Leaders at Devon Energy are excited over what the rest of 2025 and 2026 will bring for the Oklahoma City-based oil and gas company after the firm recorded a record third quarter in production and revenue.
Eight months after assuming his role as President, CEO and Director, Clay Gaspar exuded excitement during a recent third quarter conference call where he discussed what lies ahead for the company.
“These results mark our strongest performance of the year, highlighting the exceptional quality of our assets and our unwavering commitment to operational efficiency and cost control, he said.
“Building on this performance, we continue to advance our business optimization plan, firmly on track to generate an incremental $1 billion of annual pretax free cash flow. As we enter the fourth quarter, we have already achieved more than 60% of our target, underscoring both the effectiveness and urgency of our approach.”
Helping with improved performance, the company has opened its arms to incorporating the use of AI. And if investors think Devon is resting on its laurels when it comes to energy production, think again.
“Right now, we have over 80 parallel work streams on different ideas,” remarked Gaspar.
“So the progress that we’ve made essentially in 1/3 of the time to accomplish 60% of the results, I can tell you, I’m even more encouraged about what this leads to. The most important measure of success will be locking these earnings in and building into the culture of the organization, benchmarking, hunger for more creative ways of creating value.”
Robert Lowe, Devon’s Senior Vice President and Chief Technology Officer said some of the improvements were on the capital side of the business on the drilling completions operations.
“Over the last quarter, last kind of 4, 5 months, we’ve seen a lot of new ideas arriving from our production department. And we continue to see those starting to show up now in our forecast and what’s going forward.”
He explained Devon has focused on “automating and using our technology stack to help us with our downtime” and “made a ton of progress over the last 3 months on that one and scaled that across the organization. And now we’re working on the next phase of using even more kind of AI to underpin what we’re trying to do to continue to look at our faults and what causes those faults. And we’re going to see those type of examples show up.”
Those improvements helped the company drive down capital investments by 10% below the first half run rate and led to a free cash flow of $820 million in the third quarter.
“Collectively, these achievements reinforce Devon’s momentum and position us exceptionally well for the remainder of 2025 and into 2026. Our relentless focus on production optimization continues to drive our outperformance,” said Gaspar.
“The most important measure of success will be locking these earnings in and building into the culture of the organization, benchmarking, hunger for more creative ways of creating value. And like I said, there is much more to come from this.
Devon managed to return more than $400 million to shareholders in the quarter and retired $485 million in debt.