Devon completes first stage of buyback program

Devon Energy Corp. executives have completed the first phase of the company’s plan to buy back $4 billion in the company’s stock.

The company has bought back 50 million shares at an average price of $41 a share, for a total cost of just more than $2 billion, Devon said in a statement Friday.

Devon executives announced the stock buyback plan in March, with the goal of buying back $1 billion in common stock and repaying $1 billion in debt.

They said the company would pay for the program with increased cash flow and the proceeds of the sale of Barnett Shale assets in north Texas for $553 million.

The stock buyback program was expanded to $4 billion in June when executives announced the sale of Devon’s stake in pipeline companies EnLink Midstream LLC and EnLink Midstream Partners LP for $3.125 billion.

“We’re taking our position and monetizing a stock that’s done well and reinvesting those dollars back into Devon because we think the potential is even better there,” CEO Dave Hager said in a June 6 interview.

The share buyback program is part of Devon’s 2020 Vision program, which was announced last year and calls for the company to use increased cash flow and proceeds from asset sales to repay debt, buy back shares and increase the company’s dividend paid to shareholders.

Like those from most oil and natural gas companies, Devon’s shares languished over much of the past four years as the industry struggled through

its deepest downturn in a generation.

Devon shares are up 28 percent since the share

buyback program was announced on March 7. Domestic benchmark oil prices are up 13 percent over the same period.

Devon shares slipped $1.21, or 3 percent, Friday to close at $39.67 on the New York Stock Exchange.