Devon Energy Corporation

conference call. At this time, all participants are in listen-only mode. This call is being recorded. I'd now like to turn the call over to Mrs. Rosie Zuclick, Vice President of Investor Relations.

You may begin. Good morning, and thank you for joining us on the call today. Last night, we issued Devin's second quarter earnings release and presentation materials. Throughout the call today, we will make references to these materials to support prepared remarks. The release and slides can be found in the investor section of the Devon website. Joining me on the call today are Rick Moncrief, President and CEO, Clay Gaspar, Chief Operating Officer, Jeff Rittenhour, Chief Financial Officer, and David Harris, Chief Corporate Development Officer. As a reminder, this conference call will include forward-looking statements as defined under U.S. securities laws. These statements involve risks and uncertainties that may cause actual results to differ materially from our forecast. Please refer to the cautionary language and risk factors provided in our SEC filings and earnings materials. With that, I'll turn the call over to Rick.

Thank you, Rosie. It's a pleasure to be here today. We appreciate everyone taking the time to join us. By all measures, the second quarter was another excellent performance for Devon as our business continued to strengthen and build momentum. Our quarterly results were driven by our Delaware-focused operating plan, which led to record oil production, expanding EBITDA, and another round of strong cash returns to shareholders. Additionally, our effective cost management resulted in capital coming in well below expectations. We also took important steps to strengthen the quality and depth of our asset portfolio with the accretive acquisition of Grayson Mill. All in all, it was another quarter of systematic execution that advanced both the financial and operational tenets of our strategic plan. Now let's begin on slide seven by covering a few of our second quarter highlights and operating trends in greater detail. Beginning with production, we once again surpassed guidance expectations by a wide margin, with our per share volumes growing at a healthy clip of 9% year over year. This attractive per share growth rate was driven by oil production reaching a record high for us of 335,000 barrels of oil per day, coupled with the benefits of our sustained stock repurchase efforts throughout the year. A key driver of this record-setting oil result was the superb performance we delivered in the Delaware Basin. By leveraging the benefits of a temporary fourth frack crew we were able to bring online 62 new Delaware Basin wells in the quarter. Well productivity from this batch of wells was once again outstanding, with per well recoveries on track to achieve a greater than 10% uplift compared to last year's program. Looking beyond the Delaware, redevelopment success in the Eagleford, appraisal progress in the Powder River Basin, and a strong base production from our legacy Williston position also contributed to her volume beat this quarter. The team also continued to do a great job across the portfolio in controlling costs, with capital and operating costs coming in well below guidance for the quarter. The strong cost performance was driven by effective supply chain management and improving cycle times that resulted in multiple drilling and completion records across her asset portfolio. These efficiencies not only accrue to us in the form of lower well costs, but also save us valuable time and further bolstering our project level returns. Now with this operational performance, we're pleased to raise our production guidance for the second time this year. The improved outlook is driven entirely by our legacy portfolio. We now expect to produce more than 680,000 BOE per day in 2024, which represents a 5% increase compared to our initial budget expectations heading into the year. In addition, our outlook was further strengthened by the Grayson Mill acquisition of Williston Basin. These assets are an excellent addition to our portfolio, fitting perfectly within our broader strategic framework to accumulate resource and grow oil-weighted production in the best parts of the top U.S. shale plays. Upon completion of the transaction, Devon will be one of the largest oil producers in the U.S., with average daily rates estimated at around 375,000 barrels of oil per day. This transaction nearly triples our production and expands our inventory in the Williston Basin. At the current pace of development, we have about 10 years of Bakken project inventory. This vast improvement in operating scale places Devon in a great position to harvest high-margin production from this prolific oil field for many years to come. It's also important to note that our geoscience team is really encouraged about having an additional 300,000 net acre position to evaluate for future development opportunities over the next several decades. We see significant financial value created from this acquisition. We expect sustainable accretion to earnings and free cash flow. Given the strength of this transaction, we've expanded our share repurchase program by 67% to $5 billion. This increased authorization provides us ample capacity to continue to opportunistically repurchase our stock and bolster our per share growth trajectory for the next few years. We expect free cash flow from this acquisition to be additive to our dividend payout in 2025 and beyond. And lastly, as I look ahead, the outlook for Devon in 2025 is shaping up to be exceptionally strong. With the Grayson acquisition, we are now positioned to deliver healthy double-digit growth in both oil and free cash flow next year. Our legacy portfolio and key U.S. basins will provide a solid foundation for us to continue the momentum we've demonstrated so far this year. We will provide detailed guidance in the coming months as our planning prospects process matures, but I'm confident that Devon will have one of the more advantaged outlooks in 2025 of any E&P company out there. And with that, I'll now turn the call over to Clay. Clay?