Devon Energy's (NYSE: DVN) second-quarter results have shown that the shale plays are not exactly a fluke. Some solid fundamental growth, coupled with some excellent market conditions, has ensured impressive results.
Numbers show the way
Net profits shot up a fantastic 288% to $2.7 billion from $706 million in the year-ago quarter. Production rose to 60.1 million barrels of oil equivalent in the second quarter -- a 2.7% increase. Onshore North American production, which saw a 6% increase over last year' second quarter, averaged a chart-topping 660,000 barrels of oil equivalent per day. This should be exciting to any Foolish investor.
My money is on this region. Expect this company to exploit its North American onshore properties soon. A shrewd management has already divested $10 billion worth of nonstrategic properties, which included the sale of its Brazilian operations and offshore Gulf of Mexico operations. With net proceeds of $8 billion after tax, the future looks promising.
The gamble pays off
A little more than a month back, I wrote that the company's future depends on the success of this particular strategy. It is definitely paying off.
Now comfortably placed in terms of resources, Devon should be accelerating its development and drilling programs. Its oil- and liquids-rich Permian and Western Canadian properties should see substantial contribution toward production soon. Suncor Energy (NYSE: SU) and Cenovus Energy (NYSE: CVE) have already shown what the sedimentary basins of Western Canada are capable of producing.
Its head start in shale play exploration and production should always come in handy. The company plans to target new plays -- the Utica and Wolfcamp shale plays -- where it plans to drill three and eight wells, respectively, this year.
With natural gas giant Chesapeake Energy (NYSE: CHK) already developing two major properties in Utica, Devon couldn't be far behind.
Foolish bottom line
Devon looks set for hugely promising growth, and there is no doubt that things will look even better in the future. Foolish investors have something big here.
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