Devon Energy Corporation (NYSE:DVN) Q1 2018 Earnings Conference Call - Final Transcript

May 02, 2018 • 11:00 am ET


Devon Energy Corporation (NYSE:DVN) Q1 2018 Earnings Conference Call - Final Transcript


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Good morning, welcome to Devon Energy's First Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will a question-and-answer session.

(Operator Instructions)

This call is being recorded. I'd now like to turn the call over to Mr. Scott Coody, Vice President of Investor Relations. Sir, you may begin.

Scott Coody

Thank you and good morning. I hope everyone have had the chance to review our financial and operational disclosures that were released last night. This data package includes our earnings release, forward-looking guidance, and detailed operations report. Additionally, for today's call, we have slides to supplement our prepared remarks. These slides are available on our website, and we will make sure to refer to the slide number during our prepared remarks, so that everyone can follow along.

With today's call, I will cover a few preliminary items. Then, our President and CEO, Dave Hager, will provide his thoughts on the key takeaways from the quarter. Following Dave, Tony Vaughn, our Chief Operating Officer, is going to cover a few key operational highlights and review our Infill Development Strategy in the STACK. And then, we'll wrap up our prepared remarks with a brief financial review by Jeff Ritenour, our Chief Financial Officer. Overall, this commentary should last around 10 minutes. Then we'll open the call for Q&A.

I would like to remind you that comments and answers to questions on this call today will contain plans, forecasts, expectations, and estimates that are forward-looking statements under US securities law. These comments and answers are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control. These statements are not guarantees of future performance and actual results may differ materially. For a review of risk factors, please see our Form 10-K.

And with that, I'll turn the call over to our President and CEO, Dave Hager.

David A. Hager

Thank you and good morning, everyone. For the purpose of today's call, my comments will be centered on four key messages.

Turning to Slide 2, the first key message is that we are raising our 2018 guidance for US oil production due to the outstanding operational performance, we are experiencing in the Delaware and STACK. With this production raise, the midpoint of our updated guidance for 2018 US oil production, now, represents an estimated growth rate of 16% compared to 2017, up from our previous guidance of 14%.

The improved outlook is driven by higher well productivity as our development activity is focused in the economic core of the Delaware and STACK, and the efficiency gains we are achieving at our multi-zone developments. With our initial multi-zone developments, we have executed these projects with greater efficiency than planned, which is compressing the cycle times and pulling forward incremental activity into 2018. Given this outstanding execution, it is likely upstream capital spending will trend toward the top half of our full-year guidance range, benefiting our production profile in 2018 and 2019.

I want