Devon Earnings: Investors Should Consider This Higher-Quality US E&P Play at Current Valuations

Excluding the impact of derivatives, Devon Energy's sales marginally exceeded our fourth-quarter expectations, while production of 662 thousand barrels of oil equivalent per day, or mboe/d, exceeded our expectations of 637 mboe/d. However, production expenses were also a bit higher than we anticipated. Consequently, core earnings missed our expectations by roughly 5%. Our long-term view is relatively unchanged, though we will reduce our fair value estimate by $1 to $59 as we front-end load additional capital expenditures. However, 2024 production of 650 mboe/d was right in line with our expectations.