DVN - Earnings call transcript Q2 2024 | Devon Energy Corporation

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Operator

Welcome to Devon Energy's Second Quarter 2024 Conference Call. [Operator Instructions] This call is being recorded.

I'd now like to turn the call over to Mrs. Rosy Zuklic, Vice President of Investor Relations.

begin. may You

Rosy Zuklic

will thank can today. and earnings joining on section The Devon today, us and to the these Good prepared of found support night, you in we call remarks. we call the Last materials. and quarter references issued the to presentation materials slides morning, release Throughout for make be Devon's website. release Investors second the

Officer; CEO; the Development on Rick today Ritenour, Clay and Gaspar, Officer; call Operating Officer. Corporate and me Joining Muncrief, David Chief are Jeff Chief Financial Chief President Harris,

Please this earnings will actual to U.S. cause risks materials. and language As and conference a provided the defined statements uncertainties as and forward-looking results under to reminder, our cautionary laws. involve refer These SEC factors call filings forecast. risk include differ may statements in materially that securities our from

turn With that, over I'll to Rick. the call

Richard Muncrief

be taking strengthen By and the for It's momentum. you, today, another excellent to our we pleasure Devon us. join build here to performance as everyone to business appreciate all quarter time was continued Thank a and second Rosy. measures, the

expanding quarterly strong and Our driven Delaware production, our operating another which were led shareholders. oil record round by plan, of to cash to returns focused results EBITDA

resulted below capital well Additionally, our effective cost management expectations. in coming in

systematic accretive financial of strategic plan. We the quarter our Grayson of acquisition all, and to our the strengthen was operational important All another asset also Mill. advanced steps of took portfolio that quality and with both tenets it of in execution depth the

was second oil the per-share efforts at our the operating barrels wide of expectations driven in again year. day, clip quarter X margin year-over-year. reaching production, rate surpassed a Slide stock by oil record high guidance and a greater on with we share a trends repurchase with covering us of throughout of sustained with benefits This attractive begin our production, of growing let's XXX,XXX for a by our once of few healthy per growth volumes Now X% detail. per by coupled Beginning highlights

of driver were Basin. benefits XX By in a result to was fourth Delaware than crew, from once to well again new wells we performance bring in key wells the compared A oil the a program. of online quarter. Basin batch XX% we this achieve a the recoveries of uplift greater frac delivered productivity able with record-setting temporary Delaware this track Well leveraging outstanding to last was on year's superb per

appraisal The by in Looking job portfolio team Basin The for below quarter. chain beyond across resulted to times position the driven Ford, and in portfolio. progress Delaware, volume beat that River coming multiple production our controlling supply the a do the continued in also well from and to Eagle the a operating cost on was Powder strong and and guidance also redevelopment quarter. the base management across this effective Williston success our performance in contributed completion with records our great costs asset legacy cost capital strong cycle drilling improving

in time us lower but us to our save the also further accrue well only not valuable form efficiencies returns. these Importantly, project-level of bolstering cost

per driven Now produce more production compared second a which into to The XXX,XXX represents expect with day to our the our X% the time performance, now XXXX, raise budget entirely we're heading We this outlook for to increase in portfolio. this year. guidance initial improved operational year. legacy our is than expectations pleased BOE by

grow broader production the parts Mill accumulate shale by portfolio, acquisition strengthened In oil Basin. U.S. of resource best to strategic perfectly in the assets weighted an Grayson outlook was in further are and plays. These fitting Williston our our excellent top addition our addition, to within the framework

of producers in per with expands day. triples oil transaction, the production high-margin come. inventory Devon at inventory. average XXX,XXX of project Devon of operating rates our estimated daily from position years vast places in prolific Upon nearly completion the the Basin. At scale about This be our transaction of current around great in oil we the the pace in U.S. have largest This will production field many a improvement XX to and Bakken of development, barrels oil for one years harvest Williston this to

position It's to geoscience opportunities this acquisition. the decades. about team see We future is encouraged development net XXX,XXX also additional to really note an over next evaluate created financial that our several important having from for significant value acre

cash and accretion expect We free earnings sustainable flow. to

expanded by our This billion. repurchase stock continue Given this per our we've transaction, the growth strength bolster repurchase program $X us authorization the to few provides ample opportunistically and to increased share our share for next trajectory years. of XX% to capacity

We flow expect beyond. acquisition and in XXXX to be dividend free payout to cash from this additive our

exceptionally And lastly, shaping Devon as I to outlook up be strong. is ahead, look the in for XXXX

double-digit acquisition, to in both cash healthy flow With year. positioned free growth now and the we're deliver next Grayson oil

Our legacy will continue U.S. a far momentum demonstrated us foundation for we've the key this to provide portfolio so year. in basins solid

months E&P detailed I'm matures process that will of XXXX of but one out our We provide in confident more guidance in company outlooks as the Devon any will advantaged the coming planning have there.

