* Adj EPS $1.05 vs Street forecast $1.43
* Revenue up 16 percent to $2.5 bln
* Shares fall 3.3 pct in midday trading
May 2 (Reuters) - Oil and gas producer Devon Energy Corp posted a lower-than-expected quarterly profit on a drop in hydrocarbon prices that offset solid production growth, which it expects to maintain in the current quarter.
The company received an average of $32.83 per barrel of oil equivalent in the first quarter, down from $34.38 a year earlier.
In addition to weak natural gas prices, Devon said thin refining margins in Canada prompted more maintenance work by refiners there, weighing on local oil pricing. Also, maintenance work by Gulf Coast petrochemical plants meant there was less demand for inputs such as ethane and propane, which led to a 10 percent reduction in overall demand from that sector for natural gas liquids (NGLs), the company said.
Devon shares were down 3.3 percent at $68.33 in midday trading.
The Oklahoma City-based company in January struck a deal with Sinopec that gives the Chinese company a stake in five oil and gas developments being explored by Devon. Devon said it would be open to more of the same.
“We are open to taking on partners to help us develop our new exploration plays,” Chief Executive John Richels said on a conference call. “While we could easily pursue these new opportunities on our own, bringing in a partner enhances our overall risk-reward profile.”
Devon’s net earnings for the first quarter slipped to $393 million, or 97 cents per share, from $416 million, also 97 cents per share, in the year-ago quarter. The earnings per share were flat because of a nearly 10 percent drop in the number of shares outstanding.
Excluding one-time items, earnings per share were $1.05, the company said. Analysts’ average forecast was $1.43, according to Thomson Reuters I/B/E/S.
Revenue rose 16 percent to $2.5 billion, while analysts expected $2.55 billion.
Average oil and gas production rose 10 percent to 693,600 barrels of oil equivalent per day, lifted largely by a 26 percent increase in oil output.
The company forecast second-quarter output of 685,000 to 695,000 bpd and said it was comfortable with its previous full-year forecast for 6 percent production growth.
Elsewhere on Wednesday, Marathon Oil Co posted a drop in quarterly output and a jump in expenses.