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Devon Energy Q2 Production Rose on Delaware Basin Gains

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Houston-based Devon Energy (DVN) said Tuesday its Q2 production rose to 1.359 million barrels of oil equivalent per day, up from 841,000 Boe/d in the year-earlier quarter, driven by stronger-than-expected well performance in the Delaware Basin.

Oil production in the quarter ended June 30 increased to 503,000 b/d from 387,000 b/d reported for the same period a year earlier, reaching the top end of the company's guidance range.

Devon said it operated an average of 34 drilling rigs and 10 completion crews during the latest quarter, bringing 120 net operated wells online with an average lateral length of 10,800 feet.

During the quarter, Devon acquired 16,300 net acres in the core of the Delaware Basin at a New Mexico federal lease sale for $2.6 billion. The acreage includes about 400 top-tier drilling locations with 87.5% net revenue interest. The company funded the acquisition with cash on hand and expects to begin development in 2027.

Q2 oil, natural gas and natural gas liquids sales totaled $5.1 billion. Including the impact of commodity hedges, Devon realized an average price of $88.09/bbl for oil, $22.70/bbl for natural gas liquids and $1.05 per thousand cubic feet of natural gas. The company said oil prices benefited from strong benchmark crude markets, while natural gas realizations were weighed down by weak Waha hub prices because of pipeline constraints in the Delaware Basin.

Production costs, including production and property taxes, averaged $11.27/Boe. Lease operating expense, the largest component of production costs, was $5.06/Boe, below the midpoint of the company's full-year guidance.

The company reaffirmed its full-year 2026 production guidance. For Q3, Devon expects total production of 1.66 million to 1.69 million Boe/d, including oil production of 550,000 to 560,000 b/d.

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