DEVON ENERGY CORP/DE, 10-Q filed on 8/6/2010
Quarterly Report
Document and Entity Information
Share data in Millions, except Per Share data
Jul. 30, 2010
6 Months Ended
Jun. 30, 2010
Document Type
 
10-Q 
Document Period End Date
 
06/30/2010 
Amendment Flag
 
FALSE 
Entity Registrant Name
 
DEVON ENERGY CORP/DE 
Entity Central Index Key
 
0001090012 
Entity Current Reporting Status
 
Yes 
Entity Voluntary Filers
 
No 
Current Fiscal Year End Date
 
12/31 
Document Fiscal Year Focus
 
2010 
Entity Filer Category
 
Large Accelerated Filer 
Document Fiscal Period Focus
 
Q2 
Entity Common Stock, Shares Outstanding (in shares)
435.0 
 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions
Jun. 30, 2010
Dec. 31, 2009
Current assets:
 
 
Cash and cash equivalents
$ 2,174 
$ 646 
Accounts receivable
1,205 
1,208 
Current assets held for sale
1,020 
657 
Other current assets
650 
481 
Total current assets
5,049 
2,992 
Oil and gas, based on full cost accounting:
 
 
Subject to amortization
51,851 
52,352 
Not subject to amortization
3,239 
4,078 
Total oil and gas
55,090 
56,430 
Other
4,229 
4,045 
Total property and equipment, at cost
59,319 
60,475 
Less accumulated depreciation, depletion and amortization
(42,478)
(41,708)
Property and equipment, net
16,841 
18,767 
Goodwill
5,892 
5,930 
Long-term assets held for sale
1,340 
1,250 
Other long-term assets
849 
747 
Total assets
29,971 
29,686 
Current liabilities:
 
 
Accounts payable - trade
1,133 
1,137 
Revenues and royalties due to others
466 
486 
Short-term debt
53 
1,432 
Current liabilities associated with assets held for sale
548 
234 
Other current liabilities
1,202 
513 
Total current liabilities
3,402 
3,802 
Long-term debt
5,571 
5,847 
Asset retirement obligations
1,346 
1,418 
Liabilities associated with assets held for sale
189 
213 
Other long-term liabilities
919 
937 
Deferred income taxes
1,714 
1,899 
Stockholders' equity:
 
 
Common stock of $0.10 par value. Authorized 1.0 billion shares; issued 440.4 million and 446.7 million shares in 2010 and 2009, respectively
44 
45 
Additional paid-in capital
6,186 
6,527 
Retained earnings
9,369 
7,613 
Accumulated other comprehensive earnings
1,296 
1,385 
Treasury stock, at cost. 1.1 million shares in 2010
(65)
 
Total stockholders' equity
16,830 
15,570 
Commitments and contingencies (Note 12)
 
 
Total liabilities and stockholders' equity
$ 29,971 
$ 29,686 
CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) (USD $)
Share data in Millions, except Per Share data
Jun. 30, 2010
Dec. 31, 2009
Common stock, par value (in dollars per share)
$ 0.10 
$ 0.10 
Common stock, shares authorized (in shares)
1,000.0 
1,000.0 
Common stock, shares issued (in shares)
440.4 
446.7 
Treasury stock, shares
1.1 
 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data
3 Months Ended
Jun. 30, 2010
6 Months Ended
Jun. 30, 2010
3 Months Ended
Jun. 30, 2009
6 Months Ended
Jun. 30, 2009
Revenues:
 
 
 
 
Oil, gas and NGL sales
$ 1,782 
$ 3,852 
$ 1,450 
$ 2,825 
Oil and gas derivatives
45 
665 
13 
167 
Marketing and midstream revenues
405 
935 
359 
730 
Total revenues
2,232 
5,452 
1,822 
3,722 
Expenses and other, net:
 
 
 
 
Lease operating expenses
442 
856 
410 
850 
Taxes other than income taxes
92 
193 
79 
168 
Marketing and midstream operating costs and expenses
280 
677 
230 
454 
Depreciation, depletion and amortization of oil and gas properties
426 
852 
430 
990 
Depreciation and amortization of non-oil and gas properties
63 
126 
74 
144 
Accretion of asset retirement obligations
24 
50 
23 
46 
General and administrative expenses
130 
268 
173 
336 
Restructuring costs
(8)
(8)
 
 
Interest expense
111 
197 
90 
173 
Non-oil and gas financial instruments
81 
66 
(10)
(15)
Reduction of carrying value of oil and gas properties
 
 
 
6,408 
Other, net
(22)
(26)
24 
31 
Total expenses and other, net
1,619 
3,251 
1,523 
9,585 
Earnings (loss) from continuing operations before income taxes
613 
2,201 
299 
(5,863)
Income tax expense (benefit):
 
 
 
 
Current
707 
1,006 
58 
50 
Deferred
(446)
(231)
51 
(2,221)
Total income tax expense (benefit)
261 
775 
109 
(2,171)
Earnings (loss) from continuing operations
352 
1,426 
190 
(3,692)
Discontinued operations:
 
 
 
 
Earnings (loss) from discontinued operations before income taxes
473 
610 
143 
77 
Discontinued operations income tax expense
119 
138 
19 
30 
Earnings (loss) from discontinued operations
354 
472 
124 
47 
Net earnings (loss)
706 
1,898 
314 
(3,645)
Basic earnings (loss) from continuing operations per share
0.79 
3.20 
0.43 
(8.32)
Basic earnings (loss) from discontinued operations per share
0.80 
1.06 
0.28 
0.11 
Basic net earnings (loss) per share
1.59 
4.26 
0.71 
(8.21)
Diluted earnings (loss) from continuing operations per share
0.79 
3.19 
0.42 
(8.32)
Diluted earnings (loss) from discontinued operations per share
0.79 
1.05 
0.28 
0.11 
Diluted net earnings (loss) per share
$ 1.58 
$ 4.24 
$ 0.70 
$ (8.21)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS (LOSS) (USD $)
In Millions
3 Months Ended
Jun. 30, 2010
6 Months Ended
Jun. 30, 2010
3 Months Ended
Jun. 30, 2009
6 Months Ended
Jun. 30, 2009
Net earnings (loss)
$ 706 
$ 1,898 
$ 314 
$ (3,645)
Foreign currency translation:
 
