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Diamondback Ups Capital Budget for 2019, Plans Dividend Hike
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Diamondback Energy, Inc. (FANG - Free Report) recently released its capital budget along with production guidance for 2019. Moreover, the company plans to increase its dividend in 2019. Notably, it intends to operate within its cash flow for the coming year, considering the current commodity price environment and increasing service costs.
Analyzing 2019 Capital Budget & Production Guidance:
Capital Budget: For 2019,Diamondback plans to invest in the range of $2,350-$2,700 million in Horizontal drilling and completion. The figures are much higher than updated 2018 guided range of $1,250-$1,300 million. The company intends to spend $125-$150 million in Infrastructure-related investments for 2019, which is lower than the updated 2018 guidance of $250-$275 million. Moreover, the company has plans to spend $225-$250 million for its Midstream operations in 2019, excluding the long-haul pipeline investments. Total capital budget for 2019 is expected in the range of $2,700-$3,100 million, much higher than updated 2018 guidance of $1,500-$1,575 million.
Dividend Hike: Diamondback initiated an annual cash dividend of 50 cents per share in 2018, which was paid on a quarterly basis starting from the first quarter. Now, it has plans to hike the amount by 50% in 2019, with the figure likely to increase to 75 cents per share. The increased quarterly dividend will be paid from the first quarter of 2019. The decision still awaits approval from the company’s board of directors.
Production Guidance: Diamondback expects its overall net production for 2019 in the range of 275,000-290,000 barrels of oil equivalent per day (Boe/d), of which 68-70% will likely be oil. This reflects a huge increase from the company’s updated 2018 guidance for overall net production within 118,500-119,500 Boe/d, of which 72-74% is expected to be oil.
Moreover, the company expects its 2019 net horizontal wells completed to be in the range of 245-280, higher than updated 2018 guidance of 146-154. Also, Diamondback will likely reduce the number of operating rigs from its current level of 24 to the range of 18-22. Additionally, the company intends to operate eight completion crews from the beginning of the next year. It also has plans to release two crews this month.
Other Companies That Issued 2019 Budget
Some other important companies in the energy sector that revealed their 2019 capital expenditure budget include Canadian Natural Resources Limited (CNQ - Free Report) , Chevron Corporation (CVX - Free Report) and Suncor Energy Inc. (SU - Free Report) .
Reeling under discounted crude prices and pipeline crisis, the Canadian energy sector is struggling to find a path to growth. Amid this crisis, Canadian Natural slashed its capital budget by C$1 billion.
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 Ups Capital Budget for 2019, Plans Dividend Hike
Diamondback Energy, Inc. (FANG - Free Report) recently released its capital budget along with production guidance for 2019. Moreover, the company plans to increase its dividend in 2019. Notably, it intends to operate within its cash flow for the coming year, considering the current commodity price environment and increasing service costs.
Analyzing 2019 Capital Budget & Production Guidance:
Capital Budget: For 2019,Diamondback plans to invest in the range of $2,350-$2,700 million in Horizontal drilling and completion. The figures are much higher than updated 2018 guided range of $1,250-$1,300 million. The company intends to spend $125-$150 million in Infrastructure-related investments for 2019, which is lower than the updated 2018 guidance of $250-$275 million. Moreover, the company has plans to spend $225-$250 million for its Midstream operations in 2019, excluding the long-haul pipeline investments. Total capital budget for 2019 is expected in the range of $2,700-$3,100 million, much higher than updated 2018 guidance of $1,500-$1,575 million.
Dividend Hike: Diamondback initiated an annual cash dividend of 50 cents per share in 2018, which was paid on a quarterly basis starting from the first quarter. Now, it has plans to hike the amount by 50% in 2019, with the figure likely to increase to 75 cents per share. The increased quarterly dividend will be paid from the first quarter of 2019. The decision still awaits approval from the company’s board of directors.
Production Guidance: Diamondback expects its overall net production for 2019 in the range of 275,000-290,000 barrels of oil equivalent per day (Boe/d), of which 68-70% will likely be oil. This reflects a huge increase from the company’s updated 2018 guidance for overall net production within 118,500-119,500 Boe/d, of which 72-74% is expected to be oil.
Moreover, the company expects its 2019 net horizontal wells completed to be in the range of 245-280, higher than updated 2018 guidance of 146-154. Also, Diamondback will likely reduce the number of operating rigs from its current level of 24 to the range of 18-22. Additionally, the company intends to operate eight completion crews from the beginning of the next year. It also has plans to release two crews this month.
Other Companies That Issued 2019 Budget
Some other important companies in the energy sector that revealed their 2019 capital expenditure budget include Canadian Natural Resources Limited (CNQ - Free Report) , Chevron Corporation (CVX - Free Report) and Suncor Energy Inc. (SU - Free Report) .
Reeling under discounted crude prices and pipeline crisis, the Canadian energy sector is struggling to find a path to growth. Amid this crisis, Canadian Natural slashed its capital budget by C$1 billion.
Chevron has pegged its 2019 capital and exploratory budget at $20 billion, which marks the first upward revision of the same in four years.
Suncor’s full-year 2019 production is expected to grow 10%, despite output curtailment from the government of Alberta.
Price Performance & Zacks Rank
Midland, TX-based Diamondback has lost 25% in the past year compared with 28.2% collective decline of its industry. The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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