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Dec 31, 2019
Devon Energy Q4 2019 Earnings Report
Devon Energy reported strong Q4 2019 results driven by increased oil production and capital efficiency.
Key Takeaways
Devon Energy reported fourth-quarter 2019 results, with oil production increasing 28% year over year and exceeding guidance. The company's operating cash flow was $579 million and free cash flow was $171 million. A net loss of $642 million was reported, but core earnings were $0.33 per diluted share after adjustments.
Fourth-quarter oil production increased 28 percent year over year, exceeding guidance.
Upstream capital expenditures were 6 percent below midpoint due to efficiencies.
Operating cash flow expanded year over year to $579 million.
Free cash flow generation accelerated to $171 million in the fourth quarter.
Devon Energy
Devon Energy
Forward Guidance
Devon Energy is raising its full-year 2020 oil growth rate to a range of 7.5 percent to 9 percent compared to 2019 and lowering the top end of its upstream capital guidance by $50 million to a range of $1.7 billion to $1.85 billion in 2020.
Positive Outlook
- Exceptionally strong well performance in the Delaware Basin.
- Raising full-year 2020 oil growth rate to range of 7.5% to 9%.
- Lowering the top end of its upstream capital guidance by $50 million.
- Capital efficiency to be enhanced by reallocation of capital to the Delaware Basin.
- Full-year G&A outlook is expected to decline to a range of $360 million to $400 million.
Challenges Ahead
- LOE rates are expected to increase to a range of $8.00 to $8.20 per Boe in 2020.
- Increase is entirely driven by $65 million of minimum volume commitment payments in the STACK.
- These commitments expire at the end of 2020.
- Volatility of oil, gas and NGL prices.
- Regulatory restrictions and compliance costs.