DVN going into the Sweet 16 on June 1

[dan_s]

I have decided to add Devon Energy (DVN) to the Sweet 16. The company is now a pure E&P company with a large stake in a midstream MLP (EnLink Midstream Partners LP (ENLK)). Devon is now focused on increasing its oil production in the Woodford Shale and the Eagle Ford Shale. Overall production growth is minimal, but their liquids production growth (primarily crude oil) is huge. Devon has a rock solid balance sheet, strong cash flows from operations (over $7 billion in 2014) and lots of running room in several key U.S. plays.

My initial Net Income & Cash Flow Forecast can be found under the Sweet 16 Tab.

Here is what Zacks Equity Research Team has to say:

On May 29, 2014, the shares of Devon Energy Corp. (DVN) touched a 52-week high of $73.98, thanks to its acquisition of high-quality properties, robust performances by its core assets and attractive dividend growth. The share price finally closed at $73.89, up 27.8% from the year-ago closing price.

The combination of non-core asset divestments and prime U.S. asset purchases is the key factor working in favor of Devon Energy. The company’s steady expansion of its U.S. operations as is evident from the Eagleford and Cana Woodford shale acquisitions is creating new avenues for growth.

Devon Energy’s assets are positioned in some of the most critical development plays. This enabled the company to clock in impressive oil production margin in the first quarter of 2014, which helped to keep the positive earnings streak alive. To transform itself into a pure upstream player, the company in May 2014 announced its collaboration with General Electric Co. (GE) to improve production efficiency and lower drilling cost for unconventional resource projects.

Furthermore, upbeat operational performance prompted Devon Energy to offer a 9% hike in quarterly dividend to 24 cents per share in the first quarter that will certainly retain investors’ attention to the stock.

Devon Energy is poised to benefit from the encouraging prospects offered by the Eagleford shale and the Delaware basin. Accelerated drilling activity in these two basins will be the highlight of output growth in 2015. These two assets are set to be the cornerstone for Devon Energy’s future production potential.

The company plans to increase its domestic oil production by a mammoth 70% or more to 124–136 thousand barrels of oil per day (:MBOD) in 2014 compared to 2013 and overall oil production by at least 30% to 198–216 MBOD.

[dan_s]

My detailed profile for Devon has been posted under the Sweet 16 Tab.

After you click on the Sweet 16, click on the link that reads "Sweet 16 Forecasts".

Sometime this week Sabrina will set up the Devon Energy logo. When she does I will move the profile and forecast model to it.

[dan_s]

NEW YORK (TheStreet) -- Shares of Devon Energy Corp. (DVN_) were upgraded to "outperform" from "market perform" at Wells Fargo (WFC_), citing improving production visibility and an attractive valuation.

The bank raised its price target range on the shares to $85-$90 from $70-$75.

[dan_s]

Wall Street Journal: 10:20 EDT - Already at 2-year highs, Devon (DVN) gains a new bull as Wells Fargo upgrades the oil-and-gas company to outperform and boosts its valuation range $15 to $85-90 while edging up EPS views through 2015. The investment bank sees DVN, which had historically been levered to natural gas, posting 15%+ oil-output growth annually the next several years as well as "peer-leading Ebitda growth and debt-adjusted cash flow/share." Overall, DVN has "the best production visibility it has had in years." Shares rise 0.7% to $74.22, putting 2014's increase at 20%.

Several Wells Fargo financial analysts are EPG members. Maybe they read the profile published last week! - Dan

[prince_jake_33]

Dan what are you replacing with dvn. thanks bob Jacobson

[dan_s]

GTE moved to the Small-Cap Growth Portfolio