Diamondback Energy, Inc. Announces Third Quarter 2024 Financial and Operating Results
Diamondback Energy (NASDAQ: FANG) reported its Q3 2024 financial results, highlighting the completion of its merger with Endeavor Energy Resources on September 10, 2024. The company achieved average production of 321.1 MBO/d, with net cash from operations of $1.2 billion and Free Cash Flow of $708 million. Key financial actions included declaring a Q3 base dividend of $0.90 per share and repurchasing 2.9 million shares for $515 million. The company also announced a $2.0 billion increase to its share repurchase authorization and entered into an asset trade agreement with TRP Energy involving Delaware and Midland Basin assets.
Diamondback Energy (NASDAQ: FANG) ha riportato i risultati finanziari per il terzo trimestre del 2024, evidenziando il completamento della fusione con Endeavor Energy Resources avvenuta il 10 settembre 2024. L'azienda ha raggiunto una produzione media di 321,1 MBO/d, con un cash flow operativo netto di 1,2 miliardi di dollari e un Free Cash Flow di 708 milioni di dollari. Tra le principali azioni finanziarie, è stata dichiarata un dividendo base per il terzo trimestre di 0,90 dollari per azione e il riacquisto di 2,9 milioni di azioni per 515 milioni di dollari. L'azienda ha anche annunciato un aumento di 2,0 miliardi di dollari nell'autorizzazione per il riacquisto di azioni ed è entrata in un accordo di scambio di attivi con TRP Energy riguardante risorse nel Delaware e nel Midland Basin.
Diamondback Energy (NASDAQ: FANG) informó sus resultados financieros del tercer trimestre de 2024, destacando la finalización de su fusión con Endeavor Energy Resources el 10 de septiembre de 2024. La compañía logró una producción promedio de 321.1 MBO/d, con un flujo de caja neto de operaciones de 1.2 mil millones de dólares y un flujo de caja libre de 708 millones de dólares. Entre las acciones financieras clave se incluyó la declaración de un dividendo base del tercer trimestre de 0.90 dólares por acción y la recompra de 2.9 millones de acciones por 515 millones de dólares. La compañía también anunció un aumento de 2.0 mil millones de dólares en su autorización para la recompra de acciones y celebró un acuerdo de intercambio de activos con TRP Energy que involucra activos en Delaware y Midland Basin.
다이아몬드백 에너시 (NASDAQ: FANG)는 2024년 3분기 재무 결과를 발표하며, 2024년 9월 10일 엔데버 에너지 리소스와의 합병 완료를 강조했습니다. 이 회사는 평균 생산량 321.1 MBO/d를 기록하였으며, 운영에서 발생한 순 현금 12억 달러와 자유 현금 흐름 7억 8백만 달러를 달성했습니다. 주요 재무 조치로는 3분기 주당 0.90달러의 기초 배당을 선언하고, 5억 1천5백만 달러에 290만 주를 재매입한 것이 포함됩니다. 또한 이 회사는 자사주 매입 허가를 20억 달러 증가시키고, 델라웨어 및 미드랜드 분지 자산과 관련하여 TRP 에너지와 자산 거래 협약을 체결했습니다.
Diamondback Energy (NASDAQ: FANG) a annoncé ses résultats financiers du troisième trimestre 2024, mettant en avant l'achèvement de sa fusion avec Endeavor Energy Resources le 10 septembre 2024. La société a atteint une production moyenne de 321,1 MBO/d, avec un flux de trésorerie net d'exploitation de 1,2 milliard de dollars et un flux de trésorerie libre de 708 millions de dollars. Parmi les actions financières clés, on peut citer la déclaration d'un dividende de base de 0,90 dollar par action pour le troisième trimestre et le rachat de 2,9 millions d'actions pour 515 millions de dollars. La société a également annoncé une augmentation de 2,0 milliards de dollars de son autorisation de rachat d'actions et a conclu un accord de cession d'actifs avec TRP Energy concernant des actifs du Delaware et du Midland Basin.
Diamondback Energy (NASDAQ: FANG) hat seine finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht und die Vollziehung der Fusion mit Endeavor Energy Resources am 10. September 2024 hervorgehoben. Das Unternehmen erreichte eine durchschnittliche Produktion von 321,1 MBO/d, mit einem Nettocashflow aus dem operativen Geschäft von 1,2 Milliarden Dollar und einem Free Cash Flow von 708 Millionen Dollar. Zu den wichtigsten finanziellen Maßnahmen gehörte die Erklärung einer Basisdividende von 0,90 Dollar pro Aktie für das 3. Quartal und der Rückkauf von 2,9 Millionen Aktien für 515 Millionen Dollar. Darüber hinaus gab das Unternehmen eine Erhöhung der Genehmigung für den Aktienrückkauf um 2,0 Milliarden Dollar bekannt und trat in eine Vermögenshandelsvereinbarung mit TRP Energy ein, die Vermögenswerte in Delaware und Midland Basin betrifft.
