Devon Energy beats forecasts, shares rise

By Matt Daily and Braden Reddall

NEW YORK/SAN FRANCISCO (Reuters) - Independent U.S. oil and gas producer Devon Energy Corp (DVN.N) posted stronger-than-expected quarterly results on Wednesday, helped by higher production and lower costs, boosting its shares by 12 percent.

In addition, Chief Executive Larry Nichols said Devon would seek to sell stakes in four key deepwater Gulf of Mexico discoveries to reduce its capital spending on the projects.

Those sales would not exceed 50 percent of Devon's ownership stakes in the projects, he said, and should attract large players to the lower tertiary fields, which are seen as a potentially huge new source of energy.

French major Total (TOTF.PA), reporting a forecast-beating profit despite declines in oil prices and production, said on Wednesday it was still hunting acquisitions, including in the Gulf of Mexico.

Total already has 17 percent of the big Tahiti project in the Gulf of Mexico, which started up on Wednesday and should produce 125,000 barrels per day by the end of this year, according to majority owner and operator Chevron Corp (CVX.N).

The steep slide in oil and natural gas prices forced Devon and smaller peers Petrohawk Energy Corp (HK.N) and Quicksilver Resources Inc (KWK.N) to cut the value of their reserves under U.S. accounting rules, pushing them to quarterly net losses.

Devon, the second-largest independent U.S. producer by market value, took a $4.2 billion charge to cut the carrying value of oil and gas properties. But excluding that and other items, it earned 48 cents per share, beating the average analyst estimate of 29 cents, according to Reuters Estimates.

Devon's production rose 7 percent to 685,000 barrels of oil equivalent (boe) per day in the quarter, but the $1.5 billion it recorded in sales was down 53 percent due to weaker prices.

The Oklahoma City-based company also benefited from a 19 percent drop in depreciation, depletion and amortization costs to $599 million, according to analysts at Pritchard Capital Partners.

Shares of Devon, which had dropped 17 percent so far this year through Tuesday's close, jumped 12 percent to $61.01.

Also helping was a rise in oil prices to five-month highs, and a 7 percent jump in natural gas futures.

Late on Wednesday, Anadarko Petroleum Corp (APC.N) reported a loss of $338 million, or 73 cents per share, compared with a net profit of $286 million, or 61 cents per share, the year before. Revenue fell by nearly half from the year before to $1.595 billion, in line with expectations.

Anadarko's production was 600,000 boe per day in the first quarter, up from 585,000 a year before.

Anadarko's production was 600,000 boe per day in the first quarter, up from 585,000 a year before, and the company said it remained on track for total 2009 production of 208 million to 212 million boe.

The company's shares rose 6.1 percent to $48.26.