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Core Insights - The comparison between Diamondback Energy and Chevron highlights different investment profiles for oil and gas investors, with Chevron being more suitable for yield-focused investors and Diamondback offering greater upside potential with higher oil prices [1][11]. Company Analysis - Chevron's break-even oil price is approximately $30 per barrel, while Diamondback's is around $37 per barrel, giving Chevron an advantage in lower oil price environments [3][5]. - Diamondback, as a pure-play exploration and production company, employs hedging strategies to protect against oil price declines, with current hedges effective down to $55 per barrel [4][6]. - Chevron offers a dividend yield of 4.8%, which is secure down to $30 per barrel, while Diamondback's yield of 2.9% is safe down to $37 per barrel [5][11]. Financial Projections - Diamondback's management estimates adjusted free cash flow (FCF) for 2025 across various oil prices, aiming to return 50% of FCF to shareholders through dividends and share buybacks [7]. - At an oil price of $60 per barrel, Diamondback could potentially offer $5.20 in dividends, yielding 3.8%, and this could rise to $8.70 in dividends, yielding 6.4%, at $80 per barrel [8][9]. - The price of oil would need to be around $67 per barrel for Diamondback's dividend yield to match Chevron's current yield [10]. Investment Considerations - Dividend-focused investors may prefer Chevron due to its diversified operations and lower exposure to oil price volatility, while those seeking higher upside potential may favor Diamondback [11][14]. - Both companies present attractive options for passive income-seeking investors, with the possibility of holding both stocks to balance yield and growth potential [14].

Core Viewpoint - The market has shown declining interest in oil stocks over the past year, with Devon Energy, Diamondback Energy, and Vitesse Energy experiencing stock price declines, yet they now offer attractive dividend yields and price-to-free cash flow multiples [1]. Group 1: Market Sentiment and Oil Prices - The oil price environment has been volatile, particularly following geopolitical events such as Israel's attack on Iran, which caused a spike in oil prices [3]. - Prior to this spike, oil prices were trading in the low-to-mid $60 per barrel range, with negative sentiment driven by slower economic growth and OPEC's decision to increase production [5]. - The negative sentiment towards oil intensified after spring events, prompting companies to adjust their capital expenditures [7]. Group 2: Company Responses to Market Conditions - Vitesse Energy implemented a 32% cut in planned capital expenditures to preserve returns and maintain financial flexibility amid commodity price volatility [7]. - Diamondback Energy reduced its planned capital expenditures for 2025 from a range of $3.8 billion to $4.2 billion down to $3.4 billion to $3.8 billion [7]. - Devon Energy has not made specific adjustments but is monitoring the macro environment and retains flexibility in its capital programs [8]. Group 3: Hedging Strategies - Following the recent oil price spike, there was a significant increase in hedging activities among oil companies, with independent oil companies likely taking advantage of the price surge [9]. - All three companies have integrated hedging into their capital allocation strategies to ensure returns to investors through dividends and share buybacks [11]. - Vitesse had 61% of its remaining oil production hedged at an average price of $70.75 per barrel as of March [13]. - Diamondback has downside protection in place at $55 per barrel, allowing for upside exposure above this price [14]. - Devon Energy had over 25% of its expected 2025 oil production hedged, projecting significant free cash flow at various oil price levels [16]. Group 4: Dividend Security and Investment Opportunities - Diamondback and Devon Energy's dividends appear secure, with potential for increased discretionary dividends, share buybacks, or debt repayment [18]. - The hedging strategies employed by these companies enhance the security of their dividend payouts, providing passive income investors with confidence in their investments [18].

Group 1 - Diamondback Energy's stock increased by 2.05% to $140.87, outperforming the S&P 500's gain of 0.8% for the day [1] - Over the past month, Diamondback Energy shares appreciated by 1.29%, underperforming the Oils-Energy sector's gain of 3.8% and the S&P 500's gain of 5.12% [1] Group 2 - The upcoming earnings report for Diamondback Energy is expected to show an EPS of $2.72, a decline of 39.82% year-over-year, while revenue is projected to be $3.41 billion, reflecting a 37.23% increase from the same quarter last year [2] - Full-year Zacks Consensus Estimates predict earnings of $13.2 per share and revenue of $14.05 billion, indicating year-over-year changes of -20.34% and +26.94%, respectively [3] Group 3 - Recent changes in analyst estimates for Diamondback Energy suggest a correlation with near-term stock prices, with positive adjustments indicating analyst optimism regarding business and profitability [3][4] - The Zacks Rank system, which includes estimate changes, currently ranks Diamondback Energy at 3 (Hold) [5] Group 4 - Diamondback Energy has a Forward P/E ratio of 10.46, which is slightly below the industry average Forward P/E of 10.49 [6] - The Oil and Gas - Exploration and Production - United States industry, part of the Oils-Energy sector, holds a Zacks Industry Rank of 167, placing it in the bottom 33% of over 250 industries [6] Group 5 - The Zacks Industry Rank is based on the average Zacks Rank of individual stocks, with the top 50% rated industries outperforming the bottom half by a factor of 2 to 1 [7]

Company Overview - Viper Energy, Inc. is a subsidiary of Diamondback Energy, Inc. focused on owning, acquiring, and exploiting oil and natural gas properties in North America, particularly in the Permian Basin in West Texas [3] - Diamondback Energy, Inc. is an independent oil and natural gas company headquartered in Midland, Texas, specializing in the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin [4] Upcoming Financial Results - Viper Energy plans to release its second quarter 2025 financial results on August 4, 2025, after the market closes [1] - A conference call and webcast will be held on August 5, 2025, at 10:00 a.m. CT to discuss the second quarter results [2]

MIDLAND, Texas, June 26, 2025 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback”), today announced that it plans to release second quarter 2025 financial results on August 4, 2025 after the market closes. In connection with the earnings release, Diamondback will host a conference call and webcast for investors and analysts to discuss its results for the second quarter of 2025 on Tuesday, August 5, 2025 at 8:00 a.m. CT. Access to the live webcast, and replay which will be available fo ...

