Devon Energy (DVN)

[dan_s]

I just finished updating our profile on Devon Energy. My valuation is $61.00/share, compared to First Call's price target of $45.19 (which has been going up daily since the Q2 results came out).

We will send out the profile later today.

Devon hopes to close the remainder of their non-core asset sales this quarter. Proceeds of $3.2 Billion will be used primarily to pay down debt. Their balance sheet is going to be in good shape after these sales close.

Devon has the largest position in the STACK play, where they plan to have seven rigs running by year-end.

Daily production will dip in Q3 and Q4 because of the asset sales, but then production will ramp up into year-end and should keep going up in 2017.

Keep in mind that Devon's production in Q4 will be approximately 38% natural gas, 19% NGLs and 43% crude oil. Regardless of what oil prices do, natural gas and NGL prices are going higher.

Here is why I believe Devon has a lot of upside for us: Based on my forecast, Devon's operating cash flow should be approximately $3.5 Billion in 2017. This compares to their 2016 capital program of $1.4 Billion.

[wilmawatts]

7 rigs in the STACK, wow. I hope Newfield and Gastar share in the excitement and technical developments enhancing productivity that always occur with time