As the 1Q oil and gas earnings season winds down, Reese Energy Consulting today polishes off our LI week with a spotlight on Devon Energy. Among its peers, this multi-basin, Okla. City-based E&P hit the ball out of the park in 1Q reporting $1.7 billion in operating cash flow following a previous slam dunk in 4Q 2023.  Devon CEO Rick Muncrief was heard to say, “How ya like them apples?”

Back in the fall, as megamerger mania descended upon the nation’s larger independent players looking to grow their positions and inventory, Devon was rumored to have an eye on Marathon Oil and CrownRock in the Permian, and Enerplus in the Bakken. The company operates 400,000 net acres in the Delaware with more than 10 years of inventory, and 123,000 net acres in the Williston, along with assets in the Anadarko, Powder River, and Eagle Ford. While a deal never came to fruition, Muncrief made clear he was in no rush to jump into the land-grab frenzy. As the saying goes, patience is bitter, but its fruit is sweet. And Devon’s sweetest fruit, sans any new acquisition, was already on the verge of bigtime production.

Devon’s largest revenue driver lies in the Permian to the tune of 66%–and that’s where a near equal percentage of its CAPEX will be headed this year. With tighter-than-spandex drilling efficiencies, strategic midstream investments, and higher output in the Delaware—apples, if you will—Devon in 1Q made a deep-dish apple pie despite natural gas prices. The company reported 664 MBOED in total production, beating its own estimate by 4% and welcomed in a handsome $844 million in free cash flow. At the same time, Devon also raised its 2Q production targets to a range of 655 MBOED to 675 MBOED, as well as higher guidance expectations for the full year.