Published on 12 Sep 2023 on Zacks via Yahoo Finance

Devon (DVN) Gains From Cost Management & Strong US Production

Devon Energy Corp. DVN has been gaining from systematic capital investment, divestment of non-core assets, the WPX Energy merger and efficient cost management. An increase in oil production and strong free cash flow are also likely to drive the company’s performance over the long run.Devon Energy currently has a Zacks Rank #3 (Hold). It has delivered an average earnings surprise of 18.5% in the last four quarters.

Tailwinds

Courtesy of ongoing investments in high-margin U.S. oil-producing regions Devon’s 2023 total production is expected to be 643,000-663,000 barrels of oil equivalent per day. Devon aims to invest in the range of $3.6-$3.8 billion in 2023.Devon Energy’s acquisition of WPX Energy has strengthened its position in the Delaware and Williston Basins, as both players have high-quality assets in close proximity. This transaction substantially boosted DVN’s total reserves and will be accretive to DVN’s earnings and cash flow.Devon continues to manage costs in order to boost margins. It aims to generate stable and free cash flow through its initiatives, which will enable it to carry on shareholder-friendly initiatives such as share buybacks and dividend payments. Devon’s free cash flow is expected to increase with its disciplined strategy to manage operations.