DVN going into the Sweet 16 on June 1
Posted: Fri May 30, 2014 1:29 pm
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.
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.