Devon Energy Posts Profit In Q4, Beats View; But Revenues Miss

(RTTNews) - Oil and gas company Devon Energy Corp. (DVN) on Wednesday reported a profit for the fourth quarter, compared to a loss in the year-ago period that included an asset impairment charge.

In addition, the latest quarter's results reflect higher oil production as well as realized prices. Adjusted earnings per share for the quarter beat analysts' expectations, while revenues missed their estimates.

Devon's total production of oil, natural gas and natural gas liquids averaged 696,000 oil-equivalent barrels or Boe per day in the fourth quarter, exceeding the mid-point of the company's guidance range by about 6,000 Boe per day.

Devon's oil production in the fourth quarter averaged 177,000 barrels per day, a 17 percent increase from the prior-year period. The company delivered 32 percent growth in U.S. oil production, driven by growth from Devon's Permian basin.

In the Permian basin, production averaged 86,000 Boe per day. Oil production increased 29 percent, and now accounts for 60 percent of Devon's total Permian production.

Net production from Devon's Mississippian-Woodford Trend project averaged 16,000 Boe per day in December, representing a 47 percent increase from the September average and exceeding the company's projected exit rate.

Total oil equivalent production increased 2.7 percent to 64.1 MMBoe from 62.4 MMBoe in the year-ago period. The company's realized price per barrel of oil equivalent or Boe, including cash settlements, was $35.24 in the quarter, up 5.5 percent from $33.41 in the same period last year.

Devon Energy's net income for the fourth quarter was $207 million or $0.51 per share, compared to net loss of $357 million or $0.89 per share in the year-ago period. In the prior-year quarter, the company incurred $896 million for asset impairments.

Adjusted earnings for the latest quarter were $447 million or $1.10 per share. On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $1.08 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter rose 2 percent to $2.62 billion from $2.58 billion in the same period last year. Analysts had a consensus revenue estimate of $2.69 billion for the quarter.

Revenue from oil, natural gas and natural gas liquids sales rose 14 percent from the year-ago period to $2.16 billion, reflecting higher oil production and improved natural gas realizations.

For fiscal 2013, Devon Energy's net loss was $20 million or $0.06 per share, narrower than net loss of $206 million or $0.52 per share in the previous year.

Loss from continuing operations were $0.06 per share, compared to loss from continuing operations of $0.47 per share last year.

Total operating revenues for the year rose 9 percent to $10.40 billion from $9.50 billion last year.

Street expected the company to earn $4.25 per share for the year on revenues of $10.67 billion.

At December 31, 2013, Devon increased its proved oil reserves to 837 million barrels from 798 million barrels in the end of the previous year.

Earlier on Wednesday, Canadian Natural Resources Ltd. (CNQ, CNQ.TO) Wednesday said it has agreed to acquire majority of Devon's Canadian conventional assets, excluding Horn River and heavy oil properties, for an aggregate cash consideration of C$3.125 billion or about $2.8 billion. The deal is effective January 1, 2014, with a targeted closing on April 1, 2014.

DVN closed Tuesday's trading at $62.91. In Wednesday's pre-market, the stock is up $1.49 or 2.37 percent to $64.40.