Devon Energy Q4 2024 Earnings Report

PCI-PAL EPS Results

• Actual EPS: GBX 1.16
• Consensus EPS: GBX 1
• Beat/Miss: Beat by +GBX 0.16
• One Year Ago EPS: N/A

PCI-PAL Revenue Results

• Actual Revenue: $4.40 billion
• Expected Revenue: $4.25 billion
• Beat/Miss: Beat by +$155.32 million
• YoY Revenue Growth: N/A

PCI-PAL Announcement Details

• Quarter: Q4 2024
• Date: 2/18/2025
• Time: After Market Closes
• Conference Call Date: Wednesday, February 19, 2025
• Conference Call Time: 11:00AM ET

PCI-PAL (LON:PCIP) provides organisations that engage with customers by phone with globally accessible cloud solutions, ensuring their conversations are PCI compliant and personal data is protected. Safeguarding reputations and trust. Our vision is be the preferred solution provider that technology vendors globally turn to for achieving PCI compliance for payments by phone. By dedicating ourselves to the focused pursuit of easy to integrate and simple to deploy technology, we will provide the most compelling value proposition for our partners to solve their customers challenges in achieving compliance and safeguarding reputations. It is our people, beyond our technology, who underpin our business and support our partners.

Devon Energy Q4 2024 Earnings Call Transcript

Presentation

[Operator]

Welcome to Devon Energy's Fourth Quarter twenty twenty four Conference Call. At this time, all participants are in listen only mode. This call is being recorded. I'd now like to turn the call over to Ms. Rosie Zuklick, Vice President of Investor Relations.

[Operator]

You may begin.

[Rosy Zuklic, VP - Investor Relations at Devon Energy]

Good morning, and thank you for joining us on the call today. Last night, we issued Devon's fourth quarter earnings release and presentation materials. Throughout the call today, we will make references to these materials to support prepared remarks. The release and slides can be found in the Investors section of the Devon website. Joining me on the call today are Rick Muncrief, President and Chief Executive Officer Clay Gaspar, Chief Operating Officer Jeff Ritenour, Chief Financial Officer John Raines, SVP, Asset Management Tom Hellman, SVP, E and P Operations and Trey Lowe, SVP, Technology and Chief Technology Officer.

[Rosy Zuklic, VP - Investor Relations at Devon Energy]

As a reminder, this conference call will include forward looking statements as defined under U. S. Securities laws. These statements involve risks and uncertainties that may cause actual results to differ materially from our forecast. Please refer to the cautionary language and risk factors provided in our SEC filings and earnings materials.

[Rosy Zuklic, VP - Investor Relations at Devon Energy]

With that, I'll turn the call over to Rick.

[Rick Muncrief, President and CEO at Devon Energy]

Thank you, Rosie. Appreciate everyone taking the time to join us this morning. I'm very proud to report that Devin ended 2024 with exceptionally strong results. Let's start with Slide two. We had outstanding operational performance, which underpinned the robust financial outcomes and significant free cash flow generation.

[Rick Muncrief, President and CEO at Devon Energy]

This success is a testament to the dedication and hard work of our entire team. We produced record volumes, delivered 154% proved replacement reserve replacement ratio and made nice strides on continuing our resource assessment of our existing assets. We generated $3,000,000,000 of free cash flow, of which we returned $2,000,000,000 of that to our shareholders. Consistent with our strategic priority of delivering value to shareholders through a sustainable, annually growing fixed dividend, This month, our board approved an increase to $0.24 per share. This represents a 9% improvement over the twenty twenty four rate.

[Rick Muncrief, President and CEO at Devon Energy]

And to fortify our advantaged portfolio even more, we executed the Williston Basin acquisition this past year and it is performing quite nicely. Throughout the year, we've maintained financial strength with ample liquidity and low leverage. We're well positioned for the future. You'll hear more from details from Clay and Jeff in a few moments. For me, it's been an honor to lead this company for the past four years, serving our shareholders, our Board of Directors and our dedicated employees.

[Rick Muncrief, President and CEO at Devon Energy]

Together, we've built a very strong company with a solid foundation for future success. I want to thank everyone for their trust and support. I look forward to watching the company's continued achievements under Clay's capable leadership and have complete confidence in him and his management team. I look forward to the many organic catalyst they will continue to create by remaining true to Devon's values and remaining focused on its strategic priorities. And with that, I'll now turn it over to Clay.

[Clay Gaspar, EVP & COO at Devon Energy]

Thank you, Rick. I've always appreciated your guidance, mentorship and insight, and I'm truly grateful for your confidence. Good morning, everyone. Let's start on Slide three, where I can cover the outstanding fourth quarter results. For the fifth quarter in a row, we have again beaten consensus and delivered outsized returns to our shareholders.

[Clay Gaspar, EVP & COO at Devon Energy]

Fourth quarter oil production reached an all time high of 398,000 barrels per day. Fourth quarter production outperformance was largely driven by the timing and productivity of our Eagle Ford wells. A second major contributor was from the acquired Grayson Mill assets confirming how well that integration is going. The newly combined Rockies team is doing a fantastic job of learning from each other and creating additional value. From a capital perspective, we also had an outstanding quarter.

[Clay Gaspar, EVP & COO at Devon Energy]

This performance was primarily driven by the good work of the Delaware team. In addition, lower workover costs combined with higher volumes drove our per unit expenses significantly lower, boosting our margins and free cash flow generation. Thanks to our strong operating performance, we generated seven thirty eight million dollars in free cash flow, of which we returned $444,000,000 to shareholders via our fixed dividend and share repurchase program. We strongly believe that Devon presents a compelling investment opportunity, and thus, we leaned into our share repurchase program this quarter by buying $300,000,000 of Devon stock. Additionally, we strengthened our financial position by building cash this quarter to about $850,000,000 up 25% from last quarter.

[Clay Gaspar, EVP & COO at Devon Energy]

Now let's turn to Slide four and talk about some of the exciting news related to the Eagle Ford. On January 31, Devon and BPX signed an agreement to dissolve our partnership in the Blackhawk field. We expect to close on April 1, at which time we will hold approximately 46,000 Blackhawk net acres with greater than 95% working interest in these assets, primarily in DeWitt County. This will be a high quality, high working interest, fully controlled and concentrated position. After close, we will have approximately 700 undrilled locations remaining in the Eagle Ford, 5 50 of which will be in the Blackhawk Field.

