By Anna Driver and Michael Erman

HOUSTON/NEW YORK (Reuters) - Devon Energy Corp's latest bid to revive interest in its stock may take a page out of the activist investors' playbook, but Wall Street continues to look elsewhere for returns in the energy patch.

The Oklahoma City-based company said on Thursday it would transfer some assets into a publicly traded master limited partnership. The move, the latest in a four-year long effort to transform the company, was greeted by a yawn from investors who sent Devon shares lower on a day the overall market went up. That reaction symbolizes the rough ride the stock has taken in the past few years.

Starting in 2009, Devon decided to tighten its focus on North American drilling by selling off its international and offshore assets, a strategy that many of its competitors have since followed.

The move hasn't paid off for Devon. The company's shares have fallen about 30 percent over the last two years compared with a 25 percent gain in the Standard & Poor's 1500 index.

"They made strategic moves that did not work for them," said Fadel Gheit, oil analyst at Oppenheimer. "At the time, it seemed a good thing to do."

While the company's oil production is growing, about 60 percent of its output in the second quarter was natural gas, a commodity that fell to the lowest price in a decade about a year ago. Since then, natural gas has rebounded to around $4 per million British thermal units, but that price is still considered too low to be profitable in many fields.

Peers like Apache Corp and Hess Corp , which also trade with valuations that are at a discount to peers, are seen to have more options and higher exposure to oil. For example, Hess is in the process of selling its retail division and Apache initially plans to sell $4 billion in assets this year.

"I think the catalyst to make the change at Devon is just not that obvious," said a senior energy investment banker.

Many energy companies have used MLPs as a vehicle to improve valuation and raise cash.

Another energy investment banker said that due to increasing shareholder activism in the energy industry, executives at oil and gas companies are worried about being criticized publicly for being acquisitive.

"Everybody's trying to be a story in only a few basins and be a leader in those basins," the banker said. "That's what drives equity values right now - being in the right spot with size enough to drive economic results."

To invigorate growth at the $29 billion market cap company, Devon could invest more in areas that produce more profitable black oil, pay a big special dividend or shed all assets that it does not consider essential to its base, analysts said.

Chief Executive John Richels said in a statement that Devon has refocused its capital toward increasing production of U.S. oil, its highest margin product.

"In addition, Devon is evaluating a variety of alternatives to highlight the value of assets that may be currently underappreciated in the marketplace," Richels said. "This week's announced plan to form a midstream master limited partnership is an example of these efforts.".

ACTING LIKE AN ACTIVIST

The activist investors who have invaded the energy sector and prompted big change at companies including Hess and SandRidge Energy have not overtly made themselves known at Devon. Yet the company is taking measures to improve returns.

In addition to the MLP planned for the third quarter, Devon also recently repatriated $2 billion. The funds are targeted for debt reduction and a possible share buyback.

And more money from its 2010 international assets sales may be brought back into the country, Richels told analysts on the company's first-quarter earnings call.

Many energy companies, some of which had to be prodded into action by activist investors, have announced plans to shed assets over the last year, including Hess and Chesapeake Energy Corp .

Devon, like many other energy companies, is also shifting more capital to drilling on acreage in places including the Permian Basin that produce oil and natural gas liquids that are more profitable than natural gas. In the first quarter, Devon's U.S. oil production rose 23 percent.

But now it must find a way to accelerate its overall production growth which is so far nearly flat this year, said Mark Hanson, oil company analyst at Morningstar.

"The market has run in the other direction from any firm that isn't growing," said Hanson. "But it's hard to grow a company that size, it's like trying to turn around the Titanic."

(Reporting By Anna Driver in Houston and Mike Erman in New York; Editing by Patricia Kranz and Tim Dobbyn)

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