DEVON ENERGY CORP/DE, 10-Q filed on 11/6/2013
Quarterly Report
Document And Entity Information
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Oct. 22, 2013
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2013 
 
Amendment Flag
false 
 
Entity Registrant Name
DEVON ENERGY CORP/DE 
 
Entity Central Index Key
0001090012 
 
Current Fiscal Year End Date
--12-31 
 
Document Fiscal Year Focus
2013 
 
Entity Filer Category
Large Accelerated Filer 
 
Document Fiscal Period Focus
Q3 
 
Entity Common Stock, Shares Outstanding
 
406 
Consolidated Comprehensive Statements Of Earnings (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Revenues:
 
 
 
 
Oil, gas and NGL sales
$ 2,341 
$ 1,738 
$ 6,367 
$ 5,270 
Oil, gas and NGL derivatives
(141)
(295)
(95)
515 
Marketing and midstream revenues
520 
422 
1,511 
1,136 
Total revenues
2,720 
1,865 
7,783 
6,921 
Expenses and other, net:
 
 
 
 
Lease operating expenses
600 
513 
1,684 
1,540 
Marketing and midstream operating costs and expenses
383 
313 
1,128 
847 
Depreciation, depletion and amortization
691 
716 
2,069 
2,080 
General and administrative expenses
143 
150 
460 
494 
Taxes other than income taxes
115 
104 
353 
306 
Interest expense
104 
110 
322 
296 
Restructuring costs
 
50 
 
Asset impairments
1,128 
1,960 
1,128 
Other, net
34 
(8)
83 
46 
Total expenses and other, net
2,081 
3,026 
8,109 
6,737 
Earnings (loss) from continuing operations before income taxes
639 
(1,161)
(326)
184 
Current income tax expense (benefit)
(50)
(41)
82 
Deferred income tax expense (benefit)
260 
(401)
(181)
Earnings (loss) from continuing operations
429 
(719)
(227)
172 
Loss from discontinued operations, net of tax
 
 
 
(21)
Net earnings (loss)
429 
(719)
(227)
151 
Basic net earnings (loss) per share:
 
 
 
 
Basic earnings (loss) from continuing operations per share
$ 1.06 
$ (1.80)
$ (0.57)
$ 0.42 
Basic loss from discontinued operations per share
 
 
 
$ (0.05)
Basic net earnings (loss) per share
$ 1.06 
$ (1.80)
$ (0.57)
$ 0.37 
Diluted net earnings (loss) per share:
 
 
 
 
Diluted earnings (loss) from continuing operations per share
$ 1.05 
$ (1.80)
$ (0.57)
$ 0.42 
Diluted loss from discontinued operations per share
 
 
 
$ (0.05)
Diluted net earnings (loss) per share
$ 1.05 
$ (1.80)
$ (0.57)
$ 0.37 
Comprehensive earnings (loss):
 
 
 
 
Net earnings (loss)
429 
(719)
(227)
151 
Other comprehensive earnings (loss), net of tax:
 
 
 
 
Foreign currency translation
173 
311 
(281)
292 
Pension and postretirement plans
12 
12 
Other comprehensive earnings (loss), net of tax
176 
314 
(269)
304 
Comprehensive earnings (loss)
$ 605 
$ (405)
$ (496)
$ 455 
Consolidated Statements Of Cash Flows (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Cash flows from operating activities:
 
 
Net earnings (loss)
$ (227)
$ 151 
Loss from discontinued operations, net of tax
 
21 
Adjustments to reconcile earnings (loss) from continuing operations to net cash from operating activities:
 
 
Depreciation, depletion and amortization
2,069 
2,080 
Asset impairments
1,960 
1,128 
Deferred income tax expense (benefit)
(181)
Unrealized change in fair value of financial instruments
212 
173 
Other noncash charges
206 
136 
Net change in working capital
(104)
48 
Change in long-term other assets
(28)
(22)
Change in long-term other liabilities
92 
68 
Cash from operating activities - continuing operations
3,999 
3,787 
Cash from operating activities - discontinued operations
 
26 
Net cash from operating activities
3,999 
3,813 
Cash flows from investing activities:
 
 
Capital expenditures
(5,219)
(6,228)
Proceeds from property and equipment divestitures
316 
1,397 
Purchases of short-term investments
(1,076)
(2,969)
Redemptions of short-term investments
3,419 
2,308 
Other
83 
18 
Cash from investing activities - continuing operations
(2,477)
(5,474)
Cash from investing activities - discontinued operations
 
58 
Net cash from investing activities
(2,477)
(5,416)
Cash flows from financing activities:
 
 
Proceeds from borrowings of long-term debt, net of issuance costs
 
2,465 
Net short-term debt repayments
(1,577)
(898)
Credit facility borrowings
 
750 
Credit facility repayments
 
(750)
Proceeds from stock option exercises
25 
Dividends paid on common stock
(259)
(242)
Excess tax benefits related to share-based compensation
Net cash from financing activities
(1,830)
1,355 
Effect of exchange rate changes on cash
(9)
31 
Net change in cash and cash equivalents
(317)
(217)
Cash and cash equivalents at beginning of period
4,637 
5,555 
Cash and cash equivalents at end of period
$ 4,320 
$ 5,338 
Consolidated Balance Sheets (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Current assets:
 
 
Cash and cash equivalents
$ 4,320 
$ 4,637 
Short-term investments
 
2,343 
Accounts receivable
1,520 
1,245 
Other current assets
475 
746 
Total current assets
6,315 
8,971 
Oil and gas, based on full cost accounting:
 
 
Subject to amortization
73,009 
69,410 
Not subject to amortization
3,319 
3,308 
Total oil and gas
76,328 
72,718 
Other
6,050 
5,630 
Total property and equipment, at cost
82,378 
78,348 
Less accumulated depreciation, depletion and amortization
(54,416)
(51,032)
Property and equipment, net
27,962 
27,316 
Goodwill
5,954 
6,079 
Other long-term assets
615 
960 
Total assets
40,846 
43,326 
Current liabilities:
 
 
Accounts payable
1,269 
1,451 
Revenues and royalties payable
807 
750 
Short-term debt
2,112 
3,189 
Other current liabilities
594 
613 
Total current liabilities
4,782 
6,003 
Long-term debt
7,956 
8,455 
Asset retirement obligations
2,161 
1,996 
Other long-term liabilities
830 
901 
Deferred income taxes
4,505 
4,693 
Stockholders' equity:
 
 
Common stock, $0.10 par value. Authorized 1.0 billion shares; issued 406 million shares in 2013 and 2012, respectively
41 
41 
Additional paid-in capital
3,777 
3,688 
Retained earnings
15,292 
15,778 
Accumulated other comprehensive earnings
1,502 
1,771 
Total stockholders' equity
20,612 
21,278 
Commitments and contingencies (Note 17)
   
   
Total liabilities and stockholders' equity
$ 40,846 
$ 43,326 
Consolidated Balance Sheets (Parenthetical) (USD $)
Sep. 30, 2013
Dec. 31, 2012
Consolidated Balance Sheets [Abstract]
 
 
Common stock, par value (in dollars per share)
$ 0.10 
$ 0.10 
Common stock, shares authorized (in shares)
1,000,000,000 
1,000,000,000 
Common stock, shares issued (in shares)
406,000,000 
406,000,000 
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, 2011
$ 40 
$ 3,507 
$ 16,308 
$ 1,575 
 
$ 21,430 
Balance, shares, at Dec. 31, 2011
404 
 
 
 
 
 
Net earnings (loss)
 
 
151 
 
 
151 
Other comprehensive earnings (loss), net of tax
 
 
 
304 
 
304 
Stock option exercises
27 
 
 
(2)
26 
Stock option exercises, shares
 
 
 
 
 
Common stock repurchased
 
 
 
 
(4)
(4)
Common stock retired
 
(6)
 
 
 
Common stock dividends
 
 
(242)
 
 
(242)
Share-based compensation
 
111 
 
 
 
111 
Share-based compensation tax benefits
 
 
 
 
Balance, at Sep. 30, 2012
41 
3,644 
16,217 
1,879 
 
21,781 
Balance, shares, at Sep. 30, 2012
405 
 
 
 
 
 
Balance, at Dec. 31, 2012
41 
3,688 
15,778 
1,771 
 
21,278 
Balance, shares, at Dec. 31, 2012
406 
 
 
 
 
 
Net earnings (loss)
 
 
(227)
 
 
(227)
Other comprehensive earnings (loss), net of tax
 
 
 
(269)
 
(269)
Stock option exercises
 
 
 
 
Common stock repurchased
 
 
 
 
(9)
(9)
Common stock retired
 
(9)
 
 
 
Common stock dividends
 
 
(259)
 
 
(259)
Share-based compensation
 
92 
 
 
 
92 
Share-based compensation tax benefits
 
 
 
 
Balance, at Sep. 30, 2013
$ 41 
$ 3,777 
$ 15,292 
$ 1,502 
 
$ 20,612 
Balance, shares, at Sep. 30, 2013
406 
 
 
 
 
 
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 financial statements and notes included in Devon's 2012 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 and nine-month periods ended September 30, 2013 and 2012 and Devon's financial position as of September 30, 2013. 

 

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. These instruments are used to manage the inherent uncertainty of future revenues due to commodity price volatility and 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 periodically enters into foreign exchange forward contracts to manage its exposure to fluctuations in exchange rates.

 

Devon does not intend to 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 acceptable 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 contain provisions that provide for collateral payments, depending on levels of exposure and the credit rating of the counterparty.

 

As of September 30, 2013, Devon held $43 million of cash collateral. Such amount represented the estimated fair value of certain derivative positions in excess of Devon’s credit guidelines. The collateral is reported in other current liabilities in the accompanying balance sheet.

