Earnings season has been good for the energy sector in the fourth quarter of 2024, especially for upstream oil and gas companies. The companies delivered strong results, with several industry leaders outperforming expectations and demonstrating resilience amid a volatile price environment. Among the top performers were EOG Resources, Inc. EOG, Diamondback Energy FANG and Devon Energy Corporation DVN. These companies displayed solid operational and financial performances, supported by record production levels, cost management and shareholder returns.
EOG Resources: EOG is a leading oil and gas exploration and production company with an attractive growth profile. The company continues to leverage its robust operational framework and diversified asset base to drive long-term value creation. EOG Resources operates through multiple prolific U.S. basins, including the Delaware Basin, Eagle Ford, Powder River Basin, Utica and Dorado, as well as offshore natural gas operations in Trinidad and Tobago. This geographic diversity supports production growth while optimizing pricing and managing risks.
For the fourth quarter of 2024, EOG Resources reported adjusted earnings per share of $2.74, which beat the Zacks Consensus Estimate of $2.55. Quarterly earnings were driven by higher oil-equivalent production volumes, offset partially by decreased realizations of crude oil and condensates, and natural gas prices.
EOG Resources is strongly committed to returning capital to shareholders. The company has a history of stable and growing dividends for 27 years. EOG has never suspended or lowered its dividend, even during business turmoil, reflecting a solid underlying business. Apart from paying regular dividends, it rewards shareholders with special dividends. In 2024, the company returned 98% of its free cash flow to shareholders through $2.1 billion in dividends and $3.2 billion in share repurchases.
Diamondback: The company holds extensive oil and gas resources concentrated in the Permian Basin, with a strong presence in the Midland and Delaware sub-basins. The company benefits from a large inventory of high-quality drilling locations spread across multiple productive formations. Its resource portfolio includes mineral and leasehold interests that support long-term development and production activities.
Diamondback's operations are enhanced by its control over valuable acreage and its focus on efficient horizontal drilling, which maximizes resource recovery. The company also leverages the expertise of its subsidiary to strengthen its position across key producing regions.
FANG outperformed expectations in the fourth quarter of 2024, reporting adjusted earnings per share of $3.64, surpassing the Zacks Consensus Estimate of $3.26. Quarterly revenues reached $3.7 billion, a 67% increase from the same quarter in 2023 and 9.2% above the consensus estimate. The company attributed the beat to strong production and effective cost management.
Diamondback's shareholder returns were a key highlight, with $402 million in stock repurchases during the fourth quarter of 2024 and an additional $210 million in the first quarter of 2025. FANG’s board of directors declared a quarterly dividend of $1 per share, representing an 11% sequential increase.
Devon Energy: The company’s assets span several of the most productive oil and gas basins in the United States, including the Delaware Basin, Eagle Ford, Anadarko Basin, Williston Basin and Powder River Basin. These core positions provide access to high-margin production and operational efficiencies.
DVN’s asset base is further strengthened by its extensive infrastructure, which includes a large network of wells, gathering systems and processing facilities. This integrated setup supports efficient resource development and enhances Devon’s ability to execute its capital programs effectively across its premier acreage.
The company also exceeded expectations in the fourth quarter of 2024, reporting earnings per share of $1.16, beating the Zacks Consensus Estimate by 16%. Quarterly revenues totaled $4.4 billion, outpacing estimates by 3.9% and increasing 6.2% from the prior year. DVN benefited from strong production volumes in the Delaware Basin, which helped offset the impacts of lower realized commodity prices.
Devon plans to generate stable and free cash flow through several initiatives, which will allow it to carry on shareholder-friendly initiatives, such as share buybacks and dividend payments. The company generated a free cash flow in the last 17 straight quarters. DVN’s management raised quarterly dividends by 9% for first-quarter 2025, and the new quarterly rate will be 24 cents per share. Devon’s capital allocation will now focus on strengthening the balance sheet and returning capital to its shareholders through fixed dividends and share buybacks.
Market Dynamics & Outlook
Despite ongoing OPEC+ production cuts, record oil production from the United States has softened upward pressure on global prices, weighing on sector profitability throughout 2024. This dynamic is expected to continue into 2025, potentially capping price increases and leading to moderate profit margins for upstream operators.
Nevertheless, EOG, FANG and DVN have positioned themselves as strong performers through disciplined operations, strategic asset management and shareholder-focused capital allocation. These companies are worth watching as they navigate an evolving energy landscape.
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