Devon Energy Tower
With a second quarter all-time high production of oil, Oklahoma City’s Devon Energy’s second quarter financial report glowed with net earnings of $844 million or $1.34 a share—far better than the $596 million and 94 cents a share in the first quarter of the year.
The company had core earnings of $885 million and $1.41 a share in the most recent quarter compared to $730 million and $1.16 a share in the first quarter.
Second quarter oil production reached an all-time high of 335,000 barrels a day and beat guidance by 3%. Most of the production came from the Delaware Basin in West Texas and southern New Mexico. It also delivered second quarter operating cash flow of $1.5 billion and free cash flow of $587 million. Devon’s operating cash flow totaled $1.5 billion in the second quarter, a 9 percent increase versus the year-ago period. Cash balances reached $1.2 billion.
It resulted in the company raising its full-year 2024 production outlook for a second consecutive quarter.
During the quarter, the strong production and cash flow allowed Devon to repurchase 5.2 million shares of common stock at a total cost of $256 million.
“Devon delivered a strong second quarter driven by record oil production and effective cost management,” said Rick Muncrief,
president and CEO. “Our outstanding operational performance was highlighted by excellent well productivity in the Delaware.
He said the full-year production guidance wll be raised 5% than the company’s original expectations.
Devon leaders are banking on an early July acquisition of Grayson Mill in the Williston Basin to add to the company’s production and project inventory.
OPERATING RESULTS
Devon’s capital activity in the second quarter averaged 22 operated drilling rigs and 6 completion crews across its asset portfolio. This level of activity resulted in 114 gross operated wells being placed online, with an average lateral length of 9,300 feet.
Devon’s oil production in the second quarter reached an all-time high of 335,000 barrels per day, exceeding guidance by 3 percent.
Total companywide production averaged 707,000 oil-equivalent barrels (Boe) per day in the second quarter. This represents a 7
percent increase in production compared to the year-ago period.
Devon’s growth in the second quarter was driven by its Delaware Basin asset, which accounted for 65 percent of companywide
volumes at 461,000 Boe per day. This production result represents a growth rate of 5 percent quarter-over-quarter, driven by 62 gross operated wells being placed online during the quarter.
2024 OUTLOOK
Devon is raising its full-year 2024 production forecast for the second time this year to a range of 677,000 to 688,000 Boe per day. The updated volume outlook is due to better-than-expected well performance year-to-date and improving cycle times. The company maintains its full-year capital range of $3.3 billion to $3.6 billion but expects to be in the upper half due to efficiency gains bringing activity forward.
In the third quarter, Devon expects capital spending to approximate $900 million, and its oil production to average 319,000 to 325,000 barrels per day.
