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?