- Strong Q3 production of 321.1 MBO/d (571.1 MBOE/d)
- Generated $1.2 billion in operating cash flow
- Free Cash Flow of $708 million; Adjusted Free Cash Flow of $1.0 billion
- Increased share repurchase authorization by $2.0 billion to $6.0 billion
- Completed strategic merger with Endeavor Energy Resources
- Increased consolidated net debt to $12.7 billion from $5.3 billion in Q2 2024
- Decreased realized natural gas prices to negative $0.26 per Mcf
Insights
A significant earnings report with strong operational metrics.
- Production growth to 321.1 MBO/d shows operational strength
- Strong shareholder returns with
$780 million in Q3 capital returns (78% of adjusted FCF) - Increased share buyback authorization by
$2.0 billion to$6.0 billion - Healthy balance sheet with
$2.6 billion in total liquidity despite higher post-merger debt
The raised production guidance and strategic Midland Basin asset acquisition through the TRP trade indicates continued growth trajectory and operational optimization.
The TRP asset trade strategically enhances Diamondback's Midland Basin position, adding 15,000 net acres and 55 undeveloped locations in prime areas. The deal structure, combining asset swap with
MIDLAND, Texas, Nov. 04, 2024 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the “Company”) today announced financial and operating results for the third quarter ended September 30, 2024.
THIRD QUARTER 2024 HIGHLIGHTS
- As previously announced, closed merger with Endeavor Energy Resources, L.P. ("Endeavor") on September 10, 2024
- Average production of 321.1 MBO/d (571.1 MBOE/d)
- Net cash provided by operating activities of
$1.2 billion ; Operating Cash Flow Before Working Capital Changes (as defined and reconciled below) of$1.4 billion - Cash capital expenditures of
$688 million - Free Cash Flow (as defined and reconciled below) of
$708 million ; Adjusted Free Cash Flow (as defined and reconciled below) of$1.0 billion - Declared Q3 2024 base cash dividend of
$0.90 per share payable on November 21, 2024; implies a2.0% annualized yield based on November 1, 2024 closing share price of$175.81 - Repurchased 2,919,763 shares of common stock in Q3 2024 for
$515 million , excluding excise tax (at a weighted average price of$176.40 per share); repurchased 1,029,191 shares of common stock to date in Q4 2024 for$185 million , excluding excise tax (at a weighted average price of$180.13 per share) - Total Q3 2024 return of capital of
$780 million ; represents ~78% of Adjusted Free Cash Flow (as defined and reconciled below) from stock repurchases and the declared Q3 2024 base dividend - As previously announced, Board approved a
$2.0 billion increase to share repurchase authorization to$6.0 billion from$4.0 billion previously
TRP ENERGY (“TRP”) TRADE
- On November 3rd, Diamondback and TRP entered into a definitive agreement under which Diamondback will trade certain Delaware Basin assets and pay approximately
$238 million in cash to TRP in exchange for TRP’s Midland Basin assets - TRP’s Midland Basin assets are made up of ~15,000 net acres across Upton and Reagan counties and consist of 55 remaining undeveloped operated locations, the majority of which immediately compete for capital
- The asset also includes 18 Drilled Uncompleted Wells ("DUCs") which provide for additional capital allocation flexibility
- The trade is expected to be accretive to both Cash Flow and Free Cash Flow per share and enhances Diamondback's near-term oil production profile
- Expected to close in December 2024, subject to customary regulatory approvals and closing conditions
- Jefferies LLC is serving as financial advisor to Diamondback. Kirkland & Ellis LLP is serving as legal advisor to Diamondback. J.P. Morgan Securities LLC, Moelis & Company and RBC Capital Markets are acting as financial advisors to TRP. Clifford Chance US LLP is serving as legal advisor to TRP.
OPERATIONS UPDATE
The tables below provide a summary of operating activity for the third quarter of 2024.
Total Activity (Gross Operated): | |||||
Number of Wells Drilled | Number of Wells Completed | ||||
Midland Basin | 71 | 87 | |||
Delaware Basin | 5 | 8 | |||
Total | 76 | 95 |
Total Activity (Net Operated): | |||||
Number of Wells Drilled(1) | Number of Wells Completed(1) | ||||
Midland Basin | 67 | 95 | |||
Delaware Basin | 4 | 7 | |||
Total | 71 | 102 | |||
(1) Includes two additional net wells drilled and nine additional net wells completed, respectively, from interests acquired in the Endeavor Acquisition during the first six months of 2024. | |||||
During the third quarter of 2024, Diamondback drilled 71 gross wells in the Midland Basin and five gross wells in the Delaware Basin. The Company turned 87 operated wells to production in the Midland Basin and eight gross wells in the Delaware Basin, with an average lateral length of 12,238 feet. Operated completions during the third quarter consisted of 22 Wolfcamp A wells, 21 Lower Spraberry wells, 15 Jo Mill wells, 14 Wolfcamp B wells, 12 Middle Spraberry wells, four Dean wells, four Third Bone Spring wells and three Upper Spraberry wells.
