10-QPeriod: Q2 FY2023

Diamondback Energy, Inc. Quarterly Report for Q2 Ended Jun 30, 2023

Filed August 3, 2023For Securities:FANG

Summary

Diamondback Energy, Inc. (FANG) reported its second-quarter 2023 financial results, showcasing a robust operational performance despite a challenging commodity price environment. The company generated $1.92 billion in total revenues for the quarter, with net income attributable to common stockholders reaching $556 million, or $3.05 per diluted share. This demonstrates strong profitability driven by effective cost management and strategic operational execution in the Permian Basin. Financially, Diamondback Energy maintained a solid balance sheet with total assets of $27.6 billion. The company actively returned capital to shareholders by increasing its annual base dividend to $3.36 per share and repurchasing approximately $321 million of its common stock during the quarter. Furthermore, Diamondback Energy successfully executed on its divestiture strategy, exceeding its non-core asset sale target and generating significant proceeds that were used for debt reduction and general corporate purposes, indicating a focus on optimizing its asset portfolio and enhancing financial flexibility.

Financial Highlights

44 data points
Beta

Revenue

$1.92B

Net Income

$556.00M

29.0% Net Margin

EPS (Diluted)

$3.05

Total Assets

$29.00B

Cash & Equivalents

$21.00M

Free Cash Flow

$1.51B

Financial Statements
Beta
Revenue$1.92B
SG&A Expenses$37.00M
Operating Expenses$919.00M
Operating Income$1.00B
Net Income$556.00M
EPS (Basic)$3.05
EPS (Diluted)$3.05
Shares Outstanding (Basic)180.37M
Shares Outstanding (Diluted)180.37M

Key Highlights

  • 1Net income attributable to Diamondback Energy, Inc. was $556 million ($3.05 per diluted share) for Q2 2023, down from $1.42 billion ($7.93 per diluted share) in Q2 2022, reflecting lower commodity prices.
  • 2Total revenues for Q2 2023 were $1.92 billion, a decrease from $2.77 billion in Q2 2022, driven by lower oil and natural gas sales prices.
  • 3The company's cash operating costs were $10.66 per BOE for Q2 2023, showing efficient cost management.
  • 4Diamondback Energy increased its annual base dividend to $3.36 per share and declared a Q2 2023 dividend of $0.84 per share, demonstrating a commitment to returning capital to shareholders.
  • 5Significant share repurchases were made, totaling $321 million in Q2 2023, with approximately $1.8 billion remaining under the repurchase program.
  • 6The company divested non-core assets for $275 million in Q2 2023, exceeding its divestiture target and utilizing proceeds for debt reduction.
  • 7Production for Q2 2023 averaged 449.9 MBOE/d, with 89 gross operated wells turned to production.

Frequently Asked Questions

Diamondback Energy's total revenues decreased to $1.92 billion in Q2 2023 from $2.77 billion in Q2 2022, primarily due to lower average prices received for oil, natural gas, and natural gas liquids. Consequently, net income attributable to Diamondback Energy, Inc. declined to $556 million ($3.05 per diluted share) in Q2 2023, compared to $1.42 billion ($7.93 per diluted share) in Q2 2022.

Diamondback Energy demonstrated a commitment to returning capital through an increased annual base dividend, now at $3.36 per share, and a declared Q2 2023 dividend of $0.84 per share. Additionally, the company actively repurchased its common stock, spending $321 million in Q2 2023, with approximately $1.8 billion remaining under its authorized repurchase program.

The company is actively managing its asset portfolio through strategic divestitures, successfully selling non-core assets for $275 million in Q2 2023 and exceeding its divestiture target. Operationally, Diamondback Energy maintained efficient cost control, reporting cash operating costs of $10.66 per BOE for Q2 2023. The company also strategically improved its operational efficiency by utilizing simulfrac or simulfrac e-fleet completions, reducing exposure to spot frac prices.

Diamondback Energy anticipates production to grow slightly in the second half of 2023, with projected oil production between 262 and 265 MBO/d (440 to 445 MBOE/d) in the third quarter. The company expects low single-digit annual production growth in 2024, maintaining similar activity levels to 2023. Capital expenditures are projected to decrease by approximately 5% in Q3 2023 and further in Q4 2023, setting a baseline for the 2024 plan, with expectations of declining completion costs due to lower raw material and service costs.