Analyst Note| Dave Meats, CFA |
Devon's third-quarter operating performance surpassed its own guidance and pushed its financial results above consensus estimates. The firm delivered 614 mboe/d in the period, which was slightly above the high end of management's estimated range, due to better-than-expected output from the firm's flagship Delaware Basin assets. Yet capital spending came in lower than expected, due to incremental efficiency gains and supply chain optimization. The full-year outlooks for both production and capital spending were raised, though this reflects the closing of previously announced acquisitions in the Williston Basin and Eagle Ford Shale play (rather than an uptick in drilling activity). We saw no red flags in the release and expect a favorable market response when trading begins Nov. 2.