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Core Viewpoint - Devon Energy Corp. reported strong fourth-quarter 2024 earnings, exceeding expectations, driven by increased production volumes despite lower realized prices for commodities [1][4][7]. Financial Performance - The company reported fourth-quarter earnings per share (EPS) of $1.16, surpassing the Zacks Consensus Estimate of $1 by 16% [1]. - GAAP EPS for the quarter was 98 cents, down from $1.81 in the same quarter last year, with adjustments due to fair value changes and other factors [2]. - Adjusted earnings for 2024 were $4.82 per share, compared to $5.71 in 2023 [3]. - Total revenues for the quarter were $4.4 billion, exceeding the Zacks Consensus Estimate of $4.23 billion by 3.9%, and up 6.2% from the previous year [4]. Production Metrics - Net production in Q4 totaled 848,000 barrels of oil equivalent per day (Boe/d), a 28.1% increase year-over-year, exceeding guidance [5]. - Natural gas liquids production rose 30.8% year-over-year to 221,000 barrels per day (Bbl/d), while oil production increased 25.5% to 398,000 Bbl/d [6]. Price Realization - Realized oil prices for the quarter were $69.19 per barrel, down 10.1% from $76.98 a year ago, while realized prices for natural gas liquids increased by 6.8% [7]. - Total oil equivalent realized prices were $40.32 per Boe, reflecting a nearly 10.5% decline year-over-year [10]. Operational Highlights - The company achieved a 154% proven reserve replacement ratio in 2024 [8]. - Total production expenses in Q4 were $881 million, up 16.1% year-over-year, while production costs averaged $11.30 per Boe, a 1% decline from the prior period [8][9]. Shareholder Returns - Devon repurchased shares worth $301 million in Q4 and paid dividends of $144 million, with a 9% increase in the quarterly dividend for Q1 2025 [8]. Financial Position - As of December 31, 2024, cash and cash equivalents were $846 million, while long-term debt rose to $8.39 billion [13]. - Net cash from operating activities was $6.6 billion in 2024, compared to $6.54 billion in 2023, with capital expenditures totaling $3.64 billion, down 52% from the previous year [13]. Guidance - For Q1 2025, production is expected to be in the range of 805,000-825,000 Boe per day, with capital spending estimated between $0.98-$1.04 billion [14].

Core Viewpoint - Devon Energy has achieved record production and strong free cash flow, returning a significant portion to shareholders through dividends and share repurchases, and is positioned for continued growth in 2025 [1][8] Production Performance - In Q4, Devon Energy reported record oil production of 398,000 barrels per day, exceeding guidance by 3%, with total output averaging 848,000 BOE per day, a 16% increase from the previous quarter [2] - For the full year, the company produced a record 737,000 BOE per day, generating $6.6 billion in operating cash flow and $3 billion in free cash flow [4] Financial Returns - Devon returned $444 million to shareholders in Q4 through dividends and share repurchases, buying back 7.7 million shares for $301 million [3] - For the full year, the company returned $2 billion to investors and retired $474 million of maturing debt, ending the year with $846 million in cash [4] Future Outlook - Devon anticipates capital spending between $3.8 billion and $4 billion in 2025, with 50% allocated to the Delaware Basin, reflecting an increase from $3.6 billion last year [5] - The company expects to produce an average of 805,000 to 825,000 BOE per day in 2025, a more than 10% increase from last year's average [6] Cash Flow and Shareholder Returns - Devon is positioned to generate over $3 billion in free cash flow this year, planning to return up to 70% to shareholders, including a 9% increase in dividends and quarterly stock buybacks of $200 million to $300 million [7] - The company aims to strengthen its balance sheet by building cash and retiring debt, with significant maturities due in 2025 and 2026 [7]

Core Viewpoint - Devon Energy Corporation reported strong fourth-quarter results, with an EPS of $1.16, surpassing analyst estimates of $1.00, and oil production of 398,000 barrels per day, exceeding previous guidance by approximately 3% [1] Group 1: Financial Performance - The company expects first-quarter oil production to average between 380,000 to 386,000 barrels per day, and full-year 2025 production is projected to be between 805,000 to 825,000 barrels per day, reflecting a 2% increase from prior outlook [2] - Analysts have noted that Devon's FY25 guidance sets a strong foundation, with oil and total volume projections slightly exceeding consensus, despite a 4% reduction in capital expenditures [2] Group 2: Market Reaction and Analyst Ratings - Following the fourth-quarter results and improved FY25 guidance, a positive market reaction is anticipated, especially after the stock's de-rating since mid-2024 [3] - RBC Capital Markets analyst has a Sector Perform rating with a price forecast of $50, indicating that Devon's 2025 outlook exceeded expectations due to steady operations and strong efficiency [3] Group 3: Capital Allocation and Growth - All Bakken capital is being directed towards high-return Grayson Mills acreage, while Eagleford assets are expected to enhance capital efficiency and production growth [4] - Devon Energy shares have increased by 8.2%, reaching $37.75 [4]

