Printer Friendly

DEVON ENERGY REPORTS $0.8 MILLION EARNINGS COMPARED WITH LOSS; PRODUCTION, REVENUES UP FOR FIRST QUARTER

 DEVON ENERGY REPORTS $0.8 MILLION EARNINGS COMPARED WITH LOSS;
 PRODUCTION, REVENUES UP FOR FIRST QUARTER
 OKLAHOMA CITY, May 14 /PRNewswire/ -- Devon Energy Corp. (AMEX: DVN, DVN.Pr) the independent oil and gas exploration and production firm, today announced 1992 first quarter earnings were $0.8 million, compared with a loss of $17.8 million for the 1991 first quarter. After deducting preferred stock dividends, earnings per common share were 3 cents, versus a loss of $2.12 per common share for the same period last year.
 The latest quarter's results were aided by higher revenues, lower interest expenses, lower operating costs per unit of production, a lower depreciation, depletion and amortization rate and a favorable gas contract settlement. By comparison, the 1991 first quarter loss was caused by a non-cash $25 million pre-tax charge to reduce the carrying value of properties.
 Production Increase, Settlement, Raise Revenues 3 Percent
 Total revenues for the 1992 first quarter were $8.3 million, up 3 percent from $8.0 million for the same period last year. The average price per EMCF (equivalent thousand cubic feet) Devon received for oil and gas was 24 percent below that of the first three months of 1991. However, total oil and gas p gas contract settlement with a natural gas purchaser was enough to give a slight boost to revenues.
 Gas Sales Up; Oil Sales Down
 Gas sales increased 7 percent for the most recent quarter to $5.4 million. Although the average price Devon received per thousand cubic feet (MCF) of gas declined 21 percent between first quarter 1992 and 1991, the company increased its gas production 36 percent to 5.0 billion cubic feet (BCF). This increase was primarily due to a 75 percent increase in production at Devon's Northeast Blanco Unit (NEBU) coal seam gas property to 3.5 BCF.
 Production was higher because NEBU had 68 producing wells for the latest period compared with 39 wells a year ago. Further, the producing capacity for all wells has increased during the year. However, because of low gas prices, Devon curtailed production in February and March by about one-third of capacity. This reduced production for the quarter by a total of about 1 BCF. When NEBU gas prices increased in April, production was returned to near capacity levels. NEBU currently is producing approximately 250 million cubic feet of gas per day (MMCF/D), up from 173 MMCF/D in March, 1992. Devon owns about 21 percent of current production. Considering current producing rates, the fact that 34 more wells are ready to be placed on line, and recent increases in natural gas prices, the company now expects that its share of production from NEBU will be 17 to 20 BCF in 1992.
 Oil sales were down 25 percent for the 1992 quarter to $1.9 million. A 15 percent decline in production, to 111,000 barrels, contributed about half of the sales decrease. Production was down primarily because of normal depletion and the sale of an oil property in Colorado. A 13 percent decline in oil prices accounted for the remaining decrease in oil sales.
 Lifting Costs, DD&A Rate Continue To Decline
 Cash expenses for the latest quarter were stable at $4.7 million. Although total production increased 27 percent, production and operating expenses rose only 5 percent, resulting in a 16 percent decrease in production and operating expenses on a per-unit basis. This is the eighth-consecutive quarterly decrease in lifting costs per unit of production. The continued reduction was possible because of low operating costs associated with NEBU, which accounted for 60 percent of total first quarter production, and Devon's program of selling high-cost properties. Interest expense was down 28 percent to $400,000 due to lower interest rates during 1992. As a result, total cash expenses were flat quarter-to-quarter versus gains in both production and revenue.
 Depreciation, depletion and amortization (DD&A) expenses increased 14 percent in the 1992 first quarter compared with the same three months last year. The increase came from higher production in the latest quarter. However, the effect on DD&A of higher production was partially offset by an 11 percent decrease in the DD&A rate to 40 cents per EMCF. The decrease in rate resulted primarily from the $25 million adjustment to the carrying value of properties referred to previously and to the 38.8 BCF upward revision in NEBU reserve estimates made in the 1991 second quarter.
 Financial Condition Remains Solid
 Long-term debt remained stable at $32.0 million for both periods. With $4.6 million in working capital, stable cash flow, and $23.0 million of unused borrowing capacity, Devon remains financially strong and liquid.
 Devon To Acquire Oil and Gas Properties
 In March 1992, Devon entered into an agreement to purchase substantially all of the U.S. oil and gas properties of Hondo Oil & Gas Company. The company said it expects the final purchase price to be $130 to $133 million. The transaction is subject to financing and other conditions. Since the purchase has not yet occurred, the above discussion does not reflect the effects of that acquisition on Devon's operations or liquidity. The company anticipates closing the transaction during June 1992.
 Devon Energy Corp. is an independent energy company engaged primarily in oil and gas property acquisitions, exploration and production, and oil and natural gas remarketing. The company ranks in the top 25 percent of U.S. publicly held oil and gas firms, measured by oil and gas reserves. Devon Energy's common and preferred shares trade on the American Stock Exchange under the symbols DVN and DVN.Pr, respectively.
 -0- 5/14/92
 /CONTACT: Marian J. Moon of Devon Energy, 405-235-3611/
 (DVN) CO: Devon Energy Corp. ST: Oklahoma IN: OIL SU: ERN


TQ -- NY062 -- 0199 05/14/92 11:53 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:May 14, 1992
Words:969
Previous Article:W.R. BERKLEY CORP. SENIOR DEBT RATED 'AA-' BY FITCH
Next Article:THE BOSTON FIVE REPORTS MORTGAGE PRODUCTION TOTALS
Topics:


Related Articles
DEVON ENERGY REPORTS SIGNIFICANT INCREASES IN PRODUCTION, REVENUES, EARNINGS FOR THIRD QUARTER, NINE MONTHS
DEVON ENERGY REPORTS PRODUCTION INCREASES, EXPENSE DECREASE, BUT LOWER REVENUES AND EARNINGS FOR THIRD QUARTER
DEVON POSTS FOURTH CONSECUTIVE YEAR OF RECORD RESERVES, PRODUCTION IN 1991, BUT REPORTS LOSS DUE TO LOW ENERGY PRICES AND NON-CASH CHARGE
DEVON ENERGY REPORTS INCREASED PRODUCTION REVENUES; DECREASE EARNINGS FOR SECOND QUARTER
DEVON ENERGY REPORTS INCREASED PRODUCTION REVENUES: DECREASE EARNINGS FOR SECOND QUARTER
DEVON ENERGY CORP. ANNOUNCES RECORD FIRST QUARTER PRODUCTION, REVENUES AND EARNINGS
Devon Energy Continues 1997 Record Performance with Strong Third Quarter and First Nine Months
Triton Energy Reports First-Quarter Profit; Results Benefit From Cost Reduction Efforts.
Devon Energy Reports First Quarter 2000 Results; Net Earnings Up Over Nine-fold.
Devon Energy Reports First-Quarter 2009 Results.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters