What Caused Devon Energy’s Revenue Growth in 4Q17?



Devon Energy’s 4Q17 revenues

Devon Energy (DVN) reported 4Q17 revenues of ~$4.0 billion, higher than the Wall Street analyst consensus of ~$3.5 billion. For 4Q17, DVN reported crude oil and natural gas sales of ~$1.3 billion. As a result, only ~33.0% of DVN’s revenues came from oil and gas production sales.

Apart from oil and gas production sales, DVN’s 4Q17 revenues included marketing and midstream revenues of ~$2.7 billion.

Sequentially, DVN’s 4Q17 revenues were ~21.0% higher than its 3Q17 revenues of ~$3.3 billion. On a year-over-year basis, DVN’s 4Q17 revenues were ~43.0% higher than its 4Q16 revenues of ~$2.8 billion.

Article continues below advertisement

Factors behind Devon Energy’s higher revenues in 4Q17

Devon Energy’s (DVN) higher revenues in 4Q17 can be attributed to the steep increase in upstream sales. DVN’s upstream sales increased ~35.0% to ~$1.3 billion in 4Q17 from ~$988.0 million in 4Q16.

The year-over-year increase in Devon Energy’s 4Q17 production—coupled with higher realized prices for crude oil (USO), natural gas liquids, and natural gas—impacted DVN’s revenues positively.

DVN reported an ~22.0% higher worldwide crude oil (USO) realized price of $42.59 per barrel in 4Q17 compared with $34.90 per barrel in 4Q16. We’ll study DVN’s production in the next part. Devon Energy’s total realized price increased ~18.0% to $27.59 per boe (barrels of oil equivalent) in 4Q17 from $23.47 per boe in 4Q16.

Devon Energy’s 2017 revenues

For fiscal 2017, Devon Energy reported revenues of ~$13.9 billion in 2017, ~35.0% higher than ~$10.3 billion in 2016. DVN’s peer EOG Resources (EOG) is expected to report revenues of ~$10.9 billion, ~42.0% higher than ~$7.7 billion in 2016.


More From Market Realist