UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 1, 2022, Devon Energy Corporation (the “Company”) announced its financial and operational results for the quarterly period ended September 30, 2022. In connection with this announcement, the Company provided an earnings release and certain supplemental financial information (including guidance and hedging information). Copies of these documents are furnished as Exhibits 99.1 and 99.2, respectively, to this report and, along with certain other materials, will be available on the Company’s website at www.devonenergy.com.
The information contained in this report and the exhibits hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be incorporated by reference into any filings made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit |
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Description of Exhibits |
99.1 |
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99.2 |
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Supplemental financial information (including guidance and hedging information). |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
DEVON ENERGY CORPORATION
By: /s/ Jeffrey L. Ritenour
Jeffrey L. Ritenour
Executive Vice President and Chief Financial Officer
Date: November 1, 2022
Exhibit 99.1
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Devon Energy Corporation 333 West Sheridan Avenue Oklahoma City, OK 73102-5015 |
Devon Energy Reports Third-Quarter 2022 Financial and Operational Results
OKLAHOMA CITY – Nov. 1, 2022 – Devon Energy Corp. (NYSE: DVN) today reported financial and operational results for the third-quarter 2022. Supplemental financial tables and forward-looking guidance are available on the company’s website at www.devonenergy.com.
KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS
CEO PERSPECTIVE
“Devon’s third-quarter performance demonstrated the flexibility of our cash-return business model to create value for shareholders in multiple ways,” said Rick Muncrief, president and CEO.
“Foundational to our success was the team’s consistent execution of our disciplined plan. This was once again demonstrated by strong well productivity and efficiency gains that drove volumes above the high end of guidance with a capital spend that was below forecast.
“Importantly, our strong operating performance resulted in another quarter of impressive financial results that allowed us to reward shareholders with a 61 percent increase in the dividend payout and our ongoing stock buyback program continued to compound per-share growth.
“We also took important steps to opportunistically strengthen the quality and depth of our asset portfolio by closing on two highly accretive bolt-on acquisitions that further enhance our ability to deliver sustainable long-term results.
“As a result of the immediate value these acquisitions create, we are revising our financial and operational outlook higher for the fourth quarter,” Muncrief commented. “This updated outlook increases production targets, raises free cash flow projections and enhances our ability to deliver differentiated cash returns to shareholders.”
FINANCIAL RESULTS
Devon reported net earnings of $1.9 billion, or $2.88 per diluted share, in the third quarter of 2022. Adjusting for items analysts typically exclude from estimates, the company’s core earnings were $1.4 billion, or $2.18 per diluted share.
Operating cash flow totaled $2.1 billion in the quarter, a 32 percent increase versus the year-ago period. With capital reinvestment rates at 33 percent of cash flow, Devon generated $1.5 billion of free cash flow in the quarter.
1
During the third quarter, the company closed on acquisitions in the Williston Basin and Eagle Ford for $2.5 billion. After funding these acquisitions with cash, Devon exited September with cash balances of $1.3 billion and strong investment-grade credit ratings.
RETURN OF CAPITAL
Based on the third-quarter financial performance, Devon declared a fixed-plus-variable dividend of $1.35 per share, an increase of 61 percent from the third quarter of 2021. This dividend payout represents an annualized yield of 7 percent based on the company’s share price as of Oct. 28, 2022.
Devon also returned capital to shareholders through the ongoing execution of its $2.0 billion share-repurchase authorization. To date, the company has repurchased 25.2 million shares since the commencement of the program, at a total cost of $1.3 billion. With this repurchase program, Devon is on track to decrease its outstanding share count by 5 percent.
OPERATING RESULTS
Production for the third quarter averaged 614,000 oil-equivalent barrels (Boe) per day, exceeding guidance by 2 percent. This performance was driven by the company’s Delaware Basin asset that accounted for nearly 70 percent of total production.
Devon’s upstream program in the quarter averaged 21 operated drilling rigs and 103 gross operated wells were placed online. Total capital spending was $688 million in the third quarter, or 4 percent below guidance. This positive variance was attributable to efficiency gains and effective supply chain management across the asset portfolio.
Production costs, including taxes, averaged $12.99 per Boe in the quarter. This low-cost structure, coupled with exposure to higher-value production, expanded field-level cash margins by 40 percent year-over-year to $51.90 per Boe.
Depreciation, depletion and amortization (DD&A) totaled $10.28 per Boe, a 10 percent increase from the prior quarter. The change was driven by management and cost center streamlining efforts.
The company’s administrative and interest costs improved by 10 percent year-over-year. The reduction in overhead was achieved through the capture of merger-related efficiencies and reduced financing expense.
ASSET-LEVEL HIGHLIGHTS
Delaware Basin: Production averaged 421,000 Boe per day (50 percent oil). During the quarter, Devon brought online 59 gross wells diversified across 7 targeted landing zones within the Avalon, Bone Spring and Wolfcamp formations. The average lateral length for the wells completed during the quarter was 10,900 feet.
Capital activity was headlined by the CDU 604H, which was the company’s first test of the Wolfcamp B interval within Devon’s Cotton Draw area in southern Eddy County. This 3-mile lateral well delivered initial rates that exceeded 6,500 Boe per day and estimated recoveries are on track to reach 3 million Boe over the life of the well. This successful test adds to the depth and quality of the company’s Wolfcamp inventory in the area.
For the remainder of 2022, Devon plans to operate 16 rigs and 3 completion crews across its 400,000 net acres and the company remains on track to bring online approximately 215 new wells for the year.
Anadarko Basin: Production increased by 4 percent from the previous quarter to an average of 77,000 Boe per day (83 percent gas and NGLs). Devon brought online 13 wells in the quarter that were supported by a $100 million drilling carry with Dow. The carry-enhanced activity was highlighted by the Otto development in Canadian County. This 5-well project co-developed the Meramec and Woodford formations, averaging 30-day rates of more than 2,700 Boe per day.
In the fourth quarter, Devon plans to operate an average of 4 rigs and 1 completion crew on its 300,000 net acre position in the basin. This capital program is expected to bring online approximately 25 wells in the upcoming quarter.
2
Williston Basin: Production averaged 55,000 Boe per day (65 percent oil), a 22 percent increase compared to the previous quarter. This volume growth was driven by closing the RimRock acquisition on July 21, 2022, and the commencement of 10 gross wells to production from the company’s legacy position in the basin.
Devon plans to operate 2 rigs and bring online more than 10 gross wells in the fourth quarter across its 123,000 net acre position.
Eagle Ford: Production averaged 39,000 Boe per day (49 percent oil). At the end of September, Devon closed on its acquisition of Validus Energy. This accretive transaction valued at approximately 2-times cash flow enhances the company’s operational scale in the core of the Karnes Trough oil window and adds 35,000 Boe per day of high-margin production.
In the upcoming quarter, Devon plans to run 4 rigs and 1 completion crew across its 82,000 net acres. This capital program is expected to bring online greater than 20 wells in the fourth quarter.
Powder River Basin: Production averaged 18,000 Boe per day (71% oil). Capital activity in the quarter was focused on progressing the appraisal of the Niobrara oil play in Converse County. The top highlight was the SSU MLT 26-14, a 3-mile lateral project, that successfully tested the commerciality of at least 3 Niobrara wells per drilling unit. Initial flow rates from the project exceeded pre-drill expectations by 20 percent, with 30-day rates reaching 1,400 Boe per day, of which 86 percent was oil.
For the remainder of the year, Devon plans to run one operated rig and drill approximately 5 new wells across the company’s 300,000 net acre position.
UPDATED OUTLOOK
Due to the impact of acquisitions, Devon is revising its production forecast higher in the fourth quarter to a range of 640,000 to 660,000 Boe per day, a 6 percent increase compared to the year-ago quarter. This fourth-quarter volume growth will be driven by 35,000 Boe per day of incremental production from the company’s Eagle Ford acquisition.
The company also adjusted the midpoint of its upstream capital outlook to $835 million for the upcoming quarter. This guidance incorporates $120 million of incremental capital requirements related to recent bolt-on acquisitions in the Eagle Ford and Williston Basin.
Details of Devon’s forward-looking guidance are available on the company’s website at www.devonenergy.com.
CONFERENCE CALL WEBCAST AND SUPPLEMENTAL EARNINGS MATERIALS
Also provided with today’s release is the company’s detailed earnings presentation that is available on the company’s website at www.devonenergy.com. The company’s third-quarter conference call will be held at 10:00 a.m. Central (11:00 a.m. Eastern) on Wednesday, November 2, 2022, and will serve primarily as a forum for analyst and investor questions and answers.
