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Shale play Devon Energy reported better than expected third quarter earnings after the market close Tuesday. $DVN has been diversting aggressively and in August sold non-core Delaware assets to Carrizo Oil and Gas

Devon

Devon reports with other key Shale names with footprints in the main shale basins the Permian, Marcellus and Utica.

Devon Energy Corp NYSE: DVN Reported Earnings After Close Tuesday

$0.63 Beat Exp $0.43 EPS and $2.58 Beat $2.12 Billion Revenue Forecast

Earnings

Devon Energy Corp (NYSE: DVN) reported third -quarter earnings Tuesday of $2.54 billion. On a per-share basis a profit of $5.14. Earnings, adjusted to account for discontinued operations, came to 63 cents per share beating expectations of 43 cents per share. 

Revenue of $2.58 billion beat forecasts of $2.12 billion.with consensus. Investors were looking for an improvement from Q2 and an update on divestures and operating expenses.  

Devon Energy Corp NYSE: DVN

Market Reaction : After hours 32.35 −0.58 (-1.76%)

Highlights

  • Delaware Basin and Eagle Ford drive U.S. production outperformance
  • Third-quarter upstream capital expenditures were 9 percent below guidance
  • Operating cash flow expands 61 percent year over year to $807 million
  • Free cash flow generation reaches $249 million in third quarter
  • Stock-repurchase program on pace to decrease share count by 20 percent

Capital Spending Below Q3 Guidance;

No Change to 2018 Outlook In addition to the strong U.S. production performance, the company maintained discipline with its capital program. Devon’s upstream capital spending was $523 million in the third quarter, which was $52 million, or 9 percent below the company’s midpoint guidance.

For the full year, Devon has made no modifications to its capital outlook and expects its upstream capital spending to be approximately $2.4 billion in 2018.

 

Devon Divestures 

Devon Divesture Program

Devon announced they entered into a deal with Carrizo Oil & Gas to divest non-core Delaware Basin acreage for $215 million.

Devon has been aggressively divesting assets for a number of years. The deal includes 2.5 Mboe/d in production and 9,600 net acres in Ward and Reeves County, Texas. The deal is expected to close by the fourth quarter of 2018. Carrizo cited that the asset holds over 100 net potential de-risked locations across the Wolfcamp A and B, with upside from other zones.

CRZO cited a high degree of operational control with more than 90% of net acreage operated Minimal near-term drilling obligations as 94% of the acreage is held by production Low average royalty of approximately 20% Net production of approximately 2,500 Boe/d (60% oil)

More than 100 net potential de-risked drilling locations identified across the Wolfcamp A and B based on 7,000-ft. laterals, with significant upside potential from additional zones, further delineation, and future downspacing Includes salt-water disposal wells that can be integrated into the Company’s system Significant opportunities to generate efficiencies from increased scale, extension of lateral lengths, and integration of infrastructure, Read More

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 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.

Source: Devon  

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