call turn to that, Clay. the over I'll with And Clay? now

Clay Gaspar

and everyone. Rick, morning, good Thank you,

in commitment also entire expectations results, impressive team our Street not round congratulate partners service the the outstanding organization our environmental the for Our in with safety these on operating company want our standards. to results illustrated in I delivered as and XX. beating quarter achieving their to Slide guide full second only but of along financial raising and another year production

achieving drove per our asset X adds X% a are we outperformance. this the improvements reaching to our strong about second previous franchise the the quarter. rate almost with our But XXX,XXX In talk outperformance front typically quarter, by to start value I production. an completions Slide bit more much and of this individual beat want is on wells bit, to new In add Delaware doesn't record driven to The growth each with operational production, day, impact considerable the Basin production. asset, a high quarter's represents and Let's achieved which completing which production the that the I'll project base compared this the BOE well's economics. faster but drilling first, timing and entirely drilling a that of clarify

performance, the primarily As formation. projects the brought rates costs With earlier, returns is X.X aggregate, of exceed X,XXX our confident footprint, to entire achieved recoveries BOE within online With during the and per this we In batch projects wells I'm across pay some XX-day that than of the in Rick BOE impressive mentioned more day. Wolfcamp XX these the million well. than were asset These stack diversified average wells delivering high-impact projected targeting improving per more well U.S. of best quarter.

surprise Given it's force is production the operational far company's the the outlook. the this behind momentum no driving that we've Delaware year, achieved so improved

earlier, as mentioned from base I the productivity as impressive for production this excellent IDs performance. As this factors key well improvement year's the is well

high-quality which improvement of have As investments increase side capital An than infrastructure shown firmly left-hand XX% constraints most New Slide we our Mexico the on easing of by areas to inventory. in of the driver improve on of year-over-year. has the track extensive this is performance that X, important are to in more us runway enabled we

co-development have and continued basin. intervals of Additionally, optimization the positioned impressive and of formations performers this B Wolfcamp highly -- the impactful. design the well the successful among the the start year in A top been for has our These us in

superior Delaware operational wells X, on our resource of the Slide of performance side the productivity well quartile only top our the have on peers. not also optimization. of and This right the base, illustrated industry but excellence focus reflects keen As in ranked consistently team's quality our

XX% it's XX. team Turning From ways optimize exploring efficiency drilling drilling we efficiencies to operating the rig We services. associated illustrate and Slide to achieved in achieve has gain year-over-year and fleet, to the continue our impressive continually a our perspective, the Delaware. a

across to Block. Additionally, system bed the the drilling the from is innovating the Crown entire team

overall downhole design technological time innovations and the connection placement, reduction, We are operations. of working improve casing on and realm including to and off-line applications sensing practices in tripping flat well

top a well frac and modeling fit-for-purpose last frac was year-to-date refine development from incorporating front, simul programs. completions have us reservoir on improvement XX% we by the the Further, This has well influenced our significantly across change On to leading-edge delivered operations more step importantly, of improving year. of productivity. X% designs, our allowed improvement stimulation cost application continued and our

logistics improvements. our It that critical are is sand, and performance In focus strong note to allow achieve improvements safety conflict are focus. of small areas not items seemingly operational that these in and important water addition, both to location with safety like us

safety significant our improvements made fact, metrics In year-over-year. also have

learnings of to wells line bottom for improvement we These value campaign. our and certainly operational more continue as year's XX. the Slide remaining our these But will inventory importantly, create to culture to improvements the Basin depicted thousands on this Delaware drilling continuous in apply

results our XX-well Now previous the let's the County, program well. DeWitt Basin turn driven Ford, X,XXX redevelopment Basins. compared average per quarter. rates the in Ford, Eagle day Eagle growth Powder where these assets in XX% strong consistently was delivered assets a key this per production Collectively, and other Anadarko River to to by from exceeds XX-day production BOE growth In

double-digit solid with Anadarko, our program and joint the our venture capital production in In both driven quarter. growth by Dow the delivered returns

benefit the enhanced of this Anadarko returns will opportunities activity we're of expand partnership. with to expect these support evaluating next ahead, carried Looking through beneficial Furthermore, year. we Dow most mutually

River, assessing significant County. In our in Powder Niobrara team in strides making development the Converse is the

on confidence months, to spacing development-oriented next costs Powder continued play and focus in XX fairway the this subsurface productivity a step to The well asset. to last reduce resulted the Over more as move and activities. our towards bolster continue technical have development higher we refine team's across has is applications large in very in

important shaping improvements be needle material for future for identified have development We Devon. movers that this up are to

the to Basin. Moving Williston

the Upon transaction, acres of BOE Forks Mill XXX,XXX expect to oil-weighted be with XXX earlier, undrilled per the day. As XXX,XXX on around Rick touched production leasehold of acquisition locations. and position net to an incremental in is our we Three maintain basin. over We'll Grayson adding Bakken the completion transformative

in profile. to substantial anticipate we capital long-term We To incremental expect upcoming million maintain an $XXX year. around to for this level, manage a of investment these assets allow production the more

capital X- XXXX provide our by Looking formalize supplemented on that and we will include ahead, development update will a combination production. budget, X-mile this base for asset, we strategy which plan optimized tactical an our refracs our once laterals, enhance to of

I acreage We Mill to operational field. expect Williston In to and deliver the efficiencies allowing Basin to position, Grayson in forward continue X-rig consistent a summary, integration us entire program industry-leading across a to our look benefit operate from successful results.

call that, I'll the for a over financial Jeff? turn Jeff With to review.

