Devon Energy cuts staff, dividend, spending on oil price crash

HOUSTON (Reuters) - Devon Energy Corp DVN.N slashed its dividend and capital spending 75 percent on Tuesday and said it will lay off 20 percent of its staff as low prices roil shale oil companies.

An energy installation on a property leased to Devon Energy Production Company by the Catholic Archdiocese of Oklahoma City is seen near Guthrie, Oklahoma September 15, 2015. REUTERS/Nick Oxford

The Oklahoma City-based company, a top U.S. independent oil producer, said it was laying off 1,000 staff and that another 600 employees would leave in divestitures later this year.

The moves by Devon mark the latest in a string of announcements by U.S. oil companies capitulating to crude prices of less than $30 a barrel by cutting spending even more, trimming dividends, or producing less.

Devon reduced its dividend to 6 cents a share for the second quarter of 2016 from the previous distribution of 24 cents a share.

“We believe the decision to adjust the quarterly dividend is prudent given the current commodity price environment and the uncertain duration of this downturn,” Chief Executive Dave Hager said in a statement.

Exploration and production spending is estimated to range from $900 million to $1.1 billion this year, a sharp reduction from last year.

Because of less natural gas output, it also said 2016 output would be 6 percent less than overall net production from core assets of 571,000 oil equivalent barrels per day during the fourth quarter.

The company also said that Tony Vaughn, executive vice president of exploration and production, was promoted to chief operating officer under Hager.

Devon reported a net loss of $4.5 billion, for the fourth quarter of 2015, wider than a net loss of $408 million in the same period a year ago.

On an adjusted bases, the company earned 77 cents a share, beating analysts expectations of 70 cents a share consensus view from Thomson Reuters I/B/E/S.

Reporting by Terry Wade; Editing by Tom Brown and Alan Crosby