Devon Energy Corp. (NYSE: DVN) reported a bigger-than-expected quarterly profit, as the U.S. oil producer benefited from its cost-cutting initiatives.
Devon, like other oil and gas companies, has been keeping a tight leash on costs since a slide in global crude oil prices started in mid-2014.
The company said Feb. 13 total operating expenses fell 67.4% to $2.71 billion in the fourth quarter ended Dec. 31.
Total cost savings exceeded $1 billion in 2016, the company said.
Devon has also sold its noncore assets, completing a $3.2 billion divestiture program in October.
The shift to higher-margin production helped make oil the largest component of the company's product mix in the fourth quarter.
The company said it expected 2017 production at between 539,000 barrels of oil equivalent per day (boe/d) to 561,000 boe/d. Total production was 611,000 boe/d in 2016.
Devon said it expected to spend $2.3 billion to $2.7 billion this year. The company spent $3.11 billion in 2016.
Net earnings attributable to Devon was $331 million, or 63 cents per share, for the three months ended Dec. 31, compared with a loss of $4.53 billion, or $11.12 per share, a year earlier.
The year-ago quarter included a non-cash, asset impairment charge of $5.34 billion.
On an adjusted basis, the Oklahoma-based company earned 25 cents per share, while analysts on average had expected 21 cents, according to Thomson Reuters I/B/E/S.
Total revenue rose 16% to $3.35 billion. Total production, net of royalties, fell 21% to 537,000 boe/d in the quarter.
Up to close on Feb. 14, shares had more than doubled in the past 12 months.
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