Jeffrey Ritenour

expanded significantly of million earnings and core into Devon's performance, requirements share. of per financial Operating totaled $X.XX quarter operating This generated second ratio $XXX year-over-year of earnings of the cash increase ended level with for balance flow a year-over-year. a all the free net with $X.X Beginning $X.X billion, cash the translated on flow Clay. flow $XXX Thanks, debt-to-EBITDA capital or million the X% cash of funded low billion and quarter. period sheet and We X.Xx. cash

our return Consistent flow and returned through cash free disciplined of framework, dividends. buybacks combination cash to excess with a we approximately shareholders of XX%

million towards compelling quarter. the the for cash equity, our back $XXX shares of the variable X.X returns bought dividend, million share Given we repurchases skewed are over valuation during

at This to distribution fixed plus payout September. dividend program, end a declared will addition the repurchase our share. paid $X.XX our of share variable be Board per In of

believe return across the we market amounts flexibility meaningful conditions strategy of through the cycle. and cash of our to variety us opportunity Overall, shareholders appropriate cash a of provides to return the

to in to continue With returns we'll the our dividend. recent equity and pullback to variable repurchases market bias share volatility price, relative cash the

another expect day. strong to oil per we average forecasted the in quarter XXX,XXX third ahead, Looking production barrels with performance

in On remain the third versus spending at to the moving capital the fourth lower essentially in flat period front, the quarter we million prior before around $XXX anticipate quarter.

continued forward adhering higher investment the For activity. operational in plan, our efficiencies with original guidance the the forecast production full upper capital albeit our of pulling continues while to to half trend year, range

the to Turning of Grayson sheet. Mill with acquisition stock. We'll of balance fund and $X.XX billion cash our billion $X.XX

shorter the to portion, and we combination long-term notes. term For duration use hand, loans cash expect cash on a of

initiate reduction forward, billion to Moving $X.X look we'll financial upon we'll and strength, debt our program. build a

years complete few to reduction with term within and maturities this anticipated expect We flexibility upcoming the issuance. next have debt and the plan loan

call the turn Rick for I'll to some that, With back comments. over closing

Richard Muncrief

performance from production below To supply record wrap two, resulted up well Delaware our oil messages. a and outstanding production you, Thank flow, franchise in the management want expectations. underpinned consecutive driving expenses Basin. impressive Number remarks, across to operating to by guidance cash the marked for us now shareholders. cost Number reach higher original prepared due and capital our Jeff. led we cycle outlook XXX,XXX guidance this coming one, raise free second asset, translating our in improved from times cash strong quarter second delivered day, Number for an excellent projecting few to X% I per productivity a portfolio. to increased chain returns by over an four, three, quarter, improved effective Number to our is management reinforce XXXX the efficient BOE increase

in the five, both as equities and prioritizing share free by value action. we proposition, acquisition. our Given is strong into best and legacy anticipating of supported ahead, repurchases our believe the Grayson go XXXX, course cash Number flow, oil positioned we well portfolio growth is looking double-digit Devon

call I'll with Rosy for now And over that, turn Q&A. back to the

Rosy Zuklic

Emily, that you we Q&A. questions yourself one please you, now take open to our to And will question. question I of call to first follow-up. limit all will Rick. the we with Thank that, and asking one ask

Operator

Jayaram from Arun JPMorgan. first today with question Our comes

Arun Jayaram

question is the year think about of the activity just in My on basis. stand-alone a first half second Devon to how

XXX, Your that you end the -- places original XXX towards and which half obviously you've company but if frac till annualize upper of you it the to the suspended guide first fourth that, XXX kind would completed tills of crew. range, in was the

of in the in particularly how trying just Delaware? could half year, the out activity So second about think the trends play to

Clay Gaspar

Thanks for Clay. Arun. nailed This Yes, the so it. question, is you

the frac crew. of the was half first benefited The year by fourth

we in moved Now interestingly, and than little that out frac original quicker crew a plan. the

flat second a benefit say question, the some heart But relatively bit quarter course of I So year. over weighted, it's that. but front-end little the would capital the of saw from you to your

the half. frac should that the out that capital from nicely. crew of things balance And benefit so second in benefit get depressed we'll little in fourth of a front We bit half

Arun Jayaram

And Clay, just that. a quick on follow-up

bit any the has working and And one in little the I thoughts interest the working As been like look follow-up. the interest a what in projects second have around moving on half? the Delaware,

Clay Gaspar

that other capital. affects all that But the manage the important levers. Sure. I manage it's It to the we can year. -- in definitely try you, the and tell hard through to addition

the the through step a a And little had could first bit so a as first quarter, we of Well, quarter. actually step-up. we of little we see march year, bit up in

So working bit second half, we'll have a little lighter interest.

Arun Jayaram

to capital stand-alone Okay. And the just XXXX a follow-up. I but million know X, you're there, running outlook on a last so the quarters. basis been X not put $XXX or program ready has out around

sit decent and spending if incremental we from that, get mentioned Mill. just So Grayson placeholder as $XXX you $X.X to annualize [$X.X billion] million of billion, a we here Is today? you

Clay Gaspar

your XXXX, part too Obviously, telegraph of on it's to Yes. early too get to ask. much but that job I

talk into Then, a And we in run now on session our then talk fits of budgeting in holistically be What still next the out, and and ourselves, Board challenge we is need we end where a we'll have too it. between happens strategy We we get I We what internal project. little third with course, is able announcement overall to We'll scenarios to tell of month. that, the hope off. kinds process once Grayson. more the directionally, quarter. So about lines it of not all that's can sensitivities. that up bit you refine close then really about different far the the that and of

not directionally, would too So the I far off. on from say, come more to you're that. start But

Operator

comes question from Sachs. Goldman next with Mehta Neil Our

Neil Mehta

on follow-up Arun's question. Rick and team, a just

the the of by this more volume have But been guys the the it's guide. account asked on the to the were macro, a back tree but focus that investors, through could -- of CapEx, but you is you think the curious that's well philosophical the imagine decision free could throttled kept especially how point, continue to a which you flow-neutral beat into cash do question to and walk the to at you you volume maintain very you And more and back, or us I momentum we've and operationally, the the same I decision have hit perspective? volume probably capital would capital side? decision. decision taking came Can on the get

