Diamondback Energy (FANG)
Posted: Tue Oct 18, 2016 10:32 am
Just in from John White at Roth Capital:
Our net asset value and target price are based on proved and probable reserves, financial position, historical and expected drilling results. Due to continued strong well performance and lower operating costs, we are increasing our price target from $104 to $114 and reiterating our Buy rating.
Due to the recent operations update and increased production guidance as summarized below, we are increasing our price target from $104 to $114. We are adjusting our 3Q 2016 estimates for actual oil and gas prices and the updated production guidance. Our 3Q 2016 EPS/CFPS/EBITDA moves from $0.20/$0.83/$73.6 million to $0.27/$1.14/$93.0 million. We are also introducing our 2017 estimates by quarter and updating our oil and gas price forecast, as shown on page two.
FANG recently provided an operational update for 3Q 2016, increased 2016 production guidance and introduced preliminary guidance for the full year of 2017. These upward adjustments reflect continued strong well performance and increased pace of well completions. FANG is now operating four rigs with a fifth rig to be added in the coming weeks and a sixth rig to be added in early 2017. FANG's average daily production during 3Q 2016 was 44,923 BOE per day (73% oil), up 22% from 2Q 2016. Average realized prices were $42.11 per barrel of oil, $2.37 per Mcf of natural gas and $13.76 per barrel of natural gas liquids.
FANG is increasing its 2016 production guidance to a range of 41,000 to 42,000 BOE per day, up 6% from the midpoint of the previous guidance range, with the increase primarily due to continued strong well performance. FANG now intends to complete 65 to 70 gross horizontal wells in 2016 while keeping 2016 capital expenditure guidance unchanged at $350 to $425 million. Regarding lease operating costs (LOE), FANG is decreasing its full year 2016 LOE/BOE guidance to $5.50 to $6.00 per BOE from a prior range of $5.50 to $6.25 per BOE as a result of continued cost savings and efficiency improvements.
FANG expects full year 2017 production to be between 52,000 BOE per day and 58,000 BOE per day. During 2017, FANG plans to complete 90 to 120 gross horizontal wells with an estimated total capital spend of $500 to $650 million, employing a five to seven rig program, subject to WTI crude oil prices remaining above $45 per barrel.
Intraday price $99.77 as of 10:57 am ET.
John M. White
Senior Research Analyst
12 Greenway Plaza, Suite 1100
Houston, Texas 77046
If you'd like to see the full report, send me an e-mail (dmsteffens@comcast.net) and I will forward it to you. - Dan
Our net asset value and target price are based on proved and probable reserves, financial position, historical and expected drilling results. Due to continued strong well performance and lower operating costs, we are increasing our price target from $104 to $114 and reiterating our Buy rating.
Due to the recent operations update and increased production guidance as summarized below, we are increasing our price target from $104 to $114. We are adjusting our 3Q 2016 estimates for actual oil and gas prices and the updated production guidance. Our 3Q 2016 EPS/CFPS/EBITDA moves from $0.20/$0.83/$73.6 million to $0.27/$1.14/$93.0 million. We are also introducing our 2017 estimates by quarter and updating our oil and gas price forecast, as shown on page two.
FANG recently provided an operational update for 3Q 2016, increased 2016 production guidance and introduced preliminary guidance for the full year of 2017. These upward adjustments reflect continued strong well performance and increased pace of well completions. FANG is now operating four rigs with a fifth rig to be added in the coming weeks and a sixth rig to be added in early 2017. FANG's average daily production during 3Q 2016 was 44,923 BOE per day (73% oil), up 22% from 2Q 2016. Average realized prices were $42.11 per barrel of oil, $2.37 per Mcf of natural gas and $13.76 per barrel of natural gas liquids.
FANG is increasing its 2016 production guidance to a range of 41,000 to 42,000 BOE per day, up 6% from the midpoint of the previous guidance range, with the increase primarily due to continued strong well performance. FANG now intends to complete 65 to 70 gross horizontal wells in 2016 while keeping 2016 capital expenditure guidance unchanged at $350 to $425 million. Regarding lease operating costs (LOE), FANG is decreasing its full year 2016 LOE/BOE guidance to $5.50 to $6.00 per BOE from a prior range of $5.50 to $6.25 per BOE as a result of continued cost savings and efficiency improvements.
FANG expects full year 2017 production to be between 52,000 BOE per day and 58,000 BOE per day. During 2017, FANG plans to complete 90 to 120 gross horizontal wells with an estimated total capital spend of $500 to $650 million, employing a five to seven rig program, subject to WTI crude oil prices remaining above $45 per barrel.
Intraday price $99.77 as of 10:57 am ET.
John M. White
Senior Research Analyst
12 Greenway Plaza, Suite 1100
Houston, Texas 77046
If you'd like to see the full report, send me an e-mail (dmsteffens@comcast.net) and I will forward it to you. - Dan