Devon Energy Corp Reports Robust Q4 and Full-Year 2023 Results; Increases Dividend by 10%
Net Earnings: Devon Energy Corp (NYSE:DVN) reported net earnings of $1.2 billion, or $1.81 per diluted share, in Q4 2023.
Core Earnings: Core earnings stood at $902 million, or $1.41 per diluted share, after adjustments.
Operating Cash Flow & Free Cash Flow: Operating cash flow reached $1.7 billion in Q4, with annual free cash flow totaling $2.7 billion.
Dividend Increase: The fixed dividend was raised by 10% to $0.22 per share, with a total dividend payout of $0.44 per share.
Share Repurchase: Devon repurchased 5.2 million shares at a cost of $234 million, aiming to reduce outstanding shares by up to 9%.
Production Growth: Q4 production averaged 662,000 Boe per day, with oil production exceeding guidance.
2024 Outlook: Devon plans to sustain oil production at around 315,000 barrels per day, with a 10% reduction in capital requirements.
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On February 27, 2024, Devon Energy Corp (NYSE:DVN) released its 8-K filing, detailing its financial and operational results for the fourth quarter and full-year 2023. The Oklahoma City-based leading oil and gas producer, known for its extensive North American onshore asset base, has reported a strong quarter that capped off a year of significant achievements.
CEO's Perspective on Performance
President and CEO Rick Muncrief highlighted the company's positive momentum, with record-setting oil production and substantial free cash flow generation. Muncrief emphasized the company's focus on rewarding shareholders, noting a cash-return yield of 10 percent. Looking forward, he expressed confidence in the company's financial strength and the plan to improve capital efficiency, particularly in the Delaware Basin.
This disciplined plan prioritizes value over volume and is expected to result in another year of differentiated cash returns versus the broader market. The boards approval of a 10 percent increase to the fixed dividend further underscores our confidence in the plan and the underlying financial strength of our business, Muncrief commented.
Financial and Operating Results
Devon's fourth-quarter net earnings were impressive, with a reported $1.2 billion in net income. The company's operating cash flow for the quarter was the highest of the year, allowing for significant free cash flow and enabling the funding of capital requirements. Devon's financial position remained robust, with an increase in cash balances and a low net debt-to-EBITDAX ratio.
The company's operational success was marked by an average of 24 operated drilling rigs and 6 completion crews, leading to 100 gross operated wells being placed online. Production exceeded expectations, driven by strong performance across the portfolio, particularly in the Delaware Basin. Devon's production costs remained low, contributing to healthy field-level cash margins.
Capital Return and 2024 Outlook
Reflecting the strong financial performance, Devon declared a dividend of $0.44 per share, with a 10 percent increase in the fixed component. The company also continued its aggressive share-repurchase program, further signaling its commitment to shareholder returns.
For 2024, Devon has reaffirmed its production and capital outlook, with plans to sustain oil production and reduce capital requirements. Despite weather-related challenges in January, the company has restored affected production and does not anticipate any impact on its full-year targets.
Devon Energy Corp (NYSE:DVN) remains a formidable player in the U.S. oil and gas sector, with a strategic focus on delivering strong returns, generating free cash flow, and returning capital to shareholders. The company's latest earnings report underscores its operational excellence and financial resilience, positioning it well for continued success in the year ahead.
For more detailed information, investors and analysts are encouraged to view the company's earnings presentation and participate in the upcoming conference call, as detailed on Devon Energy's website.
Explore the complete 8-K earnings release (here) from Devon Energy Corp for further details.
This article first appeared on GuruFocus.
