Devon Reports Loss as Expenses Rise

   By Micah Maidenberg 
 

Devon Energy Corp. (DVN) lifted oil and gas production in the second quarter as prices for both commodities rose, but the company reported a loss amid growing expenses.

Oklahoma City-based Devon said in its second-quarter earnings report Tuesday that the firm produced an average of 541,000 barrels of oil equivalent of petroleum and natural gas in the quarter, compared to 536,000 barrels a year ago. Analysts surveyed by FactSet expected 530,000 barrels.

Revenue ticked up 4% to $2.2 billion, surpassing expectations of analysts surveyed by FactSet, who predicted $1.6 billion.

The company struggled with higher costs, however, leading to a loss from continuing operations of $474 million, or 92 cents a share. Analysts expected income from continuing operations of 31 cents a share.

The company incurred higher marketing costs and restructuring spending, as well as production expenses that were elevated from a year earlier. For example, gathering, processing and transportation costs, a major component of production expenses, rose 40% to $224 million during the quarter.

Devon reported adjusted earnings of 26 cents a share, below the average analyst estimate of 37 cents on FactSet.

Shares of Devon fell slightly to $45.01 on Tuesday, and were down 2.8% in after-hours trading.

Earlier this month, the company completed its sale of interests in oil logistics company EnLink Midstream LLC for $3.1 billion and boosted the company's share repurchase program to $4 billion.

"With the EnLink transaction, we're further simplifying the Devon story," Devon Chief Financial Officer Jeffrey Ritenour said at a conference in June.

Write to Micah Maidenberg at [e-mail]

(END) Dow Jones Newswires

July 31, 2018 18:27 ET (22:27 GMT)

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