Devon Energy Gains From Multi-Basin Assets & Debt Management

Devon Energy Corp. DVN has been reaping the benefits of strong production volumes from its multi-basin assets spread across the United States. The company is managing the debt efficiently and using every opportunity to lower the debt burden, which is boosting its margins.

Volatile commodity prices and a highly competitive oil and gas industry can have an adverse impact on its operations.

Tailwinds for DVN

DVN has a diverse commodity mix, with a balanced exposure to oil, natural gas and natural gas liquids production volumes. Courtesy of ongoing investments in higher-margin, multi-basin U.S. oil-producing regions and solid base production, management expects third-quarter 2025 total production in the range of 829,000-847,000 barrels of oil equivalent per day (Boe/d). The company is making strategic investments to upgrade and expand its assets, and plans to invest in the range of $3.6-$3.8 billion in 2025. 

Devon continues to manage costs to boost margins. The company has been reducing its costs by selling higher-cost assets and bringing new, lower-cost production assets online. DVN is also working to reduce its drilling and completion costs and better align personnel with the go-forward business.

Devon's total liquidity, as of June 30, 2025, was $4.8 billion, sufficient to meet its near-term debt obligations. The company’s current ratio at the end of the second quarter of 2025 was 1.22, indicating its financial strength to meet near-term debt obligations. Devon made plans in 2024 to cut down its debts by $2.5 billion, out of which $500 million has been achieved and $500 million will be repaid this September.

Factors Acting as Headwinds

Volatility in commodity prices and the way it will trade in the future could have a significant impact on the company's business. Despite hedges, commodity prices might keep fluctuating for various reasons that are beyond its control and can impact Devon’s expected free cash flow generation capability.

The company operates in a highly competitive oil and gas industry. Some of the competitors in this industry are financially stronger than DVN, with more resources at their disposal. This might limit its capacity to apply for new drilling rights or acquire properties.

Other Stocks Having Multi-Basin Assets

Along with Devon, a few other oil and gas companies have multi-basin assets in the United States. Companies like ConocoPhillips COP, Occidental Petroleum OXY and Chevron CVX, among others, have multi-basin assets.

These companies benefit from multi-basin high-prolific assets, which assist them in providing stable production volumes.

 

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This article originally published on Zacks Investment Research (zacks.com).

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