MIDLAND, Texas, April 30, 2024 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ:FANG) ("Diamondback" or the "Company") today announced financial and operating results for the first quarter ended March 31, 2024.
FIRST QUARTER 2024 HIGHLIGHTS
- Average production of 273.3 MBO/d (461.1 MBOE/d)
- Net cash provided by operating activities of $1.3 billion; Operating Cash Flow Before Working Capital Changes (as defined and reconciled below) of $1.4 billion
- Cash capital expenditures of $609 million
- Free Cash Flow (as defined and reconciled below) of $791 million
- Declared Q1 2024 base cash dividend of $0.90 per share and a variable cash dividend of $1.07 per share, in each case payable on May 22, 2024; implies an 3.8% annualized yield based on April 29, 2024 closing share price of $205.86
- Repurchased 279,266 shares of common stock in Q1 2024 for $42 million, excluding excise tax (at a weighted average price of $149.50/share)
- Total Q1 2024 return of capital of $396 million; represents ~50% of Q1 2024 Free Cash Flow (as defined and reconciled below) from stock repurchases and the declared Q1 2024 base-plus-variable dividend
- Announced merger with Endeavor Energy Resources, L.P. on February 12, 2024. Diamondback stockholders approved the merger on April 26, 2024. The deal remains subject to regulatory approval and is expected to close in the fourth quarter of 2024.
OPERATIONS UPDATE
The tables below provide a summary of operating activity for the first quarter of 2024.
Total Activity (Gross Operated): | |||
Number of Wells Drilled | Number of Wells Completed | ||
Midland Basin | 69 | 101 | |
Delaware Basin | 10 | — | |
Total | 79 | 101 |
Total Activity (Net Operated): | |||
Number of Wells Drilled | Number of Wells Completed | ||
Midland Basin | 67 | 89 | |
Delaware Basin | 9 | — | |
Total | 76 | 89 | |
During the first quarter of 2024, Diamondback drilled 69 gross wells in the Midland Basin and ten gross wells in the Delaware Basin. The Company turned 101 operated wells to production, all in the Midland Basin, with an average lateral length of 11,463 feet. Operated completions during the first quarter consisted of 30 Lower Spraberry wells, 19 Wolfcamp A wells, 16 Jo Mill wells, 15 Wolfcamp B wells, 12 Middle Spraberry wells, six Wolfcamp D wells and three Upper Spraberry wells.
FINANCIAL UPDATE
Diamondback's first quarter 2024 net income was $768 million, or $4.28 per diluted share. Adjusted net income (as defined and reconciled below) was $809 million, or $4.50 per diluted share.
First quarter 2024 net cash provided by operating activities was $1.3 billion.
During the first quarter of 2024, Diamondback spent $580 million on operated and non-operated drilling and completions, $25 million on infrastructure and environmental and $4 million on midstream, for total cash capital expenditures of $609 million.
First quarter 2024 Consolidated Adjusted EBITDA (as defined and reconciled below) was $1.6 billion. Adjusted EBITDA net of non-controlling interest (as defined and reconciled below) was $1.6 billion.
Diamondback's first quarter 2024 Free Cash Flow (as defined and reconciled below) was $791 million.
First quarter 2024 average unhedged realized prices were $75.06 per barrel of oil, $0.99 per Mcf of natural gas and $21.26 per barrel of natural gas liquids ("NGLs"), resulting in a total equivalent unhedged realized price of $50.07 per BOE.
Diamondback's cash operating costs for the first quarter of 2024 were $11.52 per BOE, including lease operating expenses ("LOE") of $6.08 per BOE, cash general and administrative ("G&A") expenses of $0.76 per BOE, production and ad valorem taxes of $2.84 per BOE and gathering, processing and transportation expenses of $1.84 per BOE.
As of March 31, 2024, Diamondback had $876 million in standalone cash and no borrowings under its revolving credit facility, with approximately $1.6 billion available for future borrowings under the facility and approximately $2.5 billion of total liquidity. As of March 31, 2024, the Company had consolidated total debt of $6.8 billion and consolidated net debt (as defined and reconciled below) of $5.9 billion, down from consolidated total debt of $6.8 billion and net debt of $6.2 billion as of December 31, 2023.
DIVIDEND DECLARATIONS
Diamondback announced today that the Company's Board of Directors declared a base cash dividend of $0.90 per common share for the first quarter of 2024 payable on May 22, 2024 to stockholders of record at the close of business on May 15, 2024.
The Company's Board of Directors also declared a variable cash dividend of $1.07 per common share for the first quarter of 2024 payable on May 22, 2024 to stockholders of record at the close of business on May 15, 2024.
Future base and variable dividends remain subject to review and approval at the discretion of the Company's Board of Directors.
