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Devon Energy Corporation’s DVN shares have gained 12.8% in a month, outperforming the Zacks Oil & Gas- Exploration and Production- United States industry’s return of 9.7% and the broader Zacks Oil and Energy sector’s decline of 6.5%.
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The competitive oil and gas industry and fluctuating oil and gas prices are posing challenges to the company.
While the one-month performance paints a positive picture for investors, looking at the last one-year performance is crucial for a fuller understanding. DVN’s stock has declined 11% in the past year, suggesting that it is on a gradual path to recovery. Another stock from the same industry, EQT Corporation EQT, registered a 34.8% decline in share price in the past year.
DVN’s Price Performance (One Month)
Image Source: Zacks Investment Research
Devon stock is trading above its 50-day simple moving average (SMA), signaling a bullish trend.
DVN’s 50-Day SMA
Image Source: Zacks Investment Research
The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as it is the first marker of a stock’s uptrend or downtrend.
Should you consider adding DVN stock to your portfolio only based on positive price movements? Let’s delve deeper and find out factors that can help investors decide whether it is a good entry point to add DVN stock to their portfolio.
Multi-Basin Asset Aids DVN Stock
Devon Energy’s multi-basin portfolio and focus on high-quality assets continue to boost its production. Strategic acquisitions and divestitures of non-core assets enable the company to concentrate on core assets.
Devon completed the acquisition of Grayson Mill Energy, adding a high-margin production mix that enhances Devon’s position as one of the largest producers in the United States.
This acquisition is expected to triple the total production volume to 150,000 barrels of oil equivalent per day (Boe/d) from 50,000 Boe/d earlier expected from Williston Basin.
Devon Energy possesses assets that can deliver sustainable production for many years into the future and provide reliable and affordable energy to its customers. The assets currently owned by Devon can sustain the production levels for more than 10 years. The ongoing exploration activities continue to replenish production volumes and add new reserves.
Devon’s Low-Cost Operation Boosts Margin
Devon’s low-cost operation boosts its margins. Devon is also working to reduce its drilling and completion costs and is aligning personnel with the go-forward business.
Devon also has a diverse commodity mix, with a balanced exposure to oil, natural gas and natural gas liquids production volumes. The company continues to evaluate opportunities to add more high-quality resources to its portfolio.
Due to cost management, production costs, including taxes, averaged $11.39 per Boe in the third quarter of 2024, a decline of 7% from the prior period. The cost savings will continue to boost the company’s margins.