[Clay Gaspar, EVP & COO at Devon Energy]

This is nearly a decade of drilling inventory at the current pace. A key value driver for us to dissolve this JV was that we are confident that we can save more than $2,000,000 in D and C cost per well with improved well design, supply chain and application of operational technology from our other basins. The combination of this cost reduction and control of the go forward development significantly enhances returns and provides a material uplift to the NPV of our position. Now let's turn to Slide five and talk about the updated and improved 2025 outlook. Moving forward, we remain committed to creating value to our shareholders with disciplined investment and growth per share basis.

[Clay Gaspar, EVP & COO at Devon Energy]

You should also note that we're bumping our 2025 production and reducing our capital from the soft guy that we provided on the last call. We now expect to deliver 815,000 BOE per day, including 800 excuse me, 383,000 barrels of oil per day. For capital, we expect to invest $3,900,000,000 or $200,000,000 lower than the soft guidance we provided back in November. We expect these improvements to drive more than $300,000,000 in additional free cash flow this year. As displayed on the right side of the slide, these numbers add up to a very impressive capital efficiency as compared to our peers of this highly competitive industry.

[Clay Gaspar, EVP & COO at Devon Energy]

Turning to Slide six. Let's discuss the 2025 outlook from an asset perspective. The Delaware Basin will account for greater than 50% of our total investment for the year. We expect another year of strong performance and plan to operate 14 rigs and three completion crews while bringing online about two sixty five gross wells. As we have touched on in the past, we are leaning into a higher allocation of multi zone projects as compared to historical levels, allowing us to balance rate of return, NPV and inventory.

[Clay Gaspar, EVP & COO at Devon Energy]

Based on the success of 2024, we see tremendous benefits from the multi zone developments by minimizing depletion effects between depleted dependent zones, feathering in de risk secondary targets and results that yield a more robust and sustainable inventory over time. An area that I've been extremely impressed with is our ability to continue to find ways to accelerate our operational efficiencies. In 2024, we saw about 15% improvement in both our feet drilled and completed feet per day metrics. This operational efficiency drives higher well returns and free cash flow generation. For 2025, I expect this momentum to continue, and I'm excited to see additional value creation from this work.

[Clay Gaspar, EVP & COO at Devon Energy]

Shifting to the Rockies. We possess a unique combination of assets that can provide growth and free cash flow. Approximately threefour of The Rockies capital spend will be directed towards the Williston Basin. With the impressive results to date, strong progress on the integration and a long inventory runway, most of the capital will be focused on the Western part of the Williston Basin. We believe that this three rig program balances flat production, impressive returns and an impressive inventory life.

[Clay Gaspar, EVP & COO at Devon Energy]

Since taking over the Grayson Mill asset, the organization has identified many opportunities to further enhance our investment. In just a few months since closing, we've already identified $50,000,000 in capital and expense savings for the year, fully capturing our announced synergy target. We're not done and expect additional savings on operating expenses as well as capital savings. The early wins of $600,000 in savings per well on D and C cost tie back to the drilling and completion pace, supply chain wins and leveraging operational improvements such as self sourcing sand and simulfrag. In the Anadarko Basin, the past few years have benefited from the Dow JV, which was set to end mid-twenty twenty five.

[Clay Gaspar, EVP & COO at Devon Energy]

With the success of this partnership, we have agreed to extend the JV for another 49 drilling locations for $40,000,000 in drilling carry. Activity for the new agreement is planned to start in the second quarter of this year. Turning to Slide seven. And before I hand the call off to Jeff, I want to address a common question that I've been asked since the leadership change was announced, and that is, what will be different for Devon going forward? If I had to capture the transition in two words, it would be continuity and opportunity.

[Clay Gaspar, EVP & COO at Devon Energy]

As many of you know, Rick and I have worked together for over ten years and come from a similar background. Together, we built a strong foundation for Devon and we're both excited about the next chapter for this great company. Under continuity, I see continuing to focus on the following. First, Devon's strategic priorities and values will continue to be central for the company. Second, operating excellence will remain foundational.

[Clay Gaspar, EVP & COO at Devon Energy]

In order to succeed in this industry, we must deliver on the fundamental aspects of how we convert resource to value. And third, we remain committed to delivering value to our shareholders and maintaining a fortress balance sheet. We will continue to deliver sustainable, growing fixed dividend as well as executing on our share repurchase program. As far as the opportunity, I see several needle moving prospects. First, we will focus inward to further improve our capital efficiency and margin expansion.

[Clay Gaspar, EVP & COO at Devon Energy]

Second, we will enhance our base production and organically expand our deep inventory. Third, we will further embrace our value creating technology across the company and promote innovative thinking from our outstanding employees. We are already working on several value focused opportunities and you will hear more about this in the coming quarters. With that, I'll now hand the call over to Jeff.

[Jeff Ritenour, EVP & CFO at Devon Energy]

Thanks Clay. Moving

[Jeff Ritenour, EVP & CFO at Devon Energy]

now to Slide eight to talk about our gas portfolio. With upward momentum in natural gas pricing, we see significant upside from our natural gas resource and wanted to highlight the value potential of our diverse portfolio. Although today, our capital is largely allocated to oil projects driven by returns, the associated gas production and untapped natural gas resource underlying our acreage position provides a significant upside opportunity. As highlighted on the slide, we produce more than 1,300,000,000 cubic feet per day of natural gas and with the move higher in pricing, our natural gas revenue will more than double year over year. With the majority of gas production residing in the Delaware, our marketing team has done an exceptional job of diversifying our exposure to maximize value.

[Jeff Ritenour, EVP & CFO at Devon Energy]

Through a variety of arrangements, a large portion of our Delaware gas has access to Gulf Coast markets and pricing, driven by growing industrial and LNG demand. For the remaining Delaware production exposed to in basin pricing, we've utilized regional basin swaps for protection. This strategy helps us mitigate risk and stabilize our revenue streams. In the Anadarko Basin, our gas has access to Southeastern markets, which have recently traded at a premium to Henry Hub prices as more and more companies point their molecules to the Gulf Coast. We expect increased demand for our gas in the Southeast as the need for power moves higher in this growing region of the country.

[Jeff Ritenour, EVP & CFO at Devon Energy]

And we're always looking for new demand outlets for natural gas volumes. We have an experienced and innovative marketing team that are actively assessing LNG, power producer and data center supply opportunities. We look forward to sharing specifics on these opportunities as they develop and firm up over the coming year. To summarize, while our primary focus remains on oil, our gas portfolio offers significant optionality and value. Our marketing and risk management efforts ensure that we're well positioned to capitalize on growing demand and favorable market conditions.

