Supplemental Information On Oil And Gas Operations | 12 Months Ended |
Dec. 31, 2014 |
Supplemental Information On Oil And Gas Operations [Abstract] | |
Supplemental Information On Oil And Gas Operations | 22.Supplemental Information on Oil and Gas Operations (Unaudited) |
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Supplemental unaudited information regarding Devon's oil and gas activities is presented in this note. The information is provided separately by country. Unless otherwise noted, this supplemental information excludes amounts for all periods presented related to Devon's discontinued operations. |
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Costs Incurred |
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The following tables reflect the costs incurred in oil and gas property acquisition, exploration and development activities. |
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| | Year Ended December 31, 2014 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Property acquisition costs: | | | | | | | | | | | | | | | |
Proved properties | | $ | 5,210 | | $ | - | | $ | 5,210 | | | | | | |
Unproved properties | | | 1,176 | | | 1 | | | 1,177 | | | | | | |
Exploration costs | | | 270 | | | 52 | | | 322 | | | | | | |
Development costs | | | 4,400 | | | 1,063 | | | 5,463 | | | | | | |
Costs incurred | | $ | 11,056 | | $ | 1,116 | | $ | 12,172 | | | | | | |
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| | Year Ended December 31, 2013 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Property acquisition costs: | | | | | | | | | | | | | | | |
Proved properties | | $ | 19 | | $ | 3 | | $ | 22 | | | | | | |
Unproved properties | | | 213 | | | 3 | | | 216 | | | | | | |
Exploration costs | | | 443 | | | 152 | | | 595 | | | | | | |
Development costs | | | 3,838 | | | 1,251 | | | 5,089 | | | | | | |
Costs incurred | | $ | 4,513 | | $ | 1,409 | | $ | 5,922 | | | | | | |
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| | Year Ended December 31, 2012 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Property acquisition costs: | | | | | | | | | | | | | | | |
Proved properties | | $ | 2 | | $ | 71 | | $ | 73 | | | | | | |
Unproved properties | | | 1,135 | | | 32 | | | 1,167 | | | | | | |
Exploration costs | | | 351 | | | 315 | | | 666 | | | | | | |
Development costs | | | 4,408 | | | 1,691 | | | 6,099 | | | | | | |
Costs incurred | | $ | 5,896 | | $ | 2,109 | | $ | 8,005 | | | | | | |
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Costs incurred in the tables above include additions and revisions to Devon’s asset retirement obligations. The proceeds received from our joint venture transactions at closing have not been netted against the costs incurred. At December 31, 2014, our partners’ remaining commitments to fund our future costs associated with these joint venture transactions totaled approximately $250 million. |
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Pursuant to the full cost method of accounting, Devon capitalizes certain of its general and administrative expenses that are related to property acquisition, exploration and development activities. Such capitalized expenses, which are included in the costs shown in the preceding tables, were $376 million, $368 million and $359 million in the years 2014, 2013 and 2012, respectively. Also, Devon capitalizes interest costs incurred and attributable to unproved oil and gas properties and major development projects of oil and gas properties. Capitalized interest expenses, which are included in the costs shown in the preceding tables, were $45 million, $42 million and $36 million in the years 2014, 2013 and 2012, respectively. |
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Capitalized Costs |
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The following tables reflect the aggregate capitalized costs related to oil and gas activities. |
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| | 31-Dec-14 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
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| | (In millions) | | | | | | |
Proved properties | | $ | 59,849 | | $ | 15,889 | | $ | 75,738 | | | | | | |
Unproved properties | | | 1,460 | | | 1,292 | | | 2,752 | | | | | | |
