On November 7, 2023, Devon Energy Corp (DVN, Financial) announced its third-quarter financial and operational results, demonstrating a period of strong financial growth and operational efficiency. The company's disciplined operating strategy has yielded a 10 percent increase in production per share over the past year and a significant boost in free cash flow, which more than doubled during the quarter to reach the highest level of the year.
CEO's Perspective on Performance
President and CEO Rick Muncrief expressed satisfaction with the company's performance, stating,
“Devon’s performance once again demonstrates the strength of our disciplined operating strategy, leading to another quarter of strong financial growth,”and highlighted the company's ability to reward shareholders with a substantial dividend increase. Muncrief also outlined the company's future focus on the Delaware Basin to enhance capital efficiency and generate growth in free cash flow.
Financial Achievements
Devon Energy's financial results were robust, with net earnings of $910 million, or $1.42 per diluted share. Core earnings, adjusted for items typically excluded by analysts, were $1.1 billion, or $1.65 per diluted share, marking a 40 percent increase from the prior quarter. Operating cash flow reached $1.7 billion, and with a capital reinvestment rate of 52 percent of cash flow, the company generated $843 million of free cash flow.
The company also improved its financial position by retiring $242 million of outstanding debt and increasing its cash on hand by $273 million to a total of $761 million. Devon's net debt-to-EBITDAX ratio was a modest 0.7 times.
Return of Capital to Shareholders
Reflecting the strong financial performance, Devon declared a fixed-plus-variable dividend of $0.77 per share, a 57 percent increase from the second quarter of 2023. Additionally, the company has been actively repurchasing shares through its $3.0 billion share-repurchase program, reducing its outstanding share count by up to 9 percent.
Operational Results and Updated Outlook
Devon's operational activity in the third quarter included 24 operated drilling rigs and 5 completion crews, resulting in 81 gross operated wells being placed online. Production averaged 665,000 oil-equivalent barrels (Boe) per day, an 8 percent increase year over year. The Delaware Basin was a significant contributor, accounting for 66 percent of the company's production.
Looking ahead, Devon expects fourth-quarter capital to range from $870 million to $930 million and anticipates sustaining oil production at around 315,000 barrels per day in 2024, with total volumes approximating 650,000 Boe per day. Capital requirements for 2024 are expected to decline approximately 10 percent from 2023 levels.
For more detailed information on Devon Energy Corp's financial and operational results, investors and interested parties can access the supplemental financial tables and forward-looking guidance on the company's website at www.devonenergy.com.
Devon Energy Corp (DVN, Financial) continues to focus on delivering value to its shareholders through disciplined capital allocation, operational efficiency, and a commitment to sustainable practices. The company's strategic investments and operational focus position it well for continued success in the dynamic energy market.
Explore the complete 8-K earnings release (here) from Devon Energy Corp for further details.
