DEVON ENERGY CORP/DE, 10-Q filed on 5/2/2012
Quarterly Report
Document And Entity Information
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Apr. 18, 2012
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2012 
 
Amendment Flag
false 
 
Entity Registrant Name
DEVON ENERGY CORP/DE 
 
Entity Central Index Key
0001090012 
 
Entity Current Reporting Status
Yes 
 
Current Fiscal Year End Date
--12-31 
 
Document Fiscal Year Focus
2012 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Fiscal Period Focus
Q1 
 
Entity Common Stock, Shares Outstanding
 
404.4 
Consolidated Comprehensive Statements Of Earnings (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Revenues:
 
 
Oil, gas and NGL sales
$ 1,915 
$ 1,860 
Oil, gas and NGL derivatives
145 
(168)
Marketing and midstream revenues
437 
455 
Total revenues
2,497 
2,147 
Expenses and other, net:
 
 
Lease operating expenses
514 
424 
Marketing and midstream operating costs and expenses
325 
333 
Depreciation, depletion and amortization
680 
506 
General and administrative expenses
168 
130 
Taxes other than income taxes
102 
108 
Interest expense
87 
81 
Restructuring costs
 
(5)
Other, net
10 
(10)
Total expenses and other, net
1,886 
1,567 
Earnings from continuing operations before income taxes
611 
580 
Current income tax expense (benefit)
18 
(89)
Deferred income tax expense
179 
280 
Earnings from continuing operations
414 
389 
Earnings (loss) from discontinued operations, net of tax
(21)
27 
Net earnings
393 
416 
Basic net earnings per share:
 
 
Basic earnings from continuing operations per share
$ 1.03 
$ 0.91 
Basic earnings (loss) from discontinued operations per share
$ (0.06)
$ 0.06 
Basic net earnings per share
$ 0.97 
$ 0.97 
Diluted net earnings per share:
 
 
Diluted earnings from continuing operations per share
$ 1.03 
$ 0.91 
Diluted earnings (loss) from discontinued operations per share
$ (0.06)
$ 0.06 
Diluted net earnings per share
$ 0.97 
$ 0.97 
Comprehensive earnings:
 
 
Net earnings
393 
416 
Other comprehensive income, net of tax:
 
 
Foreign currency translation
152 
185 
Pension and postretirement plans
Other comprehensive earnings, net of tax
156 
191 
Comprehensive earnings
$ 549 
$ 607 
Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Cash flows from operating activities:
 
 
Net earnings
$ 393 
$ 416 
Earnings from discontinued operations, net of tax
21 
(27)
Adjustments to reconcile earnings from continuing operations to net cash from operating activities:
 
 
Depreciation, depletion and amortization
680 
506 
Deferred income tax expense
179 
280 
Unrealized change in fair value of financial instruments
22 
253 
Other noncash charges
54 
36 
Net increase in working capital
(321)
(171)
Increase in long-term other assets
(12)
(4)
Decrease in long-term other liabilities
(16)
(23)
Cash from operating activities - continuing operations
1,000 
1,266 
Cash from operating activities - discontinued operations
26 
(6)
Net cash from operating activities
1,026 
1,260 
Cash flows from investing activities:
 
 
Capital expenditures
(2,088)
(1,827)
Purchases of short-term investments
(827)
(1,636)
Redemptions of short-term investments
1,048 
145 
Other
(1)
(4)
Cash from investing activities - continuing operations
(1,868)
(3,322)
Cash from investing activities - discontinued operations
58 
(52)
Net cash from investing activities
(1,810)
(3,374)
Cash flows from financing activities:
 
 
Net commercial paper borrowings
357 
1,197 
Credit facility borrowings
750 
 
Proceeds from stock option exercises
20 
88 
Repurchases of common stock
 
(706)
Dividends paid on common stock
(80)
(68)
Excess tax benefits related to share-based compensation
Net cash from financing activities
1,048 
520 
Effect of exchange rate changes on cash
20 
Net increase (decrease) in cash and cash equivalents
273 
(1,574)
Cash and cash equivalents at beginning of period
5,555 
3,290 
Cash and cash equivalents at end of period
$ 5,828 
$ 1,716 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Current assets:
 
 
Cash and cash equivalents
$ 5,828 
$ 5,555 
Short-term investments
1,282 
1,503 
Accounts receivable
1,107 
1,379 
Other current assets
861 
868 
Total current assets
9,078 
9,305 
Oil and gas, based on full cost accounting:
 
 
Subject to amortization
64,272 
61,696 
Not subject to amortization
3,896 
3,982 
Total oil and gas
68,168 
65,678 
Other
5,341 
5,098 
Total property and equipment, at cost
73,509 
70,776 
Less accumulated depreciation, depletion and amortization
(46,948)
(46,002)
Property and equipment, net
26,561 
24,774 
Goodwill
6,067 
6,013 
Other long-term assets
899 
1,025 
Total assets
42,605 1
41,117 
Current liabilities:
 
 
Accounts payable
1,079 
1,471 
Revenues and royalties payable
513 
678 
Short-term debt
4,120 
3,811 
Other current liabilities
550 
778 
Total current liabilities
6,262 
6,738 
Long-term debt
6,719 
5,969 
Asset retirement obligations
1,944 
1,496 
Other long-term liabilities
752 
721 
Deferred income taxes
4,972 
4,763 
Stockholders' equity:
 
 
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 404.4 million and 404.1 million shares in 2012 and 2011, respectively
40 
40 
Additional paid-in capital
3,564 
3,507 
Retained earnings
16,621 
16,308 
Accumulated other comprehensive earnings
1,731 
1,575 
Total stockholders' equity
21,956 
21,430 
Commitments and contingencies (Note 16)
   
   
Total liabilities and stockholders' equity
$ 42,605 
$ 41,117 
Consolidated Balance Sheets (Parenthetical) (USD $)
Mar. 31, 2012
Dec. 31, 2011
Consolidated Balance Sheets [Abstract]
 
 
Common stock, par value (in dollars per share)
$ 0.1 
$ 0.1 
Common stock, shares authorized (in shares)
1,000,000,000 
1,000,000,000 
Common stock, shares issued (in shares)
404,400,000 
404,100,000 
Consolidated Statements Of Stockholders' Equity (USD $)
In Millions
Common Stock [Member]
Additional Paid-In Capital [Member]
Retained Earnings [Member]
Accumulated Other Comprehensive Earnings [Member]
Treasury Stock [Member]
Total
Balance, at Dec. 31, 2010
$ 43 
$ 5,601 
$ 11,882 
$ 1,760 
$ (33)
$ 19,253 
Balance, shares, at Dec. 31, 2010
432 
 
 
 
 
 
Net earnings
 
 
416 
 
 
416 
Other comprehensive earnings, net of tax
 
 
 
191 
 
191 
Stock option exercises
 
88 
 
 
 
88 
Stock option exercises, shares
 
 
 
 
 
Common stock repurchased
 
 
 
 
(696)
(696)
Common stock retired
 
(706)
 
 
706 
 
Common stock retired, shares
(8)
 
 
 
 
 
Common stock dividends
 
 
(68)
 
 
(68)
Share-based compensation
 
36 
 
 
 
36 
Share-based compensation tax benefits
 
 
 