Total oil & gas properties | | | 61,309 | | | 17,181 | | | 78,490 | | | | | | |
Accumulated DD&A | | | -38,213 | | | -11,347 | | | -49,560 | | | | | | |
Net capitalized costs | | $ | 23,096 | | $ | 5,834 | | $ | 28,930 | | | | | | |
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| | 31-Dec-13 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Proved properties | | $ | 51,366 | | $ | 22,629 | | $ | 73,995 | | | | | | |
Unproved properties | | | 1,277 | | | 1,514 | | | 2,791 | | | | | | |
Total oil & gas properties | | | 52,643 | | | 24,143 | | | 76,786 | | | | | | |
Accumulated DD&A | | | -35,848 | | | -16,613 | | | -52,461 | | | | | | |
Net capitalized costs | | $ | 16,795 | | $ | 7,530 | | $ | 24,325 | | | | | | |
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The following is a summary of Devon's oil and gas properties not subject to amortization as of December 31, 2014. |
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| | Costs Incurred In |
| | 2014 | | 2013 | | 2012 | | Prior to 2012 | | Total |
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| | (In millions) |
Acquisition costs | | $ | 973 | | $ | 127 | | $ | 140 | | $ | 650 | | $ | 1,890 |
Exploration costs | | | 111 | | | 76 | | | 68 | | | 107 | | | 362 |
Development costs | | | 103 | | | 48 | | | 121 | | | 69 | | | 341 |
Capitalized interest | | | 43 | | | 38 | | | 30 | | | 48 | | | 159 |
Total oil and gas properties not subject to amortization | | $ | 1,230 | | $ | 289 | | $ | 359 | | $ | 874 | | $ | 2,752 |
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Included in the $2.8 billion of oil and gas properties not subject to amortization are approximately $2.2 billion of costs that Devon deems significant for individual assessment. These costs primarily relate to investments in the Pike thermal oil project in Canada and the Eagle Ford in Texas. Based on Devon’s development plans, Pike costs will begin to be included in the amortization computation when the first phase of this project is fully approved and Devon subsequently begins recognizing the associated proved reserves. Devon is evaluating and developing the newly acquired Eagle Ford properties over the next four to five years. |
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Results of Operations |
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The following tables include revenues and expenses associated with Devon's oil and gas producing activities. They do not include any allocation of Devon's interest costs or general corporate overhead and, therefore, are not necessarily indicative of the contribution to net earnings of Devon's oil and gas operations. Income tax expense has been calculated by applying statutory income tax rates to oil, gas and NGL sales after deducting costs, including depreciation, depletion and amortization and after giving effect to permanent differences. |
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| | 31-Dec-14 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
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| | (In millions) | | | | | | |
Oil, gas and NGL sales | | $ | 7,867 | | $ | 2,043 | | $ | 9,910 | | | | | | |
Lease operating expenses | | | -1,559 | | | -773 | | | -2,332 | | | | | | |
General and administrative expenses | | | -153 | | | -57 | | | -210 | | | | | | |
Production and property taxes | | | -466 | | | -37 | | | -503 | | | | | | |
Depreciation, depletion and amortization | | | -2,365 | | | -531 | | | -2,896 | | | | | | |
Gain on sale of assets | | | - | | | 1,077 | | | 1,077 | | | | | | |
Accretion of asset retirement obligations | | | -49 | | | -39 | | | -88 | | | | | | |
Income tax expense | | | -1,199 | | | -568 | | | -1,767 | | | | | | |
Results of operations(1) | | $ | 2,076 | | $ | 1,115 | | $ | 3,191 | | | | | | |
Depreciation, depletion and amortization per Boe | | $ | 11.41 | | $ | 13.80 | | $ | 11.79 | | | | | | |
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-1 | | | | | | |
In the fourth quarter of 2014, Devon recognized a $1.9 billion Canadian goodwill impairment that is not reflected in | | | | | | |
this table. | | | | | | |
| | 31-Dec-13 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Oil, gas and NGL sales | | $ | 5,964 | | $ | 2,558 | | $ | 8,522 | | | | | | |
