Core Viewpoint - Devon Energy has successfully positioned itself as a low-cost, efficient U.S. onshore oil and gas producer, allowing it to generate substantial free cash flow and withstand lower oil prices [1][8]. Production and Financial Performance - In the first quarter, Devon Energy produced an average of 388,000 barrels of oil per day, exceeding its production guidance by 5,000 barrels [3]. - The company's total output averaged 815,000 barrels of oil equivalent (BOE) per day, benefiting from strong performance in the Rockies and Eagle Ford regions [3]. - Devon achieved $1.9 billion in operating cash flow, a 17% increase from the previous quarter, and generated $1 billion in free cash flow [4]. Cost Management and Shareholder Returns - The company plans to reduce an additional $1 billion in costs over the next two years, enhancing its cash generation capabilities [2]. - Devon returned $464 million to shareholders through dividends and $301 million through share repurchases, while increasing its cash balance by $388 million to $1.2 billion [5]. Strategic Priorities and Future Outlook - CEO Clay Gaspar emphasized the company's focus on operational excellence, financial strength, and shareholder rewards as key strategic priorities [6]. - A business optimization plan is expected to deliver $1 billion in annual pre-tax cash flow improvements by the end of next year, allowing for a reduction in capital spending by $100 million [6]. - Despite the cut in capital spending, Devon increased its production guidance for the year, expecting oil output to average between 382,000 and 388,000 barrels per day, a 1% increase from the initial outlook [6]. Market Positioning - Devon Energy's strategy of enhancing efficiency positions it well to navigate volatile oil markets, making it a high-quality oil stock to hold throughout the oil market cycle [8].

Financial Performance - Net earnings for Q1 2025 were $494 million, or $0.77 per diluted share, while core earnings were $779 million, or $1.21 per diluted share[156]. - Net earnings for Q1 2025 were $509 million, down from $609 million in Q1 2024, reflecting a decrease of approximately 16.4%[175]. - Core earnings attributable to Devon (Non-GAAP) for Q1 2025 were $794 million, compared to $743 million in Q1 2024, reflecting a 6.9% increase[232]. - EBITDAX for Q1 2025 was $2.086 billion, up from $1.791 billion in Q1 2024, indicating a 16.5% growth[238]. - Field-level cash margin for Q1 2025 was $2,214 million, with a cash margin per BOE of $30.16, slightly down from $31.09 in Q1 2024[184]. - Field-level cash margin for Q1 2025 reached $2.214 billion, compared to $1.878 billion in Q1 2024, marking an 17.9% increase[238]. - The effective income tax rate remained stable at 21% for both Q1 2025 and Q1 2024, with total income tax expense decreasing to $137 million from $159 million[191]. Production and Operations - In Q1 2025, oil production totaled 388 MBbls/d, exceeding the plan by 1%[156]. - Total production volumes increased by 23% from Q1 2024 to Q1 2025, reaching 815 MBoe/d, driven by the Grayson Mill acquisition and new well activity[177][178]. - Production expenses increased by 4% to $912 million in Q1 2025, primarily due to new well activity in the Delaware Basin and Rockies[166]. - Production expenses rose by 21% to $912 million in Q1 2025, primarily due to increased activity in the Rockies related to the Grayson Mill acquisition[182]. - The company has approximately 30% and 35% of its remaining anticipated 2025 oil and gas production hedged, respectively[163]. - Devon's production expenses include lease operating, gathering, processing, and transportation expenses, which are critical for calculating Field-Level Cash Margin[233]. Cash Flow and Capital Expenditures - The company generated $1.9 billion of operating cash flow in Q1 2025, with a total of $6.8 billion for the past twelve trailing months[156]. - Operating cash flow for Q1 2025 was $1,942 million, up from $1,738 million in Q1 2024, representing an increase of approximately 12%[193]. - Total capital expenditures for Q1 2025 were $934 million, compared to $894 million in Q1 2024, reflecting a year-over-year increase of about 4.5%[196]. - The company expects capital expenditures for the remainder of 2025 to be approximately $2.7 billion to $2.9 billion[223]. Shareholder Returns - The company completed approximately 73% of its $5.0 billion share repurchase program, purchasing about 77.5 million shares for approximately $3.6 billion[156]. - Share repurchases amounted to $301 million in Q1 2025, compared to $205 million in Q1 2024, indicating a 46.8% increase in shareholder return through buybacks[201]. - The fixed