 
Balance, at Mar. 31, 2011
43 
5,028 
12,230 
1,951 
(23)
19,229 
Balance, shares, at Mar. 31, 2011
425 
 
 
 
 
 
Balance, at Dec. 31, 2011
40 
3,507 
16,308 
1,575 
 
21,430 
Balance, shares, at Dec. 31, 2011
404 
 
 
 
 
 
Net earnings
 
 
393 
 
 
393 
Other comprehensive earnings, net of tax
 
 
 
156 
 
156 
Stock option exercises
 
20 
 
 
 
20 
Common stock repurchased
   
   
   
   
(1)
(1)
Common stock repurchased, shares
   
 
 
 
 
 
Common stock retired
   
(1)
   
   
   
Common stock retired, shares
   
 
 
 
 
 
Common stock dividends
 
 
(80)
 
 
(80)
Share-based compensation
 
37 
 
 
 
37 
Share-based compensation tax benefits
 
 
 
 
Balance, at Mar. 31, 2012
$ 40 
$ 3,564 
$ 16,621 
$ 1,731 
 
$ 21,956 
Balance, shares, at Mar. 31, 2012
404 
 
 
 
 
 
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies

1. Summary of Significant Accounting Policies

     The accompanying unaudited financial statements and notes of Devon Energy Corporation ("Devon") have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission. Pursuant to such rules and regulations, certain disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted. The accompanying financial statements and notes should be read in conjunction with the accompanying financial statements and notes included in Devon's 2011 Annual Report on Form 10-K.

     The accompanying unaudited interim financial statements furnished in this report reflect all adjustments that are, in the opinion of management, necessary to a fair statement of Devon's results of operations and cash flows for the three-month periods ended March 31, 2012 and 2011 and Devon's financial position as of March 31, 2012.

Derivative Financial Instruments
Derivative Financial Instruments

2. Derivative Financial Instruments

Objectives and Strategies

     Devon periodically enters into derivative financial instruments with respect to a portion of its oil, gas and NGL production that hedge the future prices received. These instruments are used to manage the inherent uncertainty of future revenues due to commodity price volatility. Devon's derivative financial instruments typically include financial price swaps, basis swaps, costless price collars and call options.

     Devon periodically enters into interest rate swaps to manage its exposure to interest rate volatility. Devon's interest rate swaps include contracts in which Devon receives a fixed rate and pays a variable rate on a total notional amount.

     Devon periodically enters into foreign exchange forward contracts to manage its exposure to fluctuations in exchange rates.

     Devon does not hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its derivative instruments for hedge accounting treatment.

Counterparty Credit Risk

     By using derivative financial instruments, Devon is exposed to credit risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, the hedging instruments are placed with a number of counterparties whom Devon believes are minimal credit risks. It is Devon's policy to enter into derivative contracts only with investment grade rated counterparties deemed by management to be competent and competitive market makers. Additionally, Devon's derivative contracts generally require cash collateral to be posted if either its or the counterparty's credit rating falls below certain credit rating levels. As of March 31, 2012, the credit ratings of all Devon's counterparties were within established guidelines.

Commodity Derivatives

 

Interest Rate Derivatives

As of March 31, 2012, Devon had the following open interest rate derivative positions:

    Fixed Rate   Variable  
  Notional Received   Rate Paid Expiration
  (In millions)        
$ 100 1.90 % Federal funds rate August 2012
  750 3.88 % Federal funds rate July 2013
$ 850 3.65 %    

 

Foreign Exchange Derivatives

As of March 31, 2012, Devon had the following open foreign exchange rate derivative positions:

      Forward Contract  
  Contract   CAD Fixed Rate  
Currency Type   Notional Received Expiration
      (In millions) (CAD-USD)  
Canadian Dollar Sell $ 75 0.9980 April 2012
Canadian Dollar Sell $ 100 1.0121 May 2012
Canadian Dollar Sell $ 580 0.9992 June 2012

 

Financial Statement Presentation

     The following table presents the cash settlements and unrealized gains and losses on fair value changes included in the accompanying comprehensive statements of earnings associated with derivative financial instruments.

      Three Months Ended March 31,  
  Comprehensive Statement of Earnings Caption   2012     2011  
      (In millions)    
Cash settlements:              
Commodity derivatives Oil, gas and NGL derivatives $ 158   $ 86  
Interest rate derivatives Other, net   10     16  
Foreign exchange derivatives Other, net   (11 )    
Total cash settlements     157     102  
Unrealized gains (losses):              
Commodity derivatives Oil, gas and NGL derivatives   (13 )   (254 )
Interest rate derivatives Other, net   (10 )   1  
Foreign exchange derivatives Other, net   1      
Total unrealized losses     (22 )   (253 )
Net gain (loss) recognized in comprehensive statements of earnings $ 135   $ (151 )

 

 

The following table presents the derivative fair values included in the accompanying consolidated balance sheets.

  Balance Sheet Caption   March 31, 2012 December 31, 2011
      (In millions)  
Asset derivatives:          
Commodity derivatives Other current assets $ 585 $ 611
Commodity derivatives Other long-term assets   58   17
Interest rate derivatives Other current assets   29   30
Interest rate derivatives Other long-term assets   13   22
Foreign exchange derivatives Other current assets   1  
Total asset derivatives   $ 686 $ 680
Liability derivatives:          
Commodity derivatives Other current liabilities $ 71 $ 82
Commodity derivatives Other long-term liabilities   39  
Total liability derivatives   $ 110 $ 82

 

Restructuring Costs
Restructuring Costs

3. Restructuring Costs

     In the fourth quarter of 2009, Devon announced plans to divest its offshore assets. As of March 31, 2012, Devon had divested all of its U.S. Offshore and International assets. Since inception of the plan, Devon had incurred $202 million of restructuring costs associated with these divestitures.

     The schedule below summarizes restructuring costs presented in the accompanying comprehensive statements of earnings. Restructuring costs related to Devon's discontinued operations totaled $6 million in the three months ended March 31, 2011. These costs primarily related to cash severance and share-based awards and are not included in the schedule below. There were no costs related to discontinued operations in the three months ended March 31, 2012.

    Three Months Ended March 31,  
  2012 2011
    (In millions)  
Lease obligations $ $ (4 )
Share-based awards     (1 )
Total $ $ (5 )

 

     The schedule below summarizes Devon's restructuring liabilities. Devon's restructuring liabilities for cash severance related to its discontinued operations totaled $21 million at March 31, 2011 and are not included in the schedule below.

    Other     Other        
    Current     Long-Term        
    Liabilities     Liabilities     Total  
          (In millions)        
Balance as of December 31, 2011 $ 29   $ 16   $ 45  
Lease obligations settled   (2 )   (1 )   (3 )
Cash severance settled   (2 )       (2 )
Balance as of March 31, 2012 $ 25   $ 15   $ 40  
 
Balance as of December 31, 2010 $ 31   $ 51   $ 82  
Lease obligations settled   (3 )   (4 )   (7 )
Cash severance settled   (8 )       (8 )
Lease obligations revision   (3 )   (1 )   (4 )
Balance as of March 31, 2011 $ 17   $ 46   $ 63  

 

Other, Net
Other, Net

4. Other, net

The components of other, net in the accompanying comprehensive statements of earnings include the following:

  Three Months Ended March 31,
  2012 2011
    (In millions)  
Accretion of asset retirement obligations $ 27   $ 23  
Interest rate swaps – unrealized fair value changes   10     (1)
Interest rate swaps – cash settlements   (10)   (16)
Other   (17)   (16)
Other, net $ 10   $ (10)

 

Earnings Per Share
Earnings Per Share

5. Earnings Per Share

     The following table reconciles earnings from continuing operations and common shares outstanding used in the calculations of basic and diluted earnings per share.

