(Reuters) - Devon Energy Corp on Tuesday raised its full-year U.S. oil production forecast and beat analysts’ estimates for quarterly profit, supported by higher output from its operations in the Delaware basin.
The company said net production in the Delaware basin surged 76 percent in the first quarter to 107,000 oil-equivalent barrels (boe) per day. The Delaware basin of the oil-rich Permian shale field is among the largest in the region.
The increase in production from the company’s shale assets also prompted it to raise its 2019 U.S. oil output forecast.
The company now expects 2019 light-oil production growth to reach 17 percent, a 200 basis point improvement from its previous guidance.
The volume of crude being pumped out of Texas has pushed the United States over the last decade to become the world’s biggest oil producer last year. And the U.S. Energy Information Administration (EIA) estimates U.S. crude oil production to rise by 1.43 million barrels per day (bpd) in 2019 to average 12.39 million bpd, up from its previous forecast for a rise of 1.35 million bpd.
Devon’s profit beat comes as the Oklahoma-based company authorized the sale of its assets in Canada and in the gas-rich Barnett shale patch in the United States, to turn Devon into a pure-play oil producer.
Devon is also among several oil producers to invest in the SCOOP and STACK regions, a fast-growing shale oil play in the Anadarko basin that has attracted investment from crude producers expanding beyond the Permian.
However, the company has maintained its capital spending target of $1.8 billion to $2 billion for 2019.
Net loss attributable to Devon widened to $317 million, or 74 cents per share, in the first quarter ended March 31, from $197 million, or 38 cents per share, a year earlier, primarily due to a $670 million non-cash charge related to the company’s hedge positions.
Excluding items, the company earned 36 cents per share, above analysts’ average estimate of 28 cents.
On Tuesday, shale oil and gas producer Concho Resources Inc also increased full-year 2019 total production growth outlook in the range of 23 percent to 27 percent, and said it expects 2019 oil production growth of between 27 percent and 31 percent.
Reporting by Arundhati Sarkar in Bengaluru; Editing by Maju Samuel