dividend was raised by 9% from $0.22 to $0.24 per share in Q1 2025, with total dividends paid amounting to $163 million[203]. Asset Management - The company reported asset impairments of $254 million in Q1 2025, resulting from the rationalization of two headquarters-related real estate assets[169]. - Devon's asset impairments for Q1 2025 totaled $254 million, compared to no impairments reported in Q1 2024[238]. - Devon agreed to sell its investment in Matterhorn for approximately $375 million, with proceeds aimed at strengthening its financial position[224]. Cost Management - G&A costs decreased by 16% to $130 million in Q1 2025, primarily due to lower labor and benefit costs[171]. - General and administrative expenses increased by 14% to $130 million in Q1 2025, driven by higher employee compensation, although G&A per BOE decreased by 6%[187]. - Net financing costs increased to $123 million in Q1 2025, up from $76 million in Q1 2024, reflecting changes in debt management strategies[188]. - The company recognized a $542 million increase in earnings due to higher production volumes from the Grayson Mill acquisition and new well activity[178]. Market Conditions - Realized prices for unhedged oil increased by 2% to $69.13 per barrel, while unhedged gas prices rose by 96% to $2.55 per Mcf[162]. - Realized prices for oil decreased by 8% to $69.13 per Bbl in Q1 2025, while gas prices increased by 97% to $2.55 per Mcf, contributing to a $45 million decrease in earnings[179]. - A 10% change in the forward curves of commodity derivatives would have impacted Devon's net positions by approximately $275 million as of March 31, 2025[240].

Financial Data and Key Metrics Changes - Devon Energy reported core earnings of $779 million or $1.21 per share, with EBITDAX at $2.1 billion and operating cash flow of $1.9 billion, exceeding consensus estimates [14][15] - The company generated $1 billion in free cash flow for Q1, marking the highest level since Q3 2022, and returned nearly half to shareholders through dividends and share buybacks [9][15] - Cash balances increased by $388 million, reaching $1.2 billion, resulting in a net debt to EBITDA ratio of one times [18] Business Line Data and Key Metrics Changes - Oil production exceeded guidance, reaching 388,000 barrels per day, attributed to strong performance in the Rockies and Eagle Ford [7][14] - The Delaware Basin showed exceptional performance with a 12% increase in completion efficiencies year to date and a 7% increase in drilling speeds [10] - In the Eagle Ford, Devon achieved a nearly 50% reduction in costs following the dissolution of the partnership with BPX, with expected savings of $2.7 million per well [12][13] Market Data and Key Metrics Changes - Devon increased its full-year oil production outlook to a range of 382,000 to 388,000 barrels per day, reflecting a 1% increase from previous estimates [16] - The company is well-positioned to generate over $2 billion in free cash flow for the remainder of the year, with a corporate breakeven at around $45 WTI [16][18] Company Strategy and Development Direction - Devon's strategic priorities include operational excellence, maintaining financial strength, and returning value to shareholders, with a focus on business optimization to generate an additional $1 billion in annual free cash flow by year-end 2026 [4][5] - The company plans to reduce full-year capital investment by $100 million to a range of $3.7 billion to $3.9 billion, driven by better performance and capital efficiencies [17] - Devon aims to enhance operating margins and capital efficiency through targeted actions, including lowering drilling and completion costs and renegotiating contracts [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate commodity price cycles and emphasized the importance of operational consistency in decision-making [5][76] - The leadership team is closely monitoring market dynamics and is prepared to adjust plans to maintain financial strength and deliver top-tier returns [7][78] - Management indicated that while they are not currently making cuts in response to weaker oil prices, they are prepared to reevaluate plans if prices fall into the low $50s [76][78] Other Important Information - Devon's business optimization plan is expected to deliver $1 billion in pretax free cash flow improvements by year-end 2026, with a focus on capital efficiency, production optimization, and corporate cost reductions [21][24] - The company has reached an agreement to sell its interest in the Matterhorn pipeline for approximately $375 million, which will enhance cash position and liquidity [18] Q&A Session Summary Question: Can you unpack