Devon Energy Corp. Announces Business Optimization Plan Aiming for $1 Billion Annual Cash Flow Improvements by 2026

Devon Energy announces a business optimization plan targeting $1 billion in annual cash flow improvements by 2026.

Quiver AI Summary

Devon Energy Corp. has announced a strategic business optimization plan aimed at improving its annual pre-tax free cash flow by $1 billion by the end of 2026. The plan focuses on enhancing margins and capital efficiency through various measures, including optimizing field operations, reducing drilling and completion costs, and streamlining corporate expenses. By the end of 2025, the company expects to achieve approximately 30% of these improvements, which will include advances in technology and secured marketing agreements to bolster margins. CEO Clay Gaspar emphasized the initiative's potential to create significant shareholder value and enhance financial resilience in a challenging market landscape. Devon will provide regular updates on the progress of this plan and further details during its upcomingearnings conference call

Potential Positives

• Announcement of a business optimization plan targeting $1 billion in annual pre-tax free cash flow improvements, indicating a strong commitment to enhancing financial performance.
• Expected realization of approximately 30% of the targeted cash flow improvements by the end of 2025, demonstrating confidence in near-term execution.
• Implementation of advanced analytics and process automation to optimize operations, reflecting a focus on technological advancements to drive efficiency.
• Commitment to periodic updates on progress, emphasizing transparency and accountability to stakeholders.

Potential Negatives

• The reliance on a significant business optimization plan raises concerns about the company's current operational efficiency and profitability.
• The extended timeline for achieving $1 billion in annual improvements by 2026 may indicate underlying operational challenges that require time to address.
• The press release's mention of risks associated with commodity prices and market conditions underscores potential vulnerabilities that could impede the company's goals.

FAQ

What is Devon Energy's business optimization plan?

Devon Energy's plan aims to improve margins and capital efficiency, achieving $1 billion in pre-tax free cash flow improvements by 2026.

How much cash flow improvement does Devon expect by 2025?

Devon anticipates approximately $300 million of cash flow improvement by the end of 2025 as part of its optimization initiative.

What strategies will Devon employ to enhance capital efficiency?

The strategies include design optimization, cycle time reductions, facility standardization, and improved vendor management to capture $300 million in efficiencies.

When will updates on the optimization plan be provided?

Stakeholders can expect periodic updates, with additional details presented during theearnings conference callon May 7, 2025.

How does this plan benefit shareholders?

The optimization plan is expected to create significant shareholder value by expanding free cash flow generation and enhancing profitability.

Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.

$DVN Congressional Stock Trading

Members of Congress have traded $DVN stock 5 times in the past 6 months. Of those trades, 4 have been purchases and 1 have been sales.

Here’s a breakdown of recent trading of $DVN stock by members of Congress over the last 6 months:

• REPRESENTATIVE MARJORIE TAYLOR GREENE has traded it 3 times. They made 3 purchases worth up to $45,000 on 04/09, 02/12, 01/21 and 0 sales.
• REPRESENTATIVE JEFFERSON SHREVE purchased up to $50,000 on 02/24.
• REPRESENTATIVE KEVIN HERN sold up to $500,000 on 12/31.

To track congressional stock trading, check out Quiver Quantitative's congressional trading dashboard.

$DVN Hedge Fund Activity

We have seen 496 institutional investors add shares of $DVN stock to their portfolio, and 626 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

• PACER ADVISORS, INC. removed 11,510,798 shares (-99.3%) from their portfolio in Q4 2024, for an estimated $376,748,418
• CITADEL ADVISORS LLC added 10,991,639 shares (+4627.7%) to their portfolio in Q4 2024, for an estimated $359,756,344
• BLACKROCK, INC. added 5,804,329 shares (+12.1%) to their portfolio in Q4 2024, for an estimated $189,975,688
• VANGUARD GROUP INC added 5,465,692 shares (+7.3%) to their portfolio in Q4 2024, for an estimated $178,892,099
• ENCAP PARTNERS GP, LLC removed 4,915,142 shares (-47.1%) from their portfolio in Q4 2024, for an estimated $160,872,597
• UBS GROUP AG added 4,715,961 shares (+127.6%) to their portfolio in Q4 2024, for an estimated $154,353,403
• D. E. SHAW & CO., INC. removed 3,873,830 shares (-63.4%) from their portfolio in Q4 2024, for an estimated $126,790,455

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.

$DVN Analyst Ratings

Wall Street analysts have issued reports on $DVN in the last several months. We have seen 3 firms issue buy ratings on the stock, and 1 firms issue sell ratings.

Here are some recent analyst ratings:

• Morgan Stanley issued a "Overweight" rating on 03/26/2025
• Citigroup issued a "Reduce" rating on 03/05/2025
• Benchmark issued a "Buy" rating on 01/14/2025
• Wolfe Research issued a "Outperform" rating on 01/02/2025

To track analyst ratings and price targets for $DVN, check out Quiver Quantitative's $DVN forecast page.

$DVN Price Targets

Multiple analysts have issued price targets for $DVN recently. We have seen 2 analysts offer price targets for $DVN in the last 6 months, with a median target of $48.5.

