Trying to keep operating costs down is something most
companies have in common, however, techniques and discipline to
accomplish that are harder to do, said J. Larry Nichols,
president and chief executive officer of Devon Energy Corp.
"It's easy to make resolutions and know what you should do,"
Nichols said. "It is somewhat more difficult to actually do it."
In today's energy industry, companies do not want to get into
a position where market is the sole factor in determining their
success, according to Devon officials.
Devon is an Oklahoma City-based independent energy company
engaged in oil and gas property acquisition, exploration and
production and oil and natural gas remarketing.
"We've set ourselves up to succeed regardless of price," said
H. Allen Turner, vice president of corporate development.
Nichols said Devon can benefit under both high and low prices
because "we keep our financial statements efficiently clean. .
.not highly leveraged."
"We have the ability to shift back and forth between drilling
and acquisition," Nichols said. "If prices are low, that puts
pressure on highly leveraged companies to do something. High
prices help us as they do everyone else by increasing revenue and
giving us more attractive drilling opportunities."
Devon has just experienced "its best year in history" in which
the company set records for production, revenues, earnings and
The company reported a 40 percent increase in net earnings for
1993 to $20.5 million from $14.6 million. Revenues increased to
$98.8 million from $71.6 million the previous year due primarily
to increased production. In 1993, Devon set its sixth consecutive
production record to 52.1 equivalent billion cubic feet. That was
a 38 percent increase from the previous year.
Since 1987, the company has increased its number of employees
to 200 from 125.
According to Devon officials, keeping low cost reserves and
concentrating on centralized basins gives Devon the ability to
grow in the future.
Nichols said the company regularly examines its portfolio of
oil and gas properties and disposes of those that are no longer
"As bigger properties become more successful, we sell off our
interest in minor properties," Turner said.
Devon disposed of 2,000 wells during 1993. From 1989-1992, the
company disposed of 2,700 wells.
"In contrast, you can still find major oil companies that are
sitting on fairly marginal properties just because of some
emotional attachment that someone in the hierarchy has because he
discovered that field decades ago," Nichols said.
"We try to eliminate properties not critical to our central
areas of operations. …