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Diamondback (FANG) Beats on Q3 Earnings, Ups Production View
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Diamondback Energy, Inc. (FANG - Free Report) reported third-quarter adjusted net income per share of $1.67, ahead of the Zacks Consensus Estimate of $1.52 and the comparable 2017 period profit of $1.33 on strong production.
The Permian pure play’s total revenues of $538 million came above the Zacks Consensus Estimate of $524 million and increased 78.6% year over year. The company, which is in the process of acquiring Energen Corporation , saw its third-quarter adjusted EBITDA of $371.6 million increase 59.8% from $232.5 million a year ago.
Diamondback Energy, Inc. Price, Consensus and EPS Surprise
The production of oil and natural gas averaged 123 MBOE/d (72% oil), up 44.6% from last year. Diamondback’s oil production increased 43% year over year, while natural gas volumes surged 31.5%.
The average realized crude oil price during the third quarter was $55.99 per barrel, representing an increase of 22.7% from the year-ago realization of $45.62. However, the average realized natural gas price during the September quarter of 2018 was $1.90 per thousand cubic feet (Mcf), down 24.3% from the year-ago period. Overall, the company fetched $46.59 per barrel compared with $38.25 a year ago.
Expenses
Third-quarter cash operating cost was $8.7 per barrel of oil equivalent (BOE), up from $7.67 per BOE in last year’s corresponding period. Diamondback’s lease operating expense and cash G&A expense came in at $4.34 and 78 cents, respectively, increasing from $4.15 and 73 cents incurred in the third quarter of 2017. The company, which closed the previously announced acquisition of Ajax Resources during the quarter, shelled out $321 million on drilling, completion and non-operated properties, while infrastructure and midstream budget was $74 million.
Financial Position
As of Sep 30, 2018, the Permian-focused operator with a market capitalization of almost $11 billion, had $508.4 million in cash and cash equivalents. The company had long-term debt of $2.3 billion, representing a debt-to-capitalization ratio of 28.2%. At the end of the third quarter, Diamondback had $2.7 billion undrawn credit facility.
Importantly, Diamondback delivered a good cash flow performance this year – a benchmark for the oil and gas industry – with $12 million in free cash flow since the beginning of 2018.
Guidance
The company raised its full-year production forecast to reflect a number of acquisitions and surge in output over the past 12 months. Diamondback upsized 2018 output guidance to 1118.5–119.5 MBOE/d – representing annualized production growth of 50% at the midpoint – up from previous estimate of 115–119 MBOE/d. The company also hiked its full-year capital spending outlook to $1.5–$1.575 billion from $1.4–$1.5 billion earlier on added midstream infrastructure outgo.
Zacks Rank & Stock Picks
Diamondback Energy currently retains a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are Magnolia Oil & Gas Corp. (MGY - Free Report) and Murphy Oil Corp. (MUR - Free Report) . Both have Zacks Rank #2 (Buy).
Murphy Oil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 76.2%.
Meanwhile, over 30 days, Magnolia Oil & Gas has seen the Zacks Consensus Estimate for 2018 and 2019 increase 19.1% and 8.8%, to $1.37 and $1.74 per share, respectively.
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Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Diamondback (FANG) Beats on Q3 Earnings, Ups Production View
Diamondback Energy, Inc. (FANG - Free Report) reported third-quarter adjusted net income per share of $1.67, ahead of the Zacks Consensus Estimate of $1.52 and the comparable 2017 period profit of $1.33 on strong production.
The Permian pure play’s total revenues of $538 million came above the Zacks Consensus Estimate of $524 million and increased 78.6% year over year. The company, which is in the process of acquiring Energen Corporation , saw its third-quarter adjusted EBITDA of $371.6 million increase 59.8% from $232.5 million a year ago.
Diamondback Energy, Inc. Price, Consensus and EPS Surprise
Diamondback Energy, Inc. Price, Consensus and EPS Surprise | Diamondback Energy, Inc. Quote
Production & Realized Prices
The production of oil and natural gas averaged 123 MBOE/d (72% oil), up 44.6% from last year. Diamondback’s oil production increased 43% year over year, while natural gas volumes surged 31.5%.
The average realized crude oil price during the third quarter was $55.99 per barrel, representing an increase of 22.7% from the year-ago realization of $45.62. However, the average realized natural gas price during the September quarter of 2018 was $1.90 per thousand cubic feet (Mcf), down 24.3% from the year-ago period. Overall, the company fetched $46.59 per barrel compared with $38.25 a year ago.
Expenses
Third-quarter cash operating cost was $8.7 per barrel of oil equivalent (BOE), up from $7.67 per BOE in last year’s corresponding period. Diamondback’s lease operating expense and cash G&A expense came in at $4.34 and 78 cents, respectively, increasing from $4.15 and 73 cents incurred in the third quarter of 2017. The company, which closed the previously announced acquisition of Ajax Resources during the quarter, shelled out $321 million on drilling, completion and non-operated properties, while infrastructure and midstream budget was $74 million.
Financial Position
As of Sep 30, 2018, the Permian-focused operator with a market capitalization of almost $11 billion, had $508.4 million in cash and cash equivalents. The company had long-term debt of $2.3 billion, representing a debt-to-capitalization ratio of 28.2%. At the end of the third quarter, Diamondback had $2.7 billion undrawn credit facility.
Importantly, Diamondback delivered a good cash flow performance this year – a benchmark for the oil and gas industry – with $12 million in free cash flow since the beginning of 2018.
Guidance
The company raised its full-year production forecast to reflect a number of acquisitions and surge in output over the past 12 months. Diamondback upsized 2018 output guidance to 1118.5–119.5 MBOE/d – representing annualized production growth of 50% at the midpoint – up from previous estimate of 115–119 MBOE/d. The company also hiked its full-year capital spending outlook to $1.5–$1.575 billion from $1.4–$1.5 billion earlier on added midstream infrastructure outgo.
Zacks Rank & Stock Picks
Diamondback Energy currently retains a Zacks Rank #3 (Hold).
Some better-ranked players in the energy space are Magnolia Oil & Gas Corp. (MGY - Free Report) and Murphy Oil Corp. (MUR - Free Report) . Both have Zacks Rank #2 (Buy).
(You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)
Murphy Oil’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average positive surprise being 76.2%.
Meanwhile, over 30 days, Magnolia Oil & Gas has seen the Zacks Consensus Estimate for 2018 and 2019 increase 19.1% and 8.8%, to $1.37 and $1.74 per share, respectively.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>