Devon Energy Issues Production Guidance
Devon Energy provided summary estimates of 2007 and 2008 capital expenditures and reserve additions. The company also reconfirmed its oil and gas production guidance for the years 2007, 2008 and 2009. Devon will report its actual results for 2007 and provide detailed forecasts for 2008 in early February 2008.
Devon continues to expect to produce approximately 57 million oil-equivalent barrels (Boe) from continuing operations in the fourth quarter of 2007. This would represent an eight percent increase compared with Devon's fourth-quarter 2006 production from continuing operations of 52.8 million Boe. Continuing operations excludes production from the company's operations in Africa that it is divesting.
For the full year of 2007, Devon expects to produce approximately 223 million Boe. This represents annual production growth from continuing operations of approximately 11.5 percent. The growth is a result of strong performance from Devon's U.S. onshore properties, a full year of production from the ACG field in Azerbaijan and second-half start-ups of production from the company's Merganser field in the deepwater Gulf of Mexico and the Polvo field offshore Brazil.
Production from continuing operations in 2008 is expected to total 240 million to 247 million Boe. The production growth in 2008 is expected to include additional contributions from onshore properties in both Canada and the U.S., a full year of production from Merganser and continued ramp-up of production from Polvo. Devon expects further production growth in 2009, to an estimated 259 to 274 million Boe.
Strong Drill-Bit Reserve Growth Expected in 2007 and 2008
Drill-bit capital for 2007 is estimated at $5.7 to $5.8 billion. Devon estimates that for 2007 its additions to proved reserves will be 350 million to 360 million Boe.
The company expects to post strong reserve growth again in 2008. Devon forecasts proved reserve additions of 390 million to 410 million Boe in the coming year. Drill-bit capital for 2008 is forecast at $6.1 billion to $6.4 billion.
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