Devon Energy beats profit estimates as cost cuts pay off
Devon Energy beats profit estimates as cost cuts pay off
Feb 14 (Reuters) - Devon Energy Corp reported a bigger-than-expected quarterly profit, as the U.S. oil producer benefited from its cost-cutting initiatives.
Devon, like other oil and gas companies, has been keeping a tight leash on costs since a slide in global crude oil prices started in mid-2014.
The company said on Tuesday total operating expenses fell 67.4 percent to $2.71 billion in the fourth quarter ended Dec. 31.
Total cost savings exceeded $1 billion in 2016, the company said.
Devon has also sold its non-core assets, completing a $3.2 billion divestiture program in October.
The shift to higher-margin production helped make oil the largest component of the company's product mix in the fourth quarter.
The company said it expected 2017 production at between 539,000-561,000 barrels of oil equivalent per day (boe/d).
Total production was 611,000 boe/d in 2016.
Devon said it expected to spend $2.3 billion-$2.7 billion this year. The company spent $3.11 billion in 2016.
Net earnings attributable to Devon was $331 million, or 63 cents per share, for the three months ended Dec. 31, compared with a loss of $4.53 billion, or $11.12 per share, a year earlier.
The year-ago quarter included a non-cash, asset impairment charge of $5.34 billion.
On an adjusted basis, the Oklahoma-based company earned 25 cents per share, while analysts on average had expected 21 cents, according to Thomson Reuters I/B/E/S.
Total revenue rose 16 percent to $3.35 billion.
Total production, net of royalties, fell 21 percent to 537,000 boe/d in the quarter.