Summary
Diamondback Energy, Inc. (FANG) reported strong operational and financial performance for the quarter and six months ended June 30, 2019. The company demonstrated significant production growth in its core Permian Basin assets, driven by increased drilling activity and strategic acquisitions. Despite facing slightly lower average commodity prices compared to the prior year, higher volumes led to a substantial increase in total revenues, particularly from oil sales which constituted the vast majority of revenue. The company continues to execute on its strategy of deleveraging and returning capital to shareholders, highlighted by the successful Rattler Midstream IPO and the initiation of a significant $2 billion stock repurchase program. Diamondback's focus remains on efficient development, expanding its midstream infrastructure, and maintaining financial flexibility. Management expressed confidence in their ability to fund operations and capital expenditures through year-end 2019 with existing cash flow and credit facilities, while also exploring opportunities for further growth and asset optimization.
Financial Highlights
42 data points| Revenue | $1.02B |
| SG&A Expenses | $22.00M |
| Operating Expenses | $610.00M |
| Operating Income | $411.00M |
| Net Income | $349.00M |
| EPS (Basic) | $2.12 |
| EPS (Diluted) | $2.11 |
| Shares Outstanding (Basic) | 164.84M |
| Shares Outstanding (Diluted) | 165.02M |
Key Highlights
- 1Significant increase in oil, natural gas, and natural gas liquids production volumes year-over-year, contributing to a 94% revenue increase for the quarter and an 88% increase for the six-month period.
- 2Successful completion of the Rattler Midstream IPO in May 2019, generating approximately $720 million in net proceeds for Diamondback.
- 3Initiated a $2 billion stock repurchase program in May 2019, with approximately $104 million repurchased during the second quarter, demonstrating a commitment to returning capital to shareholders.
- 4Continued development focus in the Permian Basin, with significant horizontal wells drilled and completed across both the Midland and Delaware Basins.
- 5Divestiture of certain conventional and non-core Permian assets for $37 million in May 2019 and $285 million in July 2019, streamlining operations and focusing on core acreage.
- 6Expansion of credit facilities, with Diamondback's revolving credit facility borrowing base increasing to $3.4 billion as of June 30, 2019, providing ample liquidity.
- 7Realized oil prices, while lower than the prior year, improved quarter-over-quarter, with expectations to realize 95% or greater of WTI for the remainder of 2019.