For the first nine months of 2024, Diamondback drilled 211 gross wells in the Midland Basin and 24 gross wells in the Delaware Basin. The Company turned 267 operated wells to production in the Midland Basin and 15 operated wells to production in the Delaware Basin. The average lateral length for wells completed during the first nine months of 2024 was 11,645 feet, and consisted of 72 Lower Spraberry wells, 61 Wolfcamp A wells, 45 Wolfcamp B wells, 40 Jo Mill wells, 34 Middle Spraberry wells, nine Wolfcamp D wells, nine Dean wells, six Upper Spraberry wells, four Third Bone Spring wells, one Second Bone Spring well and one Barnett well.
FINANCIAL UPDATE
Diamondback's third quarter 2024 net income was
Third quarter 2024 net cash provided by operating activities was
During the third quarter of 2024, Diamondback spent
Third quarter 2024 Consolidated Adjusted EBITDA (as defined and reconciled below) was
Diamondback's third quarter 2024 Free Cash Flow (as defined and reconciled below) was
Third quarter 2024 average unhedged realized prices were
Diamondback's cash operating costs for the third quarter of 2024 were
As of September 30, 2024, Diamondback had
DIVIDEND DECLARATIONS
Diamondback announced today that the Company's Board of Directors declared a base cash dividend of
Future base and variable dividends remain subject to review and approval at the discretion of the Company's Board of Directors.
COMMON STOCK REPURCHASE PROGRAM
During the third quarter of 2024, Diamondback repurchased ~2.9 million shares of common stock at an average share price of
UPDATED 2024 GUIDANCE
Below is Diamondback's guidance for the full year 2024, which includes fourth quarter production, unit costs and capital guidance. The Company's production and capital guidance for the full year 2024 has been updated to give effect to the Endeavor merger, which was completed on September 10, 2024.
2024 Guidance | 2024 Guidance | |
Diamondback Energy, Inc. | Viper Energy, Inc. | |
2024 Net production - MBOE/d | 587 - 590 (from 462 - 470) | 48.75 - 49.25 |
2024 Oil production - MBO/d | 335 - 337 (from 273 - 276) | 27.00 - 27.25 |
Q4 2024 Oil production - MBO/d (total - MBOE/d) | 470 - 475 (840 - 850) | 29.25 - 29.75 (52.50 - 53.00) |
Q4 2024 Unit costs ($/BOE) | ||
Lease operating expenses, including workovers | ||
G&A | ||
Cash G&A | ||
Non-cash equity-based compensation | ||
DD&A | ||
Interest expense (net of interest income) | ||
Gathering, processing and transportation | ||
Production and ad valorem taxes (% of revenue) | ~ | |
Corporate tax rate (% of pre-tax income) | ||
Cash tax rate (% of pre-tax income) | ||
Cash taxes ($ - million) | ||
Capital Budget ($ - million) | ||
2024 Total capital expenditures | ||
Q4 2024 Capital expenditures | ||
Q4 2024 Gross horizontal wells drilled (net) | 105 - 125 (100 - 118) | |
Q4 2024 Gross horizontal wells completed (net) | 110 - 130 (102 - 120) | |
CONFERENCE CALL
Diamondback will host a conference call and webcast for investors and analysts to discuss its results for the third quarter of 2024 on Tuesday, November 5, 2024 at 8:00 a.m. CT. Access to the webcast, and replay which will be available following the call, may be found here. The live webcast of the earnings conference call will also be available via Diamondback’s website at www.diamondbackenergy.com under the “Investor Relations” section of the site.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding Diamondback’s: future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position; reserve estimates and its ability to replace or increase reserves; anticipated benefits or other effects of strategic transactions (including the recently completed Endeavor merger and other acquisitions or divestitures); and plans and objectives of management (including plans for future cash flow from operations and for executing environmental strategies) are forward-looking statements. When used in this news release, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to Diamondback are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Diamondback believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond Diamondback’s control. Accordingly, forward-looking statements are not guarantees of future performance and Diamondback’s actual outcomes could differ materially from what Diamondback has expressed in its forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; the impact of public health crises, including epidemic or pandemic diseases and any related company or government policies or actions; actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments, including any impact of the ongoing war in Ukraine and the Israel-Hamas war on the global energy markets and geopolitical stability; instability in the financial markets; inflationary pressures; higher interest rates and their impact on the cost of capital; regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits; federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations; physical and transition risks relating to climate change; those risks described in Item 1A of Diamondback’s Annual Report on Form 10-K, filed with the SEC on February 22, 2024, and those risks disclosed in its subsequent filings on Forms 10-Q and 8-K, which can be obtained free of charge on the SEC’s website at http://www.sec.gov and Diamondback’s website at www.diamondbackenergy.com/investors.
