While Devon Energy’s leadership maintains the firm’s financial position is “exceptionally strong,” the firm released its first quarter 2020 financial results on Tuesday showing a net loss of $1.8 billion or $4.82 per diluted share. It also indicated it intends to lower oil production in the second quarter of the year.
The company said the loss was attributable to $2.8 billion of non-cash impairment charges due to asset evaluations associated with current business conditions. Its financial report said Devon’s adjusted core earnings were $48 million or 13 cents a diluted share.
The company said its operating cash flow from continuing operations totaled $529 million in the first quarter which represented a 21% increase compared to the same period a year ago.
Devon reported it exited the quarter with $1.7 billion of cash and an undrawn credit facility of $3 billion. At the end of the quarter, Devon had an outstanding debt balance of $4.3 billion
with no outstanding debt maturities occurring until late 2025.
Company leadership said the firm’s financial strength is enhanced by an attractive hedge position where nearly 90% of expected oil production is protected for the remainder of 2020. The contracts provide an average protected floor price of $42 a barrel.
The company invested $38 million to repurchase 2.2 million shares of its common stock in the first quarter. Devon has suspended its share repurchase program to preserve liquidity in light of the COVID-19 pandemic.
In March, Devon announced it had cut its capital expenditures by $800 million for the full-year 2020 and that represents a 45% reduction compared to the original 2020 capital budget. Devon said it anticipates investing up to $250 million of capital.
It also anticipates second-quarter oil production to average 145,000 to 155,000 barrels of oil a day. Included within the company’s second-quarter production outlook
is the election to curtail 10,000 barrels per day due to low commodity prices. Given the ongoing price
volatility, curtailment decisions are expected to be made on a month-to-month basis. For the full-year,
Devon expects oil production to be essentially flat compared to 2019.
Click here to view Devon’s report.
Source: Devon Energy