Devon Energy Corporation (NYSE:DVN) today reported a net loss of $357 million for the quarter ended December 31, 2012, or $0.89 per common share ($0.89 per diluted share). The company’s fourth quarter financial results were impacted by a non-cash asset impairment charge of $896 million. Excluding the asset impairment charge and other items securities analysts typically exclude from estimates, Devon earned $316 million or $0.78 per diluted share in the fourth quarter of 2012.
Asset impairments also led to a loss of $206 million for the year ended December 31, 2012, or $0.52 per common share ($0.52 per diluted share). Excluding adjusting items, the company earned $1.3 billion or $3.26 per diluted share in 2012.
“In spite of a challenging commodity price environment that impacted our financial results, Devon delivered solid operating results in 2012. During the year, we continued to make significant progress toward the conversion of our asset portfolio to a higher oil weighting,” commented John Richels, Devon’s president and chief executive officer. “This is evident through the strong oil production growth we delivered during the year and the impressive growth in oil reserves.”
Strong Oil Growth Drives Record Production
Total production of oil, natural gas, and natural gas liquids increased to 250 million oil-equivalent barrels (Boe) in 2012. This is the highest annual production total in the company’s history from its North American property base and represents a 10 million Boe increase compared to 2011. The increase in 2012 production was driven almost entirely by growth in oil production. Devon’s oil production increased 20 percent year-over-year, more than offsetting declines in natural gas volumes due to reduced activity levels.
The company also delivered strong oil production growth in the fourth quarter of 2012. Oil production averaged 151,000 barrels per day, a 13 percent increase compared to the fourth quarter of 2011. The most significant growth in oil production came from the U.S., where fourth-quarter year-over-year oil production increased 30 percent.