Devon Energy (DVN) Q1 Results - May 5

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Devon Energy (DVN) Q1 Results - May 5

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Devon Energy Corp. (NYSE: DVN) reported financial and operational results for the first-quarter 2021. The company’s first quarter performance includes results from the merger with WPX Energy that was successfully completed on Jan. 7, 2021.

KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS
• Board increases fixed-plus-variable dividend payout by 13 percent to $0.34 per share
• Investment-grade financial strength enhanced with redemption of $743 million of debt year-to-date
• Devon reiterates its commitment to a disciplined maintenance capital program in 2021
• First-quarter oil production totaled 268,000 barrels per day, exceeding guidance by 5,000 barrels per day
• Delaware Basin efficiency gains drove upstream capital expenditures 5 percent below guidance in the quarter
• Operating cash flow in the first quarter reached $592 million
• Free cash flow generation, after adjusting for cash restructuring costs, expanded to $260 million in the first quarter

CEO PERSPECTIVE
“Devon is a premier energy company that possesses a powerful suite of assets and a disciplined strategy to maximize value for
our shareholders,” said Rick Muncrief, president and CEO. “With this advantaged platform, we delivered on exactly what we
promised to do in the first quarter by moderating capital investment, capturing cost synergies and returning significant value to
shareholders through higher dividends and the aggressive reduction of debt.”

“With our business scaled to generate free cash flow, a clear differentiator for Devon is the ability to accelerate cash returns to
shareholders through our innovative fixed-plus-variable dividend framework,” said Muncrief. “And based on the strength of our
first-quarter results, I am proud to announce a 13 percent increase in our total dividend payout to $0.34 per share.

“Looking ahead to the remainder of the year, we are unwavering in our commitment to capital discipline and will remain focused
on the strategic objectives that underpin our cash-return business model,” Muncrief added. “Devon has no intention of
allocating capital to growth projects until demand-side fundamentals recover and it becomes evident that OPEC+’s spare oil
capacity is effectively absorbed by the world markets.”
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I am updating my forecast/valuation model this morning and I will post more comments later today. Based on my initial reaction, my current valuation of $36 will be increased. DVN is currently trading at $25. - Dan
Dan Steffens
Energy Prospectus Group
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