 
 
 
Change in cumulative translation adjustment
(326)
(104)
467 
306 
Foreign currency translation income tax (expense) benefit
17 
(30)
(19)
Foreign currency translation total
(309)
(99)
437 
287 
Pension and postretirement benefit plans:
 
 
 
 
Recognition of net actuarial loss and prior service cost in earnings
16 
12 
24 
Pension and postretirement benefit plans income tax expense
(3)
(6)
(4)
(8)
Pension and postretirement benefit plans total
10 
16 
Other comprehensive earnings (loss), net of tax
(304)
(89)
445 
303 
Comprehensive earnings (loss)
$ 402 
$ 1,809 
$ 759 
$ (3,342)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $)
In Millions
3 Months Ended
Jun. 30, 2010
6 Months Ended
Jun. 30, 2010
3 Months Ended
Jun. 30, 2009
6 Months Ended
Jun. 30, 2009
Balance,
 
$ 15,570 
 
$ 17,060 
Net earnings (loss)
706 
1,898 
314 
(3,645)
Other comprehensive earnings (loss), net of tax
(304)
(89)
445 
303 
Stock option exercises
 
15 
 
Common stock repurchased
 
(503)
 
(11)
Common stock dividends
 
(142)
 
(142)
Share-based compensation
 
75 
 
103 
Share-based compensation tax benefits
 
 
Balance,
16,830 
16,830 
13,682 
13,682 
Stockholders' Equity, Ending Balance
16,830 
16,830 
 
 
Common Shares [Member]
 
 
 
 
Balance,
 
45 
 
44 
Balance, shares,
 
447 
 
444 
Common stock retired
 
(1)
 
 
Common stock retired, shares
 
(7)
 
 
Balance, shares,
 
447 
 
444 
Balance,
 
45 
 
44 
Additional Paid-in Capital
 
 
 
 
Balance,
 
6,527 
 
6,257 
Stock option exercises
 
15 
 
Common stock retired
 
(437)
 
(11)
Share-based compensation
 
75 
 
103 
Share-based compensation tax benefits
 
 
Balance,
 
6,527 
 
6,363 
Retained Earnings
 
 
 
 
Balance,
 
7,613 
 
10,376 
Net earnings (loss)
 
1,898 
 
(3,645)
Common stock dividends
 
(142)
 
(142)
Balance,
 
7,613 
 
6,589 
Accumulated Other Comprehensive Earnings
 
 
 
 
Balance,
 
1,385 
 
383 
Other comprehensive earnings (loss), net of tax
 
(89)
 
303 
Balance,
 
1,385 
 
686 
Treasury Stock
 
 
 
 
Balance,
 
 
 
 
Common stock repurchased
 
(503)
 
(11)
Common stock retired
 
438 
 
11 
Balance,
 
$ (65)
 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions
6 Months Ended
Jun. 30,
2010
2009
Cash and Cash Equivalents, Period Increase (Decrease) [Abstract]
 
 
Cash flows from operating activities:
 
 
Earnings (loss) from continuing operations
$ 1,426 
$ (3,692)
Adjustments to reconcile earnings (loss) from continuing operations to net cash provided by operating activities:
 
 
Depreciation, depletion and amortization
978 
1,134 
Deferred income tax benefit
(231)
(2,221)
Reduction of carrying value of oil and gas properties
 
6,408 
Unrealized change in fair value of financial instruments
(231)
71 
Other noncash charges
81 
125 
Net decrease in working capital
581 
52 
Decrease in long-term other assets
14 
25 
Increase in long-term other liabilities
21 
Cash from operating activities - continuing operations
2,619 
1,923 
Cash from operating activities - discontinued operations
273 
154 
Net cash from operating activities
2,892 
2,077 
Cash flows from investing activities:
 
 
Proceeds from property and equipment divestitures
4,129 
Capital expenditures
(3,221)
(2,945)
Redemptions of long-term investments
18 
Cash from investing activities - continuing operations
926 
(2,939)
Cash from investing activities - discontinued operations
429 
(254)
Net cash from investing activities
1,355 
(3,193)
Cash flows from financing activities:
 
 
Proceeds from borrowings of long-term debt, net of issuance costs
 
1,187 
Net commercial paper repayments
(1,432)
325 
Debt repayments
(350)
(1)
Proceeds from stock option exercises
15 
Repurchases of common stock
(430)
 
Dividends paid on common stock
(142)
(142)
Excess tax benefits related to share-based compensation
Net cash from financing activities
(2,333)
1,383 
Effect of exchange rate changes on cash
(9)
Net increase in cash and cash equivalents
1,905 
272 
Cash and cash equivalents at beginning of period (including cash related to assets held for sale)
1,011 
384 
Cash and cash equivalents at end of period (including cash related to assets held for sale)
$ 2,916 
$ 656 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

1.     Summary of Significant Accounting Policies 

 

The accompanying unaudited consolidated 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 consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes included in Devon's 2009 Annual Report on Form 10-K. 

 

The unaudited interim consolidated financial statements furnished in this report reflect all adjustments that are, in the opinion of management, necessary to a fair statement of Devon's financial position as of June 30, 2010 and Devon's results of operations and cash flows for the three-month and six-month periods ended June 30, 2010 and 2009.

Accounts Receivable
Accounts Receivable

2.  Accounts Receivable

 

The components of accounts receivable include the following:

 

 

June 30, 2010

December 31, 2009

 

(In millions)

Oil, gas and NGL sales

$                   711

$                   752

Joint interest billings

                     214

                     151

Marketing and midstream revenues

                     146

                     188

Production tax credits

                     125

                     110

Other

                       19

                       19

    Gross accounts receivable

                  1,215

                  1,220

Allowance for doubtful accounts

                     (10)

                     (12)

    Net accounts receivable

$                1,205

$                1,208

Derivative Financial Instruments
Derivative Financial Instruments

3.  Derivative Financial Instruments

 

Devon periodically enters into commodity and interest rate derivative financial instruments. These instruments are used to manage the inherent uncertainty of future revenues due to oil and gas price volatility and to manage Devon's exposure to interest rate volatility. Devon has elected not to designate any of its derivative instruments for hedge accounting treatment.

