Company report
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17 Pages

Devon Energy corporate report


Devon Energy corporate report

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. Gearing is 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 includes 2 file(s)

  • Devon Energy corporate report PDF - 530.96 KB 17 Pages, 8 Tables, 19 Figures
  • Devon Energy corporate report.xls XLS - 3.88 MB

Description

The upstream oil and gas industry conducts activities against a backdrop of growing energy and environmental challenges. Political instabilities, international conflicts and government and environmental regulation have all impacted the production process.

This has forced companies to re-examine their corporate strategy, moving away from high-risk exploratory drilling to lower-risk exploration in mature basins as they search for increased returns.

This Upstream Oil and Gas Company report offers thought-provoking insight into corporate financial health, investment strategy and operational outlook supported by our proprietary asset data and energy research experts.

Widely used by both the energy and financial sectors, our report gives you a unique perspective on key strategic and financial challenges, as well as opportunities facing this oil and gas company.

Wood Mackenzie provides an independent evaluation and expert opinion on the operational performance, strategy and future of the world's top oil and gas companies. Our unique, objective analysis helps you understand, validate, compare and challenge market and corporate views so you can assess strategic opportunities.

  • Executive summary
    • Strategic success factors
  • Strategy
    • Deleveraging through derivatives, then dilution, then divestitures
    • M&A-led portfolio repositioning
    • Executing on a high-graded portfolio
    • Tapping into upside through organic improvements
  • Valuation
  • Financial health
    • Financial health overview
      • Net debt outlook / Liquidity position
      • Options to free up capital
  • Resources, reserves and production
    • Production overview
    • Resources and reserves overview
  • Portfolio summary
  • Economic assumptions
    • Economic assumptions

In this report there are 27 tables or charts, including:

  • Executive summary
    • SWOT analysis
  • Strategy
    • Net-debt evolution
    • Benchmark: gearing evolution
    • Deal metrics: net change from “portfolio sharpening” M&A activity
    • Benchmark: WM commercial reserves of North American onshore liquids by breakeven
    • Key tight-oil asset breakevens and reserves
    • Key uncon-gas asset breakevens and reserves
    • Cana/STACK/SCOOP operational evolution
    • Bone Spring operational evolution
  • Valuation
    • Enterprise value vs. WM NPV10
    • Asset-level NPV10
    • Share-price evolution
    • Evolution of market premium / discount
  • Financial health
    • Cash flow breakevens evolution
    • Net debt outlook
  • Resources, reserves and production
    • Devon: reported and forecasted production
    • Benchmark: liq. production CAGR 2017 - 2022
    • Reported organic reserve replacement
    • Benchmark: WM commercial reserves life
  • Portfolio summary
    • Key assets
  • Economic assumptions
    • Base price assumptions (nominal terms)
    • Base price assumptions (nominal terms)
    • Base, high and low Brent (nominal terms)
    • High price assumptions
    • Low price assumptions
    • Valuation assumptions
    • Foreign exchange rate assumptions
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Wood Mackenzie, a Verisk Analytics business, has been a trusted source of commercial intelligence for the world's natural resources sector for more than 40 years, empowering clients to make better strategic decisions with objective analysis and advice.

We work across every sector of oil, gas, power, renewables, chemicals, metals and mining, covering more than 150 countries. Our proprietary data and models are at the core of everything we do, ensuring our independent asset and company valuations are thoroughly robust and that we offer an accurate forward-looking view of economic indicators such as market supply, demand and price trends.

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