Devon Raises 2024 Projected Production

Wedoany.com Report-Nov 13,  United States producer Devon Energy Corp. has bumped up its output guidance for 2024 to between 811,000 and 830,000 barrels of oil equivalent a day (boed), supported by newly acquired assets in the Williston Basin.

“This fourth-quarter volume growth will be driven by an estimated 110,000 Boe per day of incremental production from the company’s Williston Basin acquisition”, Devon said in its quarterly report.

The estimated $5 billion transaction with Grayson Mill Energy LLC, completed late September, already contributed 5,000 boed to Devon’s total production of 728,000 boed in the July–September quarter.

Total third quarter volumes beat guidance by four percent and grew year-on-year and quarter-on-quarter. Besides the recently purchased properties, “strong well productivity” in the Delaware Basin also drove the increase. The Delaware Basin accounted for 67 percent of Devon’s total volumes in the third quarter.

The Oklahoma City-based exploration and production company reported $812 million in third quarter net profit, or $1.3 per diluted share, down from $910 million for the same period last year as lower prices offset higher production. Its average total realized price including cash settlements fell by prior-year and prior-quarter comparisons to $40.71 per barrel, with both petroleum and natural gas weakening.

“The lower price realization was primarily driven by reduced crude and natural gas liquids benchmark pricing”, Devon wrote. “Also contributing to the lower pricing was the expanded regional gas price differential in the Delaware Basin driven by infrastructure constraints”.

Citing “pull back in commodity prices and equities”, Devon slashed its total dividend rate to $0.22 per share, payable on December 30 to shareholders of record at the close of business on December 13. The previous rate was $0.44, consisting of fixed and variable dividends. The new declaration only consists of a fixed dividend.

Devon repurchased $295 million worth of common stock in the third quarter, raising buybacks to $3 billion since the launch of the redemption package in late 2021.

Revenues totaled $4.02 billion, up year-over-year and sequentially. That included $2.67 billion from sales of oil, gas and natural gas liquids.

Production costs including taxes dropped quarter-on-quarter to an average of $11.39 per boe thanks to “lower lease operating expenses resulting from more efficient field-level operations, lower well workovers and a decrease in production tax due to lower commodity prices”.

Net cash from operating activities stood at $1.66 billion, up year-on-year but down quarter-on-quarter. Free cash flow was $786 million.

EBITDAX totaled $1.85 billion. Earnings before income taxes came at $1.06 billion.

Devon closed the quarter with $3.23 billion in current assets including $676 million in cash, cash equivalents and restricted cash. Its current liabilities stood at $2.91 billion, having retired $472 million of outstanding debt at maturity in the third quarter.