Moody's lifts Devon Energy view to positive

Moody's Investors Service said it changed the outlook on Devon Energy Corp. to positive from stable.

Moody's also said it affirmed Devon's Ba1 corporate family rating, Ba1-PD probability of default rating, Ba1 senior unsecured debt rating and SGL-1 speculative grade liquidity rating.

The positive outlook reflects Devon's improving capital efficiency in its Delaware Basin and STACK assets, the agency said, and the company's debt reduction using asset sale proceeds while maintaining very good liquidity.

Devon's ongoing focus on growing oil production within its higher-return assets while managing the decline profile of its legacy assets and controlling capital spending should improve the company's credit profile and support a potential upgrade to Baa3, Moody's said.

Devon's positive outlook is supported by Moody's expectation of improving capital efficiency due to the company's drilling focus on its higher-return assets in the Delaware Basin and STACK. Devon's cash flow based leverage metrics will likely continue improving after a number of steps taken by the company to shore up its credit profile since 2015 including debt reduction, capital spending cuts and asset sales.

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