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Analyzing Devon Energy's Performance in 2Q17

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Part 2
Analyzing Devon Energy's Performance in 2Q17 PART 2 OF 8

Analyzing Devon Energy’s 2Q17 Revenues

2Q17 revenues

For 2Q17, Devon Energy (DVN) reported revenues of ~$3.15 billion—lower than Wall Street analysts’ consensus for revenues of ~$3.25 billion. For 2Q17, Devon Energy reported crude oil (USO), natural gas (UNG), and natural gas sales of ~$1.21 billion. Only ~38% of Devon Energy’s revenues came from oil and gas production sales. Apart from oil and gas production sales, Devon Energy’s 2Q17 revenues include a gain on crude oil, natural gas, and natural gas derivatives of $126 million, marketing and midstream revenues of ~$1.93 billion, and a gain on asset disposition of $14 million.

Analyzing Devon Energy’s 2Q17 Revenues

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Sequentially, Devon Energy’s 2Q17 revenues are ~11% lower compared to revenues of ~$3.15 billion in 1Q17. On a YoY (year-over-year) basis, Devon Energy’s 2Q17 revenues are ~27% higher compared to revenues of ~$2.49 billion in 2Q16.

Despite a YoY fall in Devon Energy’s 2Q17 production, higher realized prices for natural gas (UNG), crude oil (USO), and natural gas liquids had a positive impact on Devon Energy’s revenues. The company’s total realized price rose to $24.72 per boe (barrels of oil equivalent) in 2Q17 compared to $18.50 per boe in 2Q16.

Devon Energy’s quarterly revenues

For 1Q17, Devon Energy reported revenues of ~$3.55 billion—higher than Wall Street analysts’ consensus for revenues of ~$2.91 billion. In 1Q17, Devon Energy reported crude oil (USO), natural gas (UNG), and natural gas sales of ~$1.31 billion. Only ~37% of Devon Energy’s revenues came from oil and gas production sales. Apart from oil and gas production sales, the company’s 1Q17 revenues include a gain on crude oil, natural gas, and natural gas derivatives of $232 million and marketing and midstream revenues of ~$2.01 billion. In 1Q17, Devon Energy reported a loss on asset disposition of $4 million.

On a YoY basis, Devon Energy’s 1Q17 revenues were ~67% higher compared to revenues of ~$2.13 billion in 1Q16. Sequentially, Devon Energy’s 1Q17 revenues were ~26% higher compared to revenues of ~$2.81 billion in 4Q16.

Peers

Devon Energy’s peer Encana (ECA) reported revenues of ~$1.08 billion in 2Q17—higher than Wall Street analysts’ estimates of ~$783 million. The ISE-Revere Natural Gas Index Fund (FCG) invests in natural gas producers, while the Vanguard Energy ETF (VDE) invests in the broader energy market.

In the next part, we’ll look at Devon Energy’s operational performance in 2Q17.

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