Devon Energy Corp. saw increases in its third quarter earnings and crude oil production, according to an announcement made this week.
Devon reported net earnings of $910 million, or $1.42 per diluted share, in the third quarter of 2023. Adjusting for items analysts
typically exclude from estimates, the company’s core earnings were $1.1 billion, or $1.65 per diluted share, a 40 percent increase from the prior quarter.
Increased crude oil production led to a 23% growth in operating cash flow of $1.7 billion compared to the second quarter. Devon’s free cash flow more than doubled quarter-over-quarter to $843 million.
“Devon’s performance once again demonstrates the strength of our disciplined operating strategy, leading to another quarter of
strong financial growth,“ said Rick Muncrief, president and CEO.
“This growth was highlighted by production per share increasing 10 percent over the past year and we more than doubled our free cash flow during the quarter, reaching our highest level of the year.”
Production per share grew 10% year-over-year in the third quarter and the company’s Delaware Basin well productivity gained more than 20% versus the first half of 2023.
Muncrief said the strong free cash flow generation allowed the company to reward shareholders with a 57% increase to Devon’s dividend payout.
Devon intends to use some of that financial growth to concentrate investment in the Delaware Basin.
“By shifting more capital to the core of this world-class basin and high-grading activity across our diversified portfolio, we
expect to deliver a step-change improvement in capital efficiency, and we are well positioned to generate growth in free cash flow
that can once again be harvested for shareholders,” added Muncrief.
During the quarter, Devon also took steps to strengthen its financial position by retiring $242 million of outstanding debt. The company also increased its cash on hand by $273 million in the quarter to a total of $761 million. Outstanding debt dropped to $6.2 billion.
Based on the third-quarter financial performance, Devon declared a fixed-plus-variable dividend of $0.77 per share, an increase of 57 percent from the second quarter of 2023. The dividend is payable on December 29, 2023 to shareholders of record at the close of business on December 15, 2023.