Devon Energy to buy back $1 billion worth of shares, raises dividend

(Reuters) - U.S. oil and gas producer Devon Energy Corp said on Wednesday it plans to increase its cash dividend and buy back shares worth $1 billion, the latest energy company to do so, while investors pressure the sector for better returns.

Devon’s plans to buy back shares comes a day after oil major Chevron said it was likely to repurchase stock for the first time in at least three years, even without a substantial rise in oil prices.

Oil companies have been tuned to a new normal ever since the oil crash of 2014 and are now working out ways to increase production on minimal spending and leaner operations.

Devon, which is also selling some assets in Texas for $553 million, raised its quarterly dividend to 8 cents per share from 6 cents, payable on June 29.

The company said it would buy back $1 billion in shares — about 6 percent of its outstanding stock — over the next year.

The company’s shares were up about 2 percent at $31.50 in after-market trading.

Reporting by Ahmed Farhatha in Bengaluru; Editing by Sai Sachin Ravikumar and Shounak Dasgupta