[Jeff Ritenour, EVP & CFO at Devon Energy]

Turning to slide nine, as Clay said earlier, there's no change on our commitment to delivering value to shareholders while maintaining our financial strength. For 2025, we're targeting up to 70% cash return payout for shareholders from generated free cash flow at current strip pricing. Our cash returns will be delivered via our growing fixed dividend and share repurchases. Effective in the first quarter, the quarterly dividend is increasing to $0.24 and we expect a cadence of about $200,000,000 to $300,000,000 a quarter for share repurchases throughout the year. The balance of our free cash flow will accrue to the balance sheet for further debt pay down as we aim to drive our net debt to EBITDA ratio below one times and build upon our investment grade financial strength.

[Jeff Ritenour, EVP & CFO at Devon Energy]

With that, I'll now turn the call back to Rosie for Q and A.

[Rosy Zuklic, VP - Investor Relations at Devon Energy]

Thanks, Jeff. We ask that everyone limit yourself to one question and one follow-up. So Emily, we are ready to take our first question.

[Operator]

Thank you. Our first question comes from Scott Hanold with RBC. Please go ahead. Your line is now open.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

Yes. Thanks. Hey, guys. Strong quarter and Rick, congrats on the retirement and play on the promotion. Maybe I'm going to start with the Grace and Mills.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

It seems like there's been some strong outperformance here over the last couple of quarters and it seems like you've got a lot of focus on that asset here in 2025. Could you remind us the inventory duration you see within the Grayson Mills asset and sort of how that compares with your sort of legacy Bakken?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes, Scott. Thanks for the kind words. It's a great time for Devon, and I know Rick and I are fully aligned on the best times are still yet ahead. Specifically, Grayson, I think this is an important acquisition for Devon to just absolutely stick. When I think back on our portfolio pre Grayson, we had a hole in the portfolio.

[Clay Gaspar, EVP & COO at Devon Energy]

We were not shy about admitting that. We have a great Williston Team. We're really excited about the brand that we had built within that basin and what it could allow us to do, but objectively, we were just short on inventory. Grayson really filled that inventory. And secondarily, we needed to absolutely nail the execution.

[Clay Gaspar, EVP & COO at Devon Energy]

And so we've done that. We've seen costs come down. We've seen that productivity stay up. What we've guided the street towards is we're not going to run at the same pace of the previous Grayson team, so we'll see that productivity excuse me, the production and absolute rate come down a little bit over time. What we've seen from both the cost side and the productivity side is that base decline has flattened out, these productivity of these wells have continued to improve.

[Clay Gaspar, EVP & COO at Devon Energy]

And now what we're saying is this runway that run rate that we are experiencing today is we think much more sustainable at the level we're at and that runway continues to expand. There's more organic things to do, trades, zero cost opportunities to further expand that runway, but we're approaching close to a decade of opportunity in the Williston Basin now, including Grayson. So we're really excited about where that position fits in our portfolio.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

Appreciate that. And as my follow-up question, it's going to be on the Eagle Ford split with BPX. Could you give us a little bit of color on some of the background regarding that? How did you all think about splitting the assets? And did you guys, I guess, look for more inventory versus PDP?

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

Could you just tell us how that allocation back and forth went?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes, it's interesting. I mean, I think this is a classic win win opportunity. When I summarize it and we've displayed a map, when you think about the assets that BPX is going to inherit and then the assets that we inherit, objectively, they valued more of those assets than we do. And we have valued more of the assets that we're going to inherit. And so there was a natural accretion associated mutual accretion associated with this deal.

[Clay Gaspar, EVP & COO at Devon Energy]

I think above and beyond that, I think about our ability to control pace, to really direct the operations. And then as I pointed out in the prepared remarks, we see material operational improvement and we've already displayed that. We've got since we're taking over the rig, we have one well down, we have another well exactly on pace where we thought it should be And that yields more than $2,000,000 per well in value creation straight from the top on all the remaining opportunities ahead, which obviously is a massive needle mover.

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

Thank

[Scott Hanold, Managing Director - Energy Research at RBC Capital Markets]

you.

[Operator]

The next question comes from Neal Dingmann with Truist. Neal, please go ahead.

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Thank you, guys.

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Again, Rick, just congrats on a stellar career and Clay look forward to continuing to run the ship. And guys, my first question, really just a little bit was asked earlier on the Bakken and I guess what you're calling the Rockies now specifically. Clay, I've noticed appropriately you've stepped up the CapEx a little bit. I think you're saying around $1,000,000,000 with four rigs. And I'm just wondering given your planned focus here on Grayson Mills and think the continued operation efficiencies, do you anticipate potentially seeing more growth here later in the year?

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Or is the plan just to kind of to keep things stable? What ideally would you like to see here?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes. Good point on the Rockies versus the Williston and Powder. We've combined those. We think it simplifies the story. It really is interesting assets.

[Clay Gaspar, EVP & COO at Devon Energy]

So we've got the legacy Williston position. We have the Grayson Williston position and and then we have the legacy Powder position. And so, really, when we think about overall Williston excuse me, let's start with Grayson. When we think about Grayson, it's pretty it's going to be pretty flat to where it's at now. We're going to run three rigs there.

[Clay Gaspar, EVP & COO at Devon Energy]

We see efficiencies we were talking about, not just in the capital cost, but the timing associated with that. That certainly helps productivity yield really nice capital efficiency. When we flip down to the powder and we start looking at that asset, that was an interesting one. I think that one's again, having more support of not needing that asset today allows that team to do a little bit more of the science work to really unlock that potential. And I think it has a tremendous part of our value as we think forward and where it fits in the portfolio in coming years.

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

No. I'd love to hear it and look forward to seeing what you're going to do there. And then secondly, just on the Delaware operation specifically, you all continue to I think it's demonstrated how efficient the program continues to be there. I'm just wondering, what's noticeable is versus maybe some others is that your midstream infrastructure situation appears to continue to be very strong with no takeaway issues. And I'm just wondering, is this performance largely due to contracts?

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Is it I know you've got some good surfs acreage that you've taken care of in the past. I mean, what is again, been able to efficiently drive this premier takeaway?

[Jeff Ritenour, EVP & CFO at Devon Energy]

Hey, Neil, this is Jeff. Yes, you're exactly right. We've done a lot of work over the last couple of years. Our marketing team and the business unit collectively together working with our third party providers on making sure that we've got the gathering, we've got the processing capacity that we need and then ultimately the takeaway as it relates to both the gas NGLs and oil. So that's been a really big team effort over the last couple of years.

