Devon Energy tops profit estimates on higher output, crude prices

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Nov 5 (Reuters) - Devon Energy DVN.N on Thursday surpassed Wall Street expectations for third-quarter profit, as a surge in crude oil prices and higher production boosted business.

The Iran war, now in its ninth month, has disrupted Middle East energy supplies and shipping through the Strait of Hormuz, a key maritime chokepoint. The average price of benchmark Brent crude rose 31% to $89.27 per barrel during the September quarter from a year earlier.

Devon became one of the largest independent ​oil and gas producers in the US after acquiring Coterra Energy for $58 billion earlier this year.

The company's output rose nearly 96% to 1.66 million barrels of oil equivalent per day from a year earlier, driven by growth in the Permian and Anadarko basins.

Devon's average realized price, including hedges, rose 24% to $79.54 per barrel (bbl) of oil produced.

In 2027, Devon expects to produce 1.6 mmboed and sees 1%-3% growth in oil output. It also forecast capital expenditure of roughly $5.3 billion in 2027, with nearly 75% of the budget expected to go towards the Permian basin.

The shale producer also expects buybacks to step up to over $1 billion in the fourth quarter and to rise further in 2027, fueled in part by the proceeds it will receive from the sale of its Eagle Ford assets.

The company said it had completed the strategic review of its assets, which was launched amid investor pressure to streamline its portfolio and focus on its core Permian Basin operations.

The Houston, Texas-based shale producer posted an adjusted profit of $1.42 per share for the three months ended September 30, compared with analysts' expectations of $1.33 per share, according to data compiled by LSEG.

Shares of the company fell 2% after the bell.

(Reporting by Vallari Srivastava in Bengaluru; Editing by Leroy Leo and Shailesh Kuber)

((Srivastava.Vallari@thomsonreuters.com;))