Despite taking a substantial second quarter loss, Devon Energy Corporation raised its full-year guidance due to asset sales, cost reductions and better-than-expected production. On Tuesday, the Oklahoma City-based independent oil and natural gas exploration and production company reported a second quarter net loss of $1.6 billion or $3.04 a share, up from a loss of $2.8 billion, or $6.94 a share, in the second quarter of 2015.
Revenues fell to $2.5 billion from $3.4 billion when compared with 2015’s second quarter results.
The company also reported adjusted earnings before interest, taxes depreciation and amortization of $649 million.
“Devon Energy’s strategy of operating in North America’s best resource plays, coupled with a focus on delivering best-in-class execution, led to another quarter of excellent operational results,” said Dave Hager, President and CEO. “Production from our U.S. resource plays once again exceeded guidance expectations and we were able to deliver this out-performance with dramatically lower costs. With the cost savings achieved year to date, we are now on pace to reduce operating and G&A expenses by nearly $1 billion in 2016.”
Total oil production averaged 259,000 barrels a day, marking a decrease compared to 270,000 barrels a day from the second quarter of 2015.
Among the second quarter highlights, the company stated it exceeded production expectations in U.S. resource plays, reduced lease operating expenses 26 percent year over year and completed an asset divestiture program with proceeds totaling $3.2 billion.
“In addition to our strong operating performance, we were able to significantly improve our financial strength over the past several months with the timely completion of our non-core asset divestiture program,” said Hager. “Total divestitures reached $3.2 billion and surpassed the top end of our $2 billion to $3 billion guidance range. The majority of the sales proceeds will be utilized to reduce debt and position us to further accelerate investment in our best-in-class U.S. resource plays, led by the STACK and Delaware Basin.”