ABOUT DEVON ENERGY
Devon Energy is a leading oil and gas producer in the U.S. with a premier multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devon’s disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations. For more information, please visit www.devonenergy.com.
Investor Contacts Media Contact
Scott Coody, 405-552-4735 Lisa Adams, 405-228-1732
Chris Carr, 405-228-2496
NON-GAAP DISCLOSURES
This press release includes non-GAAP (generally accepted accounting principles) financial measures. Such non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of results as reported under GAAP. Reconciliations of these non-GAAP
3
measures and other disclosures are provided within the supplemental financial tables that are available on the company’s website and in the related Form 10-Q filed with the SEC.
4
FORWARD LOOKING STATEMENTS
This press release includes “forward-looking statements” within the meaning of the federal securities laws. Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words and phrases “expects,” “believes,” “will,” “would,” “could,” “continue,” “may,” “aims,” “likely to be,” “intends,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but not limited to: the volatility of oil, gas and NGL prices; risks relating to the COVID-19 pandemic or other future pandemics; uncertainties inherent in estimating oil, gas and NGL reserves; the extent to which we are successful in acquiring and discovering additional reserves; regulatory restrictions, compliance costs and other risks relating to governmental regulation, including with respect to federal lands and environmental matters; risks related to climate change; the uncertainties, costs and risks involved in our operations, including as a result of employee misconduct; risks related to our hedging activities; counterparty credit risks; risks relating to our indebtedness; cyberattack risks; our limited control over third parties who operate some of our oil and gas properties; midstream capacity constraints and potential interruptions in production; the extent to which insurance covers any losses we may experience; competition for assets, materials, people and capital; risks related to investors attempting to effect change; our ability to successfully complete mergers, acquisitions and divestitures; our ability to pay dividends and make share repurchases; and any of the other risks and uncertainties discussed in Devon’s 2021 Annual Report on Form 10-K (the “2021 Form 10-K”) or other SEC filings.
The forward-looking statements included in this press release speak only as of the date of this press release, represent management’s current reasonable expectations as of the date of this press release and are subject to the risks and uncertainties identified above as well as those described in the 2021 Form 10-K and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in the 2021 Form 10-K and in other documents we file from time to time with the SEC. All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We do not undertake, and expressly disclaim, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.
5
Exhibit 99.2
Devon Energy Third-Quarter 2022
Supplemental Tables
TABLE OF CONTENTS: |
PAGE: |
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Consolidated Statements of Earnings |
2 |
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Supplemental Information for Consolidated Statements of Earnings |
3 |
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Consolidated Statements of Cash Flows |
4 |
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Consolidated Balance Sheets |
5 |
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Production |
6 |
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Capital Expenditures and Supplemental Information for Capital Expenditures |
7 |
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Realized Pricing |
8 |
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Asset Margins |
9 |
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Core Earnings |
10 |
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EBITDAX, Net Debt, Net Debt-to-EBITDAX and Free Cash Flow |
11 |
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Reinvestment Rate and Variable Dividend |
12 |
1
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except per share amounts) |
|
2022 |
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2021 |
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||||||||||||||
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Quarter 3 |
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Quarter 2 |
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Quarter 1 |
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Quarter 4 |
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Quarter 3 |
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Oil, gas and NGL sales |
|
$ |
3,668 |
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$ |
4,100 |
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$ |
3,175 |
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$ |
2,985 |
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$ |
2,635 |
|
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Oil, gas and NGL derivatives (1) |
|
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248 |
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(170 |
) |
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(683 |
) |
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22 |
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|
|
(335 |
) |
|
Marketing and midstream revenues |
|
|
1,516 |
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|
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1,696 |
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|
|
1,320 |
|
|
|
1,266 |
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|
|
1,166 |
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Total revenues |
|
|
5,432 |
|
|
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5,626 |
|
|
|
3,812 |
|
|
|
4,273 |
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|
|
3,466 |
|
|
Production expenses (2) |
|
|
735 |
|
|
|
729 |
|
|
|
618 |
|
|
|
605 |
|
|
|
555 |
|
|
Exploration expenses |
|
|
4 |
|
|
|
10 |
|
|
|
2 |
|
|
|
5 |
|
|
|
3 |
|
|
Marketing and midstream expenses |
|
|
1,525 |
|
|
|
1,700 |
|
|
|
1,324 |
|
|
|
1,266 |
|
|
|
1,165 |
|
|
Depreciation, depletion and amortization |
|
|
581 |
|
|
|
528 |
|
|
|
489 |
|
|
|
577 |
|
|
|
578 |
|
|
Asset dispositions |
|
|
— |
|
|
|
(14 |
) |
|
|
(1 |
) |
|
|
(49 |
) |
|
|
— |
|
|
General and administrative expenses |
|
|
95 |
|
|
|
84 |
|
|
|
94 |
|
|
|
95 |
|
|
|
95 |
|
|
Financing costs, net (3) |
|
|
