Diamondback Energy (FANG)
Posted: Wed May 04, 2016 4:05 pm
Diamondback reported solid first quarter results that beat my forecast and they raised the low end of their production guidance, which increased the confidence I have in my forecast model.
In addition to increased confidence in their production guidance, the company keeps lowering lease operating expenses and completed well costs. Recent well results are very good.
My valuation increases by $4.50 to $86.00/share, which compares to First Call's Price Target of $89.37.
My updated forecast model will be available on the EPG website on 5/5.
As of March 31, 2016, Diamondback had $236 million in cash and an undrawn credit facility. The agent lender under the Company's credit facility has recently recommended a borrowing base change to $700 million from $750 million as a result of decreasing commodity prices. The Company has again elected to limit the lenders' aggregate commitment to $500 million.
Diamondback has a large stake in Viper Energy Partners LP (VNOM), which generates steady cash flow for them. Read Viper's Q1 results at the link below.
http://finance.yahoo.com/news/viper-ene ... 37699.html
In addition to increased confidence in their production guidance, the company keeps lowering lease operating expenses and completed well costs. Recent well results are very good.
My valuation increases by $4.50 to $86.00/share, which compares to First Call's Price Target of $89.37.
My updated forecast model will be available on the EPG website on 5/5.
As of March 31, 2016, Diamondback had $236 million in cash and an undrawn credit facility. The agent lender under the Company's credit facility has recently recommended a borrowing base change to $700 million from $750 million as a result of decreasing commodity prices. The Company has again elected to limit the lenders' aggregate commitment to $500 million.
Diamondback has a large stake in Viper Energy Partners LP (VNOM), which generates steady cash flow for them. Read Viper's Q1 results at the link below.
http://finance.yahoo.com/news/viper-ene ... 37699.html