Devon Energy(US:DVN)2025-02-19 17:01Acquisition 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].