Devon Energy (DVN) has shown solid performance throughout 2024 with oil production and capital expenditures consistently beating expectations and it has rebounded well from challenges in 2023, UBS Securities said in an earnings preview emailed Wednesday.

The firm said it expects the company's Q3 cash flow per share at $2.36, slightly below the consensus of $2.50, and production of 323 thousand barrels oil equivalent per day driven by good execution.

The acquisition of Grayson Mill Energy, which closed at the end of Q3, could influence Devon's performance, particularly regarding Bakken production and midstream margin improvements, according to the note.

"We look for any detail on asset integration and the development strategy, with management previously pointing to Bakken volumes being held flat at about 100mboepd," UBS added.

The firm said Devon is focused on reducing $2.5 billion in near-term debt, including repaying $472 million of debt in Q3, and its plan to pay down $1 billion term loan used for the Grayson Mill acquisition.

UBS reiterated neutral rating for Devon with a price target of $47.

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