Devon Energy Corporation (NYSE:DVN) today reported a net loss of $719 million for the quarter ended September 30, 2012, or $1.80 per common share ($1.80 per diluted share). A $1.1 billion non-cash asset impairment charge was the primary driver of the quarterly loss. Adjusting for this and other items securities analysts typically exclude from their published estimates, the company earned $355 million or $0.88 per diluted share in the third quarter of 2012.
The company generated cash flow from operations of $1.4 billion during the third quarter. Combined with $533 million in cash payments from the closing of its joint venture agreement with Sumitomo and other minor asset sales, Devon’s cash inflows totaled $1.9 billion in the quarter.
Strong Oil Growth Drives Production Increase
Devon continued to deliver strong oil production growth in the third quarter of 2012. Oil production averaged 143,000 barrels per day, a 14 percent increase compared to the third quarter of 2011. This was achieved in spite of the scheduled shut-down for facilities maintenance at our Jackfish 1 oil sands project, which reduced production by approximately 10,000 barrels per day. Regionally, the most significant growth came from the company’s U.S. operations, where year-over-year oil production increased 26 percent.
In total, Devon’s production averaged 678,000 oil-equivalent barrels (Boe) per day in the third quarter, a 3 percent increase compared to the year-ago quarter. Year-over-year declines in natural gas volumes driven by reduced activity levels in liquids-rich gas projects partially offset the company’s oil production growth in the third quarter.
“Devon’s capital program has delivered strong results this year with aggressive drilling programs in oil-focused basins,” said John Richels, president and chief executive officer. “As we have pursued higher-returning oil projects, we also have de-emphasized natural gas drilling, limiting overall production growth. This is exactly the right tactical decision for Devon in this environment and is consistent with our longstanding strategy to optimize returns as opposed to top-line production growth.”