UPDATE 3-Devon sees no output growth; reconsiders MLP for midstream assets

Wed Feb 20, 2013 2:42pm EST
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* Oil output in Permian Basin up 31 pct in Q4

* Reports Q4 loss on asset impairment charges

* Adjusted profit beats analysts' estimates

* Sees 2013 E&P capex down 25 percent

* Shares fall 5 pct

Feb 20 (Reuters) - Devon Energy Corp said it expects output to stay flat this year as it spends less on exploration and production, and is relooking at the prospect of forming a master limited partnership for its pipelines and processing assets.

The oil and gas producer had first considered forming a publicly-traded MLP in 2007 for its gas pipeline and processing operations in Texas, Oklahoma, Wyoming and Montana, but had called off the plan due to market conditions.

MLPs have found favor with owners of cash-generating pipeline and other energy infrastructure in recent years because they pay virtually no corporate taxes.

"We will leave no stone unturned in looking for true value-creation opportunities. One potential opportunity that appears to have promise is the creation of a midstream master limited partnership," Devon Chief Executive John Richels said on a conference call with analysts.   Continued...