 

The following table presents the fair values of derivative assets and liabilities included in the accompanying consolidated balance sheets.

 

 

 

Balance Sheet Caption

Asset Derivatives

Liability Derivatives

 

 

(In millions)

June 30, 2010:

 

 

 

  Gas price swaps

Other current assets

$      323

$        

  Gas price swaps

Other long-term assets

             4

          

  Gas price collars

Other current assets

           19

          

  Gas basis swaps

Other current assets

           15

          

  Oil price collars

Other current assets

           55

          

  Oil price collars

Other long-term assets

           35

          

  Interest rate swaps

Other current assets

           39

          

  Interest rate swaps

Other long-term assets

           45

          

  Total derivatives

$      535

$        

 


 

 

 

Balance Sheet Caption

Asset Derivatives

Liability Derivatives

 

 

(In millions)

December 31, 2009:

 

 

 

  Gas price swaps

Other current assets

$      169

$        

  Gas basis swaps

Other current assets

             3

          

  Oil price collars

Other current liabilities

          

           38

  Interest rate swaps

Other current assets

           39

          

  Interest rate swaps

Other long-term assets

         131

          

  Total derivatives

$      342

$         38

 

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

 

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2010

2009

2010

2009

 

(In millions)

Cash settlements:

 

 

 

 

    Gas price swaps (1)

$             239

$               

$             337

$               

    Gas price collars (1)

                  12

               114

                  13

               232

    Gas basis swaps (1)

                    1

                 

                   (2)

                 

    Interest rate swaps (2)

                    4

                    5

                  20

                  21

    Total cash settlements

               256

               119

               368

               253

 

 

 

 

 

Unrealized gains (losses):

 

 

 

 

    Gas price swaps (1)

              (332)

                 

               158

                 

    Gas price collars (1)

                (16)

              (101)

                  19

                (65)

    Gas basis swaps (1)

                  17

                 

                  12

                 

    Oil price collars (1)

               124

                 

               128

                 

    Interest rate swaps (2)

                (85)

                    5

                (86)

                   (6)

    Total unrealized gains (losses)

              (292)

                (96)

               231

                (71)

Net gain (loss) recognized on statement of operations.

$              (36)

$               23

$             599

$             182

________________

 

Other Current Assets
Other Current Assets

4.     Other Current Assets

 

  The components of other current assets include the following:

 

 

June 30, 2010

December 31, 2009

 

(In millions)

Derivative financial instruments

$                  451

$                  211

Inventories

                     138

                     182

Other

                       61

                       88

    Other current assets

$                  650

$                  481

Property and Equipment
Property and Equipment

5.       Property and Equipment

       

Offshore Divestitures

 

        In November 2009, Devon announced plans to reposition itself strategically as a high-growth, North America onshore exploration and production company. As part of this strategic repositioning, Devon is bringing forward the value of its offshore assets by divesting them. 

 

Closed Transactions

 

The following table presents Devon's offshore divestiture transactions that closed in the first six months of 2010. Gross proceeds represent contract prices based upon a January 1, 2010 effective date for the Gulf of Mexico divestitures and a May 1, 2010 effective date for the China – Panyu divestiture. After-tax proceeds represent gross proceeds adjusted for customary purchase price adjustments, selling costs and income taxes. The purchase price adjustments consist primarily of net cash flow subsequent to the effective date of the divestitures. Proved reserves in the following table are based upon estimated proved reserves as of the divestiture dates.

 

 

Gross Proceeds

After-Tax Proceeds

Proved Reserves

 

(In millions)

(MMBoe)

(Unaudited)

Gulf of Mexico (continuing operations)

    $       4,150

    $        3,212

                        91

China – Panyu (discontinued operations)

                515

                  405

                        13

     Total

    $        4,665

    $         3,617

                      104

 

        Proceeds from these divestitures are being used to retire debt and repurchase Devon common shares. Additionally, Devon is  using divestiture proceeds to fund North America Onshore exploration and development opportunities, including a joint-venture investment in the Pike oil sands discussed below.

 

Under full cost accounting rules, sales or other dispositions of oil and gas properties are generally accounted for as adjustments to capitalized costs, with no recognition of gain or loss. However, if not recognizing a gain or loss on the disposition would otherwise significantly alter the relationship between a cost center's capitalized costs and proved reserves, then a gain or loss must be recognized.

 

The Gulf of Mexico divestitures presented above did not significantly alter such relationship for Devon's United States cost center. Therefore, Devon did not recognize a gain in connection with the Gulf of Mexico divestitures. Panyu was Devon's only producing property in its China cost center. As a result, Devon recognized a $308 million ($235 million after-tax) gain in connection with the Panyu divestiture. This gain is included in "earnings from discontinued operations" in the accompanying 2010 consolidated statements of operations.

 

Pending Transactions

 

Devon has entered into agreements to sell its Azerbaijan and Brazil assets for $5.2 billion. Devon has received the necessary government approvals for the Azerbaijan transaction, which is now scheduled to close on August 16, 2010. The Brazil transaction continues to progress through the approval process of the Brazilian government and is on track to close around the end of 2010. Devon expects to record gains when such transactions close. Devon has also entered into an agreement to sell its remaining assets in China for $0.1 billion.

 

Deepwater Drilling Rigs

       

As part of its offshore operations, Devon was leasing three deepwater drilling rigs. The Seadrill West Sirius and Ocean Endeavor deepwater drilling rigs were used in Devon's Gulf of Mexico operations. The Transocean Deepwater Discovery is being used in Devon's operations in Brazil.

 

In conjunction with the deepwater Gulf of Mexico divestiture that closed in the second quarter of 2010, the buyer assumed Devon's lease and remaining commitments for the Seadrill West Sirius rig. Subsequent to closing all its Gulf of Mexico divestitures, Devon agreed to pay $31 million to the owner of the Ocean Endeavor rig to terminate the lease. The $31 million lease termination cost is included in oil and gas property and equipment in the accompanying June 30, 2010, consolidated balance sheet. The buyer of Devon's assets in Brazil will assume Devon's lease and remaining commitments for the Transocean Deepwater Discovery rig when the divestiture transaction closes.

