Diamondback Energy(US:FANG)2025-11-05 21:16Financial Performance - Recorded net income of $1.0 billion for the third quarter of 2025[194] - Total revenues for the third quarter of 2025 increased by $131 million to $3.4 billion, driven by a 4% growth in combined production volumes and higher average oil prices[218] - For the nine months ended September 30, 2025, total revenues increased by $3.8 billion, or 57%, to $10.4 billion, primarily due to a 79% growth in combined production volumes[240] - The company reported revenues of $5.204 billion and a net income of $782 million for the nine months ended September 30, 2025[288] Production and Operational Metrics - Average production was 942.9 MBOE/d, with cash operating costs at $10.05 per BOE[194] - Oil production volumes for the third quarter reached 46,345 MBbls, up from 45,108 MBbls in the previous quarter, while natural gas production increased to 115,353 MMcf from 110,119 MMcf[217] - Approximately 53% of the production volume increase was attributed to Viper's Sitio Acquisition, with the remainder coming from new wells added during the period[219] - The company’s production data showed oil production of 134,288 MBbls and natural gas production of 326,050 MMcf for the nine months ended September 30, 2025, compared to 79,540 MBbls and 168,431 MMcf in 2024[236] - Daily oil production volumes increased by 201,605 barrels per day, or 69.4%, to 491,897 BO/d in 2025 from 290,292 BO/d in 2024[236] Expenses and Costs - Lease operating expenses increased to $490 million in the third quarter, with a per BOE cost of $5.65, compared to $440 million and $5.26 per BOE in the previous quarter[219] - Lease operating expenses increased to $1.338 billion for the nine months ended September 30, 2025, from $825 million in 2024, with a per BOE cost of $5.42 compared to $5.99[243] - General and administrative expenses totaled $70 million in the third quarter, consistent on a per BOE basis with the previous quarter at $0.80[224] - Gathering, processing, and transportation expenses decreased to $122 million in Q3 2025 from $145 million in Q2 2025, reflecting a net reduction due to contract integration[222] - Interest expense increased to $70 million in the third quarter, primarily due to new debt issued in July 2025 and other financing activities[229] Dividends and Share Repurchase - Paid dividends of $289 million during Q3 2025 and declared a base cash dividend of $1.00 per share for Q4 2025[194] - Increased common stock repurchase program authorization to $8.0 billion, repurchased $603 million of common stock, with approximately $3.1 billion available for future repurchases[194] - The board of directors declared a base cash dividend of $1.00 per share for the third quarter of 2025, as part of a commitment to return at least 50% of adjusted free cash flow to stockholders[279] - Since the inception of the stock repurchase program, the company has repurchased 36.1 million shares for a total cost of $5.0 billion, leaving approximately $3.0 billion available for future repurchases[281] Guidance and Future Expectations - Revised annual BOE guidance increased by approximately 2% to reflect successful closing of the Sitio merger[210] - Updated net production guidance for 2025 to 910 - 920 MBOE/d, up from 890 - 910 MBOE/d[211] - Anticipated Q4 2025 oil production guidance of 505 - 515 MBO/d, with total MBOE/d guidance of 927 - 963[211] - The company expects to drill approximately 445 to 465 gross horizontal wells and complete approximately 510 to 520 gross horizontal wells in 2025, with an average lateral length of approximately 11,500 feet[274] Debt and Liquidity - As of September 30, 2025, the company's total debt amounted to approximately $14.1 billion in senior notes, $1.5 billion under the 2025 Term Loan, $500 million under the Viper Term Loan, and $335 million under revolving credit facilities[270] - Liquidity at September 30, 2025, was approximately $2.4 billion, consisting of $106 million in cash and $2.3 billion available under the credit facility[260] - The company has a maximum credit amount available of $2.5 billion under its Credit Agreement, with $175 million in outstanding borrowings as of September 30, 2025[271] Gains and Losses - The company reported a net gain of $120 million on derivative instruments for the third quarter, a significant recovery from a loss of $197 million in the second quarter[225] - The net gain on derivative instruments increased to $149 million in 2025 from $101 million in 2024, reflecting a $177 million increase in cash received on natural gas contract settlements[253][254] - The company recorded a loss on extinguishment of debt of $32 million in Q3 2025, while in Q2 2025, it gained $56 million from repurchasing $252 million of senior notes[233] Taxation - The provision for income taxes increased to $894 million in 2025 from $685 million in 2024, largely due to higher pre-tax income from revenues associated with the Endeavor Acquisition[259] - The provision for income taxes for Q3 2025 was $287 million, up from $204 million in Q2 2025, primarily due to increased pre-tax income[234] - Production taxes for the nine months ended September 30, 2025, totaled $490 million, representing 4.7% of oil, natural gas, and natural gas liquids revenue, compared to $294 million and 4.4% in 2024[244]