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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Devon Energy Corp | NYSE:DVN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.08 | -0.16% | 49.00 | 6,859 | 14:15:38 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
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(Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition. |
On November 7, 2023, Devon Energy Corporation (the “Company”) announced its financial and operational results for the quarterly period ended September 30, 2023. In connection with this announcement, the Company provided an earnings release and certain supplemental financial information (including guidance and hedging information). Copies of these documents are furnished as Exhibits 99.1 and 99.2, respectively, to this report and, along with certain other materials, will be available on the Company’s website at www.devonenergy.com.
The information contained in this report and the exhibits hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. |
Description of Exhibits | |
99.1 | Earnings release, dated November 7, 2023. | |
99.2 | Supplemental financial information (including guidance and hedging information). | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DEVON ENERGY CORPORATION | ||
By: | /s/ Jeffrey L. Ritenour | |
Jeffrey L. Ritenour | ||
Executive Vice President and Chief Financial Officer |
Date: November 7, 2023
Exhibit 99.1
Devon Energy Corporation 333 West Sheridan Avenue Oklahoma City, OK 73102-5015 |
Devon Energy Reports Third-Quarter 2023 Results, Declares Quarterly Dividend and Provides Preliminary 2024 Outlook
OKLAHOMA CITY November 7, 2023 Devon Energy Corp. (NYSE: DVN) today reported financial and operational results for the third-quarter 2023. Supplemental financial tables and forward-looking guidance are available on the companys website at www.devonenergy.com.
KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS
| Production per share increased 10 percent year-over-year in the third quarter |
| Delaware Basin well productivity improved more than 20 percent versus first half of 2023 |
| Operating cash flow increased 23 percent compared to the second quarter to $1.7 billion |
| Free cash flow more than doubled quarter-over-quarter to $843 million |
| Fixed-plus-variable dividend increased by 57 percent versus second quarter to $0.77 per share |
| Balance sheet strengthened with debt reduction and cash balances increasing to a total of $761 million |
CEO PERSPECTIVE
Devons performance once again demonstrates the strength of our disciplined operating strategy, leading to another quarter of strong financial growth, said Rick Muncrief, president and CEO. This growth was highlighted by production per share increasing 10 percent over the past year and we more than doubled our free cash flow during the quarter, reaching our highest level of the year.
Our strong free cash flow generation allowed us to reward shareholders with a 57 percent increase to our dividend payout, and we took important steps to strengthen our balance sheet by retiring debt while building cash balances during the quarter.
Looking ahead to 2024, we plan to refine our capital allocation by further concentrating investment in the Delaware Basin, Muncrief commented. By shifting more capital to the core of this world-class basin and high-grading activity across our diversified portfolio, we expect to deliver a step-change improvement in capital efficiency, and we are well positioned to generate growth in free cash flow that can once again be harvested for shareholders.
FINANCIAL RESULTS
Devon reported net earnings of $910 million, or $1.42 per diluted share, in the third quarter of 2023. Adjusting for items analysts typically exclude from estimates, the companys core earnings were $1.1 billion, or $1.65 per diluted share, a 40 percent increase from the prior quarter.
Devons operating cash flow totaled $1.7 billion in the third quarter. With capital reinvestment rates at 52 percent of cash flow, Devon generated $843 million of free cash flow in the quarter, a more than two-fold increase versus the second quarter.
In the third quarter, the company took steps to strengthen its financial position by retiring $242 million of outstanding debt. The company also increased its cash on hand by $273 million in the quarter to a total of $761 million. Outstanding debt declined to $6.2 billion and the companys net debt-to-EBITDAX ratio was 0.7 times.
RETURN OF CAPITAL
Based on the third-quarter financial performance, Devon declared a fixed-plus-variable dividend of $0.77 per share, an increase of 57 percent from the second quarter of 2023. The dividend is payable on December 29, 2023 to shareholders of record at the close of business on December 15, 2023.
1
The company also has returned capital to shareholders through its ongoing $3.0 billion share-repurchase program. Since commencement of the program, Devon has repurchased approximately 40 million shares, at a total cost of $2.1 billion. With this repurchase program, the company is on track to decrease its outstanding share count by up to 9 percent.
OPERATING RESULTS
Devons capital activity in the third quarter averaged 24 operated drilling rigs and 5 completion crews across its asset portfolio. This level of activity resulted in 81 gross operated wells being placed online, with an average lateral length of 9,300 feet.
Capital spending excluding acquisitions totaled $896 million in the third quarter, a 12 percent decrease from the previous quarter. The decline in capital was driven by the timing of completions in the Delaware Basin, where the company temporarily reduced activity to 3 completion crews in the second half of the year.
Production averaged 665,000 oil-equivalent barrels (Boe) per day in the third quarter, representing an increase of 8 percent year over year. This result was 1 percent below midpoint expectations due to select well performance in the Williston Basin and temporary constraints in the Delaware. Oil totaled 321,000 barrels per day in the quarter, which was 48 percent of total volumes.
Devons operating performance was driven by its Delaware Basin asset, which accounted for 66 percent of the companys production at 440,000 Boe per day. This production result represents a growth rate of 5 percent compared to the year-ago period, driven by 59 gross operated wells being placed online during the quarter. Average 30-day production rates from this activity reached 3,000 Boe per day, representing a 20 percent-plus improvement in well productivity from the first half of 2023.
Production costs, including taxes, averaged $12.37 per Boe in the quarter. This low cost structure, coupled with the benefits of higher commodity prices, expanded field-level cash margins by 18 percent quarter-over-quarter to $34.73 per Boe.
UPDATED OUTLOOK
Devons fourth quarter capital is expected to range from $870 million to $930 million. With this level of investment, the company expects to bring online around 100 gross operated wells during the quarter. Fourth-quarter production is expected to range from 640,000 to 660,000 Boe per day, with oil production approximating 315,000 barrels per day. This decrease in production from the third quarter is driven by declines in the Williston Basin and timing of completions in the Delaware Basin.
In 2024, the company plans to sustain oil production at around 315,000 barrels per day, with total volumes approximating 650,000 Boe per day. Capital requirements are expected to decline approximately 10 percent from 2023 levels to a range from $3.3 billion to $3.6 billion. This program is estimated to be funded at pricing levels below $40 per barrel.
Additional details of Devons forward-looking guidance are available on the companys website at www.devonenergy.com.
