING STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2016
|
|
|
|
|
Devon U.S. & Canada
|
|
|
|
EnLink
|
|
|
|
Eliminations
|
|
|
|
Total
|
Oil, gas and NGL sales
|
|
|
|
$
|
1,159
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
1,159
|
|
Oil, gas and NGL derivatives
|
|
|
|
|
(171
|
)
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
(171
|
)
|
Marketing and midstream revenues
|
|
|
|
|
758
|
|
|
|
|
|
1,225
|
|
|
|
|
|
(163
|
)
|
|
|
|
|
1,820
|
|
Asset dispositions and other
|
|
|
|
|
558
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
—
|
|
|
|
|
|
542
|
|
Total revenues and other
|
|
|
|
|
2,304
|
|
|
|
|
|
1,209
|
|
|
|
|
|
(163
|
)
|
|
|
|
|
3,350
|
|
Lease operating expenses
|
|
|
|
|
367
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
367
|
|
Marketing and midstream operating expenses
|
|
|
|
|
769
|
|
|
|
|
|
1,002
|
|
|
|
|
|
(163
|
)
|
|
|
|
|
1,608
|
|
General and administrative expenses
|
|
|
|
|
133
|
|
|
|
|
|
30
|
|
|
|
|
|
—
|
|
|
|
|
|
163
|
|
Production and property taxes
|
|
|
|
|
48
|
|
|
|
|
|
7
|
|
|
|
|
|
—
|
|
|
|
|
|
55
|
|
Depreciation, depletion and amortization
|
|
|
|
|
241
|
|
|
|
|
|
131
|
|
|
|
|
|
—
|
|
|
|
|
|
372
|
|
Asset impairments
|
|
|
|
|
124
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
124
|
|
Restructuring and transaction costs
|
|
|
|
|
1
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
1
|
|
Other operating items
|
|
|
|
|
23
|
|
|
|
|
|
—
|
|
|
|
|
|
—
|
|
|
|
|
|
23
|
|
Total operating expenses
|
|
|
|
|
1,706
|
|
|
|
|
|
1,170
|
|
|
|
|
|
(163
|
)
|
|
|
|
|
2,713
|
|
Operating income
|
|
|
|
|
598
|
|
|
|
|
|
39
|
|
|
|
|
|
—
|
|
|
|
|
|
637
|
|
Net financing costs
|
|
|
|
|
284
|
|
|
|
|
|
50
|
|
|
|
|
|
—
|
|
|
|
|
|
334
|
|
Other nonoperating items
|
|
|
|
|
(92
|
)
|
|
|
|
|
20
|
|
|
|
|
|
—
|
|
|
|
|
|
(72
|
)
|
Earnings (loss) before income taxes
|
|
|
|
|
406
|
|
|
|
|
|
(31
|
)
|
|
|
|
|
—
|
|
|
|
|
|
375
|
|
Income tax expense (benefit)
|
|
|
|
|
56
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
—
|
|
|
|
|
|
55
|
|
Net earnings (loss)
|
|
|
|
|
350
|
|
|
|
|
|
(30
|
)
|
|
|
|
|
—
|
|
|
|
|
|
320
|
|
Net loss attributable to noncontrolling interests
|
|
|
|
|
—
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
—
|
|
|
|
|
|
(11
|
)
|
Net earnings (loss) attributable to Devon
|
|
|
|
$
|
350
|
|
|
|
|
$
|
(19
|
)
|
|
|
|
$
|
—
|
|
|
|
|
$
|
331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER KEY STATISTICS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
Quarter Ended December 31, 2016
|
|
|
|
|
Devon U.S. & Canada
|
|
|
|
EnLink
|
|
|
|
Eliminations
|
|
|
|
Total
|
Cash flow statement related items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flow
|
|
|
|
$
|
383
|
|
|
|
|
$
|
153
|
|
|
|
|
$
|
—
|
|
|
|
$
|
536
|
|
Capital expenditures
|
|
|
|
$
|
(432
|
)
|
|
|
|
$
|
(239
|
)
|
|
|
|
$
|
—
|
|
|
|
$
|
(671
|
)
|
Divestitures of property and equipment
|
|
|
|
$
|
1,141
|
|
|
|
|
$
|
88
|
|
|
|
|
$
|
—
|
|
|
|
$
|
1,229
|
|
Repayments of long-term debt
|
|
|
|
$
|
(1,254
|
)
|
|
|
|
$
|
(433
|
)
|
|
|
|
$
|
—
|
|
|
|
$
|
(1,687
|
)
|
EnLink distributions received (paid)
|
|
|
|
$
|
66
|
|
|
|
|
$
|
(146
|
)
|
|
|
|
$
|
—
|
|
|
|
$
|
(80
|
)
|
Issuance of subsidiary units
|
|
|
|
$
|
—
|
|
|
|
|
$
|
57
|
|
|
|
|
$
|
—
|
|
|
|
$
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance sheet statement items:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt (1)
|
|
|
|
$
|
4,911
|
|
|
|
|
$
|
3,284
|
|
|
|
|
$
|
—
|
|
|
|
$
|
8,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Net debt is a non-GAAP measure. For a reconciliation of the
comparable GAAP measure, see "Non-GAAP Financial Measures" later in
this release.
