10-QPeriod: Q1 FY2023

DEVON ENERGY CORP/DE Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 9, 2023For Securities:DVN

Summary

Devon Energy Corporation (DVN) reported a slight increase in net earnings for the first quarter of 2023 compared to the same period in the prior year, reaching $995 million from $989 million. This stability in earnings was achieved despite a notable decrease in realized commodity prices, which was offset by a significant increase in production volumes, particularly driven by recent acquisitions in the Eagle Ford and Williston Basin. The company's financial position remains strong, with substantial operating cash flow and ample liquidity. Devon continues to prioritize returning capital to shareholders through dividends and share repurchases, further supported by an expanded share repurchase program. While facing inflationary pressures and commodity price volatility, Devon remains committed to capital discipline and generating free cash flow by spending within its cash flow.

Financial Highlights

43 data points
Beta

Revenue

$3.82B

Net Income

$995.00M

26.0% Net Margin

EPS (Diluted)

$1.53

Total Assets

$23.42B

Cash & Equivalents

$887.00M

Free Cash Flow

$1.68B

Financial Statements
Beta
Revenue$3.82B
Interest Expense$93.00M
Net Income$995.00M
EPS (Basic)$1.53
EPS (Diluted)$1.53
Shares Outstanding (Basic)645.00M
Shares Outstanding (Diluted)647.00M

Key Highlights

  • 1Net earnings for Q1 2023 were $995 million, a slight increase from $989 million in Q1 2022, demonstrating resilient profitability.
  • 2Total production increased by 12% year-over-year to 641 MBoe/d, largely driven by contributions from recent acquisitions in the Eagle Ford and Williston Basin.
  • 3Realized commodity prices saw a significant decline compared to Q1 2022, with oil prices down 20% and gas prices down 39%, impacting revenue.
  • 4The company repurchased $545 million of common stock in Q1 2023, with an expanded $3.0 billion share repurchase program authorized.
  • 5Devon paid out $596 million in dividends in Q1 2023, reflecting its commitment to returning capital to shareholders.
  • 6Capital expenditures increased significantly to $1.012 billion in Q1 2023 from $537 million in Q1 2022, reflecting investments in acquired assets and inflation.
  • 7The company maintained strong liquidity with $887 million in cash, cash equivalents, and restricted cash at the end of Q1 2023.

Frequently Asked Questions

Devon Energy reported a slight increase in net earnings for Q1 2023, reaching $995 million ($1.53 per diluted share) compared to $989 million ($1.48 per diluted share) in Q1 2022. This was achieved despite lower commodity prices, thanks to a substantial increase in production volumes driven by recent acquisitions.

Production volumes increased by 12% year-over-year in Q1 2023 due to acquisitions and development. However, realized commodity prices declined significantly compared to Q1 2022, with oil prices down 20% and natural gas prices down 31%. Management is hedging approximately 25% of anticipated 2023 production.

Devon Energy continues to prioritize returning capital to shareholders through a combination of dividends and share repurchases. In Q1 2023, the company paid $596 million in dividends and repurchased $545 million of its common stock. The share repurchase program was expanded to $3.0 billion.

Devon Energy maintained strong liquidity at the end of Q1 2023 with $887 million in cash, cash equivalents, and restricted cash, and had $3.0 billion in available borrowing capacity under its Senior Credit Facility. The company's debt remains primarily fixed-rate, and it was in compliance with its financial covenant.