 

Oil Sands Joint Venture

 

In conjunction with certain offshore divestitures in the second quarter of 2010, Devon formed a heavy oil joint venture to operate and develop the Pike oil sands leases in Alberta, Canada. As a result, Devon acquired a 50 percent interest in the Pike oil sands leases for $500 million. Devon will also fund $155 million of Canadian dollar capital costs on behalf of its joint-venture partner in the form of a non-interest bearing promissory note. The majority of the capital costs are expected to be paid during 2011 and 2012. See Note 8 for more information regarding the promissory note.

Goodwill
Goodwill

6.     Goodwill

 

During the first six months of 2010, Devon's Canadian goodwill decreased $38 million. This decrease was entirely due to foreign currency translation.

Other Current Liabilities
Other Current Liabilities

7.     Other Current Liabilities   

 

  The components of other current liabilities include the following: 

 

 

June 30, 2010

December 31, 2009

 

(In millions)

Income taxes payable

$                  752

$                     40

Accrued interest

                     113

                     120

Other

                     337

                     353

    Other current liabilities

$               1,202

$                  513

Debt
Debt

8.     Debt    

 

Commercial Paper

 

During the first six months of 2010, Devon repaid $1.4 billion of commercial paper borrowings primarily with proceeds received from its Gulf of Mexico property divestitures.

 

In May 2010, Devon reduced the maximum allowed borrowings under its commercial paper program from $2.85 billion to approximately $2.2 billion. At June 30, 2010, Devon had no outstanding commercial paper borrowings.

 

$350 Million 7.25% Senior Notes Due October 1, 2011

 

On June 25, 2010, Devon redeemed $350 million of 7.25% senior notes prior to their scheduled maturity of October 1, 2011, primarily with proceeds received from its Gulf of Mexico divestitures. The notes were redeemed for $384 million, which represented 100 percent of the principal amount, a make-whole premium of $28 million and $6 million of accrued and unpaid interest. On the date of redemption, these notes also had an unamortized premium of $9 million. The $28 million make-whole premium and $9 million amortization of the remaining premium are included in interest expense in the accompanying 2010 consolidated statements of operations. 

 

Non-Interest Bearing Promissory Note

 

On June 29, 2010, Devon issued a four-year $155 million Canadian dollar non-interest bearing promissory note in connection with the formation of the Pike oil sands joint venture described in Note 5. The present value of the note was $139 million on the issue date based upon an effective interest rate of 3.125%. Of the $139 million, $53 million is presented as short-term debt and the remainder is presented as long-term debt in the accompanying June 30, 2010, consolidated balance sheet.

 

Credit Lines

 

In the second quarter of 2010, Devon cancelled its $700 million Short-Term Facility prior to its November 2, 2010  maturity date. Devon incurred no cost to cancel the facility and will avoid paying the facility fee that pertains to the cancellation period.

 

Devon has a syndicated, unsecured revolving line of credit that can be accessed to provide liquidity as needed. The following schedule summarizes the capacity of Devon's Senior Credit Facility by maturity date, as well as its available capacity as of June 30, 2010 (in millions).

 

Senior Credit Facility:

 

  April 7, 2012 maturity

$          500

  April 7, 2013 maturity

         2,150

Total Senior Credit Facility

         2,650

Less:

 

  Outstanding Senior Credit Facility borrowings

              

  Outstanding commercial paper borrowings

              

  Outstanding letters of credit

               85

Total available capacity

$       2,565

 

The Senior Credit Facility contains only one material financial covenant. This covenant requires Devon's ratio of total funded debt to total capitalization to be less than 65%. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the consolidated financial statements. Also, total capitalization is adjusted to add back noncash financial writedowns such as full cost ceiling impairments or goodwill impairments. As of June 30, 2010, Devon was in compliance with this covenant. Devon's debt-to-capitalization ratio at June 30, 2010, as calculated pursuant to the terms of the agreement, was 16.1%.

 

Interest Expense

 

The following schedule includes the components of interest expense.

 

 

Three Months

Ended June 30,

Six Months

Ended June 30,

 

 

2010

2009

2010

2009

 

 

(In millions)

Interest based on debt outstanding

$   104

$    110

$    209

$    218

Capitalized interest

     (14)

       (22)

       (35)

       (49)

Early retirement of debt

       19

        

        19

       

Other

         2

          2

          4

           4

    Total

$   111

$      90

$    197

$     173

Asset Retirement Obligations
Asset Retirement Obligations

9.     Asset Retirement Obligations  

 

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

 

 

Six Months

Ended June 30,

 

2010

2009

 

(In millions)

Asset retirement obligations as of beginning of period

$             1,513

$        1,387

  Liabilities incurred

25

43

  Liabilities settled

                  (71)

                   (43)

  Revision of estimated obligation

                  194

22

  Liabilities assumed by others

                (256)

  Accretion expense on discounted obligation

50

46

  Foreign currency translation adjustment

(14)

30

Asset retirement obligations as of end of period

1,441

1,485

Less current portion

95

175

Asset retirement obligations, long-term

$             1,346

$        1,310

 

During the first six months of 2010 and 2009, Devon recognized revisions to its asset retirement obligations totaling $194 million and $22 million, respectively. The primary factors causing the 2010 and 2009 increases were an overall increase in abandonment cost estimates and a decrease in the discount rate used to present value the obligations.

 

During the first six months of 2010, Devon reduced its asset retirement obligations by $256 million for those obligations that were assumed by purchasers of Devon's Gulf of Mexico oil and gas properties.

