Devon Business Practices

[BoulderSooner]

They have been letting people go at their HQ this entire week.

they had a layoff last week ... .they have one today and then they have a round next week ..

[gopokes88]

I could see 1200 being an accurate number after the Canadian asset is fully divested or otherwise spun off.

Which like....ya know....the plan.

[gopokes88]

You’re saying they are going from 2800 to 1200 employees company wide?

That seems unlikely. That would mean they would have less employees than Continental.
Continental is known for being lean. I doubt Devon would be able to run a larger operation with less employees

I could however see them taking the okc head count from 1500 to 1200 just not companywide total

Companywide. 1200.

New Devon without Canada will actually be smaller than CLR.

CLR exited 2018 at 324 MBOEPD.
New Devon will be 296 MBOEPD.

https://s2.q4cdn.com/462548525/files...esentation.pdf
http://www.rbcrichardsonbarr.com/Ind...PR_____DA57125

Anyone else want to keep arguing and get roasted? I’ll be here all week.

[chuck5815]

So, with tax breaks, protectionism of the oil industry, and all Trump is doing to “help the little guys”, this large oil company will take the profits, pay less taxes, lay off half the staff, and use the windfall to complete a multi billion dollar stock buyback favoring large stockholders. The rich get richer.

Sort of a misnomer. The employees aren't being laid off if they end up working for the Canadian spin-off. They just aren't on Devon's books any longer.

[Pete]

Sort of a misnomer. The employees aren't being laid off if they end up working for the Canadian spin-off. They just aren't on Devon's books any longer.

There are a bunch of people in the HQ who are being let go that don't have anything to do with the Canadian enterprise.

And they are being terminated, not reassigned.

[Dob Hooligan]

Help me here. There are real people working there who might have survived 5 rounds of layoffs in their decade (or less) working for Devon. And they are feeling battered and wondering about their future there. Some of them might call their parents or other family and ask for career advice. This thread is making me think over half the people working in that tower this week are going to be out of a job by the end of this year? Can someone give clarification?

[gopokes88]

Help me here. There are real people working there who might have survived 5 rounds of layoffs in their decade (or less) working for Devon. And they are feeling battered and wondering about their future there. Some of them might call their parents or other family and ask for career advice. This thread is making me think over half the people working in that tower this week are going to be out of a job by the end of this year? Can someone give clarification?

I think Devon is only at 3(?) might even be 2 rounds in company history.

There’s about 1300 at HQ, I would expect that number to finish around 1,000 employees left at HQ and the 4 field offices to average about 50 or so each.

A majority of the layoffs/spinoffs will be in Canada. There’s close to 400-500 employees that will be either laid off in a sale or spun off to a new company. Field offices are going to get hard as well.

It sucks, but this is the shale business now. It’s an extremely complicated business model that no one is even sure if it works or not. (Us shale as a whole has not had a year where they generate more cash than they burn despite being 10 years in. That’s aggregate, on the whole.) Okc will take some hits in this round but for the most part the cuts will be in other basins.

Engineer layoffs were done last Friday and last Monday, the layoffs today and tomorrow were accounting, HR, admin, etc.

[gopokes88]

Devon will run 0 rigs in the stack next year. They were at 10 in 2017.

Stack is a total bust. Rig count is down 50% year over year. Oklahoma oilfield is in trouble.

[mugofbeer]

Devon will run 0 rigs in the stack next year. They were at 10 in 2017.

Stack is a total bust. Rig count is down 50% year over year. Oklahoma oilfield is in trouble.

I don't know about STACK being a bust or if the cost of production exceeds the cost of oil on the market. Drive from Guthrie to Watonga sometime and marvel at the extent of drilling, pipelines, pump stations and all that comes with a concentrated drilling field. Billions have been spent here. I don't think its a bust but l do agree it will be a very long time, if ever, there is a boom.

Worldwide prices are low due to slow economies and barring Persian Gulf War or a Cat 5 slamming Houston / New Orleans, prices aren't going up much for an extended period. Cars are using less and less gas and the first pipeline from the Permian Basin to the Gulf is open and 2 more are on the way. There will soon be plenty of oil and especially LNG to export through the Gulf.

Devons layoffs are just an economic move. It has nothing to do with incentives, tax breaks, subsidies or anything else beyond supply and demand.
Supply far exceeds demand right now.

Those who think they are going to keep people employed for charity are simply dreaming. Yes, its bad layoffs happen. It's happened to me 3 times in my life but its a good job market if you can jump to another industry and I'm sure all of the laid-off are getting a good severance package. Life isnt fair but things like this happen.

[mugofbeer]

I just read the US exports 3 million barrels/day and it could be up to 5 million in 2 years compared with 7.5mm/day by Saudi Arabia.

[gopokes88]

One of the pioneers of the stack, who paid over 3.2 billion for Felix energy is at 0 rigs and leaving the basin for dead in less than 5 years.

I don’t know how to phrase it differently. The stack is a bust and capital is leaving Oklahoma not coming to it. That will pretty quickly start to effect Oklahoma’s oil production. Good for the US ok exports but all that growth is Permian and Bakken related. Oklahoma’s production will continue to decline.

[OkiePoke]

Historically, the O&G business has been a demand driven market. In the last few years, it has switched to supply driven. There is simply too much oil being produced than needed.

