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These excerpts taken from the DVN 10-K filed Feb 27, 2009. 2008
Reductions
The 2008 reductions were all recognized in the fourth quarter of
2008 and resulted primarily from a significant decrease in each
country’s full cost ceiling. The lower ceiling values
largely resulted from the effects of sharp declines in oil, gas
and NGL prices compared to previous quarter-end prices. To
demonstrate this decline, the December 31, 2008 and
September 30, 2008 weighted average wellhead prices for the
United States, Canada and Brazil are presented in the following
table.
N/A — Not applicable.
The December 31, 2008 oil and gas wellhead prices in the
table above compare to the NYMEX cash price of $44.60 per Bbl
for crude oil and the Henry Hub spot price of $5.71 per MMBtu
for gas. The September 30, 2008, wellhead prices in the
table compare to the NYMEX cash price of $100.64 per Bbl for
crude oil and the Henry Hub spot price of $7.12 per MMBtu for
gas.
2008
Reductions
The 2008 reductions were all recognized in the fourth quarter of
2008 and resulted primarily from a significant decrease in each
country’s full cost ceiling. The lower ceiling values
largely resulted from the effects of sharp declines in oil, gas
and NGL prices compared to previous quarter-end prices. To
demonstrate this decline, the December 31, 2008 and
September 30, 2008 weighted average wellhead prices for the
United States, Canada and Brazil are presented in the following
table.
N/A — Not applicable.
The December 31, 2008 oil and gas wellhead prices in the
table above compare to the NYMEX cash price of $44.60 per Bbl
for crude oil and the Henry Hub spot price of $5.71 per MMBtu
for gas. The September 30, 2008, wellhead prices in the
table compare to the NYMEX cash price of $100.64 per Bbl for
crude oil and the Henry Hub spot price of $7.12 per MMBtu for
gas.
2006
Reductions
As a result of a decline in the estimated future net revenues,
the carrying value of our Russian oil and gas properties
exceeded the full cost ceiling by $10 million at the end of
the third quarter of 2006. Therefore, we
Table of Contents
recognized a $20 million reduction of the carrying value of
our oil and gas properties in Russia, offset by a
$10 million deferred income tax benefit.
During the second quarter of 2006, we drilled two unsuccessful
exploratory wells in Brazil and determined that the capitalized
costs related to these two wells should be impaired. Therefore,
in the second quarter of 2006, we recognized a $16 million
impairment of our investment in Brazil equal to the costs to
drill the two dry holes and a proportionate share of
block-related costs. There was no tax benefit related to this
impairment. The two wells were unrelated to our Polvo
development project in Brazil.
2006
Reductions
As a result of a decline in the estimated future net revenues,
the carrying value of our Russian oil and gas properties
exceeded the full cost ceiling by $10 million at the end of
the third quarter of 2006. Therefore, we
Table of Contents
recognized a $20 million reduction of the carrying value of
our oil and gas properties in Russia, offset by a
$10 million deferred income tax benefit.
During the second quarter of 2006, we drilled two unsuccessful
exploratory wells in Brazil and determined that the capitalized
costs related to these two wells should be impaired. Therefore,
in the second quarter of 2006, we recognized a $16 million
impairment of our investment in Brazil equal to the costs to
drill the two dry holes and a proportionate share of
block-related costs. There was no tax benefit related to this
impairment. The two wells were unrelated to our Polvo
development project in Brazil.
2008 Reductions The 2008 reductions were all recognized in the fourth quarter of 2008 and resulted primarily from a significant decrease in each country’s full cost ceiling. The lower ceiling values largely resulted from the effects of sharp declines in oil, gas and NGL prices compared to previous quarter-end prices. To demonstrate this decline, the December 31, 2008 and September 30, 2008 weighted average wellhead prices for the United States, Canada and Brazil are presented in the following table.
N/A — Not applicable. The December 31, 2008 oil and gas wellhead prices in the table above compare to the NYMEX cash price of $44.60 per Bbl for crude oil and the Henry Hub spot price of $5.71 per MMBtu for gas. The September 30, 2008, wellhead prices in the table compare to the NYMEX cash price of $100.64 per Bbl for crude oil and the Henry Hub spot price of $7.12 per MMBtu for gas. 2008 Reductions The 2008 reductions were all recognized in the fourth quarter of 2008 and resulted primarily from a significant decrease in each country’s full cost ceiling. The lower ceiling values largely resulted from the effects of sharp declines in oil, gas and NGL prices compared to previous quarter-end prices. To demonstrate this decline, the December 31, 2008 and September 30, 2008 weighted average wellhead prices for the United States, Canada and Brazil are presented in the following table.
