Topic: Growth Stocks

Stock Pickers Digest Hotline – Friday, November 22, 2013

Article Excerpt

DEVON ENERGY CORP., $62.57, symbol DVN on New York, is paying GeoSouthern Energy $6 billion for oil-producing assets and other properties in Texas’s Eagle Ford shale formation. This purchase consists of 53,000 barrels of oil equivalent a day of production (including natural gas) and 82,000 acres of land with at least 1,200 undrilled locations. Peak production is expected to reach as much as 140,000 barrels a day within five years. To put these figures in perspective, Devon’s output averaged 691,000 barrels a day in the three months ended September 30, 2013. The purchase will give Devon a better balance between oil and gas production. Oil currently accounts for 25% of its output, but that will rise to around 31% after the acquisition, including natural gas assets Devon currently has up for sale The company can easily afford this move: its $8.0 billion of long-term debt is a reasonable 31.4% of its market cap, and it holds cash of $4.3 billion, or $10.59 a..