Clay Gaspar
Chief Operating Officer at Devon Energy
Thank you, Rick, and good morning, everyone. The Devon team did a really good job of rounding out 2023 by exceeding our operational targets for the fourth quarter. These positive results were driven by three key factors. Number one, improved uptime, driving base production. Number two, increased efficiencies through faster cycle times, resulting in lower capital per well. And number three, better new well productivity, improving our wedge production volume.
Slide 5 provides a good visual of these favorable operating trends. The chart on the left highlights the efficiencies we've delivered in our drilling and completions operations. On the right, you can see this track record of efficiency gains is also paired with some of the best well productivity of any producer in the U.S. While these results can certainly vary from quarter-to-quarter, our consistency over time demonstrates the quality of our assets and execution capabilities. The most significant contributor to this advantaged capital efficiency was our franchise asset in the Delaware Basin. In the fourth quarter, roughly 60% of our capital was deployed to this prolific basin allowing us to run a consistent program of 16 rigs.
This activity -- with this activity, we brought online 62 new wells, grew productivity 6% year-over-year and expanded our DUC inventory, allowing us to add a fourth completion crew earlier this year. While we had strong results across our acreage position, in the quarter, the top contributors to our performance were several large pads within our Cotton Draw and Stateline areas. At Cotton Draw in the core of the basin, we brought on 11 three-mile laterals that showcased the stacked pay potential and prolific rates this area can deliver. These extended-reach wells were diversified across five different producing intervals in the Avalon, Bone Spring and Wolfcamp formations.
In aggregate, the oil-weighted production from these wells achieved a 30-day rates of 4,400 BOE per day with impressive per well recoveries trending as high as 4 million BOE. In addition to the high rates at Cotton Draw, we also delivered record-setting drilling and completion times. This performance included a record completion pace of 3,100 feet per day, and drilling times for these three-mile laterals came in as low as 19 days with the final mile drilled in a record time of just over 24 hours.
Another standout performance during the quarter and possibly my favorite in terms of naming convention was our Claw Hammer [Phonetic] project in the Stateline area. Claw Hammer was named by a geologist after the style of playing the banjo that his dad used in their family jam sessions. The good news for him and his family is that these wells are fantastic. This eight-well pad consists of two-mile laterals, codeveloped in multiple intervals in the Wolfcamp A with production rates averaging 3,900 BOE per day. This package of wells delivered the highest well productivity per lateral foot of any project during the quarter.
As I look ahead to 2024, I expect another big year for the Delaware Basin as we have a great slate of projects lined up. We plan to bring online around 215 wells for the year with most of the capital deployed towards the best parts of our acreage in Southern Lea and Eddy Counties and the Stateline area of Texas. This plan is designed to deliver improved capital efficiency and better well productivity through the full column of development of the Upper Wolfcamp, along with select landing zones in the Wolfcamp B where applicable. The derisking of multiple targets in the Wolfcamp B over the past year has allowed us to pursue more extensive multi-zone developments in 2024, bolstering our high-quality inventory, delivering higher net present value per project and still delivering exceptional rates of return.
Turning to Slide 13, to build upon Rick's comments from earlier, we're confident in our ability to deploy more capital to the core of the Delaware because of a long list of improvements in infrastructure. These improvements include 2 Bcf a day of processing additions -- gas processing additions, expansions to the downstream gas takeaway, enhanced water handling capabilities with our WaterBridge joint venture, build-out of gathering and compression and investment in self-generated power and microgrids to increase the reliability of the electrical infrastructure. With these improvements, we are very well-positioned to execute on our 2024 plan. In fact, year-to-date, we're delivering at a pace ahead of schedule, allowing us to fully offset the winter weather downtime we experienced in January across the field.
Shifting to the Eagle Ford. The successful integration of our Validus acquisition was one of the key drivers of the production increase of 56% during 2023. With our enhanced scale in the basin, the team did a great job of capturing synergies by driving improvements across each phase of our operations. This progress can be seen through several indicators, including year-over-year 15% decrease in production costs, a 30%-plus improvement in completion cycle times over the course of the year, and we set a company record spud to rig release of only five days.
Our activity during the year continued to demonstrate that the Eagle Ford provides one of the most promising opportunities for resource upside in the U.S. shale. Through tighter redevelopment spacing and refracs, our capital program not only replenished, but expanded our risk resource in the play to an inventory runway of around 10 years at today's pace of activity.
Looking to 2024, our key focus for the Eagle Ford team is to sharpen capital efficiency by incorporating appraisal learnings from the past year, along with more balanced activity across DeWitt and Karnes County. This plan is expected to deliver single-digit production growth for roughly $75 million less capital over last year.