|
|
|
|
|
|
|
|
|
|
CAPITAL EXPENDITURES
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, 2016
|
|
|
|
Year Ended December 31, 2016
|
Exploration and development capital(1)
|
|
|
|
$
|
363
|
|
|
|
$
|
1,166
|
Capitalized G&A and interest
|
|
|
|
|
78
|
|
|
|
|
308
|
Acquisitions
|
|
|
|
|
36
|
|
|
|
|
1,595
|
Other
|
|
|
|
|
20
|
|
|
|
|
40
|
Devon capital expenditures(2)
|
|
|
|
$
|
497
|
|
|
|
$
|
3,109
|
|
|
|
|
|
|
|
|
|
(1) Exploration and development capital in this table is presented
before capitalized G&A and interest. The full-year amount excludes a
$95 million positive revision to future asset retirement
obligations, which is included in costs incurred. The fourth quarter
and full-year amounts include $8 million and $32 million for
abandonment expenditures paid during each respective period, which
are not included in costs incurred.
|
|
(2) Excludes $266 and $1,082 million attributable to EnLink for the
fourth quarter and year end of 2016, respectively.
|
|
|
|
|
|
COSTS INCURRED
|
|
|
|
Total
|
(in millions)
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2016
|
|
|
|
|
2015
|
Property acquisition costs:
|
|
|
|
|
|
|
|
|
Proved properties
|
|
|
|
$
|
237
|
|
|
|
$
|
195
|
Unproved properties
|
|
|
|
|
1,358
|
|
|
|
|
717
|
Exploration costs
|
|
|
|
|
394
|
|
|
|
|
587
|
Development costs
|
|
|
|
|
1,143
|
|
|
|
|
3,671
|
Costs Incurred
|
|
|
|
$
|
3,132
|
|
|
|
$
|
5,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2016
|
|
|
|
|
2015
|
Property acquisition costs:
|
|
|
|
|
|
|
|
|
Proved properties
|
|
|
|
$
|
237
|
|
|
|
$
|
193
|
Unproved properties
|
|
|
|
|
1,356
|
|
|
|
|
634
|
Exploration costs
|
|
|
|
|
345
|
|
|
|
|
478
|
Development costs
|
|
|
|
|
1,034
|
|
|
|
|
3,269
|
Costs Incurred
|
|
|
|
$
|
2,972
|
|
|
|
$
|
4,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
|
2016
|
|
|
|
|
2015
|
Property acquisition costs:
|
|
|
|
|
|
|
|
|
Proved properties
|
|
|
|
$
|
—
|
|
|
|
$
|
2
|
Unproved properties
|
|
|
|
|
2
|
|
|
|
|
83
|
Exploration costs
|
|
|
|
|
49
|
|
|
|
|
109
|
Development costs
|
|
|
|
|
109
|
|
|
|
|
402
|
Costs Incurred
|
|
|
|
$
|
160
|
|
|
|
$
|
596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RESERVES RECONCILIATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
Oil / Bitumen (MMBbls)
|
|
|
|
Gas (Bcf)
|
|
|
|
NGL (MMBbls)
|
|
|
|
Total (MMBoe)
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed
|
|
|
|
444
|
|
|
|
|
5,707
|
|
|
|
|
411
|
|
|
|
|
1,806
|
|
Proved undeveloped
|
|
|
|
340
|
|
|
|
|
114
|
|
|
|
|
17
|
|
|
|
|
376
|
|
Total Proved
|
|
|
|
784
|
|
|
|
|
5,821
|
|
|
|
|
428
|
|
|
|
|
2,182
|
|
Revisions due to prices
|
|
|
|
3
|
|
|
|
|
(103
|
)
|
|
|
|
(13
|
)
|
|
|
|
(27
|
)
|
Revisions other than price
|
|
|
|
(18
|
)
|
|
|
|
638
|
|
|
|
|
48
