01—Abstract
Summary
Summary of the 8-K filed July 11, 2024. Cited figures are marked; the original filing is the authoritative source.
Diamondback Energy, Inc. (FANG) filed an 8-K on July 11, 2024, providing preliminary financial insights for the second quarter ended June 30, 2024.
The filing details realized commodity prices and derivative activity, offering a glimpse into the company's financial performance before its official earnings release. Investors can assess the impact of hedging strategies on realized prices and understand the financial implications of derivative instruments, including both gains and losses on cash and non-cash instruments. Key figures released include average unhedged and hedged realized prices for oil, natural gas, and natural gas liquids.
The company also reported a net gain on derivative instruments of $18 milliona for the quarter, driven by a $54 million gain on commodity contracts, partially offset by losses on interest rate swaps and treasury locks. Notably, Diamondback plans to exclude a loss on treasury locks from its return of capital calculation. The report also specifies the weighted average basic and diluted shares outstanding for the quarter.
02—Key points
Key Highlights
- Second quarter 2024 average unhedged realized oil price of $79.51 per barrel.
- Second quarter 2024 average hedged oil price of $78.55 per barrel, indicating the impact of hedging.
- Anticipated net gain on derivative instruments of $18 million for Q2 2024.
- A $54 million gain on commodity contracts is a significant contributor to the net derivative gain.
- A $25 million loss on treasury locks is noted, which will be excluded from the return of capital calculation.
- Weighted average basic and diluted shares outstanding for Q2 2024 are both reported at 178,360 thousand shares.
03—Questions
Frequently Asked Questions
What were Diamondback's average realized prices for oil, natural gas, and NGLs in Q2 2024?
For the second quarter of 2024, Diamondback's average unhedged realized prices were $79.51 per barrel for oil, $0.10 per Mcf for natural gas, and $17.97 per barrel for natural gas liquids. The hedged realized prices were $78.55 per barrel for oil, $1.03 per Mcf for natural gas, and $17.97 per barrel for natural gas liquids.
What was the net impact of derivative instruments on Diamondback's Q2 2024 results?
Diamondback anticipates a net gain of $18 million on derivative instruments for the second quarter of 2024. This includes a $54 million gain on commodity contracts, offset by a $11 million loss on interest rate swaps and a $25 million loss on treasury locks.
Will the loss on treasury locks affect Diamondback's return of capital calculations?
No, Diamondback plans to exclude the loss on treasury locks, which amounted to $25 million, from its second quarter return of capital calculation. This loss was related to treasury locks executed prior to and settled upon the pricing of senior notes issued in April 2024.
How many shares did Diamondback have outstanding on a basic and diluted basis in Q2 2024?
For the second quarter of 2024, Diamondback reported weighted average basic shares outstanding of 178,360 thousand and weighted average diluted shares outstanding of 178,360 thousand.
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