10-QPeriod: Q3 FY2023

Diamondback Energy, Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 8, 2023For Securities:FANG

Summary

Diamondback Energy, Inc. (FANG) reported its financial results for the third quarter and nine months ended September 29, 2023. The company demonstrated solid operational performance, with revenues for the nine months decreasing to $6.1 billion from $7.6 billion in the prior year, primarily due to lower commodity prices, though production volumes increased by 15% year-over-year, driven by acquisitions. Net income for the nine months was $2.3 billion, down from $3.5 billion in the same period last year. The company continued its commitment to returning capital to shareholders, increasing its annual base dividend and repurchasing shares. Diamondback also actively managed its asset portfolio through strategic divestitures and acquisitions, including a joint venture for water assets and the acquisition of Lario Permian. The company maintained a strong liquidity position with substantial cash and an undrawn credit facility.

Financial Highlights

45 data points
Beta

Revenue

$2.34B

Net Income

$915.00M

39.1% Net Margin

EPS (Diluted)

$5.07

Total Assets

$28.05B

Cash & Equivalents

$830.00M

Free Cash Flow

$1.36B

Financial Statements
Beta
Revenue$2.34B
SG&A Expenses$34.00M
Operating Expenses$1.00B
Operating Income$1.34B
Net Income$915.00M
EPS (Basic)$5.07
EPS (Diluted)$5.07
Shares Outstanding (Basic)178.87M
Shares Outstanding (Diluted)178.87M

Key Highlights

  • 1Net income for the nine months ended September 30, 2023, was $2.3 billion, a decrease from $3.5 billion in the prior year, primarily due to lower average commodity prices.
  • 2Total revenues for the nine months decreased to $6.1 billion from $7.6 billion in 2022, driven by lower oil, natural gas, and natural gas liquid prices, partially offset by a 15% increase in production volumes.
  • 3The company increased its annual base dividend to $3.36 per share and paid dividends totaling $149 million in Q3 2023, along with declaring a combined base and variable dividend of $3.37 per share for Q4 2023.
  • 4Diamondback repurchased $56 million of its common stock during the third quarter, with approximately $1.8 billion remaining under its authorized repurchase program.
  • 5The company generated $4.3 billion in cash flow from operating activities for the nine months ended September 30, 2023.
  • 6Significant asset management activities included the formation of a joint venture for water assets (Deep Blue) and divestitures of non-core assets, generating approximately $1.7 billion in gross proceeds.
  • 7Capital expenditures for the nine months were $2.05 billion for drilling and completions, supporting a production growth strategy.

Frequently Asked Questions

For the third quarter of 2023, Diamondback Energy reported net income of $915 million, or $5.07 per diluted share, compared to $1.18 billion, or $6.72 per diluted share, in the third quarter of 2022. Total revenues decreased to $2.34 billion from $2.44 billion year-over-year.

For the first nine months of 2023, Diamondback Energy's combined production volumes increased by 15% to 120.9 million BOE compared to the same period in 2022. However, average realized commodity prices decreased significantly, with oil prices falling from $98.47/Bbl to $75.42/Bbl, and natural gas prices dropping from $5.44/Mcf to $1.33/Mcf, impacting overall revenue.

Diamondback Energy is committed to returning capital to shareholders, evidenced by an increased annual base dividend to $3.36 per share and the declaration of a $3.37 per share combined base and variable dividend for Q4 2023. The company also has a significant share repurchase program, with approximately $1.8 billion remaining available, and aims to return at least 75% of free cash flow to shareholders through dividends and buybacks, with the remainder used for debt reduction.

During the third quarter of 2023, Diamondback Energy formed a joint venture (Deep Blue) for its water assets, contributing them in exchange for cash and a 30% equity interest. The company also divested non-core assets, realizing approximately $1.7 billion in gross proceeds, exceeding its target. Acquisitions in 2023, such as the Lario Acquisition, have contributed to production growth.