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Devon Energy (DVN) Q4 Earnings & Revenues Surpass Estimates

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Devon Energy Corp. (DVN - Free Report) reported fourth-quarter 2021 adjusted earnings of $1.39 per share, beating the Zacks Consensus Estimate of $1.21 by 14.9%. In the year-ago quarter, the company reported break-even earnings.

GAAP earnings for the fourth quarter were $2.23 against a loss of 27 cents per share in the year-ago period.

Revenues

Total revenues of $4,273 million surpassed the Zacks Consensus Estimate by 19.9%. The top line also improved 23.3% from the year-ago figure.

Devon Energy Corporation Price, Consensus and EPS Surprise

Devon Energy Corporation Price, Consensus and EPS Surprise

Devon Energy Corporation price-consensus-eps-surprise-chart | Devon Energy Corporation Quote

Production

Total net production for fourth-quarter 2021 touched 611,000 barrels of oil equivalent per day (Boe/d), up 86.5% year over year. Fourth-quarter production was better than the guided range of 583,000-601,000 Boe/d. Production for the quarter was driven by high-margin production growth in the Delaware Basin.

Oil production averaged 300,000 barrels per day (Bbl/d), which increased 92.3% on a year-over-year basis, primarily due to strong contributions from Delaware and Williston Basin assets. Natural gas liquids production was also up 92.5% year over year to 154,000 BBl/d.

Realized Prices

Realized oil prices for the quarter were $62.22 per barrel, up 63.7% from $38.01 in the year-ago period. Realized prices for natural gas liquids were up 135.9% to $34.82 per barrel from $14.76 in the prior-year quarter.

Realized gas prices were up 66.3% to $3.26 per thousand cubic feet from $1.96 in the prior-year quarter.

Total oil equivalent realized prices — including cash settlements — were $44.34 per Boe, up 79% year over year.

Other Highlights

Total production expenses for the fourth quarter were $605 million, increasing 123.2% year over year.

In the fourth quarter, Devon repurchased 14 million shares at a total cost of $589 million. The board of directors expanded the company’s share-repurchase authorization by 60% to $1.6 billion, which is equivalent to 5% of Devon’s market capitalization.

Devon’s free cash flow for fourth-quarter 2021 was $1.1 billion. Financing costs for the reported quarter were $86 million, up 22.9% from $70 million in the year-ago period.

At 2021-end, Devon had proved reserves of nearly 1,625 million barrels of oil equivalent (MMBOE), up 14.8% from the 2020-end level of 1,415 MMBOE.

Financial Highlights

As of Dec 31, 2021, the company had cash and cash equivalents including restricted cash of $2,271 million, up from $2,237 million in the corresponding period of 2020. Total liquidity as of Dec 31, 2021 was $5,300 million.

As of Dec 31, 2021, long-term debt amounted to $6,482 million, up from $4,298 million in the comparable period of 2020.

Devon Energy’s net cash from operating activities for fourth-quarter 2021 was $1,616 million compared with $358 million in the year-ago period.

Guidance

Devon expects total production for the first quarter in the range of 560,000-580,000 Boe/d. First-quarter capital expenditure is projected in the range of $540-$610 million.

Devon reiterated its 2022 total production guidance in the range of 570,000-600,000 Boe/d and upstream capital investment within $1.9-$2.2 billion. Total capital expenditure for 2022 is expected in the range of $2.06-$2.44 billion.

Zacks Rank

Currently, Devon Energy holds a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases

Cheniere Energy, Inc. (LNG - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 24. The Zacks Consensus Estimate for earnings for the quarter is pegged at $1.49 per share.

Cheniere Energy’s long-term earnings growth is projected at 28.9%. The Zacks Consensus Estimate for LNG’s 2022 earnings per share indicates year-over-year growth of 432.7%.

Occidental Petroleum Corporation (OXY - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 24. The Zacks Consensus Estimate for earnings for the quarter is pegged at $1.07 per share.

Occidental’s long-term earnings growth is projected at 37.3%. The Zacks Consensus Estimate for OXY’s 2022 earnings per share indicates year-over-year growth of 81.4%.

Denbury Inc. (DEN - Free Report) is scheduled to report fourth-quarter 2021 results on Feb 24. The Zacks Consensus Estimate for earnings for the quarter is pegged at 78 cents per share.

Denbury reported four-quarter earnings surprise of 28.6%. The Zacks Consensus Estimate for DEN’s 2022 earnings per share indicates year-over-year growth of 154.7%.