Devon to keep oil output growth in check

US oil and gas producer Devon Energy said it has no plans to boost output by more than 5pct a year as it continues to focus on investor returns.

“That’s the max,” chief executive Rick Muncrief told analysts today, citing the steep backwardation in the oil market due to uncertainty around the potential return of Iranian supplies as well as other factors.

“That’s why we’ve been so focused on remaining very disciplined, keeping our budget volumes flat, operating in a maintenance capital standpoint,” he said.

Private companies are driving growth in the top-producing Permian basin in the meantime, while ExxonMobil and Chevron have also outlined plans to boost drilling there.

“I do think we’re going to continue to see growth in the Permian,” Muncrief said. “I don’t think it’s unhealthy — it’s probably going to be the only place in the US you are going to see growth.”

Devon said its production in the first quarter will be down by 3pc, or 15,000 b/d of oil equivalent (boe/d), because of severe winter weather. Adjusted for this disruption, the company forecast output of 570,000 boe/d for the period.

Production averaged 611,000 boe/d in the fourth quarter, exceeding guidance by 3pc due to growth in the Delaware basin.

Devon announced a record high fixed-plus-variable dividend totaling $1/share, and it also increased its share buyback program by 60pc to $1.6bn.

finviz dynamic chart for  DVN

The producer said it remains committed to a “disciplined” maintenance capital program in 2022. No changes were made to its previously announced plan to keep 2022 production in the range of 570,000 to 600,000 boe/d, with upstream capital investment of $1.9bn-$2.2bn.

About Stu Turley 3230 Articles
Stuart Turley is President and CEO of Sandstone Group, a top energy data, and finance consultancy working with companies all throughout the energy value chain. Sandstone helps both small and large-cap energy companies to develop customized applications and manage data workflows/integration throughout the entire business. With experience implementing enterprise networks, supercomputers, and cellular tower solutions, Sandstone has become a trusted source and advisor.   He is also the Executive Publisher of www.energynewsbeat.com, the best source for 24/7 energy news coverage, and is the Co-Host of the energy news video and Podcast Energy News Beat. Energy should be used to elevate humanity out of poverty. Let's use all forms of energy with the least impact on the environment while being sustainable without printing money. Stu is also a co-host on the 3 Podcasters Walk into A Bar podcast with David Blackmon, and Rey Trevino. Stuart is guided by over 30 years of business management experience, having successfully built and help sell multiple small and medium businesses while consulting for numerous Fortune 500 companies. He holds a B.A in Business Administration from Oklahoma State and an MBA from Oklahoma City University.