I have updated my forecast model for Diamondback Energy (FANG) and it will be posted to the EPG website this afternoon. Find the RED BOX on the forecast spreadsheet to understand why Wall Street loves FANG.
My valuation is unchanged at $137.00, which compares to First Call's price target of $130.36.
First quarter production was 61,611 BOE per day. If they stick with their current drilling program (fully funded by cash flow from operations), their production should be approaching 100,000 BOE per day by year end. FANG is an "Aggressive Growth" company. With many years of running room in the Permian Basin.
We will highlight FANG at our luncheon in Dallas on Tuesday.
FANG Forecast
FANG Forecast
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: FANG Forecast
Comments below are from John White at Roth Capital:
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Our target price remains $130 and our BUY rating is maintained.
Operations Update: In April 2017, FANG added an eighth operated rig, which began development in the Midland Basin. FANG plans to move this rig to Pecos County in the coming weeks and operate five rigs in the Midland Basin and three rigs in the Southern Delaware Basin.
Delaware Basin: In Ward County, FANG recently completed its first operated Wolfcamp A well with a 7,563 foot lateral. The Coldblood 7372 Unit 1WA achieved a peak 15-day flowing IP rate of 210 BOE per day per 1,000' with 88% oil or 1,588 BOE per day.
In Pecos County, FANG recently completed two horizontal wells in the Lower Wolfcamp A with an average lateral length of 4,581 feet. The McIntyre State 38 2H and McIntyre State 40-2H commenced with an average peak 24-hour IP rate of 186 BOE per day per 1,000' with 89% oil or 852 BOE per day and achieved an average peak 30-day flowing IP rate of 158 BOE per day per 1,000' or 724 BOE per day. Subsequently, Diamondback completed a well in the Upper Wolfcamp A with a 4,799 foot lateral. The State McGary 16-1H achieved a peak 24-hour IP rate of 243 BOE per 1,000' with 85% oil or 1,166 BOE per day.
Midland Basin: Strong Howard County Well Results: FANG completed two wells (Wolfcamp A and Wolfcamp B) that tested a 15-day IP rate of 2,104 BOE per day with 91% oil from a lateral length of 7,679 feet.
Spanish Trail: FANG recently completed a Wolfcamp A well with a 10,466 foot lateral, the Bombardier 407WA. This well achieved a peak 30-day IP rate of 154 BOE per day per 1,000' with 89% oil or 1,612 BOE per day.
2017 Guidance: There is, in our view, plenty of upside for more sequential production growth in 2017. The midpoint of the 2017 oil and gas production guidance is 72,500 BOE per day. Reaching this figure is an approximate 17% increase over the actual 1Q 2017 production figure of 61,610 BOE per day.
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Our target price remains $130 and our BUY rating is maintained.
Operations Update: In April 2017, FANG added an eighth operated rig, which began development in the Midland Basin. FANG plans to move this rig to Pecos County in the coming weeks and operate five rigs in the Midland Basin and three rigs in the Southern Delaware Basin.
Delaware Basin: In Ward County, FANG recently completed its first operated Wolfcamp A well with a 7,563 foot lateral. The Coldblood 7372 Unit 1WA achieved a peak 15-day flowing IP rate of 210 BOE per day per 1,000' with 88% oil or 1,588 BOE per day.
In Pecos County, FANG recently completed two horizontal wells in the Lower Wolfcamp A with an average lateral length of 4,581 feet. The McIntyre State 38 2H and McIntyre State 40-2H commenced with an average peak 24-hour IP rate of 186 BOE per day per 1,000' with 89% oil or 852 BOE per day and achieved an average peak 30-day flowing IP rate of 158 BOE per day per 1,000' or 724 BOE per day. Subsequently, Diamondback completed a well in the Upper Wolfcamp A with a 4,799 foot lateral. The State McGary 16-1H achieved a peak 24-hour IP rate of 243 BOE per 1,000' with 85% oil or 1,166 BOE per day.
Midland Basin: Strong Howard County Well Results: FANG completed two wells (Wolfcamp A and Wolfcamp B) that tested a 15-day IP rate of 2,104 BOE per day with 91% oil from a lateral length of 7,679 feet.
Spanish Trail: FANG recently completed a Wolfcamp A well with a 10,466 foot lateral, the Bombardier 407WA. This well achieved a peak 30-day IP rate of 154 BOE per day per 1,000' with 89% oil or 1,612 BOE per day.
2017 Guidance: There is, in our view, plenty of upside for more sequential production growth in 2017. The midpoint of the 2017 oil and gas production guidance is 72,500 BOE per day. Reaching this figure is an approximate 17% increase over the actual 1Q 2017 production figure of 61,610 BOE per day.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group