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

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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.

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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.

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