N/A — Not applicable. The December 31, 2008 oil and gas wellhead prices in the table above compare to the NYMEX cash price of $44.60 per Bbl for crude oil and the Henry Hub spot price of $5.71 per MMBtu for gas. The September 30, 2008, wellhead prices in the table compare to the NYMEX cash price of $100.64 per Bbl for crude oil and the Henry Hub spot price of $7.12 per MMBtu for gas. 2006 Reductions As a result of a decline in the estimated future net revenues, the carrying value of our Russian oil and gas properties exceeded the full cost ceiling by $10 million at the end of the third quarter of 2006. Therefore, we
Table of Contentsrecognized a $20 million reduction of the carrying value of our oil and gas properties in Russia, offset by a $10 million deferred income tax benefit. During the second quarter of 2006, we drilled two unsuccessful exploratory wells in Brazil and determined that the capitalized costs related to these two wells should be impaired. Therefore, in the second quarter of 2006, we recognized a $16 million impairment of our investment in Brazil equal to the costs to drill the two dry holes and a proportionate share of block-related costs. There was no tax benefit related to this impairment. The two wells were unrelated to our Polvo development project in Brazil. 2006 Reductions As a result of a decline in the estimated future net revenues, the carrying value of our Russian oil and gas properties exceeded the full cost ceiling by $10 million at the end of the third quarter of 2006. Therefore, we
Table of Contentsrecognized a $20 million reduction of the carrying value of our oil and gas properties in Russia, offset by a $10 million deferred income tax benefit. During the second quarter of 2006, we drilled two unsuccessful exploratory wells in Brazil and determined that the capitalized costs related to these two wells should be impaired. Therefore, in the second quarter of 2006, we recognized a $16 million impairment of our investment in Brazil equal to the costs to drill the two dry holes and a proportionate share of block-related costs. There was no tax benefit related to this impairment. The two wells were unrelated to our Polvo development project in Brazil. 2008
Reductions
The 2008 reductions were all recognized in the fourth quarter of
2008 and resulted primarily from a significant decrease in each
country’s full cost ceiling. The lower ceiling values
largely resulted from the effects of sharp declines in oil, gas
and NGL prices compared to previous quarter-end prices. To
demonstrate this decline, the December 31, 2008 and
September 30, 2008 weighted average wellhead prices for the
United States, Canada and Brazil are presented in the following
table.
N/A — Not applicable.
The December 31, 2008 oil and gas wellhead prices in the
table above compare to the NYMEX cash price of $44.60 per Bbl
for crude oil and the Henry Hub spot price of $5.71 per MMBtu
for gas. The September 30, 2008, wellhead prices in the
table compare to the NYMEX cash price of $100.64 per Bbl for
crude oil and the Henry Hub spot price of $7.12 per MMBtu for
gas.
2008
Reductions
The 2008 reductions were all recognized in the fourth quarter of
2008 and resulted primarily from a significant decrease in each
country’s full cost ceiling. The lower ceiling values
largely resulted from the effects of sharp declines in oil, gas
and NGL prices compared to previous quarter-end prices. To
demonstrate this decline, the December 31, 2008 and
September 30, 2008 weighted average wellhead prices for the
United States, Canada and Brazil are presented in the following
table.
N/A — Not applicable.
The December 31, 2008 oil and gas wellhead prices in the
table above compare to the NYMEX cash price of $44.60 per Bbl
for crude oil and the Henry Hub spot price of $5.71 per MMBtu
for gas. The September 30, 2008, wellhead prices in the
table compare to the NYMEX cash price of $100.64 per Bbl for
crude oil and the Henry Hub spot price of $7.12 per MMBtu for
gas.
2006
Reductions
As a result of a decline in the estimated future net revenues,
the carrying value of Devon’s Russian oil and gas
properties exceeded the full cost ceiling by $10 million at
the end of the third quarter of 2006. Therefore, Devon
recognized a $20 million reduction of the carrying value of
its oil and gas properties in Russia, offset by a
$10 million deferred income tax benefit.
During the second quarter of 2006, Devon drilled two
unsuccessful exploratory wells in Brazil and determined that the
capitalized costs related to these two wells should be impaired.
Therefore, in the second quarter of 2006, Devon recognized a
$16 million impairment of its investment in Brazil equal to
the costs to drill the two dry holes and a proportionate share
of block-related costs. There was no tax benefit related to this
impairment. The two wells were unrelated to Devon’s Polvo
development project in Brazil.