In light of these factors, the events anticipated by Diamondback’s forward-looking statements may not occur at the time anticipated or at all. Moreover, Diamondback operates in a very competitive and rapidly changing environment and new risks emerge from time to time. Diamondback cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this letter or, if earlier, as of the date they were made. Diamondback does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
Diamondback Energy, Inc. | |||||||
Condensed Consolidated Balance Sheets | |||||||
(unaudited, in millions, except share amounts) | |||||||
September 30, | December 31, | ||||||
2024 | 2023 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents ( | $ | 370 | $ | 582 | |||
Restricted cash | 3 | 3 | |||||
Accounts receivable: | |||||||
Joint interest and other, net | 233 | 192 | |||||
Oil and natural gas sales, net ( | 1,197 | 654 | |||||
Inventories | 126 | 63 | |||||
Derivative instruments | 42 | 17 | |||||
Prepaid expenses and other current assets | 51 | 110 | |||||
Total current assets | 2,022 | 1,621 | |||||
Property and equipment: | |||||||
Oil and natural gas properties, full cost method of accounting ( | 79,718 | 42,430 | |||||
Other property, equipment and land | 1,417 | 673 | |||||
Accumulated depletion, depreciation, amortization and impairment ( | (18,082 | ) | (16,429 | ) | |||
Property and equipment, net | 63,053 | 26,674 | |||||
Funds held in escrow | 43 | — | |||||
Equity method investments | 377 | 529 | |||||
Derivative instruments | 38 | 1 | |||||
Deferred income taxes, net | 62 | 45 | |||||
Investment in real estate, net | 81 | 84 | |||||
Other assets | 71 | 47 | |||||
Total assets | $ | 65,747 | $ | 29,001 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable - trade | $ | 198 | $ | 261 | |||
Accrued capital expenditures | 641 | 493 | |||||
Current maturities of long-term debt | 1,000 | — | |||||
Other accrued liabilities | 857 | 475 | |||||
Revenues and royalties payable | 1,444 | 764 | |||||
Derivative instruments | 34 | 86 | |||||
Income taxes payable | 289 | 29 | |||||
Total current liabilities | 4,463 | 2,108 | |||||
Long-term debt ( | 11,923 | 6,641 | |||||
Derivative instruments | 79 | 122 | |||||
Asset retirement obligations | 493 | 239 | |||||
Deferred income taxes | 9,952 | 2,449 | |||||
Other long-term liabilities | 18 | 12 | |||||
Total liabilities | 26,928 | 11,571 | |||||
Stockholders’ equity: | |||||||
Common stock, | 3 | 2 | |||||
Additional paid-in capital | 34,007 | 14,142 | |||||
Retained earnings (accumulated deficit) | 3,427 | 2,489 | |||||
Accumulated other comprehensive income (loss) | (8 | ) | (8 | ) | |||
Total Diamondback Energy, Inc. stockholders’ equity | 37,429 | 16,625 | |||||
Non-controlling interest | 1,390 | 805 | |||||
Total equity | 38,819 | 17,430 | |||||
Total liabilities and stockholders' equity | $ | 65,747 | $ | 29,001 |
Diamondback Energy, Inc. | |||||||||||||||
Condensed Consolidated Statements of Operations | |||||||||||||||
(unaudited, $ in millions except per share data, shares in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Revenues: | |||||||||||||||
Oil, natural gas and natural gas liquid sales | $ | 2,354 | $ | 2,265 | $ | 6,629 | $ | 6,063 | |||||||
Sales of purchased oil | 282 | 59 | 698 | 59 | |||||||||||
Other operating income | 9 | 16 | 28 | 62 | |||||||||||
Total revenues | 2,645 | 2,340 | 7,355 | 6,184 | |||||||||||
Costs and expenses: | |||||||||||||||
Lease operating expenses | 316 | 226 | 825 | 618 | |||||||||||
Production and ad valorem taxes | 153 | 118 | 413 | 421 | |||||||||||
Gathering, processing and transportation | 102 | 73 | 261 | 209 | |||||||||||
Purchased oil expense | 280 | 59 | 696 | 59 | |||||||||||
Depreciation, depletion, amortization and accretion | 742 | 442 | 1,694 | 1,277 | |||||||||||
General and administrative expenses | 49 | 34 | 141 | 111 | |||||||||||
Merger and integration expense | 258 | 1 | 273 | 11 | |||||||||||
Other operating expenses | 35 | 47 | 68 | 113 | |||||||||||
Total costs and expenses | 1,935 | 1,000 | 4,371 | 2,819 | |||||||||||