|
|
|
|
|
137
|
|
Extensions and discoveries
|
|
|
|
38
|
|
|
|
|
280
|
|
|
|
|
42
|
|
|
|
|
126
|
|
Purchase of reserves
|
|
|
|
8
|
|
|
|
|
33
|
|
|
|
|
7
|
|
|
|
|
20
|
|
Production
|
|
|
|
(95
|
)
|
|
|
|
(517
|
)
|
|
|
|
(42
|
)
|
|
|
|
(223
|
)
|
Sale of reserves
|
|
|
|
(25
|
)
|
|
|
|
(521
|
)
|
|
|
|
(45
|
)
|
|
|
|
(157
|
)
|
As of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed
|
|
|
|
367
|
|
|
|
|
5,377
|
|
|
|
|
387
|
|
|
|
|
1,649
|
|
Proved undeveloped
|
|
|
|
328
|
|
|
|
|
254
|
|
|
|
|
38
|
|
|
|
|
409
|
|
Total Proved
|
|
|
|
695
|
|
|
|
|
5,631
|
|
|
|
|
425
|
|
|
|
|
2,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
|
Oil / Bitumen (MMBbls)
|
|
|
|
Gas (Bcf)
|
|
|
|
NGL (MMBbls)
|
|
|
|
Total (MMBoe)
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed
|
|
|
|
203
|
|
|
|
|
5,694
|
|
|
|
|
411
|
|
|
|
|
1,563
|
|
Proved undeveloped
|
|
|
|
39
|
|
|
|
|
114
|
|
|
|
|
17
|
|
|
|
|
75
|
|
Total Proved
|
|
|
|
242
|
|
|
|
|
5,808
|
|
|
|
|
428
|
|
|
|
|
1,638
|
|
Revisions due to prices
|
|
|
|
(18
|
)
|
|
|
|
(103
|
)
|
|
|
|
(13
|
)
|
|
|
|
(48
|
)
|
Revisions other than price
|
|
|
|
(2
|
)
|
|
|
|
628
|
|
|
|
|
48
|
|
|
|
|
151
|
|
Extensions and discoveries
|
|
|
|
36
|
|
|
|
|
280
|
|
|
|
|
42
|
|
|
|
|
124
|
|
Purchase of reserves
|
|
|
|
8
|
|
|
|
|
33
|
|
|
|
|
7
|
|
|
|
|
20
|
|
Production
|
|
|
|
(47
|
)
|
|
|
|
(510
|
)
|
|
|
|
(42
|
)
|
|
|
|
(174
|
)
|
Sale of reserves
|
|
|
|
(25
|
)
|
|
|
|
(521
|
)
|
|
|
|
(45
|
)
|
|
|
|
(157
|
)
|
As of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed
|
|
|
|
160
|
|
|
|
|
5,361
|
|
|
|
|
387
|
|
|
|
|
1,439
|
|
Proved undeveloped
|
|
|
|
34
|
|
|
|
|
254
|
|
|
|
|
38
|
|
|
|
|
115
|
|
Total Proved
|
|
|
|
194
|
|
|
|
|
5,615
|
|
|
|
|
425
|
|
|
|
|
1,554
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada
|
|
|
|
|
Oil / Bitumen (MMBbls)
|
|
|
|
Gas (Bcf)
|
|
|
|
NGL (MMBbls)
|
|
|
|
Total (MMBoe)
|
As of December 31, 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed
|
|
|
|
241
|
|
|
|
|
13
|
|
|
|
|
—
|
|
|
|
|
243
|
|
Proved undeveloped
|
|
|
|
301
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
301
|
|
Total Proved
|
|
|
|
542
|
|
|
|
|
13
|
|
|
|
|
—
|
|
|
|
|
544
|
|
Revisions due to prices
|
|
|
|
21
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
21
|
|
Revisions other than price
|
|
|
|
(16
|
)
|
|
|
|
10
|
|
|
|
|
—
|
|
|
|
|
(14
|
)
|
Extensions and discoveries
|
|
|
|
2
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
2
|
|
Production
|
|
|
|
(48
|
)
|
|
|
|
(7
|
)
|
|
|
|
—
|
|
|
|
|
(49
|
)
|
As of December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proved developed
|
|
|
|
207
|
|
|
|
|
16
|
|
|
|
|
—
|
|
|
|
|
210
|
|
Proved undeveloped
|
|
|
|
294
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
