03:13 PM EDT, 07/15/2024 (MT Newswires) -- Devon Energy ( DVN ) could post another "strong operational quarter" as it continues to execute its business plan from Q1, UBS said in an earnings preview emailed Monday.

UBS said it expects the company to produce 325 mbopd, or thousand barrels of oil per day, in Q2, exceeding the midpoint of the company's guidance of 321 to 327 mbopd, which could push up the fiscal-year forecast.

Devon, however, is estimated to produce 317 mbopd in Q3, below the consensus of 324 mbopd as activity in the Delaware well and Bakken basin slows, according to the note.

UBS struck a positive note on Devon's recently announced acquisition of Grayson Mill's Williston Basin for $5 billion. While the $50 million in cost savings Devon was targeting was low when compared to other deals in the exploration and production industry, the investment firm said it "could see upside" if Grayson Mill's midstream assets improved pricing and margins on Devon's legacy assets.

UBS added that it sees Devon as being still interested in acquisitions and would look for "more color" during the company's Q2 earnings call.

UBS maintained its neutral rating and a price target of $55 on the stock.

Devon said it will release its Q2 earnings results on Aug. 6.

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