Devon Energy Announces Consolidation of U.S. E&P Operations; To save $80M Annually
Devon Energy Corporation (NYSE: DVN) today announced plans to consolidate its U.S. personnel into a single operations group centrally located at the company's corporate headquarters in Oklahoma City. As a result, Devon will close its office in Houston and transfer operational responsibilities for assets in South Texas, East Texas and Louisiana to Oklahoma City. The company expects to relocate a number of employees from Houston to Oklahoma City. The completion of this initiative is expected to be substantially complete by the end of the first-quarter 2013.
“Consolidating our U.S. operations will improve our ability to quickly shift the focus of our workforce between project areas as economic conditions dictate,” said Dave Hager, Devon's executive vice president of exploration and production. “In addition, this move will improve the sharing of best practices and enhance overall operational efficiency.”
Devon expects the announced changes to deliver savings of approximately $80 million annually. The cost reductions will materialize through both lower general and administrative expenses and reduced capitalized personnel costs.
Reorganization charges are expected to approximate $125 million, with $100 million estimated to be incurred in the fourth-quarter 2012. The remaining costs will be incurred in the first half of 2013. In aggregate, roughly 20 percent of the total restructuring charges are non-cash.
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