I see alot of information on this group about Devon's activity. When I approached them, they said no. Do not understand why if they are so active, there is no interest in my minerals? Any comments are appreciated.
Liz,
Their are lots of minerals not leased in Logan Co. The property may have a fault or not enough feet to be any good. I think Devon leased more than they can drill before all the leases expire. So, once they catch up, they may be back. Give it some time.
Since I don't know the legal of your minerals, it's hard to say what is going on.
If it is 29-17n-4w they have filed for a pooling and the hearing is set for 7/14 . It is Payne Exploration filing the pooling. Why not wait for the pooling ?
Liz, Mason Mungle who is the president of the Oklahoma National Royalty Owner's association (NARO) told me he only leases to third parties, because most operators will not give you the best lease offer. Devon is an operator and, like Virginia said, they have leased more than they can drill before lease expirations. Ron's question is somewhat rhetorical, because the pooling means there is an intent to drill and usually your third parties lease offers go up in value, because they know for sure a well will be drilled. Also, if you still don't like the lease offers one of the pooling options is participation which is costly, so you may want to participate with only a part of your mineral interest.
From NARO http://www.naro-us.org/page-697394/1210936? "The pooling order contains royalty and bonus options, and the option to participate in the well, for you to choose from. If you have not signed a lease, the pooling order instructs you to send a written election to the address provided and tell the pooling applicant which option you want. The order further states that you have a twenty day election period which starts counting the day the order is signed by the Corporation Commissioners. This is twenty calendar days. If you fail to make a written election in a timely manner under the order, the order states which option will be made for you." "Then, unless something else happens, the mineral owner is "statutorily leased" under the terms of the order issued by the OCC."
Devon was debt free 5 years ago. They now are some $13 Billion in debt. They are drilling wells that are, on the average, underperforming. They are committed to drill by financial obligations in drilling deals with foreign investors. They have to drill or be sued.
Overall, they wish they were not in the play. That is the story I got and my source is more than usually reliable, but it came from a long time operator who regularly attends "exploration managers" dinners with other OK city geologists and managers. They don't want any more acreage except that necessary to make their drilling commitment.
Wow! That's not what the financial news is reporting. Now, I wonder who's right!
"Devon Energy's acquisition initiatives are clearly intended to boost growth, while its divestments are intended to rid the company of assets that could potentially become liabilities to its long-term plan. As a result of these divestments, Devon is then able to pay off debt; and in part due to Linn Energy's recent acquisition, the company expects to reduce its net debt position by $4 billion to end this year." Devon
http://www.fool.com/investing/general/2014/07/08/can-devon-energys-impressive-run-continue.aspx
Also, DVN, like most of the other O/G shale companies are changing to EOG's and WLL's new well completion using a new I mile lateral completion design in the Eagle Ford that they claim is extremely better than 2 mile laterals sometime by 200% to 300% more. This new completion design focuses on the well bore and more surface area can be stimulated increasing the total area fractured freeing up more resource and that the technique opens up more surface area of the source rock and it keeps it open. EOG is using their new technique in Bakken and Penn Virginia and reports superior results.
http://seekingalpha.com/article/1465261-bakken-update-the-top-eagle...
"We're seeing other natural gas heavy producers...hoping to replicate (EOG's) success."
"Over the past year, EOG has implemented a new completion design. It was first used in the Eagle Ford and Permian, and now it has found its way to North Dakota."
http://oilandgasinvesting.com/news/eog-resources-completion-technology-is-a-game-changer.html
"In Dec 2013 Devon announced it would purchase GeoSouthern Energy Corp.'s assets in Texas' Eagle Ford shale, where EOG reports phenomenal success, for $6 billion in cash."
I just don't know how can Devon can pay 6$ billion in cash in the first half of 2014, reduce their debt to 4 billion by the end of 2014 and still go broke.
Bloomberg reporting on Devon's 30% earnings July 9, 2014
Martha,
Sounds like the same thing is happening to Devon that happen to Chesapeake in Woods, Woodward, Alfalfa Co in Oklahoma. I think it was the foreign investors that almost made them go under.
Virginia, According to Devon's own management they are not going under. The Bloomberg July 9, 2014 video I posted has a chart showing Devon stock is up 30% and they declared a recent dividend. According to Devon's own management they are not in any way shape or form going under. (see link below) Does anyone have actual proof that Devon is going under? I would love to see it, so please post and I'll compare it to Devon's report below and all the major money managers 2014 reports and post my findings.
"2013 vs. 2012 LOE increased $0.67 per Boe largely because of our liquids
production growth, particularly in the Permian Basin and the
Mississippian-Woodford Trend in the U.S. These projects generally require a
higher per unit cost than our gas projects, particularly because they are in the
early stages of development."