 

Commodity Derivatives

 

As of September  30, 2013, Devon had the following open oil derivative positions. The first table presents Devon’s oil derivatives that settle against the average of the prompt month NYMEX West Texas Intermediate futures price. The second table presents Devon’s oil derivatives that settle against the Western Canadian Select index.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

 

Price Collars

 

Call Options Sold

Period

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

 

Volume (Bbls/d)

 

Weighted Average Floor Price ($/Bbl)

 

Weighted Average Ceiling Price ($/Bbl)

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

Q4 2013

 

70,000

 

$

100.26

 

72,000

 

$

90.60

 

$

111.14

 

10,000

 

$

120.00

Q1-Q4 2014 

 

49,000

 

$

94.77

 

43,969

 

$

89.01

 

$

102.48

 

42,000

 

$

116.43

Q1-Q4 2015

 

500

 

$

91.00

 

 

$

 

$

 

22,000

 

$

115.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Swaps

Period

 

Index

 

Volume (Bbls/d)

 

Weighted Average Differential to WTI ($/Bbl)

Q4 2013

 

Western Canadian Select

 

40,000

 

$

(22.47)

 

As of September  30, 2013, Devon had the following open natural gas derivative positions. The first table presents Devon’s natural gas derivatives that settle against the Inside FERC first of the month Henry Hub index. The next two tables present Devon’s natural gas derivatives that settle against the AECO index.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

 

Price Collars

 

Call Options Sold

Period

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

 

Volume (MMBtu/d)

 

Weighted Average Floor Price ($/MMBtu)

 

Weighted Average Ceiling Price ($/MMBtu)

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

Q4 2013

 

987,500

 

$

4.09

 

650,000

 

$

3.61

 

$

4.28

 

 

$

Q1-Q4 2014 

 

800,000

 

$

4.42

 

210,000

 

$

4.01

 

$

4.71

 

500,000

 

$

5.00

Q1-Q4 2015

 

 

$

 

 

$

 

$

 

550,000

 

$

5.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

Period

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

Q4 2013 

 

28,435

 

$

3.54

 

 

 

 

 

 

 

 

 

 

 

 

Basis Swaps

Period

 

Index

 

Volume (MMBtu/d)

 

Weighted Average Differential to Henry Hub ($/MMBtu)

Q4 2013

 

AECO

 

62,843

 

$

(0.44)

Q1-Q4 2014

 

AECO

 

94,781

 

$

(0.52)

 

As of September  30, 2013, Devon had the following open NGL derivative positions. Devon’s NGL derivatives settle against the average of the prompt month OPIS Mont Belvieu, Texas index.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

Period

 

Product

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

Q4 2013

 

Ethane

 

1,957

 

$

15.36

Q4 2013

 

Propane

 

3,985

 

$

41.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Swaps

Period

 

Pay

 

Volume (Bbls/d)

 

Weighted Average Differential to WTI ($/Bbl)

Q4 2013

 

Natural Gasoline

 

1,000

 

$

(9.58)

Q1-Q4 2014

 

Natural Gasoline

 

329

 

$

(10.85)

 

 

Foreign Currency Derivatives

 

As of September  30, 2013, Devon had the following open foreign currency derivative position:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Contract

Currency

 

Contract Type

 

CAD Notional

 

Weighted Average Fixed Rate Received

 

Expiration

 

 

 

 

(In millions)

 

(CAD-USD)

 

 

Canadian Dollar

 

Sell

 

$

1,261 

 

0.969

 

December 2013

 

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. Cash settlements and unrealized gains and losses on fair value changes associated with Devon’s commodity derivatives are presented in oil, gas and NGL derivatives in the accompanying comprehensive statements of earnings.  Cash settlements and unrealized gains and losses on fair value changes associated with Devon’s interest rate and foreign currency derivatives are presented in other, net in the accompanying comprehensive statements of earnings.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Cash settlements:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivatives

 

$

(7)

 

$

243 

 

$

93 

 

$

668 

Interest rate derivatives

 

 

10 

 

 

10 

 

 

24 

 

 

Foreign currency derivatives

 

 

(5)

 

 

(38)

 

 

30 

 

 

(29)

Total cash settlements

 

 

(2)

 

 

215 

 

 

147 

 

 

648 

Unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivatives

 

 

(134)

 

 

(538)

 

 

(188)

 

 

(153)

Interest rate derivatives

 

 

(9)

 

 

(9)

 

 

(23)

 

 

(24)

Foreign currency derivatives

 

 

(23)

 

 

12 

 

 

(1)

 

 

Total unrealized gains (losses)

 

 

(166)

 

 

(535)

 

 

(212)

 

 

(173)

Net gains (losses) recognized on comprehensive statements of earnings

 

$

(168)

 

$

(320)

 

$

(65)

 

$

475 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Caption

 

September 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Asset derivatives:

 

 

 

 

 

 

 

 

Commodity derivatives

 

Other current assets

 

$

224 

 

$

379 

Commodity derivatives

 

Other long-term assets

 

 

58 

 

 

22 

Interest rate derivatives

 

Other current assets

 

 

 —

 

 

23 

Foreign currency derivatives

 

Other current assets

 

 

 —

 

 

Total asset derivatives

 

 

 

$

282 

 

$

425 

Liability derivatives:

 

 

 

 

 

 

 

 

Commodity derivatives

 

Other current liabilities

 

$

50 

 

$

Commodity derivatives

 

Other long-term liabilities

 

 

51 

 

 

29 

Total liability derivatives

 

 

 

$

101 

 

$

32 

 

Restructuring Costs
Restructuring Costs

3.Restructuring Costs 

 

Office Consolidation

 

In October 2012, Devon announced plans to consolidate its U.S. personnel into a single operations group centrally located at the company’s headquarters in Oklahoma City. As of September 30, 2013, Devon had substantially completed this initiative and incurred $130 million of restructuring costs associated with the office consolidation. The $130 million includes $50 million incurred during the nine months ended September 30, 2013, which largely relates to office space that is subject to non-cancellable operating lease agreements that Devon ceased using.

 

Divestiture of Offshore Assets

 

In the fourth quarter of 2009, Devon announced plans to divest its offshore assets. Devon completed this divestiture program in 2012, having incurred $196 million of cumulative restructuring costs associated with the divestitures.

 

Financial Statement Presentation

 

The schedule below summarizes restructuring costs presented in the accompanying comprehensive statements of earnings related to the office consolidation. There were no costs related to the offshore divestitures in the nine-month periods ended September 30, 2013 and 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

Nine Months

 

 

Ended September 30,

 

Ended September 30,

 

  

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

(In millions)

Lease obligations and other

  

$

  

$

 —

  

$

44 

  

$

 —

Asset impairments

  

 

 —

  

 

 —

  

 

  

 

 —

Restructuring costs

  

$

  

$

 —

  

$

50 

  

$

 —

 

 

The schedule below summarizes Devon’s restructuring liabilities. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Other

 

 

 

 

 

Current

 

Long-Term

 

 

 

 

 

Liabilities

 

Liabilities

 

Total

 

 

 

 

 

 

 

 

 

 

 

  

(In millions)

Balance as of December 31, 2012

  

$

52 

 

$

 

$

61 

Lease obligations and other - Office consolidation

 

 

18 

 

 

11 

 

 

29 

Employee severance – Office consolidation

  

 

(34)

 

 

 —

 

 

(34)

Lease obligations - Offshore

  

 

(2)

 

 

(1)

 

 

(3)

Balance as of September 30, 2013

  

$

34 

  

$

19 

  

$

53 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2011

  

$

29 

 

$

16 

 

$

45 

Lease obligations - Offshore

  

 

(9)

 

 

(3)

 

 

(12)

Employee severance - Offshore

  

 

(7)

 

 

 —

 

 

(7)

Balance as September 30, 2012

 

$

13 

 

$

13 

 

$

26 

 

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

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

  

2013

 

2012

  

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

(In millions)

Accretion of asset retirement obligations

  

$

29 

  

$

27 

  

$

86 

  

$

82 

Interest rate derivatives

  

 

(1)

  

 

(1)

  

 

(1)

  

 

15 

Foreign currency derivatives

  

 

28 

 

 

26 

  

 

(29)

 

 

25 

Foreign exchange loss (gain)

  

 

(27)

 

 

(28)

  

 

34 

 

 

(26)

Interest income

  

 

(4)

 

 

(8)

  

 

(16)

 

 

(24)

Other

  

 

 

 

(24)

  

 

 

 

(26)

Other, net

  

$

34 

 

$

(8)

  

$

83 

 

$

46 

 

 

Income Taxes
Income Taxes

 

.

5.Income Taxes

 

In the second quarter of 2013, Devon repatriated to the United States $2.0 billion of cash from its foreign subsidiaries. In conjunction with the repatriation, Devon recognized approximately $100 million of current income tax expense. The current expense was entirely offset by the recognition of deferred income tax benefits, which included the reduction of the deferred tax liability previously recognized for unremitted foreign earnings deemed not to be indefinitely reinvested. 

 

As of September 30, 2013, Devon’s unremitted foreign earnings totaled approximately $6.0 billion. Of this amount, approximately $4.8 billion was deemed to be indefinitely reinvested into the development and growth of Devon’s Canadian business. Therefore, Devon has not recognized a deferred tax liability for U.S. income taxes associated with such earnings. If such earnings were to be repatriated to the U.S., Devon may be subject to U.S. income taxes and foreign withholding taxes. However, it is not practical to estimate the amount of such additional taxes that may be payable due to the inter-relationship of the various factors involved in making such an estimate.

 

Devon has deemed the remaining $1.2 billion of unremitted foreign earnings not to be indefinitely reinvested. Consequently, Devon has recognized a deferred tax liability of approximately $550 million associated with such unremitted earnings as of September 30, 2013.    

 

The following table presents our total income tax expense (benefit) and a reconciliation of our effective income tax rate to the U.S. statutory income tax rate.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Total income tax expense (benefit) (in millions)

 

$

210 

 

$

(442)

 

$

(99)

 

$

12 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. statutory income tax rate

 

 

35% 

 

 

(35%)

 

 

(35%)

 

 

35% 

State income taxes

 

 

1% 

 

 

(1%)

 

 

(3%)

 

 

(1%)

Taxation on Canadian operations

 

 

(5%)

 

 

(1%)

 

 

9% 

 

 

(14%)

Other

 

 

2% 

 

 

(1%)

 

 

(1%)

 

 

(13%)

Effective income tax rate

 

 

33% 

 

 

(38%)

 

 

(30%)

 

 

7% 

 

Earnings (Loss) Per Share
Earnings (Loss) Per Share

6.Earnings (Loss) Per Share

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

Common

 

Earnings (loss)

 

 

Earnings (loss)

 

Shares

 

per  Share

 

 

 

 

 

 

 

 

 

 

 

  

(In millions, except per share amounts)

Three Months Ended September 30, 2013:

  

 

 

 

 

 

 

 

 

Earnings from continuing operations

  

$

429 

 

 

406 

 

 

 

Attributable to participating securities

  

 

(4)

 

 

(4)

 

 

 

Basic earnings per share

  

 

425 

 

 

402 

 

$

1.06 

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 

 

 

Diluted earnings per share

  

$

425 

 

 

403 

 

$

1.05 

 

  

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2012:

  

 

 

 

 

 

 

 

 

Loss from continuing operations

  

$

(719)

 

 

405 

 

 

 

Attributable to participating securities

  

 

(1)

 

 

(5)

 

 

 

Basic earnings per share

  

 

(720)

 

 

400 

 

$

(1.80)

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 -

 

 

 

Diluted earnings per share

  

$

(720)

 

 

400 

 

$

(1.80)

 

  

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013:

  

 

 

 

 

 

 

 

 

Loss from continuing operations

  

$

(227)

 

 

406 

 

 

 

Attributable to participating securities

  

 

(2)

 

 

(4)

 

 

 

Basic earnings per share

  

 

(229)

 

 

402 

 

$

(0.57)

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 -

 

 

 

Diluted earnings per share

  

$

(229)

 

 

402 

 

$

(0.57)

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2012:

  

 

 

 

 

 

 

 

 

Earnings from continuing operations

  

$

172 

 

 

404 

 

 

 

Attributable to participating securities

  

 

(2)

 

 

(4)

 

 

 

Basic earnings per share

  

 

170 

 

 

400 

 

$

0.42 

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 

 

 

Diluted earnings per share

  

$

170 

 

 

401 

 

$

0.42 

 

  

 

 

 

 

 

 

 

 

 

Certain options to purchase shares of Devon's common stock are excluded from the dilution calculation because the options are antidilutive. During the three-month and nine-month periods ended September 30, 2013,  7.5 million shares and 7.6 million shares, respectively, were excluded from the diluted earnings per share calculations. During the three-month and nine-month periods ended September 30, 2012, 9.0 million shares and 8.9 million shares, respectively, were excluded from the diluted earnings per share calculations.

