Devon Business Practices

[PhiAlpha]

Denver = 10% pay cut, 30-50% increase in housing costs. So yes, I see you point about money talking, and about Devon making it worth the relocated people's while to move.

From my experience... The compensation surveys for my industry show that Denver positions generally pay more than OKC usually anywhere from 10-30% higher. I assume its more or less to cover the COL difference which is, based on everything I've read and experienced first hand, 10-30% higher. You get hit hardest on increased housing costs.

[Bellaboo]

From my experience... The compensation surveys for my industry show that Denver positions generally pay more than OKC usually anywhere from 10-30% higher. I assume its more or less to cover the COL difference which is, based on everything I've read and experienced first hand, 10-30% higher. You get hit hardest on increased housing costs.

This is a major factor, my son has been in Denver for 5 years now. He says the housing is outlandish from one side of town to the other. He bought a condo 4 years ago, is currently renting it out for 500 more per month than he pays for it. They want out of Colorado, too much snow from September to May for them.....their next stop is California.

[adaniel]

[/B]

This is a major factor, my son has been in Denver for 5 years now. He says the housing is outlandish from one side of town to the other. He bought a condo 4 years ago, is currently renting it out for 500 more per month than he pays for it. They want out of Colorado, too much snow from September to May for them.....their next stop is California.

Ha, this is the way I feel. If I am going to pay that much for housing I'd rather be warm. I love CA....if they ever opened up the Monterrey Shale for drilling, I would be moving to Santa Monica in a heartbeat. Although knowing my luck and based off of other's experience, I'd probably have to move to Bakersfield or some other hot hellhole.

[PhiAlpha]

Ha, this is the way I feel. If I am going to pay that much for housing I'd rather be warm. I love CA....if they ever opened up the Monterrey Shale for drilling, I would be moving to Santa Monica in a heartbeat. Although knowing my luck and based off of other's experience, I'd probably have to move to Bakersfield or some other hot hellhole.

I feel the same, though I would have to get one heck of a pay increase to be willing to deal with the increased COL, horrible regulatory environment, and some of the land owners out there. Would be an interesting experience.

[BG918]

It may not be a big deal for some but the fact that OKC has the Devon Tower is a big advantage. I would want to go to work in that building everyday, and would move from Denver to do so (especially if my salary is higher). The COL difference between Denver and OKC is huge.

[blangtang]

guess those Devon acquisition rumors have faded...

[blangtang]

Cramer: Outing the Perpetual Losers -- Part II

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8. Devon (DVN) -- Here's a company that decided to move as aggressively as it could out of the oil business, selling $7 billion in premier oil assets, so it could be more of a natural-gas and natural-gas-liquids play. No wonder its stock has done nothing for years and years while rival EOG (EOG) has shuttered nat-gas assets and has gone all in for oil. That's how Devon has declined 10 points, falling from $68 to $58 in the last three years, while EOG has doubled. Now Devon says it is trying to get more oily, but can it? I am waiting for Devon to go in and sell all of its nat gas assets down here, and try to buy some oil properties. At that exact moment, I would short oil until the cows came home and go all in nat gas. This company is a walking poison pill.

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Cramer: Outing the Perpetual Losers -- Part II - TheStreet
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only reason I mentioned this is its on this guy's radar :

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here's his tweet from today:
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@Carl_C_Icahn

Congrats to @jimcramer – his article outing perpetual losers is a must read!

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let's hope he doesn't try to get involved with Devon!

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[catch22]

Profitable company? Perpetual losses?

[Bellaboo]

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8. Devon (DVN) -- Here's a company that decided to move as aggressively as it could out of the oil business, selling $7 billion in premier oil assets, so it could be more of a natural-gas and natural-gas-liquids play. No wonder its stock has done nothing for years and years while rival EOG (EOG) has shuttered nat-gas assets and has gone all in for oil. That's how Devon has declined 10 points, falling from $68 to $58 in the last three years, while EOG has doubled. Now Devon says it is trying to get more oily, but can it? I am waiting for Devon to go in and sell all of its nat gas assets down here, and try to buy some oil properties. At that exact moment, I would short oil until the cows came home and go all in nat gas. This company is a walking poison pill.

