On a roll

I described Oklahoma City’s Devon Energy last week as “freaking huge,” and apparently I was being somewhat conservative:

Devon Energy Corporation (NYSE: DVN) [yesterday] reported net earnings for the quarter ended September 30, 2008, of $2.6 billion, or $5.92 per common share ($5.87 per diluted common share). Third-quarter 2008 net earnings were 256 percent greater than Devon’s third-quarter 2007 net earnings of $735 million, or $1.65 per common share ($1.63 per diluted common share). This is the highest quarterly net earnings in the company’s history.

But, you say, fossil-fuel prices were dropping during the third quarter. Didn’t faze them:

Devon accounts for derivative instruments using mark-to-market accounting. As a result, for each reporting period the company recognizes in earnings the unrealized changes in the fair values of its derivative instruments. An unrealized after-tax gain on oil and natural gas derivative instruments of $1.2 billion resulted from decreases in oil and natural gas prices during the third quarter of 2008. This third-quarter unrealized after-tax gain more than offset unrealized after-tax losses on oil and natural gas derivative instruments recorded in the first two quarters of 2008.

Translation: they know how to hedge. And they also know how to drill:

Devon drilled 636 wells in the third quarter of 2008, with an overall success rate of 97 percent.

The only question, really, is this: are they too freaking huge to be bought out and moved away?





3 comments

  1. Tatyana »

    6 November 2008 · 12:41 pm

    A perfect candidate for Obama’s expropriation list.

  2. wamprat »

    6 November 2008 · 3:15 pm

    Devon doesn’t appear to be moving anytime soon; they’re building a new building downtown. It’ll be the tallest in Oklahoma and one of the tenth tallest in the country.

  3. CGHill »

    6 November 2008 · 9:19 pm

    AP is claiming that there is chatter about BP acquiring Chesapeake, which has had a rougher time of it of late.

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