Lease operating expenses | | | -1,257 | | | -1,011 | | | -2,268 | | | | | | |
General and administrative expenses | | | -125 | | | -77 | | | -202 | | | | | | |
Production and property taxes | | | -380 | | | -59 | | | -439 | | | | | | |
Depreciation, depletion and amortization | | | -1,640 | | | -825 | | | -2,465 | | | | | | |
Asset impairments | | | -1,110 | | | -843 | | | -1,953 | | | | | | |
Accretion of asset retirement obligations | | | -47 | | | -64 | | | -111 | | | | | | |
Income tax benefit (expense) | | | -510 | | | 88 | | | -422 | | | | | | |
Results of operations | | $ | 895 | | $ | -233 | | $ | 662 | | | | | | |
Depreciation, depletion and amortization per Boe | | $ | 8.69 | | $ | 12.87 | | $ | 9.75 | | | | | | |
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| | 31-Dec-12 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
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| | (In millions) | | | | | | |
Oil, gas and NGL sales | | $ | 4,679 | | $ | 2,474 | | $ | 7,153 | | | | | | |
Lease operating expenses | | | -1,059 | | | -1,015 | | | -2,074 | | | | | | |
General and administrative expenses | | | -159 | | | -137 | | | -296 | | | | | | |
Production and property taxes | | | -340 | | | -55 | | | -395 | | | | | | |
Depreciation, depletion and amortization | | | -1,563 | | | -963 | | | -2,526 | | | | | | |
Asset impairments | | | -1,793 | | | -163 | | | -1,956 | | | | | | |
Accretion of asset retirement obligations | | | -40 | | | -69 | | | -109 | | | | | | |
Income tax benefit (expense) | | | 99 | | | -3 | | | 96 | | | | | | |
Results of operations | | $ | -176 | | $ | 69 | | $ | -107 | | | | | | |
Depreciation, depletion and amortization per Boe | | $ | 8.55 | | $ | 14.41 | | $ | 10.12 | | | | | | |
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Proved Reserves |
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The following tables present Devon’s estimated proved reserves by product by country. |
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| | Oil (MMBbls) | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
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Proved developed and undeveloped reserves: | | | | | | | | |
31-Dec-11 | | | 168 | | | 80 | | | 248 | | | | | | |
Revisions due to prices | | | -1 | | | -5 | | | -6 | | | | | | |
Revisions other than price | | | -6 | | | -2 | | | -8 | | | | | | |
Extensions and discoveries | | | 65 | | | 7 | | | 72 | | | | | | |
Production | | | -21 | | | -15 | | | -36 | | | | | | |
31-Dec-12 | | | 205 | | | 65 | | | 270 | | | | | | |
Revisions due to prices | | | 1 | | | -1 | | | - | | | | | | |
Revisions other than price | | | -18 | | | - | | | -18 | | | | | | |
Extensions and discoveries | | | 69 | | | 7 | | | 76 | | | | | | |
Purchase of reserves | | | 1 | | | - | | | 1 | | | | | | |
Production | | | -28 | | | -15 | | | -43 | | | | | | |
Sale of reserves | | | -1 | | | - | | | -1 | | | | | | |
31-Dec-13 | | | 229 | | | 56 | | | 285 | | | | | | |
Revisions due to prices | | | -1 | | | - | | | -1 | | | | | | |
Revisions other than price | | | -38 | | | 1 | | | -37 | | | | | | |
Extensions and discoveries | | | 94 | | | 5 | | | 99 | | | | | | |
Purchase of reserves | | | 132 | | | - | | | 132 | | | | | | |
Production | | | -48 | | | -10 | | | -58 | | | | | | |
Sale of reserves | | | -17 | | | -29 | | | -46 | | | | | | |
31-Dec-14 | | | 351 | | | 23 | | | 374 | | | | | | |
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Proved developed reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 146 | | | 73 | | | 219 | | | | | | |
31-Dec-12 | | | 166 | | | 62 | | | 228 | | | | | | |
31-Dec-13 | | | 194 | | | 56 | | | 250 | | | | | | |
31-Dec-14 | | | 255 | | | 23 | | | 278 | | | | | | |
Proved developed-producing reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 139 | | | 65 | | | 204 | | | | | | |
31-Dec-12 | | | 155 | | | 56 | | | 211 | | | | | | |
31-Dec-13 | | | 178 | | | 51 | | | 229 | | | | | | |
31-Dec-14 | | | 224 | | | 19 | | | 243 | | | | | | |
Proved undeveloped reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 22 | | | 7 | | | 29 | | | | | | |
31-Dec-12 | | | 39 | | | 3 | | | 42 | | | | | | |
31-Dec-13 | | | 35 | | | - | | | 35 | | | | | | |
