Devon Energy Corporation

Welcome to Devon Energy's third quarter 2024 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 Devon's third 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. Starting this quarter, we are providing slides specific to the earnings call discussion. In a week or two, we will publish a more comprehensive deck that will include slides that were previously provided. Joining me on the call today are Rick Moncrief, President and Chief Executive Officer, Clay Gaspar, Chief Operating Officer, Jeff Rittenhour, Chief Financial Officer, as well as other members of management. 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. I appreciate everyone taking time to join us this morning. Let's begin on slide two by covering a few of our third quarter key highlights. Once again, we delivered strong operational and financial results driven by the continued focus on executing our strategic plan. We reached an all-time quarterly record of total production averaging 728,000 barrels of oil equivalent per day, including 335,000 barrels of oil per day. Our production has surpassed guidance expectations every quarter this year. In the Delaware Basin, well productivity was strong once again this period, and across all five basins, we delivered another solid base production performance. On a production per share basis, this represents a 12% year-over-year growth. With the operational performance in our recently closed acquisition, We're pleased to be able to raise our full-year production guidance again for this year. We now expect to produce about 730,000 BOE per day for 2024, an increase of 12% to this year's budget. This phenomenal performance enabled us to generate $786 million of free cash flow in the third quarter and return $431 million of it back to shareholders. We leaned in heavier on our share repurchase program, and we continue to think reinvesting in our company at today's prices is the right thing to do for shareholders. We also closed the Grayson Mill transaction very quickly. This acquisition enhances our position as one of the largest producers in the U.S., with average daily oil rates estimated at around 380,000 barrels per day. In the Williston Basin, our production will nearly triple and we have extended our resource depth, giving us about 10 years of inventory at current activity levels. We successfully accomplished these things during a very volatile market backdrop. We remained focused on the things we could control. With our high-quality portfolio, strong balance sheet, and disciplined business model, we are positioned to succeed through a variety of commodity cycles. We don't have a crystal ball to know where commodity prices will be in the short term, but continue to be very constructive on oil and gas and believe that the world will continue to need all forms of energy. Now, moving on to slide three to talk about where we will focus in 2025 to successfully continue to execute our strategy. We remain committed to operating excellence and will continue to look for innovative ways to improve our capital efficiency. We believe our multi-basin portfolio in the top US resource place is superior to most and provides us with over a decade of low-risk development inventory. We will continue to look for opportunities to further enhance our portfolio and grow our resource base. To succeed in our business, we need to maintain our financial strength and flexibility. We will remain disciplined in our approach to maximize free cash flow and are committed to having low leverage. And we're focused on delivering value to our shareholders through dividends and share buybacks. 2025 is shaping up to be an exceptionally strong year for Devon. With the Grayson acquisition, we are well positioned to deliver healthy growth in oil and expect robust free cash flow even in a lower commodity environment. Our legacy portfolio and key U.S. basins will provide a solid foundation for us to continue the momentum that we have demonstrated so far this year. As a result, Jeff will be providing preliminary 2025 guidance that is actually better than we have previously communicated. And before I hand the call over to Clay, I want to thank all of the Devon employees and contractors who challenge themselves daily to come up with innovative ways to create value for our company. I also want to thank the team working the integration of Grayson Mill. I'm excited to see the results from teams sharing best practices. And with that, I'll now turn the call over to Clay.