Income (loss) from operations | 710 | 1,340 | 2,984 | 3,365 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (18 | ) | (37 | ) | (101 | ) | (130 | ) | |||||||
Other income (expense), net | 89 | 33 | 87 | 61 | |||||||||||
Gain (loss) on derivative instruments, net | 131 | (76 | ) | 101 | (358 | ) | |||||||||
Gain (loss) on extinguishment of debt | — | — | 2 | (4 | ) | ||||||||||
Income (loss) from equity investments, net | 6 | 9 | 23 | 39 | |||||||||||
Total other income (expense), net | 208 | (71 | ) | 112 | (392 | ) | |||||||||
Income (loss) before income taxes | 918 | 1,269 | 3,096 | 2,973 | |||||||||||
Provision for (benefit from) income taxes | 210 | 276 | 685 | 648 | |||||||||||
Net income (loss) | 708 | 993 | 2,411 | 2,325 | |||||||||||
Net income (loss) attributable to non-controlling interest | 49 | 78 | 147 | 142 | |||||||||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ | 659 | $ | 915 | $ | 2,264 | $ | 2,183 | |||||||
Earnings (loss) per common share: | |||||||||||||||
Basic | $ | 3.19 | $ | 5.07 | $ | 12.00 | $ | 12.01 | |||||||
Diluted | $ | 3.19 | $ | 5.07 | $ | 12.00 | $ | 12.01 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 204,730 | 178,872 | 187,253 | 180,400 | |||||||||||
Diluted | 204,730 | 178,872 | 187,253 | 180,400 |
Diamondback Energy, Inc. | |||||||||||||||
Condensed Consolidated Statements of Cash Flows | |||||||||||||||
(unaudited, in millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income (loss) | $ | 708 | $ | 993 | $ | 2,411 | $ | 2,325 | |||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||
Provision for (benefit from) deferred income taxes | 51 | 10 | 180 | 185 | |||||||||||
Depreciation, depletion, amortization and accretion | 742 | 442 | 1,694 | 1,277 | |||||||||||
(Gain) loss on extinguishment of debt | — | — | (2 | ) | 4 | ||||||||||
(Gain) loss on derivative instruments, net | (131 | ) | 76 | (101 | ) | 358 | |||||||||
Cash received (paid) on settlement of derivative instruments | (4 | ) | (24 | ) | (36 | ) | (62 | ) | |||||||
(Income) loss from equity investment, net | (6 | ) | (9 | ) | (23 | ) | (39 | ) | |||||||
Equity-based compensation expense | 16 | 13 | 49 | 40 | |||||||||||
Other | 20 | 3 | 77 | (23 | ) | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 106 | (256 | ) | 61 | (218 | ) | |||||||||
Income tax receivable | — | 103 | 12 | 267 | |||||||||||
Prepaid expenses and other current assets | (11 | ) | (8 | ) | 78 | 5 | |||||||||
Accounts payable and accrued liabilities | (395 | ) | (28 | ) | (490 | ) | 46 | ||||||||
Income taxes payable | (36 | ) | 23 | (51 | ) | 4 | |||||||||
Revenues and royalties payable | 95 | 53 | 109 | 139 | |||||||||||
Other | 54 | (33 | ) | 104 | (12 | ) | |||||||||
Net cash provided by (used in) operating activities | 1,209 | 1,358 | 4,072 | 4,296 | |||||||||||
Cash flows from investing activities: | |||||||||||||||
Drilling, completions, infrastructure and midstream additions to oil and natural gas properties | (688 | ) | (684 | ) | (1,934 | ) | (2,052 | ) | |||||||
Property acquisitions | (7,791 | ) | (168 | ) | (7,994 | ) | (1,193 | ) | |||||||
Proceeds from sale of assets | 207 | 868 | 459 | 1,400 | |||||||||||
Other | 106 | (1 | ) | 103 | (14 | ) | |||||||||
Net cash provided by (used in) investing activities | (8,166 | ) | 15 | (9,366 | ) | (1,859 | ) | ||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds under term loan agreement | 1,000 | — | 1,000 | — | |||||||||||
Proceeds from borrowings under credit facilities | 1,011 | 1,015 | 1,185 | 4,466 | |||||||||||
Repayments under credit facilities | (1,073 | ) | (1,332 | ) | (1,333 | ) | (4,368 | ) | |||||||
Proceeds from senior notes | — | — | 5,500 | — | |||||||||||
Repayment of senior notes | — | — | (25 | ) | (134 | ) | |||||||||
Repurchased shares under buyback program | (515 | ) | (56 | ) | (557 | ) | (709 | ) | |||||||
Repurchased shares/units under Viper's buyback program | — | (10 | ) | — | (67 | ) | |||||||||
Proceeds from partial sale of investment in Viper Energy, Inc. | — | — | 451 | — | |||||||||||
Net proceeds from Viper's issuance of common stock | 476 | — | 476 | — | |||||||||||
Dividends paid to stockholders | (416 | ) | (149 | ) | (1,316 | ) | (841 | ) | |||||||