Here are some recent targets:

• Devin McDermott from Morgan Stanley set a target price of $47.0 on 03/26/2025
• An analyst from Williams Trading set a target price of $50.0 on 03/05/2025

Full Release

HIGHLIGHTS

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  Targeting $1 billion in annual pre-tax free cash flow improvements
  


• 
  Business optimization plan underway to improve margins and capital efficiency
  


• 
  Plan includes improvements to base production performance, midstream commercial terms and corporate costs
  


• 
  Expected to be completed by the end of 2026, with 30 percent achieved by year-end 2025
  

OKLAHOMA CITY, April 22, 2025 (GLOBE NEWSWIRE) -- Devon Energy Corp. (NYSE: DVN) today announced its business optimization plan to improve margins and capital efficiency, growing free cash flow generation and driving significant shareholder value.

“I’m excited to announce the details of our business optimization plan, set to enhance margins and deliver $1 billion in annual pre-tax free cash flow improvements by year end 2026,” said Clay Gaspar, president and CEO. “This milestone reflects the commitment, ingenuity, and talent of our employees, whose hard work and ongoing efforts continue to drive Devon’s success. This is an opportune time for us to take on this initiative, as we leverage recent leadership changes across the organization, bringing fresh perspectives and new ideas. Given the challenging market and shifting competitive landscape, this is the right moment to focus internally and improve our profitability. Importantly, this effort will create significant shareholder value by expanding our free cash flow generation and enhancing the durability of our business.”

“Our organization has been diligently advancing this initiative and has already secured marketing agreements to drive a material margin improvement through year-end 2026. Concurrently, we have implemented technological advancements, including advanced analytics and process automation, that are further enhancing our operating performance. These combined efforts are anticipated to achieve approximately $300 million of cash flow uplift by the end of 2025, reinforcing our financial resilience. We have clear visibility into the remaining objectives and are highly confident in our ability to execute this plan effectively,” Gaspar added.

PLAN PATHWAY AND TIMING TO DELIVER

Devon is committed to improving its pre-tax free cash flow generation by taking steps to deliver $1.0 billion in annual improvements. The plan includes actions to achieve more efficient field-level operations and improvements in drilling and completion costs while improving operating margins and corporate costs. Approximately 30 percent of the estimated improvements are expected to be accomplished by year-end 2025, with the remaining savings realized by year-end 2026.

The business optimization plan includes improvements in the following categories:

Capital Efficiency

–

$300 million



Capture efficiencies through design optimization, cycle time reductions, facility standardization and vendor management.

Production Optimization

–

$250 million



Use advanced analytics to minimize maintenance events, reduce downtime, flatten production declines and optimize operating cost structure.

Commercial Opportunities

–

$300 million



Leverage scale to enhance commercial contracts to increase realizations, improve recoveries and lower GP&T cost structure.

Corporate Cost Reductions

–

$150 million



Reduce interest expense and streamline corporate cost structure.

“We are committed to transparency and accountability and will provide stakeholders with periodic updates on our progress,” Gaspar concluded.

The company will provide additional details around the optimization plan during its scheduled first-quarter 2025earnings conference callon Wednesday, May 7, 2025, at 10 a.m. CDT (11 a.m. EDT). Also provided with today’s release is a supplemental presentation, which is available on the company’s website at

www.devonenergy.com

.

ABOUT DEVON ENERGY

Devon Energy is a leading oil and gas producer in the U.S. with a diversified multi-basin portfolio headlined by a world-class acreage position in the Delaware Basin. Devon’s disciplined cash-return business model is designed to achieve strong returns, generate free cash flow and return capital to shareholders, while focusing on safe and sustainable operations. For more information, please visit

www.devonenergy.com


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FORWARD LOOKING STATEMENTS

This press release includes “forward-looking statements” within the meaning of the federal securities laws. Such statements include those concerning strategic plans, our expectations and objectives for future operations, as well as other future events or conditions, and are often identified by use of the words and phrases “expects,” “believes,” “will,” “would,” “could,” “continue,” “may,” “aims,” “likely to be,” “intends,” “forecasts,” “projections,” “estimates,” “plans,” “expectations,” “targets,” “opportunities,” “potential,” “anticipates,” “outlook” and other similar terminology. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Devon expects, believes or anticipates will or may occur in the future are forward-looking statements. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. Consequently, actual future results could differ materially and adversely from our expectations due to a number of factors, including, but not limited to: the risk that we are unable to successfully implement the improvements discussed in this release on the anticipated timeline or at all, which could delay or prevent us from realizing any benefits from the business optimization plan; commodity prices, cost structures and the other assumptions underlying our forecasted value uplift from the business optimization plan could differ materially from actual results; market and geopolitical uncertainty as a result of changes in trade relations and policies, such as the imposition of tariffs by the U.S., China or other countries; and any of the other risks and uncertainties discussed in Devon’s 2024 Annual Report on Form 10-K (the “2024 Form 10-K”) or other filings with the SEC.

The forward-looking statements included in this press release speak only as of the date of this press release, represent management’s current reasonable expectations as of the date of this press release and are subject to the risks and uncertainties identified above as well as those described elsewhere in the 2024 Form 10-K and in other documents we file from time to time with the SEC. We cannot guarantee the accuracy of our forward-looking statements, and readers are urged to carefully review and consider the various disclosures made in the 2024 Form 10-K and in other documents we file from time to time with the SEC. All subsequent written and oral forward-looking statements attributable to Devon, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements above. We do not undertake, and expressly disclaim, any duty to update or revise our forward-looking statements based on new information, future events or otherwise.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.