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Devon Energy expects to exceed US production guidance in Q3, stay under budget

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Devon Energy expects to exceed US production guidance in Q3, stay under budget

Devon Energy Corp. lowered its third-quarter 2018 net production estimate for Canada due to maintenance activities at one of its heavy oil projects, while raising its estimate for U.S. net production as a result of higher NGL recoveries.

Devon also kept its spending below its guidance range in the third quarter at $523 million. The company's CapEx guidance for the quarter was $570 million to $630 million.

The Oklahoma-based energy producer now forecasts Canadian net production to be approximately 104,000 barrels of oil equivalent per day in the third quarter, down from an expected range of 117,000 boe/d to 122,000 boe/d, according to an Oct. 16 news release. Devon attributed the decrease to minor repairs at its Jackfish 1 heavy oil project in Alberta, which has only recently resumed full-scale operations.

Devon's fourth-quarter net production in Canada would grow to an average of 115,000 boe/d to 120,000 boe/d after the completion of maintenance work at Jackfish 1. The company expects the increase to continue into 2019, ending the year with Canadian net production of over 120,000 boe/d.

In the U.S., net production for the third quarter is expected to exceed expectations at about 418,000 boe/d. Adjusted for non-core asset sales with a production impact of about 2,000 boe/d, Devon's guidance range for the third quarter was 398,000 boe/d to 417,000 boe/d. The outperformance was credited to improved yields for NGLs, which also has access to premium pricing in the Mont Belvieu market, Devon said in the release.