Devon Energy misses quarterly profit estimates, signs gas supply deals

By Vallari Srivastava

Aug 5 (Reuters) - Shale producer Devon Energy DVN.N on Tuesday narrowly missed Wall Street estimate for second-quarter profit and said it had signed two natural gas supply deals amid growing demand for the fuel.

The company will supply 50 million cubic feet per day of natgas to an undisclosed buyer over a 10-year period and will provide 65 mmcfd to CPV Basin Ranch Energy Center for a seven-year term as part of the agreements.

Devon's deal comes a day after Coterra Energy CTRA.N agreed to supply 50 mmcfd of natgas to the Permian-based energy center, as U.S. energy producers tap into surging domestic electricity consumption, as well as flourishing exports of the superchilled gas.

A more than 20% fall in Brent crude prices hurt Devon's quarterly performance, with its average realized price falling to $62.97 per barrel from $78.95 a year earlier.

Oil production rose more than 15% and natural gas output jumped 22% to 1.39 billion cubic feet per day.

Devon plans to boost annual free cash flow by $1 billion by the end of 2026 and cut its current-year capital expenditure forecast by $100 million to between $3.6 billion and $3.8 billion.

The company expects current-year oil production to be in the range of 384,000-390,000 bpd, compared with a prior view of 382,000-388,000 bpd.

The production outlook along with lower capital spending for 2025 is a sign the company's efforts to optimize portfolio are starting to bear fruit, RBC Capital Markets analyst Scott Hanold said.

Oklahoma City-based Devon posted an adjusted profit of 84 cents per share for the second quarter, compared with the analysts' estimate of 85 cents, according to data compiled by LSEG.