Devon Energy Corp. (DVN: Quote) said it plans to consolidate its U.S. personnel into a single operations group centrally located at the company's corporate headquarters in Oklahoma City. Consequently, Devon would 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 may be substantially complete by the end of first-quarter 2013.
Dave Hager, Devon's executive vice president of exploration and production noted, "Consolidating our U.S. operations will improve our ability to quickly shift the focus of our workforce between project areas as economic conditions dictate." As a result of these changes, the company expects savings of around $80 million annually. The cost reductions would materialize through both lower general and administrative expenses and reduced capitalized personnel costs.
Reorganization charges are estimated to approximate $125 million, with $100 million expected to be incurred in the 2012 fourth quarter, while the remaining costs would 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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by RTT Staff Writer
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