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Gauging Devon Energy’s 3-Year-High Potential in 4Q17

PART:
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Part 3
Gauging Devon Energy’s 3-Year-High Potential in 4Q17 PART 3 OF 6

Is Devon Energy on Track to Achieve Its Crude Oil Production Growth Target for 2017?

DVN’s production guidance for 4Q17

For 4Q17, Devon Energy (DVN) expects its total production to be in the range of 551 Mboepd–571 Mboepd (thousand barrels of oil equivalent per day). This guidance includes the production impact of 5 Mboepd from Lavaca County and other minor asset divestments. These transactions are expected to close in 4Q17.

Is Devon Energy on Track to Achieve Its Crude Oil Production Growth Target for 2017?

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On a YoY (year-over-year) basis, the midpoint of Devon Energy’s 4Q17 production guidance range is ~4% higher than its 4Q16 production of 537 Mboepd. Sequentially, Devon Energy’s 4Q17 production guidance is ~6% higher than its 3Q17 production of 527 Mboepd.

By comparison, peer ConocoPhillips (COP) reported total production of 1,219 MBoepd (thousand barrels of oil equivalent per day) in 4Q17, which is ~33% lower than its 4Q16 production of 1,587 Mboepd.

Devon Energy’s liquids production to rebound in 4Q17

For 4Q17, Devon Energy now expects its liquids production to be in the range of 354,000–368,000 barrels per day, which would be ~10% higher than DVN’s 3Q17 liquids production of 327,000 barrels per day. The company’s lower liquids production in 3Q17 can be attributed to the operational impact of Hurricane Harvey in early September 2017.

Devon Energy’s 2017 production guidance

According to Devon Energy’s 3Q17 operations report, the company is on track to accelerate growth in its high-margin oil production in 2017. In 2017, DVN is expecting an exit-rate growth of ~20% for its retained assets in crude oil production when compared with 4Q16.

For fiscal 2017, DVN expects its total production volume to be in the range of 539 Mboepd –561 Mboepd.

Continue to the next part of this series for a closer look at Devon Energy’s free cash flow prospects.

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