        Common     Earnings
    Earnings   Shares     per Share
    (In millions, except per share amounts)
Three Months Ended March 31, 2012:              
Earnings from continuing operations $ 414   404      
Attributable to participating securities   (4 ) (4 )    
Basic earnings per share   410   400   $ 1.03
Dilutive effect of potential common shares issuable     1      
Diluted earnings per share $ 410   401   $ 1.03
 
Three Months Ended March 31, 2011:              
Earnings from continuing operations $ 389   428      
Attributable to participating securities   (4 ) (5 )    
Basic earnings per share   385   423   $ 0.91
Dilutive effect of potential common shares issuable     2      
Diluted earnings per share $ 385   425   $ 0.91

 

     Certain options to purchase shares of Devon's common stock are excluded from the dilution calculations because the options are antidilutive. These excluded options totaled 6.4 million and 3.1 million during the three-month periods ended March 31, 2012 and 2011, respectively.

 

Other Comprehensive Earnings
Other Comprehensive Earnings

6. Other Comprehensive Earnings

Components of other comprehensive earnings consist of the following:

    Three Months Ended March 31,  
    2012     2011  
Foreign currency translation:   (In millions)  
Beginning accumulated foreign currency translation $ 1,802   $ 1,993  
Change in cumulative translation adjustment   159     195  
Income tax expense   (7 )   (10 )
Ending accumulated foreign currency translation   1,954     2,178  
Pension and postretirement benefit plans:            
Beginning accumulated pension and postretirement benefits   (227 )   (233 )
Recognition of net actuarial loss and prior service cost in earnings   7     9  
Income tax expense   (3 )   (3 )
Ending accumulated pension and postretirement benefits   (223 )   (227 )
Accumulated other comprehensive earnings, net of tax $ 1,731   $ 1,951  

 

Supplemental Information To Statements Of Cash Flows
Supplemental Information To Statements Of Cash Flows

7. Supplemental Information to Statements of Cash Flows

  Three Months Ended March 31,  
  2012     2011  
    (In millions)    
Net change in working capital:            
Decrease (increase) in accounts receivable $ 280   $ (60 )
Increase in other current assets   (53 )   (110 )
(Decrease) increase in accounts payable   (226 )   45  
(Decrease) increase in revenues and royalties payable   (169 )   100  
(Decrease) increase in income taxes payable   (16 )   10  
Decrease in other current liabilities   (137 )   (156 )
Net increase in working capital $ (321 ) $ (171 )
 
Supplementary cash flow data – total operations:            
Interest paid (net of capitalized interest) $ 136   $ 137  
Income taxes paid $ 33   $ 9  

 

Short-Term Investments
Short-Term Investments

8. Short-Term Investments

The components of short-term investments include the following:

    March 31, 2012 December 31, 2011
    (In millions)
U.S. Treasuries $ 958 $ 201
Canadian Treasuries   249   142
Commercial paper     1,013
Other   75   147
Short-term investments $ 1,282 $ 1,503

 

 

Accounts Receivable
Accounts Receivable

9. Accounts Receivable

The components of accounts receivable include the following:

    March 31, 2012   December 31, 2011  
    (In millions)  
Oil, gas and NGL sales $ 761   $ 928  
Joint interest billings   203     247  
Marketing and midstream revenues   116     174  
Other   36     39  
Gross accounts receivable   1,116     1,388  
Allowance for doubtful accounts   (9 )   (9 )
Net accounts receivable $ 1,107   $ 1,379  

 

Other Current Assets
Other Current Assets

10. Other current assets

The components of other current assets include the following:

    March 31, 2012 December 31, 2011
    (In millions)
Derivative financial instruments $ 615 $ 641
Inventories   123   102
Income taxes receivable   44   35
Current assets held for sale     21
Other   79   69
Other current assets $ 861 $ 868

 

Goodwill
Goodwill

11. Goodwill

     During the first three months of 2012, Devon's Canadian goodwill increased $54 million entirely due to foreign currency translation.

Debt
Debt

12. Debt

Commercial Paper

As of March 31, 2012, Devon had $4.1 billion of outstanding commercial paper at an average rate of 0.43 percent.

Credit Lines

     Devon has a $2.65 billion syndicated, unsecured revolving line of credit (the "Senior Credit Facility"). As of March 31, 2012, Devon had $750 million of borrowings under the Senior Credit Facility at an average borrowing rate of 0.47 percent. On April 7, 2012, $0.46 billion of Devon's Senior Credit Facility matured and $150 million of borrowings were repaid on that date.

     The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon's ratio of total funded debt to total capitalization, as defined in the credit agreement, to be less than 65 percent. As of March 31, 2012, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 24.4 percent.

Asset Retirement Obligations
Asset Retirement Obligations

13. Asset Retirement Obligations

The schedule below summarizes changes in Devon's asset retirement obligations.

    Three Months Ended March 31,  
    2012     2011  
    (In millions)    
Asset retirement obligations as of beginning of period $ 1,563   $ 1,497  
Liabilities incurred   21     11  
Liabilities settled   (16 )   (18 )
Revision of estimated obligation   399     3  
Accretion expense on discounted obligation   27     23  
Foreign currency translation adjustment   14     21  
Asset retirement obligations as of end of period   2,008     1,537  
Less current portion   64     69  
Asset retirement obligations, long-term $ 1,944   $ 1,468  

 

     During the first quarter of 2012, Devon recognized revisions to its asset retirement obligations totaling $399 million. The primary factor contributing to this revision was an overall increase in abandonment cost estimates for certain of its production operations facilities.

Retirement Plans
Retirement Plans

14. Retirement Plans

     The following table presents the components of net periodic benefit cost for Devon's pension and postretirement benefit plans.

    Pension Benefits     Postretirement Benefits
 
    Three Months     Three Months
    Ended March 31,     Ended March 31,
    2012     2011     2012   2011
    (In millions)
Net periodic benefit cost:                      
Service cost $ 11   $ 9   $   $
Interest cost   15     15     1     1
Expected return on plan assets   (16 )   (10 )      
Amortization of prior service cost   1     1     (1 )  
Net actuarial loss   6     8        
Net periodic benefit cost $ 17   $ 23   $   $ 1

 

Stockholders' Equity
Stockholders' Equity

15. Stockholders' Equity

Dividends

     Devon paid common stock dividends of $80 million (or $0.20 per share) and $68 million (or $0.16 per share) in the first quarter of 2012 and 2011, respectively.

Commitments And Contingencies
Commitments And Contingencies

16. Commitments and Contingencies

     Devon is party to various legal actions arising in the normal course of business. Matters that are probable of unfavorable outcome to Devon and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, Devon's estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters. None of the actions are believed by management to involve future amounts that would be material to Devon's financial position or results of operations after consideration of recorded accruals. Actual amounts could differ materially from management's estimates.

