Devon Energy (NYSE" DVN) is an international, independent oil and gas company that operates primarily in the U.S. but has major production centers in Canada, China, Azerbaijan, and West Africa. The company is one of the five largest holders of deepwater properties in the lower tertiary section of the Gulf of Mexico^[1], though production in the area is not expected to start until 2010. Deepwater exploration is both costlier (and made more so by the increasing day-rates of oilfield services companies) and riskier than traditional off-shore drilling, as finding reserves becomes more difficult. The company also controls 75% of the Barnett Shale's production volume, a natural gas deposit that is the second largest producing on-shore domestic natural gas field in the United States.

Overall profitability for the company is threatened by increases in royalties paid to the Alberta government over oil sands production, terrorism and political instability in West Africa, China, and Azerbaijan, and hurricanes in the Gulf of Mexico. Devon's closest competitors are Anadarko Petroleum, Apache, and Comstock Resources.

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