Devon Energy Corporation (DVN) declares $0.22/share quarterly dividend, in line with previous. Forward yield 1.55 %. For shareholders of record September 13. Payable September 30.Ex-div date September 11. (PR)
BAML analysts lower their expectations for Brent crude prices on weakening demand in China and Europe, rising supplies and higher inventories - "a cocktail for lower prices." But demand this summer should rise, prompting the firm to suggest a list of six "stocks for the summer" to own: APC, OXY, MRO, PXD, DVN, CHK.
NorthWestern Energy (NWE -1.3%) purchases the operating and non-operating natural gas production interests in northern Montana's Bear Paw Basin from Devon Energy (DVN -0.6%), including DVN's 82% interest in the Havre Pipeline Company. Estimated natural gas production from the acquisition will be approximately 5.6 BCF in 2013, or about 28% of NWE's current annual natural gas load in Montana.
Devon Energy (DVN -1.4%) is downgraded to Neutral from Overweight at J.P. Morgan. Although DVN's decision on its midstream MLP is expected by the end of Q2 and other potential strategic changes by year-end, the firm is skeptical that any changes would be enough to cause mid- to long-term stock outperformance.
Oil production from Ohio's Utica shale was lower in 2012 than first anticipated but will be "incidental" to gas output in much of the play, Ohio regulators say. Oil production averaged 1,742 bbl/day, while gas totaled 35M cf/day. Chesapeake (CHK) was by far the largest producer, with total 2012 output of 10B cf of gas, followed by Hess (HES) and Gulfport (GPOR); Devon Energy (DVN) produced no gas from its five wells.
The shale bonanza has sparked a switch in the behavior of oil firms: Companies have been selling off assets overseas and pumping money back into the U.S. Conoco (COP) has been involved in six major foreign sales in the past year totaling $11B, and much of it is being redirected into North Dakota and Texas shale. Other firms redirecting overseas assets to the U.S.: HES, DVN, APA, MRO, MUR, NBL.
"Oil's well" with these energy stocks - BTE, APC, DVN, NTI, LINE/LNCO - which Corvette Kid says could average 40%-plus total return in 12-18 months. Of Baytex, shares can push $60 if production growth hits forecast targets and heavy oil prices continue to recover. Devon management has all but indicated a sale is on the table, which could bring 60% upside.
When an energy company wants to excite investors, just talk about starting an MLP. Devon Energy (DVN +2.4%) pops higher during its conference call after saying an evaluation of the possible creation of a midstream MLP should be completed by the end of the current quarter. DVN also says it will immediately repatriate ~$2B of its foreign cash with minimal additional tax.
More on Devon's (DVN) Q1 results: Overall loss of $1.3B was mainly due to a $1.9B non-cash impairment charge related to lower oil and gas liquids prices in North America. Also ran up a $320M derivatives loss on energy commodities vs. a $145M profit a year earlier. Total average production fell to 686.9K boe/day from 693.6K, which was still slightly above the top end of company guidance.
The rush to buy acreage in Ohio's Utica shale has reversed, as some of the biggest stakeholders in untapped deposits there - including CHK, DVN, PDCE and EVEP - have put up all or part of their acreage for sale. Early drilling results have showed the oil portion of the Utica isn’t as porous as some other shale formations and is shallower than its gas-filled areas.