[Jeff Ritenour, EVP & CFO at Devon Energy]

You go back two or three years ago there were certainly some more challenges in the basin. Today we feel really good about the position that we're in and really don't see any roadblocks on that front. So, feel really good about our ability to move the gas. I should mention as well water is not a light issue that the team is absolutely focused on as well. And so combined they've done a really great job to make sure that we've got the takeaway that we need for all those products and excited about the pricing improvement that we've seen just over the last six months in that basin.

[Neal Dingmann, Managing Director - Energy Research at Truist Securities]

Again, congrats guys. Great quarter.

[Clay Gaspar, EVP & COO at Devon Energy]

Thanks Neil.

[Operator]

The next question comes from Neil Mehta with Goldman Sachs. Please go ahead.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Yes. Good morning, team. And Rick, congrats on an amazing forty five year career. And Clay, congratulations to you. And Clay, maybe that's a good place to kick off.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

A couple of times in the prepared remarks, you talked about the organic opportunity set. Are we reading into your early strategy as you step into the CEO role to really pursue more of an organic versus an M and A focused strategy and that the optimal thing to be buying back here is your own stock versus incremental assets?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes, Neal, thanks for the comments again. And I think you're reading that right. I just see real tremendous value creation kind of underfoot the portfolio we have today. And that can come in many different forms. I mean, small land trades that will never make the earnings presentations to more material things like we just announced with VPX.

[Clay Gaspar, EVP & COO at Devon Energy]

Those are real massive value creation opportunities that are typically no cash out the door. In addition to that, we think about the technology application. Flattening the base decline on our business is a massive opportunity.

[Clay Gaspar, EVP & COO at Devon Energy]

And I can

[Clay Gaspar, EVP & COO at Devon Energy]

tell you that the teams that are working on things like artificial lift and really applying kind of real time diagnostics to those opportunities is, again, hard to put and describe on a slide, but have the biggest value creation opportunities as we think about the coming decade and beyond for the organization. So, really excited about that. Objectively, look, we're always going to stay close. We believe in consolidation. If there's a right opportunity for us, we'll remain open to that.

[Clay Gaspar, EVP & COO at Devon Energy]

But I think our primary focus is just making Devon a heck of a lot better Devon.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

That's very clear. And then Clay, just a follow-up on Slide four and DeWitt in particular and Eagle Ford. Can you just talk about why you think ultimately the partnership dissolution makes sense? How we should think about the uplift in value? And where does it ultimately come from?

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Is it from volumes? Is it from capital efficiency? And or is it about how you ultimately prosecute this acreage?

[Clay Gaspar, EVP & COO at Devon Energy]

I would have to say first on

[Clay Gaspar, EVP & COO at Devon Energy]

the list as we run the waterfall and think about the value creation for us, there's no doubt about it. Saving $2,000,000 plus per well off the top is roughly about $2,000,000 in NPV per every single well out there. So, it's that's a real opportunity for us and certainly is the headline approach for us. But controlling the pace is really valuable as we think about how quick these wells we drill these wells in seven days. And so, being able to control that when we need to, being able to back off when we have the opportunity to to.

[Clay Gaspar, EVP & COO at Devon Energy]

I know refracs aren't the hottest topic de jure, but I can tell you there is real material value. And as we see more and more value creation from this what we call as magic rock, it continues to yield more and more opportunities and that's what we're really excited about. But again, I'll reiterate, I think this is a mutual win win. Sometimes you bring together these joint ventures and you see the opportunities there. By the same token, opportunities can change, evaluations can change, technology can change, motivations can change and it can be time to dissolution.

[Clay Gaspar, EVP & COO at Devon Energy]

I mean, a similar analogy is selling midstream assets and buying midstream assets back in, both can be right at the given time. I would say when I think about the BPX opportunity, this is the right move for them now and this is the right move for us now.

[Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs]

Okay.

[Clay Gaspar, EVP & COO at Devon Energy]

Thank you.

[Operator]

The next question comes from Arun Jayaram with JPMorgan. Please go ahead.

[Arun Jayaram, Vice President at JP Morgan Chase & Co]

Good morning, gentlemen. I was wondering if

[Arun Jayaram, Vice President at JP Morgan Chase & Co]

you could

[Arun Jayaram, Vice President at JP Morgan Chase & Co]

maybe highlight yes, good morning. I wanted to see if you could highlight the strong sequential performance in the Eagle Ford, I think your volumes were up over 20% sequentially. The well count didn't seem like that was the driver. So maybe just help us understand kind of what drove that and thoughts on kind of sustaining that above 90 MBOE per day kind of figures we think about 2025 because it was the key driver I think of the beat as you highlighted?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes, Arun, thanks for the question. I want to commend the team on the incredibly value creating work around D and C efficiency. That's where some of this starts and the compounding effect of just shaving off time on the drilling side, on the completion side, we highlighted that in 2024. We've certainly seen some of those benefits there. I think as we move into the driver's seat on those operational efficiencies, I think it will take a different pace and really add a whole different level of opportunity.

[Clay Gaspar, EVP & COO at Devon Energy]

Also from the production side, again, these wells, we continue to see incremental value creation even as we space these wells in what looks like fully developed DSUs. We can subsequently bring additional wells in, stimulate these and this rock continues to produce and continue to give back to us. One thing I want to caution you on is, we did bring on a significant amount of wells in the fourth quarter early in the quarter. And so, there's a little bit of tailwind on that that's probably not fully, we're able to replicate every quarter going forward. So, I would caution you a little bit on extrapolating the fourth quarter runway run rate.

[Clay Gaspar, EVP & COO at Devon Energy]

But certainly, the operational momentum, the savvy, the hard work that the team is doing, I feel like we're about to grab another gear on, so hang on.

[Arun Jayaram, Vice President at JP Morgan Chase & Co]

Great, great. Maybe a follow-up is for Jeff. Jeff, if we do the math around, call it, $250,000,000 of buybacks per quarter, maybe up to $300,000,000 based on your $3,000,000,000 free cash flow number that you put the deck, that would imply returning somewhere between 53% to 60% of your free cash flow. Understanding that you use buybacks maybe to be opportunistically, but is it the intention to maybe return a little bit or to focus a little bit on the balance sheet versus cash return in 2025? Just going through the math around that.

[Jeff Ritenour, EVP & CFO at Devon Energy]

Yes. I appreciate the question Arun. Actually, it's one of the things we're talking a lot about with the internal focus that Clay has described this morning. Really that's all a function of us driving our breakevens lower. And so what we're really excited about is obviously that makes it that much easier for us to sustain and grow our fixed dividend and it also allows us to reevaluate that share repurchase range that we've laid out the $200,000,000 to $300,000,000 So as we work our way through the year as Clay just mentioned we catch another gear and we start to see these efficiencies continue to build into our numbers.

