Diamondback Energy, Inc. ( FANG Quick Quote FANG - Free Report) reported second-quarter 2021 adjusted earnings of $2.40 per share, which surpassed the Zacks Consensus Estimate of $2.25 and also the year-ago quarter’s earnings of 15 cents. The company’s bottom line was aided by better-than-expected production. Overall volumes were 401.5 thousand barrels of oil equivalent per day (MBOE/d), beating the Zacks Consensus Estimate of 389.8 MBOE/d. The company’s quarterly revenues of $1.68 billion outperformed the Zacks Consensus Estimate of $1.36 billion and also increased from the year-earlier figure of $425 million. Production & Realized Prices The 2018 buyouts of Energen Corporation and Ajax Resources helped Diamondback transform into one of the leading Permian Basin oil producers. Production of oil and natural gas averaged 401.5 MBOE/d comprising 60.4% oil. The figure increased 36.5% from the year-ago quarter’s 294.12 MBOE/d and also surpassed the Zacks Consensus Estimate of 389.8 MBOE/d. While oil output was up 37.5% year over year, natural gas volumes rose 39.7% year over year. The average realized crude oil price in the second quarter was $63.22 per barrel, reflecting an 187.5% rise from the year-ago realization of $21.99. Overall, the company fetched $45.63 per barrel compared with $15.39 a year ago. Expenses & Financials Second-quarter cash operating costs were $9.33 per barrel of oil equivalent (BOE), up 44.9% from the prior-year figure of $6.44. Diamondback’s lease operating expense (LOE) of $4.3 was up 11.7% year over year. Production taxes rose 245.8% from the prior-year quarter to $2.87 per BOE. Gathering and transportation expenses were $1.53 per BOE, higher than $1.35 in the second quarter of 2020. Capital expenditure in the quarter totaled $366 million. The company shelled out $330 million on drilling and completion, and spent another $12 million on non-operated properties. Plus, infrastructure and midstream budget amounted to $14 million and $10 million, respectively. As of Jun 30, 2020, this Permian-focused operator had $344 million in cash and cash equivalents, and a long-term debt of $7.4 billion with total debt-to-total capital of 40.2%. Diamondback’s board of directors declared a quarterly dividend of 45 cents per share for the second quarter. This signifies a 12.5% hike in its quarterly payout from its previous levels of 40 cents.The amount will be paid out on Aug19, 2021 to its shareholders of record as of Aug 12. It also generated free cash flow of $578 million in the second quarter. Diamondback decided to divest its 95,000 net acres in the Williston Basin to Oasis Petroleum Inc. ( OAS Quick Quote OAS - Free Report) for $745 million. Proceeds from the sale will be used for debt repayment. The deal is slated to close in the third quarter of this year, contingent on certain conditions. Outlook Diamondback raised its average daily production guidance to 363-370 MBOE/d (above the 2020 level of 300 MBOE/d) for 2021. Full-year capital spend estimate is cut to $1.525-$1.625 billion, down 6% at the midpoint from the prior guided range of $1.60-$1.75 billion. This Midland, TX-headquartered company predicts third-quarter daily production in the 388-398 MBOE/d range with an estimated capex between $430 million and $480 million. Permian Basin production for the September quarter is anticipated in the 363-370 MBOE/d band. Zacks Rank & Key Picks Diamondback currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the energy space are Matador Resources Company ( MTDR Quick Quote MTDR - Free Report) and Continental Resources, Inc. ( CLR Quick Quote CLR - Free Report) , each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here .