Other Comprehensive Earnings
Other Comprehensive Earnings

7.Other Comprehensive Earnings

 

Components of other comprehensive earnings consist of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Foreign currency translation:

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated foreign currency translation

$

1,542 

 

$

1,783 

 

$

1,996 

 

$

1,802 

Change in cumulative translation adjustment

 

182 

 

 

325 

 

 

(294)

 

 

305 

Income tax benefit (expense)

 

(9)

 

 

(14)

 

 

13 

 

 

(13)

Ending accumulated foreign currency translation

 

1,715 

 

 

2,094 

 

 

1,715 

 

 

2,094 

Pension and postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated pension and postretirement benefits

 

(216)

 

 

(218)

 

 

(225)

 

 

(227)

Recognition of net actuarial loss and prior service cost in earnings (1)

 

 

 

 

 

18 

 

 

19 

Income tax expense

 

(3)

 

 

(3)

 

 

(6)

 

 

(7)

Ending accumulated pension and postretirement benefits

 

(213)

 

 

(215)

 

 

(213)

 

 

(215)

Accumulated other comprehensive earnings, net of tax

$

1,502 

 

$

1,879 

 

$

1,502 

 

$

1,879 

__________________________

(1)  These accumulated other comprehensive earnings components are included in the computation of net periodic benefit cost, which is a component of general and administrative expenses on the accompanying comprehensive statements of earnings (see “Retirement Plans note for additional details). 

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

 

 

8.Supplemental Information to Statements of Cash Flows 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

(In millions)

Net change in working capital accounts:

 

 

 

 

 

 

Accounts receivable

 

$

(287)

 

$

275 

Other current assets

 

 

72 

 

 

(234)

Accounts payable

 

 

127 

 

 

77 

Revenues and royalties payable

 

 

56 

 

 

(34)

Other current liabilities

 

 

(72)

 

 

(36)

Net change in working capital

 

$

(104)

 

$

48 

 

 

 

 

 

 

 

Interest paid (net of capitalized interest)

 

$

342 

 

$

260 

Income taxes paid (received)

 

$

(2)

 

$

88 

 

Short-Term Investments
Short-Term Investments

9.Short-Term Investments

 

The components of short-term investments include the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

 

 

(In millions)

Canadian treasury, agency and provincial securities

 

$

 —

 

$

1,865 

U.S. treasuries

 

 

 —

 

 

429 

Other

 

 

 —

 

 

49 

Short-term investments

 

$

 —

 

$

2,343 

 

Accounts Receivable
Accounts Receivable

10.  Accounts Receivable

 

The components of accounts receivable include the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

 

 

(In millions)

Oil, gas and NGL sales

 

$

942 

 

$

752 

Joint interest billings

 

 

389 

 

 

270 

Marketing and midstream revenues

 

 

147 

 

 

161 

Other

 

 

53 

 

 

72 

Gross accounts receivable

 

 

1,531 

 

 

1,255 

Allowance for doubtful accounts

 

 

(11)

 

 

(10)

Net accounts receivable

 

$

1,520 

 

$

1,245 

 

Property And Equipment
Property And Equipment

 

 

11.Property and Equipment

 

Asset Impairments

 

In the first nine months of 2013 and 2012, Devon recognized asset impairments related to its oil and gas property and equipment and its U.S. midstream assets as presented below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013

 

Nine Months Ended September 30, 2012

 

 

Gross

 

Net of Taxes

 

Gross

 

Net of Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

U.S. oil and gas assets

 

$

1,110 

 

$

707 

 

$

1,106 

 

$

705 

Canada oil and gas assets

 

 

843 

 

 

632 

 

 

 —

 

 

 —

Midstream assets

 

 

 

 

 

 

22 

 

 

14 

Total asset impairments

 

$

1,960 

 

$

1,343 

 

$

1,128 

 

$

719 

 

Oil and Gas Impairments

 

Under the full-cost method of accounting, capitalized costs of oil and gas properties, net of accumulated DD&A and deferred income taxes, may not exceed the full cost “ceiling” at the end of each quarter. The ceiling is calculated separately for each country and is based on the present value of estimated future net cash flows from proved oil and gas reserves, discounted at 10 percent per annum, net of related tax effects. Estimated future net cash flows are calculated using end-of-period costs and an unweighted arithmetic average of commodity prices in effect on the first day of each of the previous 12 months.  

 

The oil and gas impairments resulted primarily from declines in the U.S. and Canada full cost ceilings. The lower ceiling values resulted primarily from decreases in the 12-month average trailing prices for oil, bitumen and NGLs, which have reduced proved reserve values.

 

If estimated future cash flows decline due to price decreases or other factors, Devon could incur additional full cost ceiling impairments related to its oil and gas property and equipment. 

 

Midstream Impairments  

 

In the third quarter of 2013 and 2012, Devon determined that the carrying amounts of certain midstream facilities located in south and east Texas were not recoverable from estimated future cash flows due to declining dry natural gas production. Consequently, the assets were written down to their estimated fair values, which were determined using discounted cash flow models. The fair value of Devon’s midstream assets is considered a Level 3 fair value measurement.

Goodwill
Goodwill

12.Goodwill 

 

During the first nine months of 2013, Devon’s Canadian goodwill decreased $99 million entirely due to foreign currency translation. Additionally, Devon’s U.S. goodwill decreased $26 million due to the sale of certain midstream assets.  

Debt
Debt

13.Debt 

 

Commercial Paper

 

During the second quarter of 2013, Devon repatriated $2.0 billion of foreign earnings to the United States and repaid $2.0 billion of commercial paper borrowings. As of September 30, 2013, Devon had $1.6 billion of outstanding commercial paper at an average rate of 0.27 percent.

 

Credit Lines

 

Devon has a $3.0 billion syndicated, unsecured revolving line of credit (the "Senior Credit Facility"). During the third quarter of 2013, the lenders agreed, effective October 24, 2013, to extend the maturity date of the Senior Credit Facility to October 24, 2018.  As of September 30, 2013 there were no borrowings under the Senior Credit Facility. 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 no greater than 65 percent. As of September 30, 2013, Devon was in compliance with this covenant with a debt-to-capitalization ratio of 22.4 percent.  

 

Asset Retirement Obligations
Asset Retirement Obligations

14.Asset Retirement Obligations

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

Asset retirement obligations as of beginning of period

 

$

2,095 

 

$

1,563 

 

Liabilities incurred

 

 

88 

 

 

60 

 

Liabilities settled

 

 

(46)

 

 

(57)

 

Revision of estimated obligation

 

 

104 

 

 

411 

 

Liabilities assumed by others

 

 

(15)

 

 

(18)

 

Accretion expense on discounted obligation

 

 

86 

 

 

82 

 

Foreign currency translation adjustment

 

 

(44)

 

 

35 

 

Asset retirement obligations as of end of period

 

 

2,268 

 

 

2,076 

 

Less current portion

 

 

107 

 

 

67 

 

Asset retirement obligations, long-term

 

$

2,161 

 

$

2,009 

 

 

Retirement Plans
Retirement Plans

15.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 Ended

 

Nine Months Ended

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Service cost

 

$

 

$

11 

 

$

27 

 

$

32 

 

$

 —

 

$

 

$

 —

 

$

Interest cost

 

 

13 

 

 

15 

 

 

39 

 

 

45 

 

 

 —

 

 

 —

 

 

 

 

Expected return on plan assets

 

 

(16)

 

 

(16)

 

 

(47)

 

 

(48)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Amortization of prior service cost (1)

 

 

 

 

 

 

 

 

 

 

 —

 

 

 —

 

 

 —

 

 

(1)

Net actuarial loss (gain) (1)

 

 

 

 

 

 

16 

 

 

18 

 

 

 —

 

 

(1)

 

 

(1)

 

 

(1)

Net periodic benefit cost (2)

 

$

12 

 

$

17 

 

$

38 

 

$

50 

 

$

 —

 

$

 —

 

$

 —

 

$

 —

__________________________

(1)  These net periodic benefit costs were reclassified out of other comprehensive earnings in the current period.

(2)  Net periodic benefit cost is a component of general and administrative expenses on the accompanying comprehensive statements of earnings.

Stockholders' Equity
Stockholders' Equity

16.Stockholders' Equity 

 

Dividends

 

Devon paid common stock dividends of $259 million and $242 million in the first nine months of 2013 and 2012, respectively. The quarterly cash dividend was $0.20 per share in the first nine months of 2012 and in the first quarter of 2013. Devon increased the dividend rate to $0.22 per share in the second quarter of 2013.

 

Commitments And Contingencies
Commitments And Contingencies

17.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 royalty underpayments. The suits allege that the producers and related parties used below-market prices, made improper deductions, used improper measurement techniques and entered into gas purchase and processing arrangements with affiliates that resulted in underpayment of royalties in connection with natural gas and NGLs produced and sold. Devon’s largest exposure for such matters relates to royalties in New Mexico. 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. Devon did not have a legal right of set off with respect to the judgment. Therefore, Devon had recorded a $133 million long-term liability relating to the judgment with an offsetting $133 million long-term receivable relating to its right to be indemnified by Rees-Jones and certain other parties pursuant to the indemnification agreement.

 

The plaintiffs and Rees-Jones have settled all claims related to the 2004 redemption. Under the terms of the settlement, Rees-Jones and Devon received full releases for all of the plaintiffs’ claims with Rees-Jones funding all settlement payments. Consequently, Devon reversed the previously recorded liability and asset in the first quarter of 2013. 

 

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

 

18.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 current payables and accrued expenses included in the accompanying balance sheets approximated fair value at September 30, 2013 and December 31, 2012. Therefore, such financial assets and liabilities are not presented in the following tables.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using:

 

 

Carrying

 

Total Fair

 

Level 1

 

Level 2

 

Level 3

 

 

Amount

 

Value

 

Inputs

 

Inputs

 

Inputs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

September 30, 2013 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

3,592 

 

$

3,592 

 

$

13 

 

$

3,579 

 

$

 —

Long-term investments

 

$

62 

 

$

62 

 

$

 —

 

$

 —

 

$

62 

Commodity derivatives

 

$

282 

 

$

282 

 

$

 —

 

$

282 

 

$

 —

Commodity derivatives

 

$

(101)

 

$

(101)

 

$

 —

 

$

(101)

 

$

 —

Debt

 

$

(10,068)

 

$

(10,926)

 

$

 —

 

$

(10,926)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

4,149 

 

$

4,149 

 

$

32 

 

$

4,117 

 

$

 —

Short-term investments

 

$

2,343 

 

$

2,343 

 

$

429 

 

$

1,914 

 

$

 —

Long-term investments

 

$

64 

 

$

64 

 

$

 —

 

$

 —

 

$

64 

Commodity derivatives

 

$

401 

 

$

401 

 

$

 —

 

$

401 

 

$

 —

Commodity derivatives

 

$

(32)

 

$

(32)

 

$

 —

 

$

(32)

 

$

 —

Interest rate derivatives

 

$

23 

 

$

23 

 

$

 —

 

$

23 

 

$

 —

Foreign currency derivatives

 

$

 

$

 

$

 —

 

$

 

$

 —

Debt

 

$

(11,644)

 

$

(13,435)

 

$

 —

 

$

(13,435)

 

$

 —

 

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 Canadian agency and provincial securities and commercial paper investments. The fair value approximates the carrying value.

