Current DVN Stock Info

Devon targets 2017 CapEx of $2.0-$2.3 billion
Devon Energy (ticker: DVN) reported fourth quarter earnings yesterday and 2016 reserves today, showing net earnings of $331 million, $0.63 per share. Full year earnings are a loss of $3.302 billion, or ($6.52) per share.

2016 year end reserves are down to 2,058 MMBOE, from 2,182 MMBOE last year. Much of this decrease is due to the sale of assets that Devon completed in 2016. 34% of Devon’s reserves are comprised of oil, 45% are gas, and 21% are NGLs. Estimated finding costs in 2016 were $5.01/B...

Analyst Commentary

From KLR Group:
We are increasing our DVN target price $9 to $62 per share due to approximately 10% lower capital intensity (focus on core plays), slightly higher U.S. liquids price realizations and lower other expense. Our composite weighted average cost-of-capital values the midstream business at ~11x next year’s cash generation (EnLink Midstream LLC (ENLC, $19.30, NR)/EnLink Midstream Partners (ENLK, $19.16, NR) valuation).
Lower capital intensity underpins improvement in capital yield
Devon’s mid-cycle capital yield improved by ~20% to ~115% primarily due to lower asset capital intensity and secondarily higher U.S. liquids price realizations and lower other expense. The company’s capital yield remains inferior to the industry median cash recycle ratio of ~140% largely due to Devon’s lower cash margin given its U.S. production composition (~30% oil).  


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