What were the key drivers behind Diamondback Energy's revenue growth in the first nine months of 2018?

Diamondback Energy's revenue growth was primarily driven by a substantial increase in both oil, natural gas, and natural gas liquids production volumes and higher average sales prices for these commodities. The company reported a 51% increase in average daily production and benefited from favorable commodity price trends during the period.

How did Diamondback Energy finance its recent acquisitions and its overall capital program?

Diamondback utilized a combination of financial resources to fund its operations and acquisitions. These included cash on hand, proceeds from asset sales (e.g., to Viper Energy Partners), borrowings under its revolving credit facility, and significant senior note offerings ($750 million in new 2024 notes). The pending Energen merger is an all-stock transaction, which helps manage immediate cash outflow.

What is the significance of the pending merger with Energen Corporation?

The pending merger with Energen Corporation is a transformative event for Diamondback. It is expected to significantly expand the company's asset base, increasing its Permian Basin acreage by 57% and more than doubling its estimated net horizontal drilling locations, solidifying its position as a leading operator in the region.

How is Diamondback Energy managing its operational costs and potential increases in service costs?

Diamondback Energy is proactively managing operational costs by securing critical supplies like frac sand in advance, locking in feasible costs, and purchasing items such as casing in bulk. The company is also focused on controlling and de-bundling additional costs. They believe their 2018 drilling and completion budget accounts for potential increases in service costs.

FANG 10-Q Quarterly Report Q3 FY2018 — Revenue, Net Income, EPS

Summary

Diamondback Energy, Inc. (FANG) reported strong performance for the nine months ended September 30, 2018, driven by significant production growth and higher commodity prices. Revenues surged by 89% year-over-year to $1.5 billion, reflecting a 38,175 BOE/d increase in average daily production. This operational success was bolstered by strategic acquisitions, including the Ajax Resources deal and the pending merger with Energen Corporation, which is set to substantially expand the company's acreage and drilling locations in the Permian Basin. The company is actively managing its capital expenditures, with a 2018 budget focused on drilling and completion activities. Despite increased operating expenses and interest costs related to growth and acquisitions, Diamondback maintained strong operating cash flow of $1.2 billion for the period. The company also secured additional transportation agreements and strengthened its balance sheet through senior note offerings and credit facility adjustments, positioning itself for continued growth.

Financial Highlights

42 data points

Beta

Revenue

$537.00M

Net Income

$157.00M

0.3% Net Margin

EPS (Diluted)

$1.59

Total Assets

$9.81B

Cash & Equivalents

$508.45M

Free Cash Flow

$387.72M

Financial Statements

Beta

Revenue	$537.00M
SG&A Expenses	$14.00M
Operating Expenses	$269.00M
Operating Income	$268.00M
Net Income	$157.00M
EPS (Basic)	$1.59
EPS (Diluted)	$1.59
Shares Outstanding (Basic)	98.64M
Shares Outstanding (Diluted)	98.82M

Key Highlights

1Revenue increased significantly by 89% to $1.5 billion for the nine months ended September 30, 2018, compared to the same period in 2017, driven by higher production volumes and commodity prices.
2Average daily production grew by 51% to 112,799 BOE/d for the first nine months of 2018, highlighting strong operational execution and asset development.
3The company completed strategic acquisitions, including Ajax Resources for $900 million and ExL Petroleum/EnergyQuest II for $312.5 million, expanding its Permian Basin footprint.
4A pending merger with Energen Corporation, valued at approximately $9.2 billion, was announced, which is expected to significantly increase Diamondback's acreage and drilling locations.
5Net cash provided by operating activities reached $1.2 billion for the nine months ended September 30, 2018, demonstrating robust cash generation capabilities.
6Diamondback secured firm oil transportation agreements out of the Midland Basin, mitigating potential transportation constraints and ensuring market access.
7The company's 2018 capital budget was increased to $1.5 billion - $1.6 billion, with a focus on drilling and completion activities, reflecting confidence in future growth.

Diamondback Energy, Inc. Quarterly Report for Q3 Ended Sep 30, 2018

Summary

Financial Highlights

Key Highlights

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