4Q16 production guidance
For 4Q16, Devon Energy (DVN) expects total production of 524 Mboepd[1.thousand barrels of oil equivalent per day]–546 Mboepd. The midpoint of Devon Energy’s 4Q16 production guidance is ~21% lower than it was in 4Q15. Additionally, Devon Energy’s production guidance is ~7% lower than it was in 3Q16.
For 4Q16, Devon Energy expects crude oil (USO) and bitumen production of 238 Mboepd–248 Mboepd, which is relatively stable compared with 3Q16. Key drivers of the stabilized oil production are high activity levels in the STACK (Sooner Trend Anadarko Basin Canadian and Kingfisher Counties) play and accelerated completion activity in the Eagle Ford Shale.
Fiscal 2016 production guidance
For 2016, Devon Energy expects total divested and retained asset base production of 598 Mboepd–623 Mboepd, a midpoint decrease of ~10% from 2015.
Why is Devon Energy’s production falling?
Devon Energy’s expected steep decline in 4Q16 production is attributable to its non-core assets divestiture program, where it sold non-core upstream assets that were producing ~73 Mboepd. Devon Energy sold these assets between April and July 2016. Another reason for Devon’s lower production is its reduced capital expenditure, which we’ll study in the next part of this series.