31-Dec-14 | | | 96 | | | - | | | 96 | | | | | | |
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| | Bitumen (MMBbls) | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
Proved developed and undeveloped reserves: | | | | | | | | |
31-Dec-11 | | | - | | | 457 | | | 457 | | | | | | |
Revisions due to prices | | | - | | | 14 | | | 14 | | | | | | |
Revisions other than price | | | - | | | 7 | | | 7 | | | | | | |
Extensions and discoveries | | | - | | | 67 | | | 67 | | | | | | |
Production | | | - | | | -17 | | | -17 | | | | | | |
31-Dec-12 | | | - | | | 528 | | | 528 | | | | | | |
Revisions due to prices | | | - | | | -11 | | | -11 | | | | | | |
Revisions other than price | | | - | | | 16 | | | 16 | | | | | | |
Extensions and discoveries | | | - | | | 38 | | | 38 | | | | | | |
Production | | | - | | | -19 | | | -19 | | | | | | |
31-Dec-13 | | | - | | | 552 | | | 552 | | | | | | |
Revisions due to prices | | | - | | | -37 | | | -37 | | | | | | |
Revisions other than price | | | - | | | 18 | | | 18 | | | | | | |
Extensions and discoveries | | | - | | | 8 | | | 8 | | | | | | |
Production | | | - | | | -20 | | | -20 | | | | | | |
31-Dec-14 | | | - | | | 521 | | | 521 | | | | | | |
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Proved developed reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | - | | | 90 | | | 90 | | | | | | |
31-Dec-12 | | | - | | | 99 | | | 99 | | | | | | |
31-Dec-13 | | | - | | | 111 | | | 111 | | | | | | |
31-Dec-14 | | | - | | | 137 | | | 137 | | | | | | |
Proved developed-producing reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | - | | | 90 | | | 90 | | | | | | |
31-Dec-12 | | | - | | | 99 | | | 99 | | | | | | |
31-Dec-13 | | | - | | | 111 | | | 111 | | | | | | |
31-Dec-14 | | | - | | | 137 | | | 137 | | | | | | |
Proved undeveloped reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | - | | | 367 | | | 367 | | | | | | |
31-Dec-12 | | | - | | | 429 | | | 429 | | | | | | |
31-Dec-13 | | | - | | | 441 | | | 441 | | | | | | |
31-Dec-14 | | | - | | | 384 | | | 384 | | | | | | |
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| | Gas (Bcf) | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
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Proved developed and undeveloped reserves: | | | | | | | | |
31-Dec-11 | | | 9,507 | | | 979 | | | 10,486 | | | | | | |
Revisions due to prices | | | -831 | | | -99 | | | -930 | | | | | | |
Revisions other than price | | | -287 | | | -33 | | | -320 | | | | | | |
Extensions and discoveries | | | 1,124 | | | 34 | | | 1,158 | | | | | | |
Purchase of reserves | | | 2 | | | - | | | 2 | | | | | | |
Production | | | -752 | | | -186 | | | -938 | | | | | | |
Sale of reserves | | | -1 | | | -11 | | | -12 | | | | | | |
31-Dec-12 | | | 8,762 | | | 684 | | | 9,446 | | | | | | |
Revisions due to prices | | | 405 | | | 161 | | | 566 | | | | | | |
Revisions other than price | | | -299 | | | 67 | | | -232 | | | | | | |
Extensions and discoveries | | | 471 | | | 19 | | | 490 | | | | | | |
Purchase of reserves | | | 1 | | | - | | | 1 | | | | | | |
Production | | | -709 | | | -165 | | | -874 | | | | | | |
Sale of reserves | | | -81 | | | -8 | | | -89 | | | | | | |
31-Dec-13 | | | 8,550 | | | 758 | | | 9,308 | | | | | | |
Revisions due to prices | | | 191 | | | 45 | | | 236 | | | | | | |
Revisions other than price | | | -299 | | | 4 | | | -295 | | | | | | |
Extensions and discoveries | | | 335 | | | 8 | | | 343 | | | | | | |
Purchase of reserves | | | 457 | | | - | | | 457 | | | | | | |
Production | | | -660 | | | -41 | | | -701 | | | | | | |
Sale of reserves | | | -923 | | | -738 | | | -1,661 | | | | | | |
31-Dec-14 | | | 7,651 | | | 36 | | | 7,687 | | | | | | |
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Proved developed reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 7,957 | | | 951 | | | 8,908 | | | | | | |
31-Dec-12 | | | 7,391 | | | 679 | | | 8,070 | | | | | | |
31-Dec-13 | | | 7,707 | | | 752 | | | 8,459 | | | | | | |
31-Dec-14 | | | 6,948 | | | 36 | | | 6,984 | | | | | | |
Proved developed-producing reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 7,409 | | | 862 | | | 8,271 | | | | | | |
31-Dec-12 | | | 7,091 | | | 624 | | | 7,715 | | | | | | |
31-Dec-13 | | | 7,425 | | | 680 | | | 8,105 | | | | | | |
