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Mar 31, 2020
Devon Energy Q1 2020 Earnings Report
Devon Energy's financial and operational results were reported for Q1 2020, with key highlights including exceeding oil production guidance, increasing operating cash flow, and maintaining a strong financial position.
Key Takeaways
Devon Energy reported first-quarter 2020 results, highlighting oil production exceeding guidance, increased operating cash flow, and a strong financial position. The company is reducing capital investment and improving cost outlook for 2020.
Upstream capital expenditures were 12 percent below midpoint guidance due to efficiencies.
First-quarter oil production exceeded guidance by 3,000 barrels per day.
Operating cash flow increased 21 percent year-over-year to $529 million.
Free cash flow generation reached $104 million.
Forward Guidance
Devon Energy has reduced its capital expenditures by $800 million for the full-year 2020. The revised capital outlook of approximately $1 billion represents a reduction of nearly 45 percent compared to the company’s original 2020 capital budget.
Positive Outlook
- Capital investment reduced 45 percent from original plan to $1 billion
- Oil production expected to be essentially flat compared to 2019
- Hedges protect approximately 90 percent of oil volumes at $42 per barrel
- Full-year cost outlook improved by $250 million, includes executive pay reductions
- Barnett Shale asset sale process on track to close by year-end
Challenges Ahead
- Guidance assumes 10,000 barrels per day of oil curtailments in the second quarter
- The COVID-19 pandemic and its related repercussions have created significant volatility, uncertainty and turmoil in the global economy and our industry.
- This turmoil has included an unprecedented supply-and-demand imbalance for oil and other commodities, resulting in a swift and material decline in commodity prices in early 2020.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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