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These excerpts taken from the DVN 10-K filed Feb 27, 2009. General
and Administrative Expenses (“G&A”)
Our net G&A consists of three primary components. The
largest of these components is the gross amount of expenses
incurred for personnel costs, office expenses, professional fees
and other G&A items. The gross amount of these expenses is
partially offset by two components. One is the amount of
G&A capitalized pursuant to the full cost method of
accounting related to exploration and development activities.
The other is the amount of G&A reimbursed by working
interest owners of properties for which we serve as the
operator. These reimbursements are received during both the
drilling and operational stages of a property’s life. The
gross amount of G&A incurred, less the amounts capitalized
and reimbursed, is recorded as net G&A in the
consolidated statements of operations. Net G&A includes
expenses related to oil, gas and NGL exploration and production
activities, as well as marketing and midstream activities. See
the following table for a summary of G&A expenses by
component.
2008 vs. 2007 Gross G&A increased $241 million.
The largest contributors to the increase were higher employee
compensation and benefits costs. These cost increases, which
were largely related to our growth and industry inflation during
most of 2008, caused gross G&A to increase
$184 million. Of this increase, $79 million related to
higher stock compensation.
Stock compensation increased $27 million in the second
quarter of 2008 due to a modification of the share-based
compensation arrangements for certain of our executives. The
modified compensation arrangements provide that executives who
meet certain years-of-service and age criteria can retire and
continue vesting in outstanding share-based grants. As a
condition to receiving the benefits of these modifications, the
executives must agree not to use or disclose Devon’s
confidential information and not to solicit Devon’s
employees and customers. The executives are required to agree to
these conditions at retirement and again in each subsequent year
until all grants have vested.
Although this modification does not accelerate the vesting of
the executives’ grants, it does accelerate the expense
recognition as executives approach the years-of-service and age
criteria. When the modification was made in the second quarter
of 2008, certain executives had already met the years-of-service
and age criteria. As a result, we recognized $27 million of
share-based compensation expense in the second quarter of 2008
related to this modification. In the fourth quarter of 2008, we
recognized an additional $16 million of stock compensation
for grants made to these executives. The additional expenses
would have been recognized in future reporting periods if the
modification had not been made and the executives continued
their employment at Devon.
Table of Contents
The higher employee compensation and benefits costs, exclusive
of the accelerated stock compensation expense, were also the
primary factors that caused the $94 million increase in
capitalized G&A in 2008.
2007 vs. 2006 Gross G&A increased $198 million.
The largest contributors to this increase were higher employee
compensation and benefits costs. These cost increases, which
were related to our growth and industry inflation during 2007,
caused gross G&A to increase $134 million. Of
this increase, $55 million related to higher stock
compensation. In addition, changes in the
Canadian-to-U.S. dollar exchange rate caused a
$13 million increase in costs.
The factors discussed above were also the primary factors that
caused the $69 million increase in capitalized G&A in
2007.
General
and Administrative Expenses (“G&A”)
Our net G&A consists of three primary components. The
largest of these components is the gross amount of expenses
incurred for personnel costs, office expenses, professional fees
and other G&A items. The gross amount of these expenses is
partially offset by two components. One is the amount of
G&A capitalized pursuant to the full cost method of
accounting related to exploration and development activities.
The other is the amount of G&A reimbursed by working
interest owners of properties for which we serve as the
operator. These reimbursements are received during both the
drilling and operational stages of a property’s life. The
gross amount of G&A incurred, less the amounts capitalized
and reimbursed, is recorded as net G&A in the
consolidated statements of operations. Net G&A includes
expenses related to oil, gas and NGL exploration and production
activities, as well as marketing and midstream activities. See
the following table for a summary of G&A expenses by
component.
2008 vs. 2007 Gross G&A increased $241 million.
The largest contributors to the increase were higher employee
compensation and benefits costs. These cost increases, which
were largely related to our growth and industry inflation during
most of 2008, caused gross G&A to increase
$184 million. Of this increase, $79 million related to
higher stock compensation.
Stock compensation increased $27 million in the second
quarter of 2008 due to a modification of the share-based
compensation arrangements for certain of our executives. The
modified compensation arrangements provide that executives who
meet certain years-of-service and age criteria can retire and
continue vesting in outstanding share-based grants. As a
condition to receiving the benefits of these modifications, the
executives must agree not to use or disclose Devon’s
confidential information and not to solicit Devon’s
employees and customers. The executives are required to agree to
these conditions at retirement and again in each subsequent year
until all grants have vested.
Although this modification does not accelerate the vesting of
the executives’ grants, it does accelerate the expense
recognition as executives approach the years-of-service and age
criteria. When the modification was made in the second quarter
of 2008, certain executives had already met the years-of-service
and age criteria. As a result, we recognized $27 million of
share-based compensation expense in the second quarter of 2008
related to this modification. In the fourth quarter of 2008, we
recognized an additional $16 million of stock compensation
for grants made to these executives. The additional expenses
would have been recognized in future reporting periods if the
modification had not been made and the executives continued
their employment at Devon.
Table of Contents
The higher employee compensation and benefits costs, exclusive
of the accelerated stock compensation expense, were also the
primary factors that caused the $94 million increase in
capitalized G&A in 2008.
2007 vs. 2006 Gross G&A increased $198 million.