Retirement Plans
Retirement Plans

10.  Retirement Plans

 

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

 

 

Pension Benefits

Other Postretirement Benefits

 

Three Months

Ended June 30,

Six Months

Ended June 30,

Three Months

Ended June 30,

Six Months

Ended June 30,

 

2010

2009

2010

2009

2010

2009

2010

2009

 

(In millions)

Net periodic benefit cost:

 

 

 

 

 

 

 

 

  Service cost

$       8

$     11

$     16

$     22

$  

$    

$    

$    

  Interest cost

       14

       14

       28

       28

       1

         1

         2

         2

  Expected return on plan assets

        (9)

        (9)

     (18)

     (18)

    

      

      

      

  Amortization of prior service cost

         1

         1

         2

         2

    

      

      

      

  Net actuarial loss

         7

       11

       14

       22

    

      

      

      

     Net periodic benefit cost

$     21

$     28

$     42

$     56

$     1

$       1

$       2

$       2

Stockholders' Equity
Stockholders' Equity

11.  Stockholders' Equity  

 

Stock Repurchases

 

During the second quarter of 2010, Devon repurchased 7.6 million common shares under its $3.5 billion stock repurchase program for $495 million, or $65.07 per share. This program expires December 31, 2011.

 

Dividends

 

Devon paid common stock dividends of $142 million (quarterly rates of $0.16 per share) in the first six months of 2010 and 2009, respectively.

Commitments and Contingencies
Commitments and Contingencies

12.    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 that 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. However, actual amounts could differ materially from management's estimate.

 

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 costs associated with remediation. Devon's monetary exposure for environmental matters is not expected to be material.

 

Royalty Matters

 

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

 

Other Matters

 

Devon is involved in other various routine legal proceedings incidental to its business. However, to Devon's knowledge as of the date of this report, neither Devon nor its property is subject to any material pending legal proceedings.

 

Commitments

 

At the end of 2009, Devon's commitments included $0.9 billion that related to long-term lease contracts for two deepwater drilling rigs being used in the Gulf of Mexico. As discussed in Note 5, Devon no longer has lease commitments for these two rigs.

 

At the end of 2009, Devon's commitments also included $0.5 billion that related to a long-term lease contract for a deepwater drilling rig being used in Brazil. Devon's lease and remaining commitments for this rig will be assumed by the buyer of Devon's assets in Brazil when the associated divestiture transaction closes.

 

At the end of 2009, Devon's commitments also included $0.4 billion that related to leases of floating, production, storage and offloading facilities being used in the Gulf of Mexico, Brazil and China. Devon's commitments for the Gulf of Mexico and China leases were assumed by the purchasers in the first half of 2010. The Brazil lease will be assumed by the buyer when the associated divestiture transaction closes.

Fair Value Measurements
Fair Value Measurements

13.  Fair Value Measurements    

 

The following tables provide carrying value and fair value measurement information for Devon's financial assets and liabilities.

 

 

 

 

Fair Value Measurements Using:

 

Carrying Amount

Total Fair Value

Quoted Prices in Active Markets

(Level 1)

Significant Other Observable Inputs

(Level 2)

Significant Unobservable Inputs

(Level 3)

 

(In millions)

June 30, 2010 assets (liabilities):

 

 

 

 

 

  Gas price swaps

$        327

$       327

$      

$        327

$          

  Gas price collars

$           19

$         19

$      

$          19

$          

  Gas basis swaps

$           15

$         15

$      

$          15

$          

  Oil price collars

$           90

$         90

$      

$          90

$          

  Interest rate swaps

$           84

$         84

$      

$          84

$          

  Debt

$   (5,624)

$  (6,556)

$      

$   (6,417)

$       (139)

  Long-term investments

$           97

$         97

$      

$         

$           97

 

December 31, 2009 assets (liabilities):

 

 

 

 

 

  Gas price swaps

$        169

$       169

$      

$        169

$          

  Gas basis swaps

$             3

$            3

$      

$            3

$          

  Oil price collars

$         (38)

$        (38)

$      

$        (38)

$          

  Interest rate swaps

$        170

$       170

$      

$        170

$          

  Debt

$   (7,279)

$  (8,214)

$ (1,432)

$  (6,782)

$          

  Long-term investments

$        115

$       115

$      

$         

$        115

 

Devon's Level 3 fair value measurements included in the table above relate to a non-interest bearing promissory note and certain long-term investments. As discussed in Note 8, Devon issued a non-interest bearing promissory note that was recorded at its estimated present value of $139 million on the June 29, 2010 issue date. As a result, Devon's Level 3 measurements for debt increased $139 million during the first six months of 2010. The changes in the Level 3 measurements for long-term investments during the first six months of 2010 and 2009 resulted entirely of redemptions of principal.

Restructuring Costs
Restructuring Costs

14. Restructuring Costs 

 

In the fourth quarter of 2009, Devon recognized $153 million of estimated employee severance costs associated with the planned divestiture of its offshore assets that was announced in November 2009. This amount was based on estimates of the number of employees that will ultimately be impacted by the divestitures and included amounts related to cash severance costs and accelerated vesting of share-based grants. Of the $153 million total, $105 million related to Devon's U.S. Offshore operations and the remainder related to its International discontinued operations.

 

As discussed in Note 5, Devon had divested all its U.S. Offshore assets by the end of the second quarter of 2010. As a result of these divestitures and associated employee terminations, Devon decreased its estimate of employee severance costs in the second quarter of 2010 by $14 million. As a result, Devon now estimates it will incur approximately $139 million of employee severance costs. The lower estimate results primarily from more offshore employees than previously estimated receiving comparable positions with the purchaser of the properties or in Devon's U.S. Onshore operations. Of the $139 million total, $95 million relates to Devon's U.S. Offshore operations and the remainder relates to its International discontinued operations. Of the $14 million reduction recognized in the second quarter of 2010, $9 million relates to Devon's U.S. Offshore operations and the remainder relates to its International discontinued operations.

 

All cash severance and accelerated vesting of share-based grants are included in restructuring costs in the accompanying 2010 consolidated statements of operations. Amounts related to cash severance costs are accrued for in other current liabilities in the accompanying consolidated balance sheets while amounts related to accelerated share-based awards are recorded as a reduction to Devon's additional paid-in capital in the accompanying consolidated balance sheets.

 

The schedule below summarizes activity and liability balances associated with Devon's restructuring liability included in other current liabilities.