67 |
|
|
|
84 |
|
|
|
85 |
|
|
|
86 |
|
|
|
86 |
|
|
Restructuring and transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
28 |
|
|
|
18 |
|
|
Other, net |
|
|
(40 |
) |
|
|
10 |
|
|
|
(61 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
Total expenses |
|
|
2,967 |
|
|
|
3,131 |
|
|
|
2,550 |
|
|
|
2,611 |
|
|
|
2,502 |
|
|
Earnings before income taxes |
|
|
2,465 |
|
|
|
2,495 |
|
|
|
1,262 |
|
|
|
1,662 |
|
|
|
964 |
|
|
Income tax expense (4) |
|
|
565 |
|
|
|
557 |
|
|
|
267 |
|
|
|
150 |
|
|
|
120 |
|
|
Net earnings |
|
|
1,900 |
|
|
|
1,938 |
|
|
|
995 |
|
|
|
1,512 |
|
|
|
844 |
|
|
Net earnings attributable to noncontrolling interests |
|
|
7 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
|
6 |
|
|
Net earnings attributable to Devon |
|
$ |
1,893 |
|
|
$ |
1,932 |
|
|
$ |
989 |
|
|
$ |
1,506 |
|
|
$ |
838 |
|
|
|
|
|
|
|
|
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|||||
Net earnings per share: |
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|
|
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|
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|
|||||
Basic net earnings per share |
|
$ |
2.89 |
|
|
$ |
2.94 |
|
|
$ |
1.48 |
|
|
$ |
2.24 |
|
|
$ |
1.24 |
|
|
Diluted net earnings per share |
|
$ |
2.88 |
|
|
$ |
2.93 |
|
|
$ |
1.48 |
|
|
$ |
2.23 |
|
|
$ |
1.24 |
|
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|
|
|
|
|
|
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|||||
Weighted average common shares outstanding: |
|
|
|
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|
|
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|
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|
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|
|||||
Basic |
|
|
655 |
|
|
|
658 |
|
|
|
663 |
|
|
|
671 |
|
|
|
677 |
|
|
Diluted |
|
|
656 |
|
|
|
660 |
|
|
|
665 |
|
|
|
673 |
|
|
|
679 |
|
|
2
SUPPLEMENTAL INFORMATION FOR CONSLIDATED STATEMENTS OF EARNINGS
(1) OIL, GAS AND NGL DERIVATIVES |
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|||||
(in millions) |
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
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Quarter 2 |
|
|
Quarter 1 |
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|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Derivative cash settlements |
|
$ |
(363 |
) |
|
$ |
(472 |
) |
|
$ |
(344 |
) |
|
$ |
(493 |
) |
|
$ |
(370 |
) |
|
Derivative valuation changes |
|
|
611 |
|
|
|
302 |
|
|
|
(339 |
) |
|
|
515 |
|
|
|
35 |
|
|
Oil, gas and NGL derivatives |
|
$ |
248 |
|
|
$ |
(170 |
) |
|
$ |
(683 |
) |
|
$ |
22 |
|
|
$ |
(335 |
) |
|
(2) PRODUCTION EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(in millions) |
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Lease operating expense |
|
$ |
284 |
|
|
$ |
255 |
|
|
$ |
224 |
|
|
$ |
235 |
|
|
$ |
215 |
|
|
Gathering, processing & transportation |
|
|
177 |
|
|
|
177 |
|
|
|
161 |
|
|
|
173 |
|
|
|
157 |
|
|
Production taxes |
|
|
252 |
|
|
|
278 |
|
|
|
214 |
|
|
|
197 |
|
|
|
176 |
|
|
Property taxes |
|
|
22 |
|
|
|
19 |
|
|
|
19 |
|
|
|
— |
|
|
|
7 |
|
|
Production expenses |
|
$ |
735 |
|
|
$ |
729 |
|
|
$ |
618 |
|
|
$ |
605 |
|
|
$ |
555 |
|
|
(3) FINANCING COSTS, NET |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(in millions) |
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Interest based on outstanding debt |
|
$ |
92 |
|
|
$ |
93 |
|
|
$ |
92 |
|
|
$ |
92 |
|
|
$ |
93 |
|
|
Interest income |
|
|
(19 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
— |
|
|
|
(1 |
) |
|
Other |
|
|
(6 |
) |
|
|
(7 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
|
Financing costs, net |
|
$ |
67 |
|
|
$ |
84 |
|
|
$ |
85 |
|
|
$ |
86 |
|
|
$ |
86 |
|
|
(4) INCOME TAX EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(in millions) |
|
2022 |
|
|
2021 |
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|||||
Current expense |
|
$ |
120 |
|
|
$ |
252 |
|
|
$ |
103 |
|
|
$ |
1 |
|
|
$ |
1 |
|
Deferred expense |
|
|
445 |
|
|
|
305 |
|
|
|
164 |
|
|
|
149 |
|
|
|
119 |
|
Income tax expense |
|
$ |
565 |
|
|
$ |
557 |
|
|
$ |
267 |
|
|
$ |
150 |
|
|
$ |
120 |
|
3
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions) |
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net earnings |
|
$ |
1,900 |
|
|
$ |
1,938 |
|
|
$ |
995 |
|
|
$ |
1,512 |
|
|
$ |
844 |
|
|
Adjustments to reconcile net earnings to net cash from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation, depletion and amortization |
|
|
581 |
|
|
|
528 |
|
|
|
489 |
|
|
|
577 |
|
|
|
578 |
|
|
Leasehold impairments |
|
|
2 |
|
|
|
7 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
Amortization of liabilities |
|
|
(8 |
) |
|
|
(9 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
(7 |
) |
|
Total (gains) losses on commodity derivatives |
|
|
(248 |
) |
|
|
170 |
|
|
|
683 |
|
|
|
(22 |
) |
|
|
335 |
|
|
Cash settlements on commodity derivatives |
|
|
(363 |
) |
|
|
(472 |
) |
|
|
(344 |
) |
|
|
(493 |
) |
|
|
(370 |
) |
|
Gains on asset dispositions |
|
|
— |
|
|
|
(14 |
) |
|
|
(1 |
) |
|
|
(49 |
) |
|
|
— |
|
|
Deferred income tax expense |
|
|
445 |
|
|
|
305 |
|
|
|
164 |
|
|
|
149 |
|
|
|
119 |
|
|
Share-based compensation |
|
|
22 |
|
|
|
23 |
|
|
|
20 |
|
|
|
19 |
|
|
|
19 |
|
|
Early retirement of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Other |
|
|
8 |
|
|
|
4 |
|
|
|
(21 |
) |
|
|
2 |
|
|
|
11 |
|
|
Changes in assets and liabilities, net |
|
|
(235 |
) |
|
|
198 |
|
|
|
(143 |
) |
|
|
(74 |
) |
|
|
68 |
|
|
Net cash from operating activities |
|
|
2,104 |
|
|
|
2,678 |
|
|
|
1,837 |
|
|
|
1,616 |
|
|
|
1,598 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Capital expenditures |
|
|
(628 |
) |
|
|
(573 |
) |
|
|
(537 |
) |
|
|
(512 |
) |
|
|
(474 |
) |
|
Acquisitions of property and equipment |
|
|
(2,465 |
) |
|
|
(100 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(10 |
) |
|
Divestitures of property and equipment |
|
|
4 |
|
|
|
9 |
|
|
|
26 |
|
|
|
14 |
|
|
|
1 |
|
|
Distributions from investments |
|
|
7 |
|
|
|
15 |
|
|
|
8 |
|
|
|
8 |
|
|
|
9 |
|
|
Contributions to investments |
|
|
(16 |
) |
|
|
(21 |
) |
|
|
(22 |
) |
|
|
(25 |
) |
|
|
— |
|
|
Net cash from investing activities |
|
|
(3,098 |
) |
|
|
(670 |
) |
|
|
(526 |
) |
|
|
(518 |
) |
|
|
(474 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Repurchases of common stock |
|
|
(126 |
) |
|
|
(324 |
) |
|
|
(211 |
) |
|
|
(589 |
) |
|
|
— |
|
|
Dividends paid on common stock |
|
|
(1,007 |
) |
|
|
(830 |
) |
|
|
(667 |
) |
|
|
(554 |
) |
|
|
(329 |
) |
|
Contributions from noncontrolling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Distributions to noncontrolling interests |