Dividends/distributions to non-controlling interest | (59 | ) | (25 | ) | (157 | ) | (84 | ) | |||||||
Other | (5 | ) | (7 | ) | (142 | ) | (34 | ) | |||||||
Net cash provided by (used in) financing activities | 419 | (564 | ) | 5,082 | (1,771 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | (6,538 | ) | 809 | (212 | ) | 666 | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | 6,911 | 21 | 585 | 164 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 373 | $ | 830 | $ | 373 | $ | 830 |
Diamondback Energy, Inc. | |||||||||||
Selected Operating Data | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2024 | June 30, 2024 | September 30, 2023 | |||||||||
Production Data: | |||||||||||
Oil (MBbls) | 29,537 | 25,129 | 24,482 | ||||||||
Natural gas (MMcf) | 66,519 | 51,310 | 49,423 | ||||||||
Natural gas liquids (MBbls) | 11,918 | 9,514 | 8,943 | ||||||||
Combined volumes (MBOE)(1) | 52,541 | 43,195 | 41,662 | ||||||||
Daily oil volumes (BO/d) | 321,054 | 276,143 | 266,109 | ||||||||
Daily combined volumes (BOE/d) | 571,098 | 474,670 | 452,848 | ||||||||
Average Prices: | |||||||||||
Oil ($ per Bbl) | $ | 73.13 | $ | 79.51 | $ | 81.57 | |||||
Natural gas ($ per Mcf) | $ | (0.26 | ) | $ | 0.10 | $ | 1.62 | ||||
Natural gas liquids ($ per Bbl) | $ | 17.70 | $ | 17.97 | $ | 21.02 | |||||
Combined ($ per BOE) | $ | 44.80 | $ | 50.33 | $ | 54.37 | |||||
Oil, hedged ($ per Bbl)(2) | $ | 72.32 | $ | 78.55 | $ | 80.51 | |||||
Natural gas, hedged ($ per Mcf)(2) | $ | 0.60 | $ | 1.03 | $ | 1.62 | |||||
Natural gas liquids, hedged ($ per Bbl)(2) | $ | 17.70 | $ | 17.97 | $ | 21.02 | |||||
Average price, hedged ($ per BOE)(2) | $ | 45.43 | $ | 50.89 | $ | 53.74 | |||||
Average Costs per BOE: | |||||||||||
Lease operating expenses | $ | 6.01 | $ | 5.88 | $ | 5.42 | |||||
Production and ad valorem taxes | 2.91 | 3.26 | 2.83 | ||||||||
Gathering, processing and transportation expense | 1.94 | 1.90 | 1.75 | ||||||||
General and administrative - cash component | 0.63 | 0.63 | 0.51 | ||||||||
Total operating expense - cash | $ | 11.49 | $ | 11.67 | $ | 10.51 | |||||
General and administrative - non-cash component | $ | 0.30 | $ | 0.44 | $ | 0.31 | |||||
Depreciation, depletion, amortization and accretion per BOE | $ | 14.12 | $ | 11.18 | $ | 10.61 | |||||
Interest expense, net | $ | 0.34 | $ | 1.02 | $ | 0.89 |
(1) Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
(2) Hedged prices reflect the effect of our commodity derivative transactions on our average sales prices and include gains and losses on cash settlements for matured commodity derivatives, which we do not designate for hedge accounting. Hedged prices exclude gains or losses resulting from the early settlement of commodity derivative contracts.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as net income (loss) attributable to Diamondback Energy, Inc., plus net income (loss) attributable to non-controlling interest ("net income (loss)") before non-cash (gain) loss on derivative instruments, net, interest expense, net, depreciation, depletion, amortization and accretion, depreciation and interest expense related to equity method investments, (gain) loss on extinguishment of debt, if any, non-cash equity-based compensation expense, capitalized equity-based compensation expense, merger and integration expenses, other non-cash transactions and provision for (benefit from) income taxes, if any. Adjusted EBITDA is not a measure of net income as determined by United States generally accepted accounting principles ("GAAP"). Management believes Adjusted EBITDA is useful because the measure allows it to more effectively evaluate the Company’s operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company adds the items listed above to net income (loss) to determine Adjusted EBITDA because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Further, the Company excludes the effects of significant transactions that may affect earnings but are unpredictable in nature, timing and amount, although they may recur in different reporting periods. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets. The Company’s computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.