The components of other income include the following:
Table of Contents
DEVON
ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
2006
Reductions
As a result of a decline in the estimated future net revenues,
the carrying value of Devon’s Russian oil and gas
properties exceeded the full cost ceiling by $10 million at
the end of the third quarter of 2006. Therefore, Devon
recognized a $20 million reduction of the carrying value of
its oil and gas properties in Russia, offset by a
$10 million deferred income tax benefit.
During the second quarter of 2006, Devon drilled two
unsuccessful exploratory wells in Brazil and determined that the
capitalized costs related to these two wells should be impaired.
Therefore, in the second quarter of 2006, Devon recognized a
$16 million impairment of its investment in Brazil equal to
the costs to drill the two dry holes and a proportionate share
of block-related costs. There was no tax benefit related to this
impairment. The two wells were unrelated to Devon’s Polvo
development project in Brazil.
The components of other income include the following:
Table of Contents
DEVON
ENERGY CORPORATION AND SUBSIDIARIES
NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS —
(Continued)
2008 Reductions The 2008 reductions were all recognized in the fourth quarter of 2008 and resulted primarily from a significant decrease in each country’s full cost ceiling. The lower ceiling values largely resulted from the effects of sharp declines in oil, gas and NGL prices compared to previous quarter-end prices. To demonstrate this decline, the December 31, 2008 and September 30, 2008 weighted average wellhead prices for the United States, Canada and Brazil are presented in the following table.
N/A — Not applicable. The December 31, 2008 oil and gas wellhead prices in the table above compare to the NYMEX cash price of $44.60 per Bbl for crude oil and the Henry Hub spot price of $5.71 per MMBtu for gas. The September 30, 2008, wellhead prices in the table compare to the NYMEX cash price of $100.64 per Bbl for crude oil and the Henry Hub spot price of $7.12 per MMBtu for gas. 2008 Reductions The 2008 reductions were all recognized in the fourth quarter of 2008 and resulted primarily from a significant decrease in each country’s full cost ceiling. The lower ceiling values largely resulted from the effects of sharp declines in oil, gas and NGL prices compared to previous quarter-end prices. To demonstrate this decline, the December 31, 2008 and September 30, 2008 weighted average wellhead prices for the United States, Canada and Brazil are presented in the following table.
N/A — Not applicable. The December 31, 2008 oil and gas wellhead prices in the table above compare to the NYMEX cash price of $44.60 per Bbl for crude oil and the Henry Hub spot price of $5.71 per MMBtu for gas. The September 30, 2008, wellhead prices in the table compare to the NYMEX cash price of $100.64 per Bbl for crude oil and the Henry Hub spot price of $7.12 per MMBtu for gas. 2006 Reductions As a result of a decline in the estimated future net revenues, the carrying value of Devon’s Russian oil and gas properties exceeded the full cost ceiling by $10 million at the end of the third quarter of 2006. Therefore, Devon recognized a $20 million reduction of the carrying value of its oil and gas properties in Russia, offset by a $10 million deferred income tax benefit. During the second quarter of 2006, Devon drilled two unsuccessful exploratory wells in Brazil and determined that the capitalized costs related to these two wells should be impaired. Therefore, in the second quarter of 2006, Devon recognized a $16 million impairment of its investment in Brazil equal to the costs to drill the two dry holes and a proportionate share of block-related costs. There was no tax benefit related to this impairment. The two wells were unrelated to Devon’s Polvo development project in Brazil.
The components of other income include the following:
Table of ContentsDEVON ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
2006 Reductions As a result of a decline in the estimated future net revenues, the carrying value of Devon’s Russian oil and gas properties exceeded the full cost ceiling by $10 million at the end of the third quarter of 2006. Therefore, Devon recognized a $20 million reduction of the carrying value of its oil and gas properties in Russia, offset by a $10 million deferred income tax benefit. During the second quarter of 2006, Devon drilled two unsuccessful exploratory wells in Brazil and determined that the capitalized costs related to these two wells should be impaired. Therefore, in the second quarter of 2006, Devon recognized a $16 million impairment of its investment in Brazil equal to the costs to drill the two dry holes and a proportionate share of block-related costs. There was no tax benefit related to this impairment. The two wells were unrelated to Devon’s Polvo development project in Brazil.
The components of other income include the following:
Table of ContentsDEVON ENERGY CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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