Texas independent oil and natural gas company Diamondback Energy reported worse than expected fourth second quarter earnings after the market close Tuesday. $FANG increased full year production guidance and lowered expenditure outlook.
Texas independent oil and natural gas company Diamondback Energy reported worse than expected fourth second quarter earnings after the market close Tuesday. $FANG increased full year production guidance and lowered expenditure outlook.
Diamondback Energy Inc (NASDAQ): $FANG Reported Earnings after Close Tuesday
$1.21 BEat Exp $1.62 EPS AND $633M Missed $661 million forecast in revenue
Earnings
Diamondback Energy (FANG) released fourth quarter earnings on Tuesday with earnings per share ofe $1.21, below the $1.62 estimated by analysts polled by Refinitiv. Revenue missed at $633 million, compared to the $661 million forecast.
Viper Energy Update
Viper Energy Partners LP, a subsidiary of Diamondback energy reported fourth quarter earnings after the market close Feb 5, 2019. $VNOM surpassed $1 billion in aquistions since it’s IPO four years ago. The company raised production guidance and a Q4 2018 cash distribution of $0.51 per common unit , up 11% year over year; implies a 6.4% annualized yield based on the February 4, 2019 unit closing price of $31.95.
Diamondback Energy Inc (NASDAQ): $FANG
Market Reaction – After hours $102.26 −$2.54 (-2.42%)
Highlights
HIGHLIGHTS Full year 2018
- Net income of $846 million, or $8.06 per diluted share; adjusted net income (as defined and reconciled below) of $615 million, or $5.87 per diluted share
- 2018 production of 121.4 Mboe/d (73% oil) excluding the effect of the Energen acquisition, up 53% year over year and above the high-end of 2018 guidance range
- Closed the acquisition of Energen Corporation (NYSE: EGN) (“Energen”) as well as multiple transactions in Spanish Trail North during Q4 2018, growing assets by 123% year over year to a total of approximately 461,000 net acres in the Permian (195,000 net acres in the Midland Basin, 170,000 net acres in the Delaware Basin and 96,000 net acres in other areas of the Permian)
- Proved reserves as of December 31, 2018 of 992.0 MMboe (65% PDP, 63% oil), up 196% year over year; 2018 consolidated proved developed finding and development (“PD F&D”) costs of $10.44/boe; drill bit finding and development costs of $7.28/boe Q4 2018
HIGHLIGHTS Q4 2018
- Net income of $307 million, or $2.50 per diluted share; adjusted net income (as defined and reconciled below) of $148 million, or $1.21 per diluted share
- Q4 2018 Consolidated Adjusted EBITDA (as defined and reconciled below) of $468 million Q4 2018 production of 182.8 Mboe/d (71% oil), up 49% over Q3 2018 and 97% year over year
- Declared Q4 2018 cash dividend of $0.125 per share payable on February 28, 2019; implies a 0.5% annualized yield based on the February 15, 2019 share closing price of $105.50 2019
Update Full year 2019
- Production guidance of 275 – 290 Mboe/d (68% – 70% oil), implies over 27% year over year growth from pro forma 2018 production
- owered full year 2019 capital budget for drilling, completion, midstream and infrastructure to $2.7 – $3.0 billion; expect to complete between 290 to 320 gross horizontal wells
- Full year 2019 Midland Basin drilling, completion and equip (“D,C&E”) well costs of $770 – $800 per lateral foot, midpoint flat versus full year 2018 D,C&E guidance
- Full year 2019 Delaware Basin D,C&E well costs of $1,075 – $1,150 per lateral foot, midpoint down 7% versus full year 2018 D,C&E guidance
- Currently operating 21 rigs and plan to operate between 18 and 22 drilling rigs throughout 2019
- Rattler Midstream exercised its option and acquired a 10% equity interest in EPIC Crude Oil Pipeline project (“EPIC”); closed on its acquisition of a 10% equity interest in the Gray Oak Pipeline project (“Gray Oak”)
- As previously announced, increasing annual cash dividend by 50% to $0.75 per common share to be payable quarterly beginning with Q1 2019 subject to Board approval
Diamondback Energy Q3 Earnings Recap
$1.67 BEat Exp $1.52 EPS on $538M Beating $523.70 million forecast in revenue
Earnings
Diamondback Energy (FANG) released third quarter earnings on Tuesday of $1.67 per share, beating the consensus estimate of $1.52 per share. This compares to earnings of $1.33 per share a year ago. These figures are adjusted for non-recurring items. FANG reported revenue of $538 million beating the revenue estimate of $523.70 million.