If I remember correctly, they sold their oil in western Africa, in a very unstable political climate, then they unloaded from the Gulf just before drilling was temporarily banned. They sold their operating Brazilian properties, but kept an interest in it. It seems like everytime I've read about a Devon move, at the time it was a good move for them.
Keep in mind, Cramer says a lot of stuff. I've tracked him before and not everything he says or does is golden.

[mugofbeer]

He loved CHK a nd McClendon until it was clear he was badly mismanaging the firm. Cramer has some good things to say but he misses a lot

[Bellaboo]

Devon launching their Midstream MLP -

Devon prepares to launch midstream partnership | News OK

[blangtang]

Devon keeps ending up on these short lists for attracting activists

I have been hearing good news about their Wolfcamp though, its looking like its a bigger play than the Bakken

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Faster Change

Devon, Apache Corp. (APA) and Newfield Exploration Co. (NFX), which have embraced asset sales and other shareholder-friendly steps to boost value, may still draw activists pushing for faster change, David Neuhauser, managing director at Livermore Partners Inc., said in a telephone interview Oct. 15.

“Even though some aren’t waiting for Icahn to come knocking, they may need to do more to show that they’re serious about extracting value,” said Neuhauser at Livermore, which owns shares in Occidental, Talisman and Devon.

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Returning Cash

Some investors may also seek to force Oklahoma City-based Devon to raise its payouts to shareholders, said Brian Youngberg, an analyst with Edward Jones & Co. in St. Louis. The company holds $4.23 billion in cash on its balance sheet, an amount that exceeds the cash held by ConocoPhillips (COP), which is about four times Devon’s size, according to data complied by Bloomberg.

Devon CEO John Richels began repatriating some of the $6.5 billion in cash it had amassed in overseas subsidiaries, returning $2 billion to the parent company this year. Shareholders may push for the company to bring the rest back immediately rather than waiting for the company to announce its plans, Youngberg said. Spokesmen for Apache and Newfield declined comment.

Activists Seek Repeat of $40 Billion Oil Patch Windfall: Energy - Bloomberg

[Pete]

Devon to form new midstream firm with Dallas company

Devon Energy Corp. has agreed to combine its U.S. midstream assets with those of Dallas-based Crosstex Energy LP to form a new midstream business, the companies announced Monday morning.

The new company, which will be named before the Devon-Crosstex deal closes early next year, is expected to have adjusted earnings of about $700 million in 2014.

[catch22]

Devon will have a controlling interest in both companies and will be the two companies largest customer. I don't see how this will be based in Dallas? Unless I missed something.

[HangryHippo]

Devon will have a controlling interest in both companies and will be the two companies largest customer. I don't see how this will be based in Dallas? Unless I missed something.

The other thread with links is somewhere around here I think.

[HangryHippo]

Here it is catch:

Devon Energy and Crosstex Energy to Create New Midstream Business - Yahoo Finance

Headquarters, Directors and Management
Following the close of the transaction, the New Company will be headquartered in Dallas, Texas, with a continued employee presence in Oklahoma City.

[blangtang]

time to spend some cash? rumor or leak ?


Devon Energy Nears Deal for GeoSouthern Energy - WSJ.com

By
Ryan Dezember,
Dana Mattioli and
Mike Spector
connect
Nov. 19, 2013 2:22 p.m. ET

Devon Energy Corp. DVN +4.77% is nearing a deal to buy GeoSouthern Energy Corp. for about $6 billion, people familiar with the matter said.

A deal could be announced Wednesday, some of the people said.

Devon, with a market value of about $24 billion, is one of the largest independent oil-and-gas exploration-and-production companies in the U.S.

Closely held GeoSouthern is an oil-and-gas exploration company focusing on the Eagle Ford shale formation in south Texas, which it helped pioneer. The company, which is based in The Woodlands, Texas, counts private-equity firm Blackstone Group BX -2.25% LP as an investor.

[mugofbeer]

Scooped......

[DoctorTaco]

Deal was announced today. News that will dissapoint this board is that the Woodlands employees of Geosouthern will become Devon employees but will remain in the Woodlands office.