Richard Muncrief

Rick. it's years are XX over the hand Neil, I'll is, surprise may Clay. it time time only to and things I've when The you, be. downstream good looking start that of then and whether seen again off with a some constraint to whatever kind last it have reality

also volumes -- We thought around uplift, decided the we we important the plan, that. the deliver we the XXXX, over good. job So that. exceeded think have what expectations. our Delaware to it with plan, some with that XX% did I did about is expected the saw that. performance we performance, we and what was for you position game team us when looking really wanted And to but -- And were phenomenal again we we kind talked stuck really, stuck show, once But of for doing a about we talk did I discussion

color don't more you a So or Clay, little detail. why more provide

Clay Gaspar

Neil, Yes, pretty I it's question, and think fundamental. great

about, there's a do do accelerations provide to and the we I continue kind those we Or think of tell upside to mixed absorb would trim we on As back? bag. production? you,

rigs able during the to of couple develop release rigs. able of crew, actually couple as doing we was mentioned We've of of below to a amount way were earlier. I things. the lot that frac a fourth always a frac that are We its gapped high-graded crew radar We've the year. quicker, work

into rig, really certainly, frac increased does for continue the crew mean? of the productivity this year. per to XXXX, as what evaluate look And balance we We per

thing. translate thinking opportunity. thinking about to right best to continue We're wells, we're value that X% still how more the maybe X%. And pointed you our We'll the capital, more about think that to I delivering. net net importantly, into we're does hold to footage

winning in got inside -- I the is be still The bit how challenge to more that you we'll capital little this, drive improved But a economics. per-well it's seen manage remains of right? that. we're We've to range. structure stay on think well that we side accreting do cost and better

on shape More good. so far, range. our We year about inside XXXX. things for up and So that. we the good come of how We're guide balance staying capital to of information feel the

Neil Mehta

And helpful. to on was an market. follow-up just M&A Bakken out really step on and want inventory you then look you be. it? the how is That's market But we as year? latest as forward opportunities perspective do the Obviously, the on next just business, Grayson into building your forward fits the over A&D the your important getting Your to see incremental Devon thoughts where

Richard Muncrief

have has reality eyes Neil, is and really on our that our is will getting close, bar, always but been mantra in have, Mill executing integrated that company. we'll once integrated, again, once a laser-focused Grayson open, be we the always high we're it the getting and

we'll But that it's company But see addition all that can maintain I about at a out. all discipline plays going how and going be so think I are bar. And benefit. this tell high to we'll and to truly shareholders excited you, bought, great we've we're

Operator

Our question Dingmann from comes Truist. Neal next with

Neal Dingmann

or Really Jeff. for question my likely first you nice results. Rick,

wondering specifically. the capital was allocation, I Just on

stock how volatile versus any buybacks today is commodity continues the how to cheap and think different market don't You be? still dividend variable your the about given

Richard Muncrief

this. to I'm Absolutely, it's opportunity is equity [indiscernible]. we in we that now linked on have think talk weigh certainly, Jeff on a don't priced, the in just be our Jeff, a why you? something to quite Neal. bit. It's about right way great But going

Jeffrey Ritenour

think the to I on And Neal, is We're bet. in you're as bias be remarks with to our our you framework. -- there the financial familiar lean his going know appreciate I -- we in response repo. Rick in just question, to his to continue opening highlighted Yes, question. share and your the

dividend balance to quarter consistent that kind sense. of be think Our spend out we approach most that that amount per and Grayson makes million falls been has on going over some add our that function the in after each is that's back Mill and do cash free quarter that $XXX expanding that, is be company, somewhere which then to to to variable The fixed paying because We getting quarterly of the going about as the free sure of we absolute in we're of to think generate program. to cash share the right, our growing make We basis. to going us a repurchases flow incremental close allow take even to dividend upon to some sheet. period. a the flow balance share We're quarter, that about we dedicated repurchase time. And excited

is towards So share seeing continue market a now. in without given right what bias question, repo be the we're going the to to

Neal Dingmann

love hear my And second then on that. I'd Anadarko plays. and question the to PRB

thoughts you just Clay, that it you these increased Anadarko remarks, wondering incremental for on of put for or than the Bakken Delaware the based capital. see to against maybe Specifically, plays the more returns plays compete justify just your like how and prepared expectations sounds soon that two I'm has plays? be two certainly your future sort activities believe

Clay Gaspar

In really Basin, portfolio. having to are Thanks case both with Dow Anadarko them in Neal. partnership of the I compete for the helps the think that Yes, those complementary returns question, of assets. our promote

River it's an side, On the business. our important think piece future Powder of we

and in that unlocking combination, And approach of to really we're the very material, kind the it so oily what's prospectively our potential right future. right what's investing very for really understand

future. Neal. going in So Thanks, dominate certainly to call, portfolio our the for us continue our you're future, allow for to place and build to kind capital of not look a see have our but they these

Operator

next from Wells with Read Roger Fargo. Our comes question

Roger Read

your acquisition-wise, equity acquisitive, in a at that. to do favor of we're probably But about larger as it. if the look and share kind were off me repurchases balance for you been pivot you've of just something comment way starts Let obviously record, to to

see in -- repos? make order a about want think share would the of about think equity large sort key versus what transaction we there? wondering we a transaction Like metrics to points are you what you the using -- what would that should in Just as

