(Reuters) – U.S. shale producer Devon Energy beat first-quarter profit estimates on Wednesday as higher production from Delaware basin helped it offset a decline in natural gas prices.

The Oklahoma City-based company also raised its full-year 2024 production outlook by 2% to a range of 655,000 to 675,000 barrels of oil equivalent per day (boepd).

U.S. crude prices were largely range bound in the first three months of 2024 despite rising geopolitical tensions, as non-OPEC members kept up supplies, while a milder winter season and oversupply pushed natural gas prices to a 3-1/2-year low in the quarter.

Its total production stood at 664,000 boepd in the January-March quarter, higher than 641,000 boepd it reported last year. Delaware Basin asset accounted for 66% of company wide volumes at 437,000 boepd.

Devon said realized prices, without hedges, for natural gas in the reported quarter was $1.30 per thousand cubic feet (mcf), 43% lower than last year’s $2.29 per mcf.

The oil and gas producer reported adjusted income of $1.16 per share for the three months ended March 31, topping average analysts’ estimate of $1.11 per share, according to LSEG data.

Devon added that due to the addition of a fourth Delaware completion crew in January, the company’s capital program in 2024 is expected to be weighted towards the first half of the year.

As a result of this activity, second quarter production is expected to increase to a range of 670,000 to 690,000 boepd.

“This improved outlook raises production targets and increases free cash flow projections, which will enhance our ability to accelerate the return of capital to shareholders,” said CEO Rick Muncrief.

(Reporting by Arunima Kumar in Bengaluru; Editing by Alan Barona)

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