Stock Trading in Red: Devon Energy Corp (NYSE: DVN)

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Devon Energy Corp (NYSE: DVN) stock fell over 1.1% in the pre-market session of Feb 17th, 2021 (Source: Google finance) after the company reported the loss of $102 million in its fourth quarter and posted mixed results for the fourth quarter of FY 20.

The Production from legacy Devon operations was of average 333,000 oil-equivalent barrels (Boe) per day during the fourth quarter. Oil production was of average 156,000 barrels per day, increasing 7 percent compared to the previous quarter. Oil production in the fourth quarter benefited from strong well productivity in the Delaware Basin and higher-than-expected base production performance across the portfolio. Devon’s upstream capital spending in the fourth quarter was $183 million. This result was in line with guidance and represents a 25 percent decrease from the average quarterly spend in 2020.

DVN in the fourth quarter of FY 20 has reported the adjusted earnings per share of 1 cents, missing the analysts’ estimates for the adjusted earnings per share of 5 cents, according to Zacks Investment Research. The company had reported the adjusted revenue of $1.28 billion in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $1.24 billion.

Devon, which completed its merger with WPX Energy on January 7, said it is expecting to produce between 280,000 to 300,000 barrels of oil per day during FY21 compared with its prior forecast expecting to average 280,000 barrels per day this year. Devon expects to deliver this improved 2021 oil production outlook with an upstream capital budget in the range of $1.6 billion to $1.8 billion.  The company plans to provide additional Q1 guidance once it can properly evaluate the impact of extreme winter weather on its field operations.

Additionally, the company has declared a variable dividend of $0.19 per share in addition to its previously announced quarterly dividend of $0.11 per share. Both dividends are payable March 31 to shareholders of record on March 15.

Meanwhile, WPX’s fourth quarter activity in the Delaware Basin was focused in its Stateline area. This co-development program targeting the Upper Wolfcamp and Bone Spring benches has resulted in 26 new wells online in the fourth quarter. The initial 30-day production rates from this activity outperformed pre-drill expectations, averaging 2,300 Boe per day (61 percent oil). The company’s completed well costs continued to improve, with the average cost for a 2-mile lateral declining to $553 per foot, a 44 percent reduction versus 2018. The appraisal work on WPX’s Monument Draw acreage also progressed in the quarter with a more aggressive flowback technique applied to four wells.

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