31-Dec-14 | | | 6,746 | | | 34 | | | 6,780 | | | | | | |
Proved undeveloped reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 1,550 | | | 28 | | | 1,578 | | | | | | |
31-Dec-12 | | | 1,371 | | | 5 | | | 1,376 | | | | | | |
31-Dec-13 | | | 843 | | | 6 | | | 849 | | | | | | |
31-Dec-14 | | | 703 | | | - | | | 703 | | | | | | |
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| | Natural Gas Liquids (MMBbls) | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
Proved developed and undeveloped reserves: | | | | | | | | |
31-Dec-11 | | | 525 | | | 27 | | | 552 | | | | | | |
Revisions due to prices | | | -19 | | | -5 | | | -24 | | | | | | |
Revisions other than price | | | -13 | | | - | | | -13 | | | | | | |
Extensions and discoveries | | | 114 | | | 2 | | | 116 | | | | | | |
Production | | | -36 | | | -4 | | | -40 | | | | | | |
31-Dec-12 | | | 571 | | | 20 | | | 591 | | | | | | |
Revisions due to prices | | | 8 | | | 3 | | | 11 | | | | | | |
Revisions other than price | | | -50 | | | 3 | | | -47 | | | | | | |
Extensions and discoveries | | | 64 | | | 1 | | | 65 | | | | | | |
Production | | | -41 | | | -4 | | | -45 | | | | | | |
31-Dec-13 | | | 552 | | | 23 | | | 575 | | | | | | |
Revisions due to prices | | | 7 | | | 1 | | | 8 | | | | | | |
Revisions other than price | | | 2 | | | - | | | 2 | | | | | | |
Extensions and discoveries | | | 47 | | | - | | | 47 | | | | | | |
Purchase of reserves | | | 57 | | | - | | | 57 | | | | | | |
Production | | | -50 | | | -1 | | | -51 | | | | | | |
Sale of reserves | | | -37 | | | -23 | | | -60 | | | | | | |
31-Dec-14 | | | 578 | | | - | | | 578 | | | | | | |
| | | | | | | | | | | | | | | |
Proved developed reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 402 | | | 26 | | | 428 | | | | | | |
31-Dec-12 | | | 431 | | | 20 | | | 451 | | | | | | |
31-Dec-13 | | | 468 | | | 23 | | | 491 | | | | | | |
31-Dec-14 | | | 486 | | | - | | | 486 | | | | | | |
Proved developed-producing reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 372 | | | 24 | | | 396 | | | | | | |
31-Dec-12 | | | 406 | | | 19 | | | 425 | | | | | | |
31-Dec-13 | | | 442 | | | 21 | | | 463 | | | | | | |
31-Dec-14 | | | 467 | | | - | | | 467 | | | | | | |
Proved undeveloped reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 123 | | | 1 | | | 124 | | | | | | |
31-Dec-12 | | | 140 | | | - | | | 140 | | | | | | |
31-Dec-13 | | | 84 | | | - | | | 84 | | | | | | |
31-Dec-14 | | | 92 | | | - | | | 92 | | | | | | |
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| | Total (MMBoe) (1) | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
Proved developed and undeveloped reserves: | | | | | | | | |
31-Dec-11 | | | 2,278 | | | 727 | | | 3,005 | | | | | | |
Revisions due to prices | | | -159 | | | -12 | | | -171 | | | | | | |
Revisions other than price | | | -67 | | | -1 | | | -68 | | | | | | |
Extensions and discoveries | | | 367 | | | 82 | | | 449 | | | | | | |
Production | | | -183 | | | -67 | | | -250 | | | | | | |
Sale of reserves | | | - | | | -2 | | | -2 | | | | | | |
31-Dec-12 | | | 2,236 | | | 727 | | | 2,963 | | | | | | |
Revisions due to prices | | | 76 | | | 18 | | | 94 | | | | | | |
Revisions other than price | | | -117 | | | 29 | | | -88 | | | | | | |
Extensions and discoveries | | | 212 | | | 49 | | | 261 | | | | | | |
Purchase of reserves | | | 1 | | | - | | | 1 | | | | | | |
Production | | | -189 | | | -64 | | | -253 | | | | | | |
Sale of reserves | | | -14 | | | -1 | | | -15 | | | | | | |
31-Dec-13 | | | 2,205 | | | 758 | | | 2,963 | | | | | | |
Revisions due to prices | | | 38 | | | -29 | | | 9 | | | | | | |
Revisions other than price | | | -86 | | | 21 | | | -65 | | | | | | |
Extensions and discoveries | | | 197 | | | 14 | | | 211 | | | | | | |
Purchase of reserves | | | 265 | | | - | | | 265 | | | | | | |
Production | | | -207 | | | -39 | | | -246 | | | | | | |
Sale of reserves | | | -207 | | | -176 | | | -383 | | | | | | |
31-Dec-14 | | | 2,205 | | | 549 | | | 2,754 | | | | | | |
| | | | | | | | | | | | | | | |
Proved developed reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 1,875 | | | 348 | | | 2,223 | | | | | | |
31-Dec-12 | | | 1,829 | | | 294 | | | 2,123 | | | | | | |
31-Dec-13 | | | 1,947 | | | 315 | | | 2,262 | | | | | | |