294
|
|
Total Proved
|
|
|
|
501
|
|
|
|
|
16
|
|
|
|
|
—
|
|
|
|
|
504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-GAAP FINANCIAL MEASURES
This press release includes non-GAAP financial measures. These non-GAAP
measures are not alternatives to GAAP measures, and you should not
consider these non-GAAP measures in isolation or as a substitute for
analysis of our results as reported under GAAP. Below is additional
disclosure regarding each of the non-GAAP measures used in this press
release, including reconciliations to their most directly comparable
GAAP measure.
CORE EARNINGS
Devon’s reported net earnings include items of income and expense that
are typically excluded by securities analysts in their published
estimates of the company’s financial results. Accordingly, the company
also uses the measures of core earnings and core earnings per share
attributable to Devon. Devon believes these non-GAAP measures facilitate
comparisons of its performance to earnings estimates published by
securities analysts. Devon also believes these non-GAAP measures can
facilitate comparisons of its performance between periods and to the
performance of its peers. The following table summarizes the effects of
these items on fourth-quarter 2016 earnings.
|
|
|
|
|
(in millions, except per share amounts)
|
|
|
|
Quarter Ended December 31, 2016
|
|
|
|
|
Before-tax
|
|
|
|
After-tax
|
|
|
|
After Noncontrolling Interests
|
|
|
|
Per Share
|
Earnings attributable to Devon (GAAP)
|
|
|
|
$
|
375
|
|
|
|
|
$
|
320
|
|
|
|
|
$
|
331
|
|
|
|
|
$
|
0.63
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gains and losses on asset sales
|
|
|
|
|
(539
|
)
|
|
|
|
|
(455
|
)
|
|
|
|
|
(462
|
)
|
|
|
|
|
(0.87
|
)
|
Asset impairments
|
|
|
|
|
145
|
|
|
|
|
|
107
|
|
|
|
|
|
100
|
|
|
|
|
|
0.19
|
|
Deferred tax asset valuation allowance
|
|
|
|
|
—
|
|
|
|
|
|
(16
|
)
|
|
|
|
|
(16
|
)
|
|
|
|
|
(0.03
|
)
|
Restructuring and transaction costs
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
|
|
|
|
1
|
|
|
|
|
|
—
|
|
Fair value changes in financial instruments and foreign currency
|
|
|
|
|
69
|
|
|
|
|
|
62
|
|
|
|
|
|
59
|
|
|
|
|
|
0.11
|
|
Early retirement of debt
|
|
|
|
|
185
|
|
|
|
|
|
118
|
|
|
|
|
|
118
|
|
|
|
|
|
0.22
|
|
Core earnings attributable to Devon (Non-GAAP)
|
|
|
|
$
|
236
|
|
|
|
|
$
|
137
|
|
|
|
|
$
|
131
|
|
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET DEBT
Devon defines net debt as debt less cash and cash equivalents and net
debt attributable to the consolidation of EnLink Midstream as presented
in the following table. Devon believes that netting these sources of
cash against debt and adjusting for EnLink net debt provides a clearer
picture of the future demands on cash from Devon to repay debt.
