FINANCIAL RESULTS
Devon reported net earnings of $639 million, or $0.98 per diluted share, in the fourth quarter of 2024. Adjusting for items analysts typically exclude
from estimates, the company’s core earnings were $756 million, or $1.16 per diluted share.
Operating cash flow was $1.7 billion in the
fourth quarter, which fully funded the company’s capital requirements and resulted in $738 million of free cash flow for the quarter.
During
the quarter, Devon’s investment-grade financial position strengthened with cash balances increasing by $170 million to a total of $846 million. The company ended the year with outstanding debt of $8.9 billion and a net debt-to-EBITDAX ratio of 1.0 times.
RETURN OF CAPITAL
Devon is committed to rewarding its shareholders by returning capital through the quarterly fixed dividend and share repurchases. During the fourth quarter the
company paid $143 million in dividends and repurchased 7.7 million of its shares for $301 million. Since the inception of the share repurchase program, the company has repurchased 69.0 million shares, at a total cost of
$3.3 billion.
Consistent with Devon’s strategic priority of delivering value to shareholders through a sustainable, annually growing fixed
dividend, the Board of Directors raised the quarterly fixed dividend rate by 9 percent to $0.24 per share for the first quarter of 2025. The dividend is payable on Mar. 31, 2025, to shareholders of record at the close of business on Mar. 14,
2025.
OPERATING RESULTS
Devon’s capital
activity in the fourth quarter averaged 24 operated drilling rigs and 6 completion crews across its asset portfolio. This level of activity resulted in 128 gross operated wells being placed online, with an average lateral length of 9,900 feet.
Upstream capital spending in the fourth quarter was $872 million, 3 percent below guidance expectations. Midstream, carbon and corporate capital totaled $54 million in the quarter. The company also executed $116 million in
multiple leasehold acquisitions across its portfolio, including in the Delaware, Williston and Anadarko Basins.
Devon’s oil production in the fourth
quarter reached a record 398,000 barrels per day, exceeding guidance by 3 percent. Total companywide production averaged 848,000 oil-equivalent barrels (Boe) per day in the fourth quarter. This represents
a 16 percent increase in production compared to the previous quarter. Production in the quarter benefited from the closing on the company’s Grayson Mill acquisition in late September, which contributed 117,000 Boe per day and 63,000
barrels of oil per day to the quarterly average.
Devon’s remaining production outperformance was primarily driven by its Eagle Ford asset, which
reached 92,000 Boe per day. This production result represents a growth rate of 23 percent quarter-over-quarter, driven by 23 gross operated wells being placed online during the quarter. The outperformance was driven by strong well productivity
and base production that exceeded expectations.
For the fourth quarter, Devon’s oil, gas and NGL sales totaled $3.1 billion, a 16 percent
increase in revenues compared to the prior quarter. The improvement was primarily due to the increased oil production quarter over quarter, as well as from higher natural gas liquids (NGL) and natural gas pricing. The company’s realized price
during the period, including commodity hedges, was $40.32 per Boe, down $0.39 per Boe from prior quarter. The decreased price realization largely reflected lower crude benchmark prices, partially offset by higher NGL and natural gas prices.
Production costs, including taxes, averaged $11.30 per Boe in the fourth quarter, a decline of 1 percent from the prior period. The largest component of
production costs is lease operating expense and gathering, processing and transportation costs, which totaled $8.44 per Boe in the quarter. Effective cost management efforts and lower well workovers drove
per-unit rates 10 percent below guidance expectations for the quarter.
Financing cost, net totaled
$123 million in the quarter, a $35 million increase from the prior quarter. The higher expense is primarily related to the debt issued in the prior quarter related to the Grayson Mill acquisition.
Devon exited the year with estimated proved reserves of 2.2 billion Boe. Proved undeveloped reserves accounted for 20 percent of the total.
Extensions and discoveries and performance revisions from the company’s drilling program added 415 million Boe of reserves in 2024, equating to a replacement rate of 154 percent of production. The capital costs (excluding property
acquisition costs) to deliver these additions totaled $3.5 billion, resulting in a finding and development cost of $8.54 per Boe.
2
