Devon Energy Corp. (NYSE:DVN) reported a net loss for its fourth quarter of $6.8 billion (EPS of -$15.42), and a net loss for the year of $2.1 billion (EPS of -$4.85). Anyone who is surprised by these numbers hasn’t been paying attention.
Devon recalculated the value of its oil and gas reserves, as it isrequired to do by SEC rules, and took a non-cash $7.1 billionwrite-down in the carrying value of its oil and gas properties. Withoutthat write-down, the company would have reported EPS of $9.91 for the year, belowanalysts’ estimates of $10.03. Revenue estimates were $15.09 billionfor the year, and Devon posted $15.21 billion.
The worst news from the results is Devon’s cash position, which hasmelted from $1.36 billion at the end of 2007 to $379 million at the endof 2008. The company did lower its short-term and long-term debt overthe course of the year, so that helps some.
Devon also reported a slight decrease in total proved reserves from2.496 billion barrels of oil equivalent at the end of 2007 to 2.428billion barrels at the end of 2008.
Its reserves of crude oil dropped from 677 million barrels to 429million barrels. The drop in prices accounted for 355 million barrelsof the decline. Crude production of 53 million barrels was offset by150 million barrels of newly discovered and acquired properties. Thestory in the company’s natural gas reserves is the same. If there’s anygood news in Devon’s numbers, this is where it is.
Devon’s share price is off nearly 4% at $59.65 so far this morning, off about 53% from 52-week highs.
Paul Ausick
February 4, 2009
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