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Devon's (DVN) Q4 Production Down 2% Due to Severe Weather
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Devon Energy (DVN - Free Report) fourth-quarter 2022 production volumes are likely to be down 2% due to extreme winter weather across its operations. Devon boasts a multi-basin portfolio and the adverse weather conditions significantly impacted its Williston Basin operations.
The extreme weather conditions resulted in well shut-ins, facility downtime and delays in the completion of activity. As a result, 15,000 oil-equivalent barrels (Boe) per day of production was lost. Per the update, Devon is expected to produce an average of 636,000 Boe/d in the fourth quarter, including 316,000 barrels per day of oil.
Devon Energy has already restored production volumes in the affected regions and the production drop will be limited to its fourth-quarter volumes only.
Devon Energy initially expected its fourth-quarter 2022 production volumes in the range of 640,000-660,000 Boe/d, taking into consideration the accretive acquisitions of Williston Basin and Eagle.
Strong Asset Base
Despite an expected drop in the fourth-quarter production volumes, Devon Energy has sufficient production areas to recoup the production volumes.
In the beginning of third-quarter 2022, Devon Energy completed the acquisition of RimRock Oil and Gas LP in the Williston Basin. This acquisition also adds more than 100 highly economic undrilled locations, positioning Devon’s Williston assets to maintain high-margin production and strong free cash flow for years to come.
During the end of third-quarter, Devon Energy completed the acquisition of Validas Energy, which further expanded Devon’s operation in the Eagle Ford shale. This acquisition added 42,000 net acres and an oil-weighted production mix with a low-cost structure that will further boost margins and free cash flow of the company.
In the last four quarters, Murphy USA, Patterson-UTI Energy and Helmerich & Payne reported earnings surprises of 50.9%, 169.2% and 124.2%, respectively.
The Zacks Consensus Estimate for 2023 earnings of Murphy USA and Patterson-UTI Energy has moved up by 4.04% and 4.03% in the past 60 days, respectively. Fiscal 2023 estimates for Helmerich & Payne have also moved up by 20.2% in the same time frame.
Price Performance
Devon Energy has gained 21.5% in the past six months compared with its industry’s growth of 13.3%.
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Devon's (DVN) Q4 Production Down 2% Due to Severe Weather
Devon Energy (DVN - Free Report) fourth-quarter 2022 production volumes are likely to be down 2% due to extreme winter weather across its operations. Devon boasts a multi-basin portfolio and the adverse weather conditions significantly impacted its Williston Basin operations.
The extreme weather conditions resulted in well shut-ins, facility downtime and delays in the completion of activity. As a result, 15,000 oil-equivalent barrels (Boe) per day of production was lost. Per the update, Devon is expected to produce an average of 636,000 Boe/d in the fourth quarter, including 316,000 barrels per day of oil.
Devon Energy has already restored production volumes in the affected regions and the production drop will be limited to its fourth-quarter volumes only.
Devon Energy initially expected its fourth-quarter 2022 production volumes in the range of 640,000-660,000 Boe/d, taking into consideration the accretive acquisitions of Williston Basin and Eagle.
Strong Asset Base
Despite an expected drop in the fourth-quarter production volumes, Devon Energy has sufficient production areas to recoup the production volumes.
In the beginning of third-quarter 2022, Devon Energy completed the acquisition of RimRock Oil and Gas LP in the Williston Basin. This acquisition also adds more than 100 highly economic undrilled locations, positioning Devon’s Williston assets to maintain high-margin production and strong free cash flow for years to come.
During the end of third-quarter, Devon Energy completed the acquisition of Validas Energy, which further expanded Devon’s operation in the Eagle Ford shale. This acquisition added 42,000 net acres and an oil-weighted production mix with a low-cost structure that will further boost margins and free cash flow of the company.
Zacks Rank and Key Picks
Devon Energy currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the same industry worth considering are Murphy USA (MUSA - Free Report) , Patterson-UTI Energy, Inc. (PTEN - Free Report) and Helmerich & Payne (HP - Free Report) , all sporting a Zacks Rank #1 ( Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Murphy USA, Patterson-UTI Energy and Helmerich & Payne reported earnings surprises of 50.9%, 169.2% and 124.2%, respectively.
The Zacks Consensus Estimate for 2023 earnings of Murphy USA and Patterson-UTI Energy has moved up by 4.04% and 4.03% in the past 60 days, respectively. Fiscal 2023 estimates for Helmerich & Payne have also moved up by 20.2% in the same time frame.
Price Performance
Devon Energy has gained 21.5% in the past six months compared with its industry’s growth of 13.3%.
Image Source: Zacks Investment Research