Devon Energy on Tuesday reported its highest quarterly profit since 2022 that also topped Wall Street expectations, benefiting from its merger with Coterra Energy and a surge in global oil prices.
The conflict in the Middle East, now in its sixth month, has disrupted energy supplies, with benchmark Brent crude prices averaging 19.2% higher at $89.62 per barrel in the second quarter from a year earlier.
Devon closed its $58 billion acquisition of Coterra Energy in May, driving up quarterly production to 1.36 million barrels of oil equivalent per day (boepd) from 841,000 boepd a year earlier.
Devon’s average realized price was $88.09 per barrel of oil produced, up from $62.97 per barrel a year earlier.
Its second-quarter net income more than doubled year-on-year to $1.91 billion, the highest since the second quarter of 2022, when oil prices surged following Russia’s invasion of Ukraine.
The merger with Coterra allowed Devon to consolidate overlapping positions in several major U.S. shale formations, including the Delaware portion of the Permian Basin in Texas and New Mexico, as well as in Oklahoma’s Anadarko Basin.
The company also said it was moving with “speed and intention” in its ongoing portfolio review. The shale producer has faced pressure from activist investors to streamline its portfolio and focus on its core Permian Basin operations.
The Houston, Texas-based shale producer posted an adjusted profit of $1.57 per share for the three months ended June 30, compared with analysts’ expectations of $1.39, according to data compiled by LSEG.
(Reporting by Vallari Srivastava in Bengaluru; Editing by Diti Pujara and Sriraj Kalluvila)