“New Devon will emerge with a highly focused US asset portfolio and has the ability to substantially increase returns and profitability as we aggressively align our cost structure to expand margins with this top-tier oil business. The New Devon will be able to grow oil volumes at a mid-teens rate while generating free cash flow at pricing above $46 per barrel,” CEO Dave Hager said in a statement.
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Devon increased its total share repurchase program to $5 billion from the previous $4 billion and increased its quarterly dividend by 13% to $0.09 per share. The company is also looking to deliver at least $780 million in annual cost savings by 2021, and expects to achieve around 70% of these reductions by the end of 2019. Devon expects its efforts to drive down per-unit cash costs more than 20% by 2021.
Devon’s highly concentrated US oil business is expected to generate 13-18% oil growth in 2019, with 10% less upstream capital than 2018, and is self-funded at $46 oil prices.