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Devon Energy Corporation (DVN)

  • Nov. 19, 2013, 2:33 PM
    • Devon Energy (DVN +1.9%) reportedly is close to acquiring privately-held GeoSouthern Energy for ~$6B, and a deal could be announced as soon as tomorrow.
    • GeoSouthern is a Texas-based oil and gas exploration company whose operations are focused in the Eagle Ford shale, which it helped pioneer.
  • Nov. 12, 2013, 10:48 AM
    • Crosstex Energy LP (XTEX +4.2%) is upgraded to Outperform from Sector Perform with a $29 target price at RBC, which says the combination with Devon Midstream should result in a lower-risk investment-grade MLP, with attractive sponsor support offering increasing organic and dropdown growth options.
    • Within this context, the firm thinks the 5.6% yield and above-average distribution growth outlook screens attractively vs. other investment-grade MLPs; execution on new projects is a key risk, but management has proven itself through a diverse project slate this year.
    • Baird also upgrades XTEX to Outperform, adding that Crosstex Energy Inc. (XTXI) appears fully valued following the Devon announcement.
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  • Nov. 9, 2013, 8:13 PM
    • "We've diversified our efforts, cut expenses, and fully concentrated our efforts in North America, selling all but our most important holdings [abroad]," Devon Energy (DVN) CEO John Richels tells Barron's.
    • Despite these efforts, and despite the company's generally well received move to merge its midstream assets with Crosstex Energy (XTXI) and Crosstex Energy LP (XTEX), Jack Willoughby thinks the market hasn't given the company enough credit.
    • An interesting statistic cited by Willoughby: DVN "has risen to $60, but [is] down 15% from five years ago. Rival companies are up an average of 72% over that time."
    • "The market values its 3B or so barrels of proven reserves at $8.50/barrel, the cheapest level of any independent producer and less than half of the $20-$25 figure in recent deals," Barron's continues, citing an analyst at Milwaukee-based Fiduciary Management. The same analyst values the stock at around $81.
    • See also: Q3 numbers, Q3 summary, CC transcript
    • For more on the Crosstex deal, see here and here
  • Nov. 7, 2013, 10:19 AM
    • Crosstex Energy LP (XTEX -0.8%) and Crosstex Energy (XTXI -1%) say they have completed construction of Phase I of the Cajun-Sibon natural gas liquids expansion project, which connects their Eunice fractionator in southern Louisiana to Mt. Belvieu supply pipelines in east Texas.
    • The pipeline is now delivering 25K-30K bbl/day into various Louisiana delivery points and is expected to be moving its full volume of ~70K bbl/day by the end of 2013.
    • The partnership expects combined contribution of both phases of the Cajun-Sibon expansion project of $115M-$130M of annual run-rate adjusted EBITDA when completed, which is expected in H2 2014.
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  • Nov. 6, 2013, 9:08 AM
    • Devon Energy (DVN) +0.5% premarket after beating Q3 earnings estimates on higher output, which averaged 691K boe/day, up from 678K in the year-earlier period.
    • Oil production rose 16% Y/Y to average 165K bbl/day; the most significant growth came from U.S. operations, where production jumped 38%, highlighted by growth from Permian Basin and Mississippian-Woodford Trend projects.
    • Revenue from oil, natural gas and natural gas liquids sales totaled $2.3B in Q3, up 35% Y/Y, due to improved natural gas and oil price realizations combined with higher oil production; oil sales have climbed to nearly 60% of DVN's total upstream revenues.
    • DVN is the second-worst performer in the past year in the S&P 500 Oil & Gas Exploration & Production Index, beating only Southwestern Energy (SWN).
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  • Nov. 6, 2013, 8:03 AM
    • Devon Energy (DVN): Q3 EPS of $1.29 beats by $0.08.
    • Revenue of $2.72B misses by $0.02B. (PR)
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  • Nov. 6, 2013, 12:05 AM
  • Nov. 5, 2013, 5:30 PM
  • Oct. 28, 2013, 12:57 PM
    • Devon Energy's (DVN -0.4%) price target is raised to $86 from $77 at Canaccord, which believes DVN's merger of its midstream operation with Crosstex Energy generates many positives.
    • The merger increases the scale and scope of DVN's midstream business, fosters added growth opportunities and enhances the new entity's finances, which should keep DVN's midstream valuation robust, the firm says; it also highlights how undervalued its E&P business is, something the firm thinks can change for a variety of reasons.
