Devon Energy Turns To Profit In Q1, Results Beat View

(RTTNews) - Oil and gas company Devon Energy Corp. (DVN) on Wednesday reported a profit for the first quarter, compared to loss in the year-ago period that included a hefty asset impairment charge. In addition, the latest quarter's results reflect higher revenues and realized prices. Both revenue and adjusted earnings per share for the quarter beat analysts' estimates.

John Richels, president and chief executive officer of Devon Energy said, "Our disciplined focus on high-margin drilling opportunities led to outstanding growth in oil production and enhanced profitability in the first quarter. Additionally, we made meaningful progress high-grading our go-forward asset portfolio by closing our Eagle Ford acquisition, completing the EnLink Midstream combination, and attractively monetizing our conventional gas business in Canada."

Devon's total production of oil, natural gas and natural gas liquids averaged 691,000 oil-equivalent barrels or Boe per day in the first quarter. Excluding production associated with divestiture properties, top-line production from Devon's retained, go-forward asset base increased 7 percent from the prior-year period to 563,000 Boe per day in the latest quarter.

Devon's oil production in the first quarter averaged 176,000 barrels per day, a 21 percent increase from the prior-year period. The company delivered U.S. oil production growth of 56 percent year over year, driven by growth from Devon's Permian Basin and Eagle Ford assets.

In the Permian Basin, production averaged 91,000 Boe per day. Oil production increased 36 percent, and accounted for 60 percent of Devon's total Permian production.

Total oil equivalent production edged up 0.6 percent to 690.9 MBoe from 686.9 MBoe in the year-ago period. The company's realized price per barrel of oil equivalent or Boe, including cash settlements, was $39.52 in the quarter, up 29 percent from $30.57 in the same period last year.

Devon Energy's net income for the first quarter was $324 million or $0.79 per share, compared to net loss of $1.34 billion or $3.34 per share in the year-ago period. In the prior-year quarter, the company incurred $1.91 billion for asset impairments.

Excluding items, adjusted earnings for the latest quarter were $547 million or $1.34 per share. On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $1.27 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 89 percent to $3.73 billion from $1.97 billion in the same period last year. Analysts had a consensus revenue estimate of $2.94 billion for the quarter.

Revenue from oil, natural gas and natural gas liquids sales grew 42 percent from the year-ago period to $2.56 billion, reflecting growth in high-margin oil production and improved price realizations for all products.

In the first quarter, Devon had announced a 9 percent increase to its quarterly cash dividend to $0.24 per share from $0.22 per share, marking its ninth dividend increase since 2004.

Deon noted that the divestiture process for its remaining non-core properties in the U.S. was ongoing. The company expects to open data rooms for these U.S. assets in the second quarter and complete the divestiture program by year end.

DVN is currently trading at $70.21, up $0.02 or 0.03 percent on a volume of 1.80 million shares.