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| DVN > SEC Filings for DVN > Form 8-K on 20-Feb-2013 | All Recent SEC Filings |
20-Feb-2013
Other Events
Information Regarding Forward-Looking Estimates
This report includes our 2013 forward-looking estimates and associated forward-looking statements regarding our expectations and plans, as well as future events or conditions. Such forward-looking statements are based on our examination of historical operating trends, the information used to prepare our December 31, 2012 reserve reports and other data in our possession or available from third parties. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially from our expectations due to a number of factors, such as changes in the supply of and demand for oil, natural gas and NGLs and related products and services; exploration or drilling programs; political or regulatory events; general economic and financial market conditions; and other risk factors we discuss in our Annual Report on Form 10-K. All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by these cautionary statements. We assume no duty to update or revise our forward-looking statements based on new information, future events or otherwise.
In this report, financial amounts related to our Canadian operations have been converted to U.S. dollars using estimated average exchange rates of $1.00 U.S. dollar to $1.00 Canadian dollar.
Production and Prices
Set forth below are our daily production and price realization estimates for the first quarter and full year 2013. The price realizations for oil, bitumen and NGLs are determined using the monthly average of NYMEX settled prices on each trading day for the benchmark West Texas Intermediate crude oil price at Cushing, Oklahoma. The price realizations for natural gas are determined using the first-of-month South Louisiana Henry Hub price index as published in Inside FERC.
Quarter 1 Full Year
Low High Low High
Daily Production
Oil and bitumen (MBbls/d)
United States 65.0 70.0 80.0 85.0
Canada 88.0 93.0 84.0 89.0
Natural gas (MMcf/d)
United States 1,935.0 1,965.0 1,920.0 1,960.0
Canada 410.0 440.0 385.0 415.0
Natural gas liquids (MBbls/d)
United States 105.0 111.0 112.0 118.0
Canada 8.0 10.0 7.0 9.0
Price Realizations
Oil and bitumen-% of WTI
United States 84 % 94 % 88 % 98 %
Canada 36 % 46 % 48 % 58 %
Natural gas-% of Henry Hub
United States 81 % 91 % 80 % 90 %
Canada 88 % 98 % 86 % 96 %
Natural gas liquids-% of WTI
United States 25 % 35 % 26 % 36 %
Canada 48 % 58 % 47 % 57 %
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Commodity Price Risk Management
As of February 15, 2013, we had the following oil derivative positions
associated with 2013 production. Our oil price swaps and collars settle against
the average of the prompt month NYMEX West Texas Intermediate futures price.
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Price Swaps Price Collars Call Options Sold
Weighted Weighted Weighted Weighted
Volume Average Price Volume Average Floor Price Average Ceiling Price Volume Average Price
Period (Bbls/d) ($/Bbl) (Bbls/d) ($/Bbl) ($/Bbl) (Bbls/d) ($/Bbl)
Q1-Q4 2013 55,110 $ 101.22 60,068 $ 90.34 $ 112.70 10,000 $ 120.00
Basis Swaps
Weighted Average
Volume Differential to WTI
Period Index (Bbls/d) ($/Bbl)
Q1-Q2 2013 Western Canadian Select 3,000 $ (19.58 )
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As of February 15, 2013, we had the following open natural gas derivative positions associated with 2013 production. The first table presents our natural gas contracts that settle against the Inside FERC first-of-the-month Henry Hub index. The second table presents our natural gas contracts that settle against the AECO index.
Price Swaps Price Collars Call Options Sold
Weighted
Average Weighted Weighted Weighted
Volume Price Volume Average Floor Price Average Ceiling Price Volume Average Price
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Price Swaps
Weighted
Volume Average Price
Period (MMBtu/d) ($/MMBtu)
Q1-Q4 2013 28,435 $ 3.64
Basis Swaps
Weighted Average
Volume Differential to Henry Hub
Period Index (MMBtu/d) ($/MMBtu)
Q1-Q4 2013 El Paso Natural Gas 20,000 $ (0.12 )
Q1-Q4 2013 Panhandle Eastern Pipeline 20,000 $ (0.17 )
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Other Operating Items
The following table includes full year estimates of other revenue and expense
items associated with our operations.
Full Year
Low High
($ in millions,
except per Boe)
Marketing & midstream operating profit $ 425 $ 475
Lease operating expenses per Boe $ 8.60 $ 9.00
Depreciation, depletion and amortization per Boe $ 11.50 $ 12.50
General & administrative expenses per Boe $ 2.70 $ 2.90
Taxes other than income taxes as % of wellhead revenue 5.8 % 6.8 %
Interest expense $ 420 $ 460
Other expense, net $ 50 $ 70
Current income tax rate 2 % 8 %
Deferred income tax rate 28 % 32 %
Total income tax rate 30 % 40 %
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Capital Expenditures
Set forth below are our capital expenditure estimates for the first quarter and
full year 2013.
Quarter 1 Full Year
Low High Low High
(In millions)
Development $ 1,100 $ 1,250 $ 4,450 $ 4,750
Exploration 265 315 490 590
Subtotal 1,365 1,565 4,940 5,340
Capitalized G&A and interest 95 105 385 415
Total oil and gas 1,460 1,670 5,325 5,755
Midstream 250 300 975 1,045
Corporate and other 50 70 125 175
Total other 300 370 1,100 1,220
Total capital expenditures $ 1,760 $ 2,040 $ 6,425 $ 6,975
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