Richard Muncrief

Roger, it's what That's going factors, as as talk In going can that's question. transactions, record and to to mind, that -- can't turn program, repo about let our you share have for that's it metrics, as I the you that that great the will play But understand. I'm of we a make repurchases far think that of be stronger a to know the the doing. Jeff always predict without. of have base some -- kind him has case. how absolutely number track share to we're our over company out that accretion been but that us to we acquisition certainly, a our than with And

Jeffrey Ritenour

flow required or question, appreciate and for to about relates our thoughts very I'll as for said, with pretty driven around capture Rick that all just much are it of that we've transparent which think, Roger, right? other go assets familiar It's I bet. we're you I cash that, much us been, and to free merging and and what's is think the any incremental our echo looking you M&A in financial Yes, accretion what out transaction. by with framework, companies,

investment-grade very rating credit looks We're a to the what to what going that the me into and hear any balance be the say always do, You're is about priority. on we transaction, our what going future. impact like sheet of that thoughtful has that

to going the few a are priorities. of be those So

right? not not very have the the we the situation without to whether seller think capital to have shares can. our upon specific But or is how the that in at, the as and use But that and transaction in shares it we what always back in bias finance that to us, are to wherever front dependent we'll our and the relates that's interested we upon it structure relates set of back our a current Our environment question, buy looking about we given buy in, we and of depending equity As portfolio. specific is issue front all in that the we're opportunity shares, ultimately, bias our transaction, those things us opportunity base different deal. is

Roger Read

great. you was the Eagle believe, could refracs, just the I like the sounds I on that that about have if is but Bakken And made tap, operations. No, the up The could, you more the Ford? And follow that Eagle about or if of a comment, lot either we're what I then, wondering shale, Bakken terms way? Ford on percentage I CapEx hearing what directed of of you of portion was curious then CapEx kind -- of

Clay Gaspar

appreciate Clay. Yes, I is the this Roger, question.

excited seeing about refracs. We are we're pretty South what in specifically Texas around

We have more room running experience and, there. frankly, more

we We for some stimulation the then stimulation. screen kind and really what's nice approach we of we wellbore, ultimately numbers, do the right from prepare to potential really have the them quietly how out posted how begin the how operational clean wells that these, derisk with, the pieces -- of

had through, the Williston few all okay you We've to in Grayson When a guys existing Basin. a this results Then in the you upside tried We've done Grayson fantastic a that job other flip And to We've in have portfolio. return Anadarko pretty run had also results okay Mill. of it's it's compelling the Mill all Basin. and the areas. apply really, more on the of the have assets. the of can of business, some supplement to production. think, I we in refracs. see that in learn these But base to This we as done of synergies, how more part area one they've even a it that we already from ongoing legacy what Williston, what talk the about is specifically we

it dollars. I incredible basins, the bring on where the as this out very capital be capital we So our tool overall spend big in highlighting But this not and call And to portion we we're be try a more out a supplemental. these and more our of will of more probably as as important going of portfolio. think significant resource of think

Operator

question next Our Citigroup. comes from Gruber with Scott

Scott Gruber

spuds, Your half. the in tie-ins running been operated well ahead have of you first

achieving drop are do given build in the schedules. thinking size more want do fleet some you mentioned half? about the the to to But [docks] on you How plan gaps in rig efficiency basis? a of 'XX. rig incorporating into just You on rigs guys your you you you permanent the Or second are any the rig side, gave, some contracted

Clay Gaspar

rolls way with but about the initial like from when earlier we talking into plays started definitely Scott, into -- the the also came spuds, deliveries counts capital an effect about thinking from of that, you're production up, and cadence really about question I thinking well that. net as you

byproduct that our I doing of more think of and more service the that the company work rig great the count teams partners and really equipment and a is efficient. are making kind

would set bit. count the rig So aside actual a I little

do overlap. And rigs, there's we high-grade when again, an sometimes to we things opportunity

an there's Again, to bit. rig a improve from are we and day-to-day look how count on productivity gap to expectation maintain less on and more the focused a efficiency those capital and Sometimes rigs do focused standpoint. we that little always opportunity

Scott Gruber

the to Houston to that Do down that just to the guys more then Houston the do be take market? you Do gas down it. see out of margin. risk protection Got the impact will at guys see you And some WAHA you ship? How are gets shifting side, up shortly. oversupply see Matterhorn the here you impacting How thinking ship? about transferred a basis on need starting

Jeffrey Ritenour

Scott, not the say, just move positive, is of broader more from Hub. a WAHA the we as we're and the think those sector going I Jeff. but this but away excited it's the me first to Matterhorn online, Devon let all, for Yes, to obviously, specifically, get molecules question. Yes, I be appreciate of

and molecules get over Again, part to coming away to transferred improvement we're to being as You've absolutely of standpoint, time we've those movement from advantage Coast. We're Gulf out. pricing we'll projects the away beyond. move some of on advantage and Matterhorn, be about XXXX from WAHA, there's project. why the risk that's some that WAHA absolutely molecules again, right, it Katy time to the hopeful Louisiana to also of further is of opportunities specifically the But that of also from heard of going molecules taken see backup in a from move to And frame. that the the over get to Blackcomb our further other Katy, to LNG over excited molecules built into take you're

the the great to where the kind chain value job these we're can we at of what end the about price and day, highest a thinking really team so because realized marketing we move accomplish. of to And has the entire get trying done molecules of that's how

commitments we Gulf not the Coast. to outside the but made we've that to ability Gulf Coast, So move really the just of and around, good feel molecules over the with our

that move to we to about Gas markets our the in you quarter, second Oklahoma gas were another to ability If the able think Henry we where to as the capture Southeast example, have Hub. premium

