Summary
Diamondback Energy, Inc. (FANG) reported its third-quarter results for the period ending September 29, 2016. The company has demonstrated resilience in a challenging commodity price environment by significantly increasing production volumes while controlling costs. Despite lower average sales prices compared to the prior year, higher production, driven by increased drilling activity and strategic acquisitions, led to a substantial revenue increase of 27% year-over-year for the quarter. The company successfully raised capital through equity offerings and the issuance of senior notes, enhancing its financial flexibility. Furthermore, Diamondback executed a significant acquisition in the Southern Delaware Basin, expanding its acreage and future drilling potential. The company's operational focus on efficiency is evident in its reduced drilling times and well costs, which are among the lowest in the industry. Diamondback is strategically positioning itself for potential future growth, as evidenced by its increased rig count and plans to add more rigs if commodity prices strengthen. While the company recorded a non-cash impairment of its oil and gas properties due to lower commodity prices in the nine-month period, its strong production growth and cost management strategies suggest a positive outlook in the current market.
Financial Highlights
39 data points| SG&A Expenses | $9.91M |
| Operating Expenses | $135.44M |
| Operating Income | $6.69M |
| Net Income | -$2.23M |
| EPS (Basic) | $-0.03 |
| EPS (Diluted) | $-0.03 |
| Shares Outstanding (Basic) | 77.17M |
| Shares Outstanding (Diluted) | 77.17M |
Key Highlights
- 1Revenue increased by 27% to $142.1 million for the three months ended September 30, 2016, compared to the prior year, primarily driven by a 31.8% increase in average daily production.
- 2The company completed a significant acquisition of approximately 19,180 net acres in the Southern Delaware Basin for $560.0 million, significantly expanding its Permian Basin footprint.
- 3Diamondback successfully raised substantial capital through two public equity offerings totaling approximately $806.3 million in net proceeds during the first nine months of 2016.
- 4A new $500.0 million offering of 4.75% Senior Notes due 2024 was completed in October 2016, with proceeds used to repurchase existing senior notes.
- 5Operational efficiency improvements are highlighted by leading-edge drilling costs below $6.0 million for a 10,000-foot lateral well and below $5.0 million for a 7,500-foot lateral well.
- 6The company increased its operational activity, operating five horizontal rigs and two completion crews by the end of the third quarter, with plans to add more rigs if commodity prices strengthen.
- 7Despite a challenging commodity price environment, lease operating expenses per BOE decreased year-over-year, reflecting successful cost management and operational efficiencies.