Stocks of Devon Energy Corp (NYSE:DVN) Can Go Up

The stocks of Devon Energy Corp (NYSE:DVN) are being traded at quite low prices these days, for the prices of oil have dropped considerably.

The shares of the company have recovered a little, even though the energy prices are still low. Market analysts are expecting the stock to rise even further, for the company has a number of compelling reasons, which suggest that it will go forward in the upcoming quarters.

The management of the company, in a recent sales call, stated that it is very optimistic about its future. It further commented that the portfolio of Devon Energy Corp (NYSE:DVN) seems profitable. The company currently has a very high drilling yield; although the costs are increasing, but the returns are going up as well. Devon mentioned that the company’s returns are ranging from staggering to significant.

Devon is in process of its hydraulic fracturing, and the company is filling the wells by sands. The sand will reveal the cracks in the rocks from which oil and gas will easily flow out. It is important to mention here that this new process is much more efficient than the previous process that the company was using to drill out oil from the reservoirs.

The company expects its yield to increase in the upcoming quarters for the impact of its new drilling process on its well is huge. Devon can drill out much more oil than its competitors, which has made its wells more valuable. Market analysts are expecting the company’s revenues to increase by many folds, for the spread from the new process will cover thousands of its wells.

The balance sheet of Devon Energy Corp (NYSE:DVN) is very strong, as the company has a total debt of $6.8 billion whereas the cash available in the company’s accounts is recorded to be at $3.4 billion. Moreover, the company also has $1 billion lying around in its midstream assets of EnLink Midstream Partners LP. If the assets of the company are combined with its cash ratio, the cash flow turns out to be quite strong. Market analysts are of the opinion that the company should go ahead and acquire one of its competitors.

It is important to mention here that the company recently acquired Eagle Ford Shale. This step of the company is an indication to the fact that Devon is not afraid of adding new and valuable assets to its portfolio. It will not be surprising if the company goes ahead and buys the Bakken Shale, for the financial results of that region are remarkable.

Devon Energy Corp (NYSE:DVN) does not rely on oil prices for a raise in its stocks, for it has discovered new ways of completions and drillings. Coming to the stock prices of Devon Energy Corp (NYSE:DVN), the company, on the last trading day of November 26, 2014, opened its stocks at a price of $64.35 and closed at a price of $64.02, after hitting the highest price of $64.50. The company has a total market capitalization of $26.19 billion.