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Texas independent oil and natural gas company Diamondback Energy reported better than expected fourth quarter earnings after the market close Tuesday. FANG increased full year production guidance and CAPEX with cash cost guidance. $FANG traded 5% higher after the release.

Diamondback Drilling


Q4 EPS of $1.56 EPS beat $1.52 per share with revenue of $399.2 million up 115.8% year over year beating the expected $371 million. 

Reaction > Diamondback Energy NASDAQ: $FANG

After-hours: 121.00 +$5.97 (+5.19%)

$FANG reported ahead of other shale plays EOG Resources $EOG and Devon Energy $DVN. Diamondback operates and explores its onshore oil and natural gas reserves in the major oil producing Permian Basin in West Texas. 


  • Q4 2017 net income of $115 million, or $1.16 per diluted share; adjusted net income (as defined and reconciled below) of $153 million, or $1.56 per diluted share
  • Q4 2017 production of 92.9 Mboe/d (74% oil), up 9% over Q3 2017 and 79% year over year; full year 2017 production of 79.2 Mboe/d (74% oil), up 84% year over year within operating cash flow
  • Proved reserves as of December 31, 2017 of 335.4 MMboe (62% PDP, 70% oil), up 63% year over year; 2017 proved developed finding and development ("PD F&D") costs of $9.09/boe
  • Full year 2018 production guidance of 108.0 – 116.0 Mboe/d, up over 40% at the midpoint from full year 2017 average daily production
  • Full year 2018 CAPEX guidance of $1,300 - $1,500 million, including drill, complete and equip ("D,C&E") of $1,175 - $1,325 million and infrastructure of $125 - $175 million
  • Expect to turn 170 to 190 gross operated horizontal wells to production in 2018 with an average lateral length of approximately 9,300 feet Initiating annual cash dividend of $0.50 per common share to be payable quarterly beginning with Q1 2018

“In a year where investor focus shifted from resource capture to resource execution and capital discipline in the Permian Basin, Diamondback delivered on its promises by achieving 84% year over year production growth within cash flow. After successfully integrating multiple large acquisitions and doubling our asset base, we decreased cash costs by over 10% year over year and increased proved reserves by over 60% while maintaining peer-leading capital efficiency. Capital discipline and growth within cash flow are not new concepts to Diamondback, with our 2018 plan calling for over 40% growth within cash flow at current commodity prices," stated Travis Stice, Chief Executive Officer of Diamondback.


Diamondback's guidance for the full year 2018.

The Company expects full year production to be between 108.0 and 116.0 Mboe/d with an estimated capital spend for drilling, completion, infrastructure and non-operated properties of $1,300 to $1,500 million.

During 2018, Diamondback expects to complete between 170 and 190 gross operated horizontal wells from a 10 to 12 rig program.

Mr. Stice continued, "Diamondback continues to increase its focus on return on and return of capital, with our return on average capital employed nearly doubling in 2017 and expected to continue to rise given current commodity prices and our continued development of undeveloped acreage. We are also taking our first step toward rewarding shareholders for their support of our growth these last five years by initiating a $0.50 annual cash dividend to be payable quarterly beginning with the first quarter of 2018. Diamondback is now in a position to generate industry-leading organic growth as well as return capital to shareholders while continuing to reduce leverage. Our commitment to robust production growth at the highest margins and efficiencies of our peer group has not changed, and we will continue to be opportunistic through multiple avenues to maximize shareholder returns.”


  • Diamondback’s Q4 2017 production was 92.9 Mboe/d (74% oil), up 79% year over year from 51.9 Mboe/d in Q4 2016, and up 9% quarter over quarter from 85.0 Mboe/d in Q3 2017.
  • Average daily production for the full year 2017 was 79.2 Mboe/d (74% oil), up 84% year over year from 43.0 Mboe/d (73% oil) in 2016. During the fourth quarter of 2017,
  • Diamondback drilled 46 gross horizontal wells and turned 38 operated horizontal wells to production. The average completed lateral length for fourth quarter wells was 10,091 feet, up from 9,603 feet in the third quarter.
  • Operated completions during the fourth quarter consisted of 19 Lower Spraberry wells, 15 Wolfcamp A wells and four Wolfcamp B wells.
  • The Company operated 10 rigs and four dedicated frac spreads during the quarter.
  • For the full year 2017, Diamondback drilled 150 gross horizontal wells, with 123 gross operated horizontal wells turned to production over the same period.
  • The Company is currently operating 10 horizontal rigs and plans to operate between 10 and 12 horizontal rigs throughout 2018.
  • As a result, Diamondback expects to turn between 170 and 190 gross operated horizontal wells to production for the full year 2018.

Diamondback doubled their our Tier 1 acreage in the second half of 2016 and shifted them to focus on execution. This has allowed them to benefit from the stronger oil prices through 2017 and 2018 and convert resource into cash flow. They expanded into the Southern Delaware Basin marks and back in February 2017 and were able to guide higher with 65% production growth at the midpoint

- 189,000+ net acres in the Permian Basin:

- Northern Midland Basin: ~88,000 net surface acres

- Southern Delaware Basin: ~101,000 net surface acres

- Over 4,300 gross horizontal locations with average laterals of over 8,300 ft. economic at today’s prices(4)

About DiamondBack Energy

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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