The following tables present a reconciliation of the GAAP financial measure of net income (loss) attributable to Diamondback Energy, Inc. to the non-GAAP financial measure of Adjusted EBITDA:
Diamondback Energy, Inc. | |||||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA | |||||||||||
(unaudited, in millions) | |||||||||||
Three Months Ended | |||||||||||
September 30, 2024 | June 30, 2024 | September 30, 2023 | |||||||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ | 659 | $ | 837 | $ | 915 | |||||
Net income (loss) attributable to non-controlling interest | 49 | 57 | 78 | ||||||||
Net income (loss) | 708 | 894 | 993 | ||||||||
Non-cash (gain) loss on derivative instruments, net | (135 | ) | (46 | ) | 52 | ||||||
Interest expense, net | 18 | 44 | 37 | ||||||||
Depreciation, depletion, amortization and accretion | 742 | 483 | 442 | ||||||||
Depreciation and interest expense related to equity method investments | 15 | 23 | 18 | ||||||||
Non-cash equity-based compensation expense | 24 | 26 | 21 | ||||||||
Capitalized equity-based compensation expense | (8 | ) | (7 | ) | (8 | ) | |||||
Merger and integration expenses | 258 | 3 | 1 | ||||||||
Other non-cash transactions | (72 | ) | 6 | (12 | ) | ||||||
Provision for (benefit from) income taxes | 210 | 252 | 276 | ||||||||
Consolidated Adjusted EBITDA | 1,760 | 1,678 | 1,820 | ||||||||
Less: Adjustment for non-controlling interest | 104 | 103 | 78 | ||||||||
Adjusted EBITDA attributable to Diamondback Energy, Inc. | $ | 1,656 | $ | 1,575 | $ | 1,742 |
ADJUSTED NET INCOME
Adjusted net income is a non-GAAP financial measure equal to net income (loss) attributable to Diamondback Energy, Inc. plus net income (loss) attributable to non-controlling interest ("net income (loss)") adjusted for non-cash (gain) loss on derivative instruments, net, (gain) loss on extinguishment of debt, if any, merger and integration expense, other non-cash transactions and related income tax adjustments, if any. The Company’s computation of adjusted net income may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts. Management believes adjusted net income helps investors in the oil and natural gas industry to measure and compare the Company's performance to other oil and natural gas companies by excluding from the calculation items that can vary significantly from company to company depending upon accounting methods, the book value of assets and other non-operational factors. Further, in order to allow investors to compare the Company's performance across periods, the Company excludes the effects of significant transactions that may affect earnings but are unpredictable in nature, timing and amount, although they may recur in different reporting periods.
The following table presents a reconciliation of the GAAP financial measure of net income (loss) attributable to Diamondback Energy, Inc. to the non-GAAP measure of adjusted net income:
Diamondback Energy, Inc. | |||||||
Adjusted Net Income | |||||||
(unaudited, $ in millions except per share data, shares in thousands) | |||||||
Three Months Ended September 30, 2024 | |||||||
Amounts | Amounts Per Diluted Share | ||||||
Net income (loss) attributable to Diamondback Energy, Inc.(1) | $ | 659 | $ | 3.19 | |||
Net income (loss) attributable to non-controlling interest | 49 | 0.24 | |||||
Net income (loss)(1) | 708 | 3.43 | |||||
Non-cash (gain) loss on derivative instruments, net | (135 | ) | (0.66 | ) | |||
Merger and integration expense | 258 | 1.26 | |||||
Other non-cash transactions | (72 | ) | (0.35 | ) | |||
Adjusted net income excluding above items(1) | 759 | 3.68 | |||||
Income tax adjustment for above items | (12 | ) | (0.06 | ) | |||
Adjusted net income(1) | 747 | 3.62 | |||||
Less: Adjusted net income attributable to non-controlling interest | 49 | 0.24 | |||||
Adjusted net income attributable to Diamondback Energy, Inc.(1) | $ | 698 | $ | 3.38 | |||
Weighted average common shares outstanding: | |||||||
Basic | 204,730 | ||||||
Diluted | 204,730 |
(1) The Company’s earnings (loss) per diluted share amount has been computed using the two-class method in accordance with GAAP. The two-class method is an earnings allocation which reflects the respective ownership among holders of common stock and participating securities. Diluted earnings per share using the two-class method is calculated as (i) net income attributable to Diamondback Energy, Inc, (ii) less the reallocation of
OPERATING CASH FLOW BEFORE WORKING CAPITAL CHANGES AND FREE CASH FLOW
Operating cash flow before working capital changes, which is a non-GAAP financial measure, represents net cash provided by operating activities as determined under GAAP without regard to changes in operating assets and liabilities. The Company believes operating cash flow before working capital changes is a useful measure of an oil and natural gas company’s ability to generate cash used to fund exploration, development and acquisition activities and service debt or pay dividends. The Company also uses this measure because changes in operating assets and liabilities relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. This allows the Company to compare its operating performance with that of other companies without regard to financing methods and capital structure.
