Devon Energy executives reported a solid first quarter with the highest margins coming from their Eagle Ford assets. The company’s focus has them on track to produce cost saving of more than $1 billion this year.
Related: Devon Energy to Cut 1,000 Jobs
In the midst of tough conditions, Devon’s ‘lasor-focused’ efforts have delivered significant cost reductions and accelerate efficiency gains. First quarter highlights included a net production of 107,000 Boe per day and operating costs of $58 million, an 18% reduction year over year.
Eagle Ford Operations
Devon’s Eagle Ford operations produced the highest per‐unit margin of any its asset, averaging $13 per Boe, with margins approaching 70% of upstream revenue.The company’s DeWitt County ‘s 50,000 acres are very economical and by far one of the best places to be operating. That asset alone generated $78 million in free cash flow during the first quarter.
Other first quarter highlights include:
- Drilling times improved by >55% compared to the 2014 average
- A record rate of 26 wells per rig line per year achieved this quarter
- Assets generated $78 million of free cash flow and remain on pace to deliver >$250 million of free cash flow in 2016
- Raised full-year production guidance by 3 percent
- Reduced LOE costs by 21 percent year over year
- Lowered 2016 operating cost outlook by $50 million
- Improved balance sheet strength with liquidity increasing to $4.6 billion
Devon has plans to spend $200 million developing the Eagle Ford this year compared to $1 billion on its Eagle Ford asset.
In February, Devon announced layoffs of 20 percent of its workforce, or 1,000 employees company wide.
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