10-KPeriod: FY2018

Diamondback Energy, Inc. Annual Report, Year Ended Dec 31, 2018

Filed February 25, 2019For Securities:FANG

Summary

Diamondback Energy, Inc. (FANG) reported significant growth and strategic expansion throughout 2018, culminating in the transformative acquisition of Energen Corporation. This acquisition substantially increased Diamondback's acreage in the Permian Basin, nearly doubling its Tier One acres and more than doubling its estimated horizontal drilling locations. The company's operational focus remains on the development of oil-rich unconventional resources in the Midland and Delaware Basins, leveraging its experienced management team and efficient, low-cost development strategy. Financially, 2018 saw a substantial increase in revenues and net income compared to prior years, driven by higher production volumes and improved commodity prices, despite a late-year price decline. The company also managed its capital effectively, balancing significant investments in acquisitions and development with a commitment to maintaining financial flexibility. Looking ahead, Diamondback is positioned for continued growth through its extensive drilling inventory and strategic acquisitions, aiming to maximize shareholder returns.

Financial Highlights

46 data points
Beta

Revenue

$2.18B

Net Income

$846.00M

38.9% Net Margin

EPS (Diluted)

$8.06

Total Assets

$21.60B

Cash & Equivalents

$215.00M

Free Cash Flow

$1.56B

Financial Statements
Beta
Revenue$2.18B
SG&A Expenses$65.00M
Operating Expenses$1.17B
Operating Income$1.01B
Interest Expense$87.00M
Net Income$846.00M
EPS (Basic)$8.09
EPS (Diluted)$8.06
Shares Outstanding (Basic)104.62M
Shares Outstanding (Diluted)104.93M

Key Highlights

  • 1Completed the acquisition of Energen Corporation in November 2018, significantly expanding acreage and drilling inventory in the Permian Basin.
  • 2Reported a substantial increase in revenues to $2.18 billion and net income of $845.7 million for 2018, compared to $1.21 billion in revenues and $516.8 million in net income for 2017.
  • 3Grew average daily production by 65% to 130,439 BOE/d in 2018, driven by increased drilling activity and acquisitions.
  • 4Maintained a strong focus on operational efficiency, with lease operating expenses per BOE decreasing slightly in 2018.
  • 5Ended 2018 with approximately 992,001 MBOE of proved reserves, with 65% classified as proved developed producing.
  • 6Announced a 2019 capital budget of $2.7 billion to $3.0 billion, signaling continued investment in development and infrastructure.
  • 7Initiated a quarterly cash dividend in early 2018, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

Diamondback Energy completed the acquisition of Energen Corporation in November 2018. This all-stock transaction was transformative, significantly increasing the company's footprint in the Permian Basin by adding substantial acreage and a large inventory of drilling locations.

The acquisition of Energen more than doubled Diamondback's estimated horizontal drilling locations and increased its Tier One acreage in the Permian Basin by 57%. This significantly enhances the company's development pipeline and long-term growth potential.

For the year ended December 31, 2018, Diamondback reported total revenues of approximately $2.18 billion and net income attributable to the company of $845.7 million. This represents a significant increase from 2017, driven by higher production volumes and improved commodity prices, although the company noted a late-year price decline.

Diamondback is strategically deploying capital towards development and acquisitions, as evidenced by its 2019 capital budget of $2.7 to $3.0 billion. The company also maintains financial flexibility, with a significant borrowing base available under its credit facilities, and has initiated a quarterly cash dividend, signaling a balanced approach to growth and shareholder returns.