5 Things Devon Energy Corp’s Management Wants You to Know

Source: Devon Energy Corp Investor Presentation

As the above slide demonstrates, well costs are in-line with expectations, however, the company has improved its 30-day initial production rates by 35% while also improving its estimated ultimate recovery per well by 15% -- both of which really improve the company's returns as it can create more value per dollar invested.

The Eagle Ford shale is better than expected

We could not be more pleased with the performance we have seen from this world-class asset. And we have already identified several promising opportunities that can further enhance well economics and boost our drilling inventory.-- Dave Hager

Last quarter, the Eagle Ford Shale produced 65,000 barrels of oil per day, or BOE/d, which was in-line with expectations. This was despite the fact that 8,000 BOE/d of production was constrained due to issues with a third-party gathering system. This strong production is enhanced by the fact that it carries margins of $60 per BOE, which is the best in its portfolio and nearly double the $30.47 per BOE margins the company delivered as a whole last quarter. On top of that the company now sees upside opportunities in the upper Eagle Ford, which wasn't an area it ascribed any value to when it acquired its position.

Key takeaways from the CEO

Let me leave you with a few key takeaways from today's call. First, we have dramatically improved our portfolio in a short period of time. Devon emerges with a formidable portfolio that's on track to deliver attractive high margin production growth for many years to come. As evidenced by our second quarter results, our pursuit of high margin production is significantly expanding our margins and profitability. And finally the commitment to our top strategic objectives that you heard us talk about often, which is to optimize long-term growth and debt adjusted cash flow per share has never been stronger. As we deliver on our growth expectations we are poised to create significant value for our shareholders in the upcoming years.-- John Richels

Bottom line here, Devon Energy is in the best position it's ever seen and only expects to get stronger as it continues to develop its assets and grow production that creates value for investors.

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The article 5 Things Devon Energy Corp's Management Wants You to Know originally appeared on

Matt DiLallo owns shares of Linn Energy, LLC. The Motley Fool owns shares of Devon Energy. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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