the cost reductions discussed in slides ten and eleven? - Management highlighted confidence in achieving cost reductions, particularly in commercial opportunities due to renegotiated contracts that will take effect in 2026 [28][31] Question: Can you clarify the impact of lower GP and T rates in the Delaware? - Management indicated that legacy contracts have been renegotiated, significantly reducing costs, which will materially benefit the overall business [44][46] Question: What are the incremental midstream investments that could be subject to future monetization? - Management stated that they are evaluating midstream assets for potential monetization, emphasizing a holistic approach to asset management [48][49] Question: How is technology being integrated into the business optimization plan? - Management discussed the substantial investment in technology and analytics to improve operations, which is expected to drive significant productivity gains [59][63] Question: What is the outlook for maintenance CapEx over the next couple of years? - Management expects maintenance CapEx to decrease to around $3.4 billion by 2027 due to ongoing optimization efforts [112][113] Question: Which asset has more flexibility to slow down if needed? - Management indicated that the Powder River Basin, while challenging, has significant upside potential and may be prioritized for continued investment [120]

Core Viewpoint - Devon Energy Corp. reported mixed financial results for the first quarter of 2025, with earnings per share missing estimates but revenues exceeding expectations. The company showed significant year-over-year production growth, particularly in oil and natural gas liquids, while facing challenges in realized prices for oil. Financial Performance - Earnings per share (EPS) for Q1 2025 was $1.21, missing the Zacks Consensus Estimate of $1.27 by 4.72% [1] - GAAP EPS was 77 cents, down from 94 cents in the same quarter last year, influenced by fair value changes, asset impairments, and restructuring costs [2] - Total revenues for the quarter were $4.45 billion, surpassing the Zacks Consensus Estimate of $4.36 billion by 2.05% [3] Production Metrics - Net production totaled 815,000 barrels of oil equivalent per day (Boe/d), up 22.7% year over year, within the guided range of 805,000-825,000 Boe/d [4] - Natural gas liquids production increased 23% year over year to 203,000 barrels per day (Bbl/d), while oil production rose 21.6% to 398,000 Bbl/d [5] Price Realization - Realized oil prices were $69.15 per barrel, down 7.98% from $75.15 a year ago, while realized prices for natural gas liquids increased 5.8% to $21.93 per barrel [6] - Realized gas prices were $2.48 per thousand cubic feet, up 53.1% from $1.62 a year ago, contributing to an overall realized price of $42.45 per Boe, down 3.6% year over year [6][8] Operational Highlights - Total production expenses were $912 million, up 21.4% year over year, while production costs averaged $12.42 per Boe, a slight decline of 0.08% from the prior year [7] - The company repurchased shares worth $301 million and paid dividends of $163 million in the first quarter [7] Strategic Developments - On April 1, 2025, Devon finalized the dissolution of its Eagle Ford partnership, gaining approximately 46,000 net acres in the Blackhawk Field [10] - On May 5, 2025, the company agreed to sell its equity stake in the Matterhorn Pipeline for around $375 million, with proceeds aimed at enhancing its financial standing [11] Financial Position - As of March 31, 2025, cash and cash equivalents were $1.23 billion, up from $0.85 billion at the end of 2024, while long-term debt remained at $8.39 billion [12] - Net cash from operating activities was $1.94 billion, compared to $1.66 billion in Q1 2024, with capital expenditures totaling $0.93 billion, a 4.5% increase from the previous year [13] Future Guidance - Second-quarter production is expected to be in the range of 810,000-828,000 Boe/d, with capital spending estimated between $0.98-$1.04 billion [14] - Full-year production guidance for 2025 has been revised to 810,000-828,000 Boe/d, reflecting strong first-quarter volumes [14][15]

Q1 2025 EARNINGS PRESENTATION May 6, 2025 NYSE: DVN DEVONENERGY.COM Q1 2025 – KEY HIGHLIGHTS Delivered strong operating performance Oil production averaged 388,000 barrels/day, exceeding guidance and supported by outstanding well performance across all basins Disciplined capital spending below plan Invested $964 million, coming in 5% under midpoint guidance, with reinvestment rate reduced to 50% of operating cash flow OUR STRATEGIC PRIORITIES STRATEGIC PRIORITIES + OUR CORE VALUES Enhanced financial strengt ...

