I am finishing up my review of our updated profile for FANG.
At the time of this post FANG is trading for $74.98, which is less than 4X my operating cash flow per share forecast for 2021.
TipRanks: In the last 3 months, 14 ranked analysts set 12-month price targets for FANG. The average price target among the analysts is $112.86. 5 of the analysts reports are dated in August and their price targets are $105 to $126.
FANG will generate over $2 Billion of free cash flow from operations this year and over $3 Billion in 2022 if their average realized oil price is $65/bbl.
Diamondback Energy (FANG) Update - August 25
Diamondback Energy (FANG) Update - August 25
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Diamondback Energy (FANG) Update - August 25
Rattler Midstream LP (RTLR) is being added to our High Yield Income Portfolio. It is a controlled subsidiary of FANG.
Board of Directors of Rattler's general partner approved an increased cash distribution for the second quarter of 2021 of $0.25 per common unit ($1.00 annualized); implies a 9.33% annualized yield based on the August 25, 2021 unit price of $10.71
RTLR has elected to be taxed as a C-Corp., so it is suitable for an IRA account.
Rattler Midstream Second Quarter Highlights
• Q2 2021 consolidated net income (including non-controlling interest) of $54.5 million
• Q2 2021 consolidated Adjusted EBITDA of $76.0 million
• Q2 2021 cash flow provided by operating activities of $75.7 million; Q2 2021 Operating Cash Flow Before Working Capital Changes of $62.8 million
• Q2 2021 cash operated capital expenditures of $11.9 million; 2021 operated midstream capex guidance reduced to $30 - $50 million, a 43% decrease at the midpoint from previous guidance
• Q2 2021 consolidated Free Cash Flow of $81.0 million; Q2 2021 Recurring Free Cash Flow of $51.0 million
• Repurchased approximately 0.5 million common units at an average unit price of $10.94 for a total cost of $5.2 million during the quarter
• Q2 2021 average produced water gathering and disposal volumes of 802 MBbl/d
• Q2 2021 average sourced water volumes of 242 MBbl/d; 20% of total sourced water volumes in Q2 2021 sourced from recycled produced water
• Q2 2021 average crude oil gathering volumes of 84 MBbl/d
• Q2 2021 average gas gathering volumes of 142 BBtu/d
“The second quarter of 2021 was another strong operational performance for Rattler as volumes and operations normalized after the impact of the first quarter's weather events. Both the operated business and our equity method joint ventures witnessed a return to trend in both volumes and earnings, and the Rattler team did a tremendous job in controlling costs during the quarter. Accordingly, due to our strong financial position and with improved confidence in our free cash flow trajectory, Rattler is increasing its distribution by 25% to $1.00 annualized per common unit.
Since the onset of the COVID-19 pandemic and the associated retrenchment of Rattler's and Diamondback's operations to focus on cash flow over growth, we have tasked the Rattler organization with cutting operational expense and capital expenditures to increase cash flow in an environment in which growth in volumes and midstream capacity is not called for. The results of these efforts are apparent as Rattler has generated over $100 million in recurring free cash flow in the first half of 2021, not including divestitures of non-core real estate and the Amarillo Rattler stake, which have netted another $30 million.” – Travis Stice, CEO of Viper’s general partner, Diamondback Energy
Board of Directors of Rattler's general partner approved an increased cash distribution for the second quarter of 2021 of $0.25 per common unit ($1.00 annualized); implies a 9.33% annualized yield based on the August 25, 2021 unit price of $10.71
RTLR has elected to be taxed as a C-Corp., so it is suitable for an IRA account.
Rattler Midstream Second Quarter Highlights
• Q2 2021 consolidated net income (including non-controlling interest) of $54.5 million
• Q2 2021 consolidated Adjusted EBITDA of $76.0 million
• Q2 2021 cash flow provided by operating activities of $75.7 million; Q2 2021 Operating Cash Flow Before Working Capital Changes of $62.8 million
• Q2 2021 cash operated capital expenditures of $11.9 million; 2021 operated midstream capex guidance reduced to $30 - $50 million, a 43% decrease at the midpoint from previous guidance
• Q2 2021 consolidated Free Cash Flow of $81.0 million; Q2 2021 Recurring Free Cash Flow of $51.0 million
• Repurchased approximately 0.5 million common units at an average unit price of $10.94 for a total cost of $5.2 million during the quarter
• Q2 2021 average produced water gathering and disposal volumes of 802 MBbl/d
• Q2 2021 average sourced water volumes of 242 MBbl/d; 20% of total sourced water volumes in Q2 2021 sourced from recycled produced water
• Q2 2021 average crude oil gathering volumes of 84 MBbl/d
• Q2 2021 average gas gathering volumes of 142 BBtu/d
“The second quarter of 2021 was another strong operational performance for Rattler as volumes and operations normalized after the impact of the first quarter's weather events. Both the operated business and our equity method joint ventures witnessed a return to trend in both volumes and earnings, and the Rattler team did a tremendous job in controlling costs during the quarter. Accordingly, due to our strong financial position and with improved confidence in our free cash flow trajectory, Rattler is increasing its distribution by 25% to $1.00 annualized per common unit.
Since the onset of the COVID-19 pandemic and the associated retrenchment of Rattler's and Diamondback's operations to focus on cash flow over growth, we have tasked the Rattler organization with cutting operational expense and capital expenditures to increase cash flow in an environment in which growth in volumes and midstream capacity is not called for. The results of these efforts are apparent as Rattler has generated over $100 million in recurring free cash flow in the first half of 2021, not including divestitures of non-core real estate and the Amarillo Rattler stake, which have netted another $30 million.” – Travis Stice, CEO of Viper’s general partner, Diamondback Energy
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group