Company Overview - Diamondback Energy (FANG) shares increased by 3.7% to close at $154.91, with a notable trading volume compared to normal sessions, and a total gain of 5.2% over the past four weeks [1][2] Recent Developments - The company amended its credit agreement with Wells Fargo Bank, extending the maturity to 2030 and reducing interest rates, which enhanced investor confidence in its financial stability [2] - Escalating tensions between Israel and Iran have driven oil prices up, benefiting U.S. shale producers like Diamondback Energy due to concerns over the security of the Strait of Hormuz, a key oil supply route [2] Earnings Expectations - Diamondback is expected to report quarterly earnings of $2.72 per share, reflecting a year-over-year decline of 39.8%, while revenues are projected to be $3.41 billion, an increase of 37.2% from the previous year [3] - The consensus EPS estimate has been revised 6.4% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Context - Diamondback Energy is part of the Zacks Oil and Gas - Exploration and Production - United States industry, which includes other companies like Comstock Resources (CRK) [5] - Comstock's EPS estimate for the upcoming report remains unchanged at $0.16, representing a year-over-year increase of 180% [6]

Company Overview - Diamondback Energy is an independent oil and gas company focused on exploration and production of unconventional reserves in the Permian Basin, positioning itself as a leader in this sector with extensive production capabilities and strong fundamentals [1]. Investment Focus - The analysis emphasizes a strategy of identifying undervalued and disliked companies or industries with strong fundamentals and good cash flows, particularly in sectors like Oil & Gas and consumer goods [1]. Market Sentiment - Energy Transfer is highlighted as a company that was previously overlooked by investors but has shown potential for substantial returns, indicating a shift in market sentiment towards certain energy companies [1]. Investment Philosophy - The focus is on long-term value investing, while also exploring potential deal arbitrage opportunities in various sectors, showcasing a diverse investment approach [1].

Company Overview - Diamondback Energy (FANG) shares have increased by approximately 7.8% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Estimates for Diamondback Energy have trended downward, with a consensus estimate shift of -12.4% in the past month [2] - The overall direction and magnitude of estimate revisions indicate a downward shift, leading to a Zacks Rank of 3 (Hold) [4] VGM Scores - Diamondback Energy has an average Growth Score of C, a Momentum Score of F, and a Value Score of B, resulting in an aggregate VGM Score of C [3] Industry Comparison - Diamondback operates within the Zacks Oil and Gas - Exploration and Production - United States industry, where Range Resources (RRC) has gained 11.5% over the past month [5] - Range Resources reported revenues of $854.02 million for the last quarter, reflecting a year-over-year increase of +18.9% and an EPS of $0.96 compared to $0.69 a year ago [6] - Range Resources is expected to post earnings of $0.68 per share for the current quarter, indicating a year-over-year change of +47.8% [6] - Range Resources also holds a Zacks Rank of 3 (Hold) and has a VGM Score of A [7]

Core Viewpoint - Viper Energy, Inc. has announced a definitive agreement to acquire Sitio Royalties Corp. in an all-equity transaction valued at approximately $4.1 billion, which includes Sitio's net debt of about $1.1 billion as of March 31, 2025 [1] Transaction Details - The acquisition will involve the exchange of 0.4855 shares of Class A common stock of a new holding company for each share of Sitio Class A common stock, and 0.4855 units of Viper's operating subsidiary for each unit of Sitio's operating subsidiary, implying a value of $19.41 per Sitio share based on Viper's stock price on June 2, 2025 [1] - The transaction has received unanimous approval from the Boards of Directors of both companies and has the consent of Diamondback Energy, Viper's majority stockholder [1] - Approximately 48% of Sitio's voting power has agreed to support the transaction [1] - The deal is subject to customary regulatory approvals and is expected to close in Q3 2025 [1] Financial Highlights - Viper has approved a 10% increase in its base dividend to $1.32 per share annually, which represents approximately 45% of cash available for distribution at $50 WTI [2][6] - The acquisition is expected to be approximately 8-10% accretive to cash available for distribution per Class A share immediately upon closing [6] - The pro forma Viper's base dividend breakeven is expected to decrease by approximately $2 per barrel to below $20 WTI [6] - Estimated annual synergies from the merger are projected to exceed $50 million, primarily from administrative and capital cost savings [6] Strategic Rationale - The merger is expected to create a leader in the minerals industry with enhanced size, scale, liquidity, and access to investment-grade capital [7] - The combined company will have approximately 34,300 net royalty acres in the Permian Basin and an additional ~9,000 net royalty acres in other major basins [6][7] - The merger will position the combined entity to compete effectively for capital with mid and large-cap North American exploration and production companies, benefiting from higher margins and lower operating costs [7] Production and Operational Highlights - The average production for Q1 2025 was reported at 18.9 mbo/d (42.1 mboe/d), with Permian production at 14.5 mbo/d (31.9 mboe/d) [6] - The pro forma Viper is expected to have an average production of 64-68 mbo/d (122-130 mboe/d) by Q4 2025, with a mid-single-digit percentage increase expected for the full year 2026 [6]