|
|
(9 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
|
Shares exchanged for tax withholdings and other |
|
|
(1 |
) |
|
|
(12 |
) |
|
|
(73 |
) |
|
|
— |
|
|
|
(3 |
) |
|
Net cash from financing activities |
|
|
(1,143 |
) |
|
|
(1,171 |
) |
|
|
(959 |
) |
|
|
(1,149 |
) |
|
|
(337 |
) |
|
Effect of exchange rate changes on cash |
|
|
(10 |
) |
|
|
(5 |
) |
|
|
2 |
|
|
|
1 |
|
|
|
(5 |
) |
|
Net change in cash, cash equivalents and restricted cash |
|
|
(2,147 |
) |
|
|
832 |
|
|
|
354 |
|
|
|
(50 |
) |
|
|
782 |
|
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
3,457 |
|
|
|
2,625 |
|
|
|
2,271 |
|
|
|
2,321 |
|
|
|
1,539 |
|
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
1,310 |
|
|
$ |
3,457 |
|
|
$ |
2,625 |
|
|
$ |
2,271 |
|
|
$ |
2,321 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reconciliation of cash, cash equivalents and restricted cash: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents |
|
$ |
1,166 |
|
|
$ |
3,300 |
|
|
$ |
2,459 |
|
|
$ |
2,099 |
|
|
$ |
2,144 |
|
|
Restricted cash |
|
|
144 |
|
|
|
157 |
|
|
|
166 |
|
|
|
172 |
|
|
|
177 |
|
|
Total cash, cash equivalents and restricted cash |
|
$ |
1,310 |
|
|
$ |
3,457 |
|
|
$ |
2,625 |
|
|
$ |
2,271 |
|
|
$ |
2,321 |
|
|
4
CONSOLIDATED BALANCE SHEETS
(in millions) |
September 30, |
|
|
December 31, |
|
||
|
2022 |
|
|
2021 |
|
||
Current assets: |
|
|
|
|
|
||
Cash, cash equivalents and restricted cash |
$ |
1,310 |
|
|
$ |
2,271 |
|
Accounts receivable |
|
2,061 |
|
|
|
1,543 |
|
Other current assets |
|
638 |
|
|
|
435 |
|
Total current assets |
|
4,009 |
|
|
|
4,249 |
|
Oil and gas property and equipment, based on successful efforts accounting, net |
|
16,258 |
|
|
|
13,536 |
|
Other property and equipment, net |
|
1,535 |
|
|
|
1,472 |
|
Total property and equipment, net |
|
17,793 |
|
|
|
15,008 |
|
Goodwill |
|
753 |
|
|
|
753 |
|
Right-of-use assets |
|
232 |
|
|
|
235 |
|
Investments |
|
431 |
|
|
|
402 |
|
Other long-term assets |
|
339 |
|
|
|
378 |
|
Total assets |
$ |
23,557 |
|
|
$ |
21,025 |
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
||
Accounts payable |
$ |
761 |
|
|
$ |
500 |
|
Revenues and royalties payable |
|
1,810 |
|
|
|
1,456 |
|
Short-term debt |
|
255 |
|
|
|
— |
|
Other current liabilities |
|
634 |
|
|
|
1,131 |
|
Total current liabilities |
|
3,460 |
|
|
|
3,087 |
|
Long-term debt |
|
6,196 |
|
|
|
6,482 |
|
Lease liabilities |
|
259 |
|
|
|
252 |
|
Asset retirement obligations |
|
498 |
|
|
|
468 |
|
Other long-term liabilities |
|
941 |
|
|
|
1,050 |
|
Deferred income taxes |
|
1,196 |
|
|
|
287 |
|
Stockholders' equity: |
|
|
|
|
|
||
Common stock |
|
65 |
|
|
|
66 |
|
Additional paid-in capital |
|
6,956 |
|
|
|
7,636 |
|
Retained earnings |
|
3,981 |
|
|
|
1,692 |
|
Accumulated other comprehensive loss |
|
(129 |
) |
|
|
(132 |
) |
Total stockholders’ equity attributable to Devon |
|
10,873 |
|
|
|
9,262 |
|
Noncontrolling interests |
|
134 |
|
|
|
137 |
|
Total equity |
|
11,007 |
|
|
|
9,399 |
|
Total liabilities and equity |
$ |
23,557 |
|
|
$ |
21,025 |
|
|
|
|
|
|
|
||
Common shares outstanding |
|
654 |
|
|
|
663 |
|
5
PRODUCTION
|
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Oil (MBbls/d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
|
210 |
|
|
|
222 |
|
|
|
209 |
|
|
|
213 |
|
|
|
213 |
|
|
Anadarko Basin |
|
|
13 |
|
|
|
14 |
|
|
|
14 |
|
|
|
14 |
|
|
|
14 |
|
|
Williston Basin |
|
|
35 |
|
|
|
27 |
|
|
|
32 |
|
|
|
36 |
|
|
|
39 |
|
|
Eagle Ford |
|
|
19 |
|
|
|
19 |
|
|
|
17 |
|
|
|
19 |
|
|
|
20 |
|
|
Powder River Basin |
|
|
13 |
|
|
|
14 |
|
|
|
12 |
|
|
|
14 |
|
|
|
14 |
|
|
Other |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
3 |
|
|
Total |
|
|
294 |
|
|
|
300 |
|
|
|
288 |
|
|
|
300 |
|
|
|
303 |
|
|
Natural gas liquids (MBbls/d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
|
108 |
|
|
|
111 |
|
|
|
92 |
|
|
|
107 |
|
|
|
100 |
|
|
Anadarko Basin |
|
|
27 |
|
|
|
25 |
|
|
|
25 |
|
|
|
27 |
|
|
|
25 |
|
|
Williston Basin |
|
|
8 |
|
|
|
9 |
|
|
|
8 |
|
|
|
9 |
|
|
|
9 |
|
|
Eagle Ford |
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
9 |
|
|
|
11 |
|
|
Powder River Basin |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
3 |
|
|
Other |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Total |
|
|
154 |
|
|
|
156 |
|
|
|
136 |
|
|
|
154 |
|
|
|
148 |
|
|
Gas (MMcf/d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
|
623 |
|
|
|
618 |
|
|
|
561 |
|
|
|
577 |
|
|
|
578 |
|
|
Anadarko Basin |
|
|
224 |
|
|
|
212 |
|
|
|
210 |
|
|
|
222 |
|
|
|
219 |
|
|
Williston Basin |
|
|
71 |
|
|
|
52 |
|
|
|
54 |
|
|
|
64 |
|
|
|
59 |
|
|
Eagle Ford |
|
|
63 |
|
|
|
60 |
|
|
|
61 |
|
|
|
60 |
|
|
|
67 |
|
|
Powder River Basin |
|
|
18 |
|
|
|
18 |
|
|
|
19 |
|
|
|
19 |
|
|
|
19 |
|
|
Other |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
Total |
|
|
1,000 |
|
|
|
961 |
|
|
|
906 |
|
|
|
943 |
|
|
|
943 |
|
|
Total oil equivalent (MBoe/d) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
|
421 |
|
|
|
436 |
|
|
|
394 |
|
|
|
416 |
|
|
|
409 |
|
|
Anadarko Basin |
|
|
77 |
|
|
|
74 |
|
|
|
75 |
|
|
|
78 |
|
|
|
75 |
|
|
Williston Basin |
|
|
55 |
|
|
|
45 |
|
|
|
48 |
|
|
|
55 |
|
|
|
58 |
|
|
Eagle Ford |
|
|
39 |
|
|
|
38 |
|
|
|
36 |
|
|
|
38 |
|
|
|
42 |
|
|
Powder River Basin |
|
|
18 |
|
|
|
19 |
|
|
|
18 |
|
|
|
19 |
|
|
|
20 |
|
|
Other |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
5 |
|
|
|
4 |
|
|
Total |
|
|
614 |
|
|
|
616 |
|
|
|
575 |
|
|
|
611 |
|
|
|
608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
6
CAPITAL EXPENDITURES
(in millions) |
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Delaware Basin |
|
$ |
444 |
|
|
$ |
374 |
|
|
$ |
413 |
|
|
$ |
392 |
|
|
$ |
363 |
|
|
Anadarko Basin |
|
|
55 |
|
|
|
42 |
|
|
|
16 |
|
|
|
19 |
|
|
|
15 |
|
|
Williston Basin |
|
|
57 |
|
|
|
21 |
|
|
|
17 |
|
|
|
25 |
|
|
|
13 |
|
|
Eagle Ford |
|
|
38 |
|
|
|
37 |
|
|
|
27 |
|
|
|
21 |
|
|
|
34 |
|
|
Powder River Basin |
|
|
44 |
|
|
|
37 |
|
|
|
27 |
|
|
|
27 |
|
|
|
15 |
|
|
Other |
|
|
1 |
|
|
|
2 |
|
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
|
Total upstream capital |
|
$ |
639 |
|
|
$ |
513 |
|
|
$ |
501 |
|
|
$ |
486 |
|
|
$ |
442 |
|
|
Environmental (1) |
|
|
27 |
|
|
|
22 |
|
|
|
16 |
|
|
|
— |
|
|
|
— |
|
|
Midstream and Corporate |
|
|
22 |
|
|
|
32 |
|
|
|
46 |
|
|
|
31 |
|
|
|
29 |
|
|
Acquisitions (2) |
|
|
2,534 |
|
|
|
13 |
|
|
|
1 |
|
|
|
4 |
|
|
|
10 |
|
|
Total capital |
|
$ |
3,222 |
|
|
$ |
580 |
|
|
$ |
564 |
|
|
$ |
521 |
|
|
$ |
481 |
|
|
SUPPLEMENTAL INFORMATION FOR CAPITAL EXPENDITURES
GROSS OPERATED SPUDS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Delaware Basin |
|
|
50 |
|
|
|
46 |
|
|
|
59 |
|
|
|
54 |
|
|