 

Commodity, interest rate and foreign currency derivatives — The fair values of commodity, interest rate and foreign currency derivatives are estimated using internal discounted cash flow calculations based upon forward curves and data obtained from independent third parties for contracts with similar terms or data 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 value of Devon’s variable-rate commercial paper is the carrying value.

 

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 an inactive 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 continued receipts of principal at par, the collection of all accrued interest to date, the probability of full repayment of the securities considering the U.S. government guarantees substantially all of the underlying student loans, and the AAA credit rating of the securities. 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 September  30, 2013 and December 31, 2012.

 

Included below is a summary of the changes in Devon's Level 3 fair value measurements during the first nine months of 2013 and 2012.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2013

 

2012

 

 

 

 

 

 

 

 

 

(In millions)

Long-term investments balance at beginning of period

 

$

64 

 

$

84 

Redemptions of principal

 

 

(2)

 

 

(20)

Long-term investments balance at end of period

 

$

62 

 

$

64 

 

Segment Information
Segment Information

19.Segment Information

 

Devon manages its operations through distinct operating segments, which are defined primarily by geographic areas. For financial reporting purposes, Devon aggregates its U.S. operating segments into one reporting segment due to the similar nature of the businesses. However, Devon's Canadian operating segment is reported as a 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 September 30, 2013:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

1,573 

 

$

768 

 

$

2,341 

Oil, gas and NGL derivatives

 

$

(153)

 

$

12 

 

$

(141)

Marketing and midstream revenues

 

$

509 

 

$

11 

 

$

520 

Depreciation, depletion and amortization

 

$

492 

 

$

199 

 

$

691 

Interest expense

 

$

94 

 

$

10 

 

$

104 

Asset impairments

 

$

 

$

 —

 

$

Earnings from continuing operations before income taxes

 

$

410 

 

$

229 

 

$

639 

Income tax expense

 

$

160 

 

$

50 

 

$

210 

Earnings from continuing operations

 

$

250 

 

$

179 

 

$

429 

Capital expenditures

 

$

1,256 

 

$

437 

 

$

1,693 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2012:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

1,144 

 

$

594 

 

$

1,738 

Oil, gas and NGL derivatives

 

$

(290)

 

$

(5)

 

$

(295)

Marketing and midstream revenues

 

$

415 

 

$

 

$

422 

Depreciation, depletion and amortization

 

$

478 

 

$

238 

 

$

716 

Interest expense

 

$

94 

 

$

16 

 

$

110 

Asset impairments

 

$

1,128 

 

$

 —

 

$

1,128 

Earnings (loss) from continuing operations before income taxes

 

$

(1,169)

 

$

 

$

(1,161)

Income tax benefit

 

$

(438)

 

$

(4)

 

$

(442)

Earnings (loss) from continuing operations

 

$

(731)

 

$

12 

 

$

(719)

Capital expenditures

 

$

1,586 

 

$

382 

 

$

1,968 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

4,377 

 

$

1,990 

 

$

6,367 

Oil, gas and NGL derivatives

 

$

(82)

 

$

(13)

 

$

(95)

Marketing and midstream revenues

 

$

1,436 

 

$

75 

 

$

1,511 

Depreciation, depletion and amortization

 

$

1,426 

 

$

643 

 

$

2,069 

Interest expense

 

$

284 

 

$

38 

 

$

322 

Asset impairments

 

$

1,117 

 

$

843 

 

$

1,960 

Earnings (loss) from continuing operations before income taxes

 

$

208 

 

$

(534)

 

$

(326)

Income tax expense (benefit)

 

$

59 

 

$

(158)

 

$

(99)

Earnings (loss) from continuing operations

 

$

149 

 

$

(376)

 

$

(227)

Property and equipment, net

 

$

19,462 

 

$

8,500 

 

$

27,962 

Total assets

 

$

24,668 

 

$

16,178 

 

$

40,846 

Capital expenditures

 

$

3,650 

 

$

1,377 

 

$

5,027 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2012:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

3,394 

 

$

1,876 

 

$

5,270 

Oil, gas and NGL derivatives

 

$

520 

 

$

(5)

 

$

515 

Marketing and midstream revenues

 

$

1,064 

 

$

72 

 

$

1,136 

Depreciation, depletion and amortization

 

$

1,348 

 

$

732 

 

$

2,080 

Interest expense

 

$

249 

 

$

47 

 

$

296 

Asset impairments

 

$

1,128 

 

$

 —

 

$

1,128 

Earnings from continuing operations before income taxes

 

$

91 

 

$

93 

 

$

184 

Income tax expense

 

$

 

$

 

$

12 

Earnings from continuing operations

 

$

85 

 

$

87 

 

$

172 

Property and equipment, net

 

$

18,306 

 

$

8,840 

 

$

27,146 

Total assets

 

$

24,425 

 

$

19,123 

 

$

43,548 

Capital expenditures

 

$

5,007 

 

$

1,276 

 

$

6,283 

 

Subsequent Event
Subsequent Event

 

20.  Subsequent Event

On October 21, 2013, Devon, Crosstex Energy, Inc. and Crosstex Energy, L.P. (collectively “Crosstex”) announced plans to combine substantially all of Devon’s U.S. midstream assets with Crosstex’s assets to form a new midstream business. The new business will consist of a master limited partnership and a general partner entity (the “Master Limited Partnership” and the “General Partner”), which will both be publicly traded entities. 

 

In exchange for a controlling interest in both the General Partner and the Master Limited Partnership, Devon will contribute its equity interest in a newly formed Devon subsidiary (“Devon Holdings”) and $100 million in cash. Devon Holdings will own Devon’s midstream assets in the Barnett Shale in North Texas and the Cana and Arkoma Woodford Shales in Oklahoma, as well as Devon’s interest in Gulf Coast Fractionators in Mt. Belvieu, Texas. The Master Limited Partnership and the General Partner will each own 50% of Devon Holdings. The completion of these transactions is subject to Crosstex Energy, Inc. shareholder approval.

 

Upon closing of the transactions, the pro forma ownership of the General Partner will be approximately:

 

 

 

70% - Devon Energy Corporation

 

 

 

 

 

 

 

30% - Current Crosstex Energy, Inc. public stockholders

Upon closing of the transactions, the pro forma ownership of the Master Limited Partnership will be approximately:

 

 

 

 

 

 

 

53% - Devon Energy Corporation

 

 

 

 

 

 

 

40% - Current Crosstex Energy, L.P. public unitholders

 

 

 

 

 

 

 

7% - the General Partner

 

Derivative Financial Instruments (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Cash settlements:

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivatives

 

$

(7)

 

$

243 

 

$

93 

 

$

668 

Interest rate derivatives

 

 

10 

 

 

10 

 

 

24 

 

 

Foreign currency derivatives

 

 

(5)

 

 

(38)

 

 

30 

 

 

(29)

Total cash settlements

 

 

(2)

 

 

215 

 

 

147 

 

 

648 

Unrealized gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

Commodity derivatives

 

 

(134)

 

 

(538)

 

 

(188)

 

 

(153)

Interest rate derivatives

 

 

(9)

 

 

(9)

 

 

(23)

 

 

(24)

Foreign currency derivatives

 

 

(23)

 

 

12 

 

 

(1)

 

 

Total unrealized gains (losses)

 

 

(166)

 

 

(535)

 

 

(212)

 

 

(173)

Net gains (losses) recognized on comprehensive statements of earnings

 

$

(168)

 

$

(320)

 

$

(65)

 

$

475 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet Caption

 

September 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Asset derivatives:

 

 

 

 

 

 

 

 

Commodity derivatives

 

Other current assets

 

$

224 

 

$

379 

Commodity derivatives

 

Other long-term assets

 

 

58 

 

 

22 

Interest rate derivatives

 

Other current assets

 

 

 —

 

 

23 

Foreign currency derivatives

 

Other current assets

 

 

 —

 

 

Total asset derivatives

 

 

 

$

282 

 

$

425 

Liability derivatives:

 

 

 

 

 

 

 

 

Commodity derivatives

 

Other current liabilities

 

$

50 

 

$

Commodity derivatives

 

Other long-term liabilities

 

 

51 

 

 

29 

Total liability derivatives

 

 

 

$

101 

 

$

32 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

 

Price Collars

 

Call Options Sold

Period

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

 

Volume (Bbls/d)

 

Weighted Average Floor Price ($/Bbl)

 

Weighted Average Ceiling Price ($/Bbl)

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

Q4 2013

 

70,000

 

$

100.26

 

72,000

 

$

90.60

 

$

111.14

 

10,000

 

$

120.00

Q1-Q4 2014 

 

49,000

 

$

94.77

 

43,969

 

$

89.01

 

$

102.48

 

42,000

 

$

116.43

Q1-Q4 2015

 

500

 

$

91.00

 

 

$

 

$

 

22,000

 

$

115.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Swaps

Period

 

Index

 

Volume (Bbls/d)

 

Weighted Average Differential to WTI ($/Bbl)

Q4 2013

 

Western Canadian Select

 

40,000

 

$

(22.47)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

 

Price Collars

 

Call Options Sold

Period

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

 

Volume (MMBtu/d)

 

Weighted Average Floor Price ($/MMBtu)

 

Weighted Average Ceiling Price ($/MMBtu)

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

Q4 2013

 

987,500

 

$

4.09

 

650,000

 

$

3.61

 

$

4.28

 

 

$

Q1-Q4 2014 

 

800,000

 

$

4.42

 

210,000

 

$

4.01

 

$

4.71

 

500,000

 

$

5.00

Q1-Q4 2015

 

 

$

 

 

$

 

$

 

550,000

 

$

5.09

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

Period

 

Volume (MMBtu/d)

 

Weighted Average Price ($/MMBtu)

Q4 2013 

 

28,435

 

$

3.54

 

 

 

 

 

 

 

 

 

 

 

 

Basis Swaps

Period

 

Index

 

Volume (MMBtu/d)

 

Weighted Average Differential to Henry Hub ($/MMBtu)

Q4 2013

 

AECO

 

62,843

 

$

(0.44)

Q1-Q4 2014

 

AECO

 

94,781

 

$

(0.52)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Price Swaps

Period

 

Product

 

Volume (Bbls/d)

 

Weighted Average Price ($/Bbl)

