Devon Energy Corporation Q2 2009 Earnings Call Transcript

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2009-08-05 13:01:28.0

Tags: Acre, Call Transcript, Earnings, Simmons & Co., Cana-Woodford, Financial Accounting, Finance, Seeking Alpha, Devon Energy Corp.

Question-and-Answer Session

Operator

[Operator Instructions]. Your first question comes from the line of Tom Gardner with Simmons & Company. Please proceed.

Thomas Gardner - Simmons & Company

I had a question regarding Devon's progress in derisking acreage in some of your key emerging plays, specifically in the Haynesville. I understand you have about 580,000 gross acres that may have changed, but have you ruled out any of this other than what you indicated in this morning's release as not being perspective or being perspective?

Dave Hager

No, we have not ruled out any of the acreage as not being perspective. We are methodically moving our way through the acreage position. At this point we drilled most of the wells in the Carthage area and we are very confident that we have derisked that area.

We are now moving to the south. We are currently drilling a well in the San Augustine county, the [Cardill] well. After that we will be drilling a well in Shelby county which is in between Carthage and San Augustine county. That will help to derisk an additional 47,000 acres. A great deal of the remaining acreage is actually minerals and held by production. So there's not as much of an urgency to derisk most of the other areas, outside of the acreage that I just mentioned.

Thomas Gardner - Simmons & Company

I have a similar question on the Cana-Woodford. I understand about 112,000 acres. Have you ruled any of that out?

Dave Hager

It's about 109,000 acres and, no, we have not ruled any of it out. The Cana-Woodford is working extremely well. The bulk of our drilling to date has been concentrated on what we call the core and the central portion of the position. We are now moving out to the western portion of the acreage position to evaluate it. So far everything has worked outstanding and as I mentioned, we are adding two additional rigs up there. So, we are obviously pleased with the results we are seeing.

Operator

Your next question comes from the line of David Heikkinen with Tudor Pickering Holt. Please proceed.

David Heikkinen - Tudor Pickering Holt

Just going through your guidance and I saw the 8-K, but working through numbers I understand you got 3 million barrels of curtailment. It looks like two of that is really in the fourth quarter.

Does that imply that you expect fourth quarter gas prices to be much lower than the third?

 

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