I don't think the Stack is dead, but definitely isn't as profitable as everyone has hoped. There seems to be decent gas production. If gas prices ever rise, and with increased exporting of gas/lng, this play will still be relevant. The infrastructure is built-out for when/if that happens.

[BG918]

Historically, the O&G business has been a demand driven market. In the last few years, it has switched to supply driven. There is simply too much oil being produced than needed.

I don't think the Stack is dead, but definitely isn't as profitable as everyone has hoped. There seems to be decent gas production. If gas prices ever rise, and with increased exporting of gas/lng, this play will still be relevant. The infrastructure is built-out for when/if that happens.

Oklahoma has a huge natural gas reserve pretty much stretching across the state (as opposed to oil which is mostly concentrated in the western half). The problem is that NG prices are too low for this to be very profitable, but that will change in time.

[Mr. Blue Sky]

Oklahoma has a huge natural gas reserve pretty much stretching across the state (as opposed to oil which is mostly concentrated in the western half). The problem is that NG prices are too low for this to be very profitable, but that will change in time.

The question is not about the price or availability, it’s about its ability to
survive as a source of energy at all. Time is short.
https://theweek.com/articles/785309/...an-natural-gas

[chuck5815]

The question is not about the price or availability, it’s about its ability to
survive as a source of energy at all. Time is short.
https://theweek.com/articles/785309/...an-natural-gas

lol, yeah, whatever.

[Mr. Blue Sky]

lol, yeah, whatever.

That comment simply shows you are living on an island.
Forget the dynamics of the science, you are denying what's happening - on a global scale - to fight climate change. You can pretend the climate change is not real, but you can't pretend that, right or wrong, the serious steps to stop it is very real indeed. You might try getting off the island (and the fossil fuels echo chamber) and start thinking of a very different future. Laugh it off at your own expense. Not climate change per se, but the future of what's coming sooner rather than later to fight it -- real or not -- and it's not a pretty picture for the islands that want to pretend it's 1954.

[OKC Guy]

We only have 12 years left to live...actually less now if I’m not mistaken lol.

[Mr. Blue Sky]

We only have 12 years left to live...actually less now if I’m not mistaken lol.

See? You, too, are missing my point. You want to argue, make fun of, dismiss the science. The economic impact on our city, companies like Devon, are looking at a very different future due to all that is being done, and what's coming, to fight climate change -- real. or. not. And hint: it doesn't include fossil fuels. That's all I'm saying.

[chuck5815]

That comment simply shows you are living on an island.
Forget the dynamics of the science, you are denying what's happening - on a global scale - to fight climate change. You can pretend the climate change is not real, but you can't pretend that, right or wrong, the serious steps to stop it is very real indeed. You might try getting off the island (and the fossil fuels echo chamber) and start thinking of a very different future. Laugh it off at your own expense. Not climate change per se, but the future of what's coming sooner rather than later to fight it -- real or not -- and it's not a pretty picture for the islands that want to pretend it's 1954.

Wrong.

[mugofbeer]

One of the pioneers of the stack, who paid over 3.2 billion for Felix energy is at 0 rigs and leaving the basin for dead in less than 5 years.

I don’t know how to phrase it differently. The stack is a bust and capital is leaving Oklahoma not coming to it. That will pretty quickly start to effect Oklahoma’s oil production. Good for the US ok exports but all that growth is Permian and Bakken related. Oklahoma’s production will continue to decline.

Respectfully, can you provide some backup to your claims? STACK is an important part of their portfolio and from what l can see, continues to be. They have said they are cutting down on the density of well location in the area but they continue to drill and continue to produce as do numerous other companies. As l said, all you have to do is drive Guthrie to Watonga. The activity is amazing.
Yes, they sold their Canadian assets and have looked to see about options in the Barnett but l can't find mention of abandoning STACK.

[dankrutka]

We only have 12 years left to live...actually less now if I’m not mistaken lol.

It's such a funny topic. These scientists are great comedians.

[Rover]

Those funny scientists... they actually are proclaiming the world to be round. Us deniers know it’s really flat..everyone says so. Round earth is fake news. Make uninformed opinion great again.

[gopokes88]

Respectfully, can you provide some backup to your claims? STACK is an important part of their portfolio and from what l can see, continues to be. They have said they are cutting down on the density of well location in the area but they continue to drill and continue to produce as do numerous other companies. As l said, all you have to do is drive Guthrie to Watonga. The activity is amazing.
Yes, they sold their Canadian assets and have looked to see about options in the Barnett but l can't find mention of abandoning STACK.

Lol. Sure. Here you go.

4 rigs! Wow!!! It’s was 4X that a year ago.

I work in the oilfield, the news will break eventually, but they’ve got from 10 rigs to 2 at current in, one year. 2 will go to 0 before long.

[gopokes88]

Oklahoma has a huge natural gas reserve pretty much stretching across the state (as opposed to oil which is mostly concentrated in the western half). The problem is that NG prices are too low for this to be very profitable, but that will change in time.

No it won’t. The Marcellus and Haynesville have more prolific wells than Oklahoma. Any increase in nat gas prices will quickly be brought down by the fact we have at minimum 300+ years of gas supply at current production.

[RedDollar]

I've got a good hunch, that the problem with the STACK is depletion rate, which is the problem with almost all shale wells.

They have to continually keep drilling new wells to maintain production levels. Eventually, the financeers grow tired.