Summary
Diamondback Energy, Inc. (FANG) presented its 2013 annual report, highlighting significant growth and strategic positioning in the Permian Basin. The company has substantially expanded its acreage and production, focusing on oil-weighted reserves within the Wolfberry play. Key to this growth were strategic acquisitions and a strong development program, including a notable increase in horizontal drilling activities, which the company believes will enhance recovery rates and reduce costs per barrel. Diamondback's management emphasized its experienced team and operational control as key strengths, aiming to maximize value from its resource base. The company also detailed its financial performance and outlook, noting increased revenues driven by higher production volumes. Significant capital was deployed into property acquisitions and drilling activities. Diamondback is actively managing its financial flexibility through its revolving credit facility and senior notes to fund its expansion plans. Looking ahead, the company outlined a robust drilling program for 2014, focused on further developing its extensive inventory of drilling locations, particularly targeting horizontal wells in key Permian Basin formations.
Financial Highlights
40 data points| SG&A Expenses | $9.87M |
| Operating Expenses | $112.81M |
| Operating Income | $95.19M |
| Interest Expense | $8.06M |
| Net Income | $54.59M |
| EPS (Basic) | $1.30 |
| EPS (Diluted) | $1.29 |
| Shares Outstanding (Basic) | 42.02M |
| Shares Outstanding (Diluted) | 42.26M |
Key Highlights
- 1Substantial acreage growth: Diamondback expanded its net acreage position in the Permian Basin to 65,938 acres by the end of 2013, with 99% operated.
- 2Significant production increase: Average daily production grew to 7,321 BOE/d in 2013, a 149% increase from 2012, driven by increased drilling and property acquisitions.
- 3Focus on oil-weighted assets: Approximately 76% of 2013 production was oil, with 67% of proved reserves also classified as oil, aligning with favorable commodity prices.
- 4Strategic acquisitions: Completed significant acquisitions, including mineral interests in Midland County and leasehold interests in Martin and Dawson Counties, bolstering the company's resource base.
- 5Expansion of horizontal drilling: The company increased its focus on horizontal wells, drilling 41 as operator and participating in 6 as non-operator in 2013, aiming to enhance hydrocarbon recovery.
- 6Robust future drilling inventory: Identified a multi-year inventory of 848 potential vertical and 1,430 potential horizontal drilling locations.
- 7Strong financial position and flexibility: Maintained financial flexibility with available borrowing capacity under its revolving credit facility and proceeds from senior note offerings.