Royalty Matters

     Numerous natural gas producers and related parties, including Devon, have been named in various lawsuits alleging violation of the federal False Claims Act. The suits allege that the producers and related parties used below-market prices, improper deductions, improper measurement techniques and transactions with affiliates, which resulted in underpayment of royalties in connection with natural gas and NGLs produced and sold. Devon does not currently believe that it is subject to material exposure with respect to such royalty matters.

Environmental Matters

     Devon is subject to certain laws and regulations relating to environmental remediation activities associated with past operations, such as the Comprehensive Environmental Response, Compensation, and Liability Act and similar state statutes. In response to liabilities associated with these activities, loss accruals primarily consist of estimated uninsured remediation costs. Devon's monetary exposure for environmental matters is not expected to be material.

Chief Redemption Matters

     In 2006, Devon acquired Chief Holdings LLC ("Chief") from the owners of Chief, including Trevor Rees-Jones, the majority owner of Chief. In 2008, a former owner of Chief filed a petition against Rees-Jones, as the former majority owner of Chief, and Devon, as Chief's successor pursuant to the 2006 acquisition. The petition claimed, among other things, violations of the Texas Securities Act, fraud and breaches of Rees-Jones' fiduciary responsibility to the former owner in connection with Chief's 2004 redemption of the owner's minority ownership stake in Chief.

     On June 20, 2011, a court issued a judgment against Rees-Jones for $196 million, of which $133 million of the judgment was also issued against Devon. Both Rees-Jones and Devon are appealing the judgment. If the appeal is unsuccessful, Devon can and will seek full payment of the judgment and any related interest, costs and expenses from Rees-Jones pursuant to an existing indemnification agreement between Rees-Jones, certain other parties and Devon. Devon does not expect to have any net exposure as a result of the judgment. However, because Devon does not have a legal right of set off with respect to the judgment, Devon has recorded in the accompanying March 31, 2012 and December 31, 2011, balance sheets both a $133 million liability relating to the judgment with an offsetting $133 million receivable relating to its right to be indemnified by Rees-Jones and certain other parties pursuant to the indemnification agreement.

Other Matters

     Devon is involved in other various routine legal proceedings incidental to its business. However, to Devon's knowledge, there were no other material pending legal proceedings to which Devon is a party or to which any of its property is subject.

Fair Value Measurements
Fair Value Measurements

17. Fair Value Measurements

     The following tables provide carrying value and fair value measurement information for certain of Devon's financial assets and liabilities. The carrying values of cash, accounts receivable, other current receivables, accounts payable, other payables and accrued expenses included in the accompanying balance sheets approximated fair value at March 31, 2012 and December 31, 2011. Therefore, such financial assets and liabilities are not presented in the following table.

                Fair Value Measurements Using:  
    Carrying     Total Fair     Level 1   Level 2     Level 3  
    Amount     Value     Inputs   Inputs     Inputs  
                (In millions)            
March 31, 2012 assets (liabilities):                            
Cash equivalents $ 5,155   $ 5,155   $ 2,202 $ 2,953   $  
Short-term investments $ 1,282   $ 1,282   $ 1,282 $   $  
Long-term investments $ 84   $ 84   $ $   $ 84  
Commodity derivatives $ 643   $ 643   $ $ 643   $  
Commodity derivatives $ (110 ) $ (110 ) $ $ (110 ) $  
Interest rate derivatives $ 42   $ 42   $ $ 42   $  
Foreign exchange derivatives $ 1   $ 1   $ $ 1   $  
Debt $ (10,839 ) $ (12,222 ) $ $ (12,185 ) $ (37 )
 
December 31, 2011 assets (liabilities):                            
Cash equivalents $ 5,123   $ 5,123   $ 1,369 $ 3,754   $  
Short-term investments $ 1,503   $ 1,503   $ 490 $ 1,013   $  
Long-term investments $ 84   $ 84   $ $   $ 84  
Commodity derivatives $ 628   $ 628   $ $ 628   $  
Commodity derivatives $ (82 ) $ (82 ) $ $ (82 ) $  
Interest rate derivatives $ 52   $ 52   $ $ 52   $  
Debt $ (9,780 ) $ (11,380 ) $ $ (11,295 ) $ (85 )

 

The following methods and assumptions were used to estimate the fair values in the tables above.

Level 1 Fair Value Measurements

     Cash equivalents and short-term investments — Amounts consist primarily of U.S. and Canadian Treasury securities and money market investments. The fair value approximates the carrying value.

Level 2 Fair Value Measurements

     Cash equivalents and short-term investments — Amounts consist primarily of commercial paper investments. The fair value is based upon quotes from brokers, which approximate the carrying value.

     Commodity, interest rate and foreign exchange derivatives — The fair values of commodity and interest rate derivatives are estimated using internal discounted cash flow calculations based upon forward curves and quotes obtained from brokers for contracts with similar terms or quotes obtained from counterparties to the agreements.

     Debt — Devon's debt instruments do not actively trade in an established market. The fair values of its fixed-rate debt are estimated based on rates available for debt with similar terms and maturity. The fair values of Devon's variable-rate commercial paper and credit facility borrowings are the carrying values.

Level 3 Fair Value Measurements

     Long-term investments — Devon's long-term investments presented in the tables above consisted entirely of auction rate securities. Due to auction failures and the lack of an active market for Devon's auction rate securities, quoted market prices for these securities were not available. Therefore, Devon used valuation techniques that rely on unobservable inputs to estimate the fair values of its long-term auction rate securities. These inputs were based on the AAA credit rating of the securities, the probability of full repayment of the securities considering the U.S. government guarantees substantially all of the underlying student loans, the collection of all accrued interest to date and continued receipts of principal at par. As a result of using these inputs, Devon concluded the estimated fair values of its long-term auction rate securities approximated the par values as of March 31, 2012 and December 31, 2011. There were no changes in the fair value of these instruments in the three month periods ended March 31, 2012 and 2011, respectively.

     Debt — Devon's Level 3 debt consisted of a non-interest bearing promissory note. Due to the lack of an active market, quoted marked prices for this note, or similar notes, were not available. Therefore, Devon used valuation techniques that rely on unobservable inputs to estimate the fair value of its promissory note. The fair value of this debt is estimated using internal discounted cash flow calculations based upon estimated future payment schedules and a 3.125% interest rate.

    Three Months Ended March 31,  
  2012     2011  
    (In millions)  
Debt balance at beginning of period $ (85 ) $ (144 )
Foreign exchange translation adjustment   (2 )   (3 )
Accretion of promissory note       (1 )
Redemptions of principal   50     29  
Debt balance at end of period $ (37 ) $ (119 )

 

Discontinued Operations
Discontinued Operations

18. Discontinued Operations

     In March 2012, Devon received $71 million upon closing the divestiture of its operations in Angola, which completed Devon's offshore divestiture program that was announced in November 2009. In aggregate, Devon's U.S. and International offshore divestitures have generated total proceeds of $10.1 billion, or approximately $8 billion after-tax, assuming repatriation of a substantial portion of the foreign proceeds under current U.S. tax law.

     Revenues related to Devon's discontinued operations totaled $43 million in the three months ended March 31, 2011. Devon did not have revenues related to its discontinued operations during the first three months of 2012. Earnings (loss) from discontinued operations before income taxes totaled $(16) million and $30 million in the three months ended March 31, 2012 and March 31, 2011, respectively.