CONFERENCE CALL WEBCAST AND SUPPLEMENTAL EARNINGS MATERIALS
Also provided with todays release is the companys detailed earnings presentation that is available on the companys website at www.devonenergy.com. The companys third-quarter conference call will be held at 10:00 a.m. Central (11:00 a.m. Eastern) on Wednesday, November 8, 2023, and will serve primarily as a forum for analyst and investor questions and answers.
ABOUT DEVON ENERGY
Devon Energy is a leading oil and gas producer in the U.S. with a premier multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devons disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations. For more information, please visit www.devonenergy.com.
Investor Contacts |
Media Contact | |
Scott Coody, 405-552-4735 |
Brenda Anthony, 405-228-2812 | |
Chris Carr, 405-228-2496 |
2
NON-GAAP DISCLOSURES
This press release includes non-GAAP (generally accepted accounting principles) financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of results as reported under GAAP. Reconciliations of these non-GAAP measures and other disclosures are provided within the supplemental financial tables that are available on the companys website and in the related Form 10-Q filed with the Securities and Exchange Commission (the SEC).
FORWARD LOOKING STATEMENTS
This press release includes forward-looking statements within the meaning of the federal securities laws. Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words and phrases expects, believes, will, would, could, continue, may, aims, likely to be, intends, forecasts, projections, estimates, plans, expectations, targets, opportunities, potential, anticipates, outlook and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but not limited to: the volatility of oil, gas and NGL prices; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; the uncertainties, costs and risks involved in our operations; risks related to our hedging activities; our limited control over third parties who operate some of our oil and gas properties; midstream capacity constraints and potential interruptions in production, including from limits to the build out of midstream infrastructure; competition for assets, materials, people and capital; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands, environmental matters and seismicity; risks related to regulatory, social and market efforts to address climate change; governmental interventions in energy markets; risks relating to the COVID-19 pandemic or other future pandemics; counterparty credit risks; risks relating to our indebtedness; cyberattack risks; the extent to which insurance covers any losses we may experience; risks related to stockholder activism; our ability to successfully complete mergers, acquisitions and divestitures; our ability to pay dividends and make share repurchases; and any of the other risks and uncertainties discussed in Devons 2022 Annual Report on Form 10-K (the 2022 Form 10-K) or other filings with the SEC.
The forward-looking statements included in this press release speak only as of the date of this press release, represent managements current reasonable expectations as of the date of this press release and are subject to the risks and uncertainties identified above as well as those described elsewhere in the 2022 Form 10-K and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in the 2022 Form 10-K and in other documents we file from time to time with the SEC. All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We do not undertake, and expressly disclaim, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.
3
Exhibit 99.2
Devon Energy Third-Quarter 2023
Supplemental Tables
PAGE: | ||||
TABLE OF CONTENTS: |
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Consolidated Statements of Earnings |
2 | |||
Supplemental Information for Consolidated Statements of Earnings |
3 | |||
Consolidated Balance Sheets |
4 | |||
Consolidated Statements of Cash Flows |
5 | |||
Production |
6 | |||
Capital Expenditures and Supplemental Information for Capital Expenditures |
7 | |||
Realized Pricing |
8 | |||
Asset Margins |
9 | |||
Core Earnings and EBITDAX |
10 | |||
Net Debt, Net Debt-to-EBITDAX and Free Cash Flow |
11 | |||
Reinvestment Rate and Variable Dividend |
12 |
1
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share amounts) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Oil, gas and NGL sales |
$ | 2,882 | $ | 2,493 | $ | 2,679 | $ | 3,139 | $ | 3,668 | ||||||||||
Oil, gas and NGL derivatives (1) |
(194 | ) | (76 | ) | 64 | (53 | ) | 248 | ||||||||||||
Marketing and midstream revenues |
1,148 | 1,037 | 1,080 | 1,213 | 1,516 | |||||||||||||||
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Total revenues |
3,836 | 3,454 | 3,823 | 4,299 | 5,432 | |||||||||||||||
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Production expenses (2) |
757 | 719 | 693 | 715 | 735 | |||||||||||||||
Exploration expenses |
3 | 10 | 3 | 13 | 4 | |||||||||||||||
Marketing and midstream expenses |
1,160 | 1,051 | 1,105 | 1,231 | 1,525 | |||||||||||||||
Depreciation, depletion and amortization |
651 | 638 | 615 | 625 | 581 | |||||||||||||||
Asset dispositions |
| (41 | ) | | (29 | ) | | |||||||||||||
General and administrative expenses |
99 | 92 | 106 | 122 | 95 | |||||||||||||||
Financing costs, net (3) |
81 | 78 | 72 | 73 | 67 | |||||||||||||||
Other, net |
13 | 10 | 5 | (4 | ) | (40 | ) | |||||||||||||
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Total expenses |
2,764 | 2,557 | 2,599 | 2,746 | 2,967 | |||||||||||||||
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Earnings before income taxes |
1,072 | 897 | 1,224 | 1,553 | 2,465 | |||||||||||||||
Income tax expense (4) |
152 | 199 | 221 | 349 | 565 | |||||||||||||||
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Net earnings |
920 | 698 | 1,003 | 1,204 | 1,900 | |||||||||||||||
Net earnings attributable to noncontrolling interests |