So future. well a up think of by work and set we're marketing great the the for lot team done

Operator

Our Lynch. Merrill next question of America Akamine Bank comes from Kalei with

Kaleinoheaokealaula Akamine

companies few one a the real that pipeline, on you to which we to I isn't is sign guys the sufficiently some want inventory And now yet from of Matterhorn going ask and into Blackcomb commitment. pipe, peers, I'm continue Blackcomb. tie that feedback the and get that's that Devon, a new are it differentiated to on

half what about if pipeline? second with Permian as infer that question does meeting think that about oil your to gas? period? base the it you So this fill in what's over my growth incremental 'XX, And that so, case obligation is, Is

Jeffrey Ritenour

is question, question, position. begs which the color significant Jeff the our why -- think can start I firm bit about we we is on the of This we're how Delaware speak about our inventory depth of But worried Clay in these I'll if inventory give making Yes. these the you Delaware. making like you then and pretty and little commitments, started these further commitments it again. way about a are

to question. commitment production that without and We're doubt, see oil to we going a in the as gas excuse we're me, obviously, so to But drilling more -- believe the Delaware dedicated that we gas continue see going our to grow. Basin. continue commitments to oil answers oil grow, pursue probably to continue and And more Delaware projects the in Basin our

by so And making support like to and that's so Blackcomb help we Matterhorn commitments. why these these volume it's think important projects

like more it question, could have ability we a Matterhorn he there. bit have about to position to feel the commitment little inventory talk over that So I'll make Clay, without And on and we Blackcomb. going and our we're the both the and to flip

Clay Gaspar

This I Yes. Thanks talk months running inventory. the falling of it. is cliff producing produced we've are some off piece question. are are out XX take some of and happy we that fantastic XX wells worried posting I'll to And here and we numbers. most the best when folks productive the something ever remember for and ago, the that months about inventory ago,

ourselves of looks think data, companies. you I inventory, our I'll strong. XX, have we to So pure third-party at looking the just not where but refer our Slide incredibly runway

the which down to our team an and again, amazing as upside of of those bar curves, we job And trying drive improve improve becomes a on those a white efficiencies, potential. costs the that the more is then part on part little does And unlock those and more becomes really white inventory. gray resources, recovery in-hand of eke of slightly out it spot that factors, bit that of those

wells good Basin pipes We really so that certainly again And Delaware we're about place. so we in to we're in. desperately literally long-term have this And of underscores willing our our activity. these sign and underwrite that thousands be need Thanks that commitment to that I us. ahead position deals, to our good of feel that think question. area confidence the I for just feel in

Kaleinoheaokealaula Akamine

have Wondering X have you guys is your follow-up Permian. My last M&A. bit a philosophy. outside little on executed deals the can if talk of about been that you The

about Permian the that not your spread the there, in you But wondering subscale. in that bid As transact highlighted need, says it's of anything Permian to basin? a view about the is sort if the given not decision

Richard Muncrief

Not really.

major I not on think we've transacted transactions.

there, mantra time. And on premiums fit really just saw continue we not people. you to the you that's this a the disciplined we we ground a our We fit a I us game in having some out recently. some very that bar in didn't in have that. participated and going tell with the that I transacted We It may of of stick Permian But high tell can being works. can have way healthy it couple, but that

Operator

The with next question Betty Barclays. from comes Jiang

Wei Jiang

the great operational momentum It's year-to-date. to see

time you cycle in the have of sustainable -- So second the do have contemplated the productivity look performance improvements improvement that think is any these better when you then first seen of that your any into and that going And half forward? well at we you half guidance?

Clay Gaspar

Thanks for question, Betty. the

will timing, the to We in really to hold of the unlocked of forecast. grab bake are time It's constantly bouncing the easier things really we're Basin, like month-to-month a harder basis. bit both forecast, productivity, We've company. bake And and a production. current continue forecast on a updating Delaware we to we're to We into upside finding capital believe little operational huge When improvements got a in around. our the but that. forward unlock into kind are a be in area, specifically able that and, around little to the the course, in

able we predict And achieve. some that, there's we the easier especially said, I to what operational so, that simul-frac continuing are do. can on sure the to make say, issues, design, those of forward, know on. teams some would continued casing we're upside capital things changes, things, I We that a we we it's -- to to like And little of timing in the want work just put

a look to where a we we area, make well do. those improvements of can those certainly clear we the what performance, to we we sight that productivities as are. we've understand got As and to line we capture sure make certain want And within

Wei Jiang

guess, then it. I the that things. through on similar CapEx side of And along Got sense. line, That my parsing follow-up, on pretty makes

the With with and XXXX, our that activity guiding well. for as the range the to higher CapEx comes CapEx upper of half guidance or

the across out seeing So the benefits a Permian. efficiency bit hard gains, in that to particularly you're parse cost the to any play due

on any help cost really basis, you if well would Clay, per maybe foot the deflation that So with be dollar could helpful?