Q4 2013

 

Ethane

 

1,957

 

$

15.36

Q4 2013

 

Propane

 

3,985

 

$

41.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Swaps

Period

 

Pay

 

Volume (Bbls/d)

 

Weighted Average Differential to WTI ($/Bbl)

Q4 2013

 

Natural Gasoline

 

1,000

 

$

(9.58)

Q1-Q4 2014

 

Natural Gasoline

 

329

 

$

(10.85)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward Contract

Currency

 

Contract Type

 

CAD Notional

 

Weighted Average Fixed Rate Received

 

Expiration

 

 

 

 

(In millions)

 

(CAD-USD)

 

 

Canadian Dollar

 

Sell

 

$

1,261 

 

0.969

 

December 2013

 

Restructuring Costs (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

Nine Months

 

 

Ended September 30,

 

Ended September 30,

 

  

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

(In millions)

Lease obligations and other

  

$

  

$

 —

  

$

44 

  

$

 —

Asset impairments

  

 

 —

  

 

 —

  

 

  

 

 —

Restructuring costs

  

$

  

$

 —

  

$

50 

  

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Other

 

 

 

 

 

Current

 

Long-Term

 

 

 

 

 

Liabilities

 

Liabilities

 

Total

 

 

 

 

 

 

 

 

 

 

 

  

(In millions)

Balance as of December 31, 2012

  

$

52 

 

$

 

$

61 

Lease obligations and other - Office consolidation

 

 

18 

 

 

11 

 

 

29 

Employee severance – Office consolidation

  

 

(34)

 

 

 —

 

 

(34)

Lease obligations - Offshore

  

 

(2)

 

 

(1)

 

 

(3)

Balance as of September 30, 2013

  

$

34 

  

$

19 

  

$

53 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2011

  

$

29 

 

$

16 

 

$

45 

Lease obligations - Offshore

  

 

(9)

 

 

(3)

 

 

(12)

Employee severance - Offshore

  

 

(7)

 

 

 —

 

 

(7)

Balance as September 30, 2012

 

$

13 

 

$

13 

 

$

26 

 

Other, Net (Tables)
Components Of Other, Net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

  

2013

 

2012

  

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

(In millions)

Accretion of asset retirement obligations

  

$

29 

  

$

27 

  

$

86 

  

$

82 

Interest rate derivatives

  

 

(1)

  

 

(1)

  

 

(1)

  

 

15 

Foreign currency derivatives

  

 

28 

 

 

26 

  

 

(29)

 

 

25 

Foreign exchange loss (gain)

  

 

(27)

 

 

(28)

  

 

34 

 

 

(26)

Interest income

  

 

(4)

 

 

(8)

  

 

(16)

 

 

(24)

Other

  

 

 

 

(24)

  

 

 

 

(26)

Other, net

  

$

34 

 

$

(8)

  

$

83 

 

$

46 

 

Income Taxes (Tables)
Schedule Of Effective Income Tax Reconciliation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

Total income tax expense (benefit) (in millions)

 

$

210 

 

$

(442)

 

$

(99)

 

$

12 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. statutory income tax rate

 

 

35% 

 

 

(35%)

 

 

(35%)

 

 

35% 

State income taxes

 

 

1% 

 

 

(1%)

 

 

(3%)

 

 

(1%)

Taxation on Canadian operations

 

 

(5%)

 

 

(1%)

 

 

9% 

 

 

(14%)

Other

 

 

2% 

 

 

(1%)

 

 

(1%)

 

 

(13%)

Effective income tax rate

 

 

33% 

 

 

(38%)

 

 

(30%)

 

 

7% 

 

Earnings (Loss) Per Share (Tables)
Earnings (Loss) Per Share Computations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

Common

 

Earnings (loss)

 

 

Earnings (loss)

 

Shares

 

per  Share

 

 

 

 

 

 

 

 

 

 

 

  

(In millions, except per share amounts)

Three Months Ended September 30, 2013:

  

 

 

 

 

 

 

 

 

Earnings from continuing operations

  

$

429 

 

 

406 

 

 

 

Attributable to participating securities

  

 

(4)

 

 

(4)

 

 

 

Basic earnings per share

  

 

425 

 

 

402 

 

$

1.06 

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 

 

 

Diluted earnings per share

  

$

425 

 

 

403 

 

$

1.05 

 

  

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2012:

  

 

 

 

 

 

 

 

 

Loss from continuing operations

  

$

(719)

 

 

405 

 

 

 

Attributable to participating securities

  

 

(1)

 

 

(5)

 

 

 

Basic earnings per share

  

 

(720)

 

 

400 

 

$

(1.80)

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 -

 

 

 

Diluted earnings per share

  

$

(720)

 

 

400 

 

$

(1.80)

 

  

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013:

  

 

 

 

 

 

 

 

 

Loss from continuing operations

  

$

(227)

 

 

406 

 

 

 

Attributable to participating securities

  

 

(2)

 

 

(4)

 

 

 

Basic earnings per share

  

 

(229)

 

 

402 

 

$

(0.57)

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 -

 

 

 

Diluted earnings per share

  

$

(229)

 

 

402 

 

$

(0.57)

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2012:

  

 

 

 

 

 

 

 

 

Earnings from continuing operations

  

$

172 

 

 

404 

 

 

 

Attributable to participating securities

  

 

(2)

 

 

(4)

 

 

 

Basic earnings per share

  

 

170 

 

 

400 

 

$

0.42 

Dilutive effect of potential common shares issuable

  

 

 -

 

 

 

 

 

Diluted earnings per share

  

$

170 

 

 

401 

 

$

0.42 

 

  

 

 

 

 

 

 

 

 

 

Other Comprehensive Earnings (Tables)
Components Of Other Comprehensive Earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Foreign currency translation:

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated foreign currency translation

$

1,542 

 

$

1,783 

 

$

1,996 

 

$

1,802 

Change in cumulative translation adjustment

 

182 

 

 

325 

 

 

(294)

 

 

305 

Income tax benefit (expense)

 

(9)

 

 

(14)

 

 

13 

 

 

(13)

Ending accumulated foreign currency translation

 

1,715 

 

 

2,094 

 

 

1,715 

 

 

2,094 

Pension and postretirement benefit plans:

 

 

 

 

 

 

 

 

 

 

 

Beginning accumulated pension and postretirement benefits

 

(216)

 

 

(218)

 

 

(225)

 

 

(227)

Recognition of net actuarial loss and prior service cost in earnings (1)

 

 

 

 

 

18 

 

 

19 

Income tax expense

 

(3)

 

 

(3)

 

 

(6)

 

 

(7)

Ending accumulated pension and postretirement benefits

 

(213)

 

 

(215)

 

 

(213)

 

 

(215)

Accumulated other comprehensive earnings, net of tax

$

1,502 

 

$

1,879 

 

$

1,502 

 

$

1,879 

__________________________

(1)  These accumulated other comprehensive earnings components are included in the computation of net periodic benefit cost, which is a component of general and administrative expenses on the accompanying comprehensive statements of earnings (see “Retirement Plans note for additional details)

Supplemental Information To Statements Of Cash Flows (Tables)
Schedule Of Supplemental To Cash Flow Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

(In millions)

Net change in working capital accounts:

 

 

 

 

 

 

Accounts receivable

 

$

(287)

 

$

275 

Other current assets

 

 

72 

 

 

(234)

Accounts payable

 

 

127 

 

 

77 

Revenues and royalties payable

 

 

56 

 

 

(34)

Other current liabilities

 

 

(72)

 

 

(36)

Net change in working capital

 

$

(104)

 

$

48 

 

 

 

 

 

 

 

Interest paid (net of capitalized interest)

 

$

342 

 

$

260 

Income taxes paid (received)

 

$

(2)

 

$

88 

 

Short-Term Investments (Tables)
Components Of Short-Term Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

 

 

(In millions)

Canadian treasury, agency and provincial securities

 

$

 —

 

$

1,865 

U.S. treasuries

 

 

 —

 

 

429 

Other

 

 

 —

 

 

49 

Short-term investments

 

$

 —

 

$

2,343 

 

Accounts Receivable (Tables)
Schedule Of Components Of Accounts Receivable

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2013

 

December 31, 2012

 

 

 

 

 

 

 

 

 

(In millions)

Oil, gas and NGL sales

 

$

942 

 

$

752 

Joint interest billings

 

 

389 

 

 

270 

Marketing and midstream revenues

 

 

147 

 

 

161 

Other

 

 

53 

 

 

72 

Gross accounts receivable

 

 

1,531 

 

 

1,255 

Allowance for doubtful accounts

 

 

(11)

 

 

(10)

Net accounts receivable

 

$

1,520 

 

$

1,245 

 

Property And Equipment (Tables)
Schedule Of Asset Impairments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013

 

Nine Months Ended September 30, 2012

 

 

Gross

 

Net of Taxes

 

Gross

 

Net of Taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

U.S. oil and gas assets

 

$

1,110 

 

$

707 

 

$

1,106 

 

$

705 

Canada oil and gas assets

 

 

843 

 

 

632 

 

 

 —

 

 

 —

Midstream assets

 

 

 

 

 

 

22 

 

 

14 

Total asset impairments

 

$

1,960 

 

$

1,343 

 

$

1,128 

 

$

719 

 

Asset Retirement Obligations (Tables)
Summary Of Changes In Asset Retirement Obligations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

Asset retirement obligations as of beginning of period

 

$

2,095 

 

$

1,563 

 

Liabilities incurred

 

 

88 

 

 

60 

 

Liabilities settled

 

 

(46)

 

 

(57)

 

Revision of estimated obligation

 

 

104 

 

 

411 

 

Liabilities assumed by others

 

 

(15)

 

 

(18)

 

Accretion expense on discounted obligation

 

 

86 

 

 

82 

 

Foreign currency translation adjustment

 

 

(44)

 

 

35 

 

Asset retirement obligations as of end of period

 

 

2,268 

 

 

2,076 

 

Less current portion

 

 

107 

 

 

67 

 

Asset retirement obligations, long-term

 

$

2,161 

 

$

2,009 

 

 

Retirement Plans (Tables)
Schedule Of Net Periodic Benefit Cost For Pension And Postretirement Benefit Plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits

 

Postretirement Benefits

 

 

Three Months Ended

 

Nine Months Ended

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

September 30,

 

September 30,

 

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Service cost

 

$

 

$

11 

 

$

27 

 

$

32 

 

$

 —

 

$

 

$

 —

 

$

Interest cost

 

 

13 

 

 

15 

 

 

39 

 

 

45 

 

 

 —

 

 

 —

 

 

 

 

Expected return on plan assets

 

 

(16)

 

 

(16)

 

 

(47)

 

 

(48)

 

 

 —

 

 

 —

 

 

 —

 

 

 —

Amortization of prior service cost (1)

 

 

 

 

 

 

 

 

 

 

 —

 

 

 —

 

 

 —

 

 

(1)

Net actuarial loss (gain) (1)

 

 

 

 

 

 

16 

 

 

18 

 

 

 —

 

 

(1)

 

 

(1)

 

 

(1)

Net periodic benefit cost (2)

 

$

12 

 

$

17 

 

$

38 

 

$

50 

 

$

 —

 

$

 —

 

$

 —

 

$

 —

__________________________

(1)  These net periodic benefit costs were reclassified out of other comprehensive earnings in the current period.

