The company plans to increase its oil production from its assets in the Eagle Ford shale formation and in Permian Basin, which are both in Texas.
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Devon Energy completed its purchase of 82,000 acres in Eagle Ford in February. Devon projects its production from Eagle Ford will increase from 65,000 barrels of oil equivalent per day in the second quarter to 100,000 boe per day next year.
It produced 95,000 boe per day in the Permian Basin in the second quarter, a level that is expected to slowly rise in coming quarters.
The company reduced its debt by $3.2 billion in the second quarter by selling non-core assets and with cash on hand and free cash flow. Its pending $2.3 billion sale of non-core assets (mostly natural gas) that span across six U.S. states to Linn Energy (LINE) will reduce debt further.
Shares of Devon trade at 18.4 times this year's estimated earnings, compared with a forward price-to-earnings ratio of 19.2 for Standard & Poor's 500 Index.
The stock, which closed at $74.70 on Monday, is up 21% this year, compared with the S&P 500's 8% gain.