OKLAHOMA CITY (AP) — Devon Energy Corp.'s profit fell 5.5 percent in the first quarter as natural gas prices fell, drilling costs rose and the company received lower prices for its crude produced in Canada.
Devon said Wednesday that its net income fell to $393 million, or 97 cents per share, for the three months ended March 31 from $416 million, or 97 cents per share, a year ago. It had fewer shares outstanding in the latest quarter.
Excluding the effects of discontinued operations and some financial transactions, the company said it earned $1.05 per share. Analysts had expected adjusted earnings of $1.44 per share,
Revenue rose to $2.5 billion from $2.1 billion a year earlier. Analysts expected revenue of $2.45 billion.
Devon shares fell $1.50, or 2.1 percent, to $69.15 per share in morning trading. Its shares are up 36 percent from their low of $50.74 in early October. They peaked at $86.38 per share last May.
Devon's total production of oil, natural gas and natural gas liquids rose to 694,000 barrels per day, up 10 percent from a year ago. Devon is the nation's fourth largest natural gas producer.
The company's cost to develop fields rose 5 percent to $13.80 per barrel of oil-equivalent. The cost to lease land rose 9 percent.
Average benchmark natural gas prices during the quarter fell by 34 percent to $2.72 per thousand cubic feet from $4.11.
Benchmark oil prices rose 9 percent to $102.87 from $94.11. But the oil Devon produces in its oil sands project in Canada was not able to command those prices because producers in Canada's oil sands were generating more crude during the quarter than refiners accessible by pipeline could handle.
Devon, like most of its competitors, is working to shift its exploration and production away from natural gas and toward fields that contain more oil and natural gas liquids to capture higher prices.