It's tough being an oil company these days. Just ask Devon Energy Corp. (NYSE:DVN). The company reported the best quarter operationally in its history, yet it missed Wall Street's estimates rather badly. We can blame the dramatic sell-off in the price of oil last quarter for the miss on profits. However, despite the poor treatment it received from the price of oil during the quarter, Devon Energy isn't about to give up on black gold. It still has big plans to grow its oil production this year. 

Drilling down into the numbers
Like most oil companies, Devon Energy reports two sets of numbers to provide its investors with a more detailed look at its financial performance. Neither set of numbers was good this quarter. The company's core earnings, which adjust for the impact of oil and gas hedges, were $343 million, or $0.83 per share. That was $0.22 per share less than analysts were expecting. Meanwhile, on a GAAP basis the company reported a loss of $408 million, or $1.01 per share, resulting from a massive $1.9 billion non-cash impairment charge as it wrote down the value of some of its oil and gas assets. 

However, as bad as both numbers sound, Devon Energy's fourth-quarter results would have been outstanding if not for its being an oil company. The company produced a record amount of oil in the quarter and exceeded its own guidance. If fact, the company's U.S. oil production alone surged by a remarkable 84% in the quarter compared with the fourth quarter of last year. There's just one problem -- the price of oil during the quarter:

WTI Crude Oil Spot Price data by YCharts

Record production of a commodity that went straight downhill meant that the company's profits were going to follow suit.

Still, investors should focus on the fact that Devon Energy was really firing on all cylinders during the quarter. Leading the way last quarter was the company's Eagle Ford Shale assets, which produced 98,000 barrels of oil equivalent per day, or BOE/d, during the quarter. That's double what the asset was producing when the company acquired it just this past March. The other big highlight was the company's Canadian operations, as the company achieved a record high of 93,000 barrels per day in the quarter, which exceeded the company's own guidance by 5,000 barrels per day. Overall, the company was able to produce 664,000 oil-equivalent barrels per day, or BOE/d, during the fourth quarter of 2014. That exceeded the company's guidance range by 9,000 BOE/d and was 20% higher than the fourth quarter of 2013.

A look at outlook 
In light of the dramatic drop in the price of oil over the past few months, Devon Energy is cutting back its capital spending program in 2015 by 20% over what it spent last year. That reduced level will better help the company align its cash outflow with its expected cash inflows.

However, the company still expects to grow its oil production by the 20%-25% it had been forecasting. The reason the company can grow as fast with less money is due to two factors. First, it's seeing a significant improvement in well completion design, which means the company can get more oil out of each new well. On top of that, the company is focusing its capital spending on drilling development wells, as opposed to exploration wells. That means more of its capex is being used to move the needle on production next year, as opposed to looking for new sources of oil and gas that could be produced in future years.

Investor takeaway
Devon Energy's quarter was really a tale of two sides. Operationally, the quarter was fantastic, as it set records for oil production. However, because the price of oil nose-dived in the quarter, its financial results were less robust. Such is the life of an oil company, which is why it isn't backing down from its growth plan. It knows the price of oil can rebound just as quickly as it declines.