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Devon Energy reports lower profit, sees production hit from winter storm

In Business
February 28, 2024

(Reuters) -U.S. shale producer Devon Energy reported a fall in fourth-quarter profit on Tuesday, hurt by lower oil and gas prices and forecast a 2% impact in first-quarter production due to severe winter weather.

Concerns over global demand weighed on commodity prices throughout the reported quarter, with U.S. natural gas prices declining by more than half.

Devon’s averaged realized price without hedges fell to $44.93 per barrel of oil equivalent during the quarter, compared with $53.66 boe a year ago, with realized natural gas prices tumbling 58%.

The company reaffirmed its 2024 production forecast at about 650,000 barrels of oil equivalent per day (boepd) but forecast first-quarter production to be down 2% due to curtailments arising from severe winter weather.

A severe winter storm dumped snow across a broad part of the country In January, shutting a Gulf Coast refinery in Texas and halving North Dakota’s oil production.

Devon’s fourth-quarter production rose to 662,000 boepd, compared with 636,000 boepd in the year-ago quarter, backed by strong output from its Delaware assets.

U.S. crude oil production had reached record heights in 2023 as companies focused on boosting drilling efficiency and cut costs.

The company said it added a fourth frac crew in the Delaware basin in January and expects its capital program to be weighted towards the first half of 2024.

Its adjusted profit of $1.41 per share was in line with estimates, according to LSEG data.

The Oklahoma City-based company also raised its fixed quarterly dividend by 10%.

The company’s net income fell to $1.15 billion, or $1.81 per share, in the three months ended Dec. 31, from $1.20 billion, or $1.83 per share, a year earlier.

(Reporting by Sourasis Bose in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)

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