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Devon Energy Corp. First Quarter 2023 Results

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   |    Tuesday,May 16,2023

Devon Energy Corp., announced first quarter 2023 results.


  • Oil production reached an all-time high of 320,000 barrels per day in the first quarter
  • Capital activity headlined by Exotic Cat Raider project that achieved per-well rates as high as 7,200 Boe per day
  • Operating cash flow totaled $1.7 billion and free cash flow reached $665 million in the first quarter
    • Declared fixed-plus-variable dividend payout of $0.72 per share based on first quarter results
    • Share buyback activity accelerated with $692 million of repurchases year-to-date
  • Board of directors increased share-repurchase authorization by 50 percent to $3.0 billion
Devon Energy Corp., reported financial and operational results for the first-quarter 2023. Supplemental financial tables and forward-looking guidance are available on the company’s website at

Rick Muncrief, president and CEO, commented: “Devon’s strong financial performance in the first quarter was fueled by record-setting oil production and effective cost management across the portfolio.”

“This solid operational execution, combined with low reinvestment rates, has allowed Devon to generate free cash flow for 11 consecutive quarters across a variety of market conditions. This success showcases the durability of our business model to consistently create value through the cycle.

“With this free cash flow generation, we have been able to return more than $1 billion of capital to shareholders in 2023 through our differentiated dividend policy and the acceleration of our share repurchase program."

“Furthermore, given the substantial progress we have made with our buyback program, I am pleased to announce the board has expanded our share-repurchase authorization by 50 percent to $3 billion. This upsized program provides us additional runway to further compound per-share growth as we continue to execute on the tenets of our disciplined strategy,” Muncrief commented.


Devon reported net earnings of $995 million, or $1.53 per diluted share, in the first quarter of 2023. Adjusting for items analysts typically exclude from estimates, the company’s core earnings were $952 million, or $1.46 per diluted share.

Operating cash flow totaled $1.7 billion in the first quarter, which funded all the company’s capital requirements and resulted in $665 million of free cash flow for the quarter. In addition to this free cash flow, Devon received $69 million in divestiture contingency payments during the quarter.

At the end of the first quarter, the company had a cash balance of $887 million and an undrawn credit facility of $3 billion. Outstanding debt totaled $6.4 billion and the company’s net debt-to-EBITDAX ratio was 0.6 times.


Based on the first-quarter financial performance, Devon declared a fixed-plus-variable dividend of $0.72 per share. The dividend is payable on June 30, 2023, to shareholders of record at the close of business on June 15, 2023. This payout includes a $0.11 per share benefit from divestiture contingency payments received in the quarter.

The company also returned capital to shareholders through the execution of its share-repurchase program. Year-to-date, Devon has repurchased 12.9 million shares at a total cost of $692 million. Since program inception in late 2021, the company has repurchased 38.5 million shares, at a total cost of $2.0 billion.

As a result of this buyback activity, the company has increased its share-repurchase authorization by 50 percent to $3.0 billion, which is equivalent to 9 percent of Devon’s market capitalization. This expanded authorization extends through the end of 2024.


Oil production averaged 320,000 barrels per day in the first quarter, exceeding midpoint guidance by 2,000 barrels per day. This record-setting oil volume performance was driven by better-than-forecasted results across the company’s diversified portfolio. Total production for the first quarter averaged 641,000 oil-equivalent barrels (Boe) per day.

Devon’s total capital spending, excluding acquisitions, was $988 million in the first quarter. This level of investment was in range with guidance expectations, reflecting improvements in service-cost price stability and availability.

Production costs averaged $12.02 per Boe, a 2 percent reduction compared to the previous quarter. The improved cost structure was driven by lower production taxes, resulting in field-level cash margins of $34.42 per Boe in the first quarter.

The company’s administrative and interest costs improved by 11 percent on a per-unit basis year-over-year. The reduction in per-unit overhead costs resulted from the impact of accretive acquisitions that captured efficiencies and reduced financing expense.


Delaware Basin

Production increased 5 percent year over year to an average of 415,000 Boe per day (51 percent oil). During the quarter, Devon operated 16 rigs and 4 completion crews, resulting in 42 gross wells placed online across the company’s 400,000 net acres in the basin.

Capital activity from the quarter was headlined by the Exotic Cat Raider development within the company’s Todd area in Lea County, New Mexico. This 3-mile lateral project, consisting of 6 wells drilled in the Upper Wolfcamp formation, exceeded pre- drill expectations with 30-day rates reaching as high as 7,200 Boe per day. Per-well recoveries from this high-impact development are currently on track to surpass 2 million BOE.

Another key operational event in the quarter was the successful restart of the company’s Stateline compressor station 8. This compressor facility has resumed operations and downtime associated with this temporary outage has been confined to the first quarter. The company also recently commenced operations at its Stateline compressor station 10, providing even more flexibility in this area of the basin going forward.

Eagle Ford

 Production averaged 68,000 Boe per day (59 percent oil), a 90 percent increase in production compared to the year-ago quarter. This volume growth was driven by the Validus acquisition and the commencement of 26 gross wells to first production. Over the remainder of 2023, Devon plans to place online an additional 65 infill wells and execute up to 10 refracs across its 82,000 net acre position.

Anadarko Basin

Production increased by 5 percent from the previous quarter to an average of 81,000 Boe per day (49 percent gas). In the first quarter, Devon placed 7 wells online and spud 19 new wells supported by a $100 million drilling carry with Dow. The top well result for the quarter was the Hornet 9 16-14N 2HX, targeting the Meramec formation, that achieved a 30- day rate of 4,000 Boe per day (57 percent liquids). In 2023, the company expects to spud up to 40 new wells in this basin.

Williston Basin

Production averaged 53,000 Boe per day (67 percent oil), a 10 percent increase year over year. First-quarter results were highlighted by the 4-well Palo Pinto project that achieved average 30-day rates of 2,900 Boe per day. This high- margin asset remains on track to bring online 40 development wells in 2023 and harvest approximately $700 million of cash flow for the year.

Powder River Basin

Production increased 7 percent year-over-year to an average of 19,000 Boe per day (75 percent oil). This growth was primarily driven by successful Niobrara appraisal and Parkman development work over the past year. The company possesses 300,000 net acres in the oil fairway of this emerging resource opportunity.


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