Devon Energy posted better than expected first-quarter 2019 earnings and also reported increased oil production.
The company reported a 24 percent increase in light-oil production compared to the first quarter of 2018, reaching 138,000 bbl/day. The result was 8,000 barrels a day better as the company also saw a 76 percent surge in Delaware Basin output to 107,000 boe/day.
Because of the improvements, Dave Hager, President and CEO announced the company would be raising its full-year growth outlook for the company’s U.S. oil business.
““We now expect 2019 light-oil production growth to reach 17 percent, a 200 basis point improvement from our previous guidance. Importantly, we are delivering this incremental production growth without any increase in capital spending and our margins will benefit from operating and G&A cost-saving initiatives that are tracking ahead of plan,” said Hager.
He also said the company saw a 23 percent drop in some expenses in its corporate structure.
Overall, Devon reported a net loss of $317 million or 74 cents per diluted share. The company attributed the loss to a $670 million non-cash charge related to fair value changes in the company’s derivative position. But adjusting for items securities analysts typically exclude from published estimates, Devon’s core earnings totaled 36 cents per diluted share, exceeding analyst consensus estimates by a wide margin.
The company’s operating cash flow totaled $377 million in the first quarter. But it was reduced by $302 million due to the timing of working capital changes largely related to the Canadian business, driven by weak heavy-oil prices in the fourth quarter of 2018.
Devon also reported its $5 billion share-repurchase authorization as resulted in 114 million shares being repurchased, or greater than 20 percent of outstanding shares at a total cost of $4 billion. The company said it expects the repurchase program to reach $5 bill by the end of the year.