[Pete]

Deal was announced today. News that will dissapoint this board is that the Woodlands employees of Geosouthern will become Devon employees but will remain in the Woodlands office.

Thanks for the update.

Still very good news for the growth of Devon.

[BoomerSooner06]

Full article released internally:

Devon is delivering a dramatic boost to its oil portfolio, announcing today a $6 billion cash acquisition for assets in the heart of the Eagle Ford, one of North America’s most prolific oil plays. The move makes Devon one of the top light oil producers among North American independents.

Devon will acquire GeoSouthern Energy’s interest in the play, which includes:
Current production of approximately 53,000 barrels of oil equivalent (BOE) per day, 56 percent of which is light, sweet oil
82,000 net acres
1,200 undrilled locations
The risked recoverable resource is estimated at 400 million barrels of oil equivalent. The transaction is expected to be immediately accretive to almost all financial metrics, including earnings per share and cash flow per share, adjusted for debt.

“This is a world-class asset in the heart of the Eagle Ford,” said John Richels, president and CEO. “It is derisked and ready for full-scale development.”

The acquired acreage is focused exclusively in the Eagle Ford with the acreage primarily located in DeWitt and Lavaca counties in Texas. The acreage is largely contiguous, with most of the position held by production. The acreage position is located in the very best part of the play, as evidenced by the highest average initial production rates in the entire Eagle Ford play.

The majority of the 82,000 net acres is located in DeWitt County and is derisked, with at least one producing well in each drilling unit. By entering the play in full development mode, Devon expects to substantially grow production in the near term while generating significant free cash flow.

The acquired assets are expected to grow at a compound annual growth rate of approximately 25 percent over the next several years, reaching a peak of 140,000 BOE per day. The development drilling program is immediately self-funding and expected to generate annual free cash flow in excess of $800 million in 2015 and to grow thereafter.

The deal is expected to close in the first quarter of 2014. Once it closes, most of GeoSouthern’s Eagle Ford employees will become Devon employees, working in the Woodlands, Texas, office.

The New Devon

This transaction is one part of Devon’s strategy to bolster its asset portfolio with high-margin properties and bring greater focus to its capital, both human and financial. This increased focus on core assets will deliver significant light oil production growth in 2014 and beyond.

“We are focusing on optimizing our key development areas and pursuing our emerging plays,” said Dave Hager, chief operating officer. “This also means we will be monetizing non-core assets, which generate low margins, lack scale and are not capable of contributing significant growth today or in the future.”

These non-core assets include Devon’s entire Canadian conventional business and certain other assets in the United States.

“These are important steps to improve our portfolio, but great assets alone will not deliver great results,” said Hager. “It takes exceptional execution and thoughtful alignment with our company’s value chain. I am very optimistic that with the bold steps we are taking to improve our portfolio, combined with superior execution by our terrific team of employees, we will achieve our vision to be the premier independent oil and natural gas company in North America.”

[Pete]

You would think that consolidating a lot of those employees back to HQ would make sense, apart from those needed for the field operations.

There are certainly tons of redundancies in the other departments and one of the main benefit of any merger is creating synergies.

[catch22]

Most acquisitions and mergers tout the line of job security for all workers involved and the locations they are presently employed.

Just be patient and wait until this clears regulatory hurdles and the sale is closed. They will then move positions around and eliminate overlapping positions.

[Pete]

I have been part of three major mergers, once as a senior executive in charge of strategic planning and even I was told "nothing will change". And of course, in all instances things completely changed and almost all the functions were consolidated to the company that paid the money.

BTW, it's almost never a 'merger' -- it's an acquisition, where one company pays big money to buy another.


Also, as a management consultant I've worked on many 'mergers' and we always ALWAYS consolidated staff.

No company needs completely separate accounting, IT, HR and other admin functions and most don't want their business functions completely separate, either.

Yet, in all these incidences employees and the rest of the world were told things would stay the same; right up until the time there were some layoffs and lots of moves.

[Dubya61]

Funny joke from a few years back: How do you pronounce Daimler-Chrysler? The "Chrysler" is silent.