Fueled by record oil production, Devon Energy Corp. beat analysts’ estimates with its fourth-quarter earnings.
The Oklahoma City-based oil producer also announced Wednesday it is selling most of its conventional assets in Canada for about $2.8 billion in cash.
Devon on Wednesday reported adjusted income of $447 million, or $1.10 a share. That was 2 cents more per share than analysts estimated.
Devon’s net income for the fourth quarter was $207 million, or 51 cents a share, after posting a loss of $357 million, or 89 cents a share, in the same period of 2012.
The company also boosted its oil production to a record 177,000 barrels a day, driven by gains in west Texas’ Permian Basin. That is 17 percent higher than the same quarter of 2012.
“Our drilling programs not only drove impressive oil production growth, but also expanded margins and improved operating cash flow,” CEO John Richels said. “Additionally, we high-graded our portfolio through an accretive Eagle Ford Shale acquisition, an innovative midstream combination, and initiated an asset divestiture program.
“These actions provide a platform for Devon to achieve attractive high-margin growth in 2014 and for many years to come.”
Devon’s stock rose $1.34 Wednesday to $64.25 a share.
With the sale of most of its conventional assets in Canada, Devon will retain its operations in Canada’s oil sands, but about 900 employees will be joining buyer Canadian Natural Resources Limited.
The deal will net Devon about $2.7 billion after currency exchange and taxes to help finance its pending $6 billion acquisition of acreage in south Texas’ oil-rich Eagle Ford Shale.
The Eagle Ford will be one of Devon’s five core focus areas as it moves forward. Devon also will continue exploring emerging plays in central Oklahoma and Wyoming, while selling assets not expected to grow materially.
Richels said there has been significant interest in Devon’s other asset packages, which will be put on the market in the second quarter.
Devon expects to complete its remaining asset sales by the end of the year.
Devon tracks oil increases
Devon Energy Corp. set a quarterly record in the fourth quarter when it produced 177,000 barrels of oil a day. The company has seen increasing oil production over the past four years.
•2010: 40.6 million barrels
•2011: 44.7 million barrels
•2012: 53.5 million barrels
•2013: 61.4 million barrels