Reading company reports are important to understanding a company’s status. Devon Energy is getting ready to report on their company, and there are few important items to look for. Paul Chi gives us 3 things to pay attention to and note.
No. 1: production
In 2011, production averaged 658,000 barrels equivalent per day. That number should increase nicely in 2012. For the first quarter, growth is only expected to clock in at 1.5% year over year, which should make for production of 685,000 to 695,000 barrels equivalent per day. As the year goes on, that number should steadily increase. In fact, as of early April, the company was already producing almost 700,000 barrels per day. At the end of the year, Devon expects to be producing about 710,000 barrels a day.No. 2: liquids growth
Year-over-year production growth is great, but we want profitable growth. That’s no problem for Devon, as the company is held by production on essentially all of its acreage. That means that while other companies are still drilling for natural gas in order to avoid losing their acreage, Devon can instead make capital allocation decisions based on rates of return. Obviously, natural-gas plays are bad places for capital right now. Devon’s current rig allocation bears that out.No. 3: increased spending
In addition to its portfolio of developmental drilling opportunities, Devon has a robust pipeline of exploration projects to balance out its portfolio of maturing assets. One of the major exploration projects is the 1.4 million-acre joint venture with China Petrochemical (NYSE:SNP ) , otherwise known as Sinopec. The pair will drill 125 wells across five different emerging plays for a gross amount of $620 million.
Looks like they have the nuts and bolts to be a successful report. However, if one of these items become questionable to you, be sure to research further. The report is key, just know what to take note of!
Quotes taken from report from Paul Chi, Read the entire article here.
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