Devon Energy Corp. reported its 2022 operating cash soared 74% and free cash flow for the year reached its highest level in company history.
Devon reported net earnings of $1.2 billion, or $1.83 per diluted share, in the fourth quarter of 2022.
As a result, Deon said its fixed-plus-variable dividend payout more than doubled last year to $5.17 per share. Oil production for the fourth quarter reached an all-time high of 316,000 barrels a day.
“2022 was another year of outstanding accomplishment for Devon that resulted in record-setting operating results and the best financial performance in our company’s prestigious 52-year history,” said Rick Muncrief, president and CEO.
“With our powerful suite of assets and financially driven strategy, our oil production reached a new all-time high, our streamlined cost structure captured the full benefit of rising commodity prices, and our disciplined reinvestment rates allowed us to generate a recordsetting amount of free cash flow during the year.”
Muncrief said looking to 2023, the company plans no change in its disciplined approach to the business.
FINANCIAL RESULTS
Devon reported net earnings of $1.2 billion, or $1.83 per diluted share, in the fourth quarter of 2022. Adjusting for items analysts
typically exclude from estimates, the company’s core earnings were $1.1 billion, or $1.66 per diluted share.
Operating cash flow totaled $1.9 billion in the fourth quarter, an 18 percent increase versus the year-ago period. This level of
cash flow funded all capital requirements and resulted in $1.1 billion of free cash flow for the quarter. For the full-year 2022,
operating cash flow totaled $8.5 billion, a 74 percent increase versus 2021. Devon’s free cash flow reached $6.0 billion in the
year, representing the highest amount in the company’s 52-year history.
The company’s investment-grade financial position continued to strengthen in the fourth quarter with cash balances increasing by
$144 million to a total of $1.5 billion. Devon exited the quarter with an outstanding debt balance of $6.4 billion and a net debt-to EBITDAX ratio of 0.5 times.
Based on the fourth-quarter financial performance, Devon declared a fixed-plus-variable dividend of $0.89 per share. The dividend is payable on March 31, 2023, to shareholders of record at the close of business on March 15, 2023. For the full-year 2022, the company’s dividend payout more than doubled compared to 2021 to a record high of $5.17 per share.
Devon also returned capital to shareholders through the ongoing execution of its $2.0 billion share-repurchase authorization. To date, the company has repurchased 26 million shares since the commencement of the program, at a total cost of $1.3 billion. With this repurchase program, Devon is on track to decrease its outstanding share count by 5 percent.
Production averaged 636,000 oil-equivalent barrels (Boe) per day in the fourth quarter, with oil volumes reaching a record high of
316,000 barrels per day. The company’s production in the quarter was reduced by 2 percent due to the impact of severe winter
weather across its portfolio.
Devon’s upstream program for the fourth quarter averaged 25 operated drilling rigs and 114 gross operated wells were placed online.
Total upstream capital spending was $874 million in the fourth quarter. Midstream, environmental, and other capital totaled $61
million in the quarter.
Production costs declined 6 percent compared to the previous quarter averaging $12.22 per Boe. The improved cost structure was driven by lower production taxes, resulting in field-level cash margins of $41.44 per Boe in the fourth quarter.
The company’s general and administrative expenses for the full-year 2022 increased 1 percent year over year. The increase was driven by higher personnel costs incurred in the fourth quarter.
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