With the fourth quarter underway for Oklahoma City’s Devon Energy, the company’s leadership is moving ahead cautiously, despite third quarter earnings of $109 million or 27 cents a diluted share.
Yes, the company made money in the third quarter but Devon is hoping to finish some of its divestiture of certain assets before the end of the year.
“— with regard to our Barnett sale process, the bids are in and we continue to advance the process with interested parties. We expect to exit the Barnett by year end at a price that is consistent with our view of the intrinsic value of the asset,” said Dave Hager, President and CEO told investors and analysts at the recent third quarter earnings update.
The company also stated that its “sale process for its enhanced oil recovery project in the Rockies is also ongoing.” Devon has an ongoing debt-reduction program which saw interest costs cut by $20 million since the third quarter of 2018. The firm has yet to announce the conclusion of any of the divestiture efforts.
Even with success in its ventures, Devon is also paring down areas of operation that aren’t as productive as others in its operations.
“Looking ahead to 2020, we have conviction in our multi-year plan and expect to progress the operational scale of our business in the highest return areas of our portfolio, while delivering growth in free cash flow. With the significant improvements in capital efficiency we have experienced across our asset portfolio, we believe we can achieve the strategic objectives of our multi-year plan with substantially lower capital requirements compared to the original projection we laid out in February of this year,” said Hager in early November.
Devon expects to bring online another 25 wells in the Eagle Ford in South Texas where it did not add any new wells in the third quarter. Production is also expected to increase in Oklahoma’s STACK.
The company plans to be selective in the areas of exploration, only investing in the “high-return projects” that will expand cash flow.