10 | 8 | 8 | 3 | 7 | |||||||||||||||
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Net earnings attributable to Devon |
$ | 910 | $ | 690 | $ | 995 | $ | 1,201 | $ | 1,893 | ||||||||||
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Net earnings per share: |
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Basic net earnings per share |
$ | 1.43 | $ | 1.08 | $ | 1.53 | $ | 1.84 | $ | 2.89 | ||||||||||
Diluted net earnings per share |
$ | 1.42 | $ | 1.07 | $ | 1.53 | $ | 1.83 | $ | 2.88 | ||||||||||
Weighted average common shares outstanding: |
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Basic |
637 | 638 | 645 | 647 | 649 | |||||||||||||||
Diluted |
639 | 639 | 647 | 649 | 651 |
2
SUPPLEMENTAL INFORMATION FOR CONSOLIDATED STATEMENTS OF EARNINGS
(1) OIL, GAS AND NGL DERIVATIVES
(in millions) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Derivative cash settlements |
$ | (11 | ) | $ | 37 | $ | 13 | $ | (177 | ) | $ | (363 | ) | |||||||
Derivative valuation changes |
(183 | ) | (113 | ) | 51 | 124 | 611 | |||||||||||||
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Oil, gas and NGL derivatives |
$ | (194 | ) | $ | (76 | ) | $ | 64 | $ | (53 | ) | $ | 248 | |||||||
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(2) PRODUCTION EXPENSES |
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(in millions) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Lease operating expense |
$ | 367 | $ | 353 | $ | 327 | $ | 308 | $ | 284 | ||||||||||
Gathering, processing & transportation |
178 | 177 | 166 | 178 | 177 | |||||||||||||||
Production taxes |
191 | 165 | 175 | 210 | 252 | |||||||||||||||
Property taxes |
21 | 24 | 25 | 19 | 22 | |||||||||||||||
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Production expenses |
$ | 757 | $ | 719 | $ | 693 | $ | 715 | $ | 735 | ||||||||||
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(3) FINANCING COSTS, NET |
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(in millions) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Interest based on outstanding debt |
$ | 93 | $ | 96 | $ | 93 | $ | 93 | $ | 92 | ||||||||||
Interest income |
(11 | ) | (15 | ) | (17 | ) | (16 | ) | (19 | ) | ||||||||||
Other |
(1 | ) | (3 | ) | (4 | ) | (4 | ) | (6 | ) | ||||||||||
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Financing costs, net |
$ | 81 | $ | 78 | $ | 72 | $ | 73 | $ | 67 | ||||||||||
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(4) INCOME TAX EXPENSE |
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(in millions) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Current expense |
$ | 139 | $ | 80 | $ | 141 | $ | 84 | $ | 120 | ||||||||||
Deferred expense |
13 | 119 | 80 | 265 | 445 | |||||||||||||||
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Income tax expense |
$ | 152 | $ | 199 | $ | 221 | $ | 349 | $ | 565 | ||||||||||
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3
CONSOLIDATED BALANCE SHEETS
(in millions) | September 30, 2023 |
December 31, 2022 |
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Current assets: |
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Cash, cash equivalents and restricted cash |
$ | 761 | $ | 1,454 | ||||
Accounts receivable |
1,853 | 1,767 | ||||||
Inventory |
233 | 201 | ||||||
Other current assets |
365 | 469 | ||||||
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Total current assets |
3,212 | 3,891 | ||||||
Oil and gas property and equipment, based on successful efforts accounting, net |
17,563 | 16,567 | ||||||
Other property and equipment, net |
1,468 | 1,539 | ||||||
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Total property and equipment, net |
19,031 | 18,106 | ||||||
Goodwill |
753 | 753 | ||||||
Right-of-use assets |
261 | 224 | ||||||
Investments |
671 | 440 | ||||||
Other long-term assets |
313 | 307 | ||||||
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Total assets |
$ | 24,241 | $ | 23,721 | ||||
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Current liabilities: |
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Accounts payable |
$ | 812 | $ | 859 | ||||
Revenues and royalties payable |
1,434 | 1,506 | ||||||
Short-term debt |
487 | 251 | ||||||
Other current liabilities |
597 | 489 | ||||||
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Total current liabilities |
3,330 | 3,105 | ||||||
Long-term debt |
5,675 | 6,189 | ||||||
Lease liabilities |
290 | 257 | ||||||
Asset retirement obligations |
641 | 511 | ||||||
Other long-term liabilities |
850 | 900 | ||||||
Deferred income taxes |
1,676 | 1,463 | ||||||
Stockholders equity: |
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Common stock |
64 | 65 | ||||||
Additional paid-in capital |
6,153 | 6,921 | ||||||
Retained earnings |
5,535 | 4,297 | ||||||
Accumulated other comprehensive loss |
(113 | ) | (116 | ) | ||||
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Total stockholders equity attributable to Devon |
11,639 | 11,167 | ||||||
Noncontrolling interests |
140 | 129 | ||||||
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Total equity |
11,779 | 11,296 | ||||||
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Total liabilities and equity |
$ | 24,241 | $ | 23,721 | ||||
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Common shares outstanding |
641 | 653 |
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Cash flows from operating activities: |
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Net earnings |
$ | 920 | $ | 698 | $ | 1,003 | $ | 1,204 | $ | 1,900 | ||||||||||
Adjustments to reconcile net earnings to net cash from operating activities: |
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Depreciation, depletion and amortization |
651 | 638 | 615 | 625 | 581 | |||||||||||||||
Leasehold impairments |
1 | 3 | | 2 | 2 | |||||||||||||||
Amortization of liabilities |
(2 | ) | (8 | ) | (7 | ) | (8 | ) | (8 | ) | ||||||||||