Financial Data and Key Metrics Changes - Devon Energy Corporation reported a record production volume and a 154% proved reserve replacement ratio, generating $3 billion in free cash flow, with $2 billion returned to shareholders [7][8][9] - The company increased its quarterly dividend to $0.24 per share, representing a 9% improvement over the previous year [8][9] - Free cash flow for the fourth quarter was $738 million, with $444 million returned to shareholders through dividends and share repurchases [16] Business Line Data and Key Metrics Changes - Fourth quarter oil production reached an all-time high of 398,000 barrels per day, driven by the performance of Eagle Ford wells and the integration of Grayson Mill assets [13][14] - The Delaware Basin is expected to account for over 50% of total investment in 2025, with plans to operate 14 rigs and three completion crews [22] - The company anticipates operating efficiencies to continue, with a 15% improvement in feet drilled and completed per day metrics in 2024 [24] Market Data and Key Metrics Changes - Devon Energy's natural gas production exceeds 1.3 billion cubic feet per day, with expectations for natural gas revenue to more than double year-over-year due to rising prices [35] - The company has diversified its gas marketing strategy to access Gulf Coast markets, enhancing revenue potential [36] Company Strategy and Development Direction - The company is focused on disciplined investment and growth on a per-share basis, with a revised production target of 815,000 BOE per day for 2025 [20] - Devon Energy aims to enhance capital efficiency and margin expansion while maintaining a strong balance sheet and sustainable dividend [31][39] - The dissolution of the joint venture with BPX is expected to save over $2 million in drilling and completion costs per well, enhancing returns and operational control [19][72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operational performance and financial strength, highlighting a commitment to shareholder value through dividends and share repurchases [39][40] - The leadership transition is characterized by continuity and opportunity, with a focus on improving capital efficiency and organic growth [30][71] Other Important Information - The company executed a successful acquisition in the Williston Basin, which is performing well and contributing to overall portfolio strength [9][25] - Devon Energy plans to maintain a cash return payout of up to 70% from generated free cash flow in 2025 [39] Q&A Session Summary Question: Performance of Grayson Mill assets - Management highlighted the strong outperformance of Grayson Mill, indicating it filled a gap in the inventory and improved productivity and cost efficiency [46][49] Question: Dissolution of the joint venture with BPX - The dissolution was described as a win-win, allowing Devon to control operations and achieve significant cost savings [52][73] Question: Capital expenditure and production growth in the Rockies - Management indicated a focus on maintaining stable production levels while exploring opportunities for growth in the Rockies [56][60] Question: Impact of tariffs on capital expenditures - The company anticipates a minor impact from tariffs, estimating less than a 2% effect on the overall capital program [119][120] Question: Balance between dividends, buybacks, and debt reduction - Management emphasized the importance of maintaining a strong balance sheet while also returning capital to shareholders through dividends and buybacks [146]

Acquisition and Business Expansion - The company acquired Grayson Mill's Williston Basin business for approximately $5.0 billion, consisting of $3.5 billion in cash and 37.3 million shares of common stock[148]. - The Grayson Mill acquisition was completed for $3.5 billion in cash and approximately 37.3 million shares of common stock, enhancing production and operational scale[184]. - The company acquired Grayson Mill in 2024, contributing total assets of $5.6 billion and total revenues of $687 million[257]. Production and Operational Performance - In 2024, oil production totaled 347 MBbls/d, an 8% increase year over year, with significant contributions from the Delaware Basin and Rockies[150][160]. - The company expects production volumes to increase in 2025, ranging from approximately 805 to 825 MBoe/d due to the Grayson Mill acquisition[161]. - Total production expenses increased by 9% from $2,928 million in 2023 to $3,183 million in 2024, driven by higher activity levels and the Grayson Mill acquisition[166]. Financial Performance - Net earnings for 2024 were $2.9 billion, down from $3.8 billion in 2023, reflecting changes in commodity prices and production volumes[158]. - The company generated $6.6 billion of operating cash flow in 2024, consistent with 2023, despite a decline in commodity prices[153]. - Total revenues for the year ended December 31, 2024, were $15.94 billion, an increase from $15.26 billion in 2023, representing a growth of 4.5%[270]. - Oil, gas, and NGL sales increased to $11.18 billion in 2024 from $10.79 billion in 2023, marking a rise of 3.6%[270]. - The company recorded a depletion expense of $3.3 billion for the year ended December 31, 2024[265]. Shareholder Returns and Capital Management - The company returned approximately $2.0 billion to shareholders through dividends and share repurchases in 2024[154]. - The company repurchased 24.2 million shares for $1.1 billion in 2024, compared to 19.1 million shares for $979 million in 2023[189]. - The company raised its fixed dividend by 9% to $0.24 per share, expected to total approximately $156 million in the first quarter of 2025[210]. Cost and Expense Management - General and administrative expenses rose by 23% from $408 million in 2023 to $500 million in 2024, largely due to higher employee compensation and non-labor costs related to technology upgrades[170]. - Depreciation, depletion, and amortization (DD&A) increased by 27% from $2,554 million in 2023 to $3,255 million in 2024, primarily due to higher production volumes and increased DD&A rates[169]. - The company expects to mitigate cost inflation through operational efficiencies and long-standing supplier relationships[200]. Commodity Price and Risk Management - WTI oil prices averaged $75.79 per Bbl in 2024, a decrease from $77.62 per Bbl in 2023, indicating ongoing price volatility[155]. - Realized prices for oil, gas, and NGLs contributed to a $700 million decrease in earnings from 2023 to 2024, primarily due to lower WTI and Henry Hub index prices[163]. - The company has approximately 30% of its anticipated 2025 oil and gas production hedged to mitigate commodity price volatility[155][152]. - The company systematically hedges a portion of its production to manage pricing volatility in oil and gas markets[247]. Debt and Liquidity - Total debt as of December 31, 2024, was $8.9 billion, with $7.9 billion in fixed-rate debt averaging 5.7%[249]. - The company maintains a debt-to-capitalization ratio of 26.5%, well below the 65% limit set by its credit facility[203]. - As of December 31, 2024, the company had approximately $3.0 billion of available borrowing capacity under its 2023 Senior Credit Facility[202]. Asset Management and Reserves - 89% of the company's proved reserves were subjected to third-party audits in 2024, reflecting a commitment to transparency and accuracy in reserve estimates[225]. - The company has approximately $1.9 billion of undeveloped leasehold costs as of December 31, 2024, with none scheduled to expire in 2025[224]. - Devon's oil and gas properties are accounted for using the successful efforts method, with exploration costs charged against earnings as incurred[329].