Clay Gaspar

Thanks question. for the Betty. Yes,

that as you from during gains 'XX 'XX, recall, So we deflation forecasted to X% period.

that improvements of I an these to creeping make think there's that. At on we've improvements the on opposing and continued race same kind in. operational time, capital

probably to So of, seeing the the X%, even bit? that improvements. or year, it's we're seeing a the operational been overtake more the kind offset look far, going so balance is outrun of are of we by far little as little that that X% battle the deflation can is, to improvements so bit we beyond a we a operational is What

in material good And Those around overall sticky. for side sure the gains deflation on future both to on The the and that, efficiency this. is improvements translate we helped project we both will the These are have, opportunities just company. Delaware, capital connect and wells I but The the -- into not operational economics. that the make operational the especially economics. good news the want is news are

Operator

question from comes with Rice. Charles Johnson next The Meade

Charles Meade

in they at I've I've wake One well people noncore. few a the say, say particularly some Grayson is comment that, heard of look deal that, a is times and portion -- the heard the of Western the Mill math they lot

in been give perhaps is much view I'm was hasn't to your what as given attention on bucket alternatively, was? as comments our would whether that on outdated And -- you curious agree say the once that that with you And if whether reflected so there extent there maybe that? purchase could price or

Richard Muncrief

I X what has a XX, a is this what years And with Yes. think seeing that could seen I'd And Tier have ago, it Charles, and things cost was X I good efficiencies XX we're X that become and once the these all seeing in question. and some been we XX over is arguably That's what Tier we're learned something or plus. the Tier last that of call years core. over we've that shale XX control time it's, plays, think is between core.

to nice see going returns. some really So we're

day, efficiency. it wells our And same to at with of us all capital the see it time the you what day, changing orientation with used transactions, it's efficiencies. we're X, take core, we of X-mile honestly, whatever and your does to how you efficiencies, Tier or end than that's our at X, it's price is, drilling level the the end as the existing our whether the whether may that quite the we're drilling completions of down we're Tier At these laterals and Tier X-mile X, drill less the in What we comes all at to the end it of current fact the for in day, start looking when program or to X slightly, X, well do returns anything development assets. be, it

in about good a it's Williston the pretty really Personally, feel very we This XXth And with. it. familiar we're the that year So basin been recall, that have there. been involved Basin, is it's I've incredible. I

next X,XXX -- to having running the that's this explore I've decades. And watched in X,XXX on you, can develop, ton a the So tell of to acres I several over evolve. acres room

back what to our team geoscience remarks, what really, our prepared of some on with we will top really might excited lie about ahead new know we're of my go XXX drills. So already

So yes, it. about we pretty feel good

Charles Meade

refracs, like about And is of Clay. more was Eagle helpful you Got what a is talked there what redevelopment DeWitt. refrac? you sounds there? detail, at composition that the that a it. Rick. bit least Could then for was? into It activity partly just that Clay, That Ford Or XXX% little maybe was follow-up characterize but

Clay Gaspar

wells, developed taking those Charles, essentially able and that feather then is on that developed these are the and to spacing is It's we're the that giving. like in at to phenomenal units coming rates. What finding are wells much as redevelopment basically down-spacing units opportunities new look the for development in redevelopment looking keeps Ford. that Eagle tighter refer into they're you unique we're these fully to of fully gift very what and

complement refracs on that, from areas and developed. the that to X, of these when existing provide look a punch that lots room Now continues view very you really in X of with finding a map lots some running we're wells,

about Karnes great that in excited in areas. us in the South DeWitt room position about our the We're gives both that's and encouragement and area. continued County So the Texas running

Operator

from next Kevin Energy The with question comes MacCurdy Pickering Partners.

Kevin MacCurdy

low Eagle the driver of and especially the impressive was CapEx But we there. most the getting actually bigger attention saw really of are as they Delaware, it. the The Ford was beat the

gains? you talked changes Are Eagle other or other efficiency as in the growth. such just there the wells any about redevelopment areas driving some Ford, were the there You drilling

Clay Gaspar

our analysts calls performing. questions Thanks Kevin, night, this really board the And across I -- that beat, are some as a areas. had took listening was the Clay. picking board, is for across of we I teams the were and great different last it on up complement the question Actually different to

a from of Ford, Eagle another our JV role. Eagle the in could the it there. partnership our maybe So Unique have you very the or day critical "Wow, say, really Delaware." Ford to we a carried XX-XX assets, assets angle, played we was half the more But County Williston in you're conventional about partnership, run right, of the way. our About half in area, a DeWitt operations

are we partners. be good work neighbor. And -- so our with a We

good And get really a there. we activity sometimes some opportunity. quarters, just it and of more a that what bit it's we're potential quarter that happened means more to is good And the some drilling opportunity, really got where others. This that more wells be little than on JV

extrapolate of I bit little a continue credit nice it's to move So just quarter on we'll nothing that a necessarily, take to and real think forward.

Kevin MacCurdy

just the primarily question, follow in And Betty's [indiscernible] is all is of seeing areas? Or Permian? that you're are up your Great. the per that to on across foot,

Clay Gaspar

stand. know, there's place know a it. where first a companies there's exactly competition that advantage all those And those those we stack know, frac Well, running doing. has they that, have reps and I competition, last with really and that there XX they're how mean, of on day and and And Permian rigs because rigs currently X those healthy every economies scale rack crews. place and engineers And those adds guys XX to we and

an we we and to that part-time crew, frac challenging X As a those rig, learnings have to area that really opposed and apply Powder have area scale. really that's like a

and mind able fast Powder is, that. end savings So more opportunities, there's potential other and of at some be lean efficiency, on do we into the to had up when look or forward is much what we -- when to so we to those comes that one, cost

into the that's potential trying what really understand does of so when portfolio, that our evaluate to part And eventually fit is consideration. and that I think

other from and and other. as always trying each learnings from to they we're Delaware Eagle well, to Anadarko, from export Now from all the the and areas Ford learn

we're some remarks. of in, the pointed doesn't team and competition that about the learning I competition that's about, prepared the the back the We them, that to provide that just in sharing improvement stay now around excited from of basin. those we this again, So try And inside to kind and to healthy continuous roll company. collaboration and Grayson have learnings, that nature culture the of