     The following table presents the main classes of assets and liabilities associated with Devon's discontinued operations at December 31, 2011. Devon did not have assets or liabilities held for sale at March 31, 2012.

  Balance Sheet Caption   December 31, 2011
      (In millions)
Other current assets Other current assets $ 21
Property and equipment, net Other long-term assets $ 132
 
Accounts payable Other current liabilities $ 20
Other current liabilities Other current liabilities $ 28

 

Segment Information
Segment Information

19. Segment Information

     Devon manages its operations through distinct operating segments, or divisions, which are defined primarily by geographic areas. For financial reporting purposes, Devon aggregates its U.S. divisions into one reporting segment due to the similar nature of the businesses. However, Devon's Canadian division is reported as separate reporting segment primarily due to the significant differences between the U.S. and Canadian regulatory environments. Devon's segments are all primarily engaged in oil and gas producing activities. Revenues are all from external customers.

U.S.     Canada   Total  
    (In millions)  
Three Months Ended March 31, 2012:                
Oil, gas and NGL sales $ 1,236   $ 679 $ 1,915  
Oil, gas and NGL derivatives $ 145   $ $ 145  
Marketing and midstream revenues $ 399   $ 38 $ 437  
Interest expense $ 71   $ 16 $ 87  
Depreciation, depletion and amortization $ 431   $ 249 $ 680  
Earnings from continuing operations before income taxes $ 533   $ 78 $ 611  
Income tax expense $ 185   $ 12 $ 197  
Earnings from continuing operations $ 348   $ 66 $ 414  
Property and equipment, net $ 18,103   $ 8,458 $ 26,561  
Total assets (1) $ 23,842   $ 18,763 $ 42,605  
Capital expenditures (2) $ 1,546   $ 799 $ 2,345  
 
Three Months Ended March 31, 2011:                
Oil, gas and NGL sales $ 1,212   $ 648 $ 1,860  
Oil, gas and NGL derivatives $ (168 ) $ $ (168 )
Marketing and midstream revenues $ 423   $ 32 $ 455  
Interest expense $ 37   $ 44 $ 81  
Depreciation, depletion and amortization $ 318   $ 188 $ 506  
Earnings from continuing operations before income taxes $ 438   $ 142 $ 580  
Income tax expense $ 155   $ 36 $ 191  
Earnings from continuing operations $ 283   $ 106 $ 389  
Property and equipment, net $ 13,314   $ 7,767 $ 21,081  
Total continuing assets (1) $ 19,432   $ 13,672 $ 33,104  
Capital expenditures $ 1,239   $ 546 $ 1,785  

 

(1) 

Amounts in the table above do not include assets held for sale related to Devon's discontinued operations, which totaled $1.4 billion at March 31, 2011. There were no assets held for sale at March 31, 2012.

(2) Capital expenditures for the first three months of 2012 presented above include the $399 million revision to Devon's asset retirement obligations presented in Note 13. Of the $399 million, $110 million relates to the U.S. and $289 million relates to Canada.

Subsequent Event
Subsequent Events

20. Subsequent Event

     In April 2012, Devon closed its previously announced $2.5 billion joint venture transaction with Sinopec International Petroleum Exploration & Production Corporation. Pursuant to the agreement, Sinopec invested approximately $900 million in cash and received a 33.3% interest in five of Devon's new ventures exploration plays in the U.S. at closing of the transaction. Additionally, Sinopec is required to fund approximately $1.6 billion of Devon's share of future exploration, development and drilling costs associated with these plays.

Derivative Financial Instruments (Tables)
      Three Months Ended March 31,  
  Comprehensive Statement of Earnings Caption   2012     2011  
      (In millions)    
Cash settlements:              
Commodity derivatives Oil, gas and NGL derivatives $ 158   $ 86  
Interest rate derivatives Other, net   10     16  
Foreign exchange derivatives Other, net   (11 )    
Total cash settlements     157     102  
Unrealized gains (losses):              
Commodity derivatives Oil, gas and NGL derivatives   (13 )   (254 )
Interest rate derivatives Other, net   (10 )   1  
Foreign exchange derivatives Other, net   1      
Total unrealized losses     (22 )   (253 )
Net gain (loss) recognized in comprehensive statements of earnings $ 135   $ (151 )
  Balance Sheet Caption   March 31, 2012 December 31, 2011
      (In millions)  
Asset derivatives:          
Commodity derivatives Other current assets $ 585 $ 611
Commodity derivatives Other long-term assets   58   17
Interest rate derivatives Other current assets   29   30
Interest rate derivatives Other long-term assets   13   22
Foreign exchange derivatives Other current assets   1  
Total asset derivatives   $ 686 $ 680
Liability derivatives:          
Commodity derivatives Other current liabilities $ 71 $ 82
Commodity derivatives Other long-term liabilities   39  
Total liability derivatives   $ 110 $ 82
      Forward Contract  
  Contract   CAD Fixed Rate  
Currency Type   Notional Received Expiration
      (In millions) (CAD-USD)  
Canadian Dollar Sell $ 75 0.9980 April 2012
Canadian Dollar Sell $ 100 1.0121 May 2012
Canadian Dollar Sell $ 580 0.9992 June 2012
    Fixed Rate   Variable  
  Notional Received   Rate Paid Expiration
  (In millions)        
$ 100 1.90 % Federal funds rate August 2012
  750 3.88 % Federal funds rate July 2013
$ 850 3.65 %    
Restructuring Costs (Tables)
    Three Months Ended March 31,  
  2012 2011
    (In millions)  
Lease obligations $ $ (4 )
Share-based awards     (1 )
Total $ $ (5 )
    Other     Other        
    Current     Long-Term        
    Liabilities     Liabilities     Total  
          (In millions)        
Balance as of December 31, 2011 $ 29   $ 16   $ 45  
Lease obligations settled   (2 )   (1 )   (3 )
Cash severance settled   (2 )       (2 )
Balance as of March 31, 2012 $ 25   $ 15   $ 40  
 
Balance as of December 31, 2010 $ 31   $ 51   $ 82  
Lease obligations settled   (3 )   (4 )   (7 )
Cash severance settled   (8 )       (8 )
Lease obligations revision   (3 )   (1 )   (4 )
Balance as of March 31, 2011 $ 17   $ 46   $ 63  
Other, Net (Tables)
Components Of Other, Net
  Three Months Ended March 31,
  2012 2011
    (In millions)  
Accretion of asset retirement obligations $ 27   $ 23  
Interest rate swaps – unrealized fair value changes   10     (1)
Interest rate swaps – cash settlements   (10)   (16)
Other   (17)   (16)
Other, net $ 10   $ (10)
Earnings Per Share (Tables)
Earnings Per Share Computations
        Common     Earnings
    Earnings   Shares     per Share
    (In millions, except per share amounts)
Three Months Ended March 31, 2012:              
Earnings from continuing operations $ 414   404      
Attributable to participating securities   (4 ) (4 )    
Basic earnings per share   410   400   $ 1.03
Dilutive effect of potential common shares issuable     1      
Diluted earnings per share $ 410   401   $ 1.03
 