分组1 - Devon Energy reported quarterly earnings of $1.21 per share, missing the Zacks Consensus Estimate of $1.27 per share, but showing an increase from $1.16 per share a year ago, resulting in an earnings surprise of -4.72% [1] - The company posted revenues of $4.45 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 2.05%, compared to year-ago revenues of $3.6 billion [2] - Over the last four quarters, Devon Energy has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The stock has underperformed the market, losing about 6.5% since the beginning of the year, compared to the S&P 500's decline of -3.9% [3] - The current consensus EPS estimate for the coming quarter is $0.98 on $4.06 billion in revenues, and for the current fiscal year, it is $4.34 on $16.81 billion in revenues [7] - The Zacks Industry Rank for Oil and Gas - Exploration and Production - United States is currently in the bottom 24% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - Total revenues for Q1 2025 reached $4.45 billion, a slight increase from $4.40 billion in Q4 2024[3] - The company reported net earnings of $509 million for Q1 2025, down from $653 million in Q4 2024[3] - Basic net earnings per share were $0.77 in Q1 2025, compared to $0.98 in Q4 2024[3] - Net financing costs for Q1 2025 were $123 million, consistent with Q4 2024, and up from $76 million in Q1 2024[6] - Total income tax expense for Q1 2025 was $137 million, a decrease from $187 million in Q4 2024 and $239 million in Q3 2024[7] - Devon's net earnings for Q1 2025 were $509 million, with core earnings (non-GAAP) at $794 million, translating to $1.21 per diluted share[23] - EBITDAX (non-GAAP) for Q1 2025 was $2.086 billion, reflecting a net debt-to-EBITDAX ratio of 1.0[29] - Free cash flow (non-GAAP) for Q1 2025 was $1.008 billion, with total operating cash flow at $1.942 billion[31] Production and Sales - Oil, gas, and NGL sales amounted to $3.12 billion in Q1 2025, compared to $3.08 billion in Q4 2024[3] - Total production in Q1 2025 was 388 MBoe/d, a decrease from 398 MBoe/d in Q4 2024[11] - Production guidance for Q2 2025 includes oil at 381-387 MBbls/d and total oil equivalent at 810-828 MBoe/d[35] Expenses and Capital Expenditures - Production expenses totaled $912 million in Q1 2025, up from $881 million in Q4 2024, reflecting a 3.5% increase[5] - Lease operating expenses increased to $479 million in Q1 2025, compared to $445 million in Q4 2024, marking a 7.6% rise[5] - Capital expenditures in Q1 2025 were $934 million, slightly higher than $926 million in Q4 2024[10] - Total capital expenditures for Q1 2025 amounted to $964 million, an increase from $926 million in Q4 2024[12] - Upstream capital expenditures reached $908 million in Q1 2025, compared to $872 million in Q4 2024, reflecting a 4.1% increase[12] - The company plans to increase capital expenditures by 10% in 2025 to support new projects and technology advancements[3] - Upstream capital expenditures guidance for 2025 is set between $3.475 billion and $3.625 billion[36] Debt and Equity - The net debt-to-EBITDAX ratio was reported at 1.5x, indicating a stable leverage position[3] - Total debt as of Q1 2025 was $8.880 billion, with net debt (non-GAAP) at $7.646 billion after accounting for cash and cash equivalents[27] - Long-term debt remained stable at $8,395 million in Q1 2025 compared to $8,398 million in Q4 2024[9] - Total stockholders' equity attributable to the company increased to $14,545 million in Q1 2025 from $14,496 million in Q4 2024[9] Cash Flow and Assets - Net cash from operating activities for Q1 2025 was $1,942 million, up from $1,664 million in Q4 2024[10] - Cash, cash equivalents, and restricted cash at the end of Q1 2025 were $1,234 million, up from $846 million at the end of Q4 2024[10] - Total current assets increased to $3,905 million in Q1 2025 from $3,427 million in Q4 2024, driven by higher cash and accounts receivable[9] Market and Pricing - Realized price for oil in the Delaware Basin was $70.28 per barrel in Q1 2025, slightly up from $69.06 in Q4 2024[17] - The realized price for natural gas in the Delaware Basin was $2.47 per Mcf in Q1 2025, significantly higher than $1.01 in Q4 2024[17] - Field-level cash margin in the Delaware Basin was $31.13 per barrel in Q1 2025, up from $28.90 in Q4 2024[19] Hedging and Guidance - Devon has hedged 15,000 Bbls/d at an average price of $72.18 for Q2 2025[40] - Q2 2025 natural gas price swaps volume is 342,000 MMBtu/d at an average price of $3.36/MMBtu[42] - Oil price realizations guidance for Q2 2025 is projected at 95%-99% of WTI[37] - Current income tax rate guidance for Q2 2025 is estimated between 14% and 16%[39]

