Operating results and a “successful” repositioning of the company’s assets garnered Devon Energy Corp. record net earnings last year, CEO John Richels said Wednesday.
Devon reported record net earnings for 2010 of $4.6 billion, or $10.31/share, compared to a net loss in 2009 of $2.5 billion, or minus $5.58/share. The company’s 2009 results were impacted by a $4.2 billion noncash, after-tax reduction in the carrying value of oil and gas properties.
“The company’s record earnings were accompanied by excellent operating results and the successful execution of our strategic repositioning,” said Richels. “Our focused North American onshore capital program helped grow proved reserves to an all-time record of 2.9 billion equivalent barrels, and we are nearing completion of our strategic repositioning with total asset sales of more than $10 billion.”
At year-end 2010 Devon’s North American onshore estimated proved reserves were a record 2,873 million boe, a 9% increase over year-end 2009. During 2010 Devon added 389 million boe through drilling (discoveries, extensions and performance revisions). Drillbit capital applicable to North American onshore properties was $6.1 billion. Revisions related to changes in oil, natural gas and natural gas liquids (NGL) prices increased North American onshore proved reserves by 71 million boe, the company said.
Proved developed reserves were 2,042 million boe at year-end, or 71% of total proved reserves. Year-end proved reserves were composed of 681 million bbl of crude oil, 10.3 Tcf of natural gas and 479 million bbl of NGLs.
“Our drillbit reserve additions were 175% of our production output for the year. In addition, the reserves were added at very competitive finding costs in spite of adding $1.2 billion of unproved acreage during the year,” said Dave Hager, executive vice president of exploration and production.
Sales of oil, gas and NGLs from continuing operations increased 19% to $7.3 billion in 2010. Comparable sales for 2009 were $6.1 billion. Devon’s average full-year 2010 realized price per boe, including the impact of hedges, increased 26% over the prior year to $35.81/bbl. Higher commodity prices more than offset a decrease in production resulting from Gulf of Mexico properties that were divested during 2010.
Full-year 2010 production from the company’s North American onshore properties grew by 3 million boe over the prior year to a total of 223 million boe. The improvement was driven entirely by higher oil and NGL production, Devon said.
Devon increased oil and NGL production from its North American onshore properties by 6% in 2010, to an average of 193,000 b/d.
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