Devon Energy’s production guidance for 2Q16
For 2Q16, Devon Energy (DVN) expects total production in a range of 616 Mboe (thousand barrels of oil equivalent) to 653 Mboe per day. The midpoint of the 2Q16 production guidance is 634.5 Mboe per day, which is ~6% lower than the production of ~674 Mboe per day in 2Q15. Sequentially, Devon Energy’s production guidance is ~7% lower than it was in 1Q16.
Devon Energy’s updated 2016 capex and production guidance
In June 2016, Devon Energy increased its fiscal 2016 upstream capital program to $1.1 billion–$1.3 billion, an increase of $200 million from the previous guidance. DVN plans to deploy the incremental capital investment in the Delaware Basin and the Oklahoma STACK play, beginning in 3Q16 with the addition of three operated rigs.
In June 2016, Devon Energy also increased its 2016 production guidance by 7 Mboe per day. According to its revised guidance, DVN now expects a total production volume of 620 Mboe–653 Mboe per day.
Devon Energy’s divestitures
On July 14, 2016, Devon Energy announced the divestiture of its 50% ownership interest in Access Pipeline to Wolf Midstream for 1.4 billion Canadian dollars. Under the terms of the sale agreement, Devon Energy’s thermal-oil acreage will be dedicated to Access Pipeline for an initial term of 25 years. A market-based toll will be applied to production from the DVN’s three Jackfish projects, which are fully operational. As a result, Devon Energy expects its lease operating expense at the Jackfish complex to increase by ~$100 million on an annualized basis.
In June 2016, Devon Energy announced the divestiture of its non-core assets in the Midland Basin for $858 million. The current net production associated with these assets is ~23 Mboe per day.