Devon Energy Q2 Profit Meets View, Revenues Beat

(RTTNews) - Oil and gas company Devon Energy Corp. (DVN) on Wednesday reported a 1 percent decline in profit for the second quarter from last year despite strong revenue growth and higher realized prices, while production for the quarter declined.

However, adjusted earnings per share for the quarter matched analysts' expectations, while revenues beat their estimates.

Devon's total production of oil, natural gas and natural gas liquids averaged 667,000 oil-equivalent barrels or Boe per day in the second quarter, down 4 percent from 698,000 Boe per day in the year-ago period.

Excluding production associated with divestiture properties, production from Devon's retained, go-forward asset base increased 14 percent from the prior-year period to 620,000 Boe per day in the latest quarter.

The company's realized price per barrel of oil equivalent or Boe, including cash settlements, increased 20 percent in the quarter to $42.34 from $35.23 in the same period last year.

Devon's oil production in the second quarter averaged 205,000 barrels per day, representing a 34 percent increase from the prior-year period. The company delivered U.S. oil production growth of 79 percent year over year, driven by growth from Devon's Permian Basin and Eagle Ford operations.

In the Permian Basin, production averaged 95,000 Boe per day. Oil production increased 25 percent, and accounted for 60 percent of Devon's total Permian production.

Devon Energy's net income for the second quarter was $675 million or $1.64 per share, down from $683 million or $1.68 per share in the year-ago period.

Excluding items, adjusted earnings for the latest quarter were $574 million or $1.40 per share. On average, 29 analysts polled by Thomson Reuters expected the company to report earnings of $1.40 per share for the quarter. Analysts' estimates typically exclude special items.

Total operating revenues for the quarter grew 46 percent to $4.51 billion from $3.09 billion in the same period last year. Analysts had a consensus revenue estimate of $3.71 billion for the quarter.

Revenue from oil, natural gas and natural gas liquids sales grew 21 percent from the year-ago period to $2.68 billion, reflecting growth in high-margin oil production and improved oil price realizations.

In November 2013, Devon announced an initiative to monetize non-core assets in both the U.S. and Canada, sharpening its focus on retained, high-growth assets. Since that announcement, the company has sold or agreed to sell $5.1 billion in non-core assets.

DVN closed Tuesday's trading at $74.59, down $2.22 or 2.89 percent on a volume of 3.74 million shares.