Three Months Ended March 31, 2011:              
Earnings from continuing operations $ 389   428      
Attributable to participating securities   (4 ) (5 )    
Basic earnings per share   385   423   $ 0.91
Dilutive effect of potential common shares issuable     2      
Diluted earnings per share $ 385   425   $ 0.91
Other Comprehensive Earnings (Tables)
Components Of Other Comprehensive Earnings
    Three Months Ended March 31,  
    2012     2011  
Foreign currency translation:   (In millions)  
Beginning accumulated foreign currency translation $ 1,802   $ 1,993  
Change in cumulative translation adjustment   159     195  
Income tax expense   (7 )   (10 )
Ending accumulated foreign currency translation   1,954     2,178  
Pension and postretirement benefit plans:            
Beginning accumulated pension and postretirement benefits   (227 )   (233 )
Recognition of net actuarial loss and prior service cost in earnings   7     9  
Income tax expense   (3 )   (3 )
Ending accumulated pension and postretirement benefits   (223 )   (227 )
Accumulated other comprehensive earnings, net of tax $ 1,731   $ 1,951  
Supplemental Information To Statements Of Cash Flows (Tables)
Schedule Of Supplemental To Cash Flow Information
  Three Months Ended March 31,  
  2012     2011  
    (In millions)    
Net change in working capital:            
Decrease (increase) in accounts receivable $ 280   $ (60 )
Increase in other current assets   (53 )   (110 )
(Decrease) increase in accounts payable   (226 )   45  
(Decrease) increase in revenues and royalties payable   (169 )   100  
(Decrease) increase in income taxes payable   (16 )   10  
Decrease in other current liabilities   (137 )   (156 )
Net increase in working capital $ (321 ) $ (171 )
 
Supplementary cash flow data – total operations:            
Interest paid (net of capitalized interest) $ 136   $ 137  
Income taxes paid $ 33   $ 9  
Short-Term Investments (Tables)
Components Of Short-Term Investments
    March 31, 2012 December 31, 2011
    (In millions)
U.S. Treasuries $ 958 $ 201
Canadian Treasuries   249   142
Commercial paper     1,013
Other   75   147
Short-term investments $ 1,282 $ 1,503
Accounts Receivable (Tables)
Schedule Of Components Of Accounts Receivable
    March 31, 2012   December 31, 2011  
    (In millions)  
Oil, gas and NGL sales $ 761   $ 928  
Joint interest billings   203     247  
Marketing and midstream revenues   116     174  
Other   36     39  
Gross accounts receivable   1,116     1,388  
Allowance for doubtful accounts   (9 )   (9 )
Net accounts receivable $ 1,107   $ 1,379  
Other Current Assets (Tables)
Schedule Of Components Of Other Current Assets
    March 31, 2012 December 31, 2011
    (In millions)
Derivative financial instruments $ 615 $ 641
Inventories   123   102
Income taxes receivable   44   35
Current assets held for sale     21
Other   79   69
Other current assets $ 861 $ 868
Asset Retirement Obligations (Tables)
Summary Of Changes In Asset Retirement Obligations
    Three Months Ended March 31,  
    2012     2011  
    (In millions)    
Asset retirement obligations as of beginning of period $ 1,563   $ 1,497  
Liabilities incurred   21     11  
Liabilities settled   (16 )   (18 )
Revision of estimated obligation   399     3  
Accretion expense on discounted obligation   27     23  
Foreign currency translation adjustment   14     21  
Asset retirement obligations as of end of period   2,008     1,537  
Less current portion   64     69  
Asset retirement obligations, long-term $ 1,944   $ 1,468  
Retirement Plans (Tables)
Schedule Of Net Periodic Benefit Cost For Pension And Postretirement Benefit Plans
    Pension Benefits     Postretirement Benefits
 
    Three Months     Three Months
    Ended March 31,     Ended March 31,
    2012     2011     2012   2011
    (In millions)
Net periodic benefit cost:                      
Service cost $ 11   $ 9   $   $
Interest cost   15     15     1     1
Expected return on plan assets   (16 )   (10 )      
Amortization of prior service cost   1     1     (1 )  
Net actuarial loss   6     8        
Net periodic benefit cost $ 17   $ 23   $   $ 1
Fair Value Measurements (Tables)
                Fair Value Measurements Using:  
    Carrying     Total Fair     Level 1   Level 2     Level 3  
    Amount     Value     Inputs   Inputs     Inputs  
                (In millions)            
March 31, 2012 assets (liabilities):                            
Cash equivalents $ 5,155   $ 5,155   $ 2,202 $ 2,953   $  
Short-term investments $ 1,282   $ 1,282   $ 1,282 $   $  
Long-term investments $ 84   $ 84   $ $   $ 84  
Commodity derivatives $ 643   $ 643   $ $ 643   $  
Commodity derivatives $ (110 ) $ (110 ) $ $ (110 ) $  
Interest rate derivatives $ 42   $ 42   $ $ 42   $  
Foreign exchange derivatives $ 1   $ 1   $ $ 1   $  
Debt $ (10,839 ) $ (12,222 ) $ $ (12,185 ) $ (37 )
 
December 31, 2011 assets (liabilities):                            
Cash equivalents $ 5,123   $ 5,123   $ 1,369 $ 3,754   $  
Short-term investments $ 1,503   $ 1,503   $ 490 $ 1,013   $  
Long-term investments $ 84   $ 84   $ $   $ 84  
Commodity derivatives $ 628   $ 628   $ $ 628   $  
Commodity derivatives $ (82 ) $ (82 ) $ $ (82 ) $  
Interest rate derivatives $ 52   $ 52   $ $ 52   $  
Debt $ (9,780 ) $ (11,380 ) $ $ (11,295 ) $ (85 )
    Three Months Ended March 31,  
  2012     2011  
    (In millions)  
Debt balance at beginning of period $ (85 ) $ (144 )
Foreign exchange translation adjustment   (2 )   (3 )
Accretion of promissory note       (1 )
Redemptions of principal   50     29  
Debt balance at end of period $ (37 ) $ (119 )
Discontinued Operations (Tables)
Schedule Of Discontinued Operations
  Balance Sheet Caption   December 31, 2011
      (In millions)
Other current assets Other current assets $ 21
Property and equipment, net Other long-term assets $ 132
 
Accounts payable Other current liabilities $ 20
Other current liabilities Other current liabilities $ 28
Segment Information (Tables)
Condensed Statements Of Comprehensive Earnings And Balance Sheets Of Reportable Segments
U.S.     Canada   Total  
    (In millions)  
Three Months Ended March 31, 2012:                
Oil, gas and NGL sales $ 1,236   $ 679 $ 1,915  
Oil, gas and NGL derivatives $ 145   $ $ 145  
Marketing and midstream revenues $ 399   $ 38 $ 437  
Interest expense $ 71   $ 16 $ 87  
Depreciation, depletion and amortization $ 431   $ 249 $ 680  
Earnings from continuing operations before income taxes $ 533   $ 78 $ 611  
Income tax expense $ 185   $ 12 $ 197  
Earnings from continuing operations $ 348   $ 66 $ 414  
Property and equipment, net $ 18,103   $ 8,458 $ 26,561  
Total assets (1) $ 23,842   $ 18,763 $ 42,605  
Capital expenditures (2) $ 1,546   $ 799 $ 2,345  
 
Three Months Ended March 31, 2011:                
Oil, gas and NGL sales $ 1,212   $ 648 $ 1,860  
Oil, gas and NGL derivatives $ (168 ) $ $ (168 )
Marketing and midstream revenues $ 423   $ 32 $ 455  
Interest expense $ 37   $ 44 $ 81  
Depreciation, depletion and amortization $ 318   $ 188 $ 506  
Earnings from continuing operations before income taxes $ 438   $ 142 $ 580  
Income tax expense $ 155   $ 36 $ 191  
Earnings from continuing operations $ 283   $ 106 $ 389  
Property and equipment, net $ 13,314   $ 7,767 $ 21,081  
Total continuing assets (1) $ 19,432   $ 13,672 $ 33,104  
Capital expenditures $ 1,239   $ 546 $ 1,785  

 

(1) 

Amounts in the table above do not include assets held for sale related to Devon's discontinued operations, which totaled $1.4 billion at March 31, 2011. There were no assets held for sale at March 31, 2012.