 

 

Continuing Operations

Discontinued Operations

 

Total

 

(In millions)

Balance as of December 31, 2009

$           61

$           23

$      84

  Cash payments

              (5)

              (1)

          (6)

  Revision of estimate

              (5)

              (3)

          (8)

Balance as of June 30, 2010

$           51

$           19

$      70

 

The schedule below summarizes the components of restructuring costs in the accompanying consolidated statements of operations for the second quarter and first six months of 2010.

 

 

Continuing Operations

Discontinued Operations

 

Total

 

(In millions)

Revision to estimate – cash severance

$            (5)

$            (3)

$       (8)

Revision to estimate – acceleration of share-based awards

              (4)

              (2)

          (6)

Other

               1

           

           1

   Restructuring costs

$            (8)

$            (5)

$     (13)

Reduction of Carrying Value of Oil and Gas Properties
Reduction of Carrying Value of Oil and Gas Properties

15.  Reduction of Carrying Value of Oil and Gas Properties

 

In the first quarter of 2009, Devon reduced the carrying value of its United States oil and gas properties $6,408 million, or $4,085 million after taxes, due to a full cost ceiling limitation. The reduction resulted from a significant decrease in the full cost ceiling compared to the immediately preceding quarter due to the effects of declining natural gas prices subsequent to December 31, 2008.

Discontinued Operations
Discontinued Operations

16.  Discontinued Operations

 

Revenues related to Devon's discontinued operations totaled $222 million and $434 million in the second quarter and first six months of 2010, respectively, and $268 million and $396 million in the second quarter and first six months of 2009, respectively.

 


The following table presents the main classes of assets and liabilities associated with Devon's discontinued operations.

 

 

June 30,

December 31,

 

2010

2009

 

(In millions)

  Cash and cash equivalents

$                  742

$                  365

  Accounts receivable

                     125

                     165

  Other current assets

                     153

                     127

    Current assets

$               1,020

$                  657

 

 

 

  Property and equipment, net

$               1,203

$               1,099

  Goodwill

                       68

                       68

  Other long-term assets

                       69

                       83

    Total long-term assets

$               1,340

$               1,250

 

 

 

  Accounts payable

$                  358

$                  158

  Other current liabilities

                     190

                       76

    Current liabilities

$                  548

$                  234

 

 

 

  Asset retirement obligations

$                  100

$                  109

  Deferred income taxes

                       85

                     101

  Other liabilities

                         4

                         3

    Long-term liabilities

$                  189

$                  213

 

Reductions of Carrying Value of Oil and Gas Properties

 

In the first quarter of 2009, Devon reduced the carrying values of its Brazilian and other International oil and gas properties, which are now held for sale, $109 million due to full cost ceiling limitations. The Brazilian reduction of $103 million, which had no related tax benefit, resulted largely from an exploratory well drilled at the BM-BAR-3 block in the offshore Barreirinhas Basin. After drilling this well in the first quarter of 2009, Devon concluded that the well did not have adequate reserves for commercial viability. As a result, the seismic, leasehold and drilling costs associated with this well contributed to the reduction recognized in the first quarter of 2009.

 

Divestiture

 

See Note 5 for more information on the divestiture of Devon's Panyu operations in China.

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

17.  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 (loss) per share for the three-month and six-month periods ended June 30, 2010 and 2009. Because a net loss from continuing operations was generated during the six-month period ended June 30, 2009, the dilutive shares produce an antidilutive net loss per share result. Therefore, the diluted loss per share from continuing operations in the six months ended June 30, 2009 reported in the accompanying 2009 consolidated statement of operations is the same as the basic loss per share amount.

 

 

 

 

Earnings (Loss)

 

Common Shares

Earnings (Loss)

per Share

 

(In millions, except per share amounts)

Three Months Ended June 30, 2010:

 

 

 

  Earnings from continuing operations

$           352

             445

 

  Attributable to participating securities

                (4)

                (5)

 

  Basic earnings per share

             348

             440

$              0.79

  Dilutive effect of potential common shares issuable

     upon the exercise of outstanding stock options

 

               

 

                  1

 

 

  Diluted earnings per share

$           348

             441

$              0.79

 

 

 

 

Three Months Ended June 30, 2009:

 

 

 

  Earnings from continuing operations

$           190

             444

 

  Attributable to participating securities

                (3)

                (5)

 

  Basic earnings per share

              187

              439

$              0.43

  Dilutive effect of potential common shares issuable

     upon the exercise of outstanding stock options

 

               

 

                  2

 

 

  Diluted earnings per share

$           187

             441

$              0.42

 

 

 

 

Six Months Ended June 30, 2010:

 

 

 

  Earnings from continuing operations

$       1,426

             446

 

  Attributable to participating securities

              (17)

                (5)

 

  Basic earnings per share

          1,409

             441

$              3.20

  Dilutive effect of potential common shares issuable

     upon the exercise of outstanding stock options

 

               

 

                  1

 

 

  Diluted earnings per share

$       1,409

             442

$              3.19

 

 

 

 

Six Months Ended June 30, 2009:

 

 

 

  Loss from continuing operations

$      (3,692)

             444

 

  Attributable to participating securities

               44

                (5)

 

  Basic and diluted loss per share

$      (3,648)

             439

$            (8.32)

 

Certain options to purchase shares of Devon's common stock are excluded from the dilution calculations because the options are antidilutive. During the three-month and six-month periods ended June 30, 2010, 7.9 million shares and 6.4 million shares, respectively, were excluded from the diluted earnings per share calculations. During the three-month and six-month periods ended June 30, 2009, 7.1 million shares and 8.9 million shares, respectively, were excluded from the diluted earnings per share calculations.

Segment Information
Segment Information

18.   Segment Information

 

Devon manages its operations through distinct operating segments, or divisions, which are defined primarily by geographic areas. For financial reporting purposes, Devon aggregates its United States divisions into one reporting segment due to the similar nature of the business. However, Devon's Canadian and International divisions are reported as separate reporting segments primarily due to significant differences in the respective regulatory environments.

 

Following is certain financial information regarding Devon's reporting segments. The revenues reported are all from external customers.

 

 

U.S.

