Prices affect Devon, XTO, Chesapeake
Devon Energy Corp.’s net earnings for the third quarter 2009 dropped 81 percent to $499 million, as compared to $2.6 billion for the same three-month period in 2008, due to declining revenues from oil, natural gas and natural gas liquids sales.
The Oklahoma City-based energy exploration and production company reported revenues of $1.7 billion, or 54 percent less than third quarter 2008, due to the large drop in commodity prices.
Meanwhile, production grew 6 percent to 673 thousand barrels of oil equivalent per day during the third quarter 2009. U.S. onshore natural gas production fell slightly to 171.7 billion cubic feet, while onshore oil production increased to 2.8 million barrels.
“Year to date, Devon increased oil and gas production 8 percent compared with 2008,” said company President John Richels in a statement. “The performance of the company’s oil and gas properties has continued to exceed our expectations throughout 2009.”
According to the Nov. 4 results, Devon Energy has posted a $3.1 billion net loss; however, excluding a first quarter value loss on oil and gas properties, the company has had earnings of $4.7 billion.
The company drilled 233 wells during the quarter – including its first Haynesville Shale well in Saint Augustine County, Texas – as compared to 636 wells during 2008’s third quarter. Devon Energy is drilling another east Texas well northwest in Shelby County.
XTO Energy income falls 4 percent
XTO Energy Inc. reported net income of $500 million, or $0.86 per share, for its third quarter 2009 results, a 4 percent decline from the same three-month period last year, and record production of 2.95 billion cubic feet equivalent per day.
The Fort Worth company’s quarterly production was a 23 percent jump from third quarter 2008 and a 2 percent increase from second quarter 2009, according to the Nov. 4 results.
The average realized gas price for the third quarter fell 18 percent to $6.93 per thousand cubic feet from $8.42 per Mcf in third quarter 2008. Natural gas liquids prices averaged $30.59 per barrel for the quarter, 43 percent lower than the 2008 quarter average price of $53.65. The third quarter average oil price was 16 percent higher than the previous year’s price, to $108.04 per barrel, up from 2008’s $93.40.
XTO Energy is maintaining Barnett Shale production flat at about 610 million cubic feet equivalent per day with nine rigs running, said CEO Keith Hutton. Fayetteville Shale production is more than 100 MMcfe; Haynesville Shale production is expected to reach at least 60 MMcfe by the end of the year.
The company’s annual production growth target was raised to 23 percent.
“Looking towards 2010, with about 55 percent of our anticipated production already hedged at $9.62 per Mcfe,” said Bob R. Simpson, chairman and founder, “we expect to deliver another year of strong financial returns and substantial free cash flow, while generating double-digit production growth.”
Chesapeake 3Q income down
Chesapeake Energy Corp. reported
net income for the third quarter 2009 of $186 million, a far cry from the $3.3 billion for the same period last year but still beating analysts’ expectations of $0.65 per share by 5 cents.
The Oklahoma City-based natural gas exploration and production company posted relatively flat production – about 1 percent compared to the previous quarter but a 7 percent increase over third quarter 2008 – of 2.483 billion cubic feet equivalent per day, according to the Nov. 2 results. Natural gas still accounts for 92 percent of the company’s total production, but executives recently said the company would be open to growing its oil business.
The company expects annual production growth of between 5 percent and 6 percent for 2009, and at least 8 percent and 12 percent in 2010 and 2011, respectively.
The company’s realized price for natural gas during the quarter was $6.44 per thousand cubic feet; without hedging, that price would have been $2.84 per Mcf. The realized price during the third quarter 2008 was $8.02 per Mcf.
jtronche@bizpress.net