The largest contributors to this increase were higher employee
compensation and benefits costs. These cost increases, which
were related to our growth and industry inflation during 2007,
caused gross G&A to increase $134 million. Of
this increase, $55 million related to higher stock
compensation. In addition, changes in the
Canadian-to-U.S. dollar exchange rate caused a
$13 million increase in costs.
The factors discussed above were also the primary factors that
caused the $69 million increase in capitalized G&A in
2007.
General
and Administrative Expenses (“G&A”)
Our G&A includes employee compensation and benefits costs
and the costs of many different goods and services used in
support of our business. G&A varies with the level of our
operating activities and the related staffing and professional
services requirements. In addition, employee compensation and
benefits costs vary due to various market factors that affect
the level and type of compensation and benefits offered to
employees. Also, goods and services are subject to general price
level increases or decreases. Therefore, significant variances
in any of these factors from current expectations could cause
actual G&A to vary materially from the estimate.
Given these limitations, we estimate our G&A for 2009 will
be between $565 million and $605 million. This
estimate includes approximately $110 million of non-cash,
share-based compensation, net of related capitalization in
accordance with the full cost method of accounting for oil and
gas properties.
General
and Administrative Expenses (“G&A”)
Our G&A includes employee compensation and benefits costs
and the costs of many different goods and services used in
support of our business. G&A varies with the level of our
operating activities and the related staffing and professional
services requirements. In addition, employee compensation and
benefits costs vary due to various market factors that affect
the level and type of compensation and benefits offered to
employees. Also, goods and services are subject to general price
level increases or decreases. Therefore, significant variances
in any of these factors from current expectations could cause
actual G&A to vary materially from the estimate.
Given these limitations, we estimate our G&A for 2009 will
be between $565 million and $605 million. This
estimate includes approximately $110 million of non-cash,
share-based compensation, net of related capitalization in
accordance with the full cost method of accounting for oil and
gas properties.
General and Administrative Expenses (“G&A”) Our G&A includes employee compensation and benefits costs and the costs of many different goods and services used in support of our business. G&A varies with the level of our operating activities and the related staffing and professional services requirements. In addition, employee compensation and benefits costs vary due to various market factors that affect the level and type of compensation and benefits offered to employees. Also, goods and services are subject to general price level increases or decreases. Therefore, significant variances in any of these factors from current expectations could cause actual G&A to vary materially from the estimate. Given these limitations, we estimate our G&A for 2009 will be between $565 million and $605 million. This estimate includes approximately $110 million of non-cash, share-based compensation, net of related capitalization in accordance with the full cost method of accounting for oil and gas properties. General and Administrative Expenses (“G&A”) Our G&A includes employee compensation and benefits costs and the costs of many different goods and services used in support of our business. G&A varies with the level of our operating activities and the related staffing and professional services requirements. In addition, employee compensation and benefits costs vary due to various market factors that affect the level and type of compensation and benefits offered to employees. Also, goods and services are subject to general price level increases or decreases. Therefore, significant variances in any of these factors from current expectations could cause actual G&A to vary materially from the estimate. Given these limitations, we estimate our G&A for 2009 will be between $565 million and $605 million. This estimate includes approximately $110 million of non-cash, share-based compensation, net of related capitalization in accordance with the full cost method of accounting for oil and gas properties. General
and Administrative Expenses
General and administrative expenses are reported net of amounts
reimbursed by working interest owners of the oil and gas
properties operated by Devon and net of amounts capitalized
pursuant to the full cost method of accounting.
General
and Administrative Expenses
General and administrative expenses are reported net of amounts
reimbursed by working interest owners of the oil and gas
properties operated by Devon and net of amounts capitalized
pursuant to the full cost method of accounting.
General and Administrative Expenses General and administrative expenses are reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Devon and net of amounts capitalized pursuant to the full cost method of accounting. General and Administrative Expenses General and administrative expenses are reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Devon and net of amounts capitalized pursuant to the full cost method of accounting. These excerpts taken from the DVN 10-K filed Jun 9, 2008. General
and Administrative Expenses
General and administrative expenses are reported net of amounts
reimbursed by working interest owners of the oil and gas
properties operated by Devon and net of amounts capitalized
pursuant to the full cost method of accounting.
Table of Contents
DEVON
ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
General and Administrative Expenses General and administrative expenses are reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Devon and net of amounts capitalized pursuant to the full cost method of accounting.
Table of ContentsDEVON ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) These excerpts taken from the DVN 10-K filed Feb 28, 2008. General
and Administrative Expenses
General and administrative expenses are reported net of amounts
reimbursed by working interest owners of the oil and gas
properties operated by Devon and net of amounts capitalized
pursuant to the full cost method of accounting.
Table of Contents
DEVON
ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
General and Administrative Expenses General and administrative expenses are reported net of amounts reimbursed by working interest owners of the oil and gas properties operated by Devon and net of amounts capitalized pursuant to the full cost method of accounting.
Table of ContentsDEVON ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued) This excerpt taken from the DVN 10-K filed Feb 28, 2007. General
and Administrative Expenses
General and administrative expenses are reported net of amounts
reimbursed by working interest owners of the oil and gas
properties operated by Devon and net of amounts capitalized
pursuant to the full cost method of accounting.
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