Canada

International

Total

 

(In millions)

As of June 30, 2010:

 

 

 

 

Current assets

$      3,468

$         561

$      1,020

$      5,049

Property and equipment, net

      10,478

        6,363

             

      16,841

Goodwill

        3,046

        2,846

             

        5,892

Other assets

            511

            338

        1,340

        2,189

     Total assets

$    17,503

$    10,108

$      2,360

$    29,971

 

 

 

 

 

Current liabilities

$      2,178

$         676

$         548

$      3,402

Long-term debt

        2,503

        3,068

             

        5,571

Asset retirement obligations

            550

            796

             

        1,346

Other liabilities

            874

              45

            189

        1,108

Deferred income taxes

            591

        1,123

             

        1,714

Stockholders' equity

      10,807

        4,400

        1,623

      16,830

     Total liabilities and stockholders' equity

$    17,503

$    10,108

$      2,360

$    29,971

 


 

 

U.S.

Canada

Total

 

(In millions)

Three Months Ended June 30, 2010:

 

 

 

Revenues:

 

 

 

  Oil, gas and NGL sales

$  1,144

$    638

 $ 1,782

  Oil and gas derivatives

          32

        13

          45

  Marketing and midstream revenues

        372

        33

        405

     Total revenues

     1,548

      684

     2,232

Expenses and other, net:

 

 

 

  Lease operating expenses

        243

      199

        442

  Taxes other than income taxes

          83

          9

          92

  Marketing and midstream operating costs and expenses

        252

        28

        280

  Depreciation, depletion and amortization of oil and gas

     properties

 

        248

 

      178

 

        426

  Depreciation and amortization of non-oil and gas properties.

          57

          6

          63

  Accretion of asset retirement obligations

          12

        12

          24

  General and administrative expenses

          98

        32

        130

  Restructuring costs

           (8)

        

           (8)

  Interest expense

          55

        56

        111

  Non-oil and gas financial instruments

          81

       

          81

  Other, net

         (26)

          4

         (22)

     Total expenses and other, net

     1,095

      524

     1,619

Earnings from continuing operations before income taxes

        453

      160

        613

Income tax expense (benefit):

 

 

 

  Current

        631

        76

        707

  Deferred

       (421)

       (25)

       (446)

     Total income tax expense

        210

        51

        261

Earnings from continuing operations

$      243

$    109

$      352

 

 

 

 

Capital expenditures, continuing operations

$    1,145

$    774

$   1,919


 

 

U.S.

Canada

Total

 

(In millions)

Three Months Ended June 30, 2009:

 

 

 

Revenues:

 

 

 

  Oil, gas and NGL sales

$       907

$     543

 $    1,450

  Oil and gas derivatives

           13

        

             13

  Marketing and midstream revenues

         351

           8

           359

     Total revenues

      1,271

       551

        1,822

Expenses and other, net:

 

 

 

  Lease operating expenses

         252

       158

           410

  Taxes other than income taxes

           70

           9

             79

  Marketing and midstream operating costs and expenses

         226

           4

           230

  Depreciation, depletion and amortization of oil and gas

     properties

 

         274

 

       156

 

           430

  Depreciation and amortization of non-oil and gas properties.

           67

           7

             74

  Accretion of asset retirement obligations

           14

           9

             23

  General and administrative expenses

         141

         32

           173

  Interest expense

           34

         56

             90

  Non-oil and gas financial instruments

          (10)

         

            (10)

  Other, net

           18

            6

             24

     Total expenses and other, net

      1,086

       437

        1,523

Earnings from continuing operations before income taxes

         185

       114

           299

Income tax expense (benefit):

 

 

 

  Current

           14

         44

             58

  Deferred

           55

          (4)

             51

     Total income tax expense

           69

          40

           109

Earnings from continuing operations

$       116

$        74

$         190

 

 

 

 

Capital expenditures, continuing operations

$       757

$      185

$         942

 


 

 

U.S.

Canada

Total

 

(In millions)

Six Months Ended June 30, 2010:

 

 

 

Revenues:

 

 

 

  Oil, gas and NGL sales

$     2,514

$     1,338

 $    3,852

  Oil and gas derivatives

           657

              8

           665

  Marketing and midstream revenues

           868

            67

           935

     Total revenues

        4,039

       1,413

        5,452

Expenses and other, net:

 

 

 

  Lease operating expenses

           467

          389

           856

  Taxes other than income taxes

           173

            20

           193

  Marketing and midstream operating costs and expenses

           621

            56

           677

  Depreciation, depletion and amortization of oil and gas

     properties

 

           509

 

          343

 

           852

  Depreciation and amortization of non-oil and gas properties.

           113

            13

           126

  Accretion of asset retirement obligations

             25

            25

             50

  General and administrative expenses

           206

            62

           268

  Restructuring costs

              (8)

             

             (8)

  Interest expense

             85

          112

           197

  Non-oil and gas financial instruments

             66

            

             66

  Other, net

            (29)

               3

           (26)

     Total expenses and other, net

        2,228

        1,023

        3,251

Earnings from continuing operations before income taxes

        1,811

           390

        2,201

Income tax expense (benefit):

 

 

 

  Current

           845

          161

        1,006

  Deferred

          (186)

           (45)

          (231)

     Total income tax expense

           659

           116

           775

Earnings from continuing operations

$     1,152

$         274

$     1,426

 

 

 

 

Capital expenditures, before revision of future asset retirement

     obligations

 

$     2,189

 

$     1,144

 

$     3,333

Revision of future asset retirement obligations

            72

          122

          194

Capital expenditures, continuing operations

$     2,261

$     1,266

$     3,527

 


 

 

U.S.

Canada

Total

 

(In millions)

Six Months Ended June 30, 2009:

 

 

 

Revenues:

 

 

 

  Oil, gas and NGL sales

$    1,845

$       980

 $   2,825

  Oil and gas derivatives

         167

         

         167

  Marketing and midstream revenues

         715

           15

         730

     Total revenues

      2,727

         995

      3,722

Expenses and other, net:

 

 

 

  Lease operating expenses

         522

         328

         850

  Taxes other than income taxes

         151

           17

         168

  Marketing and midstream operating costs and expenses

         446

             8

         454

  Depreciation, depletion and amortization of oil and gas

     properties

 

         714

 

         276

 

         990

  Depreciation and amortization of non-oil and gas properties.

