Despite the leadership change, incoming CEO Dave Hager, 58, said the company will continue with much the same strategy and direction when he takes over Aug. 1.
“This will be an extremely smooth transition,” Hager said. “Larry Nichols, John Richels and myself all have tremendous respect for each other and will continue to work together in the future.”
Outgoing CEO Richels, 64, will remain on Devon’s board. The company’s directors have said they plan to promote Richels to chairman next year when co-founder and former CEO Nichols is expected to retire from the board and become chairman emeritus.
Industry analyst Fadel Gheit praised the transition process.
“Dave Hager is not new to the company or to the industry. He is a quality person with vast experience who is very well respected and admired by his peers,” said Gheit, an analyst with Oppenheimer in New York. “They replace quality with quality.”
Devon executives and directors detailed the transition plan in December.
“It’s an orderly change, an orderly retirement,” Gheit said. “It couldn’t have been smoother. It was well telegraphed to the market.”
Hager has spent much of the past 15 years in Oklahoma City, first at Kerr-McGee Corp. and at Devon since 2009. Hager takes over Devon at a difficult time for the oil and natural gas industry with oil prices at less than half their year-ago level and natural gas prices seven years into a down market.
“Commodity prices impact everyone in the business, but Devon has a strong balance sheet and a great financial strength, which is a good place to start from,” Hager said. “We have the ability to adjust our capital spending as appropriate given the cashflow of the company.”
Despite cutting its drilling budget and reducing operations, Devon has avoided large-scale layoffs.
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