Diamondback Energy (FANG) Q2 Results - Aug 1

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dan_s
Posts: 34470
Joined: Fri Apr 23, 2010 8:22 am

Diamondback Energy (FANG) Q2 Results - Aug 1

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Great quarter!. My pre-release valuation of $222 will be increased due to balance sheet strength, higher operating cash flow and big increase in share repurchases.
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MIDLAND, Texas, Aug. 01, 2022 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the “Company”) today announced financial and operating results for the second quarter ended June 30, 2022.

SECOND QUARTER 2022 HIGHLIGHTS

Average production of 221.1 MBO/d (380.5 MBOE/d) < Compares to my Q2 forecast of 220,000 barrels of oil per day.

Cash flow from operating activities of $1.7 billion; Operating Cash Flow Before Working Capital Changes (as defined and reconciled below) of $1.8 billion < This is VERY GOOD. My Q2 Adjusted Operating Cash Flow forecast was $1,745 million ($9.83/share).

Cash capital expenditures of $468 million

Free Cash Flow (as defined and reconciled below) of $1.3 billion < My full-year FCF forecast is $4.7 billion.

As previously announced, increasing annual base dividend by 7% to $3.00 per share; declared Q2 2022 base cash dividend of $0.75 per share payable on August 23, 2022; implies a 2.3% annualized yield based on July 29, 2022 closing share price of $128.02

Announcing a variable cash dividend of $2.30 per share payable on August 23, 2022; total base-plus-variable dividend of $3.05 per share implies a 9.5% annualized yield based on July 29, 2022 closing share price of $128.02

Repurchased 2,368,816 shares of common stock in Q2 2022 for $303 million (at a weighted average price of $127.61/share); repurchased 1,761,363 shares of common stock to date in Q3 2022 for $200 million (at a weighted average price of $113.70/share)

Total Q2 2022 return of capital of $837 million; represents 63% of Q2 2022 Free Cash Flow (as defined and reconciled below) from stock repurchases and the declared base-plus-variable dividend

Board approved a $2.0 billion increase to share repurchase program authorization to $4.0 billion from $2.0 billion previously

As previously announced, increasing quarterly return of capital commitment to at least 75% of Free Cash Flow beginning in Q3 2022; up from at least 50% of Free Cash Flow

Repurchased ~$337 million in aggregate principal amount across multiple tranches of Diamondback's Senior Notes at an average cost of 95.5% of par (~$322 million)

In July 2022, paid off $20 million in legacy Energen notes due July 2022 and called $25 million in QEP notes due October 2022 at par, removing all 2022 debt maturities

Rattler Midstream LP buy-in transaction expected to close in late August 2022

“Diamondback continued to build on its execution track record in the second quarter. The Company generated a record $1.3 billion in Free Cash Flow, exceeding last quarter’s prior Company record by 35%. We used the cash to reduce our net debt by 5% quarter over quarter, pay a total dividend of $3.05 per share and buy back over 2.3 million shares,” stated Travis Stice, Chairman and Chief Executive Officer of Diamondback. “We continue to focus on operational excellence and cost control in this inflationary operating environment, working to mitigate and offset the persistent inflationary pressures we are seeing across our business. Diamondback has a strong track record of cost control, and we expect to continue to improve on this track record in the coming quarters.”

Mr. Stice continued, “Beginning this quarter, we have committed to return a minimum of 75% of our Free Cash Flow to stockholders, which places Diamondback’s cash returns framework at the forefront of the industry. We believe this combination of execution, cost control and cash returns presents a differentiated value proposition to our stockholders that is not reflected in today’s equity value, which is why our Board approved a $2.0 billion increase to our share repurchase authorization to $4.0 billion.”
Dan Steffens
Energy Prospectus Group
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