|
|
|
|
|
(in millions)
|
|
|
|
December 31, 2016
|
|
|
|
|
Devon U.S. & Canada
|
|
|
|
EnLink
|
|
|
|
Devon Consolidated
|
Total debt (GAAP)
|
|
|
|
$
|
6,859
|
|
|
|
|
$
|
3,295
|
|
|
|
|
$
|
10,154
|
|
Less cash and cash equivalents
|
|
|
|
|
(1,948
|
)
|
|
|
|
|
(11
|
)
|
|
|
|
|
(1,959
|
)
|
Net debt (Non-GAAP)
|
|
|
|
$
|
4,911
|
|
|
|
|
$
|
3,284
|
|
|
|
|
$
|
8,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FINDING COST
Finding cost is defined as costs incurred less acquisitions costs. Devon
believes finding cost is relevant because it provides additional insight
into costs associated with current year exploration and development
activities. Certain securities analysts also use this methodology to
measure Devon’s performance. It should be noted that the actual costs of
reserves added through Devon’s drilling program will differ, sometimes
significantly, from the direct comparison of capital spent and reserves
added in any given period due to the timing of capital expenditures and
reserves bookings.
|
|
|
|
|
(in millions)
|
|
|
|
Year Ended December 31, 2016
|
|
|
|
|
United States
|
Costs Incurred (GAAP)
|
|
|
|
$
|
2,972
|
Less:
|
|
|
|
|
Acquisition costs
|
|
|
|
|
1,593
|
Finding cost (Non-GAAP)
|
|
|
|
$
|
1,379
|
|
|
|
|
|
Revisions other than price
|
|
|
|
|
151
|
Extensions and discoveries
|
|
|
|
|
124
|
Total
|
|
|
|
|
275
|
|
|
|
|
|
Finding cost per BOE (Non-GAAP)
|
|
|
|
$
|
5.01
|
|
|
|
|
|
|
UPSTREAM CASH FLOW
Devon defines upstream cash flow as cash flow from operations less
EnLink cash flow from operations, less cash flow from divested assets
and debt repayments, plus distributions received from EnLink. Devon
believes upstream cash flow is relevant because it provides a clearer
picture of cash flow generation ability from Devon’s retained upstream
assets and its investment in EnLink.
|
|
|
|
|
(in millions)
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2016
|
Consolidated cash flow from operations (GAAP)
|
|
|
|
$
|
1,746
|
Less: EnLink cash flow from operations
|
|
|
|
|
666
|
Devon cash flow from operations
|
|
|
|
|
1,080
|
|
|
|
|
|
Less: cash flow from divested assets
|
|
|
|
|
150
|
Less: cash associated with debt repayments
|
|
|
|
|
265
|
Add: EnLink distributions received
|
|
|
|
|
265
|
|
|
|
|
|
Upstream cash flow (Non-GAAP)
|
|
|
|
$
|
930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DEVON ENERGY CORPORATION
|
FORWARD-LOOKING GUIDANCE
|
|
|
|
|
|
|
|
|
|
PRODUCTION GUIDANCE
|
|
|
|
Quarter 1
|
|
|
|
Full Year
|
|
|
|
|
Low
|
|
|
|
High
|
|
|
|
Low
|
|
|
|
High
|
Oil and bitumen (MBbls/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
114
|
|
|
|
118
|
|
|
|
119
|
|
|
|
123
|
Heavy Oil
|
|
|
|
133
|
|
|
|
138
|
|
|
|
130
|
|
|
|
135
|
Total
|
|
|
|
247
|
|
|
|
256
|
|
|
|
249
|
|
|
|
258
|
Natural gas liquids (MBbls/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
88
|
|
|
|
93
|
|
|
|
95
|
|
|
|
100
|
Gas (MMcf/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
1,190
|
|
|
|
1,220
|
|
|
|
1,160
|
|
|
|
1,200
|
Heavy Oil
|
|
|
|
14
|
|
|
|
18
|
|
|
|
14
|
|
|
|
16
|
Total
|
|
|
|
1,204
|
|
|
|
1,238
|
|
|
|
1,174
|
|
|
|
1,216
|
Oil equivalent (MBoe/d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
400
|
|
|
|
414
|
|
|
|
407
|
|
|
|
423
|
Heavy Oil
|
|
|
|
135
|
|
|
|
141
|
|
|
|
132
|
|
|
|
138
|
Total
|
|
|
|
535
|
|
|
|
555
|
|
|
|
539
|
|
|
|
561
|
|
|
|
|
|
|
|
|
|
PRICE REALIZATIONS GUIDANCE
|
|
|
|
Quarter 1
|
|
|
|
Full Year
|
|
|
|
|
Low
|
|
|
|
High
|
|
|
|
Low
|
|
|
|
High
|
Oil and bitumen - % of WTI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S.
