Must-know: Soros Fund Management's positions in 1Q 2014

Part 4
Must-know: Soros Fund Management's positions in 1Q 2014 (Part 4 of 9)

Soros Fund Management opens a 1Q14 position in Devon Energy

Soros Fund Management and Devon Energy

Soros Fund Management added new positions in Baker Hughes Inc. (BHI), RF Micro Devices Inc. (RFMD), Devon Energy (DVN), Spansion Inc. (CODE), and Marathon Petroleum (MPC) in 1Q14. The top positions it sold include J.P. Morgan Chase & Co. (JPM), Citigroup (C), and J.C. Penney (JCP).

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George Soros’ Soros Fund Management added a new position in Devon Energy (DVN) that accounts for 0.50% of the fund’s 1Q 2014 portfolio.

Devon Energy is an independent energy company engaged primarily in the exploration, development, and production of oil, natural gas, and NGLs. Its operations are concentrated in various North American onshore areas in the U.S. and Canada.

In February, Devon closed the GeoSouthern acquisition and acquired GeoSouthern’s Eagle Ford Shale assets and operations in South Texas for approximately $6 billion. This acquisition included approximately 250 MMBoe of proved reserves and was announced in November last year. The acquisition was funded with a combination of cash on hand and borrowings. Devon said it expects to repay the borrowings with free cash flow and proceeds from the monetization of non-core assets.

As part of the above strategy to sell non-core assets, the Oklahoma City–based Devon Energy last month completed the sale of its Canadian conventional assets to Canadian Natural Resources Limited for $2.8 billion. It also recently acquired 50,000 net acres and associated production, primarily in the Cana-Woodford Shale for $249 million in cash.

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Devon’s 1Q 2014 results beat estimates with a profit of $324 million, or $0.79 per share, compared to a loss of $1.3 billion, or $3.34 per share, in the same period the previous year. Revenue surged 89% to $3.73 billion. Devon said the improved 2014 results were driven primarily by increases in oil and gas prices, liquids volumes, and oil realizations.

A November report on the Market Realist website on Devon’s Eagle Ford acquisition noted that with the addition of the Eagle Ford properties and with the exclusion of the assets to be sold, Devon will have significantly more oil production and will continue to shift more towards oil and less towards natural gas. For more on the acquisition, please read Must-know points from Devon Energy’s $6 billion acquisition.

The above series also states that Devon and other companies located in the Eagle Ford are part of energy ETFs such as the Energy Select Sector SPDR (XLE), the Vanguard Energy ETF (VDE), the iShares US Energy ETF (IYE), and the Oil & Gas Exploration & Production SPDR (XOP).

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