DBRS confirms Devon Energy

DBRS said it confirmed the senior debt ratings of Devon Energy Corp. and Devon Finance Corp. at BBB (high) and the company's commercial paper at R-2 (high), all with stable trends.

The ratings are based on results and corporate developments in the six months ended June 30. The agency said Devon maintained a solid balance sheet through the first half despite lower cash flow resulting from decreased commodity pricing.

DBRS said the company's capital expenditures for the year ($6.5 billion to $6.9 billion) are aggressive relative to cash flow, as they focus the majority of its spending on liquids growth. This capex could result in deterioration of credit metrics unless other sources of funding (asset sales, joint ventures) are used, as the agency does not expect operating cash flow to fully fund capex and dividends for 2012.

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