[Jeff Ritenour, EVP & CFO at Devon Energy]

I think that we'll likely reevaluate that range and absolutely see the potential for that to move higher as we work our way through the year. Now that being said, we do have a $2,500,000,000 debt reduction target that we've laid out there last year. We've already hit $500,000,000 of that last quarter with the maturities that came due in 2024. We'll have another $500,000,000 this year of maturities and then we've got our $1,000,000,000 term loan coming due next year. And so we'll have ample opportunities to pay down debt And we agree with you with the cash flow, the free cash flow projection that we're looking at today, the efficiencies that we're seeing work their way into the numbers.

[Jeff Ritenour, EVP & CFO at Devon Energy]

We think there's upside on our ability on the cash returns to shareholders specifically on the share repurchases.

[Arun Jayaram, Vice President at JP Morgan Chase & Co]

Rick, I wanted to wish you the best as you approach retirement. I've enjoyed all the war stories with you over the years and hearing about how the industry has evolved. And Clay, it's also great to see you in the CEO seat and remember our time together as we used to follow Anadarko, but best wishes to both of you.

[Rick Muncrief, President and CEO at Devon Energy]

Arun, thank you very much. Those are kind comments to both of us. Best wishes to you in the future as well, buddy.

[Operator]

The next question comes from Paul Cheng with Scotiabank. Please go ahead.

[Paul Cheng, Analyst at Scotiabank]

Hi, good morning.

[Clay Gaspar, EVP & COO at Devon Energy]

Good morning.

[Paul Cheng, Analyst at Scotiabank]

Kay, just trying to understand that when you dissolve the JV with DP, you're saying that you're going to save the cost by about $2,000,000 per well. And from a design standpoint, I mean, as a JV, you are the partner. And is there any maybe bottleneck or hurdle that you disallow you to achieve those savings all along?

[Paul Cheng, Analyst at Scotiabank]

I I'm trying to understand that, I mean, exactly how that why just dissolving it all of a sudden that we will be able to seeing the $2,000,000 saving? The second question is on the Terra. I think last year that you did about two thirty wells and then before that, like 200 a little bit less than two forty wells. So you're now doing two fifty to two seventy. One we think that as a result, your production for 2025 maybe is going to be higher than what we suggest in the guidance.

[Paul Cheng, Analyst at Scotiabank]

Is it the I mean, can you tell us that the cadence on the well coming on stream? You said we need more towards the end of the year, that's why we're not seeing the full benefit this year? Or that because it's the multi zone and then you're looking at a lot of the secondary branches. So as a result, the production on those wells may be somewhat lower even though the return is good. Thank you.

[Clay Gaspar, EVP & COO at Devon Energy]

Hey, thanks, Paul. Let me start with the first question, the BPX D and C JV. So this JV was pretty unique. BPX handled the drilling and the completions and then Devon handled the facilities design and the production. So, there was a pretty good split.

[Clay Gaspar, EVP & COO at Devon Energy]

Now, we certainly tried to work with each other as we had different views on how to approach casing design, well designed, prac design, lots of different things. And sometimes we're able to come together and sometimes we weren't. The advantage that we have and the reason I'm so confident in these numbers is after the val of this deal, that gave us the real opportunity to do our own D and C, run our own rigs and really compare side by side. And sometimes, we're seeing opportunities next door, side by side DSUs. And so, we've been able to extrapolate that, understand what it means to us and this was a significant motivation for us.

[Clay Gaspar, EVP & COO at Devon Energy]

As I said, we've already got our hands on the wheel. We're seeing those that improvement come through and we feel very, very confident in being able to achieve what I said was greater than $2,000,000 In addition to that, the amount of control that we'll have our ability to dial up, dial down activity as we need to, I think is a huge value creator as well. So, really excited about that. And again, we're really pleased. This has been a long conversation that we've had.

[Clay Gaspar, EVP & COO at Devon Energy]

And finally, the stars have aligned, where both sides could feel really good about doing this. Your second question was to the Delaware. And I think the heart of the question is really, seems like productivity on a per gross well basis is down. And what I want to caution you is, there's a little bit of a difference in working interest. So last year, on average 2024, we were about 80% working interest, on average 25% to about 73%.

[Clay Gaspar, EVP & COO at Devon Energy]

Don't see this as a trend. Don't extrapolate those numbers. That's just the way that the wells kind of fell to us. We've got a smattering of different working interests in the area and it actually kind of alternates 80s and 70s, even down to 60s and one or high 60s in one quarter. But that's just the way these big pads come in and they can really influence the overall average for that quarter.

[Clay Gaspar, EVP & COO at Devon Energy]

So, anyway, just want to make sure you're aware of that. It's not a productivity issue. As we think about the incredible productivity we displayed in 2024, we think 2025 is going to be like for like Wolfcamp As to Wolfcamp As, Cotton Draw to Cotton Draw equally productive. Now we did caution in the prepared remarks that we have a slightly different well mix. We're digging in deeper into some of the Wolfcamp B zones.

[Clay Gaspar, EVP & COO at Devon Energy]

We truly believe is the right value creation strategy for the organization and for the shareholders, which does provide a different mix. Sometimes that's in working interest, sometimes that's in GOR, but all of that's baked into our guidance. So thank you very much for the question, Paul.

[Paul Cheng, Analyst at Scotiabank]

Thank you.

[Operator]

The next question comes from Doug Leggate with Wolfe Research. Please go ahead. Doug, your line is now open. Please proceed with your question.

[Clay Gaspar, EVP & COO at Devon Energy]

Well, that's the easiest question I've ever had from Doug Leggate, so we can move on to the next.

[Operator]

Moving on, our next question comes from Roger Read with Wells Fargo. Roger, please go ahead.

[Roger Read, Senior Energy Analyst at Wells Fargo Securities]

Well, Doug's lost my game. Good morning, everybody.

[Rick Muncrief, President and CEO at Devon Energy]

Good morning.

[Roger Read, Senior Energy Analyst at Wells Fargo Securities]

Anyway, quick congrats to you, Rick. And, Chloe, we look forward to working with you going forward. So, these transitions are always great, but be entertaining nonetheless. I just really wanted to follow-up on kind of one key question, Eagle Ford. You mentioned the refracs maybe not the most interesting or exciting, but we're hearing more and more about it.

[Roger Read, Senior Energy Analyst at Wells Fargo Securities]

Where do you think you are in terms of working on some of the refracs? And how should we think about that from a returns that are on impact basis relative to just say baseline operations?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes. Roger, let me be clear. We are very pro refrac. I think the market is just doesn't have a whole lot of excitement around it. So that's fine.