  • Oct. 22, 2013, 10:18 AM
    • Halliburton (HAL +2.1%) bounces back following modestly disappointing Q3 results, and Jefferies reiterates its Buy rating on HAL shares and raises its price target to $60 from $58 while lowering its EPS estimates for Q4 2013, FY 2013 and FY 2014.
    • Management’s "less content-rich conversation" in its Q3 report leaves the stock waiting for the November analyst day, when Jefferies expects clarity on efficiency initiatives and growth paths; the firm continues to see HAL as a top pick based on multi-year prospects related to U.S. shale efficiency.
    • Jefferies also raises its price target on Devon Energy (DVN +2%), to $74 from $71, noting that the combination of DVN's midstream assets with Crosstex adds ~$3/share to its NAV estimate, and future drop-downs could provide additional upside.
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  • Oct. 21, 2013, 2:51 PM
    • "It's an epic deal," R.W. Baird analyst Ethan Bellamy says of plans to combine Devon's (DVN +4.2%) midstream operations with Crosstex (XTXI +59.4%; XTEX +37.7%) to form a publicly traded MLP that will combine the companies' pipelines, processing plants, rail terminals and other oil and natural gas infrastructure.
    • "Devon is getting out of the gates on their midstream standalone business much bigger and stronger and potentially at investment-grade status right away," the analyst says, adding the combination also is "fantastic" for Crosstex.
    • The Devon-Crosstex combo will be larger and more formidable than DVN's midstream assets would be in its own company; DVN expects the new business to bring $700M in earnings in 2014 vs. $425M it had expected via a standalone MLP.
  • Oct. 21, 2013, 12:46 PM
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  • Oct. 21, 2013, 9:14 AM
    • Devon Energy (DVN), Crosstex Energy (XTXI) and Crosstex Energy LP (XTEX) agree to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business consisting of two publicly traded entities: the general partner entity and an MLP.
    • The combination of Devon’s and Crosstex’s midstream systems, including gathering and transportation pipelines, and processing, fractionation and logistics assets, will provide the new company with diversification and scale, along with an enhanced liquids-oriented growth profile.
    • Assets are located in several of North America’s major oil and gas regions, including the Barnett Shale, Permian Basin, Cana and Arkoma Woodford, Eagle Ford, Haynesville, Gulf Coast, Utica and Marcellus.
    • DVN +2.5% premarket.
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  • Oct. 18, 2013, 5:25 PM
    • More boardroom shakeups likely will force further restructuring and asset sales in the energy sector during the next year, and activist investors will be drawn to energy companies as long as oil and gas prices remain stable, according to bankers at a Bloomberg oil and gas conference.
    • Devon Energy (DVN), Freeport McMoRan (FCX) and WPX Energy (WPX) are mentioned as potential targets for activists who see a chance to speed up efforts to boost shares, buy undervalued reserves and win shareholder support for management and governance changes.
    • Targets may include companies where charismatic leaders or founding families are ignoring shareholders; even today, Occidental Petroleum (OXY) announced changes largely the result of shareholders ousting its longtime chairman.
  • Oct. 16, 2013, 10:59 AM
    • Pioneer Natural Resources (PXD +5%) gaps up to a new 52-week high as Susquehanna raises its price target for PXD to $180 from $170, noting that the company’s operations in the northern and central parts of Midland Wolfcamp in Texas are expected to be a strong catalyst for the stock next year.
    • Jim Cramer sees the stock hitting $300: "This stock is not nearly done.. the good news about the Permian is that we've already got the pipe laid."
    • Michael Fitzsimmons says shares could easily double over the next three years as drilling results in the Spraberry/Wolfcamp play unlock the value of PXD's 800K-plus acreage position.
    • Permian/Wolfcamp stocks are following PXD's lead: DVN +2.4%, EOG +2.7%, AREX +2.6%, HK +3.4%, SWN +1.4%.
  • Sep. 27, 2013, 7:48 AM
    • Devon Midstream Partners, a partnership recently formed by Devon Energy (DVN) to own and operate midstream assets in North America, files for an IPO of up to $400M in common units.
    • Devon Midstream has processing facilities in the Barnett Shale in Texas, Cana- Woodford Shale in Oklahoma and the Arkoma-Woodford Shale in Oklahoma, as well as a stake in a natural gas liquids fractionator on the Gulf Coast.
    • The partnership says it will use proceeds to reimburse its parent company for capital expenditures and for general partnership purposes.
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Company Description
Devon Energy Corporation is an independent energy company engaged in the exploration, development and production of oil, natural gas and NGLs.