|
|
|
|
|
88
|
%
|
|
|
|
|
98
|
%
|
|
|
|
|
88
|
%
|
|
|
|
|
98
|
%
|
Canada
|
|
|
|
|
45
|
%
|
|
|
|
|
55
|
%
|
|
|
|
|
48
|
%
|
|
|
|
|
58
|
%
|
NGL - realized price
|
|
|
|
$
|
12
|
|
|
|
|
$
|
15
|
|
|
|
|
$
|
12
|
|
|
|
|
$
|
15
|
|
Natural gas - % of Henry Hub
|
|
|
|
|
78
|
%
|
|
|
|
|
88
|
%
|
|
|
|
|
78
|
%
|
|
|
|
|
88
|
%
|
|
|
|
|
|
|
|
|
|
OTHER GUIDANCE ITEMS
|
|
|
|
Quarter 1
|
|
|
|
Full Year
|
($ millions, except %)
|
|
|
|
Low
|
|
|
|
High
|
|
|
|
Low
|
|
|
|
High
|
Marketing & midstream operating profit
|
|
|
|
$
|
200
|
|
|
|
|
$
|
220
|
|
|
|
|
$
|
900
|
|
|
|
|
$
|
950
|
|
Lease operating expenses
|
|
|
|
$
|
350
|
|
|
|
|
$
|
400
|
|
|
|
|
$
|
1,500
|
|
|
|
|
$
|
1,600
|
|
General & administrative expenses - Devon
|
|
|
|
$
|
130
|
|
|
|
|
$
|
150
|
|
|
|
|
$
|
500
|
|
|
|
|
$
|
550
|
|
General & administrative expenses - EnLink
|
|
|
|
$
|
35
|
|
|
|
|
$
|
45
|
|
|
|
|
$
|
130
|
|
|
|
|
$
|
140
|
|
Production and property taxes
|
|
|
|
$
|
75
|
|
|
|
|
$
|
85
|
|
|
|
|
$
|
275
|
|
|
|
|
$
|
325
|
|
Depreciation, depletion and amortization
|
|
|
|
$
|
375
|
|
|
|
|
$
|
425
|
|
|
|
|
$
|
1,650
|
|
|
|
|
$
|
1,750
|
|
Other operating items
|
|
|
|
$
|
15
|
|
|
|
|
$
|
25
|
|
|
|
|
$
|
70
|
|
|
|
|
$
|
80
|
|
Net financing costs
|
|
|
|
$
|
125
|
|
|
|
|
$
|
135
|
|
|
|
|
$
|
485
|
|
|
|
|
$
|
535
|
|
Current income tax rate
|
|
|
|
|
5.0
|
%
|
|
|
|
|
15.0
|
%
|
|
|
|
|
5.0
|
%
|
|
|
|
|
15.0
|
%
|
Deferred income tax rate
|
|
|
|
|
20.0
|
%
|
|
|
|
|
30.0
|
%
|
|
|
|
|
20.0
|
%
|
|
|
|
|
30.0
|
%
|
Total income tax rate
|
|
|
|
|
25.0
|
%
|
|
|
|
|
45.0
|
%
|
|
|
|
|
25.0
|
%
|
|
|
|
|
45.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings attributable to noncontrolling interests
|
|
|
|
$
|
—
|
|
|
|
|
$
|
5
|
|
|
|
|
$
|
50
|
|
|
|
|
$
|
100
|
|
|
|
|
|
|
|
|
|
|
CAPITAL EXPENDITURES GUIDANCE
|
|
|
|
Quarter 1
|
|
|
|
Full Year
|
(in millions)
|
|
|
|
Low
|
|
|
|
High
|
|
|
|
Low
|
|
|
|
High
|
Exploration and development
|
|
|
|
$
|
450
|
|
|
|
$
|
500
|
|
|
|
$
|
2,000
|
|
|
|
$
|
2,300
|
Capitalized G&A
