It has been about a month since the last earnings report for Diamondback Energy (FANG) . Shares have added about 6.4% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Diamondback due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.How Have Estimates Been Moving Since Then ...

MIDLAND, Texas, March 19, 2025 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback”), today announced that it plans to release first quarter 2025 financial results on May 5, 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 first quarter of 2025 on Tuesday, May 6, 2025 at 8:00 a.m. CT. Access to the live webcast, and replay which will be available following ...

Diamondback Energy (FANG) ended the recent trading session at $142.70, demonstrating a -1.61% swing from the preceding day's closing price. This change lagged the S&P 500's 1.12% gain on the day. Elsewhere, the Dow saw an upswing of 1.14%, while the tech-heavy Nasdaq appreciated by 1.46%.The energy exploration and production company's stock has dropped by 12.78% in the past month, falling short of the Oils-Energy sector's loss of 5.86% and the S&P 500's loss of 4.13%.Market participants will be closely foll ...

Core Viewpoint - Diamondback Energy reported strong fourth-quarter 2024 results with adjusted earnings per share of $3.64, exceeding expectations, but down from $4.74 a year ago due to lower overall realization [1][2]. Financial Performance - Revenues reached $3.7 billion, a 67% increase year-over-year, and surpassed the Zacks Consensus Estimate by 9.2% [2]. - The company repurchased $402 million in shares during the fourth quarter and an additional $210 million in the current quarter [3]. - A quarterly cash dividend of $1 per share was declared, marking an 11% increase sequentially [3]. Production & Realized Prices - Average production was 883,424 BOE/d, up 91% year-over-year, with oil comprising 54% of total production [4]. - The average realized oil price was $69.48 per barrel, down 9% from $76.42 a year ago, while the average realized natural gas price fell to 48 cents per Mcf from $1.29 [5]. Costs & Financial Position - Cash operating costs decreased to $10.30 per BOE from $10.83 in the prior year, reflecting lower lease operating expenses [6]. - Capital expenditures totaled $933 million, with $834 million allocated to drilling and completion [7]. - Free cash flow for the fourth quarter was $1.4 billion, with $161 million in cash and cash equivalents and $12.1 billion in long-term debt, resulting in a debt-to-capitalization ratio of 30.6% [7]. Guidance - The company anticipates production of 883,000-909,000 BOE/d in 2025, with oil volumes expected between 485,000 and 498,000 barrels per day [8]. - Capital spending is projected to be between $3.8 billion and $4.2 billion [8].

Group 1 - Samuel Smith has extensive experience in dividend stock research and investment, having served as lead analyst and Vice President at notable firms [1] - He is a Professional Engineer and Project Management Professional, holding degrees in Civil Engineering & Mathematics and a Master's in Engineering with a focus on applied mathematics and machine learning [1] - Samuel leads the High Yield Investor investing group, collaborating with Jussi Askola and Paul R. Drake to balance safety, growth, yield, and value in investment strategies [2] Group 2 - High Yield Investor provides real-money core, retirement, and international portfolios, along with regular trade alerts and educational content [2] - The service includes an active chat room for investors to share insights and strategies [2]