Core Viewpoint - Devon Energy Corp. reported its financial and operational results for Q1 2025, declared its quarterly dividend, and provided an updated outlook for 2025 [1] Financial Results - The company’s earnings release, supplemental financial tables, guidance, and related earnings presentation are available on its Investor Relations website [1] Conference Call - A conference call for Q1 results will take place on May 7, 2025, at 10:00 a.m. Central time, primarily for analyst and investor Q&A [2] Company Overview - Devon Energy is a leading oil and gas producer in the U.S. with a diversified multi-basin portfolio, particularly noted for its position in the Delaware Basin [3] - The company employs a disciplined cash-return business model aimed at achieving strong returns, generating free cash flow, and returning capital to shareholders while maintaining safe and sustainable operations [3]

Core Viewpoint - Devon Energy (DVN) is expected to report quarterly earnings of $1.27 per share, a 9.5% increase year-over-year, with revenues projected at $4.36 billion, reflecting a 21.3% year-over-year increase [1]. Earnings Estimates - Over the past 30 days, the consensus EPS estimate has been revised downward by 13.7%, indicating a reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts project 'Revenues - Marketing and midstream revenues' to reach $1.27 billion, a 14% increase from the previous year [5]. - 'Revenues - Oil, gas and NGL sales' are expected to be $3.10 billion, representing a 17.9% year-over-year increase [5]. Production Estimates - Total oil equivalent production is estimated at 817.20 million barrels per day, up from 664 million barrels in the same quarter last year [6]. - Average Daily Production - Total Oil is projected at 383.85 million barrels, compared to 319 million barrels in the previous year [6]. - Average Daily Production - Total Gas is expected to be 1,329.95 million cubic feet, an increase from 1,079 million cubic feet year-over-year [7]. - Average Daily Production - Total NGL is estimated at 211.10 million barrels, up from 165 million barrels in the same quarter last year [7]. Price Estimates - The average realized price per barrel of oil is forecasted to be $68.99, down from $75.15 in the previous year [8]. - Production - Oil - Other is expected to reach 3.91 million barrels per day, compared to 4 million barrels in the same quarter last year [8]. Regional Production Insights - Production - Oil - Anadarko Basin is projected at 12.65 million barrels per day, up from 11 million barrels last year [9]. - Production - Oil - Eagle Ford is expected to reach 46.66 million barrels per day, compared to 43 million barrels in the same quarter last year [9]. - Production - NGL - Eagle Ford is estimated at 19.91 million barrels per day, up from 14 million barrels year-over-year [10]. - Production - NGL - Anadarko Basin is projected to be 29.44 million barrels per day, compared to 26 million barrels last year [10]. Stock Performance - Devon Energy shares have decreased by 6% over the past month, contrasting with a -0.5% change in the Zacks S&P 500 composite [11].

Devon Energy Corporation (DVN) is expected to report an improvement in its top line and a decline in its bottom line when it reports 2024 results on May 6, after market close. (See the Zacks Earnings Calendar to stay ahead of market-making news.)The Zacks Consensus Estimate for DVN’s first-quarter revenues is pegged at $4.36 billion, indicating growth of 21.31% from the year-ago reported figure.The Zacks Consensus Estimate for earnings is pegged at $1.27 per share. The Zacks Consensus Estimate for DVN’s fir ...