In Q2 FANG reported EPS of $1.59 on revenue of $526.3 million which missed forecast EPS to $1.64 but beat revenue of $477 million. This compares to earnings of $1.40 per share a year ago
Viper Energy Update
Viper Energy Partners LP, a subsidiary of Diamondback energy reported weaker than expected third quarter earnings after the market close Monday. $VNOM surpassed $1 billion in aquistions since it’s IPO four years ago. The company raised production guidance. Read More
- Viper Energy NYSE: $VNOM Earnings Market Reaction After hours 32.40 −2.49 (-7.14%)
Diamondback Energy Inc (NASDAQ): $FANG
Market Reaction – After hours $114.00 +0.63 (+0.56%)
Highlights
- Q3 2018 production of 123.0 Mboe/d (72% oil), up 9% over Q2 2018 and 45% year over year Increasing full year 2018 production guidance range to 118.5 – 119.5 Mboe/d, up 2% from prior guidance midpoint; implies 50% annualized growth at the midpoint from full year 2017 average daily production
- Q3 2018 cash dividend of $0.125 per share payable on November 26, 2018; implies a 0.4% annualized yield based on the November 5, 2018 share closing price of $115.99
- Shareholder meetings to vote on the previously announced all-stock acquisition of Energen Corporation are scheduled for November 27; deal expected to close shortly thereafter pending shareholder approval
- On October 31, 2018, closed previously announced acquisition of leasehold interests and related assets from Ajax Resources, LLC (“Ajax”) Also on October 31, 2018, closed additional tack-on acquisitions of 3,646 net leasehold acres, ~3,500 boe/d of estimated current net production and related assets in Northwest Martin and Northeast Andrews counties from ExL Petroleum Management, LP, ExL Petroleum Operating, Inc. (“ExL”) and EnergyQuest II, LLC (“EnergyQuest”) for $312.5 million, subject to adjustment; complementary assets adjacent to existing Diamondback and Ajax acreage
- Rattler Midstream intends to exercise its right to acquire a 10% equity interest in the Gray Oak Pipeline, subject to certain closing conditions; Diamondback has increased its volume commitment to the Gray Oak Pipeline from 50,000 bo/d to 100,000 bo/d, taking Diamondback’s total volume commitment to new long-haul pipelines to 200,000 bo/d (including previously announced volume commitment of 100,000 bo/d on the EPIC Crude Oil Pipeline project)
- Acquired ownership of overriding royalty interests across a large portion of Ajax’s asset base in Northwest Martin and Northeast Andrews counties; increases net revenue interest by 1% across field
- Executed joint development agreement with Carlyle for development of the San Pedro area of Pecos County and commenced drilling operations
Ajax Resources Acerage Buy
Diamondback also agreed to acquire all leasehold interests and related assets of Ajax Resources for $900 million in cash and 2.58 million shares of common stock. The deal gives Diamondback 25,493 net leasehold acres in the Northern Midland Basin. Producing over net 12,100 boe/d (88% oil) as of August 6, 2018
The acerage has 362 net identified potential horizontal drilling locations with an average lateral length of over 9,500 feet; ~220 net potential locations in the top quartile of Diamondback’s current inventory ~99% of acreage operated, with average 99% working interest and 23% average royalty burden. The acreage HBP allows for 12+ well multi-zone pad development in the Middle Spraberry, Lower Spraberry and Wolfcamp A
Takeway From June Presentation
About Diamondback
Diamondback Energy is an independent oil and natural gas company headquartered in Midland, TX. Diamondback’s growth strategy is focused on the acquisition, development, exploration and exploitation of unconventional, long-life, onshore oil and natural gas reserves in the major oil producing Permian Basin in West Texas. The Company’s operations are directed primarily at the large acreage areas of the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations, collectively known as the Wolfberry Trend.
Source Diamondback Energy
Live From The Pit