Devon Energy (NYSE:DVN) is holding the company's annual meeting for institutional investors in early April 2012, providing the company an excellent opportunity to update investors and shareholders on recent activity. Here are several items and issues that the company should discuss in detail next week. (To know more about oil and gas, read Oil And Gas Industry Primer.)

Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

New Ventures
Devon Energy has a New Ventures portfolio that encompasses five emerging onshore areas in the United States. These plays are spread across the country and include the Mississippian in Oklahoma and Kansas, the Niobrara in Colorado, the Utica Shale in Ohio, the Tuscaloosa in Louisiana and Mississippi, and the A-1 Carbonate play in Michigan.

Devon Energy has 1.4 million acres in these five plays, and plans to spend $450 million in gross capital here in 2012. Despite the size of these emerging plays, the company has detailed very little information on the potential or recent results of wells drilled into these plays.

These plays have significant potential and have attracted the attention of many large international oil and gas companies. China Petroleum & Chemical Corp. (NYSE:SNP) recently acquired a 33% interest in Devon Energy's New Ventures portfolio for $2.5 billion.

Cash Levels
Devon Energy initiated a restructuring in late 2010 that involved the divestiture of the company's international and offshore oil and gas properties. The restructuring is nearly complete and has yielded net proceeds after tax of approximately $8 billion for the company.

Although Devon Energy used some of this excess cash to repurchase stock and boost its dividend, the company ended 2011 with $7.1 billion in cash and short-term investments.

I will grant you that Devon Energy is no Apple (Nasdaq:AAPL) or Google (Nasdaq:GOOG), which have $97.6 billion and $44.6 billion in cash and investments, respectively.

However, Devon Energy seems to have too much cash to hold on its balance sheet, given the size of the company. The company may want to give a little insight on plans for this cash hoard.

Natural Gas Armageddon
Natural gas prices are currently at the lowest levels in a decade and the management of Devon Energy should give a detailed macro view on the natural gas markets. This is particularly important now, since some market pundits are discussing the possibility of natural gas storage becoming full later in the year.

The Bottom Line
Devon Energy will use an upcoming investor meeting to flesh out its operations and strategy for the investment community. Investors should look for more information on the above issues from management. (For additional reading, check out A Guide To Investing In Oil Markets.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

Related Articles
  1. Products and Investments

    Cash vs. Stocks: How to Decide Which is Best

    Is it better to keep your money in cash or is a down market a good time to buy stocks at a lower cost?
  2. Investing News

    Who Does Cheap Oil Benefit? See This Stock (DG)

    Cheap oil won't benefit most companies, but this retailer might buck that trend.
  3. Investing

    How to Ballast a Portfolio with Bonds

    If January and early February performance is any guide, there’s a new normal in financial markets today: Heightened volatility.
  4. Stock Analysis

    Performance Review: Emerging Markets Equities in 2015

    Find out why emerging markets struggled in 2015 and why a half-decade long trend of poor returns is proving optimistic growth investors wrong.
  5. Investing News

    Today's Sell-off: Are We in a Margin Liquidation?

    If we're in market liquidation, is it good news or bad news? That party depends on your timeframe.
  6. Investing News

    Bank Stocks: Time to Buy or Avoid? (WFC, JPM, C)

    Bank stocks have been pounded. Is this the right time to buy or should they be avoided?
  7. Stock Analysis

    Why the Bullish Are Turning Bearish

    Banks are reducing their targets for the S&P 500 for 2016. Here's why.
  8. Stock Analysis

    How to Find Quality Stocks Amid the Wreckage

    Finding companies with good earnings and hitting on all cylinders in this environment, although possible, is not easy.
  9. Stock Analysis

    The Top 5 Platinum Penny Stocks for 2016 (PLG, XPL)

    Examine five penny stocks in the platinum mining business that investors may wish to consider adding to their investment portfolios for 2016.
  10. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>
Trading Center