OKLAHOMA CITY (AP) _ Devon Energy Corp. (DVN) on Tuesday reported second-quarter net income of $495 million, after reporting a loss in the same period a year earlier.
The Oklahoma City-based company said it had net income of $1.19 per share. Earnings, adjusted to account for discontinued operations, were 43 cents per share.
“Devon is executing at a very high level on all aspects of our strategic plan,” said Dave Hager, president and CEO. “Our second-quarter performance was highlighted by improving well productivity and capital efficiency that drove oil production above the high end of guidance with a total capital investment well below forecast. Furthermore, our profitability was significantly enhanced by our operating and G&A cost-savings initiatives that are delivering results ahead of plan.”
“With the positive business momentum we have demonstrated year-to-date, we are raising our full-year oil production outlook for the second time this year,” said Hager. “And importantly, we are delivering this incremental volume growth with lower capital and operating costs, positioning Devon to generate higher free cash flow in the second half of the year.”
Within Devon’s U.S. onshore portfolio, the company said the strongest asset-level performance was achieved at the company’s Delaware Basin operations in southeast New Mexico. Production from there increased 58 percent year over year, driving volumes in the Delaware to 120,000 oil-equivalent barrels (Boe) per day. A key growth driver was 28 new wells brought online in the state-line area that averaged initial 30-day rates of approximately 2,100 Boe per day per well, of which 70 percent was oil.
Given the strong operational momentum achieved in the Delaware Basin, Devon is raising its 2019 U.S. oil production outlook for the second time this year. The midpoint of the company’s updated guidance represents an estimated oil growth rate of 19 percent compared to 2018, a 400-basis point improvement compared to original budget expectations.
The financial results topped Wall Street expectations. The average estimate of 12 analysts surveyed by Zacks Investment Research was for earnings of 36 cents per share.
The oil and gas exploration company posted revenue of $1.92 billion in the period, falling short of Street forecasts. Five analysts surveyed by Zacks expected $2.22 billion.
Devon Energy shares have risen 7.5% since the beginning of the year, while the Standard & Poor's 500 index has risen 15%. In the final minutes of trading on Tuesday, shares hit $24.22, a fall of 45% in the last 12 months.