Total (gains) losses on commodity derivatives |
194 | 76 | (64 | ) | 53 | (248 | ) | |||||||||||||
Cash settlements on commodity derivatives |
(11 | ) | 37 | 13 | (177 | ) | (363 | ) | ||||||||||||
Gains on asset dispositions |
| (41 | ) | | (29 | ) | | |||||||||||||
Deferred income tax expense |
13 | 119 | 80 | 265 | 445 | |||||||||||||||
Share-based compensation |
22 | 25 | 23 | 23 | 22 | |||||||||||||||
Other |
(2 | ) | (2 | ) | 2 | (1 | ) | 8 | ||||||||||||
Changes in assets and liabilities, net |
(61 | ) | (140 | ) | 12 | (46 | ) | (235 | ) | |||||||||||
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Net cash from operating activities |
1,725 | 1,405 | 1,677 | 1,911 | 2,104 | |||||||||||||||
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Cash flows from investing activities: |
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Capital expenditures |
(882 | ) | (1,079 | ) | (1,012 | ) | (804 | ) | (628 | ) | ||||||||||
Acquisitions of property and equipment |
(23 | ) | (18 | ) | (13 | ) | (17 | ) | (2,465 | ) | ||||||||||
Divestitures of property and equipment |
1 | 1 | 21 | | 4 | |||||||||||||||
Distributions from investments |
7 | 9 | 8 | 9 | 7 | |||||||||||||||
Contributions to investments and other |
| (15 | ) | (37 | ) | (17 | ) | (16 | ) | |||||||||||
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Net cash from investing activities |
(897 | ) | (1,102 | ) | (1,033 | ) | (829 | ) | (3,098 | ) | ||||||||||
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Cash flows from financing activities: |
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Repayments of long-term debt |
(242 | ) | | | | | ||||||||||||||
Repurchases of common stock |
| (228 | ) | (517 | ) | (57 | ) | (126 | ) | |||||||||||
Dividends paid on common stock |
(312 | ) | (462 | ) | (596 | ) | (875 | ) | (1,007 | ) | ||||||||||
Contributions from noncontrolling interests |
10 | 8 | | | | |||||||||||||||
Distributions to noncontrolling interests |
(9 | ) | (13 | ) | (11 | ) | (8 | ) | (9 | ) | ||||||||||
Shares exchanged for tax withholdings and other |
| (9 | ) | (87 | ) | | (1 | ) | ||||||||||||
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Net cash from financing activities |
(553 | ) | (704 | ) | (1,211 | ) | (940 | ) | (1,143 | ) | ||||||||||
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Effect of exchange rate changes on cash |
(2 | ) | 2 | | 2 | (10 | ) | |||||||||||||
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Net change in cash, cash equivalents and restricted cash |
273 | (399 | ) | (567 | ) | 144 | (2,147 | ) | ||||||||||||
Cash, cash equivalents and restricted cash at beginning of period |
488 | 887 | 1,454 | 1,310 | 3,457 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash, cash equivalents and restricted cash at end of period |
$ | 761 | $ | 488 | $ | 887 | $ | 1,454 | $ | 1,310 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reconciliation of cash, cash equivalents and restricted cash: |
||||||||||||||||||||
Cash and cash equivalents |
$ | 654 | $ | 372 | $ | 761 | $ | 1,314 | $ | 1,166 | ||||||||||
Restricted cash |
107 | 116 | 126 | 140 | 144 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash, cash equivalents and restricted cash |
$ | 761 | $ | 488 | $ | 887 | $ | 1,454 | $ | 1,310 | ||||||||||
|
|
|
|
|
|
|
|
|
|
5
PRODUCTION
2023 | 2022 | |||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Oil (MBbls/d) | ||||||||||||||||||||
Delaware Basin |
215 | 209 | 211 | 201 | 210 | |||||||||||||||
Eagle Ford |
40 | 45 | 40 | 42 | 19 | |||||||||||||||
Anadarko Basin |
14 | 15 | 15 | 15 | 13 | |||||||||||||||
Williston Basin |
35 | 36 | 36 | 37 | 35 | |||||||||||||||
Powder River Basin |
13 | 14 | 14 | 16 | 13 | |||||||||||||||
Other |
4 | 4 | 4 | 5 | 4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
321 | 323 | 320 | 316 | 294 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Natural gas liquids (MBbls/d) | ||||||||||||||||||||
Delaware Basin |
112 | 105 | 97 | 101 | 108 | |||||||||||||||
Eagle Ford |
15 | 16 | 15 | 12 | 9 | |||||||||||||||
Anadarko Basin |
27 | 31 | 26 | 23 | 27 | |||||||||||||||
Williston Basin |
9 | 9 | 8 | 9 | 8 | |||||||||||||||
Powder River Basin |
2 | 2 | 2 | 3 | 2 | |||||||||||||||
Other |
1 | 1 | 1 | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
166 | 164 | 149 | 148 | 154 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gas (MMcf/d) | ||||||||||||||||||||
Delaware Basin |
680 | 636 | 640 | 626 | 623 | |||||||||||||||
Eagle Ford |
78 | 86 | 82 | 84 | 63 | |||||||||||||||
Anadarko Basin |
235 | 254 | 237 | 238 | 224 | |||||||||||||||
Williston Basin |
58 | 59 | 54 | 64 | 71 | |||||||||||||||
Powder River Basin |
18 | 18 | 16 | 21 | 18 | |||||||||||||||
Other |
1 | 1 | 1 | 1 | 1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
1,070 | 1,054 | 1,030 | 1,034 | 1,000 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total oil equivalent (MBoe/d) | ||||||||||||||||||||
Delaware Basin |
440 | 420 | 415 | 407 | 421 | |||||||||||||||
Eagle Ford |
68 | 74 | 68 | 68 | 39 | |||||||||||||||
Anadarko Basin |
80 | 89 | 81 | 77 | 77 | |||||||||||||||
Williston Basin |
54 | 56 | 53 | 57 | 55 | |||||||||||||||
Powder River Basin |
19 | 19 | 19 | 22 | 18 | |||||||||||||||
Other |
4 | 4 | 5 | 5 | 4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
665 | 662 | 641 | 636 | 614 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
6
CAPITAL EXPENDITURES
(in millions) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Delaware Basin |
$ | 503 | $ | 583 | $ | 572 | $ | 518 | $ | 444 | ||||||||||
Eagle Ford |
198 | 179 | 188 | 160 | 38 | |||||||||||||||
Anadarko Basin |
13 | 67 | 66 | 59 | 55 | |||||||||||||||
Williston Basin |
69 | 89 | 73 | 90 | 57 | |||||||||||||||
Powder River Basin |
45 | 39 | 32 | 46 | 44 | |||||||||||||||
Other |
2 | 1 | 2 | 1 | 1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total upstream capital |
