uploads/2017/10/DVN-3Q17-Pre-Production-1.png

Understanding Devon Energy’s Production Guidance for 3Q17

By

Updated

Devon Energy’s production guidance for 3Q17

For 3Q17, Devon Energy (DVN) expects total production in a range of 511–531 Mboepd (thousand barrels of oil equivalent per day). This guidance includes the operational impact from Hurricane Harvey. On a year-over-year basis, the mid-point of Devon Energy’s 3Q17 production guidance range is ~10% lower than its 3Q16 production of 577 Mboepd. Even sequentially, Devon Energy’s 3Q17 production guidance is ~3% lower than its 1Q17 production of 536 Mboepd.

Article continues below advertisement

Devon Energy’s liquids production to decline in 3Q17

For 3Q17, Devon Energy now expects liquids production in a range of 315,000–330,000 barrels per day, which is ~4% lower when compared with DVN’s 2Q17 liquids production of 335,000 barrels per day. The lower liquids production in 3Q17 could be attributed to the operational impact from Hurricane Harvey. In early September 2017, due to Hurricane Harvey, DVN had to temporarily shut down its production in the Eagle Ford. On September 15, Devon Energy reduced its liquids production guidance by 15,000 barrels per day due to the impact from Hurricane Harvey

Devon Energy’s 2Q17 production

For 2Q17, Devon Energy (DVN) reported total production (USO)(UNG) of 536 Mboepd (thousand barrels of oil equivalent per day), which is significantly higher than the mid-point of its 2Q17 production guidance range of 519–540 Mboepd. Sequentially, Devon Energy’s 2Q17 production is ~5% lower compared with DVN’s 1Q17 production of 563 Mboepd. On a year-over-year basis, Devon Energy’s 2Q17 production is ~17% lower compared with DVN’s 2Q16 production of 644 Mboepd. DVN’s steep decline in year-over-year production could be attributed to its non-core assets divestiture program, where DVN sold non-core upstream assets producing ~73 Mboepd. Devon Energy sold these assets in 2Q16 and 3Q16.

DVN’s peer ConocoPhillips (COP) reported total production of 1,425 MBoepd (thousand barrels of oil equivalent per day) in 2Q17, which is ~8% lower compared with 2Q16 production of 1,546 Mboepd.

Devon Energy’s 2017 production guidance

For 2017, DVN expects total production volume in a range of 539–561 Mboepd. For 2017, Devon Energy expects liquids production in a range of 344–358 Mboepd.

Advertisement

More From Market Realist