(2) Capital expenditures for the first three months of 2012 presented above include the $399 million revision to Devon's asset retirement obligations presented in Note 13. Of the $399 million, $110 million relates to the U.S. and $289 million relates to Canada.

Derivative Financial Instruments (Schedule Of Open Commodity Derivative Positions) (Details)
Mar. 31, 2012
Q2-Q4 2012 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Price Swaps [Member]
 
Derivative [Line Items]
 
Volume per day
22,000 
Weighted Average Price
107.17 
Q2-Q4 2012 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Price Collars [Member]
 
Derivative [Line Items]
 
Volume per day
67,382 
Weighted Average Floor Price
88.66 
Weighted Average Ceiling Price
123.98 
Q2-Q4 2012 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Call Options Sold [Member]
 
Derivative [Line Items]
 
Volume per day
19,500 
Weighted Average Price
95.00 
Q2-Q4 2012 [Member] |
MMBtu [Member] |
Open Natural Gas Derivative Positions [Member] |
Price Swaps [Member]
 
Derivative [Line Items]
 
Volume per day
389,527 
Weighted Average Price
4.71 
Q2-Q4 2012 [Member] |
MMBtu [Member] |
Open Natural Gas Derivative Positions [Member] |
Price Collars [Member]
 
Derivative [Line Items]
 
Volume per day
504,891 
Weighted Average Floor Price
4.69 
Weighted Average Ceiling Price
5.50 
Q2-Q4 2012 [Member] |
MMBtu [Member] |
Open Natural Gas Derivative Positions [Member] |
Call Options Sold [Member]
 
Derivative [Line Items]
 
Volume per day
487,500 
Weighted Average Price
6.00 
Q1-Q4 2013 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Price Swaps [Member]
 
Derivative [Line Items]
 
Volume per day
25,000 
Weighted Average Price
104.29 
Q1-Q4 2013 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Price Collars [Member]
 
Derivative [Line Items]
 
Volume per day
32,000 
Weighted Average Floor Price
90.00 
Weighted Average Ceiling Price
118.42 
Q1-Q4 2013 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Call Options Sold [Member]
 
Derivative [Line Items]
 
Volume per day
6,000 
Weighted Average Price
120.00 
Q1-Q4 2013 [Member] |
MMBtu [Member] |
Open Natural Gas Derivative Positions [Member] |
Price Swaps [Member]
 
Derivative [Line Items]
 
Volume per day
150,000 
Weighted Average Price
4.50 
Q1-Q4 2014 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Price Swaps [Member]
 
Derivative [Line Items]
 
Volume per day
4,000 
Weighted Average Price
100.49 
Q1-Q4 2014 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Price Collars [Member]
 
Derivative [Line Items]
 
Volume per day
2,000 
Weighted Average Floor Price
90.00 
Weighted Average Ceiling Price
111.13 
Q1-Q4 2014 [Member] |
Bbl [Member] |
Open Oil Derivative Positions [Member] |
Call Options Sold [Member]
 
Derivative [Line Items]
 
Volume per day
6,000 
Weighted Average Price
120.00 
Q1-Q4 2014 [Member] |
MMBtu [Member] |
Open Natural Gas Derivative Positions [Member] |
Call Options Sold [Member]
 
Derivative [Line Items]
 
Volume per day
150,000 
Weighted Average Price
5.00 
Derivative Financial Instruments (Schedule Of Open Interest Rate Swap Derivative Positions) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Derivative [Line Items]
 
Notional
$ 850 
Average Fixed Rate Received
3.65% 
August 2012 [Member]
 
Derivative [Line Items]
 
Notional
100 
Fixed Rate Received
1.90% 
Variable Rate Paid
Federal funds rate 
Expiration
Aug. 01, 2012 
July 2013 [Member]
 
Derivative [Line Items]
 
Notional
$ 750 
Fixed Rate Received
3.88% 
Variable Rate Paid
Federal funds rate 
Expiration
Jul. 01, 2013 
Derivative Financial Instruments (Schedule Of Open Foreign Exchange Rate Derivative Positions) (Details) (CAD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
April 2012 [Member]
 
Derivative [Line Items]
 
Contract Type
Sell 
CAD Notional
$ 75 
Fixed Rate Received
0.99800 
Expiration
April 2012 
May 2012 [Member]
 
Derivative [Line Items]
 
Contract Type
Sell 
CAD Notional
100 
Fixed Rate Received
1.01210 
Expiration
May 2012 
June 2012 [Member]
 
Derivative [Line Items]
 
Contract Type
Sell 
CAD Notional
$ 580 
Fixed Rate Received
0.99920 
Expiration
June 2012 
Derivative Financial Instruments (Schedule Of Derivative Financial Instruments Included In The Consolidated Balance Sheets And Consolidated Comprehensive Statement Of Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Dec. 31, 2011
Derivative [Line Items]
 
 
 
Fair value of derivative assets
$ 686 
 
$ 680 
Fair value of derivative liabilities
110 
 
82 
Total cash settlements
157 
102 
 
Total unrealized gains (losses)
(22)
(253)
 
Net gain (loss) recognized on comprehensive statements of earnings
135 
(151)
 
Commodity Derivatives [Member]
 
 
 
Derivative [Line Items]
 
 
 
Total cash settlements
158 
86 
 
Total unrealized gains (losses)
(13)
(254)
 
Commodity Derivatives [Member] |
Other Current Assets [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair value of derivative assets
585 
 
611 
Commodity Derivatives [Member] |
Other Current Liabilities [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair value of derivative liabilities
71 
 
82 
Commodity Derivatives [Member] |
Other Long-Term Liabilities [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair value of derivative liabilities
39 
 
 
Commodity Derivatives [Member] |
Other Long-Term Assets [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair value of derivative assets
58 
 
17 
Foreign Exchange Derivatives [Member]
 
 
 
Derivative [Line Items]
 
 
 
Total cash settlements
(11)
 
 
Total unrealized gains (losses)
 
 
Foreign Exchange Derivatives [Member] |
Other Current Assets [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair value of derivative assets
 
 
Interest Rate Derivatives [Member]
 
 
 
Derivative [Line Items]
 
 
 
Total cash settlements
10 
16 
 
Total unrealized gains (losses)
(10)
 
Interest Rate Derivatives [Member] |
Other Current Assets [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair value of derivative assets
29 
 
30 
Interest Rate Derivatives [Member] |
Other Long-Term Assets [Member]
 
 
 
Derivative [Line Items]
 
