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Devon (DVN) Trims View on Account of Asset Sale, Weather Woes
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Devon Energy (DVN - Free Report) announced that it has revised its first quarter and 2021 production guidance, taking into account the impact of severe winter weather on its service territories and sale of Wind River asset in Wyoming. The winter weather is expected to reduce first-quarter production by 8%, while the asset sale is likely to lower 2021 daily oil production by 2,000 barrels. Moreover, per-unit expenses are expected to increase 5% in the first quarter as a result of the impact of weather on Devon Energy’s operations.
The company expects first-quarter total production in the range of 485,000-499,000 barrels of oil equivalent per day (boe/d) and oil production within 261,000-265,000 barrels per day. The acquisition of WPX Energy is likely to benefit total production volumes in the first quarter.
The company now expects 2021 total production in the range of 529,000-559,000 boe/d, down from prior expectation within 543,000-580,000 Boe/d. However, it has kept its 2021 capital expenditure guidance unchanged in the range of $1,720-$1,980 million.
Devon’s Focus on High-Quality U.S. Oil Assets
Devon Energy completed the divestiture of Canadian assets in 2019 and Barnett Shale gas assets in October 2020. The primary idea behind these divestitures is to focus on four oil-rich U.S. basins.
Its strong U.S. operations are spread across key oil assets of Delaware Basin, Eagle Ford, Anadarko Basin and Powder River Basin. Initial production rates from new wells continue to improve in its four U.S. oil plays. With improved cycle time, incorporation of production optimization strategies and other cost-reduction initiatives, the company is able to lower breakeven costs across its portfolio of assets.
The company operates in a highly competitive industry but its existing high-quality assets in different basins and accretive acquisitions allow it to further expand and strengthen operations in the United States.
Price Performance
Shares of Devon Energy have outperformed the industry in the past 12 months.
EOG Resources, Diamond Energy and Matador Resources delivered an earnings surprise of 41.7%, 119.98% and 171.1%, respectively, in the last four quarters.
The Zacks Consensus Estimate for EOG Resources, Diamond Energy and Matador Resources’ 2021 earnings has moved up 98.8%, 54.3% and 62.3%, respectively, in the past 60 days.
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Devon (DVN) Trims View on Account of Asset Sale, Weather Woes
Devon Energy (DVN - Free Report) announced that it has revised its first quarter and 2021 production guidance, taking into account the impact of severe winter weather on its service territories and sale of Wind River asset in Wyoming. The winter weather is expected to reduce first-quarter production by 8%, while the asset sale is likely to lower 2021 daily oil production by 2,000 barrels. Moreover, per-unit expenses are expected to increase 5% in the first quarter as a result of the impact of weather on Devon Energy’s operations.
The company expects first-quarter total production in the range of 485,000-499,000 barrels of oil equivalent per day (boe/d) and oil production within 261,000-265,000 barrels per day. The acquisition of WPX Energy is likely to benefit total production volumes in the first quarter.
The company now expects 2021 total production in the range of 529,000-559,000 boe/d, down from prior expectation within 543,000-580,000 Boe/d. However, it has kept its 2021 capital expenditure guidance unchanged in the range of $1,720-$1,980 million.
Devon’s Focus on High-Quality U.S. Oil Assets
Devon Energy completed the divestiture of Canadian assets in 2019 and Barnett Shale gas assets in October 2020. The primary idea behind these divestitures is to focus on four oil-rich U.S. basins.
Its strong U.S. operations are spread across key oil assets of Delaware Basin, Eagle Ford, Anadarko Basin and Powder River Basin. Initial production rates from new wells continue to improve in its four U.S. oil plays. With improved cycle time, incorporation of production optimization strategies and other cost-reduction initiatives, the company is able to lower breakeven costs across its portfolio of assets.
The company operates in a highly competitive industry but its existing high-quality assets in different basins and accretive acquisitions allow it to further expand and strengthen operations in the United States.
Price Performance
Shares of Devon Energy have outperformed the industry in the past 12 months.
Zacks Rank & Other Key Picks
Devon Energy currently sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the same industry include EOG Resources Inc. (EOG - Free Report) , Diamondback Energy (FANG - Free Report) and Matador Resources (MTDR - Free Report) , each currently sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
EOG Resources, Diamond Energy and Matador Resources delivered an earnings surprise of 41.7%, 119.98% and 171.1%, respectively, in the last four quarters.
The Zacks Consensus Estimate for EOG Resources, Diamond Energy and Matador Resources’ 2021 earnings has moved up 98.8%, 54.3% and 62.3%, respectively, in the past 60 days.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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