31-Dec-14 | | | 1,900 | | | 165 | | | 2,065 | | | | | | |
Proved developed-producing reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 1,746 | | | 323 | | | 2,069 | | | | | | |
31-Dec-12 | | | 1,743 | | | 278 | | | 2,021 | | | | | | |
31-Dec-13 | | | 1,857 | | | 297 | | | 2,154 | | | | | | |
31-Dec-14 | | | 1,815 | | | 162 | | | 1,977 | | | | | | |
Proved undeveloped reserves as of: | | | | | | | | | | | | | | | |
31-Dec-11 | | | 403 | | | 379 | | | 782 | | | | | | |
31-Dec-12 | | | 407 | | | 433 | | | 840 | | | | | | |
31-Dec-13 | | | 258 | | | 443 | | | 701 | | | | | | |
31-Dec-14 | | | 305 | | | 384 | | | 689 | | | | | | |
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(1)Gas reserves are converted to Boe at the rate of six Mcf per Bbl of oil, based upon the approximate relative energy content of gas and oil. This rate is not necessarily indicative of the relationship of natural gas and oil prices. Bitumen and natural gas liquids reserves are converted to Boe on a one-to-one basis with oil. |
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Proved Undeveloped Reserves |
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The following table presents the changes in Devon’s total proved undeveloped reserves during 2014 (in MMBoe). |
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| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
Proved undeveloped reserves as of December 31, 2013 | | | 258 | | | 443 | | | 701 | | | | | | |
Extensions and discoveries | | | 153 | | | 8 | | | 161 | | | | | | |
Revisions due to prices | | | -1 | | | -34 | | | -35 | | | | | | |
Revisions other than price | | | -61 | | | 18 | | | -43 | | | | | | |
Sale of reserves | | | -4 | | | -2 | | | -6 | | | | | | |
Conversion to proved developed reserves | | | -40 | | | -49 | | | -89 | | | | | | |
Proved undeveloped reserves as of December 31, 2014 | | | 305 | | | 384 | | | 689 | | | | | | |
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At December 31, 2014, Devon had 689 MMBoe of proved undeveloped reserves. This represents a 2 percent decrease as compared to 2013 and represents 25 percent of total proved reserves. Drilling and development activities increased Devon’s proved undeveloped reserves 161 MMBoe and resulted in the conversion of 89 MMBoe, or 13 percent, of the 2013 proved undeveloped reserves to proved developed reserves. Costs incurred related to the development and conversion of Devon’s proved undeveloped reserves were approximately $1.0 billion for 2014. Additionally, revisions other than price decreased Devon’s proved undeveloped reserves 43 MMBoe primarily due to evaluations of certain U.S. onshore dry-gas areas, which Devon does not expect to develop in the next five years. The largest revisions, which were approximately 69 MMBoe, relate to the dry-gas areas in the Barnett Shale in north Texas. |
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A significant amount of Devon’s proved undeveloped reserves at the end of 2014 related to its Jackfish operations. At December 31, 2014 and 2013, Devon’s Jackfish proved undeveloped reserves were 384 MMBoe and 441 MMBoe, respectively. Development schedules for the Jackfish reserves are primarily controlled by the need to keep the processing plants at their 35,000 barrel daily facility capacity. Processing plant capacity is controlled by factors such as total steam processing capacity and steam-oil ratios. Furthermore, development of these projects involves the up-front construction of steam injection/distribution and bitumen processing facilities. Due to the large up-front capital investments and large reserves required to provide economic returns, the project conditions meet the specific circumstances requiring a period greater than 5 years for conversion to developed reserves. As a result, these reserves are classified as proved undeveloped for more than five years. Currently, the development schedule for these reserves extends though the year 2031. |
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Price Revisions |
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2014 - Reserves increased 9 MMBoe primarily due to higher gas prices in the Barnett Shale and the Anadarko Basin, partially offset by higher bitumen prices, which result in lower after-royalty volumes, in Canada. |