Devon Energy (DVN) Q4 2024 Earnings Call February 19, 2025 11:00 AM ET Company Participants Rosy Zuklic - VP - Investor RelationsRick Muncrief - President and CEOClay Gaspar - EVP & COOJeff Ritenour - EVP & CFOScott Hanold - Managing Director - Energy ResearchNeal Dingmann - Managing Director - Energy ResearchNeil Mehta - Head of Americas Natural Resources Equity ResearchArun Jayaram - Vice PresidentKevin MacCurdy - Managing DirectorJohn Freeman - Managing DirectorMatthew Portillo - Partner & Head of Resear ...

A much more stark dichotomy of opinions seems to have formed regarding what the near future holds for Devon (NYSE: DVN ). If one were to listen to every opinionAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in DVN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not re ...

Q4 2024 Earnings Presentation February 18, 2025 NYSE: DVN devonenergy.com 2024 – A Year of Outstanding Achievement CONSISTENT PRODUCTION GROWTH TOTAL PRODUCTION BY PRODUCT (MBOED) 0 200 400 600 800 2021 2022 2023 2024 OIL NGLs GAS 572 610 658 737 | Q4 2024 Earnings Presentation 2 Q4 2024 – Executing on Our Operating Plan Efficient capital spending Upstream capital ($ in millions) Q4 24 Guidance Q4 2024 Result 3% CAPITAL BEAT $895 $872 Expanding oil production Oil production (MBOD) Q4 24 Guidance Q4 2024 Res ...

Core Insights - Devon Energy reported revenue of $4.4 billion for the quarter ended December 2024, reflecting a 6.2% increase year-over-year and a surprise of +3.93% over the Zacks Consensus Estimate of $4.24 billion [1] - The company's EPS was $1.16, down from $1.41 in the same quarter last year, with an EPS surprise of +16.00% compared to the consensus estimate of $1.00 [1] Financial Performance - Total oil equivalent production was 848 million barrels per day, exceeding the seven-analyst average estimate of 821 million barrels [4] - Average daily oil production was 398 million barrels, surpassing the six-analyst average estimate of 386.04 million barrels [4] - Average daily gas production reached 1,371 million cubic feet, above the six-analyst average estimate of 1,321.45 million cubic feet [4] - Average daily NGL production was 221 million barrels, compared to the six-analyst average estimate of 214.77 million barrels [4] Revenue Breakdown - Marketing and midstream revenues were reported at $1.40 billion, exceeding the average estimate of $1.22 billion and representing a year-over-year increase of +29.2% [4] - Oil, gas, and NGL sales amounted to $3.09 billion, surpassing the four-analyst average estimate of $2.96 billion, with a year-over-year change of +12.8% [4] - Oil, gas, and NGL derivatives reported a loss of -$84 million, contrasting with the two-analyst average estimate of $74.38 million, indicating a year-over-year change of -125.9% [4] Stock Performance - Devon Energy's shares have returned -8.7% over the past month, while the Zacks S&P 500 composite increased by +4.7% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]