COMMON STOCK REPURCHASE PROGRAM
During the first quarter of 2024, Diamondback repurchased 279,266 shares of common stock at an average share price of $149.50 for a total cost of approximately $42 million, excluding excise tax. To date, Diamondback has repurchased 19,337,765 shares of common stock at an average share price of $124.52 for a total cost of approximately $2.4 billion and has approximately $1.6 billion remaining on its current share buyback authorization. Diamondback intends to continue to purchase common stock under the common stock repurchase program opportunistically with cash on hand, free cash flow from operations and proceeds from potential liquidity events such as the sale of assets. This repurchase program has no time limit and may be suspended from time to time, modified, extended or discontinued by the Board at any time. Purchases under the repurchase program may be made from time to time in privately negotiated transactions, or in open market transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and will be subject to market conditions, applicable legal requirements and other factors. Any common stock purchased as part of this program will be retired.
FULL YEAR 2024 GUIDANCE
Below is Diamondback's guidance for the full year 2024, which includes second quarter production, cash tax and capital guidance.
2024 Guidance | 2024 Guidance | |
Diamondback Energy, Inc. | Viper Energy, Inc. | |
Net production - MBOE/d | 458 - 466 | 46.00 - 48.00 |
Oil production - MBO/d | 270 - 275 | 25.75 - 26.75 |
Q2 2024 oil production - MBO/d (total - MBOE/d) | 271 - 275 (459 - 466) | 26.00 - 26.50 (46.50 - 47.25) |
Unit costs ($/BOE) | ||
Lease operating expenses, including workovers | $6.00 - $6.50 | |
G&A | ||
Cash G&A | $0.55 - $0.65 | $1.00 - $1.20 |
Non-cash equity-based compensation | $0.40 - $0.50 | $0.10 - $0.15 |
DD&A | $10.50 - $11.50 | $11.00 - $11.50 |
Interest expense (net of interest income) | $1.65 - $1.85 | $4.25 - $4.50 |
Gathering, processing and transportation | $1.80 - $2.00 | |
Production and ad valorem taxes (% of revenue) | ~7% | ~7% |
Corporate tax rate (% of pre-tax income) | 23% | 20% - 22% |
Cash tax rate (% of pre-tax income) | 15% - 18% | |
Q2 2024 Cash taxes ($ - million) | $180 - $220 | $13 - $18 |
Capital Budget ($ - million) | ||
2024 Drilling, completion, capital workovers, and non-operated properties | $2,100 - $2,330 | |
2024 Infrastructure and midstream | $200 - $220 | |
2024 Total capital expenditures | $2,300 - $2,550 | |
Q2 2024 Capital expenditures | $580 - $620 | |
Gross horizontal wells drilled (net) | 265 - 285 (244 - 263) | |
Gross horizontal wells completed (net) | 300 - 320 (273 - 291) | |
Average completed lateral length (Ft.) | ~11,500' | |
FY 2024 Midland Basin well costs per lateral foot | $600 - $650 | |
FY 2024 Delaware Basin well costs per lateral foot | $875 - $925 | |
Midland Basin completed net lateral feet (%) | ~90% | |
Delaware Basin completed net lateral feet (%) | ~10% | |
CONFERENCE CALL
Diamondback will host a conference call and webcast for investors and analysts to discuss its results for the first quarter of 2024 on Wednesday, May 1, 2024 at 8:00 a.m. CT. Access to the webcast, and replay which will be available following the call, may be found here. The live webcast of the earnings conference call will also be available via Diamondback's website at www.diamondbackenergy.com under the "Investor Relations" section of the site.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding Diamondback's: future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position; reserve estimates and its ability to replace or increase reserves; anticipated benefits of strategic transactions (including acquisitions and divestitures); and plans and objectives of management (including plans for future cash flow from operations and for executing environmental strategies) are forward-looking statements. When used in this news release, the words "aim," "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "model," "outlook," "plan," "positioned," "potential," "predict," "project," "seek," "should," "target," "will," "would," and similar expressions (including the negative of such terms) as they relate to Diamondback are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Diamondback believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond Diamondback's control. Accordingly, forward-looking statements are not guarantees of future performance and Diamondback's actual outcomes could differ materially from what Diamondback has expressed in its forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: the completion of the proposed transaction on anticipated terms and timing or at all, including obtaining regulatory approval and satisfying other conditions to the completion of the transaction; uncertainties as to whether the proposed Endeavor transaction, if consummated, will achieve its anticipated benefits and projected synergies within the expected time period or at all; Diamondback's ability to integrate Endeavor's operations in a successful manner and in the expected time period; the occurrence of any event, change, or other circumstance that could give rise to the termination of the proposed transaction; risks that the anticipated tax treatment of the proposed transaction is not obtained; unforeseen or unknown liabilities; unexpected future capital expenditures; litigation relating to the proposed transaction; the possibility that the proposed transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the effect of the pendency, or completion of the proposed transaction on the parties' business relationships and business generally; risks that the proposed transaction disrupts current plans and operations of Diamondback or Endeavor and their respective management teams and potential difficulties in retaining employees as a result of the proposed transaction; the risks related to Diamondback's financing of the proposed transaction; potential negative effects of the pendency or completion of the proposed transaction on the market price of Diamondback's common stock and/or operating results; rating agency actions and Diamondback's ability to access short- and long-term debt markets on a timely and affordable basis; changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; the impact of public health crises, including epidemic or pandemic diseases and any related company or government policies or actions; actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments, including any impact of the ongoing war in Ukraine and the Israel-Hamas war on the global energy markets and geopolitical stability; instability in the financial markets; concerns over a potential economic slowdown or recession; inflationary pressures; rising interest rates and their impact on the cost of capital; regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits; federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations; physical and transition risks relating to climate change; those risks described in Item 1A of Diamondback's Annual Report on Form 10-K, filed with the SEC on February 22, 2024, and those risks disclosed in its subsequent filings on Forms 10-Q and 8-K, which can be obtained free of charge on the SEC's website at http://www.sec.gov and Diamondback's website at www.diamondbackenergy.com/investors/; and those risks more fully described in the definitive proxy statement on Schedule 14A filed with the SEC in connection with the proposed transaction.
