Devon Energy will close its Houston office in a move to consolidate its U.S. personnel into a single operations group at the company's headquarters in Oklahoma City.
Operational responsibilities for the company's South Texas, East Texas and Louisiana operations will be based in Oklahoma City following the consolidation, the company said in a statement on Thursday.
Consolidating its U.S. operations will save Devon approximately $80 million per year by reducing its general and administrative costs and capitalized personnel costs. Reorganization charges are estimated at approximately $125 million, with $100 million estimated to be incurred in the first half of next year. In aggregate, roughly 20 percent of the total restructuring charges are non-cash.
As part of the consolidation, the company expects to relocate a number of employees from Houston to Oklahoma City. The initiative is expected to be substantially complete by the end of first quarter 2013.
"Consolidating our U.S. operations will improve our ability to quickly shift the focus of our workforce between project areas as economic conditions dictate," said Dave Hager, executive vice president of exploration and production, in a press statement. "In addition, this move will improve the sharing of best practices and enhance overall operational efficiency."
Devon has 500 employees in Houston, a company spokesperson told Rigzone in an email statement. The company is still very early in the process of closing its Houston office, and does not have a count of how many will stay with Devon and make the move to Oklahoma City.
The company is still operating all of its assets, and will need hundreds of its employees from Houston.
"However, it is too early to have an exact figure on many of them will move to Oklahoma City," the spokesperson said.
Employees that opt to stay will be given severance packages.
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