Shale play Devon Energy reported better than expected first quarter earnings after the market close Tuesday and raised production guidance with improving well productivity in the Delaware and STACK.
Shale play Devon Energy reported better than expected first quarter earnings after the market close Tuesday and raised production guidance with improving well productivity in the Delaware and STACK
Devon reported with other key Shale names with footprints in the main shale basins the Permian, Marcellus and Utica.
Earnings, adjusted for non-recurring costs, were 20 cents per share, beating Wall Street expectations of 19 cents per share. Revenue of $3.81 billion missed Street forecastsof $3.89 billion. Net loss attributable to company shareholders stood at $197 million, or 38 cents per share compared with a profit of $303 million, or 58 cents per share, a year earlier. otal revenue rose to $3.81 billion from $3.55 billion
Devon Energy Corp NYSE: $DVN
Market Reaction > After hours 37.60 +1.40 (3.87%)
Q1 production averaged 544K boe/day (46% oil), driven by Delaware and STACK assets, where combined oil production increased 16% Q/Q.
In the Delaware, new well activity in Q1 was headlined by two Boundary Raider wells that achieved a combined 24-hour initial production rate of ~24K boe/day (80%), which DVN says are the highest-rate wells brought online in the history of the Delaware Basin.
For the full year, DVN now sees production of 536K-560K boe/day, for an estimated Y/Y growth rate of 16%, up from the previous guidance of 14%; the improved outlook is driven by a combination of improving well productivity in the Delaware and STACK as well as efficiency gains compressing cycle times with development projects.
“Importantly, we are delivering this incremental production with lower costs.We expect per-unit lease operating expense to decline 5%-10% by year-end, and we are on pace to reduce G&A and interest costs by $175M annually.”
Last year Devon sold Eagle Ford Assets to Penn Virginia for $205 Million as part of its $1 billion divestiture plan, first announced in May, 2017.
Devon Energy Operations
About Devon Energy
Devon Energy Corporation is a leading independent oil and natural gas exploration and production company. Devon’s operations are focused onshore in the United States and Canada. Devon has more than doubled its onshore North American oil production since 2011. Today the company produces approximately 250,000 barrels a day and has a deep inventory of development opportunities to deliver future oil growth. Devon also produces about 1.3 billion cubic feet of natural gas a day and about 100,000 barrels of natural gas liquids per day.
Headquartered in Oklahoma City, Devon is a Fortune 500 company and is included in the S&P 500 Index. Its common shares trade on the New York Stock Exchange under the ticker symbol DVN.
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