In the Rockies, we possess a unique combination of assets that can provide both growth and free cash flow specifically in the Powder River Basin, we are building upon the well productivity improvements achieved over the past couple of years, where the average six-month cumes increased nearly 20% from historic levels. A recent highlight was the SHU Iberlin 3X [Phonetic] well, which reached peak rates in Q4. This three-mile Niobrara well achieved initial production rates greater than 1,500 BOE per day with an 85% oil cut and then hung in at that rate for quite a while.
In addition to the strong oil productivity, the Iberlin attained a record drilling performance of 1,350 feet per day, a 45% improvement compared to the average Niobrara well. In 2024, our efforts will be focused on refining spacing, reducing costs and continue to ready this asset for full development in the later part of this decade.
In the Williston, I want to thank the team for safely working through the incredibly severe winter storm weather that we experienced in January and rapidly restoring affected production. As I look into 2024, our focus for this asset will be to optimize base production, deploy selective investments to high-confidence projects, and harvest $300 million of field-level cash flow. So far this year, our capital program is off to a great start with our bull moves project maxing out our production facilities at over 15,000 barrels of oil per day with several of the wells flowing 3,000 barrels per day or more during their flowback.
Lastly, I'd like to briefly cover our activity in the Anadarko Basin, where we delivered an 8% production growth rate during 2023. The three-rig drilling program funded by our Dow joint venture, delivered very impressive well production. The value of this production was also enhanced by our ability to route volumes into the premium Southeast gas markets and by the team driving operational costs 10% lower. In 2024, we plan to maintain a similar pace of drilling activity in the Anadarko with a keen focus on developing the liquids-rich window of the play, where returns from our joint venture activity will benefit from higher condensate cuts.
And with that, I'll turn the call to Jeff for a financial review. Jeff? Thanks, Clay. I'll spend my time today discussing the highlights of our financial performance in 2023 and the priorities for our free cash flow as we head into 2024. Beginning with our fourth quarter financial performance, Devon's operating cash flow totaled $1.7 billion, exceeding consensus estimates and represents the highest quarterly total of the year. This cash flow comfortably funded our capital spending and resulted in $827 million of free cash flow, driving full year free cash flow to $2.7 billion. Even in the face of headwinds from lower commodity prices, this level of free cash flow ranks as one of the highest in Devon's 50-year-plus history. Another powerful example of the consistent financial results, our disciplined strategy can deliver. As Rick touched on earlier, with this free cash flow, we're targeting a cash return payout of 70% with the remainder reserved for balance sheet improvement. Slide 23 in the appendix is a good exhibit representing how we allocated our cash returns in the most recent quarter. Given the compelling valuation of our equity, we prioritize share repurchases over the variable dividend. This resulted in us repurchasing 5.2 million shares in the fourth quarter at a total cost of $234 million. In 2024, we've continued to actively acquire shares through our 10b5-1 program, and we plan to supplement this with systematic buying with open market purchases during the year. With plenty of runway remaining on our $3 billion buyback authorization, we see Devon's current valuation as a great opportunity to compound the per share growth for our investors. In addition to our buyback activity, we delivered investors an attractive stream of income through our fixed plus variable dividend framework. In the fourth quarter, we declared a dividend payout of $0.44 per share that is payable at the end of March. This dividend consists of the Board's approval to increase the fixed dividend by 10% to $0.22 per share and declare a variable distribution of $0.22 per share. We continue to believe dividends are a great way to reward shareholders and are a critical contributor to total returns over time. We also believe that the flexibility designed into our dividend framework allows us to return meaningful and appropriate amounts of cash to shareholders across a variety of market conditions through the cycle. Moving to the balance sheet. Devon's investment-grade financial position continued to strengthen in the fourth quarter with cash balances increasing by $144 million to a total of $875 million. In addition to our strong liquidity, we exited the year with low leverage marked by a net debt-to-EBITDA ratio of only 0.7 times. Looking ahead with the excess free cash flow that accrues to our balance sheet, we plan to build liquidity and retire maturing debt. Our next debt maturity comes due in September of this year, totaling $472 million and we will have the opportunity to retire another $485 million of notes in 2025. So in summary, our financial strategy is working well. We have successfully scaled our business to consistently generate free cash flow. We are boosting per share results by opportunistically repurchasing our shares. We offer a dividend yield that far exceeds that of the broader market and the balance sheet is in great shape with a clear pathway of continued improvement over the next few years. With that, I'll turn the call back to Rick for some closing comments.
