Devon Energy beats by $0.07, reports revs in-line
- Reports Q4 (Dec) earnings of $0.25 per share, excluding non-recurring items, $0.07 better than the Capital IQ Consensus of $0.18; revenues fell 2.7% year/year to $2.81 bln vs the $2.8 bln Capital IQ Consensus.
- The company's significantly improved profitability in the fourth quarter was attributable to higher commodity prices and an improved cost structure.
- Total companywide production in the fourth quarter reached 537,000 oil-equivalent barrels (Boe) per day, exceeding the midpoint of guidance by 2,000 Boe per day.
- In 2017, with strong growth expected from EnLink, Devon projects its midstream operating profits will advance to a range of $900 million to $950 million. Based on the midpoint of guidance, this estimate represents approximately a 10 percent increase compared to 2016.
- In 2017, Devon expects to further accelerate activity in its U.S. resource plays to as many as 20 operated rigs by year end. With this level of planned activity, the company expects to invest between $2.0 billion and $2.3 billion of E&P capital in 2017, with nearly 90 percent of the capital devoted to U.S. resource plays.
- Devon's upstream capital plans are expected to drive 13 to 17 percent oil production growth in the U.S. during 2017 compared to the fourth quarter of 2016, which marks the low point of Devon's production profile. This resumption of growth in high-margin production will begin in the first quarter of 2017.
- Excluding EnLink, first quarter capital expenditures are expected to range from $525-$595 million, while full-year capital expenditures are expected to range from $2.285-$2.690 billion
- The operational momentum created by accelerated drilling activity in the STACK and Delaware Basin in the upcoming year is expected to advance light-oil production in the U.S. by approximately 20 percent in 2018 compared to 2017. This rapid growth in high-margin production, combined with a significantly improved cost structure, positions Devon to deliver peer-leading cash flow expansion at today's market prices.