10-QPeriod: Q3 FY2022

DEVON ENERGY CORP/DE Quarterly Report for Q3 Ended Sep 30, 2022

Filed November 2, 2022For Securities:DVN

Summary

Devon Energy Corp./DE (DVN) reported strong financial performance for the third quarter and the first nine months of 2022, driven by higher commodity prices and increased production volumes, particularly from its Delaware Basin assets. The company generated substantial operating cash flow, exceeding previous periods significantly. Strategic acquisitions in the Eagle Ford and Williston Basins during 2022 have expanded its asset base and are expected to contribute positively to future production and cash flow. Devon continues to prioritize returning capital to shareholders through a combination of fixed and variable dividends, alongside an active share repurchase program. The company maintained a strong liquidity position and managed its debt levels prudently, with no significant debt maturities until late 2023. Management remains focused on capital discipline, operational efficiencies, and optimizing reinvestment rates to maximize free cash flow, while navigating a dynamic commodity price environment.

Financial Highlights

42 data points
Beta

Revenue

$5.43B

Net Income

$1.89B

34.8% Net Margin

EPS (Diluted)

$2.88

Total Assets

$23.56B

Cash & Equivalents

$1.31B

Free Cash Flow

$2.10B

Financial Statements
Beta
Revenue$5.43B
Interest Expense$92.00M
Net Income$1.89B
EPS (Basic)$2.89
EPS (Diluted)$2.88
Shares Outstanding (Basic)649.00M
Shares Outstanding (Diluted)651.00M

Key Highlights

  • 1Strong revenue growth driven by higher commodity prices, with total revenues reaching $5.43 billion in Q3 2022 and $14.87 billion in the first nine months of 2022, up from $3.47 billion and $7.93 billion in the respective prior-year periods.
  • 2Net earnings significantly increased to $1.90 billion in Q3 2022 and $4.83 billion in the first nine months of 2022, compared to $844 million and $1.32 billion in the prior-year periods, respectively.
  • 3Operating cash flow showed robust growth, increasing to $2.10 billion in Q3 2022 and $6.62 billion in the first nine months of 2022, up from $1.60 billion and $3.28 billion in the prior-year periods.
  • 4The company completed strategic acquisitions in the Eagle Ford and Williston Basins for approximately $1.7 billion and $830 million, respectively, in 2022, enhancing its asset portfolio.
  • 5Devon returned substantial capital to shareholders, with dividends paid totaling $2.50 billion in the first nine months of 2022, and approximately $1.3 billion in share repurchases completed under its $2.0 billion program.
  • 6As of September 30, 2022, the company maintained a strong liquidity position with $1.31 billion in cash and cash equivalents and no significant debt maturities until August 2023.

Frequently Asked Questions

In the third quarter of 2022, Devon Energy reported total revenues of $5.43 billion and net earnings of $1.90 billion. Operating cash flow was $2.10 billion. The company also continued its strategy of returning capital to shareholders through dividends and share repurchases.

Devon Energy completed acquisitions of producing properties in the Eagle Ford and Williston Basins for a total of approximately $2.5 billion in 2022. These acquisitions are expected to complement existing acreage, offer operational synergies, and add high-quality inventory, contributing positively to production volumes and cash flow.

Devon Energy employs a 'fixed plus variable' dividend strategy. In addition to a fixed quarterly dividend, the company may pay a variable dividend based on excess free cash flow. It also has an active share repurchase program in place, demonstrating a commitment to returning value to its stockholders.

As of September 30, 2022, Devon Energy had approximately $6.2 billion in long-term debt. The company maintained a strong liquidity position with $1.31 billion in cash and cash equivalents and ample availability under its senior credit facility, with no debt maturities until August 2023, indicating prudent financial management.