Devon Energy Corporation (DVN) is a leading independent energy company that is engaged in the exploration and development of natural gas liquids. For the first quarter of 2012, the company reported earnings per share of $1.05 per share against an EPS for the fiscal 2011 of $6 per share. First-quarter revenues of $2.5 billion were down more than 3% on a year on year basis and the revenues for the full year 2011 were $11.45 billion.
Gross margin at 66.4% was down, but operating margin at 28.4% – which was 1.5% better than the comparable quarter in the previous year. Net margin at 15.7% was down by 2.3%. Net earnings for the quarter were $393 million and cash flow generation was $1.4 billion, which is a 3% increase over the comparable quarter in the previous year. The strong showing for the quarter was partly due to the increased production of liquids for the sixth consecutive quarter at 256,000 Boe per day.
Devon is performing well and shareholders showed their appreciation for the company and its management with strong support for all the proposals of the company at its annual meeting. The company has gained a foothold in most of the significant gas plays in the US such as the Mississippian, the Utica, the Permian, and the Barnett as well as oil sands and liquid natural gas developments in Canada.
Within the United States, the company appears to be focusing on the Utica and the Cline. Devon estimates that each well drilled in the Cline formation, which is rich in oil and liquid gas, could produce 570,000 boe, with flow rates up to 600 boe per day in the first month, at a cost of $6.5 million per well.To continue reading, click here.