DVN Devon Energy Corp

By Tess Stynes 

Devon Energy Corp. said its second-quarter loss narrowed as the oil-and-gas company benefited from its cost-cutting efforts, along with a decline in asset write-downs and other items.

The Oklahoma City company has cut costs, shed noncore assets and slashed its dividend as part of its efforts to improve its balance sheet amid a commodities downturn.

Devon last month completed its goal of divesting itself of $2 billion to $3 billion in assets with a deal to sell its 50% ownership stake in Access Pipeline to Wolf Midstream Inc., which brought Devon's asset-sale tally to $3.2 billion.

Devon, which has been increasing its focus on North America in recent years, on Tuesday raised its 2016 production guidance for its remaining operations by 3%.

Chief Executive Dave Hager said in prepared remarks that the company's production from U.S. resource plays again topped expectations. He added that with cost-savings so far this year, Devon is on track to reduce its overhead costs by nearly $1 billion this year.

Over all, Devon reported a loss of $1.57 billion, or $3.04 a share, compared with a year-earlier loss of $2.82 billion, or $6.94 a share. Excluding asset write-downs, restructuring-related expenses and other items, adjusted per-share earnings were 6 cents. Revenue dropped 27% to $2.49 billion amid lower average selling prices.

Analysts polled by Thomson Reuters expected a per-share loss of 19 cents and revenue of $2.33 billion.

Lease operating expenses declined by 26%, driven by improved power and water-handling infrastructure, declining labor expense and lower supply-chain costs. Overhead costs declined 31%.

The company raised its estimated 2016 upstream capital spending budget by $200 million to between $1.1 billion and $1.3 billion, with the potential to add as many as seven rigs in key U.S. resource plays.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

August 02, 2016 17:48 ET (21:48 GMT)

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