Summary
Devon Energy Corp. reported a net loss of $317 million for the first quarter of 2019, a significant increase from the $153 million net loss in the same period of the prior year. This widened loss is largely attributable to derivative valuation changes and lower upstream revenues, despite a reduction in financing costs due to lower debt levels and the absence of significant debt retirement charges experienced in Q1 2018. The company is undergoing a strategic transformation, focusing on becoming a U.S. oil growth company and announcing its intention to separate its Canadian and Barnett Shale assets. This strategic shift is accompanied by significant cost-reduction initiatives and substantial share repurchases. Operationally, the company saw increased production in key U.S. oil plays like the Delaware Basin and Powder River Basin. However, total revenues decreased year-over-year, primarily impacted by unfavorable commodity derivative valuations. The company's balance sheet reflects a decrease in cash and an increase in accounts receivable. Despite the net loss, Devon emphasized its liquidity position, with ample credit availability and a focus on maintaining financial strength and returning capital to shareholders through dividends and share buybacks.
Financial Highlights
45 data points| Revenue | $1.08B |
| Cost of Revenue | $750.00M |
| Gross Profit | $329.00M |
| Operating Income | -$378.00M |
| Interest Expense | $65.00M |
| Net Income | -$317.00M |
| EPS (Basic) | $-0.74 |
| EPS (Diluted) | $-0.74 |
| Shares Outstanding (Diluted) | 428.00M |
Key Highlights
- 1Net loss widened to $317 million in Q1 2019 from $153 million in Q1 2018, primarily due to $670 million in unfavorable valuation changes for commodity derivatives.
- 2Total revenues decreased to $1,501 million from $2,198 million year-over-year, driven by lower upstream and marketing revenues.
- 3The company announced its intent to separate its Canadian and Barnett Shale assets, signaling a strategic shift towards a U.S. oil growth company.
- 4Significant cost-reduction initiatives targeting $200 million in annualized savings by the end of 2019 are underway.
- 5Share repurchases totaled $999 million in Q1 2019, as part of a $5.0 billion authorization, leading to a 20% reduction in outstanding shares since the program's inception.
- 6Capital expenditures decreased to $548 million from $651 million year-over-year, with a focus on optimizing the cost structure.
- 7Liquidity remains strong with $1.3 billion in cash and $2.9 billion in available credit, with no significant debt maturities until 2021.