Last quarter, when exploration-and-production specialist Devon
In impressive fashion, Devon churned out even better growth in its latest quarter than Apache
With a current market capitalization near $35 billion, Devon's no small-fry. And its success further reinforces the growth gap between the large independents and integrated majors such as Imperial Oil
While the deepwater exploration of huge offshore prospects tends to hog the headlines, the real growth story today is about onshore unconventional gas production. Devon jumped into this realm with both feet -- first with its purchase of Mitchell Energy in 2001, and then with its Chief Holdings buy last year. The company now sits on the largest-acreage position in the boomin' Barnett Shale. Output there was up a whopping 37% this quarter.
So why aren't the supermajors swooping in on the Barnett, or other promising shale plays? The simple answer is that the present gas flows there are hardly enough to move the needle. Devon is flowing about 800 million cubic feet of gas per day out of the Barnett. That's less than 5% of the output from a supermajor such as Royal Dutch Shell
For now, Devon is master of its domain. I expect continued success out of its onshore position, and I imagine it will do well in its higher-risk endeavors in the deepwater.