         131

           13

         144

  Accretion of asset retirement obligations

           28

           18

           46

  General and administrative expenses

         276

           60

         336

  Interest expense

           61

         112

         173

  Non-oil and gas financial instruments

         (15)

           

         (15)

  Reduction of carrying value of oil and gas properties

      6,408

           

      6,408

  Other, net

           15

           16

           31

     Total expenses and other, net

      8,737

         848

      9,585

Earnings (loss) from continuing operations before income

     taxes

 

    (6,010)

 

         147

 

    (5,863)

Income tax expense (benefit):

 

 

 

  Current

             4

           46

           50

  Deferred

    (2,224)

             3

    (2,221)

     Total income tax expense (benefit)

    (2,220)

           49

    (2,171)

Earnings (loss) from continuing operations

$  (3,790)

$         98

$  (3,692)

 

 

 

 

Capital expenditures, before revision of future asset retirement

     obligations

 

$   1,902

 

$       486

 

$   2,388

Revision of future asset retirement obligations

          37

         (15)

          22

Capital expenditures, continuing operations

$   1,939

$       471

$   2,410

Supplemental Information to Statements of Cash Flows
Supplemental Information to Statements of Cash Flows

19.  Supplemental Information to Statements of Cash Flows

 

Information related to Devon's cash flows is presented below.

 

 

Six Months

Ended June 30,

 

2010

2009

 

(In millions)

Net decrease in working capital:

 

 

  (Increase) decrease in accounts receivable

$          (1)

$       176 

  Decrease in other current assets

44 

173 

  Decrease in accounts payable

(21)

(72)

  Decrease in revenues and royalties due to others

(21)

(113)

  Increase (decrease) in other current liabilities

580 

(112)

     Net decrease in working capital

$       581 

$         52 

 

 

 

Supplementary cash flow data – continuing and discontinued operations:

 

 

  Interest paid – net of capitalized interest

$       202

$       138 

  Income taxes paid (received)

$       306

$     (139)


Accounts Receivable (Tables)
Schedule of components of accounts receivable

 

June 30, 2010

December 31, 2009

 

(In millions)

Oil, gas and NGL sales

$                   711

$                   752

Joint interest billings

                     214

                     151

Marketing and midstream revenues

                     146

                     188

Production tax credits

                     125

                     110

Other

                       19

                       19

    Gross accounts receivable

                  1,215

                  1,220

Allowance for doubtful accounts

                     (10)

                     (12)

    Net accounts receivable

$                1,205

$                1,208

Derivative Financial Instruments (Tables)
6 Months Ended
Jun. 30, 2010
Year Ended
Dec. 31, 2009
Schedule of derivative instruments
Derivative financial instruments included in the consolidated statement of operations
 

 

 

Balance Sheet Caption

Asset Derivatives

Liability Derivatives

 

 

(In millions)

June 30, 2010:

 

 

 

  Gas price swaps

Other current assets

$      323

$        

  Gas price swaps

Other long-term assets

             4

          

  Gas price collars

Other current assets

           19

          

  Gas basis swaps

Other current assets

           15

          

  Oil price collars

Other current assets

           55

          

  Oil price collars

Other long-term assets

           35

          

  Interest rate swaps

Other current assets

           39

          

  Interest rate swaps

Other long-term assets

           45

          

  Total derivatives

$      535

$        

 

 

Balance Sheet Caption

Asset Derivatives

Liability Derivatives

 

 

(In millions)

December 31, 2009:

 

 

 

  Gas price swaps

Other current assets

$      169

$        

  Gas basis swaps

Other current assets

             3

          

  Oil price collars

Other current liabilities

          

           38

  Interest rate swaps

Other current assets

           39

          

  Interest rate swaps

Other long-term assets

         131

          

  Total derivatives

$      342

$         38

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2010

2009

2010

2009

 

(In millions)

Cash settlements:

 

 

 

 

    Gas price swaps (1)

$             239

$               

$             337

$               

    Gas price collars (1)

                  12

               114

                  13

               232

    Gas basis swaps (1)

                    1

                 

                   (2)

                 

    Interest rate swaps (2)

                    4

                    5

                  20

                  21

    Total cash settlements

               256

               119

               368

               253

 

 

 

 

 

Unrealized gains (losses):

 

 

 

 

    Gas price swaps (1)

              (332)

                 

               158

                 

    Gas price collars (1)

                (16)

              (101)

                  19

                (65)

    Gas basis swaps (1)

                  17

                 

                  12

                 

    Oil price collars (1)

               124

                 

               128

                 

    Interest rate swaps (2)

                (85)

                    5

                (86)

                   (6)

    Total unrealized gains (losses)

              (292)

                (96)

               231

                (71)

Net gain (loss) recognized on statement of operations.

$              (36)

$               23

$             599

$             182

________________

(1)Cash settlements and unrealized gains and losses on fair value changes associated with Devon's gas price swaps, gas price collars, gas basis swaps and oil price collars have been recorded in the "Oil and gas derivatives" line item in the accompanying consolidated statements of operations.

 

(2)Cash settlements and unrealized gains and losses on fair value changes associated with Devon's interest rate swaps have been recorded in the "Non-oil and gas financial instruments" line item in the accompanying consolidated statements of operations.

Other Current Assets (Tables)
Schedule of components of other current assets

 

June 30, 2010

December 31, 2009

 

(In millions)

Derivative financial instruments

$                  451

$                  211

Inventories

                     138

                     182

Other

                       61

                       88

    Other current assets

$                  650

$                  481

Property and Equipment (Tables)
Schedule of proceeds and reserves from offshore divestitures

 

Gross Proceeds

After-Tax Proceeds

Proved Reserves

 

(In millions)

(MMBoe)

(Unaudited)

Gulf of Mexico (continuing operations)

    $       4,150

    $        3,212

                        91

China – Panyu (discontinued operations)

                515

                  405

                        13

     Total

    $        4,665

    $         3,617

                      104

Other Current Liabilities (Tables)
Schedule of components of other current liabilities

 

June 30, 2010

December 31, 2009