Kevin MacCurdy

details. Thanks for the

Operator

Scotiabank. question Cheng with next Our from comes Paul

Paul Cheng

your is that Powder egg, a want everything that right degree, some I chicken and you substantial result, Clay. I of First, having has so a to or you're River you Basin. least or to enough ones to become bit the go that are at for now pace right? even comment and as about that a you the not be able not into To Because finished activity, back that Permian won't unit comparing with Grayson. chasing Bakken, at improve cost But capital. think,

what for you? mean, River how So at that we that? level kind terms the at and Basin internally moving Powder should look next the I it of in the how And on should have you're we to Permian of and balance line to time excited going

Clay Gaspar

for one. Thanks I question, and Yes. appreciate the it, good I it's think Paul. a really

mature and the back complementary Powder, Powder. ride able potential news developed much we're while great a the and really in As The the to the I more going of other it mentioned to we we be basins are asset. that Delaware Basin about unlock the the strong as think is

in very around. casing the that and are on us things. the There's kind productivity, get understand But the side to we of of new rigs well productivity plan savings. are to applied. really material focused a equation. able learnings we'll be really to around construction, arms consistency understanding the our realm, of design that the is it's Those allows side couple side, cost just So really that It a that that things that us on productivity of is material X of can what spacing, mentioned a having kind X on we're I some applying improvements. we

potential the when going we've we that certainty there's are down in in, we chicken that. And this get costs And until with cost and side, up, mind had scale a on you we've materially. full worked that. Now and also ever back XXX% will to that's never that That's I on the basin the we pointed egg conundrum know other my to. every come achieve success the of

a I couple run able also we'll wins rigs, then can achieve extrapolate get as and But some we'll with companies the have well. over other that is we wins, basins to think we'll able look some we a to play to be the X to when learnings potential little what what to of X part. to our bit start our productivity the be allow of confidence A those and achieve certain fence. cost will bigger from be activity more the can of really can we'll

long-term our side. We've got on Time second is of leases. part the we've answer question, look, To got your time.

great allows to have We inventory that a time. in play us this derisk

So and the portfolio that valuable sudden, out as return as potential this unlock we world capital don't of day, and a think very all And to we'll systematic an your to will of to a on towards going our has keep really horizon of it shareholders. capital derisk there's in be from the incredible return a in of remarks just price. piece value our want be a the one continue X of way. of of in any I of our overall value rush creation to part probably this there Powder. But meantime, share my

Paul Cheng

over start at line, of wait get a the Permian, really until, more don't for will time look you sense your we aging. basins, the will Powder then there other with the example, to slow on in or that look then should that basin in bit that pace performance angle? How you and down the a development from based And you you increase the in that we

Clay Gaspar

do is this evaluate incredible fit. we strategic board the still and to looking we is XX I Delaware opportunities mentioned Slide of and these years mentioned that's capital. of a be Basin. in XX annually of a have September, What that, development we're certainly, I where all meeting how chunk There's out Tier we on ready go. in yet also X on kind have the the kind big inventory to Yes,

all puts unlock to runway. to continue probably on sure of understood which have unlocking in incumbent still of of needing the well there, advance little on us things these a out us think As we But that make we other I are a potentials do asset to that potential, Delaware lot them. further it's

I expect the the of to really with we're opportunity be maybe second decade, seeing. would that is of more need make time, really Powder really we're to you the today what for that meantime, In pleased And the we so what of decade, signal step for steady in that there'll half in. half progress my ready that. an sure And to front the we're

Paul Cheng

one final and cost Bakken the in quick Is well better real operating legacy compare one is than the one of the your Maybe a Perfect. from cost? with Grayson me. other then, Can or similar? you terms

Clay Gaspar

important some there's Well, differences.

room. so running point is The the and reason we're I Grayson to first would the to attracted thing the

acres, well a X-mile excited. incredible us an for positioned of running lot really XXX,XXX room, Additional gets development

on the side. east is from lean has to we're the for the WPX our been asset legacy reservation side objectively, a basin rock, decade better which on Now the an incredible position of just at where in us

some And incredible so we've value that. from created

As the long room, too we side, was a look on ago lot running the Rick acreage. X mentioned stuff not incredible of Tier Grayson

refracs further So down recovery ideas there's kind of more potential like nature other road. and importantly, think potential rock, from with upside upside then further of enhanced and this we it things hasn't And the been developed. oil in the

to really we'll would really gain Grayson. base well well. holistically great tell. some entire as us the efficiencies ballpark. in early will look think we there about cost So really gain to It But those for as From excited about say, the rigs I efficiencies some for and standpoint, be a same too

Richard Muncrief

don't that Number inflows have interject Rick. think we'll cut I'll margins things. the of one the also oil Grayson because going infrastructure have the better it's is you're the position. I couple of legacy we Paul, see on there other or to we less a acreage, the But control have think the I percentage. with which project, Grayson overall slightly

going that's net think plus I for that. to So on us a be

thanks we're the question. for excited But So about it.

Rosy Zuklic

reached reach to and hope you. team the in And the session. you if questions, please of have any Investor Q&A end interest anyone We Thank out has Devon. for our want We appreciate further everyone have a to in wonderful everyone Relations your day.

Operator

for your Thank you, This today. everyone, us our you disconnect and now lines. joining concludes may call,

Devon Energy (DVN) 7 Aug 242024 Q2 Earnings call transcript