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Devon Energy corporate report

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Report summary

Devon’s seven-month flurry of M&A repositioned its portfolio to be better suited for growth in a low-price environment. We now estimate that Devon holds the second-largest base of undeveloped North American liquids reserves that generates >10% returns under US$70/bbl WTI. Our deal valuations suggest Devon had to pay a modest premium to acquire the high-upside tight-oil assets, while selling its non-core assets at a small discount. Devon will rely on its proven track record as a strong tight-oil operator to improve results and create incremental value. Gearingis far above historical norms; the company needs to prove it can de-lever orgaincally. We believe Devon is well positioned to generate free cash flow.

What's included

This report contains

  • Document

    Devon Energy corporate report

    PDF 520.37 KB

  • Document

    Devon Energy corporate report

    ZIP 2.85 MB

  • Document

    Devon Corporate Report.xls

    XLS 3.63 MB

  • Document

    Devon Clean Spreadsheet.xls

    XLS 4.50 MB

Table of contents

  • Other Devon Energy research
  • Executive summary
    • Sharpening the portfolio (again)
    • Allocating free cash flow: big potential for shareholder distributions
    • Hedging: opportunistic versus programmatic
    • Executing on the core
    • Assessing the upside
  • Portfolio summary
  • Valuation
  • Investment
  • Production
  • Reserves and resources
    • Economic assumptions

Tables and charts

This report includes 35 images and tables including:


  • Share-price performance
  • Portfolio summary: Image 1
  • Base case upstream NPV,10
  • Current NPV,10 vs. future NPV,10
  • Upstream EV vs. Upstream NPV,10
  • Upstream portfolio sensitivities vs. Upstream EV
  • Forecast development expenditure (nominal)
  • Forecast operating expenditure (nominal)
  • Reported cost
  • New project returns
  • Reported and WM forecast production
  • Liquid vs. Gas
  • Liquid production
  • Gas production
  • Total reserves: Wood Mackenzie commercial
  • Total resources: regional breakdown
  • Total reserves: reported vs. Wood Mackenzie
  • Reserve life: reported vs. Wood Mackenzie
  • Divestiture candidates
  • WM base case: free cash flow
  • Divestiture scenario: free cash flow
  • Hedging in 2018: quantity vs. quality
  • Bone Spring: productivity trends
  • Strategy: Image 7
  • % of capex allocated to US Mid-Continent
  • Share-price performance: 2018 YTD
  • Valuation: Implied long-term oil price
  • Base price assumptions (nominal terms)
  • Base, high and low Brent (nominal terms)


  • SWOT analysis
  • Base price assumptions (nominal terms)
  • High price assumptions
  • Low price assumptions
  • Economic assumptions: Table 4
  • Foreign exchange rate assumptions

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