[Clay Gaspar, EVP & COO at Devon Energy]

We don't need to talk about it a whole lot. But know that we've got a huge inventory of opportunities ahead. And we have done a tremendous amount of work in that space, more than 40 in the Eagle Ford, more than 40 in Williston, and really have a good understanding of what works, what's the right recipe and how it fits in. The interesting thing with this dissolution of our joint venture is those refracs have actually moved down in our priority list because the well productivity and the well value creation has moved significantly up. So, you'll probably see a little bit slower cadence of refracs, but know that we're just as confident as we were.

[Clay Gaspar, EVP & COO at Devon Energy]

We see tremendous value creation from those and remaining upside, which again, this kind of falls into that organic value creation. Extracting more from the resources that we already have underfoot is the name of the game. And the beauty of those refracs, just to tout that just a little bit, is the full cycle cost and economics of those refracs is exactly the half cycle cost because the primary well has already underwritten the entry cost of that land. So, when you're really thinking about it on a full cycle like for like basis, these refracts are tremendously valuable. And I think there's more to come on thinking about how we do artificial lift strategy, how do we apply technology to continue to think about that, flatten those base declines, improve those recovery factors.

[Clay Gaspar, EVP & COO at Devon Energy]

We're still overall 10% plus or minus recovery factor on these resource plays. There's tremendous value creation from the incredible position that we have. It's no accident we're in these five particular basins, very prolific, lots of zones, up hole and down hole from where we sit. And by the way, lots of oil remaining in those zones that we're already producing from. So really excited about that and you'll hear more about that coming quarters.

[Roger Read, Senior Energy Analyst at Wells Fargo Securities]

Appreciate that. Just a quick follow-up. Trump tariffs impacts on some of the materials that are used in wells, how is that reflected in your CapEx guidance? Or is there a plus minus we should be paying attention to there?

[Jeff Ritenour, EVP & CFO at Devon Energy]

Yes, Roger. Obviously, there's been a lot flying around on tariffs. And your guess is as good as mine as to when those will land and what will be the go forward game plan. But we have done some work with our supply chain team to try to understand what that could look like, what the impact would be. Frankly, as we've done the rough math, which I would describe as pretty aggressive, kind of assuming that the tariffs were in place today, all the tariffs that have been talked about are in place today and carried forward into the future.

[Jeff Ritenour, EVP & CFO at Devon Energy]

We view it as less than a 2% impact on our overall capital program for the year. So we really don't see it as a big impact at this point in time. And now that being said, we'll watch with everybody else the news and see what ultimately gets printed. But we feel pretty good that it's going to have a minor impact on us at this point.

[Roger Read, Senior Energy Analyst at Wells Fargo Securities]

Yes. Well, given the uncertainty, you can understand why I'd ask you the question instead of coming up with an answer on my own. Thanks, guys.

[Clay Gaspar, EVP & COO at Devon Energy]

Yes. We appreciate that. Thanks.

[Operator]

The next question comes from Kevin McGurdy with Pickering Energy Partners. Kevin, please go ahead.

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

Hey, first I wanted to say to Rick that we'll miss you on these calls. And I personally appreciate all the answers you've given me over the years at Devon and WPX before that.

[Rick Muncrief, President and CEO at Devon Energy]

Thanks, Kevin.

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

Only one question for me,

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

I wanted to ask what changed on your 2025 capital plan over the last several months that you were able to lower your guidance. Was it mostly just a reduction in Permian and Eagle Ford well costs? Or any specifics that you can give us on basin details would help?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes. Thanks for that question, Kevin. I mean, there's a lot of things at work. We're always pushing the teams. We're encouraging.

[Clay Gaspar, EVP & COO at Devon Energy]

We're making sure that we capture those realized gains. As we provide a soft guide in November and then continue to hone that, there's a few things that we felt very confident in at this point that we weren't as confident in capturing back in November. And top of that list is certainly the gains in the Williston. The $600,000 per well is a material improvement that we didn't have fully grasped at the time of the last call. And then second is this BPX dissolution.

[Clay Gaspar, EVP & COO at Devon Energy]

Certainly, that is a huge needle mover for us. Now across the board, as I mentioned in the prepared remarks, the operational efficiencies that we gained in 2024, we expect continued tailwind momentum on that. But we have not baked in any additional deflation or contract terms that we don't already have in place today. Basically, from an inflationarydeflationary standpoint, we assume a little bit of essentially status quo and we are pretty at least betting on the margin that we have equal chance of going up or down at this point. We feel really good about where we stand for our '25 guide.

[Kevin MacCurdy, Managing Director at Pickering Energy Partners]

Thank you for the answer. And sorry if I cut you off earlier, Rick.

[Rick Muncrief, President and CEO at Devon Energy]

Kevin my only point was I've enjoyed working with you and a lot of your peers and colleagues through the years it's been, it's just been a pleasure and and the change in our industry is just phenomenal. It really is and people are selling best in the world and I'm really proud of what we have done these last four years post merger here at Devon. We have built a just a fortress of a company and so proud of the people here and the assets we have. Take care.

[Operator]

The next question comes from John Freeman with Raymond James. Please go ahead.

[John Freeman, Managing Director at Raymond James Financial]

Good morning. And yes, just echoing prior congratulations to both you Rick and Clay, all the best. The first topic for me just, obviously, we've seen a dramatic improvement in natural gas prices. Jeff, you did a good job showing on Slide eight kind of you all improved, all the options you've got on the marketing side, dramatically better realizations on the gas side. And I can appreciate the fact that months goes into coming up with like a 2025 plan.

[John Freeman, Managing Director at Raymond James Financial]

But I'm just curious, having like a diversified asset base like you all do, if there's any potential flexibility in the program, if gas prices remain strong, maybe improve further from here, if there'd be any potential kind of shift in the plan to certain assets that potentially benefit more from the really robust gas price strip we're looking at right now?

[Jeff Ritenour, EVP & CFO at Devon Energy]

Hey, John, this is Jeff. Yeah, thanks for those comments. And, it's absolutely something that we'll monitor and be mindful of. But frankly, as we've done the analysis for a number of years, when we look across each of our different basins, they're all focused on that oil production and the high margin outcome that we get from producing the oil. So most of the gas upside as we highlighted on the slide we think will come from our associated gas.

[Jeff Ritenour, EVP & CFO at Devon Energy]

But there's a significant amount of additional resource underfoot in each of those basins that we could go prosecute in the future as we see continued momentum around pricing. So we feel really good about the position we have. We think it's one of the benefits of the multi basin just gives you lots of shots on goal and opportunities that a lot of other companies frankly just don't have. And again, I just want to thank the marketing team for doing such a great job of getting those molecules to market where we see the highest demand and the best opportunity to get the highest realized price.