|
50 |
|
|
Anadarko Basin |
|
|
13 |
|
|
|
14 |
|
|
|
13 |
|
|
|
6 |
|
|
|
9 |
|
|
Williston Basin |
|
|
10 |
|
|
|
5 |
|
|
|
— |
|
|
|
9 |
|
|
|
— |
|
|
Eagle Ford |
|
|
7 |
|
|
|
4 |
|
|
|
11 |
|
|
|
9 |
|
|
|
10 |
|
|
Powder River Basin |
|
|
6 |
|
|
|
1 |
|
|
|
— |
|
|
|
4 |
|
|
|
9 |
|
|
Total |
|
|
86 |
|
|
|
70 |
|
|
|
83 |
|
|
|
82 |
|
|
|
78 |
|
|
GROSS OPERATED WELLS TIED-IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Delaware Basin |
|
|
59 |
|
|
|
52 |
|
|
|
52 |
|
|
|
65 |
|
|
|
52 |
|
|
Anadarko Basin |
|
|
13 |
|
|
|
1 |
|
|
|
— |
|
|
|
12 |
|
|
|
4 |
|
|
Williston Basin |
|
|
14 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
Eagle Ford |
|
|
8 |
|
|
|
14 |
|
|
|
8 |
|
|
|
7 |
|
|
|
19 |
|
|
Powder River Basin |
|
|
9 |
|
|
|
— |
|
|
|
4 |
|
|
|
2 |
|
|
|
2 |
|
|
Total |
|
|
103 |
|
|
|
67 |
|
|
|
64 |
|
|
|
86 |
|
|
|
81 |
|
|
AVERAGE LATERAL LENGTH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
(based on wells tied-in) |
|
2022 |
|
|
2021 |
|
|||||||||||
|
|
Quarter 3 |
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|||
Delaware Basin |
|
10,900' |
|
9,100' |
|
|
8,900' |
|
|
10,100' |
|
|
9,700' |
|
|||
Anadarko Basin |
|
9,500' |
|
10,100' |
|
|
|
— |
|
|
11,700' |
|
|
9,200' |
|
||
Williston Basin |
|
10,500' |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
9,600' |
|
Eagle Ford |
|
7,800' |
|
5,800' |
|
|
7,500' |
|
|
7,100' |
|
|
6,300' |
|
|||
Powder River Basin |
|
11,800' |
|
|
— |
|
|
10,400' |
|
|
9,600' |
|
|
10,500' |
|
||
Total |
|
10,500' |
|
8,400' |
|
|
8,800' |
|
|
10,100' |
|
|
8,900' |
|
|||
7
REALIZED PRICING
BENCHMARK PRICES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(average prices) |
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Oil ($/Bbl) - West Texas Intermediate (Cushing) |
|
$ |
91.87 |
|
|
$ |
108.70 |
|
|
$ |
94.45 |
|
|
$ |
76.91 |
|
|
$ |
70.64 |
|
|
Natural Gas ($/Mcf) - Henry Hub |
|
$ |
8.20 |
|
|
$ |
7.17 |
|
|
$ |
4.96 |
|
|
$ |
5.84 |
|
|
$ |
4.02 |
|
|
NGL ($/Bbl) - Mont Belvieu Blended |
|
$ |
39.67 |
|
|
$ |
46.44 |
|
|
$ |
43.99 |
|
|
$ |
40.39 |
|
|
$ |
36.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
REALIZED PRICES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2022 |
|
|
2021 |
|
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|
|||||
Oil (Per Bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
$ |
93.60 |
|
|
$ |
109.05 |
|
|
$ |
93.12 |
|
|
$ |
75.67 |
|
|
$ |
68.44 |
|
|
Anadarko Basin |
|
|
91.42 |
|
|
|
108.15 |
|
|
|
92.70 |
|
|
|
76.07 |
|
|
|
69.11 |
|
|
Williston Basin |
|
|
91.30 |
|
|
|
109.85 |
|
|
|
90.87 |
|
|
|
74.02 |
|
|
|
66.60 |
|
|
Eagle Ford |
|
|
91.53 |
|
|
|
109.77 |
|
|
|
94.51 |
|
|
|
75.35 |
|
|
|
68.32 |
|
|
Powder River Basin |
|
|
91.33 |
|
|
|
104.75 |
|
|
|
92.69 |
|
|
|
72.86 |
|
|
|
65.81 |
|
|
Realized price without hedges |
|
|
92.98 |
|
|
|
108.93 |
|
|
|
92.94 |
|
|
|
75.36 |
|
|
|
68.19 |
|
|
Cash settlements |
|
|
(8.60 |
) |
|
|
(13.13 |
) |
|
|
(11.32 |
) |
|
|
(13.14 |
) |
|
|
(10.60 |
) |
|
Realized price, including cash settlements |
|
$ |
84.38 |
|
|
$ |
95.80 |
|
|
$ |
81.62 |
|
|
$ |
62.22 |
|
|
$ |
57.59 |
|
|
Natural gas liquids (Per Bbl) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
$ |
34.37 |
|
|
$ |
40.75 |
|
|
$ |
38.43 |
|
|
$ |
35.56 |
|
|
$ |
31.34 |
|
|
Anadarko Basin |
|
|
35.52 |
|
|
|
41.64 |
|
|
|
38.38 |
|
|
|
35.66 |
|
|
|
33.20 |
|
|
Williston Basin |
|
|
25.41 |
|
|
|
23.88 |
|
|
|
20.71 |
|
|
|
24.97 |
|
|
|
19.36 |
|
|
Eagle Ford |
|
|
35.55 |
|
|
|
41.98 |
|
|
|
39.68 |
|
|
|
38.17 |
|
|
|
32.80 |
|
|
Powder River Basin |
|
|
44.85 |
|
|
|
55.62 |
|
|
|
52.49 |
|
|
|
47.30 |
|
|
|
40.66 |
|
|
Realized price without hedges |
|
|
34.44 |
|
|
|
40.28 |
|
|
|
37.76 |
|
|
|
35.36 |
|
|
|
31.25 |
|
|
Cash settlements |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.54 |
) |
|
|
(0.45 |
) |
|
Realized price, including cash settlements |
|
$ |
34.44 |
|
|
$ |
40.28 |
|
|
$ |
37.76 |
|
|
$ |
34.82 |
|
|
$ |
30.80 |
|
|
Gas (Per Mcf) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
$ |
7.06 |
|
|
$ |
6.41 |
|
|
$ |
3.83 |
|
|
$ |
4.60 |
|
|
$ |
3.58 |
|
|
Anadarko Basin |
|
|
8.89 |
|
|
|
7.11 |
|
|
|
4.00 |
|
|
|
5.37 |
|
|
|
4.05 |
|
|
Williston Basin |
|
|
3.23 |
|
|
|
1.56 |
|
|
|
0.74 |
|
|
|
1.53 |
|
|
|
0.65 |
|
|
Eagle Ford |
|
|
7.53 |
|
|
|
7.10 |
|
|
|
4.91 |
|
|
|
5.76 |
|
|
|
4.08 |
|
|
Powder River Basin |
|
|
8.23 |
|
|
|
7.93 |
|
|
|
4.24 |
|
|
|
6.10 |
|
|
|
4.15 |
|
|
Realized price without hedges |
|
|
7.25 |
|
|
|
6.37 |
|
|
|
3.77 |
|
|
|
4.68 |
|
|
|
3.55 |
|
|
Cash settlements |
|
|
(1.42 |
) |
|
|
(1.31 |
) |
|
|
(0.62 |
) |
|
|
(1.42 |
) |
|
|
(0.78 |
) |
|
Realized price, including cash settlements |
|
$ |
5.83 |
|
|
$ |
5.06 |
|
|
$ |
3.15 |
|
|
$ |
3.26 |
|
|
$ |
2.77 |
|
|
Total oil equivalent (Per Boe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Delaware Basin |
|
$ |
65.80 |
|
|
$ |
75.02 |
|
|
$ |
63.75 |
|
|
$ |
54.28 |
|
|
$ |
48.29 |
|
|
Anadarko Basin |
|
|
53.72 |
|
|
|
54.46 |
|
|
|
42.08 |
|
|
|
41.39 |
|
|
|
35.62 |
|
|
Williston Basin |
|
|
66.65 |
|
|
|
73.15 |
|
|
|
63.31 |
|
|
|
53.44 |
|
|
|
48.55 |
|
|
Eagle Ford |
|
|
65.49 |
|
|
|
75.07 |
|
|
|
62.74 |
|
|
|
56.06 |
|
|
|
47.40 |
|
|
Powder River Basin |
|
|
78.58 |
|
|
|
89.84 |
|
|
|
75.75 |
|
|
|
63.45 |
|
|
|
55.93 |
|
|
Realized price without hedges |
|
|
64.89 |
|
|
|
73.13 |
|
|
|
61.40 |
|
|
|
53.12 |
|
|
|
47.08 |
|
|
Cash settlements |
|
|
(6.41 |
) |
|
|
(8.43 |
) |
|
|
(6.65 |
) |
|
|
(8.78 |
) |
|
|
(6.60 |
) |
|
Realized price, including cash settlements |
|
$ |
58.48 |
|
|
$ |
64.70 |
|
|
$ |
54.75 |
|
|
$ |
44.34 |
|
|
$ |
40.48 |
|
|
8
ASSET MARGINS
BENCHMARK PRICES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
(average prices) |
|
2022 |
|
|
2021 |
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|||||
Oil ($/Bbl) - West Texas Intermediate (Cushing) |
|
$ |
91.87 |
|
|
$ |
108.70 |
|
|
$ |
94.45 |
|
|
$ |
76.91 |
|
|
$ |
70.64 |
|
Natural Gas ($/Mcf) - Henry Hub |
|
$ |
8.20 |
|
|
$ |
7.17 |
|
|
$ |
4.96 |
|
|
$ |
5.84 |
|
|
$ |
4.02 |
|
NGL ($/Bbl) - Mont Belvieu Blended |
|
$ |
39.67 |
|
|
$ |
46.44 |
|
|
$ |
43.99 |
|
|
$ |
40.39 |
|
|
$ |
36.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
PER-UNIT CASH MARGIN BY ASSET (per Boe) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
2022 |
|
|
2021 |
|
||||||||||||||
|
|
Quarter 3 |
|
|
Quarter 2 |
|
|
Quarter 1 |
|
|
Quarter 4 |
|
|
Quarter 3 |
|
|||||
Delaware Basin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Realized price |
|
$ |
65.80 |
|
|
$ |
75.02 |
|
|
$ |
63.75 |
|
|
$ |
54.28 |
|
|
$ |
48.29 |
|
Lease operating expenses |
|
|
(4.39 |
) |
|
|
(3.98 |
) |
|
|
(3.79 |