In light of these factors, the events anticipated by Diamondback's forward-looking statements may not occur at the time anticipated or at all. Moreover, Diamondback operates in a very competitive and rapidly changing environment and new risks emerge from time to time. Diamondback cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this letter or, if earlier, as of the date they were made. Diamondback does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
Diamondback Energy, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(unaudited, in millions, except share amounts) | |||||||
March 31, | December 31, | ||||||
2024 | 2023 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 896 | $ | 582 | |||
Restricted cash | 3 | 3 | |||||
Accounts receivable: | |||||||
Joint interest and other, net | 208 | 192 | |||||
Oil and natural gas sales, net ($132 million and $109 million related to Viper) | 734 | 654 | |||||
Income tax receivable | — | 1 | |||||
Inventories | 57 | 63 | |||||
Derivative instruments | 7 | 17 | |||||
Prepaid expenses and other current assets | 43 | 109 | |||||
Total current assets | 1,948 | 1,621 | |||||
Property and equipment: | |||||||
Oil and natural gas properties, full cost method of accounting ($8,455 million and $8,659 million excluded from amortization at March 31, 2024 and December 31, 2023, respectively) ($4,649 million and $4,629 million and $1,719 million and $1,769 million excluded from amortization related to Viper) | 43,240 | 42,430 | |||||
Other property, equipment and land | 675 | 673 | |||||
Accumulated depletion, depreciation, amortization and impairment ($913 million and $866 million related to Viper) | (16,891 | ) | (16,429 | ) | |||
Property and equipment, net | 27,024 | 26,674 | |||||
Equity method investments | 529 | 529 | |||||
Derivative instruments | 7 | 1 | |||||
Deferred income taxes, net | 61 | 45 | |||||
Investment in real estate, net | 83 | 84 | |||||
Other assets | 38 | 47 | |||||
Total assets | $ | 29,690 | $ | 29,001 | |||
Liabilities and Stockholders' Equity | |||||||
Current liabilities: | |||||||
Accounts payable - trade | $ | 243 | $ | 261 | |||
Accrued capital expenditures | 570 | 493 | |||||
Other accrued liabilities | 337 | 475 | |||||
Revenues and royalties payable | 732 | 764 | |||||
Derivative instruments | 102 | 86 | |||||
Income taxes payable | 134 | 29 | |||||
Total current liabilities | 2,118 | 2,108 | |||||
Long-term debt ($1,094 million and $1,083 million related to Viper) | 6,629 | 6,641 | |||||
Derivative instruments | 144 | 122 | |||||
Asset retirement obligations | 266 | 239 | |||||
Deferred income taxes | 2,502 | 2,449 | |||||
Other long-term liabilities | 12 | 12 | |||||
Total liabilities | 11,671 | 11,571 | |||||
Stockholders' equity: | |||||||
Common stock, $0.01 par value; 400,000,000 shares authorized; 178,339,978 and 178,723,871 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 2 | 2 | |||||
Additional paid-in capital | 14,251 | 14,142 | |||||
Retained earnings (accumulated deficit) | 2,705 | 2,489 | |||||
Accumulated other comprehensive income (loss) | (8 | ) | (8 | ) | |||
Total Diamondback Energy, Inc. stockholders' equity | 16,950 | 16,625 | |||||
Non-controlling interest | 1,069 | 805 | |||||
Total equity | 18,019 | 17,430 | |||||
Total liabilities and stockholders' equity | $ | 29,690 | $ | 29,001 |
Diamondback Energy, Inc. | |||||||
Condensed Consolidated Statements of Operations | |||||||
(unaudited, $ in millions except per share data, shares in thousands) | |||||||
Three Months Ended March 31, | |||||||
2024 | 2023 | ||||||
Revenues: | |||||||
Oil, natural gas and natural gas liquid sales | $ | 2,101 | $ | 1,902 | |||
Sales of purchased oil | 116 | — | |||||
Other operating income | 10 | 23 | |||||
Total revenues | 2,227 | 1,925 | |||||
Costs and expenses: | |||||||
Lease operating expenses | 255 | 192 | |||||
Production and ad valorem taxes | 119 | 155 | |||||
Gathering, processing and transportation | 77 | 68 | |||||
Purchased oil expense | 117 | — | |||||
Depreciation, depletion, amortization and accretion | 469 | 403 | |||||
General and administrative expenses | 46 | 40 | |||||
Merger and integration expense | 12 |