Devon Energy Holds the Line on Output Plan

“We will remain extremely disciplined by prioritizing value over the pursuit of volume,” Chief Executive Officer Rick Muncrief said Tuesday in a statement announcing year-end results. Output in the first quarter will be down 3% due to severe winter weather.

Publicly traded independents have been hesitant to bring on too much production too quickly, wary of disturbing a tentative balance or irking OPEC+ members, who have twice crashed the market in the past eight years through damaging price wars in response to U.S. shale growth. At these prices, though, there’s a large profit incentive to drill more. Muncrief had said as recently as January that he’d need to see a firm nod from shareholders before boosting output again.

The results follow those from smaller shale rival Continental Resources Inc., which on Monday announced plans to hike spending almost 50% this year after expanding its portfolio into two more basins last year. It forecast annual output growth to be somewhere between flat to up 5% for the next five years.

Devon posted fourth-quarter earnings per share excluding one-time items of $1.39, compared with the $1.24 average analysts had been expecting. Devon produced the equivalent of 611,000 barrels of crude in the final three months of the year, higher than the 597,200 barrels that analysts had been targeting. It also boosted its dividend and share buyback authorization.

Devon shares rose about 1.5% as of 4:25 p.m. in New York after the close of regular trading. The stock is up nearly 18% year to date.