Energy
Devon Energy to Cut Capex 20% in 2015, Expects 25% Production Growth
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For the full year, Devon reported adjusted EPS of $4.91 on revenues of $19.57 billion, compared with a net loss of $0.06 and revenues of $10.4 billion in 2013. Analysts were looking for EPS of $5.16 on revenues of $18.09 billion.
Devon is planning to reduce its capital spending budget by about 20% in 2015, down to a range of $4.1 billion to $4.4 billion. As with other producers, however, Devon anticipates no reduction in its production growth:
With significant improvements in completion design and a capital program focused on development drilling, Devon expects to deliver oil production growth of 20 to 25 percent year over year on a retained property basis. This production outlook is driven by balanced oil growth in both the U.S. and Canada.
In 2014 the company’s revenues jumped 16% year-over-year, which Devon attributes to increased production in light crude oil. Oil sales increased to 60% of Devon’s total upstream revenues during the year.
In the fourth quarter, upstream revenue fell 3% year-over-year. Thanks to the company’s hedging plan, cash settlements per barrel of oil equivalent raised Devon’s revenue by $4.23 a barrel, helping to offset lower realized prices for oil and natural gas liquids.
Shares traded down about 0.8% in Tuesday’s after-hours session, at $66.10 in a 52-week range of $51.76 to $80.63. Thomson Reuters had a consensus analyst price target of around $69.50 before today’s report.
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