$ | 830 | $ | 958 | $ | 933 | $ | 874 | $ | 639 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Carbon capital |
25 | 30 | 27 | 20 | 27 | |||||||||||||||
Midstream and Corporate |
41 | 30 | 28 | 28 | 22 | |||||||||||||||
Acquisitions (1) |
23 | 18 | 13 | 13 | 2,534 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total capital |
$ | 919 | $ | 1,036 | $ | 1,001 | $ | 935 | $ | 3,222 | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Q3 2022 includes $2,532 million related to Validus and RimRock acquisitions. |
SUPPLEMENTAL INFORMATION FOR CAPITAL EXPENDITURES
GROSS OPERATED SPUDS |
||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Delaware Basin |
64 | 65 | 60 | 60 | 50 | |||||||||||||||
Eagle Ford |
28 | 18 | 23 | 31 | 7 | |||||||||||||||
Anadarko Basin |
10 | 9 | 19 | 8 | 13 | |||||||||||||||
Williston Basin |
7 | 8 | 6 | 9 | 10 | |||||||||||||||
Powder River Basin |
4 | 3 | 3 | 4 | 6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
113 | 103 | 111 | 112 | 86 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
GROSS OPERATED WELLS TIED-IN |
||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Delaware Basin |
59 | 76 | 42 | 55 | 59 | |||||||||||||||
Eagle Ford |
13 | 29 | 26 | 28 | 8 | |||||||||||||||
Anadarko Basin |
| 16 | 7 | 23 | 13 | |||||||||||||||
Williston Basin |
6 | 8 | 17 | 5 | 14 | |||||||||||||||
Powder River Basin |
3 | 2 | 5 | 3 | 9 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
81 | 131 | 97 | 114 | 103 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
AVERAGE LATERAL LENGTH |
||||||||||||||||||||
(based on wells tied-in) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Delaware Basin |
9,700 | 10,100 | 9,900 | 9,600 | 10,900 | |||||||||||||||
Eagle Ford |
5,000 | 6,200 | 6,700 | 6,500 | 7,800 | |||||||||||||||
Anadarko Basin |
| 9,100 | 9,300 | 8,700 | 9,500 | |||||||||||||||
Williston Basin |
12,300 | 10,000 | 11,500 | 9,900 | 10,500 | |||||||||||||||
Powder River Basin |
13,300 | 15,000 | 10,700 | 9,600 | 11,800 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total |
9,300 | 9,200 | 9,300 | 8,700 | 10,500 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
7
REALIZED PRICING
BENCHMARK PRICES
(average prices) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Oil ($/Bbl) - West Texas Intermediate (Cushing) |
$ | 82.06 | $ | 73.76 | $ | 76.17 | $ | 82.53 | $ | 91.87 | ||||||||||
Natural Gas ($/Mcf) - Henry Hub |
$ | 2.54 | $ | 2.09 | $ | 3.44 | $ | 6.26 | $ | 8.20 | ||||||||||
NGL ($/Bbl) - Mont Belvieu Blended |
$ | 26.62 | $ | 23.99 | $ | 29.48 | $ | 30.46 | $ | 39.67 | ||||||||||
REALIZED PRICES |
||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Oil (Per Bbl) |
||||||||||||||||||||
Delaware Basin |
$ | 80.72 | $ | 71.86 | $ | 74.43 | $ | 82.48 | $ | 93.60 | ||||||||||
Eagle Ford |
80.85 | 72.36 | 74.06 | 83.23 | 91.53 | |||||||||||||||
Anadarko Basin |
79.86 | 71.52 | 74.14 | 82.57 | 91.42 | |||||||||||||||
Williston Basin |
79.50 | 70.80 | 74.09 | 81.05 | 91.30 | |||||||||||||||
Powder River Basin |
78.51 | 70.75 | 74.30 | 81.29 | 91.33 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price without hedges |
80.48 | 71.74 | 74.32 | 82.31 | 92.98 | |||||||||||||||
Cash settlements |
(0.67 | ) | | (0.10 | ) | (4.87 | ) | (8.60 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price, including cash settlements |
$ | 79.81 | $ | 71.74 | $ | 74.22 | $ | 77.44 | $ | 84.38 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Natural gas liquids (Per Bbl) |
||||||||||||||||||||
Delaware Basin |
$ | 20.76 | $ | 18.07 | $ | 23.72 | $ | 23.68 | $ | 34.37 | ||||||||||
Eagle Ford |
23.70 | 20.22 | 26.18 | 29.06 | 35.55 | |||||||||||||||
Anadarko Basin |
23.37 | 19.42 | 27.88 | 29.58 | 35.52 | |||||||||||||||
Williston Basin |
4.09 | 2.52 | 8.97 | 7.97 | 25.41 | |||||||||||||||
Powder River Basin |
29.63 | 24.52 | 35.72 | 34.91 | 44.85 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price without hedges |
20.72 | 17.79 | 24.12 | 24.32 | 34.44 | |||||||||||||||
Cash settlements |
| | | | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price, including cash settlements |
$ | 20.72 | $ | 17.79 | $ | 24.12 | $ | 24.32 | $ | 34.44 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gas (Per Mcf) |
||||||||||||||||||||
Delaware Basin |
$ | 1.94 | $ | 1.18 | $ | 1.90 | $ | 4.30 | $ | 7.06 | ||||||||||
Eagle Ford |
2.31 | 1.80 | 2.99 | 5.02 | 7.53 | |||||||||||||||
Anadarko Basin |
2.17 | 1.72 | 3.14 | 5.37 | 8.89 | |||||||||||||||
Williston Basin |
N/M | N/M | 1.57 | 0.44 | 3.23 | |||||||||||||||
Powder River Basin |
2.53 | 2.41 | 4.25 | 5.57 | 8.23 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price without hedges |
1.92 | 1.27 | 2.29 | 4.39 | 7.25 | |||||||||||||||
Cash settlements |
0.09 | 0.39 | 0.18 | (0.38 | ) | (1.42 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price, including cash settlements |
$ | 2.01 | $ | 1.66 | $ | 2.47 | $ | 4.01 | $ | 5.83 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total oil equivalent (Per Boe) |
||||||||||||||||||||
Delaware Basin |
$ | 47.68 | $ | 42.05 | $ | 46.35 | $ | 53.34 | $ | 65.80 | ||||||||||
Eagle Ford |
55.71 | 49.69 | 52.81 | 62.92 | 65.49 | |||||||||||||||
Anadarko Basin |
27.88 | 24.04 | 32.16 | 41.25 | 53.72 | |||||||||||||||
Williston Basin |
52.64 | 45.94 | 52.94 | 54.51 | 66.65 | |||||||||||||||
Powder River Basin |
62.21 | 56.33 | 63.01 | 67.59 | 78.58 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price without hedges |
47.10 | 41.39 | 46.44 | 53.66 | 64.89 | |||||||||||||||
Cash settlements |
(0.18 | ) | 0.61 | 0.22 | (3.04 | ) | (6.41 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Realized price, including cash settlements |
$ | 46.92 | $ | 42.00 | $ | 46.66 | $ | 50.62 | $ | 58.48 | ||||||||||
|
|
|
|
|
|
|
|
|
|
8
ASSET MARGINS
BENCHMARK PRICES |
||||||||||||||||||||
(average prices) | 2023 | 2022 | ||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Oil ($/Bbl) - West Texas Intermediate (Cushing) |
