Moody's: Devon outlook now stable

Moody's Investors Service said it affirmed the long-term debt ratings of Devon Energy Corp. (Baa2 senior unsecured) and raised the outlook to stable from negative.

Moody's said the change in Devon's outlook reflects progress the company has made in several areas discussed in Moody's credit opinion dated June 3, including (i) reduced leverage through debt repayment and cash accumulation for future debt retirement; (ii) improved clarity around organic reserves replacement that should more than replace 2004 production; and (iii) lower full-cycle costs, with 2004 drillbit finding and development costs expected to be roughly half of 2003 values.

The stable outlook also considers Moody's expectation that Devon will prudently manage its announced asset sale and stock repurchase plan in the current robust commodity price environment, such that excess cash would be returned to shareholders only after appropriate capital investments to replace production and after targeted debt repayment.

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