Devon Energy Research Report

This report reflects the research and analysis I've performed on this company. It is provided for informational purposes only and does not constitute personalized financial advice nor an endorsement or solicitation to purchase stock in this or any other company. Please do your own due diligence or hire a financial advisor before making any investment decisions.

DVN:US research report posted: 2007, July 29

Devon (DVN:US) Investment Report

07/26/2007

Current Price: @ US $74.97; Market Cap: $33.6B; Dividend: 0.14 (0.74%)

Devon Energy is one of the largest US independent oil & gas exploration and production (E & P) companies. Their resource mix is 64% gas / 36% liquids, with the bulk of assets in onshore North America. Devon is one of the biggest domestic natural gas producers with the largest position in the Barnett Shale. They also have a substantial stake in the prospective deepwater Gulf of Mexico play. Additionally, Devon has midstream operations, primarily in the Texas Barnett area.

Valuation:
Intrinsic Value: $90 - $100 per share
Accumulation Range: $75 or better

Bring projects online & on time: Jackfish by YE 2008, Polvo
Hit 2008 guidance:
- Production: 240-247 MMBOE
- CapEx: $6.1-$6.4B drill-bit capital ($1B on longer-term, high-impact growth prospects)
- Midstream & Marketing operating profit: $510-550M
- DD&A rate: $12.75-13.25 per BOE/li>
- Added reserves: 390-410 MMBOE via drill-bit
Sanction or move along new projects (Kaskida, Cascade, Jackfish 2, Woodford Shale, Jack, Mission Deep, St. Malo, etc).
Control operating cost inflation.

DISCLOSURE: Please see our portfolio page for all disclosures.

The author received no compensation and is not affiliated with the company reviewed in this report with the possible exception of being a shareholder. The author reserves the right to buy or sell the stock as deemed personally prudent without further notification

The Enlightened American

Devon Energy Research Report