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. Personal Finance

    A Day in the Life of an Equity Research Analyst

    What does an equity research analyst do on an everyday basis?
  2. Mutual Funds & ETFs

    ETF Analysis: PowerShares S&P 500 Downside Hedged

    Find out about the PowerShares S&P 500 Downside Hedged ETF, and learn detailed information about characteristics, suitability and recommendations of it.
  3. Mutual Funds & ETFs

    ETF Analysis: ProShares Large Cap Core Plus

    Learn information about the ProShares Large Cap Core Plus ETF, and explore detailed analysis of its characteristics, suitability and recommendations.
  4. Mutual Funds & ETFs

    ETF Analysis: iShares Core Growth Allocation

    Find out about the iShares Core Growth Allocation Fund, and learn detailed information about its characteristics, suitability and recommendations.
  5. Mutual Funds & ETFs

    ETF Analysis: iShares MSCI USA Minimum Volatility

    Learn about the iShares MSCI USA Minimum Volatility exchange-traded fund, which invests in low-volatility equities traded on the U.S. stock market.
  6. Stock Analysis

    Should You Follow Millionaires into This Sector?

    Millionaire investors—and those who follow them—should take another look at the current economic situation before making any more investment decisions.
  7. Professionals

    What to do During a Market Correction

    The market has corrected...now what? Here's what you should consider rather than panicking.
  8. Mutual Funds & ETFs

    ETF Analysis: Vanguard Mid-Cap Value

    Take an in-depth look at the Vanguard Mid-Cap Value ETF, one of the largest and most popular mid-cap funds in the U.S. equity space.
  9. Mutual Funds & ETFs

    ETF Analysis: Schwab US Broad Market

    Take an in-depth look at the Schwab U.S. Broad Market ETF, an incredibly low-cost fund based on a wide selection of the U.S. equity market.
  10. Professionals

    Tips for Helping Clients Though Market Corrections

    When the stock market sees a steep drop, clients are bound to get anxious. Here are some tips for talking them off the ledge.
RELATED TERMS
  1. Equity

    The value of an asset less the value of all liabilities on that ...
  2. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  3. Sucker Yield

    When an investor has essentially risked all of his capital for ...
  4. Benchmark Crude Oil

    Benchmark crude oil is crude oil that serves as a pricing reference, ...
  5. PT (Perseroan Terbatas)

    An acronym for Perseroan Terbatas, which is Limited Liability ...
  6. Ltd. (Limited)

    An abbreviation of "limited," Ltd. is a suffix that ...
RELATED FAQS
  1. 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 >>
  2. 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 >>
  3. 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 >>
  4. 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 >>
  5. 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 >>
  6. What happens to the shares of stock purchased in a tender offer?

    The shares of stock purchased in a tender offer become the property of the purchaser. From that point forward, the purchaser, ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!