(2)  Net periodic benefit cost is a component of general and administrative expenses on the accompanying comprehensive statements of earnings

Fair Value Measurements (Tables)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements Using:

 

 

Carrying

 

Total Fair

 

Level 1

 

Level 2

 

Level 3

 

 

Amount

 

Value

 

Inputs

 

Inputs

 

Inputs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

September 30, 2013 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

3,592 

 

$

3,592 

 

$

13 

 

$

3,579 

 

$

 —

Long-term investments

 

$

62 

 

$

62 

 

$

 —

 

$

 —

 

$

62 

Commodity derivatives

 

$

282 

 

$

282 

 

$

 —

 

$

282 

 

$

 —

Commodity derivatives

 

$

(101)

 

$

(101)

 

$

 —

 

$

(101)

 

$

 —

Debt

 

$

(10,068)

 

$

(10,926)

 

$

 —

 

$

(10,926)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2012 assets (liabilities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

4,149 

 

$

4,149 

 

$

32 

 

$

4,117 

 

$

 —

Short-term investments

 

$

2,343 

 

$

2,343 

 

$

429 

 

$

1,914 

 

$

 —

Long-term investments

 

$

64 

 

$

64 

 

$

 —

 

$

 —

 

$

64 

Commodity derivatives

 

$

401 

 

$

401 

 

$

 —

 

$

401 

 

$

 —

Commodity derivatives

 

$

(32)

 

$

(32)

 

$

 —

 

$

(32)

 

$

 —

Interest rate derivatives

 

$

23 

 

$

23 

 

$

 —

 

$

23 

 

$

 —

Foreign currency derivatives

 

$

 

$

 

$

 —

 

$

 

$

 —

Debt

 

$

(11,644)

 

$

(13,435)

 

$

 —

 

$

(13,435)

 

$

 —

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2013

 

2012

 

 

 

 

 

 

 

 

 

(In millions)

Long-term investments balance at beginning of period

 

$

64 

 

$

84 

Redemptions of principal

 

 

(2)

 

 

(20)

Long-term investments balance at end of period

 

$

62 

 

$

64 

 

Segment Information (Tables)
Condensed Statements Of Comprehensive Earnings And Balance Sheets Of Reportable Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

 

U.S.

 

Canada

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

Three Months Ended September 30, 2013:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

1,573 

 

$

768 

 

$

2,341 

Oil, gas and NGL derivatives

 

$

(153)

 

$

12 

 

$

(141)

Marketing and midstream revenues

 

$

509 

 

$

11 

 

$

520 

Depreciation, depletion and amortization

 

$

492 

 

$

199 

 

$

691 

Interest expense

 

$

94 

 

$

10 

 

$

104 

Asset impairments

 

$

 

$

 —

 

$

Earnings from continuing operations before income taxes

 

$

410 

 

$

229 

 

$

639 

Income tax expense

 

$

160 

 

$

50 

 

$

210 

Earnings from continuing operations

 

$

250 

 

$

179 

 

$

429 

Capital expenditures

 

$

1,256 

 

$

437 

 

$

1,693 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2012:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

1,144 

 

$

594 

 

$

1,738 

Oil, gas and NGL derivatives

 

$

(290)

 

$

(5)

 

$

(295)

Marketing and midstream revenues

 

$

415 

 

$

 

$

422 

Depreciation, depletion and amortization

 

$

478 

 

$

238 

 

$

716 

Interest expense

 

$

94 

 

$

16 

 

$

110 

Asset impairments

 

$

1,128 

 

$

 —

 

$

1,128 

Earnings (loss) from continuing operations before income taxes

 

$

(1,169)

 

$

 

$

(1,161)

Income tax benefit

 

$

(438)

 

$

(4)

 

$

(442)

Earnings (loss) from continuing operations

 

$

(731)

 

$

12 

 

$

(719)

Capital expenditures

 

$

1,586 

 

$

382 

 

$

1,968 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2013:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

4,377 

 

$

1,990 

 

$

6,367 

Oil, gas and NGL derivatives

 

$

(82)

 

$

(13)

 

$

(95)

Marketing and midstream revenues

 

$

1,436 

 

$

75 

 

$

1,511 

Depreciation, depletion and amortization

 

$

1,426 

 

$

643 

 

$

2,069 

Interest expense

 

$

284 

 

$

38 

 

$

322 

Asset impairments

 

$

1,117 

 

$

843 

 

$

1,960 

Earnings (loss) from continuing operations before income taxes

 

$

208 

 

$

(534)

 

$

(326)

Income tax expense (benefit)

 

$

59 

 

$

(158)

 

$

(99)

Earnings (loss) from continuing operations

 

$

149 

 

$

(376)

 

$

(227)

Property and equipment, net

 

$

19,462 

 

$

8,500 

 

$

27,962 

Total assets

 

$

24,668 

 

$

16,178 

 

$

40,846 

Capital expenditures

 

$

3,650 

 

$

1,377 

 

$

5,027 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2012:

 

 

 

 

 

 

 

 

 

Oil, gas and NGL sales

 

$

3,394 

 

$

1,876 

 

$

5,270 

Oil, gas and NGL derivatives

 

$

520 

 

$

(5)

 

$

515 

Marketing and midstream revenues

 

$

1,064 

 

$

72 

 

$

1,136 

Depreciation, depletion and amortization

 

$

1,348 

 

$

732 

 

$

2,080 

Interest expense

 

$

249 

 

$

47 

 

$

296 

Asset impairments

 

$

1,128 

 

$

 —

 

$

1,128 

Earnings from continuing operations before income taxes

 

$

91 

 

$

93 

 

$

184 

Income tax expense

 

$

 

$

 

$

12 

Earnings from continuing operations

 

$

85 

 

$

87 

 

$

172 

Property and equipment, net

 

$

18,306 

 

$

8,840 

 

$

27,146 

Total assets

 

$

24,425 

 

$

19,123 

 

$

43,548 

Capital expenditures

 

$

5,007 

 

$

1,276 

 

$

6,283 

 

Derivative Financial Instruments (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Derivative Financial Instruments [Abstract]
 
Derivative collateral
$ 43 
Derivative Financial Instruments (Schedule Of Open Oil Derivative Positions) (Details) (Open Oil Derivative Positions [Member])
9 Months Ended
Sep. 30, 2013
Price Swaps [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Volume per day
70,000 
Weighted Average Price, Price Swap
100.26 
Price Swaps [Member] |
Q1-Q4 2014 [Member]
 
Derivative [Line Items]
 
Volume per day
49,000 
Weighted Average Price, Price Swap
94.77 
Price Swaps [Member] |
Q1-Q4 2015 [Member]
 
Derivative [Line Items]
 
Volume per day
500 
Weighted Average Price, Price Swap
91.00 
Price Collars [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Volume per day
72,000 
Weighted Average Floor Price
90.60 
Weighted Average Ceiling Price
111.14 
Price Collars [Member] |
Q1-Q4 2014 [Member]
 
Derivative [Line Items]
 
Volume per day
43,969 
Weighted Average Floor Price
89.01 
Weighted Average Ceiling Price
102.48 
Call Option Sold [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Volume per day
10,000 
Weighted Average Price, Call Options
120.00 
Call Option Sold [Member] |
Q1-Q4 2014 [Member]
 
Derivative [Line Items]
 
Volume per day
42,000 
Weighted Average Price, Call Options
116.43 
Call Option Sold [Member] |
Q1-Q4 2015 [Member]
 
Derivative [Line Items]
 
Volume per day
22,000 
Weighted Average Price, Call Options
115.45 
Commodity Basis Swap [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Index
Western Canadian Select 
Volume per day
40,000 
Weighted average differential to WTI
(22.47)
Derivative Financial Instruments (Schedule Of Open Natural Gas Derivative Positions) (Details) (Open Natural Gas Derivative Positions [Member])
9 Months Ended
Sep. 30, 2013
Price Swaps [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Volume per day
987,500 
Weighted Average Price, Price Swap
4.09 
Price Swaps [Member] |
Q1-Q4 2014 [Member]
 
Derivative [Line Items]
 
Volume per day
800,000 
Weighted Average Price, Price Swap
4.42 
Price Collars [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Volume per day
650,000 
Weighted Average Floor Price
3.61 
Weighted Average Ceiling Price
4.28 
Price Collars [Member] |
Q1-Q4 2014 [Member]
 
Derivative [Line Items]
 
Volume per day
210,000 
Weighted Average Floor Price
4.01 
Weighted Average Ceiling Price
4.71 
Call Option Sold [Member] |
Q1-Q4 2014 [Member]
 
Derivative [Line Items]
 
Volume per day
500,000 
Weighted Average Price, Call Options
5.00 
Call Option Sold [Member] |
Q1-Q4 2015 [Member]
 
Derivative [Line Items]
 
Volume per day
550,000 
Weighted Average Price, Call Options
5.09 
Commodity Basis Swap [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Index
AECO 
Volume per day
62,843 
Weighted Average Differential To Henry Hub
(0.44)
Commodity Basis Swap [Member] |
Q1-Q4 2014 [Member]
 
Derivative [Line Items]
 
Index
AECO 
Volume per day
94,781 
Weighted Average Differential To Henry Hub
(0.52)
AECO [Member] |
Price Swaps [Member] |
Q4 2013 [Member]
 
Derivative [Line Items]
 
Volume per day
28,435 
Weighted Average Price, Price Swap
3.54 
Derivative Financial Instruments (Schedule Of Open NGL Derivative Positions) (Details) (Open NGL Derivative Positions [Member])
9 Months Ended
Sep. 30, 2013
Price Swaps [Member] |
Q4 2013 [Member] |
Ethane [Member]
 
Derivative [Line Items]
 
Volume per day
1,957 
Weighted Average Price, Price Swap
15.36 
Price Swaps [Member] |
Q4 2013 [Member] |
Propane [Member]
 
Derivative [Line Items]
 
Volume per day
3,985 
Weighted Average Price, Price Swap
41.73 
Commodity Basis Swap [Member] |
Q4 2013 [Member] |
Natural Gasoline [Member]
 
Derivative [Line Items]
 
Volume per day
1,000 
Weighted average differential to WTI
(9.58)
Commodity Basis Swap [Member] |
Q1-Q4 2014 [Member] |
Natural Gasoline [Member]
 
Derivative [Line Items]
 
Volume per day
329 
Weighted average differential to WTI
(10.85)
Derivative Financial Instruments (Schedule Of Open Foreign Exchange Rate Derivative Positions) (Details) (Forward Contract [Member], CAD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Forward Contract [Member]
 
Derivative [Line Items]
 
Currency
Canadian Dollar 
Contract Type
Sell 
CAD Notional
$ 1,261 
Weighted Average Fixed Rate Received
0.9690 
Expiration
Dec. 01, 2013 
Derivative Financial Instruments (Schedule Of Derivative Financial Instruments Included In The Consolidated Comprehensive Statement Of Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Derivatives, Fair Value [Line Items]
 
