Higher oil prices this year are giving oil companies the fuel to produce record cash flows. In times past, the industry used its windfall from higher oil prices to drill more wells and boost production. However, they've been reluctant to do that this year, having been burned in the past since higher production eventually sent prices lower.

While oil prices could go higher in 2023, giving oil stocks the fuel to continue growing their cash flow, the industry isn't banking on that outcome. Instead, many companies are using some of their oil-fueled cash flow to make acquisitions and drive growth in the coming year.

Devon Energy (NYSE: DVN) has been a trailblazer in the oil industry over the past few years. It launched the sector's first fixed-plus-variable dividend framework, following its merger of equals with WPX Energy last year. That strategy has Devon paying a fixed quarterly dividend that it can sustain at lower oil prices and steadily increase. It also pays out up to 50% of its post-base-dividend free cash flow to shareholders each quarter via a variable dividend.

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Source Fool.com