$ | 82.06 | $ | 73.76 | $ | 76.17 | $ | 82.53 | $ | 91.87 | ||||||||||
Natural Gas ($/Mcf) - Henry Hub |
$ | 2.54 | $ | 2.09 | $ | 3.44 | $ | 6.26 | $ | 8.20 | ||||||||||
NGL ($/Bbl) - Mont Belvieu Blended |
$ | 26.62 | $ | 23.99 | $ | 29.48 | $ | 30.46 | $ | 39.67 | ||||||||||
PER-UNIT CASH MARGIN BY ASSET (per Boe) |
||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||
Quarter 3 | Quarter 2 | Quarter 1 | Quarter 4 | Quarter 3 | ||||||||||||||||
Delaware Basin |
||||||||||||||||||||
Realized price |
$ | 47.68 | $ | 42.05 | $ | 46.35 | $ | 53.34 | $ | 65.80 | ||||||||||
Lease operating expenses |
(5.03 | ) | (4.96 | ) | (4.58 | ) | (4.55 | ) | (4.39 | ) | ||||||||||
Gathering, processing & transportation |
(2.63 | ) | (2.63 | ) | (2.63 | ) | (2.52 | ) | (2.40 | ) | ||||||||||
Production & property taxes |
(3.48 | ) | (3.18 | ) | (3.43 | ) | (3.89 | ) | (4.81 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Field-level cash margin |
$ | 36.54 | $ | 31.28 | $ | 35.71 | $ | 42.38 | $ | 54.20 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Eagle Ford |
||||||||||||||||||||
Realized price |
$ | 55.71 | $ | 49.69 | $ | 52.81 | $ | 62.92 | $ | 65.49 | ||||||||||
Lease operating expenses |
(7.52 | ) | (6.18 | ) | (6.32 | ) | (5.63 | ) | (4.94 | ) | ||||||||||
Gathering, processing & transportation |
(1.63 | ) | (1.67 | ) | (1.49 | ) | (3.08 | ) | (4.94 | ) | ||||||||||
Production & property taxes |
(3.18 | ) | (2.97 | ) | (3.25 | ) | (2.97 | ) | (3.79 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Field-level cash margin |
$ | 43.38 | $ | 38.87 | $ | 41.75 | $ | 51.24 | $ | 51.82 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Anadarko Basin |
||||||||||||||||||||
Realized price |
$ | 27.88 | $ | 24.04 | $ | 32.16 | $ | 41.25 | $ | 53.72 | ||||||||||
Lease operating expenses |
(3.43 | ) | (3.13 | ) | (3.41 | ) | (3.59 | ) | (3.46 | ) | ||||||||||
Gathering, processing & transportation |
(6.11 | ) | (5.97 | ) | (5.93 | ) | (6.84 | ) | (6.91 | ) | ||||||||||
Production & property taxes |
(1.36 | ) | (1.22 | ) | (1.73 | ) | (2.29 | ) | (3.26 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Field-level cash margin |
$ | 16.98 | $ | 13.72 | $ | 21.09 | $ | 28.53 | $ | 40.09 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Williston Basin |
||||||||||||||||||||
Realized price |
$ | 52.64 | $ | 45.94 | $ | 52.94 | $ | 54.51 | $ | 66.65 | ||||||||||
Lease operating expenses |
(13.04 | ) | (13.43 | ) | (13.25 | ) | (9.93 | ) | (9.97 | ) | ||||||||||
Gathering, processing & transportation |
(2.31 | ) | (2.29 | ) | (2.19 | ) | (1.92 | ) | (2.40 | ) | ||||||||||
Production & property taxes |
(5.13 | ) | (4.68 | ) | (4.85 | ) | (5.64 | ) | (6.33 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Field-level cash margin |
$ | 32.16 | $ | 25.54 | $ | 32.65 | $ | 37.02 | $ | 47.95 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Powder River Basin |
||||||||||||||||||||
Realized price |
$ | 62.21 | $ | 56.33 | $ | 63.01 | $ | 67.59 | $ | 78.58 | ||||||||||
Lease operating expenses |
(8.45 | ) | (10.03 | ) | (11.07 | ) | (7.15 | ) | (7.03 | ) | ||||||||||
Gathering, processing & transportation |
(3.02 | ) | (2.97 | ) | (2.73 | ) | (2.98 | ) | (3.24 | ) | ||||||||||
Production & property taxes |
(7.45 | ) | (6.79 | ) | (7.78 | ) | (8.13 | ) | (9.50 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Field-level cash margin |
$ | 43.29 | $ | 36.54 | $ | 41.43 | $ | 49.33 | $ | 58.81 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Devon - Total |
||||||||||||||||||||
Realized price |
$ | 47.10 | $ | 41.39 | $ | 46.44 | $ | 53.66 | $ | 64.89 | ||||||||||
Lease operating expenses |
(6.00 | ) | (5.86 | ) | (5.67 | ) | (5.26 | ) | (5.02 | ) | ||||||||||
Gathering, processing & transportation |
(2.91 | ) | (2.94 | ) | (2.88 | ) | (3.05 | ) | (3.13 | ) | ||||||||||
Production & property taxes |
(3.46 | ) | (3.14 | ) | (3.47 | ) | (3.91 | ) | (4.84 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Field-level cash margin |
$ | 34.73 | $ | 29.45 | $ | 34.42 | $ | 41.44 | $ | 51.90 | ||||||||||
|
|
|
|
|
|
|
|
|
|
9
NON-GAAP MEASURES
(all monetary values in millions, except per share amounts)
Devons earnings materials include non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in the earnings materials, including reconciliations to their most directly comparable GAAP measure.
The earnings materials may include forward-looking non-GAAP measures. The company is unable to provide reconciliations of these forward-looking non-GAAP measures, because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, the timing of changes in capital accruals, unknown future events and estimating certain future GAAP measures. The inability to reliably quantify certain components of the calculation would significantly affect the usefulness and accuracy of a reconciliation.
CORE EARNINGS
Devons reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the companys financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on third- quarter 2023 earnings.
Quarter Ended September 30, 2023 | ||||||||||||||||
Before-tax | After-tax | After NCI | Per Diluted Share |
|||||||||||||
Total |
||||||||||||||||
Earnings (GAAP) |
$ | 1,072 | $ | 920 | $ | 910 | $ | 1.42 | ||||||||
Adjustments: |
||||||||||||||||
Deferred tax asset valuation allowance |
| 3 | 3 | | ||||||||||||
Fair value changes in financial instruments |
186 | 145 | 145 | 0.23 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Core earnings (Non-GAAP) |
$ | 1,258 | $ | 1,068 | $ | 1,058 | $ | 1.65 | ||||||||
|
|
|
|
|
|
|
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EBITDAX
Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings before financing costs, net; income tax expense; exploration expenses; depreciation, depletion and amortization; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; accretion on discounted liabilities; and other items not related to normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies.