[John Freeman, Managing Director at Raymond James Financial]

Thanks. And then just one quick one for me. The 25 plan, the 22 rigs, how many frac crews does that assume? I was just looking relative to the six y'all ran in 4Q?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes, three consistent crews in the Delaware. We may top that with a spot crew here and there and then about two to three other frac crews depending on how you count them during the time. But yes, so I call it Ballpark 6.

[John Freeman, Managing Director at Raymond James Financial]

Got it. Thanks, Clay. Appreciate

[John Freeman, Managing Director at Raymond James Financial]

it.

[Clay Gaspar, EVP & COO at Devon Energy]

You bet, John.

[Operator]

The next question is from Doug Leggate with Wolfe Research. Doug, your line is now open. Please go ahead.

[Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research]

Hey guys, I apologize for the comms problems earlier, but I wanted to make sure I'm traveling currently. I wanted to make sure I got a chance to come on and wish Rick well. Rick it's been a pleasure and amazing to watch what all the changes have taken place. I wish you well and Clay look forward to seeing you in the seats. But I do have a question for Clay and for Jeff, if I may.

[Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research]

And as predictable as always, one of them has to do with the balance sheet. So let me start there, Jeff, if that's okay. When we talk about inventory depth with Devon, we've talked about ten years at 60 and maybe higher that 80 and so on. You guys have given us that before. And if I think about, well, that basically means if you've got a less than 3% dividend, you need thirty three years to get your money back and you're telling us you've got ten to twenty years of inventory.

[Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research]

So I guess my question is, how do you stack the importance of the dividend, the buyback and the balance sheet when you think about free cash flow because you still have twenty five percent of your capital structure as debt and ultimately that amplifies your equity volatility depending what happens with the commodity. So I guess my question is why not target the balance sheet before you allocate $2,000,000,000 to the buyback? That's my first question. My second question, if I may, is a follow-up on John's actually. And Clay, I don't know if you want to get into this in any detail, but I mean gas markets are obviously changing in The U.

[Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research]

S. As it's been a view we've held for some time and you have a lot of optionality to be more than talk about second order derivative gas exposure. You could actually go direct and for example, rather than just expand the Dow joint venture, you could probably go back to more direct spending in some of your gas plays. I'm just curious what it would take for you to do that for those to be competitive versus your liquids targets? And I'll leave it there.

[Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research]

But thanks again and congrats Rick.

[Jeff Ritenour, EVP & CFO at Devon Energy]

Yeah. Thanks Doug. I appreciate the question as always. And I'm probably going to sound like a broken record here because we talk about this every quarter with you. But for us it continues to be all of the above.

[Jeff Ritenour, EVP & CFO at Devon Energy]

We think that the fixed dividend, the share repurchase program which obviously drive our cash returns to shareholders is absolutely table stakes. And the balance sheet without question is a priority for us. You see from the framework that we lay out, the first thirty percent of our free cash flow goes right back to the balance sheet. So I think that underscores our priority for maintaining that strong investment grade position that we have today. And you've seen us execute on that for a number of quarters now.

[Jeff Ritenour, EVP & CFO at Devon Energy]

On top of that though, again, what we've seen in the market, what we can continue to hear from our shareholders is that the cash returns are important. Folks like the growing fixed dividend and then we supplement that with the share repurchase program. So when you put it all together, we feel really good about the value proposition that we're delivering and plan to execute on that well into the future. I'll flip it over to Clay.

[Clay Gaspar, EVP & COO at Devon Energy]

Yes. Thanks for the question, Doug. That sounds like the Doug we know. I was thinking we might be getting a pass on an easy a non hard question from you. Yes, so let me start with you mentioned We've got

[Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research]

to outperform on you now Clay. We've got to ask the hard ones.

[Clay Gaspar, EVP & COO at Devon Energy]

Hey, man. I'm all for it. I'll take that every day. Yes, you bet. So let me go back to the ten years of de risk inventory that we've talked about.

[Clay Gaspar, EVP & COO at Devon Energy]

You've acknowledged Enveris and others acknowledge third party. Please don't mistake that as we're in a blowdown mode and the fifty three year old company is going to live to be 63 and then we shut the whole thing down. There is no intention of that. We certainly plan to rejuvenate the inventory, continue to do some hard work to continue to be creative and extend the runway for decades out into the future. Now that's hard work to do.

[Clay Gaspar, EVP & COO at Devon Energy]

I've talked about some of the organic things that we have in hand today that we really think provides incredible value. But this company has been built on hard work and hard decisions, as I mentioned, for fifty three years. So, second, let me shift to your second question on that and you talked about the gas inventory. As Jeff mentioned, we do have a very substantial amount of gas inventory, specifically in the Anadarko Basin and in the Delaware Basin. We love to test our portfolio.

[Clay Gaspar, EVP & COO at Devon Energy]

We've got a really cool black box model that you can put in whatever kind of scenario you want and it tells you ideally this is how you should prosecute the opportunities that you have. And so, we love to test that. We tested, I think, every oil and gas price combination you can think of. And what it keeps telling us is that even in the foreseeable future, the gas prices we're seeing today and even in the upside cases that we've run, it continues to point to our robust returns related to our oil processes, so our oil opportunities. And so that is where our dollars are really being directed.

[Clay Gaspar, EVP & COO at Devon Energy]

But please know that we continue to keep our eyes wide open to those opportunities. And absolutely, there will come a time when the call for gas is strong enough relative to oil and we'll be ready because we've got some really good inventory in our portfolio today.

[Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research]

It's very clear guys. I'll see you in a couple of weeks Clay. Thanks so much for that. Sounds great Doug.

[Operator]

The next question comes from Matthew Portillo with TPH. Please go ahead, Matthew.

[Matthew Portillo, Partner & Head of Research at Tudor, Pickering, Holt & Co]

Good morning, all. And I as well wanted to pass along congratulations to Rick and Clay in the new role. Maybe just a follow-up there, Clay, on the Anadarko, been a while since we've refreshed our thoughts on inventory depth in the basin. Just curious if you might be able to give us some context around how you think about inventory, especially in the context of higher natural gas and NGL prices, as you mentioned, progressing that program through the course of 2025 and beyond?