 
 
 
Total cash settlements
$ (2)
$ 215 
$ 147 
$ 648 
Unrealized gains (losses)
(166)
(535)
(212)
(173)
Net gains (losses) recognized on comprehensive statements of earnings
(168)
(320)
(65)
475 
Commodity Derivatives [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Total cash settlements
(7)
243 
93 
668 
Unrealized gains (losses)
(134)
(538)
(188)
(153)
Interest Rate Derivatives [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Total cash settlements
10 
10 
24 
Unrealized gains (losses)
(9)
(9)
(23)
(24)
Foreign Currency Derivatives [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Total cash settlements
(5)
(38)
30 
(29)
Unrealized gains (losses)
$ (23)
$ 12 
$ (1)
$ 4 
Derivative Financial Instruments (Schedule Of Derivative Financial Instruments Included In The Consolidated Balance Sheets) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
$ 282 
$ 425 
Fair value of derivative liabilities
101 
32 
Commodity Derivatives [Member] |
Other Current Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
224 
379 
Commodity Derivatives [Member] |
Other Long-Term Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
58 
22 
Commodity Derivatives [Member] |
Other Current Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative liabilities
50 
Commodity Derivatives [Member] |
Other Long-Term Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative liabilities
51 
29 
Interest Rate Derivatives [Member] |
Other Current Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
 
23 
Foreign Currency Derivatives [Member] |
Other Current Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative assets
 
$ 1 
Restructuring Costs (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 39 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Sep. 30, 2013
Office Consolidation [Member]
Sep. 30, 2013
Offshore Divestiture [Member]
Sep. 30, 2012
Offshore Divestiture [Member]
Dec. 31, 2012
Offshore Divestiture [Member]
Sep. 30, 2013
Non-Cancellable Operating Lease Agreements [Member]
Office Consolidation [Member]
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
Restructuring costs incurred to date
 
 
$ 130 
 
 
$ 196 
 
Restructuring charges
$ 4 
$ 50 
 
$ 0 
$ 0 
 
$ 50 
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 9 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Restructuring Cost and Reserve [Line Items]
 
 
Restructuring costs
$ 4 
$ 50 
Lease Obligations And Other [Member] |
Office Consolidation [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Restructuring costs
44 
Asset Impairment [Member] |
Office Consolidation [Member]
 
 
Restructuring Cost and Reserve [Line Items]
 
 
Restructuring costs
 
$ 6 
Restructuring Costs (Schedule Of The Activity And Balances Associated With Restructuring Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Dec. 31, 2011
Sep. 30, 2013
Other Current Liabilities [Member]
Dec. 31, 2012
Other Current Liabilities [Member]
Sep. 30, 2012
Other Current Liabilities [Member]
Dec. 31, 2011
Other Current Liabilities [Member]
Sep. 30, 2013
Other Long-Term Liabilities [Member]
Dec. 31, 2012
Other Long-Term Liabilities [Member]
Sep. 30, 2012
Other Long-Term Liabilities [Member]
Dec. 31, 2011
Other Long-Term Liabilities [Member]
Sep. 30, 2013
Office Consolidation [Member]
Lease Obligations And Other [Member]
Sep. 30, 2013
Office Consolidation [Member]
Employee Severance [Member]
Sep. 30, 2013
Office Consolidation [Member]
Other Current Liabilities [Member]
Lease Obligations And Other [Member]
Sep. 30, 2013
Office Consolidation [Member]
Other Current Liabilities [Member]
Employee Severance [Member]
Sep. 30, 2013
Office Consolidation [Member]
Other Long-Term Liabilities [Member]
Lease Obligations And Other [Member]
Sep. 30, 2013
Office Consolidation [Member]
Other Long-Term Liabilities [Member]
Employee Severance [Member]
Sep. 30, 2013
Offshore Divestiture [Member]
Lease Obligations [Member]
Sep. 30, 2012
Offshore Divestiture [Member]
Lease Obligations [Member]
Sep. 30, 2012
Offshore Divestiture [Member]
Employee Severance [Member]
Sep. 30, 2013
Offshore Divestiture [Member]
Other Current Liabilities [Member]
Lease Obligations [Member]
Sep. 30, 2012
Offshore Divestiture [Member]
Other Current Liabilities [Member]
Lease Obligations [Member]
Sep. 30, 2012
Offshore Divestiture [Member]
Other Current Liabilities [Member]
Employee Severance [Member]
Sep. 30, 2013
Offshore Divestiture [Member]
Other Long-Term Liabilities [Member]
Lease Obligations [Member]
Sep. 30, 2012
Offshore Divestiture [Member]
Other Long-Term Liabilities [Member]
Lease Obligations [Member]
Sep. 30, 2012
Offshore Divestiture [Member]
Other Long-Term Liabilities [Member]
Employee Severance [Member]
Restructuring Cost and Reserve [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$ 53 
$ 61 
$ 26 
$ 45 
$ 34 
$ 52 
$ 13 
$ 29 
$ 19 
$ 9 
$ 13 
$ 16 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Restructuring reserve activity
 
 
 
 
 
 
 
 
 
 
 
 
29 
(34)
18 
(34)
11 
   
(3)
(12)
(7)
(2)
(9)
(7)
(1)
(3)
   
Ending balance
$ 53 
$ 61 
$ 26 
$ 45 
$ 34 
$ 52 
$ 13 
$ 29 
$ 19 
$ 9 
$ 13 
$ 16 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other, Net (Components Of Other, Net) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Other, Net [Abstract]
 
 
 
 
Accretion of asset retirement obligations
$ 29 
$ 27 
$ 86 
$ 82 
Interest rate derivatives
(1)
(1)
(1)
15 
Foreign currency derivatives
28 
26 
(29)
25 
Foreign exchange loss (gain)
(27)
(28)
34 
(26)
Interest income
(4)
(8)
(16)
(24)
Other
(24)
(26)
Other, net
$ 34 
$ (8)
$ 83 
$ 46 
Income Taxes (Narrative) (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Jun. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Foreign earnings repatriated
 
$ 2,000,000,000 
 
 
 
Unremitted foreign earnings
6,000,000,000 
 
 
6,000,000,000 
 
Current tax expense
(50,000,000)
 
(41,000,000)
82,000,000 
8,000,000 
Unremitted earnings from subsidiaries permanently reinvested
4,800,000,000 
 
 
4,800,000,000 
 
Unremitted earnings from subsidiaries not to be permanently reinvested
1,200,000,000 
 
 
1,200,000,000 
 
Deferred tax liabilities, taxes on unremitted foreign earnings
550,000,000 
 
 
550,000,000 
 
Repatriated Earnings [Member]
 
 
 
 
 
Current tax expense
 
$ 100,000,000 
 
 
 
Income Taxes (Schedule Of Effective Income Tax Reconciliation) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Income Taxes [Abstract]
 
 
 
 
Total income tax expense (benefit)
$ 210 
$ (442)
$ (99)
$ 12 
U.S. statutory income tax rate
35.00% 
(35.00%)
(35.00%)
35.00% 
State income taxes
1.00% 
(1.00%)
(3.00%)
(1.00%)
Taxation on Canadian operations
(5.00%)
(1.00%)
9.00% 
(14.00%)
Other
2.00% 
(1.00%)
(1.00%)
(13.00%)
Effective income tax rate
33.00% 
(38.00%)
(30.00%)
7.00% 
Earnings (Loss) Per Share (Earnings Per Share Computations) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Earnings (Loss) Per Share [Abstract]
 
 
 
 
Earnings (loss) from continuing operations, Earnings
$ 429 
$ (719)
$ (227)
$ 172 
Earnings (loss) from continuing operations, Common Shares
406 
405 
406 
404 
Attributable to participating securities, Earnings
(4)
(1)
(2)
(2)
Attributable to participating securities, Common Shares
(4)
(5)
(4)
(4)
Basic earnings (loss) per share, Earnings
425 
(720)
(229)
170 
Basic earnings per share, Common Shares
402 
400 
402 
400 
Basic earnings (loss) per share, Earnings per Share
$ 1.06 
$ (1.80)
$ (0.57)
$ 0.42 
Dilutive effect of potential common shares issuable, Common Shares
 
 
Diluted earnings (loss) per share, Earnings
$ 425 
$ (720)
$ (229)
$ 170 
Diluted earnings (loss) per share, Common Shares
403 
400 
402 
401 
Diluted earnings (loss) per share, Earnings per Share
$ 1.05 
$ (1.80)
$ (0.57)
$ 0.42 
Antidilutive securities excluded from computation of earnings per share, amount
7.5 
9.0 
7.6 
8.9 
Other Comprehensive Earnings (Components Of Other Comprehensive Earnings) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Foreign currency translation:
 
 
 
 
 
Beginning accumulated foreign currency translation
$ 1,542 
$ 1,783 
$ 1,996 
$ 1,802 
 
Change in cumulative translation adjustment
182 
325 
(294)
305 
 
Income tax benefit (expense)
(9)
(14)
13 
(13)
 
Ending accumulated foreign currency translation
1,715 
2,094 
1,715 
2,094 
 
Pension and postretirement benefit plans:
 
 
 
 
 
Beginning accumulated pension and postretirement benefits
(216)
(218)
(225)
(227)
 
Recognition of net actuarial loss and prior service cost in earnings
1
1
18 1
19 1
 
Income tax benefit (expense)
(3)
(3)
(6)
(7)
 
Ending accumulated pension and postretirement benefits
(213)
(215)
(213)
(215)
 
Accumulated other comprehensive earnings, net of tax
$ 1,502 
$ 1,879 
$ 1,502 
$ 1,879 
$ 1,771 
Supplemental Information To Statements Of Cash Flows (Schedule Of Supplemental To Cash Flow Information) (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Net change in working capital accounts:
 
 
Accounts receivable
$ (287)
$ 275 
Other current assets
72 
(234)
Accounts payable
127 
77 
Revenues and royalties payable
56 
(34)
Other current liabilities
(72)
(36)
Net change in working capital
(104)
48 
Interest paid (net of capitalized interest)
342 
260 
Income taxes paid (received)
$ (2)
$ 88 
Short-Term Investments (Components Of Short-Term Investments) (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2012
Schedule of Investments [Line Items]
 
Short-term investments
$ 2,343 
Canadian Treasury, Agency And Provincial Securities [Member]
 
Schedule of Investments [Line Items]
 
Short-term investments
1,865 
U.S. Treasuries [Member]
 
Schedule of Investments [Line Items]
 
Short-term investments
429 
Other
 
Schedule of Investments [Line Items]
 
Short-term investments
$ 49 
Accounts Receivable (Schedule Of Components Of Accounts Receivable) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Joint interest billings
$ 389 
$ 270 
Other
53 
72 
Gross accounts receivable
1,531 
1,255 
Allowance for doubtful accounts
(11)
(10)
Net accounts receivable
1,520 
1,245 
Oil, Gas And NGL Sales [Member]
 
