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Texas independent oil and natural gas company Diamondback Energy reported better than expected third second quarter earnings after the market close Tuesday. $FANG increased full year production guidance.


Diamondback Drilling

Diamondback Energy Inc (NASDAQ): $FANG Reported Earnings after Close Tuesday

$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

 

Diamondback Energy Inc  Q2 Earnings Recap

$1.59 Missed $1.64 EPS and $526.3 million Beat $477 million forecast in revenue 

Earnings

EPS of $1.59 on revenue of $526.3 million missed forecast EPS to $1.64 but beat revenue of $477 million. This compares to earnings of $1.40 per share a year ago

Diamondback Energy Inc (NASDAQ): $FANG

Market Reaction - After hours $131.00 −$2.79 (2.09%)

"I am extremely pleased with our organization's continued ability to deliver on securing firm takeaway out of the Permian as we look to maximize our exposure to international pricing. Diamondback's oil marketing strategy in the near term is to secure firm transportation at fixed discounts to Gulf Coast pricing while not compromising realizations over the long term," said CEO Travis Stice in a statement.

Highlights

  • Production rose 46% to 112,600 barrels of oil equivalent per day.
  • Average realized prices were $50.26 per boe, down 1% from Q1.
  • Q2 2018 cash dividend of $0.125 per share payable on August 27, 2018; implies a 0.4% annualized yield based on August 6, 2018 share closing price of $133.62
  • Executed agreement for option to acquire up to 10% equity interest in the EPIC Crude Oil Pipeline project; increases previously announced volume commitment from 50,000 bo/d to 100,000 bo/d (50% take or pay)

 

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

Diamondback Permian takeway

Takeway From June Presentation

Outlook

Full-year production is now seen at 115,000-119,000 boe per day, up 4% at the midpoint from prior guidance. Management also narrowed full-year capital spending guidance to $1.4 billion-$1.5 billion from $1.3 billion-$1.5 billion previously.

About Diamindback

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

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