Devon Energy posted a $3.1 billion loss in the first quarter of the year, down $6.44 per share, but less than the $3.6 billion, or $8.88 a share in the first quarter of 2015.
In explaining the loss, the company argued low oil prices. More precisely, Devon said it was presently selling a barrel of oil around the $20 mark, while a year ago, it was selling for about $56. Natural gas is going for $1.66 for 1,000 cubic feet, compared to $2.96 from a year ago.
The company's revenues for the same period dropped to $2.1 billion, down from almost $3.3 billion in the last year's quarter. Devon said it had a core earnings loss of $249 million, or 53 cents a share.
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"In spite of the challenging industry conditions, Devon achieved another high-quality operating performance in the first quarter as we continued to take the appropriate steps to deliver significant cost reductions and accelerate efficiency gains across our portfolio," CEO Dave Hager said in a statement.
Amid a decline in revenues, Devon resorted to cutting expenses. Compared to a year ago, general and administrative costs were down by 23 percent, namely $194 million, with year-round savings estimated to reach $500 million. At the same time, operating costs were cut by 20 per cent compared to last year.
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The company on Tuesday raised production guidance for the second quarter and the full year. For the second quarter the company now projects oil production of 616,000 to 653,000 barrels a day. For the full year the estimates have risen to 611,000 to 648,000 barrels of oil equivalent production. Crude oil makes up about 40 percent of projected production.
Over the first quarter, Devon produced an average of 285,000 barrels of oil, up from 271,000 per day in the first period of 2015.
By James Burgess of Oilprice.com
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