RTLR - Diamondback Energy: This Model Works Well

Diamondback Energy (FANG) has long followed the "living within" cash flow discipline. Continuing operations within cash flow were the norm, though acquisitions often caused an outspend of cash flow. Since there is a long list of acquisitions in the history of this company, the result of many acquisitions meant that cash flow was outspent for assimilation and operational optimization. However, much of that growth was financed by equity issuance. Therefore financial leverage remained low.

Management has acquired excellent acreage. Therefore this unconventional producer generates a relatively large amount of cash from operating activities.