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2013 - Reserves increased 94 MMBoe primarily due to higher gas prices. Of this increase, 43 MMBoe related to the Barnett Shale and 19 MMBoe related to the Rocky Mountain area. |
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2012 - Reserves decreased 171 MMBoe primarily due to lower gas prices. Of this decrease, 100 MMBoe related to the Barnett Shale and 25 MMBoe related to the Rocky Mountain area. |
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Revisions Other Than Price |
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Total revisions other than price for 2014, 2013 and 2012 primarily related to Devon’s evaluation of certain dry gas regions, with the largest revisions being made in the Cana-Woodford Shale and Barnett Shale. |
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Extensions and Discoveries |
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2014 – Of the 211 MMBoe of extensions and discoveries, 70 MMBoe related to the Permian Basin in west Texas and southeast New Mexico, 54 MMBoe related to the Eagle Ford in south Texas, 36 MMBoe related to the Barnett Shale, 14 MMBoe related to the Anadarko Basin, 8 MMBoe related to Jackfish and 14 MMBoe related to the Mississippian-Woodford Trend in north Oklahoma. |
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The 2014 extensions and discoveries included 5 MMBoe related to additions from Devon’s infill drilling activities, primarily consisting of 4 MMBoe at the Permian Basin. |
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2013 – Of the 261 MMBoe of extensions and discoveries, 76 MMBoe related to the Permian Basin, 54 MMBoe related to the Barnett Shale, 42 MMBoe related to the Anadarko Basin, 38 MMBoe related to Jackfish and 32 MMBoe related to the Mississippian-Woodford Trend. |
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The 2013 extensions and discoveries included 175 MMBoe related to additions from Devon’s infill drilling activities, including 23 MMBoe at the Cana-Woodford Shale, 54 MMBoe at the Barnett Shale, 38 MMBoe at Jackfish, 33 MMBoe at the Permian Basin and 20 MMBoe at the Mississippian-Woodford Trend. |
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2012 – Of the 449 MMBoe of extensions and discoveries, 151 MMBoe related to the Cana-Woodford Shale, 95 MMBoe related to the Barnett Shale, 72 MMBoe related to the Permian Basin, 67 MMBoe related to Jackfish, 16 MMBoe related to the Rocky Mountain area and 18 MMBoe related to the Granite Wash area. |
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The 2012 extensions and discoveries included 229 MMBoe related to additions from Devon’s infill drilling activities, including 134 MMBoe at the Cana-Woodford Shale and 82 MMBoe at the Barnett Shale. |
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Purchase of Reserves |
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2014 – Of the 265 MMBoe of reserves purchases, 246 MMBoe related to Devon’s GeoSouthern acquisition in the Eagle Ford. |
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Sale of Reserves |
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2014 – The total 383 MMBoe of reserves sales related to Devon’s asset divestitures in the U.S. and Canada. |
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Standardized Measure |
The tables below reflect Devon’s standardized measure of discounted future net cash flows from its proved reserves. |
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| | | | | | | | | | | | | | | |
| | Year Ended December 31, 2014 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Future cash inflows | | $ | 75,847 | | $ | 31,371 | | $ | 107,218 | | | | | | |
Future costs: | | | | | | | | | | | | | | | |
Development | | | -7,168 | | | -3,619 | | | -10,787 | | | | | | |
Production | | | -29,740 | | | -14,232 | | | -43,972 | | | | | | |
Future income tax expense | | | -11,021 | | | -3,026 | | | -14,047 | | | | | | |
Future net cash flow | | | 27,918 | | | 10,494 | | | 38,412 | | | | | | |
10% discount to reflect timing of cash flows | | | -12,819 | | | -5,119 | | | -17,938 | | | | | | |