 
 
Fair value of derivative assets
$ 13 
 
$ 22 
Restructuring Costs (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Dec. 31, 2011
Dec. 31, 2010
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring costs incurred to date associated with divestitures
$ 202 
 
 
 
Restructuring charges
 
(5)
 
 
Restructuring liabilities
40 
63 
45 
82 
Discontinued Operations [Member]
 
 
 
 
Restructuring Cost and Reserve [Line Items]
 
 
 
 
Restructuring charges
 
 
Restructuring liabilities
 
$ 21 
 
 
Restructuring Costs (Schedule Of The Components Of Restructuring Costs Included In The Consolidated Statements Of Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2011
Restructuring Cost and Reserve [Line Items]
 
Restructuring costs
$ (5)
Share-Based Awards [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring costs
(1)
Lease Obligations [Member]
 
Restructuring Cost and Reserve [Line Items]
 
Restructuring costs
$ (4)
Restructuring Costs (Schedule Of The Activity And Balances Associated With Restructuring Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2011
Mar. 31, 2012
Dec. 31, 2011
Mar. 31, 2012
Cash Severance [Member]
Mar. 31, 2011
Cash Severance [Member]
Mar. 31, 2012
Lease Obligations [Member]
Mar. 31, 2011
Lease Obligations [Member]
Mar. 31, 2011
Other Current Liabilities [Member]
Mar. 31, 2012
Other Current Liabilities [Member]
Dec. 31, 2011
Other Current Liabilities [Member]
Mar. 31, 2012
Other Current Liabilities [Member]
Cash Severance [Member]
Mar. 31, 2011
Other Current Liabilities [Member]
Cash Severance [Member]
Mar. 31, 2012
Other Current Liabilities [Member]
Lease Obligations [Member]
Mar. 31, 2011
Other Current Liabilities [Member]
Lease Obligations [Member]
Mar. 31, 2011
Other Long-Term Liabilities [Member]
Mar. 31, 2012
Other Long-Term Liabilities [Member]
Dec. 31, 2011
Other Long-Term Liabilities [Member]
Mar. 31, 2012
Other Long-Term Liabilities [Member]
Cash Severance [Member]
Mar. 31, 2012
Other Long-Term Liabilities [Member]
Lease Obligations [Member]
Mar. 31, 2011
Other Long-Term Liabilities [Member]
Lease Obligations [Member]
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$ 82 
$ 40 
$ 45 
 
 
 
 
$ 31 
$ 25 
$ 29 
 
 
 
 
$ 51 
$ 15 
$ 16 
 
 
 
Restructuring reserved settled with cash
 
 
 
(2)
(8)
(3)
(7)
 
 
 
(2)
(8)
(2)
(3)
 
 
 
   
(1)
(4)
Lease obligations revision
(4)
 
 
 
 
 
 
(3)
 
 
 
 
 
 
(1)
 
 
 
 
 
Ending balance
$ 63 
$ 40 
$ 45 
 
 
 
 
$ 17 
$ 25 
$ 29 
 
 
 
 
$ 46 
$ 15 
$ 16 
 
 
 
Other, Net (Components Of Other, Net) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Accretion of asset retirement obligations
$ 27 
$ 23 
Total unrealized gains (losses)
22 
253 
Total cash settlements
(157)
(102)
Other
(17)
(16)
Other, net
10 
(10)
Interest Rate Derivatives [Member]
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
Total unrealized gains (losses)
10 
(1)
Total cash settlements
$ (10)
$ (16)
Earnings Per Share (Earnings Per Share Computations) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Earnings from continuing operations, Earnings
$ 414 
$ 389 
Basic earnings per share, Earnings per Share
$ 1.03 
$ 0.91 
Diluted earnings per share, Earnings per Share
$ 1.03 
$ 0.91 
Antidilutive securities excluded from computation of earnings per share, amount
6.4 
3.1 
Earnings [Member]
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Earnings from continuing operations, Earnings
414 
389 
Attributable to participating securities, Earnings
(4)
(4)
Basic earnings per share, Earnings
410 
385 
Dilutive effect of potential common shares issuable, Earnings
   
 
Diluted earnings per share, Earnings
$ 410 
$ 385 
Common Stock [Member]
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
Earnings from continuing operations, Common Shares
404 
428 
Attributable to participating securities, Common Shares
(4)
(5)
Basic earnings per share, Common Shares
400 
423 
Dilutive effect of potential common shares issuable, Common Shares
Diluted earnings per share, Common Shares
401 
425 
Other Comprehensive Earnings (Components Of Other Comprehensive Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Dec. 31, 2011
Other Comprehensive Earnings [Abstract]
 
 
 
Beginning accumulated foreign currency translation
$ 1,802 
$ 1,993 
 
Change in cumulative translation adjustment
159 
195 
 
Income tax expense
(7)
(10)
 
Ending accumulated foreign currency translation
1,954 
2,178 
 
Beginning accumulated pension and postretirement benefits
(227)
(233)
 
Recognition of net actuarial loss and prior service cost in earnings
 
Income tax expense
(3)
(3)
 
Ending accumulated pension and postretirement benefits
(223)
(227)
 
Accumulated other comprehensive earnings, net of tax
$ 1,731 
$ 1,951 
$ 1,575 
Supplemental Information To Statements Of Cash Flows (Schedule Of Supplemental To Cash Flow Information) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Net change in working capital:
 
 
Decrease (increase) in accounts receivable
$ 280 
$ (60)
Increase in other current assets
(53)
(110)
(Decrease) increase in accounts payable
(226)
45 
(Decrease) increase in revenues and royalties payable
(169)
100 
(Decrease) increase in income taxes payable
(16)
10 
Decrease in other current liabilities
(137)
(156)
Net increase in working capital
(321)
(171)
Supplementary cash flow data - total operations:
 
 
Interest paid (net of capitalized interest)
136 
137 
Income taxes paid
$ 33 
$ 9 
Short-Term Investments (Components Of Short-Term Investments) (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Schedule of Investments [Line Items]
 
 
Short-term investments
$ 1,282 
$ 1,503 
Commercial Paper [Member]
 
 
Schedule of Investments [Line Items]
 
 
Short-term investments
 
1,013 
Canadian Treasuries [Member]
 
 
Schedule of Investments [Line Items]
 
 
Short-term investments
249 
142 
U.S. Treasuries [Member]
 
 
Schedule of Investments [Line Items]
 
 
Short-term investments
958 
201 
Other
 
 
Schedule of Investments [Line Items]
 
 
Short-term investments
$ 75 
$ 147 
Accounts Receivable (Schedule Of Components Of Accounts Receivable) (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Joint interest billings
$ 203 
$ 247 
Other
36 
39 
Gross accounts receivable
1,116 
1,388 
Allowance for doubtful accounts
(9)
(9)
Net accounts receivable
1,107 
1,379 
Oil, Gas And NGL Sales [Member]
 
 
Gross accounts receivable
761 
928 
Marketing And Midstream Revenues [Member]
 
 
Gross accounts receivable
$ 116 
$ 174 
Other Current Assets (Schedule Of Components Of Other Current Assets) (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Other Current Assets [Abstract]
 
 
Derivative financial instruments
$ 615 
$ 641 
Inventories
123 
102 
Income taxes receivable
44 
35 
Current assets held for sale
 
21