Production and Drilling Activity - For the year ended December 31, 2024, total oil production was 123,325 MBbls, an increase from 96,176 MBbls in 2023, representing a growth of 28.3%[67] - The company drilled a total of 372 operated horizontal wells in 2024, compared to 350 in 2023, indicating a 6.3% increase in drilling activity[68] - The company completed 410 operated horizontal wells in 2024, an increase from 315 in 2023, representing a growth of 30.2%[68] - The company has approximately 9,188 gross (7,130 net) identified economic potential horizontal drilling locations based on an assumed price of $50.00 per Bbl WTI[64] - As of December 31, 2024, the company owned an interest in 30,928 gross productive wells, with an average working interest of 77%[69] - Only 1,381 of the identified drilling locations were attributed to proved reserves, indicating a significant portion of growth strategy relies on speculative drilling[188] - Approximately 33% of the total estimated proved reserves as of December 31, 2024, were proved undeveloped reserves, which may require significant capital expenditures for development[199] Financial Performance and Projections - Average oil price for 2024 was $73.52 per Bbl, down from $75.68 in 2023, reflecting a decrease of 2.5%[67] - The average production cost per BOE for 2024 was $7.50, up from $7.10 in 2023, marking a 5.6% increase[67] - In 2024, the company's total capital expenditures were approximately $2.9 billion, with a projected increase to between $3.80 billion and $4.20 billion in 2025, representing a 40% increase[177] - The company expects to increase production levels in 2025 due to the Endeavor Acquisition and other pending acquisitions[154] - The company’s ability to finance future capital expenditures is dependent on cash flow from operations, which is influenced by proved reserves and oil and natural gas production volumes[178] - The company’s future success relies on finding, developing, or acquiring additional economically recoverable oil and natural gas reserves, as current proved reserves will decline over time[182] Regulatory and Compliance Issues - The company believes it is in substantial compliance with environmental laws and regulations, although changes could materially affect operations and financial position[85] - The company is subject to stringent regulations under the Clean Air Act, which may increase compliance costs and delay project developments[95] - The Texas Railroad Commission has imposed stricter regulations on flaring and venting gas, which could increase operational costs for the company[98] - The company is monitoring ongoing governmental reviews that may lead to further regulations on hydraulic fracturing practices, potentially increasing compliance costs[105] - The oil and natural gas industry is heavily regulated, with increasing regulatory burdens affecting profitability, but these burdens are consistent across similar companies in the industry[110] - Compliance with various governmental regulations can be burdensome and expensive, potentially leading to increased operational costs and sanctions for non-compliance[213] Environmental and Climate Change Considerations - The Infrastructure Investment and Jobs Act and the Inflation Reduction Act include billions in incentives for renewable energy, potentially decreasing demand for oil and natural gas[96] - The U.S. aims to reduce greenhouse gas emissions by 50-52% below 2005 levels by 2030, which could impact the company's market[99] - The EPA's methane emissions charge starts at $900 per ton in 2024, increasing to $1,200 in 2025 and $1,500 in 2026, which could raise operating costs for the company[97] - The company faces potential increases in operational costs due to climate change-related regulations, including a methane emissions charge under the IRA, which could adversely impact financial condition and cash flows[163] Workforce and Safety - As of December 31, 2024, the company had 1,983 full-time employees, with a low annual attrition rate of approximately 15%[136][139] - The company reported 11 OSHA recordable cases in 2024, an increase from 3 in 2023, resulting in a total recordable incident rate (TRIR) of 0.88, up from 0.30 in 2023[142] - The company aims to maintain a TRIR of 0.25 or less as a short-term goal[142] - The company is focused on expanding recruitment efforts, particularly in college recruitment and internship programs, to attract top talent[139] - Over 24% of the company's employees are women, and over 42% self-identify as ethnic minorities[138] Market and Operational Risks - The company faces risks related to market volatility in oil and natural gas prices, which could adversely affect revenue and cash flows[149] - The company is subject to credit risk due to the concentration of oil and natural gas receivables with several significant customers, which may impact overall credit risk[191] - The company’s producing properties are concentrated in the Permian Basin, exposing it to regional supply and demand risks and potential production interruptions[200] - The marketability of oil and natural gas production is dependent on third-party transportation facilities, which may lead to interruptions and reduced revenues if unavailable[212] - The company may incur substantial costs due to the need to implement new technologies in response to competitive pressures[234] Debt and Financial Management - The company incurred substantial debt to finance the Endeavor Acquisition, which may limit operational and financial flexibility[247] - The company expects to fund capital expenditures through borrowings, cash flow from operations, and proceeds from debt and equity offerings[249][250] - The company may face liquidity concerns that could lead to a downgrade in debt ratings, impacting access to financing and increasing borrowing costs[255] - The company is subject to restrictive covenants in its debt instruments, which may limit its ability to respond to market changes and pursue business opportunities[251][252] - The weighted average interest rate on borrowings under the company's revolving credit facility was 6.33% for the year ended December 31, 2024, while Viper LLC's was 7.34%[256][257]