 
Gross accounts receivable
942 
752 
Marketing And Midstream Revenues [Member]
 
 
Gross accounts receivable
$ 147 
$ 161 
Property And Equipment (Schedule Of Asset Impairments) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
$ 7 
$ 1,128 
$ 1,960 
$ 1,128 
Gross [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
1,960 
1,128 
Gross [Member] |
U.S. Oil And Gas Assets [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
1,110 
1,106 
Gross [Member] |
Canada Oil And Gas Assets [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
843 
 
Gross [Member] |
Midstream Assets [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
22 
Net Of Tax [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
1,343 
719 
Net Of Tax [Member] |
U.S. Oil And Gas Assets [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
707 
705 
Net Of Tax [Member] |
Canada Oil And Gas Assets [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
632 
 
Net Of Tax [Member] |
Midstream Assets [Member]
 
 
 
 
Impaired Long-Lived Assets Held and Used [Line Items]
 
 
 
 
Asset impairments
 
 
$ 4 
$ 14 
Goodwill (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Goodwill [Abstract]
 
Decrease in goodwill due to foreign currency translation adjustment
$ 99 
Decrease in goodwill due to sale of certain midstream assets
$ 26 
Debt (Details) (USD $)
In Billions, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Sep. 30, 2013
Sep. 30, 2013
Senior Credit Facility [Member]
Sep. 30, 2013
Maximum [Member]
Foreign earnings repatriated
$ 2.0 
 
 
 
Repayment of commercial paper
2.0 
 
 
 
Credit Facility, borrowing capacity
 
3.0 
 
 
Outstanding Senior Credit Facility borrowings
 
 
 
Debt, maturity date
 
 
Oct. 24, 2018 
 
Debt-to-capitalization ratio
 
0.224 
 
0.65 
Outstanding commercial paper
 
$ 1.6 
 
 
Average borrowing rate on commercial paper borrowings
 
0.27% 
 
 
Asset Retirement Obligations (Summary Of Changes In Asset Retirement Obligations) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Asset Retirement Obligations [Abstract]
 
 
 
 
 
Asset retirement obligations as of beginning of period
 
 
$ 2,095 
$ 1,563 
 
Liabilities incurred
 
 
88 
60 
 
Liabilities settled
 
 
(46)
(57)
 
Revision of estimated obligation
 
 
104 
411 
 
Liabilities assumed by others
 
 
(15)
(18)
 
Accretion expense on discounted obligation
29 
27 
86 
82 
 
Foreign currency translation adjustment
 
 
(44)
35 
 
Asset retirement obligations as of end of period
2,268 
2,076 
2,268 
2,076 
 
Less current portion
107 
67 
107 
67 
 
Asset retirement obligations, long-term
$ 2,161 
$ 2,009 
$ 2,161 
$ 2,009 
$ 1,996 
Retirement Plans (Schedule Of Net Periodic Benefit Cost And Other Comprehensive Income For Pension And Other Postretirement Benefit Plans) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Pension Benefits [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
$ 9 
$ 11 
$ 27 
$ 32 
Interest cost
13 
15 
39 
45 
Expected return on plan assets
(16)
(16)
(47)
(48)
Amortization of prior service cost
1
1
1
1
Net actuarial loss (gain)
1
1
16 1
18 1
Net periodic benefit cost
12 2
17 2
38 2
50 2
Postretirement Benefits [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
 
 
Interest cost
 
 
Amortization of prior service cost
 
 
 
(1)1
Net actuarial loss (gain)
 
$ (1)1
$ (1)1
$ (1)1
Stockholders' Equity (Narrative) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Jun. 30, 2013
Mar. 31, 2013
Sep. 30, 2013
Sep. 30, 2012
Stockholders' Equity [Abstract]
 
 
 
 
Payments of ordinary dividends
 
 
$ 259 
$ 242 
Dividends paid per share
$ 0.22 
$ 0.20 
 
$ 0.20 
Commitments And Contingencies (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Jun. 20, 2011
Trevor Rees-Jones [Member]
Jun. 20, 2011
Devon [Member]
Issued court judgment
 
$ 196 
$ 133 
Recorded liability due to court judgment
133 
 
 
Recorded receivable due to indemnification agreement
$ 133 
 
 
Fair Value Measurements (Schedule Of Carrying Value And Fair Value Measurement Information For Financial Assets And Liabilities) (Details) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
$ 282 
$ 425 
 
 
Derivatives, liabilities
(101)
(32)
 
 
Carrying Amount [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Cash equivalents
3,592 
4,149 
 
 
Debt
(10,068)
(11,644)
 
 
Total Fair Value [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Cash equivalents
3,592 
4,149 
 
 
Debt
(10,926)
(13,435)
 
 
Level 1 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Cash equivalents
13 
32 
 
 
Level 2 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Cash equivalents
3,579 
4,117 
 
 
Debt
(10,926)
(13,435)
 
 
Short-Term Investments [Member] |
Carrying Amount [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Investments
 
2,343 
 
 
Short-Term Investments [Member] |
Total Fair Value [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Investments
 
2,343 
 
 
Short-Term Investments [Member] |
Level 1 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Investments
 
429 
 
 
Short-Term Investments [Member] |
Level 2 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Investments
 
1,914 
 
 
Long-Term Investments [Member] |
Carrying Amount [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Investments
62 
64 
 
 
Long-Term Investments [Member] |
Total Fair Value [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Investments
62 
64 
 
 
Long-Term Investments [Member] |
Level 3 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Investments
62 
64 
64 
84 
Commodity Derivatives [Member] |
Carrying Amount [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
282 
401 
 
 
Derivatives, liabilities
(101)
(32)
 
 
Commodity Derivatives [Member] |
Total Fair Value [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
282 
401 
 
 
Derivatives, liabilities
(101)
(32)
 
 
Commodity Derivatives [Member] |
Level 2 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
282 
401 
 
 
Derivatives, liabilities
(101)
(32)
 
 
Interest Rate Derivatives [Member] |
Carrying Amount [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
 
23 
 
 
Interest Rate Derivatives [Member] |
Total Fair Value [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
 
23 
 
 
Interest Rate Derivatives [Member] |
Level 2 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
 
23 
 
 
Foreign Currency Derivatives [Member] |
Carrying Amount [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
 
 
 
Foreign Currency Derivatives [Member] |
Total Fair Value [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
 
 
 
Foreign Currency Derivatives [Member] |
Level 2 Inputs [Member]
 
 
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
Derivatives, assets
 
$ 1 
 
 
Fair Value Measurements (Summary Of Changes In Level 3 Fair Value Measurements) (Details) (Level 3 Inputs [Member], Long-Term Investments [Member], USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Level 3 Inputs [Member] |
Long-Term Investments [Member]
 
 
Long-term investments balance at beginning of period
$ 64 
$ 84 
Redemptions of principal
(2)
(20)
Long-term investments balance at end of period
$ 62 
$ 64 
Segment information (Condensed Statements Of Comprehensive Earnings And Balance Sheets Of Reportable Segments) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Segment Reporting Information [Line Items]
 
 
 
 
 
Oil, gas and NGL sales
$ 2,341 
$ 1,738 
$ 6,367 
$ 5,270 
 
Oil, gas and NGL derivatives
(141)
(295)
(95)
515 
 
Marketing and midstream revenues
520 
422 
1,511 
1,136 
 
Depreciation, depletion and amortization
691 
716 
2,069 
2,080 
 
Interest expense
104 
110 
322 
296 
 
Asset impairments
1,128 
1,960 
1,128 
 
Earnings (loss) from continuing operations before income taxes
639 
(1,161)
(326)
184 
 
Total income tax expense (benefit)
210 
(442)
(99)
12 
 
Earnings (loss) from continuing operations
429 
(719)
(227)
172 
 
Property and equipment, net
27,962 
27,146 
27,962 
27,146 
27,316 
Total assets
40,846 
43,548 
40,846 
43,548 
43,326 
Capital expenditures
1,693 
1,968 
5,027 
6,283 
 
United States [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Oil, gas and NGL sales
1,573 
1,144 
4,377 
3,394 
 
Oil, gas and NGL derivatives
(153)
(290)
(82)
520 
 
Marketing and midstream revenues
509 
415 
1,436 
1,064 
 
Depreciation, depletion and amortization
492 
478 
1,426 
1,348 
 
Interest expense
94 
94 
284 
249 
 
Asset impairments
1,128 
1,117 
1,128 
 
Earnings (loss) from continuing operations before income taxes
410 
(1,169)
208 
91 
 
Total income tax expense (benefit)
160 
(438)
59 
 
Earnings (loss) from continuing operations
250 
(731)
149 
85 
 
Property and equipment, net
19,462 
18,306 
19,462 
18,306 
 
Total assets
24,668 
24,425 
24,668 
24,425 
 
Capital expenditures
1,256 
1,586 
3,650 
5,007 
 
Canada [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Oil, gas and NGL sales
768 
594 
1,990 
1,876 
 
Oil, gas and NGL derivatives
12 
(5)
(13)
(5)
 
Marketing and midstream revenues
11 
75 
72 
 
Depreciation, depletion and amortization
199 
238 
643 
732 
 
Interest expense
10 
16 
38 
47 
 
Asset impairments
 
 
843 
 
 
Earnings (loss) from continuing operations before income taxes
229 
(534)
93 
 
Total income tax expense (benefit)
50 
(4)
(158)
 
Earnings (loss) from continuing operations
179 
12 
(376)
87 
 
Property and equipment, net
8,500 
8,840 
8,500 
8,840 
 
Total assets
16,178 
19,123 
16,178 
19,123 
 
Capital expenditures
$ 437 
$ 382 
$ 1,377 
$ 1,276 
 
Subsequent Event (Details) (Subsequent Event [Member], USD $)
In Millions, unless otherwise specified
9 Months Ended 0 Months Ended
Sep. 30, 2013
Oct. 21, 2013
Devon Energy Corporation [Member]
Forecast [Member]
General Partner Entity [Member]
Oct. 21, 2013
Devon Energy Corporation [Member]
Forecast [Member]
Master Limited Partnership [Member]
Oct. 21, 2013
Current Crosstex Energy, Inc. [Member]
Forecast [Member]
General Partner Entity [Member]
Oct. 21, 2013
Current Crosstex Energy, L.P. [Member]
Forecast [Member]
Master Limited Partnership [Member]
Oct. 21, 2013
General Partner Entity [Member]
Forecast [Member]
Devon Holdings [Member]
Oct. 21, 2013
General Partner Entity [Member]
Forecast [Member]
Master Limited Partnership [Member]
Oct. 21, 2013
Master Limited Partnership [Member]
Forecast [Member]
Devon Holdings [Member]
Oct. 21, 2013
Master Limited Partnership and General Partnership [Member]
Forecast [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
Subsequent event date
Oct. 21, 2013 
 
 
 
 
 
 
 
 
Ownership percentage
 
70.00% 
53.00% 
30.00% 
40.00% 
50.00% 
7.00% 
50.00% 
 
Devon Corporation contribution to partnership
 
 
 
 
 
 
 
 
$ 100