10-QPeriod: Q1 FY2022

DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 3, 2022For Securities:DVN

Summary

Devon Energy Corp. reported strong financial performance for the first quarter of 2022, driven by significantly higher commodity prices and increased production volumes, particularly from the Delaware Basin. Total revenues reached $3.81 billion, a substantial increase from $2.05 billion in the same period last year, reflecting robust market conditions and the company's operational execution. Net earnings attributable to Devon surged to $989 million ($1.48 per diluted share) from $213 million ($0.32 per diluted share) in Q1 2021. The company demonstrated strong operational cash flow generation, amounting to $1.84 billion, enabling significant shareholder returns. Devon returned approximately $667 million to shareholders through dividends in Q1 2022, and continued its share repurchase program, buying back $230 million worth of stock. With ample liquidity and a strong balance sheet, including $2.6 billion in cash and no significant debt maturities until 2023, Devon is well-positioned to manage its capital and continue its cash return strategy.

Financial Highlights

41 data points
Beta

Revenue

$3.81B

Net Income

$989.00M

25.9% Net Margin

EPS (Diluted)

$1.48

Total Assets

$21.78B

Cash & Equivalents

$2.63B

Free Cash Flow

$1.84B

Financial Statements
Beta
Revenue$3.81B
Interest Expense$92.00M
Net Income$989.00M
EPS (Basic)$1.48
EPS (Diluted)$1.48
Shares Outstanding (Basic)656.00M
Shares Outstanding (Diluted)658.00M

Key Highlights

  • 1Net earnings attributable to Devon soared to $989 million ($1.48 per diluted share) in Q1 2022, a significant increase from $213 million ($0.32 per diluted share) in Q1 2021, driven by higher commodity prices and production.
  • 2Total revenues increased by approximately 85% to $3.81 billion in Q1 2022, compared to $2.05 billion in Q1 2021, primarily due to favorable oil, gas, and NGL prices.
  • 3Operating cash flow was robust at $1.84 billion for Q1 2022, a substantial increase from $592 million in Q1 2021, supporting strong shareholder returns.
  • 4Devon returned $667 million to shareholders via dividends in Q1 2022 and repurchased approximately $230 million of common stock, demonstrating a commitment to capital return.
  • 5The company maintained strong liquidity with $2.6 billion in cash and cash equivalents and $3.0 billion in available credit as of March 31, 2022.
  • 6Capital expenditures were $537 million in Q1 2022, focused on disciplined capital allocation to maximize returns.
  • 7Production volumes increased by 15% to 575 MBoe/d in Q1 2022 compared to 499 MBoe/d in Q1 2021, led by growth in the Delaware Basin.

Frequently Asked Questions

Devon Energy's strong performance in Q1 2022 was primarily driven by significantly higher commodity prices for oil, natural gas, and NGLs, coupled with an 8% increase in production volumes year-over-year, particularly from its key Delaware Basin assets. These factors led to a substantial increase in revenues and net earnings.

Devon Energy is committed to returning capital to shareholders through a 'fixed plus variable' dividend strategy and a share repurchase program. In Q1 2022, the company paid dividends totaling $667 million and repurchased approximately $230 million of its common stock. The company also announced an expansion of its share repurchase program to $2.0 billion.

As of March 31, 2022, Devon Energy reported strong liquidity with $2.6 billion in cash and cash equivalents and an undrawn $3.0 billion credit facility. The company has $6.5 billion in long-term debt, with no significant maturities until August 2023, indicating a stable debt outlook.

Devon's production mix continues to be led by the Delaware Basin, which accounted for 69% of combined production (MBoe/d) in Q1 2022. The company saw increased activity and production in the Delaware Basin, Anadarko Basin, and Eagle Ford, while experiencing lower volumes in the Williston Basin and Powder River Basin.