Devon Energy Unveils $1 Billion Annual Optimization Plan, Targets Efficiency Gains By 2026

Devon Energy Corporation DVN shares are trading higher premarket on Tuesday after the company unveiled a business optimization strategy.

The company aims to enhance its pre-tax free cash flow by $1.0 billion annually through a comprehensive plan.

The company plans to focus on optimizing field operations, reducing drilling and completion costs, and improving both operating margins and corporate expenses.

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Devon’s business optimization plan includes improvement of $300 million from capital efficiency, $250 million from production optimization, $300 million from commercial opportunities, and $150 million from corporate cost reductions.

The company expects to achieve around 30% of these gains by the end of 2025, with full realization targeted by the end of 2026.

Clay Gaspar, president and CEO said, “This is an opportune time for us to take on this initiative, as we leverage recent leadership changes across the organization, bringing fresh perspectives and new ideas. Given the challenging market and shifting competitive landscape, this is the right moment to focus internally and improve our profitability.”

“Concurrently, we have implemented technological advancements, including advanced analytics and process automation, that are further enhancing our operating performance. These combined efforts are anticipated to achieve approximately $300 million of cash flow uplift by the end of 2025, reinforcing our financial resilience.”

The company expects to report first-quarter 2025 earnings results on May 7, 2025.

Investors can gain exposure to the stock via the Invesco Energy Exploration & Production ETF PXE and the Texas Capital Funds Trust Texas Capital Texas Oil Index ETF OILT.

Price Action: DVN shares are up 5.5% at $31.11 at last check Tuesday.

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