Shares of Devon Energy (NYSE: DVN) slumped 26.4% in 2023, according to data provided by S&P Global Market Intelligence. Several factors weighed on the oil company, including lower oil prices. That impacted its cash flow, which affected its variable dividend.

Oil prices slumped last year. West Texas Intermediate (WTI), the primary U.S. oil price benchmark, fell 10.7% in 2023, ending at $71.65 per barrel. That was the first down year for crude oil since 2020.

Falling oil prices weighed on Devon Energy's cash flow. On top of that, service cost inflation forced the company to increase capital spending last year. With cash flow falling and spending rising, Devon produced a lot less free cash flow in 2023. The company generated $1.8 billion in free cash flow through the third quarter of last year, down from nearly $4.9 billion through the same period in 2022.

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Source Fool.com