In This Article:
Devon Energy Corporation’s DVN shares have gained 1.6% in the year-to-date period, outperforming the Zacks Oil & Gas- Exploration and Production- United States industry’s decline of 22.8% and the broader Zacks Oil and Energy sector’s decline of 1.3%.
While the year-to-date performance paints a positive picture for investors, looking at the past one-year performance is crucial for a fuller understanding. DVN’s stock has declined 32.7% in the past year, suggesting that it is on a gradual path to recovery. Another stock from the same sector, Occidental Petroleum Corporation OXY, registered a decline of 31.7% in share price over the past year.
Price Performance (Year to Date)
Image Source: Zacks Investment Research
Should you consider adding DVN stock to your portfolio only based on positive price movements? Let’s delve deeper and find out the factors that can help investors decide whether it is a good entry point to add the stock to their portfolio.
Factors Contributing Toward DVN’s Stable Performance
Devon Energy also benefits from a well-balanced commodity mix, with exposure to oil, natural gas, and natural gas liquids. The company remains focused on expanding its portfolio with high-quality resources. In 2024, exploration efforts led to a production replacement rate of 154%, ensuring the company can sustain production levels well into the future through strong reserve additions.
DVN possesses a diversified, multi-basin portfolio of high-margin oil and gas assets with strong long-term growth potential. The company continues to enhance its asset base through strategic acquisitions.
Through the acquisition of Grayson Mill Energy’s Williston Basin assets, DVN expanded net acreage in the region from 123,000 to 430,000 acres. This acquisition is expected to triple production from 50,000 to 150,000 barrels of oil equivalent per day (Boe/d). These newly acquired assets have already begun contributing to the company’s output and are expected to support long-term growth.
Devon Energy’s low-cost operating model further supports its profitability. By divesting higher-cost assets and bringing online more efficient, lower-cost production, the company is improving its cost structure. Ongoing efforts to reduce drilling and completion expenses, along with streamlining its workforce to align with its strategic goals, continue to strengthen Devon Energy’s margins.
Devon Energy’s Earnings Surprise
DVN has been reporting strong earnings results, courtesy of solid financial and operational performance from its multi-basin assets. Yet, the company missed expectations in the last reported quarter. It surpassed expectations in the other three of the last four quarters, with an average earnings surprise of 6.09%.