Diamondback Energy (FANG) to buy Double Eagle - Feb 18

[dan_s]

This morning on Bloomberg: "Diamondback Energy Inc. will expand in the Permian Basin after agreeing to acquire subsidiaries of closely held Double Eagle IV Midco LLC for about $4.1 billion, a significant asset boost for the top independent oil producer in North America’s most prolific shale patch."

Diamondback is an "Aggressive Growth" company with a Capital A.

Diamondback slides with details here: https://www.diamondbackenergy.com/static-files/20a8dd0d-25c2-440f-820b-f06afbf8c114

[dan_s]

The Double Eagle acquisition is expected to increase Diamondback's production by 27,000 Boepd (69% oil) at closing on April 1st. Since Diamondback is adding another drilling rig, I've increased my Q2 production forecast by 27,000 Boepd, Q3 by 29,000 Boepd and Q4 by 31,000 Boepd.

I am expecting Diamondback to report Q4 2024 production of 850,000 Boepd, primarily due to the "Mega Acquisition" of Endeavor Energy that closed on September 10, 2024.

Diamondback's 2025 exit rate should be over 895,000 Boepd, up from 571,098 Boepd in Q3 2024.

My updated forecast/valuation model for FANG will be posted to the EPG website this afternoon.

My current valuation increases by $2 to $242 per share.

[dan_s]

Seven energy sector analysts have submitted updated price targets to TipRanks this morning. Their price targets range from $210 to $238, with an average of $221.

Diamondback will announce Q4 2024 results and 2025 guidance on February 24th. 23 members of the Wall Street Gang cover FANG and VNOM, so there will be lots of high-powered analysts on the conference call.

FANG was trading at $158.41 when this was posted.