Standardized measure of discounted future net cash flows | | $ | 15,099 | | $ | 5,375 | | $ | 20,474 | | | | | | |
| | | | | | | | | | | | | | | |
| | Year Ended December 31, 2013 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Future cash inflows | | $ | 61,983 | | $ | 33,305 | | $ | 95,288 | | | | | | |
Future costs: | | | | | | | | | | | | | | | |
Development | | | -5,448 | | | -5,308 | | | -10,756 | | | | | | |
Production | | | -26,663 | | | -15,709 | | | -42,372 | | | | | | |
Future income tax expense | | | -9,046 | | | -2,327 | | | -11,373 | | | | | | |
Future net cash flow | | | 20,826 | | | 9,961 | | | 30,787 | | | | | | |
10% discount to reflect timing of cash flows | | | -10,346 | | | -4,700 | | | -15,046 | | | | | | |
Standardized measure of discounted future net cash flows | | $ | 10,480 | | $ | 5,261 | | $ | 15,741 | | | | | | |
| | | | | | | | | | | | | | | |
| | Year Ended December 31, 2012 | | | | | | |
| | U.S. | | Canada | | Total | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Future cash inflows | | $ | 55,297 | | $ | 33,570 | | $ | 88,867 | | | | | | |
Future costs: | | | | | | | | | | | | | | | |
Development | | | -6,556 | | | -6,211 | | | -12,767 | | | | | | |
Production | | | -24,265 | | | -16,611 | | | -40,876 | | | | | | |
Future income tax expense | | | -6,542 | | | -1,992 | | | -8,534 | | | | | | |
Future net cash flow | | | 17,934 | | | 8,756 | | | 26,690 | | | | | | |
10% discount to reflect timing of cash flows | | | -9,036 | | | -4,433 | | | -13,469 | | | | | | |
Standardized measure of discounted future net cash flows | | $ | 8,898 | | $ | 4,323 | | $ | 13,221 | | | | | | |
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Future cash inflows, development costs and production costs were computed using the same assumptions for prices and costs that were used to estimate Devon’s proved oil and gas reserves at the end of each year. For 2014 estimates, Devon’s future realized prices were assumed to be $87.14 per barrel of oil, $57.25 per barrel of bitumen, $3.94 per Mcf of gas and $25.05 per barrel of natural gas liquids. Of the $10.8 billion of future development costs as of the end of 2014, $2.2 billion, $1.9 billion and $1.0 billion are estimated to be spent in 2015, 2016 and 2017, respectively. |
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Future development costs include not only development costs but also future asset retirement costs. Included as part of the $10.8 billion of future development costs are $1.5 billion of future asset retirement costs. The future income tax expenses have been computed using statutory tax rates, giving effect to allowable tax deductions and tax credits under current laws. |
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The principal changes in Devon’s standardized measure of discounted future net cash flows are as follows: |
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| | | | | | | | | | | | | | | |
| | Year Ended December 31, | | | | | | |
| | 2014 | | 2013 | | 2012 | | | | | | |
| | | | | | | | | | | | | | | |
| | (In millions) | | | | | | |
Beginning balance | | $ | 15,741 | | $ | 13,221 | | $ | 17,844 | | | | | | |
Net changes in prices and production costs | | | 2,561 | | | 3,018 | | | -9,889 | | | | | | |
Oil, bitumen, gas and NGL sales, net of production costs | | | -6,865 | | | -5,613 | | | -4,388 | | | | | | |
Changes in estimated future development costs | | | -768 | | | 399 | | | -1,094 | | | | | | |
Extensions and discoveries, net of future development costs | | | 4,836 | | | 4,047 | | | 4,669 | | | | | | |
Purchase of reserves | | | 6,422 | | | 14 | | | 18 | | | | | | |
Sales of reserves in place | | | -2,384 | | | -44 | | | -25 | | | | | | |
Revisions of quantity estimates | | | -746 | | | -1,040 | | | 162 | | | | | | |
Previously estimated development costs incurred during the period | | | 1,933 | | | 1,986 | | | 1,321 | | | | | | |
Accretion of discount | | | 1,746 | | | 1,940 | | | 1,420 | | | | | | |
Other, primarily changes in timing and foreign exchange rates | | | -107 | | | -583 | | | 113 | | | | | | |
Net change in income taxes | | | -1,895 | | | -1,604 | | | 3,070 | | | | | | |
Ending balance | | $ | 20,474 | | $ | 15,741 | | $ | 13,221 | | | | | | |
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