[Clay Gaspar, EVP & COO at Devon Energy]

Yeah. Thanks for the question, Matt. You know, we have needed the partnership in Dow to really promote the economics of the opportunities that we've had so that they can viably compete in the portfolio relative to the other opportunities. And we think even in today's commodity price that that's the right move going forward displayed by our extension of the JV that we have with Dow. Now, the team continues to look creatively, as I mentioned, up and down the hole, thinking about the rest of the basin, the opportunities there, expand our footprint very methodically, that we've done very well on that.

[Clay Gaspar, EVP & COO at Devon Energy]

And there will be a time when those opportunities really are on the more of the forefront. For now, we'll quietly keep working in the Anadarko Basin. We'll leverage resources like this financial arrangement so that we can make sure that we're being very prudent with the investor dollars and making sure that we are delivering the returns that we are expected to deliver in the organization that we have and competitively with the high quality portfolio that we have in the other basins.

[Matthew Portillo, Partner & Head of Research at Tudor, Pickering, Holt & Co]

Perfect. And then maybe just a follow-up question

[Matthew Portillo, Partner & Head of Research at Tudor, Pickering, Holt & Co]

on the Permian. You mentioned obviously chasing the Wolfcamp B in a bigger program for 2025. I was curious if you could maybe provide some context

[Matthew Portillo, Partner & Head of Research at Tudor, Pickering, Holt & Co]

around how much that program made up in

[Matthew Portillo, Partner & Head of Research at Tudor, Pickering, Holt & Co]

2024? How you're thinking about it in 2025? And then I guess for the Permian as a whole, how should we be thinking about the oil cut? I think you've been averaging around 46%, forty seven % through the course of the end of last year. Should that mix shift change dramatically or should we expect that to be pretty constant going forward?

[Clay Gaspar, EVP & COO at Devon Energy]

Yes, Matt, great question. Love talking to the Delaware Basin. That's our crown jewel asset and the team there is doing some very incredible work creating value. Jeff mentioned earlier some of the work that the marketing team did in ensuring that we had takeaway capacity. That's over the course of years, that kind of investment and relationships that we have to lean on to make sure that that happens.

[Clay Gaspar, EVP & COO at Devon Energy]

Last year, we talked about digging deeper into the Wolfcamp B, really testing how best to prosecute those opportunities. Should we develop them now? Should we stay later with them? And so I'll let John Raines talk a little bit about since he was leading the team at the time, talk a little bit more about what we learned in 2024 and how we're applying that to 2025?

[John Raines, SVP - E&P Asset Management at Devon Energy]

Yes, Matt, thanks for the question. As Clay said earlier, we're diving in more to these multi zone developments and through appraisal. We've gotten a lot more comfortable with the Wolfcamp B. And so we continue to lean in. We feel like this is the right development philosophy for us in the Delaware Basin.

[John Raines, SVP - E&P Asset Management at Devon Energy]

So when you think about Wolfcamp B from 2024 and 2025, I think your question was around allocation. And so we're moving from about 10% of our total program in 2024 up to about 30% in 2025 that will co develop with Wolfcamp A. And I think your second question, if I heard you correctly, was around oil mix. Oil mix is going to be pretty consistent in the Delaware Basin year over year. I think we're somewhere around 47% last year and maybe slightly below that, but really consistent year over year.

[Matthew Portillo, Partner & Head of Research at Tudor, Pickering, Holt & Co]

Thanks all.

[Operator]

The next question comes from John Davenport with Johnson Rice. Please go ahead. John, your line is now open. Please proceed with your question.

[Clay Gaspar, EVP & COO at Devon Energy]

Another one of those hard questions.

[John Davenport, Equity Research Associate at Johnson Rice & Company L.L.C.]

Hey, good morning guys.

[Rick Muncrief, President and CEO at Devon Energy]

We'll move on.

[Clay Gaspar, EVP & COO at Devon Energy]

Oh, there we go.

[John Davenport, Equity Research Associate at Johnson Rice & Company L.L.C.]

Thank you. I'm sorry. Yes, my question has been answered, but thank you guys.

[Clay Gaspar, EVP & COO at Devon Energy]

All right.

[Clay Gaspar, EVP & COO at Devon Energy]

Thank you, John.

[Operator]

The next question comes from Paul Cheng with Scotiabank. Please go ahead.

[Paul Cheng, Analyst at Scotiabank]

Hey, guys. Just a real quick follow-up. Okay, for the CapEx spending, do you have a cadence and also the number of wells coming on stream? Do you have a cadence that how it's going to look for the year? Thank you.

[Clay Gaspar, EVP & COO at Devon Energy]

Paul, tell me again which basin were you talking about there, the cadence?

[Paul Cheng, Analyst at Scotiabank]

Actually on all of them, in general that I mean I think that you guys do you expect that it's going to be prorated throughout the year because that your production outlook seems like that's what you suggest. But in terms of actual spending and also the number of wells that you're going to come on stream, is there anything that we should be aware that is not really prorated?

[Jeff Ritenour, EVP & CFO at Devon Energy]

No, Paul. I would say as a general statement, the IDs as they work their way through the year and this is on a gross basis, are generally pretty consistent. The capital actually we think it could trend down as we work our way through the year. First quarter is likely going to be the highest CapEx quarter for us and you'll see that trend down over time.

[Paul Cheng, Analyst at Scotiabank]

Okay. We do. Thank you.

[Rosy Zuklic, VP - Investor Relations at Devon Energy]

So, we have reached the conclusion of our call. So, thank you everyone for your interest in, in Devon. And if you have any further questions, please reach out to Chris or myself.

[Operator]

Thank you everyone for joining us today. This concludes our call and you may now disconnect your lines.

Participants

Executives

• Rosy Zuklic, VP - Investor Relations
• Rick Muncrief, President and CEO
• Clay Gaspar, EVP & COO
• Jeff Ritenour, EVP & CFO

Analysts

• Scott Hanold, Managing Director - Energy Research at RBC Capital Markets
• Neal Dingmann, Managing Director - Energy Research at Truist Securities
• Neil Mehta, Head of Americas Natural Resources Equity Research at Goldman Sachs
• Arun Jayaram, Vice President at JP Morgan Chase & Co
• Paul Cheng, Analyst at Scotiabank
• Roger Read, Senior Energy Analyst at Wells Fargo Securities
• Kevin MacCurdy, Managing Director at Pickering Energy Partners
• John Freeman, Managing Director at Raymond James Financial
• Doug Leggate, Managing Director - Senior Research Analyst at Wolfe Research
• Matthew Portillo, Partner & Head of Research at Tudor, Pickering, Holt & Co
• John Raines, SVP - E&P Asset Management at Devon Energy
• John Davenport, Equity Research Associate at Johnson Rice & Company L.L.C.