Financial Data and Key Metrics Changes - The company reported a free cash flow per share decrease of nine dollars per barrel compared to the previous year, indicating improved capital efficiency and successful accretive deals [12][26] - At seventy dollars per barrel, the business generates twenty dollars per share of free cash flow in 2025, representing a yield of approximately twelve and a half to thirteen percent [26] Business Line Data and Key Metrics Changes - The company is drilling fewer wells while completing more, with a significant drawdown of drilled but uncompleted (DUC) wells planned in the capital expenditure (CapEx) budget [16] - The completion efficiency has improved, with solid frac fleets achieving about one hundred wells per fleet per year, up from eighty a year ago [18] Market Data and Key Metrics Changes - The company has consolidated many quality positions in the Permian Basin, indicating a pause in mergers and acquisitions (M&A) activity [24] - The market conditions will influence the execution of the company's commitment to return at least fifty percent of free cash flow to shareholders [45] Company Strategy and Development Direction - The company aims to focus on share repurchases at current valuation levels, viewing it as a great use of capital [26] - The strategy includes leveraging the quality of the inventory acquired from the Double Eagle transaction while digesting the recent acquisitions [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining strong capital efficiency and productivity levels despite market volatility [67] - The company is exploring opportunities to build a large gas power plant in the basin, which could enhance operational flexibility and reduce costs [52] Other Important Information - The company plans to reduce midstream infrastructure CapEx to five to seven percent of total capital expenditures [38] - There is a commitment to a one and a half billion dollar asset sale program, primarily targeting non-core assets without selling operated acreage [58] Q&A Session Summary Question: What are the drivers behind the free cash flow changes? - Management indicated that the decrease in the breakeven price for free cash flow per share is due to improved capital efficiency and successful acquisitions [12] Question: How does the company view its M&A strategy post-Double Eagle acquisition? - Management stated that they see limited opportunities for further acquisitions in the core area and are focusing on digesting existing assets [24] Question: What is the expected impact of the Double Eagle transaction on capital and production? - Management noted that there would be no capital impact from the agreement, and it is expected to generate about one hundred million dollars of free cash flow on a consolidated basis by 2026 [74] Question: How does the company plan to manage its power needs? - Management mentioned a budget of seventy to a hundred million dollars annually for power needs and is exploring partnerships for a gas power plant [51][52] Question: What are the expectations for capital efficiency in the upcoming years? - Management expressed confidence in maintaining strong capital efficiency, with a focus on reducing ancillary CapEx while maximizing production [67] Question: How does the company plan to handle the share overhang from the Endeavor transaction? - Management indicated that they are comfortable with their ownership structure and are focused on maximizing shareholder value through share repurchases [130]

Investor Presentation February 2025 1 Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements Operating cash flow before working capital changes, which is a non-GAAP financial measure representing net cash provided by operating activities as determined under GAAP without regard to changes in operating assets and liabilities. The Company believes operating cash flow before working capital changes is a useful measure of an oil and gas company's ability to generate cash used to fu ...

Core Insights - Diamondback Energy reported $3.71 billion in revenue for Q4 2024, a 66.6% year-over-year increase, with an EPS of $3.64 compared to $4.74 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $3.4 billion by 9.18%, and the EPS surpassed the consensus estimate of $3.26 by 11.66% [1] Financial Performance - Average daily production was 883,424 BOE/D, exceeding the eight-analyst average estimate of 848,018.4 BOE/D [4] - Total production volume was 81,275 MBOE, above the five-analyst average estimate of 77,953.35 MBOE [4] - Revenue from oil, natural gas, and natural gas liquids was $3.47 billion, compared to the $3.37 billion average estimate, reflecting a 60.3% year-over-year change [4] Price Metrics - Average price for natural gas liquids, hedged, was $19.27 per barrel, slightly below the $19.37 per barrel estimate [4] - Average price for oil, hedged, was $68.72 per barrel, compared to the $69.35 per barrel average estimate [4] - Average price for natural gas, hedged, was $0.82 per thousand cubic feet, lower than the $0.88 estimate [4] Stock Performance - Diamondback shares returned -9.9% over the past month, while the Zacks S&P 500 composite changed by -0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Insights - Diamondback Energy reported quarterly earnings of $3.64 per share, exceeding the Zacks Consensus Estimate of $3.26 per share, but down from $4.74 per share a year ago, indicating an earnings surprise of 11.66% [1] - The company generated revenues of $3.71 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 9.18% and significantly up from $2.23 billion year-over-year [2] - Diamondback has outperformed consensus EPS estimates three times in the last four quarters and has topped consensus revenue estimates four times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.91 on revenues of $3.56 billion, while for the current fiscal year, the estimate is $15.67 on revenues of $14.99 billion [7] - The estimate revisions trend for Diamondback is mixed, leading to a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the top 20% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]