) |
|
|
(4.02 |
) |
|
|
(3.52 |
) |
Gathering, processing & transportation |
|
|
(2.40 |
) |
|
|
(2.37 |
) |
|
|
(2.32 |
) |
|
|
(2.27 |
) |
|
|
(2.18 |
) |
Production & property taxes |
|
|
(4.81 |
) |
|
|
(5.35 |
) |
|
|
(4.65 |
) |
|
|
(3.40 |
) |
|
|
(3.31 |
) |
Field-level cash margin |
|
$ |
54.20 |
|
|
$ |
63.32 |
|
|
$ |
52.99 |
|
|
$ |
44.59 |
|
|
$ |
39.28 |
|
Anadarko Basin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Realized price |
|
$ |
53.72 |
|
|
$ |
54.46 |
|
|
$ |
42.08 |
|
|
$ |
41.39 |
|
|
$ |
35.62 |
|
Lease operating expenses |
|
|
(3.46 |
) |
|
|
(3.49 |
) |
|
|
(2.75 |
) |
|
|
(2.70 |
) |
|
|
(2.58 |
) |
Gathering, processing & transportation |
|
|
(6.91 |
) |
|
|
(6.65 |
) |
|
|
(6.67 |
) |
|
|
(6.60 |
) |
|
|
(6.14 |
) |
Production & property taxes |
|
|
(3.26 |
) |
|
|
(3.17 |
) |
|
|
(2.35 |
) |
|
|
(2.44 |
) |
|
|
(1.70 |
) |
Field-level cash margin |
|
$ |
40.09 |
|
|
$ |
41.15 |
|
|
$ |
30.31 |
|
|
$ |
29.65 |
|
|
$ |
25.20 |
|
Williston Basin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Realized price |
|
$ |
66.65 |
|
|
$ |
73.15 |
|
|
$ |
63.31 |
|
|
$ |
53.44 |
|
|
$ |
48.55 |
|
Lease operating expenses |
|
|
(9.97 |
) |
|
|
(9.40 |
) |
|
|
(7.67 |
) |
|
|
(5.76 |
) |
|
|
(5.83 |
) |
Gathering, processing & transportation |
|
|
(2.40 |
) |
|
|
(2.44 |
) |
|
|
(2.32 |
) |
|
|
(2.09 |
) |
|
|
(2.13 |
) |
Production & property taxes |
|
|
(6.33 |
) |
|
|
(6.75 |
) |
|
|
(5.67 |
) |
|
|
(4.64 |
) |
|
|
(4.47 |
) |
Field-level cash margin |
|
$ |
47.95 |
|
|
$ |
54.56 |
|
|
$ |
47.65 |
|
|
$ |
40.95 |
|
|
$ |
36.12 |
|
Eagle Ford |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Realized price |
|
$ |
65.49 |
|
|
$ |
75.07 |
|
|
$ |
62.74 |
|
|
$ |
56.06 |
|
|
$ |
47.40 |
|
Lease operating expenses |
|
|
(4.94 |
) |
|
|
(4.98 |
) |
|
|
(4.63 |
) |
|
|
(3.78 |
) |
|
|
(3.43 |
) |
Gathering, processing & transportation |
|
|
(4.94 |
) |
|
|
(6.39 |
) |
|
|
(5.67 |
) |
|
|
(6.65 |
) |
|
|
(4.17 |
) |
Production & property taxes |
|
|
(3.79 |
) |
|
|
(3.99 |
) |
|
|
(3.52 |
) |
|
|
(2.93 |
) |
|
|
(1.99 |
) |
Field-level cash margin |
|
$ |
51.82 |
|
|
$ |
59.71 |
|
|
$ |
48.92 |
|
|
$ |
42.70 |
|
|
$ |
37.81 |
|
Powder River Basin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Realized price |
|
$ |
78.58 |
|
|
$ |
89.84 |
|
|
$ |
75.75 |
|
|
$ |
63.45 |
|
|
$ |
55.93 |
|
Lease operating expenses |
|
|
(7.03 |
) |
|
|
(7.04 |
) |
|
|
(9.01 |
) |
|
|
(7.49 |
) |
|
|
(8.09 |
) |
Gathering, processing & transportation |
|
|
(3.24 |
) |
|
|
(3.50 |
) |
|
|
(3.19 |
) |
|
|
(2.86 |
) |
|
|
(2.93 |
) |
Production & property taxes |
|
|
(9.50 |
) |
|
|
(10.89 |
) |
|
|
(9.23 |
) |
|
|
(7.49 |
) |
|
|
(6.73 |
) |
Field-level cash margin |
|
$ |
58.81 |
|
|
$ |
68.41 |
|
|
$ |
54.32 |
|
|
$ |
45.61 |
|
|
$ |
38.18 |
|
Devon - Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Realized price |
|
$ |
64.89 |
|
|
$ |
73.13 |
|
|
$ |
61.40 |
|
|
$ |
53.12 |
|
|
$ |
47.08 |
|
Lease operating expenses |
|
|
(5.02 |
) |
|
|
(4.56 |
) |
|
|
(4.33 |
) |
|
|
(4.18 |
) |
|
|
(3.85 |
) |
Gathering, processing & transportation |
|
|
(3.13 |
) |
|
|
(3.15 |
) |
|
|
(3.11 |
) |
|
|
(3.08 |
) |
|
|
(2.81 |
) |
Production & property taxes |
|
|
(4.84 |
) |
|
|
(5.30 |
) |
|
|
(4.51 |
) |
|
|
(3.49 |
) |
|
|
(3.25 |
) |
Field-level cash margin |
|
$ |
51.90 |
|
|
$ |
60.12 |
|
|
$ |
49.45 |
|
|
$ |
42.37 |
|
|
$ |
37.17 |
|
9
NON-GAAP MEASURES
(all monetary values in millions, except per share amounts)
Devon’s earnings materials include non-GAAP financial measures. These non-GAAP measures are not alternatives to GAAP measures, and you should not consider these non-GAAP measures in isolation or as a substitute for analysis of our results as reported under GAAP. Below is additional disclosure regarding each of the non-GAAP measures used in the earnings materials, including reconciliations to their most directly comparable GAAP measure.
The earnings materials may include forward-looking non-GAAP measures. The company is unable to provide reconciliations of these forward-looking non-GAAP measures, because components of the calculations are inherently unpredictable, such as changes to current assets and liabilities, the timing of changes in capital accruals, unknown future events and estimating certain future GAAP measures. The inability to reliably quantify certain components of the calculation would significantly affect the usefulness and accuracy of a reconciliation.
CORE EARNINGS
Devon’s reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company’s financial results. Accordingly, the company also uses the measures of core earnings and core earnings per share attributable to Devon. Devon believes these non-GAAP measures facilitate comparisons of its performance to earnings estimates published by securities analysts. Devon also believes these non-GAAP measures can facilitate comparisons of its performance between periods and to the performance of its peers. The following table summarizes the effects of these items on third-quarter and second-quarter 2022 earnings.
|
|
Quarter Ended September 30, 2022 |
|
|||||||||||||
|
|
Before-tax |
|
|
After-tax |
|
|
After Noncontrolling Interests |
|
|
Per Diluted Share |
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (GAAP) |
|
$ |
2,465 |
|
|
$ |
1,900 |
|
|
$ |
1,893 |
|
|
$ |
2.88 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset and exploration impairments |
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
Deferred tax asset valuation allowance |
|
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
— |
|
Fair value changes in financial instruments |
|
|
(604 |
) |
|
|
(464 |
) |
|
|
(464 |
) |
|
|
(0.70 |
) |
Core earnings (Non-GAAP) |
|
$ |
1,862 |
|
|
$ |
1,436 |
|
|
$ |
1,429 |
|
|
$ |
2.18 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Quarter Ended June 30, 2022 |
|
|||||||||||||
|
|
Before-tax |
|
|
After-tax |
|
|
After Noncontrolling Interests |
|
|
Per Diluted Share |
|
||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings (GAAP) |
|
$ |
2,495 |
|
|
$ |
1,938 |
|
|
$ |
1,932 |
|
|
$ |
2.93 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Asset dispositions |
|
|
(14 |
) |
|
|
(11 |
) |
|
|
(11 |
) |
|
|
(0.02 |
) |
Asset and exploration impairments |
|
|
8 |
|
|
|
6 |
|
|
|
6 |
|
|
|
0.01 |
|
Deferred tax asset valuation allowance |
|
|
— |
|
|
|
10 |
|
|
|
10 |
|
|
|
0.02 |
|
Fair value changes in financial instruments |
|
|
(299 |
) |
|
|
(230 |
) |
|
|
(230 |
) |
|
|
(0.35 |
) |
Core earnings (Non-GAAP) |
|
$ |
2,190 |
|
|
$ |
1,713 |
|
|
$ |
1,707 |
|
|
$ |
2.59 |
|
* The tax impact for the adjustments to core earnings in the tables above are all deferred.
