Devon Energy’s fourth quarter 2024 earnings call provided critical insights into the company’s ambitious plans for the Delaware Basin, one of its crown jewel assets. Accounting for over half of Devon’s total investment in 2025, the Delaware Basin is a primary focus area aimed at driving growth, enhancing operational efficiency, and maximizing shareholder value. Here’s a look at what Devon Energy has planned for this prolific region.
Delaware Basin Overview
The Delaware Basin continues to be the cornerstone of Devon’s oil and gas portfolio. In 2025, Devon plans to allocate more than 50% of its total capital investment to the Delaware Basin, aiming to maintain strong performance through an aggressive drilling and completion program.
Operational Plan for 2025
- Rigs & Crews: Devon will operate 14 rigs and three completion crews, bringing online approximately 265 gross wells in 2025.
- Production Targets: The company expects to produce around 815,000 BOE per day, including approximately 383,000 barrels of oil per day.
- Working Interest: Average working interest in 2025 is expected to be around 73%, slightly down from 80% in 2024 due to the mix of wells being drilled.
- Multi-Zone Development: Devon continues to lean into multi-zone projects to balance rate of return, net present value (NPV), and inventory sustainability. This strategy involves developing deeper zones such as the Wolfcamp B formation, which will make up about 30% of the company’s 2025 program, up from 10% in 2024.
Focus on Efficiency and Infrastructure
- Operational Efficiency: 2024 saw a 15% improvement in both drilling speed and completed feet per day, which Devon aims to continue in 2025.
- Takeaway Infrastructure: Devon’s marketing team has secured sufficient takeaway capacity for gas, NGLs, and oil, allowing the company to access premium Gulf Coast markets and maximize revenue.
- Technology Integration: The company plans to leverage technology to flatten base declines and improve recovery factors, driving continued growth and enhancing overall project economics.
Stable Oil Cut & Revenue Generation
- Oil Cut: The Delaware Basin’s oil cut is expected to remain stable at approximately 46%-47%, contributing to steady revenue generation.
- Revenue Strategy: By securing strong takeaway capacity and having access to high-demand markets, Devon is well-positioned to capitalize on increasing demand for oil and natural gas.
Insights from Well Data Analysis
Record Counts Analysis:
- The record counts of wells drilled per quarter show consistent growth from Q1 2024 to Q1 2025 with a notable increase of approximately 32.69% year-over-year.
- Quarterly distribution of well counts:
- Q1 2024: 52 wells
- Q2 2024: 65 wells
- Q3 2024: 65 wells
- Q4 2024: 36 wells
- Q1 2025: 69 wells
Rig Utilization Analysis:
- The most frequently used rigs in Q1 2025 include Patterson 565, H&P 393, Unit 403, H&P 269, and Cactus 135.
- Year-over-year rig utilization comparison shows a slight decline in the number of unique rigs used, from 16 in Q1 2024 to 15 in Q1 2025.
- Some rigs remain consistently active, indicating strong operational efficiency and effective resource management.
Visual Analysis:
- Record Counts of Wells Drilled by Month (2024 – 2025)
- Record Counts of Wells Drilled by Quarter (2024 – 2025)
- Rig Utilization (Most Active Rigs in Q1 2025)
These charts provide a clear overview of Devon’s drilling activities in the Delaware Basin and illustrate the company’s strategic approach to maintaining growth and efficiency.
Looking Ahead
The Delaware Basin will continue to be the primary engine driving Devon’s growth in 2025. By increasing focus on multi-zone development, enhancing operational efficiency, and ensuring robust takeaway capacity, the company is well-prepared to navigate the complexities of the oil and gas market. The ambitious plans laid out for 2025 show Devon’s commitment to creating sustainable value for shareholders through disciplined investment and technological innovation.
