Diamondback Energy, Inc. Quarterly Report for Q3 Ended Sep 30, 2017

Summary

Diamondback Energy, Inc. (FANG) reported a significant turnaround in its financial performance for the nine months ended September 30, 2017, compared to the same period in 2016. The company demonstrated strong revenue growth, driven by both increased production volumes and higher average commodity prices. This operational and financial improvement is largely attributable to successful drilling activities and strategic acquisitions, particularly in the Permian Basin's Midland and Delaware Basins. Despite a volatile commodity price environment, Diamondback maintained a focus on operational efficiency and cost control, aiming to deliver best-in-class execution. The company's strategic investments, including a major acquisition in the Delaware Basin earlier in 2017, have expanded its acreage and production base. Investors can take comfort in the company's proactive management of its balance sheet and its stated commitment to a conservative financial approach, as evidenced by its leverage ratio and liquidity position. The report also details ongoing capital expenditure plans and financing strategies to support future growth.

Key Highlights

• 1Revenue surged by 111% to $299.2 million for the third quarter of 2017 and by 134% to $799.2 million for the first nine months of 2017, compared to the prior year periods, driven by significant increases in production volumes and higher commodity prices.
• 2Net income turned positive, reaching $73.0 million for Q3 2017 and $367.7 million for the first nine months of 2017, a substantial recovery from the net loss of $2.2 million and $190.6 million, respectively, in the comparable 2016 periods.
• 3The company completed a significant acquisition in the Delaware Basin in February 2017 for approximately $2.5 billion, expanding its acreage and production capabilities.
• 4Average daily production more than doubled, increasing by 89.3% to 85,029 BOE/d for Q3 2017 and by 86.4% to 74,624 BOE/d for the first nine months of 2017, compared to the prior year.
• 5Operating expenses per BOE decreased to $7.67 for Q3 2017 and $8.12 for the first nine months of 2017, down from $9.15 and $9.48 respectively in the prior year, reflecting improved operational efficiency.
• 6Net cash provided by operating activities increased significantly to $638.0 million for the first nine months of 2017 from $226.3 million in the prior year, indicating robust cash generation from core operations.
• 7As of September 30, 2017, the company had $234.5 million in outstanding borrowings and $515.5 million available under its $2.0 billion revolving credit facility, with a proposed increase in borrowing base to $1.8 billion.

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