“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.
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.