10
EBITDAX
Devon believes EBITDAX provides information useful in assessing operating and financial performance across periods. Devon computes EBITDAX as net earnings before income tax expense; financing costs, net; exploration expenses; depreciation, depletion and amortization; asset impairments; asset disposition gains and losses; non-cash share-based compensation; non-cash valuation changes for derivatives and financial instruments; restructuring and transaction costs; accretion on discounted liabilities; and other items not related to normal operations. EBITDAX as defined by Devon may not be comparable to similarly titled measures used by other companies.
|
|
Q3 '22 |
|
|
Q2 '22 |
|
|
Q1 '22 |
|
|
Q4 '21 |
|
|
TTM |
|
|
Q3 '21 |
|
|
Q2 '21 |
|
|
Q1 '21 |
|
||||||||
Net earnings (GAAP) |
|
$ |
1,900 |
|
|
$ |
1,938 |
|
|
$ |
995 |
|
|
$ |
1,512 |
|
|
$ |
6,345 |
|
|
$ |
844 |
|
|
$ |
261 |
|
|
$ |
216 |
|
Financing costs, net |
|
|
67 |
|
|
|
84 |
|
|
|
85 |
|
|
|
86 |
|
|
|
322 |
|
|
|
86 |
|
|
|
80 |
|
|
|
77 |
|
Income tax expense (benefit) |
|
|
565 |
|
|
|
557 |
|
|
|
267 |
|
|
|
150 |
|
|
|
1,539 |
|
|
|
120 |
|
|
|
43 |
|
|
|
(248 |
) |
Exploration expenses |
|
|
4 |
|
|
|
10 |
|
|
|
2 |
|
|
|
5 |
|
|
|
21 |
|
|
|
3 |
|
|
|
3 |
|
|
|
3 |
|
Depreciation, depletion and amortization |
|
|
581 |
|
|
|
528 |
|
|
|
489 |
|
|
|
577 |
|
|
|
2,175 |
|
|
|
578 |
|
|
|
536 |
|
|
|
467 |
|
Asset dispositions |
|
|
— |
|
|
|
(14 |
) |
|
|
(1 |
) |
|
|
(49 |
) |
|
|
(64 |
) |
|
|
— |
|
|
|
(87 |
) |
|
|
(32 |
) |
Share-based compensation |
|
|
22 |
|
|
|
22 |
|
|
|
20 |
|
|
|
19 |
|
|
|
83 |
|
|
|
18 |
|
|
|
20 |
|
|
|
20 |
|
Derivative & financial instrument non-cash val. changes |
|
|
(613 |
) |
|
|
(302 |
) |
|
|
339 |
|
|
|
(515 |
) |
|
|
(1,091 |
) |
|
|
(35 |
) |
|
|
336 |
|
|
|
296 |
|
Restructuring and transaction costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
28 |
|
|
|
28 |
|
|
|
18 |
|
|
|
23 |
|
|
|
189 |
|
Accretion on discounted liabilities and other |
|
|
(38 |
) |
|
|
10 |
|
|
|
(61 |
) |
|
|
(2 |
) |
|
|
(91 |
) |
|
|
2 |
|
|
|
(14 |
) |
|
|
(29 |
) |
EBITDAX (Non-GAAP) |
|
$ |
2,488 |
|
|
$ |
2,833 |
|
|
$ |
2,135 |
|
|
$ |
1,811 |
|
|
$ |
9,267 |
|
|
$ |
1,634 |
|
|
$ |
1,201 |
|
|
$ |
959 |
|
Annualized EBITDAX for first-quarter 2021 (Non-GAAP) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
3,836 |
|
|||||||
NET DEBT
Devon defines net debt as debt (includes short-term and long-term debt) less cash, cash equivalents and cash restricted for discontinued operations. Devon believes that netting these sources of cash against debt provides a clearer picture of the future demands on cash from Devon to repay debt.
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
|
Dec. 31, 2021 |
|
|
Sep. 30, 2021 |
|
|
Mar. 31, 2021 |
|
||||||
Total debt (GAAP) |
|
$ |
6,451 |
|
|
$ |
6,461 |
|
|
$ |
6,471 |
|
|
$ |
6,482 |
|
|
$ |
6,492 |
|
|
$ |
7,268 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cash, cash equivalents and restricted cash |
|
|
(1,310 |
) |
|
|
(3,457 |
) |
|
|
(2,625 |
) |
|
|
(2,271 |
) |
|
|
(2,321 |
) |
|
|
(1,878 |
) |
Net debt (Non-GAAP) |
|
$ |
5,141 |
|
|
$ |
3,004 |
|
|
$ |
3,846 |
|
|
$ |
4,211 |
|
|
$ |
4,171 |
|
|
$ |
5,390 |
|
NET DEBT-TO-EBITDAX
Devon defines net debt-to-EBITDAX as net debt divided by an annualized EBITDAX measure. Devon believes this ratio provides information useful to investors in assessing the company’s credit position and debt leverage.
|
|
Sep. 30, 2022 |
|
|
Jun. 30, 2022 |
|
|
Mar. 31, 2022 |
|
|
Dec. 31, 2021 |
|
|
Sep. 30, 2021 |
|
|
Mar. 31, 2021 |
|
||||||
Net debt (Non-GAAP) |
|
$ |
5,141 |
|
|
$ |
3,004 |
|
|
$ |
3,846 |
|
|
$ |
4,211 |
|
|
$ |
4,171 |
|
|
$ |
5,390 |
|
EBITDAX (Non-GAAP) (1) |
|
$ |
9,267 |
|
|
$ |
8,413 |
|
|
$ |
6,781 |
|
|
$ |
5,605 |
|
|
$ |
5,059 |
|
|
$ |
3,836 |
|
Net debt-to-EBITDAX (Non-GAAP) |
|
|
0.6 |
|
|
|
0.4 |
|
|
|
0.6 |
|
|
|
0.8 |
|
|
|
0.8 |
|
|
|
1.4 |
|
FREE CASH FLOW
Devon defines free cash flow as total operating cash flow less capital expenditures. Devon believes free cash flow provides a useful measure of available cash generated by operating activities for other investing and financing activities.
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|||||
Total operating cash flow (GAAP) |
|
$ |
2,104 |
|
|
$ |
2,678 |
|
|
$ |
1,837 |
|
|
$ |
1,616 |
|
|
$ |
1,598 |
|
Less capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Capital expenditures |
|
|
(628 |
) |
|
|
(573 |
) |
|
|
(537 |
) |
|
|
(512 |
) |
|
|
(474 |
) |
Free cash flow (Non-GAAP) |
|
$ |
1,476 |
|
|
$ |
2,105 |
|
|
$ |
1,300 |
|
|
$ |
1,104 |
|
|
$ |
1,124 |
|
|
|
Full Year 2021 |
|
|
Full Year 2020 |
|
||
Total operating cash flow (GAAP) |
|
$ |
4,899 |
|
|
$ |
1,464 |
|
Less capital expenditures: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(1,989 |
) |
|
|
(1,153 |
) |
Free cash flow (Non-GAAP) |
|
$ |
2,910 |
|
|
$ |
311 |
|
11
REINVESTMENT RATE
Devon defines reinvestment rate as accrued capital expenditures (excluding acquisitions) divided by operating cash flow. Devon believes this measure provides useful information to our investors as an indicator of the capital demands of our business relative to the cash flow generated from normal business operations.
