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The mega cap oil and gas companies tend to be stodgy behemoths. Lacking nimbleness these supermajors compensate with patience. Next on the food chain are the large independent US oil and gas producers with more robust growth. The large E&Ps are leaders in advancing technology and deal making. Perhaps the stock of conservative independent Devon Energy (DVN) has a catalyst with management planning to capitalize on opportunities and become more aggressive.

Only a decade ago Devon was the pioneer of horizontal shale drilling through the purchase of Mitchell Energy. Today Devon is considered slow moving next to land grab chasers EOG Resources (EOG) and especially Chesapeake Energy (CHK). EOG is well capitalized next to Chesapeake, but Devon has a cash hoard.

In a stroke of good fortune, Devon sold their Gulf of Mexico production assets for more than $9 billion shortly before the BP (BP) Macondo disaster. Last year Devon sold assets in Brazil for $3.2 billion. In November Devon completed a $3.5 billion share repurchase program for 11% of outstanding shares and finished 2011 with a cash balance of $7.1 billion. Devon's debt to capital is 46%, however, net debt to adjusted capital was a low 11%. Investors and analysts have been impatient in waiting for management to deploy the capital.

As opportunities in the industry have expanded, many participants are stretching their balance sheets and being creative with financing. Monetizing pipeline assets is common, but Devon still owns all of its 15,000 miles of pipe. Joint ventures are popular, yet Devon's JV with Sinopec (SHI) was done on its own merits. Devon Energy has a vast array of assets; however, the capital structure of the company is not hidden from view with many off balance sheet arrangements.

At the Analyst's Day Presentation Devon announced an increase in their 2012 budget for exploration and leasehold acquisition from $530 million to $1.6 billion. Chesapeake, for example, is under constant pressure by investors for their continual and aggressive land grab. Devon is in the opposite position. Perhaps the dull and uninspiring view of the company will change.

Moving faster into the horizontal oil drilling land grab with over $1 billion in 2012 grass roots leasehold acquisitions, without stretching the balance sheet, may have investors re-rate the stock higher. Putting a premium valuation on the stock could be worth a bump in the shares relative to industry peers.

Source: Devon Energy Takes Action, Investors Should Follow Suit