DOW JONES NEWSWIRES
Devon Energy Corp. (DVN) said Wednesday it swung to a
first-quarter loss on a $4.2 billion write-down of the value of its
oil and gas properties.
The oil and gas independent - meaning it produces oil and gas
but doesn't refine - has grown through its unconventional natural
gas sources, such as shale. Falling commodity prices have hit the
industry hard, however, driving many companies to cut back
production and capital spending.
The company had $1.54 billion in capital expenditures during the
quarter, down from $2 billion a year earlier. Devon said in
December it was delaying the release of its capital budget until
early this year, citing market volatility, though it projected
activity would decrease. It didn't give any forecasts for spending
with its results.
Devon posted a loss of $3.96 billion, or $8.92 a share,
compared-with year-earlier income of $749 million, or $1.66 a
share, a year earlier. The latest results included the write-down,
while the prior year's included 22 cents in income from
discontinued operations. Excluding items, earnings were 48
cents.
Revenue decreased 32% to $2.03 billion.
Analysts surveyed by Thomson Reuters expected earnings of 28
cents on revenue of $1.84 billion.
The company does most of its business in North America. Devon
shed its West African properties in 2007 and 2008, but it still has
assets in China, Brazil and Azerbaijan.
Production from continuing operations rose 7% to 685,000 barrels
of oil equivalent a day. Total natural gas production rose 9.8% as
realized prices, excluding hedging effects, dropped 49%. Oil
production fell 4.9% as prices plunged 62%.
Devon's shares closed Tuesday at $54.48 and haven't traded
premarket.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com