Among the companies hit hard by the sudden impact of hydraulic fracturing technology and the subsequent boom in U.S. natural gas production, one of the hardest hit was Devon Energy Corp. (NYSE: DVN), which has seen its share price cut in half since peaking at around $120 in the summer of 2008. Today the company reported that it took a fourth quarter impairment charge of $896 million, resulting in a net loss of $0.89 per share.

To combat the declining book value of its assets, the company’s CEO mentioned during the conference call that Devon may take a second look at spinning off its pipeline and processing assets into a master limited partnership (MLP). The company first explored the possibility in 2007, but had to pull back when it became clear that the opportunity just wasn’t there.

Devon’s midstream and marketing revenues totaled $1.66 billion in 2012 against costs and expenses totaling $1.25 billion. Midstream capex totaled $530 million for the year.

At the end of 2011 Devon claimed more than 3,000 miles of pipeline, two natural gas processing plants, and a natural gas liquids fractionation plant. The midstream operations support the company’s production capabilities in the Barnett shale play. Devon added more processing capacity during 2012, so the relatively high capex spending may be a one-time thing.

Still, while there may be value in the company’s midstream operations, convincing investors could be a different story.

Shares of Devon are down about 3.7% today, at $58.36 in a 52-week range of $50.89 to $76.34.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.