According to Devon's own management they are not going under
Of course they wouldn't say that. And they wouldn't say what I said the way I said it, but would say it like was said above...
divestments are intended to rid the company of assets that could potentially become liabilities
They are happy to offload such problems onto someone else when possible. The problem isn't that they don't make a little money, but that they tie up a lot of money to make a very little money and it is risky. It is risky because most of the oil patch expects oil prices to drop to the $80s and it would if there was no turmoil in Syria, Libya, Nigeria, Iraq and Ukraine. We are riding high prices that will collapse the moment peace comes to the Middle East. The good news for the patch is that its unlikely peace will come.
Why do you think the gas companies are desperate to export gas? It will increase the cost of gas period and that is good for explorers like Devon. Then they can make money again on nat gas.
As for Chesapeake, they are shedding assets like crazy because of one reason....Aubrey McClendon, the docket jumping (think claim jumper) landman that became filthy rich riding the shirttails of others. I was in an office where perhaps the most noted geophysical expert in the nation was fuming with my long time friend and geologist who ran a small company in Edmond. Seems he had just come from CHK Hdq. and he said, Those wet behind the ears kids don't know **** about geophysics. All they know is to drill shale and outbid everyone for the acreage. They need better geologists."
My friend replied to the effect, " They bought out the undertaker to expand their campus. Perhaps they should have bought the cemetery instead." Parker looked at him and he continued, "There are a lot of old dead geologists there."
There is no comparison between Devon and CHK. Devon is a far better company. I expect Anadarko to eventually take over Chesapeake. As for blurbs from the website. How many of these are now evidence in stockholder lawsuits? McClendon went to Little Rock and talked about how they would unlock 30 BCF per section or more in the Fayetteville. I have yet to see a section make 15 BCF. BHP bought out Chesapeake and over 10% of the title work was flawed. And BHP wrote down the assets dramatically. CHK's last well was in Conway County and was a dud. BHP has tried to turn it into an injection well.
I'm just saying... take what the companies say with a grain of salt. Watch what they do and if they sell a play then it wasn't working for them.
http://petroleumtruthreport.blogspot.com/2013/08/shale-boom-profits-bypass-big-oil.html
Yes indeed, according to Devon's own management Devon is not going under and it is clearly reported in Devon's 2013 report to the US Securities and Exchange Commission (SEC) . Using unethical standards when reporting information on financial statements is breaking the law. If the company does not report the correct information, it is in violation of the standards set forth by the SEC. Devon's CEO and other executives of the company could then stand to face criminal prosecution in this case. The company could also have to pay substantial fines to the SEC and the executives could face jail time.
Petroleum truth is a 'Blog' by some guy who can write any kind of information all day long and not be held accountable. His report is not an SEC report and is not backed by any factual supporting SEC financial documents.
http://www.sec.gov/divisions/corpfin/cffinancialreportingmanual.shtml
http://www.alboran.com/files/2013/07/PR-6.pdf
So you are saying no one has been sued over "optimistic" SEC reports?
in connection with purchases of shares directly or on behalf of the company. In all three cases,
key claims include breach of contract and breach of fiduciary duty.
1. Texas: Allen v. Devon Energy Holdings (Tex. Ct. App. 2012)
In March, 2012, the Texas Court of Appeals reversed a dismissal of certain fraud and
fiduciary duty claims brought by a former shareholder of a limited liability company after the
company bought back his shares and then sold itself two years later at a significantly higher
valuation.11
http://www.alboran.com/files/2013/07/PR-6.pdf
I don't need to go on. I am just saying I trust the old geologists I worked with for decades in their own company to tell me a lot more than I trust the empty suits in the penthouse above to tell me the truth.
Nothing in the SEC filings will tell diddly. It is all spin manufactured within the "rules" of the SEC. The explanation for why Devon wants no more acreage than they need lies in where they wish they were drilling not necessarily where they are drilling.
TL, Yes, I'm aware of lawsuits surrounding false reporting. After the 2008 market crash the SEC changed all financial reporting but centered efforts on Energy and Banking. However, Petroleum Review could be an unreliable source. It's a club and McAfee Security indicated the site was suspicious. Below is the link to SEC's Modernization of Oil and Gas Reporting effective January 2010. The Petroleum club members might have issues with the new SEC Goals/Principles of Investor Protection, Comparability, Transparency, and Long Term Applicability that have been implemented to protect private investors from highly promoted oil and gas ventures most of which go bankrupt in the first year. The commission on these venture's sales is higher than the purchase points, the points are outrageously expensive and the promoters make all their money up front leaving investors high and dry.
http://www.sec.gov/rules/final/2008/33-8995.pdf