* 3rd-qtr loss $719 million, or $1.80 per share
* Revenue slumps 47 percent from year earlier
* Takes $1.1 billion writedown
* Shares down 7 percent
* Spending seen lower in 2013
(Updates shares, adds quote)
Nov 7 (Reuters) – Devon Energy Corp reported a
third-quarter loss as it wrote down the value of some assets due
to low natural gas prices and the company’s output disappointed,
prompting a 7 percent drop in the stock.
The company came up short after it produced less
liquids-rich natural gas and new production from a Canadian oil
sands project was also less than expected, it said.
Devon’s oil and gas output rose 3 percent from a year ago to
678,000 barrels of oil equivalent per day in the quarter. That
was below Robert W. Baird & Co’s forecast for 685,000 boe per
day.
Burdened by heavy supplies, U.S. natural gas prices fell
about 30 percent from a year earlier in the third quarter to an
average of $2.83 per million British thermal units.
Those low prices caused a number of exploration and
production companies to write down the value of some assets. In
the third quarter, Devon took a $1.1 billion writedown.
Low natural gas prices sent many exploration and production
companies in search of natural gas liquids such as butane,
propane and ethane, but excess supplies of these liquids have
also put pressure on prices. The price of ethane has been hit
particularly hard, falling more than 60 percent this year.
Devon will continue its search for pricier crude oil next
year, but plans to spend “significantly” less as purchases of
oil and gas acreage slow, said John Richels, Devon chief
executive, on a call with analysts.
For the first nine months, Devon spent $5.3 billion on
exploration and production and expects to spend about $1.7
billion in the fourth quarter, the company said.
The Oklahoma City, Oklahoma company reported a third-quarter
loss of $719 million, or $1.80 per share, compared with a profit
of $1 billion, or $2.51 per share, a year earlier.
Excluding one-time items, the company earned 88 cents per
share. Analysts on average expected 69 cents, according to
Thomson Reuters I/B/E/S.
A good part of Devon’s earnings beat was due to a tax
benefit, analysts at Houston-based energy investment bank
Simmons & Co said in a note to clients.
Revenue fell 47 percent to $1.87 billion as average realized
prices for natural gas fell 27 percent, and that for natural gas
liquids fell 37 percent. Analysts expected $2.27 billion.
Shares of Devon were down $4.16 to $55.46 in afternoon New
York Stock Exchange trading.
(Reporting by Thyagaraju Adinarayan in Bangalore and Anna
Driver in Houston; Editing by Roshni Menon and John Wallace)