|
|
|
|
|
55
|
|
|
|
|
65
|
|
|
|
|
200
|
|
|
|
|
250
|
Capitalized interest
|
|
|
|
|
15
|
|
|
|
|
20
|
|
|
|
|
60
|
|
|
|
|
90
|
Other
|
|
|
|
|
5
|
|
|
|
|
10
|
|
|
|
|
25
|
|
|
|
|
50
|
Devon capital expenditures (1)
|
|
|
|
$
|
525
|
|
|
|
$
|
595
|
|
|
|
$
|
2,285
|
|
|
|
$
|
2,690
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes capital expenditures related to EnLink.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMODITY HEDGES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Commodity Hedges
|
|
|
|
|
Price Swaps
|
|
|
|
Price Collars
|
Period
|
|
|
|
Volume (Bbls/d)
|
|
|
|
Weighted Average Price ($/Bbl)
|
|
|
|
Volume (Bbls/d)
|
|
|
|
Weighted Average Floor Price ($/Bbl)
|
|
|
|
Weighted Average Ceiling Price ($/Bbl)
|
Q1-Q4 2017
|
|
|
|
73,760
|
|
|
|
$
|
54.33
|
|
|
|
56,259
|
|
|
|
$
|
45.45
|
|
|
|
$
|
58.11
|
Q1-Q4 2018
|
|
|
|
4,096
|
|
|
|
$
|
54.31
|
|
|
|
7,685
|
|
|
|
$
|
47.77
|
|
|
|
$
|
57.77
|
|
|
|
|
|
|
|
|
|
Oil Basis Swaps
|
Period
|
|
|
|
Index
|
|
|
|
Volume (Bbls/d)
|
|
|
|
Weighted Average Differential to WTI ($/Bbl)
|
Q1-Q4 2017
|
|
|
|
Western Canadian Select
|
|
|
|
26,910
|
|
|
|
$
|
(15.24
|
)
|
Q1-Q4 2017
|
|
|
|
Midland Sweet
|
|
|
|
17,534
|
|
|
|
$
|
(0.41
|
)
|
|
|
|
|
|
Natural Gas Commodity Hedges
|
|
|
Price Swaps
|
|
Price Collars
|
Period
|
|
Volume (MMBtu/d)
|
|
Weighted Average Price ($/MMBtu)
|
|
Volume (MMBtu/d)
|
|
Weighted Average Floor Price ($/MMBtu)
|
|
Weighted Average Ceiling Price ($/MMBtu)
|
Q1-Q4 2017
|
|
209,863
|
|
$
|
3.16
|
|
360,425
|
|
$
|
2.99
|
|
$
|
3.40
|
Q1-Q4 2018
|
|
44,500
|
|
$
|
3.32
|
|
33,904
|
|
$
|
3.29
|
|
$
|
3.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Devon’s oil derivatives settle against the average of the prompt month
NYMEX West Texas Intermediate futures price. Devon’s natural gas
derivatives settle against the Inside FERC first of the month Henry Hub
index. Commodity hedge positions are shown as of February 7, 2017.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170214006351/en/
Source: Devon Energy Corporation