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
|
Quarter Ended |
|
||||
Capital expenditures (excludes acquisitions) |
|
$ |
688 |
|
|
$ |
567 |
|
|
$ |
563 |
|
|
$ |
517 |
|
Operating cash flow |
|
$ |
2,104 |
|
|
$ |
2,678 |
|
|
$ |
1,837 |
|
|
$ |
1,616 |
|
Reinvestment rate (Non-GAAP) |
|
|
33 |
% |
|
|
21 |
% |
|
|
31 |
% |
|
|
32 |
% |
VARIABLE DIVIDEND
Devon may pay a variable dividend of up to 50 percent of its excess cash flow. Each quarter’s excess cash flow is computed as adjusted cash flow less capital expenditures and the fixed dividend.
|
|
Quarter Ended |
|
|
Operating cash flow (GAAP) |
|
$ |
2,104 |
|
Changes in assets and liabilities, net |
|
|
235 |
|
Adjusted cash flow (Non-GAAP) |
|
|
2,339 |
|
Capital expenditures (Accrued) |
|
|
(690 |
) |
Adjusted free cash flow (Non-GAAP) |
|
|
1,649 |
|
Fixed quarterly dividend |
|
|
(117 |
) |
Excess free cash flow (Non-GAAP) |
|
|
1,532 |
|
~50% Pay out (Board Discretion: Up to 50%) |
|
|
50 |
% |
Total variable dividend |
|
$ |
763 |
|
12
FOURTH-QUARTER 2022 GUIDANCE
PRODUCTION GUIDANCE |
|
|
|
|
|
|
|
|
|
|
Quarter 4 |
|
|||||
|
|
Low |
|
|
High |
|
||
Oil (MBbls/d) |
|
|
319 |
|
|
|
326 |
|
Natural gas liquids (MBbls/d) |
|
|
154 |
|
|
|
161 |
|
Gas (MMcf/d) |
|
|
1,000 |
|
|
|
1,040 |
|
Total oil equivalent (MBoe/d) |
|
|
640 |
|
|
|
660 |
|
CAPITAL EXPENDITURES GUIDANCE |
|
|
|
|
|
|
|
|
|
|
Quarter 4 |
|
|||||
(in millions) |
|
Low |
|
|
High |
|
||
Upstream capital(1) |
|
$ |
810 |
|
|
$ |
860 |
|
Environmental capital |
|
|
15 |
|
|
|
25 |
|
Midstream & other capital |
|
|
20 |
|
|
|
30 |
|
Total capital |
|
$ |
845 |
|
|
$ |
915 |
|
(1) Outlook incorporates $120 million of incremental capital requirements related to recent bolt-on acquisitions in the Eagle Ford and Williston Basin.
PRICE REALIZATIONS GUIDANCE |
|
|
|
|
|
|
|
|
|
|
Quarter 4 |
|
|||||
|
|
Low |
|
|
High |
|
||
Oil - % of WTI |
|
|
95 |
% |
|
|
100 |
% |
NGL - % of WTI |
|
|
35 |
% |
|
|
40 |
% |
Natural gas - % of Henry Hub(2) |
|
|
70 |
% |
|
|
80 |
% |
(2) Gas realizations do not incorporate impact from gas basis swaps in the Delaware Basin.
OTHER GUIDANCE ITEMS |
|
|
|
|
|
|
|
|
|
|
Quarter 4 |
|
|||||
($ millions, except Boe and %) |
|
Low |
|
|
High |
|
||
Marketing & midstream operating profit |
|
$ |
(15) |
|
|
$ |
(5) |
|
LOE & GP&T per BOE |
|
$ |
8.20 |
|
|
$ |
8.60 |
|
Production & property taxes as % of upstream sales |
|
|
7.0% |
|
|
|
8.0% |
|
Exploration expenses |
|
$ |
— |
|
|
$ |
5 |
|
Depreciation, depletion and amortization |
|
$ |
610 |
|
|
$ |
670 |
|
General & administrative expenses |
|
$ |
90 |
|
|
$ |
100 |
|
Financing costs, net |
|
$ |
75 |
|
|
$ |
85 |
|
Other expenses |
|
$ |
— |
|
|
$ |
10 |
|
Note: Q4 DD&A is expected to increase compared to the prior quarter due to the closing of the Validus acquisition.
INCOME TAX GUIDANCE |
|
|
|
|
|
|
|
|
(% of pre-tax earnings) |
|
Quarter 4 |
|
|||||
Current income tax rate(3) |
|
|
8% |
|||||
Deferred income tax rate |
|
|
14% |
|
||||
Total income tax rate |
|
|
22% |
|
||||
(3) Assumes $90 WTI for Q4 2022.
1
CONTINGENT PAYMENTS FOR BARNETT SHALE DIVESTITURE (4-year period beginning in 2021)
|
WTI Threshold |
|
WTI Annual Earnout Amount |
|
Henry Hub Threshold |
|
Henry Hub Annual Earnout Amount |
|
|
||||
|
$ |
50.00 |
|
$ |
10,000,000 |
|
$ |
2.75 |
|
$ |
20,000,000 |
|
|
|
$ |
55.00 |
|
$ |
12,500,000 |
|
$ |
3.00 |
|
$ |
25,000,000 |
|
|
|
$ |
60.00 |
|
$ |
15,000,000 |
|
$ |
3.25 |
|
$ |
35,000,000 |
|
|
|
$ |
65.00 |
|
$ |
20,000,000 |
|
$ |
3.50 |
|
$ |
45,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 & 2023 HEDGING POSITIONS
Oil Commodity Hedges |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Price Swaps |
|
|
Price Collars |
|
||||||||||||||
Period |
|
Volume (Bbls/d) |
|
|
Weighted Average Price ($/Bbl) |
|
|
Volume (Bbls/d) |
|
|
Weighted Average Floor Price ($/Bbl) |
|
|
Weighted Average Ceiling Price ($/Bbl) |
|
|||||
Q4 2022 |
|
|
35,000 |
|
|
$ |
44.61 |
|
|
|
46,500 |
|
|
$ |
63.47 |
|
|
$ |
90.61 |
|
Q1-Q4 2023 |
|
|
— |
|
|
$ |
— |
|
|
|
86,207 |
|
|
$ |
69.03 |
|
|
$ |
94.66 |
|
Oil Basis Swaps |
|
|
|
|
|
|
|
|
|
|
Period |
|
Index |
|
Volume (Bbls/d) |
|
|
Weighted Average Differential to WTI ($/Bbl) |
|
||
Q4 2022 |
|
BRENT/WTI Spread |
|
|
1,000 |
|
|
$ |
(7.75) |
|
Q4 2022 |
|
NYMEX Roll |
|
|
29,000 |
|
|
$ |
0.45 |
|
Q1-Q4 2023 |
|
Midland Sweet |
|
|
12,296 |
|
|
$ |
0.52 |
|
Natural Gas Commodity Hedges - Henry Hub |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Price Swaps |
|
|
Price Collars |
|
||||||||||||||
Period |
|
Volume (MMBtu/d) |
|
|
Weighted Average Price ($/MMBtu) |
|
|
Volume (MMBtu/d) |
|
|
Weighted Average Floor Price ($/MMBtu) |
|
|
Weighted Average Ceiling Price ($/MMBtu) |
|
|||||
Q4 2022 |
|
|
125,000 |
|
|
$ |
3.34 |
|
|
|
165,000 |
|
|
$ |
3.16 |
|
|
$ |
4.82 |
|
Q1-Q4 2023 |
|
|
8,658 |
|
|
$ |
5.24 |
|
|
|
147,436 |
|
|
$ |
3.67 |
|
|
$ |
8.87 |
|
Natural Gas Basis Swaps |
|
|
|
|
|
|
|
|
||
Period |
|
Index |
|
Volume (MMBtu/d) |
|
|
Weighted Average Differential to Henry Hub ($/MMBtu) |
|
||
Q4 2022 |
|
WAHA |
|
|
70,000 |
|
|
$ |
(0.57) |
|
Q4 2022 |
|
El Paso Permian |
|
|
50,000 |
|
|
$ |
(0.85) |
|
Q4 2022 |
|
Houston Ship Channel |
|
|
40,000 |
|
|
$ |
(0.15) |
|
Q1-Q4 2023 |
|
WAHA |
|
|
70,000 |
|
|
$ |
(0.51) |
|
Q1-Q4 2023 |
|
El Paso Permian |
|
|
140,041 |
|
|
$ |
(1.58) |
|
Q1-Q4 2023 |
|
Houston Ship Channel |
|
|
110,000 |
|
|
$ |
(0.16) |
|
Devon’s oil derivatives settle against the average of the prompt month NYMEX West Texas Intermediate futures price. Devon’s natural gas derivatives settle against the Inside FERC end of the month NYMEX index. Commodity hedge positions are shown as of October 28, 2022.
2