Q3 23 | Q2 23 | Q1 23 | Q4 22 | TTM | Q3 22 | |||||||||||||||||||
Net earnings (GAAP) |
$ | 920 | $ | 698 | $ | 1,003 | $ | 1,204 | $ | 3,825 | $ | 1,900 | ||||||||||||
Financing costs, net |
81 | 78 | 72 | 73 | 304 | 67 | ||||||||||||||||||
Income tax expense |
152 | 199 | 221 | 349 | 921 | 565 | ||||||||||||||||||
Exploration expenses |
3 | 10 | 3 | 13 | 29 | 4 | ||||||||||||||||||
Depreciation, depletion and amortization |
651 | 638 | 615 | 625 | 2,529 | 581 | ||||||||||||||||||
Asset dispositions |
| (41 | ) | | (29 | ) | (70 | ) | | |||||||||||||||
Share-based compensation |
22 | 25 | 23 | 23 | 93 | 22 | ||||||||||||||||||
Derivative & financial instrument non-cash val. changes |
183 | 113 | (51 | ) | (122 | ) | 123 | (613 | ) | |||||||||||||||
Accretion on discounted liabilities and other |
13 | 10 | 5 | (6 | ) | 22 | (38 | ) | ||||||||||||||||
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EBITDAX (Non-GAAP) |
$ | 2,025 | $ | 1,730 | $ | 1,891 | $ | 2,130 | $ | 7,776 | $ | 2,488 | ||||||||||||
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10
NET DEBT
Devon defines net debt as debt (includes short-term and long-term debt) less cash, cash equivalents and restricted cash. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | ||||||||||||||||
Total debt (GAAP) |
$ | 6,162 | $ | 6,413 | $ | 6,422 | $ | 6,440 | $ | 6,451 | ||||||||||
Less: |
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Cash, cash equivalents and restricted cash |
(761 | ) | (488 | ) | (887 | ) | (1,454 | ) | (1,310 | ) | ||||||||||
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Net debt (Non-GAAP) |
$ | 5,401 | $ | 5,925 | $ | 5,535 | $ | 4,986 | $ | 5,141 | ||||||||||
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NET DEBT-TO-EBITDAX
Devon defines net debt-to-EBITDAX as net debt divided by an annualized EBITDAX measure. Devon believes this ratio provides information useful to investors in assessing the companys credit position and debt leverage.
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | ||||||||||||||||
Net debt (Non-GAAP) |
$ | 5,401 | $ | 5,925 | $ | 5,535 | $ | 4,986 | $ | 5,141 | ||||||||||
EBITDAX (Non-GAAP) (1) |
$ | 7,776 | $ | 8,239 | $ | 9,342 | $ | 9,586 | $ | 9,267 | ||||||||||
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Net debt-to-EBITDAX (Non-GAAP) |
0.7 | 0.7 | 0.6 | 0.5 | 0.6 | |||||||||||||||
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(1) | EBITDAX is an annualized measure using a trailing twelve-month calculation. |
FREE CASH FLOW
Devon defines free cash flow as total operating cash flow less capital expenditures. Devon believes free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.
Quarter Ended Sep. 30, 2023 |
Quarter Ended Jun. 30, 2023 |
Quarter Ended Mar. 31, 2023 |
Quarter Ended Dec. 31, 2022 |
Quarter Ended Sep. 30, 2022 |
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Total operating cash flow (GAAP) |
$ | 1,725 | $ | 1,405 | $ | 1,677 | $ | 1,911 | $ | 2,104 | ||||||||||
Less capital expenditures: |
(882 | ) | (1,079 | ) | (1,012 | ) | (804 | ) | (628 | ) | ||||||||||
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Free cash flow (Non-GAAP) |
$ | 843 | $ | 326 | $ | 665 | $ | 1,107 | $ | 1,476 | ||||||||||
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11
REINVESTMENT RATE
Devon defines reinvestment rate as accrued capital expenditures (excluding acquisitions) divided by operating cash flow. Devon believes this measure provides useful information to our investors as an indicator of the capital demands of our business relative to the cash flow generated from normal business operations.
Quarter Ended Sep. 30, 2023 |
Quarter Ended Jun. 30, 2023 |
Quarter Ended Mar. 31, 2023 |
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Capital expenditures (excludes acquisitions) |
$ | 896 | $ | 1,018 | $ | 988 | ||||||
Operating cash flow |
$ | 1,725 | $ | 1,405 | $ | 1,677 | ||||||
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Reinvestment rate (Non-GAAP) |
52 | % | 72 | % | 59 | % | ||||||
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VARIABLE DIVIDEND
Devon may pay a variable dividend of up to 50 percent of its excess cash flow. Each quarters excess cash flow is computed as adjusted cash flow less capital expenditures and the fixed dividend.
