October 16, 2012
Having personnel spread out around the country can be both a good and a bad thing for a large organization. On the plus side, multiple office locations can position a company in closer proximity to assets that are around the operating area, allowing for a better understanding of regional differences in operations. As for the negative aspects, companies often experience higher costs and greater confusion when determining the company's overall focus and direction.
To address some of these issues, Devon Energy (NYSE: DVN ) has decided to move its Houston-based office under the same roof as its corporate headquarters in Oklahoma City, Okla. The announcement came yesterday and is expected to be all but wrapped up in the first half of their FY2013.
Cost savings will be felt upon completion of the move and are expected to be around $80 million annually. The charges associated with the reorg should total $125 million and be spread over the coming fourth quarter and the first half of 2013. On top of the cost savings, Executive Vice President of Exploration and Production Dave Hager said operational efficiency and focus will also be improved.
Tune into the video below for a more detailed look at how this could make Devon more competitive with peers such as Apache (NYSE: APA ) , Newfield Exploration (NYSE: NFX ) and Noble Energy, (NYSE: NBL ) .
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