Diamondback Energy (FANG) Q1 Results - May 4

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dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Diamondback Energy (FANG) Q1 Results - May 4

Post by dan_s »

I am updating the FANG forecast/valuation model this morning and it will be posted to the EPG website.

FIRST QUARTER 2021 HIGHLIGHTS

Previously announced Q1 2021 average production of 184.2 MBO/d (307.4 MBOE/d)

Generated Q1 2021 cash flow from operating activities of $624 million. Operating Cash Flow Before Working Capital Changes of $627 million < Compares to my forecast of $668 million.

Q1 2021 cash capital expenditures of $296 million; Q1 2021 activity-based capital expenditures incurred of approximately $267 million

Generated Q1 2021 Free Cash Flow of $331 million < Above my forecast because capex spending compares to my forecast of $400 million.

Q1 2021 cash operating costs of $8.06 per BOE; including cash general and administrative ("G&A") expenses of $0.54 per BOE and lease operating expenses ("LOE") of $3.69 per BOE

Closed the previously announced acquisition of assets from Guidon Operating LLC ("Guidon") and the acquisition of QEP Resources, Inc. ("QEP") in an all stock merger, adding an aggregate of over 80,000 net acres to our asset base in the Permian Basin and generating significant synergies

Signed definitive agreements in the second quarter of 2021 to divest Williston Basin assets acquired in the merger with QEP and non-core Permian Basin assets for total consideration of $832 million, subject to certain closing adjustments; assets being sold have estimated full year 2021 net production of approximately 16 MBO/d (28 MBOE/d)

Flared 0.75% (1.0% including QEP) of gross natural gas production in the first quarter of 2021

Received $103 million federal net operating loss carryback and alternative minimum tax credit refund in January 2021, which included $3 million of interest income

Initiating Q2 2021 production guidance of 232.0 - 236.0 MBO/d (387.0 - 394.0 MBOE/d) < Compares to my Q2 forecast of 220,000 bbls of oil and 365,000 Boepd.
and cash capex guidance of $350 - $400 million

“Diamondback started 2021 with a successful first quarter, effectively overcoming the production obstacles presented by Winter Storm Uri while keeping our capital and operating costs near all-time lows. As a result, we generated over $330 million of Free Cash Flow in the first quarter. At current strip pricing, and pro forma for our asset sales announced today, we expect to continue generating significant Free Cash Flow in 2021. This Free Cash Flow, coupled with the cash proceeds from the successful execution of our three non-core asset sales announced today, will allow us to accelerate our debt reduction program, further strengthening our balance sheet," stated Travis Stice, Chief Executive Officer of Diamondback.

Mr. Stice continued, “We continue to be pleased with the seamless integration of both the Guidon and QEP assets, and we are achieving our synergy targets ahead of schedule and in excess of those highlighted during the acquisition announcement. This progress only adds to our 'exploit and return' strategy of spending maintenance capital to hold oil production flat, while using Free Cash Flow to reduce debt and return cash to stockholders."
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Diamondback Energy (FANG) Q1 Results - May 4

Post by dan_s »

Diamondback announced today that the Company's Board of Directors declared a cash dividend of $0.40 per common share for the first quarter of 2021 payable on May 20, 2021, to stockholders of record at the close of business on May 13, 2021. Future dividends remain subject to review and approval at the discretion of the Company's Board of Directors.
Dan Steffens
Energy Prospectus Group
dan_s
Posts: 34471
Joined: Fri Apr 23, 2010 8:22 am

Re: Diamondback Energy (FANG) Q1 Results - May 4

Post by dan_s »

I have updated my valuation of FANG to $120/share.
First Call's price target (based on lots of old forecasts) is $97.36.
Raymond James currently rates FANG a BUY with a price target of $125.00
It is currently trading at $81.11
Dan Steffens
Energy Prospectus Group
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