Quarter Ended Sep. 30, 2023 |
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Operating cash flow (GAAP) |
$ | 1,725 | ||
Changes in assets and liabilities, net |
61 | |||
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Adjusted cash flow (Non-GAAP) |
1,786 | |||
Capital expenditures (Accrued) |
(919 | ) | ||
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Adjusted free cash flow (Non-GAAP) |
867 | |||
Fixed quarterly dividend |
(127 | ) | ||
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Excess free cash flow (Non-GAAP) |
$ | 740 | ||
~50% Pay out (Board Discretion: Up to 50%) |
50 | % | ||
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Total variable dividend |
$ | 365 | ||
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12
FOURTH-QUARTER 2023 GUIDANCE |
PRODUCTION GUIDANCE
Quarter 4 | ||||||||
Low | High | |||||||
Oil (MBbls/d) |
312 | 318 | ||||||
Natural gas liquids (MBbls/d) |
160 | 166 | ||||||
Gas (MMcf/d) |
1,010 | 1,055 | ||||||
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Total oil equivalent (MBoe/d) |
640 | 660 | ||||||
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CAPITAL EXPENDITURES GUIDANCE
Quarter 4 | ||||||||
(in millions) | Low | High | ||||||
Upstream capital |
$ | 820 | $ | 860 | ||||
Carbon capital |
20 | 30 | ||||||
Midstream & other capital |
30 | 40 | ||||||
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Total capital |
$ | 870 | $ | 930 | ||||
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PRICE REALIZATIONS GUIDANCE
Quarter 4 | ||||||||
Low | High | |||||||
Oil - % of WTI |
96 | % | 100 | % | ||||
NGL - % of WTI |
20 | % | 30 | % | ||||
Natural gas - % of Henry Hub |
60 | % | 70 | % |
OTHER GUIDANCE ITEMS
Quarter 4 | ||||||||
($ millions, except Boe and %) | Low | High | ||||||
Marketing & midstream operating profit |
$ | (15 | ) | $ | (5 | ) | ||
LOE & GP&T per BOE |
$ | 9.15 | $ | 9.35 | ||||
Production & property taxes as % of upstream sales |
7.0 | % | 8.0 | % | ||||
Exploration expenses |
$ | | $ | 5 | ||||
Depreciation, depletion and amortization |
$ | 620 | $ | 660 | ||||
General & administrative expenses |
$ | 100 | $ | 110 | ||||
Financing costs, net |
$ | 70 | $ | 80 | ||||
Other expenses |
$ | | $ | 5 |
INCOME TAX GUIDANCE
Quarter 4 | ||||||||
(% of pre-tax earnings) | Low | High | ||||||
Current income tax rate |
11 | % | 13 | % | ||||
Deferred income tax rate |
9 | % | 11 | % | ||||
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Total income tax rate |
~22% | |||||||
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1
CONTINGENT PAYMENTS FOR BARNETT SHALE DIVESTITURE (2 more years through 2024) |
WTI Threshold | WTI Annual Earnout Amount | Henry Hub Threshold | Henry Hub Annual Earnout Amount |
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$ | 50.00 | $ | 10,000,000 | $ | 2.75 | $ | 20,000,000 | |||||||
$ | 55.00 | $ | 12,500,000 | $ | 3.00 | $ | 25,000,000 | |||||||
$ | 60.00 | $ | 15,000,000 | $ | 3.25 | $ | 35,000,000 | |||||||
$ | 65.00 | $ | 20,000,000 | $ | 3.50 | $ | 45,000,000 |
2023 & 2024 HEDGING POSITIONS
Oil Commodity Hedges
Price Swaps | Price Collars | |||||||||||||||
Period | Volume (Bbls/d) | Weighted Average Price ($/Bbl) |
Volume (Bbls/d) |
Weighted Average Floor Price ($/Bbl) |
Weighted Average Ceiling Price ($/Bbl) |
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Q4 2023 | 23,000 | $ | 73.38 | 81,000 | $ | 69.63 | $ | 94.29 | ||||||||
Q1-Q4 2024 | 27,486 | $ | 77.74 | 60,238 | $ | 65.71 | $ | 84.89 |
Oil Basis Swaps
Period | Index | Volume (Bbls/d) | Weighted Average Differential to WTI ($/Bbl) |
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Q4 2023 | Midland Sweet | 66,500 | $ | 1.11 | ||||||
Q1-Q4 2024 | Midland Sweet | 62,500 | $ | 1.17 | ||||||
Q1-Q4 2024 | NYMEX Roll | 26,000 | $ | 0.82 |
Natural Gas Commodity Hedges - Henry Hub
Price Swaps | Price Collars | |||||||||||||||
Period | Volume (MMBtu/d) | Weighted Average Price ($/MMBtu) |
Volume (MMBtu/d) |
Weighted Average Floor Price ($/MMBtu) |
Weighted Average Ceiling Price ($/MMBtu) |
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Q4 2023 | 161,000 | $ | 3.36 | 147,000 | $ | 3.67 | $ | 7.62 | ||||||||
Q1-Q4 2024 | 152,426 | $ | 3.37 | 40,527 | $ | 3.78 | $ | 7.05 |
Natural Gas Basis Swaps
Period | Index | Volume (MMBtu/d) | Weighted Average Differential to Henry Hub ($/MMBtu) |
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Q4 2023 | WAHA | 70,000 | $ | (0.51 | ) | |||
Q4 2023 | El Paso Permian | 145,000 | $ | (1.58 | ) | |||
Q4 2023 | Houston Ship Channel | 70,000 | $ | (0.19 | ) | |||
Q1-Q4 2024 | WAHA | 44,973 | $ | (0.58 | ) | |||
Q1-Q4 2024 | El Paso Permian | 34,863 | $ | (0.91 | ) | |||
Q1-Q4 2024 | Houston Ship Channel | 110,000 | $ | (0.24 | ) |
NGL Commodity Hedges
Price Swaps | ||||||||||
Period | Product | Volume (Bbls/d) | Weighted Average Price ($/Bbl) |
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Q1-Q4 2024 | Natural Gasoline | 3,000 | $ | 69.11 | ||||||
Q1-Q4 2024 | Normal Butane | 3,350 | $ | 37.58 | ||||||
Q1-Q4 2024 | Propane | 3,000 | $ | 32.20 |
Devons oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devons natural gas derivatives settle against the Inside FERC end of the month NYMEX index. Devons NGL derivatives settle against the average of the prompt month OPIS Mont Belvieu, Texas index. Commodity hedge positions are shown as of October 31, 2023.
2
Document and Entity Information |
Nov. 07, 2023 |
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Cover [Abstract] | |
Entity Registrant Name | DEVON ENERGY CORP/DE |
Entity Incorporation State Country Code | DE |
Entity Address, State or Province | OK |
Amendment Flag | false |
Entity Central Index Key | 0001090012 |
Document Type | 8-K |
Document Period End Date | Nov. 07, 2023 |
Entity File Number | 001-32318 |
Entity Tax Identification Number | 73-1567067 |
Entity Address, Address Line One | 333 W. SHERIDAN AVE. |
Entity Address, City or Town | OKLAHOMA CITY |
Entity Address, Postal Zip Code | 73102-5015 |
City Area Code | 405 |
Local Phone Number | 235-3611 |
Written Communications | false |
Soliciting Material | false |
Pre Commencement Tender Offer | false |
Pre Commencement Issuer Tender Offer | false |
Security 12b Title | Common Stock, par value $0.10 per share |
Trading Symbol | DVN |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
1 Year Devon Energy Chart |
1 Month Devon Energy Chart |
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