Free Cash Flow, which is a non-GAAP financial measure, is cash flow from operating activities before changes in working capital in excess of cash capital expenditures. The Company believes that Free Cash Flow is useful to investors as it provides measures to compare both cash flow from operating activities and additions to oil and natural gas properties across periods on a consistent basis as adjusted for non-recurring tax impacts from divestitures, merger and integration expenses, the early termination of derivative contracts and settlements of treasury locks. These measures should not be considered as an alternative to, or more meaningful than, net cash provided by operating activities as an indicator of operating performance. The Company's computation of Free Cash Flow may not be comparable to other similarly titled measures of other companies. The Company uses Free Cash Flow to reduce debt, as well as return capital to stockholders as determined by the Board of Directors.
The following tables present a reconciliation of the GAAP financial measure of net cash provided by operating activities to the non-GAAP measure of operating cash flow before working capital changes and to the non-GAAP measure of Free Cash Flow:
Diamondback Energy, Inc. | |||||||||||||||
Operating Cash Flow Before Working Capital Changes and Free Cash Flow | |||||||||||||||
(unaudited, in millions) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
Net cash provided by operating activities | $ | 1,209 | $ | 1,358 | $ | 4,072 | $ | 4,296 | |||||||
Less: Changes in cash due to changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 106 | (256 | ) | 61 | (218 | ) | |||||||||
Income tax receivable | — | 103 | 12 | 267 | |||||||||||
Prepaid expenses and other current assets | (11 | ) | (8 | ) | 78 | 5 | |||||||||
Accounts payable and accrued liabilities | (395 | ) | (28 | ) | (490 | ) | 46 | ||||||||
Income taxes payable | (36 | ) | 23 | (51 | ) | 4 | |||||||||
Revenues and royalties payable | 95 | 53 | 109 | 139 | |||||||||||
Other | 54 | (33 | ) | 104 | (12 | ) | |||||||||
Total working capital changes | (187 | ) | (146 | ) | (177 | ) | 231 | ||||||||
Operating cash flow before working capital changes | 1,396 | 1,504 | 4,249 | 4,065 | |||||||||||
Drilling, completions, infrastructure and midstream additions to oil and natural gas properties | (688 | ) | (684 | ) | (1,934 | ) | (2,052 | ) | |||||||
Total Cash CAPEX | (688 | ) | (684 | ) | (1,934 | ) | (2,052 | ) | |||||||
Free Cash Flow | 708 | 820 | 2,315 | 2,013 | |||||||||||
Tax impact from divestitures(1) | — | 64 | — | 64 | |||||||||||
Merger and integration expenses | 258 | — | 273 | — | |||||||||||
Early termination of derivatives | 37 | — | 37 | — | |||||||||||
Treasury locks | — | — | 25 | — | |||||||||||
Adjusted Free Cash Flow | $ | 1,003 | $ | 884 | $ | 2,650 | $ | 2,077 |
(1) Includes the tax impact for the disposal of certain Midland Basin water assets and Delaware Basin oil gathering assets.
NET DEBT
The Company defines the non-GAAP measure of net debt as total debt (excluding debt issuance costs, discounts, premiums and unamortized basis adjustments) less cash and cash equivalents. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Management uses net debt to determine the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. The Company believes this metric is useful to analysts and investors in determining the Company's leverage position because the Company has the ability to, and may decide to, use a portion of its cash and cash equivalents to reduce debt.
Diamondback Energy, Inc. | |||||||||||||||||||||||
Net Debt | |||||||||||||||||||||||
(unaudited, in millions) | |||||||||||||||||||||||
September 30, 2024 | Net Q3 Principal Borrowings/ (Repayments) | June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | ||||||||||||||||||
(in millions) | |||||||||||||||||||||||
Diamondback Energy, Inc.(1) | $ | 12,284 | $ | 1,115 | $ | 11,169 | $ | 5,669 | $ | 5,697 | $ | 5,697 | |||||||||||
Viper Energy, Inc.(1) | 830 | (177 | ) | 1,007 | 1,103 | 1,093 | 680 | ||||||||||||||||
Total debt | 13,114 | $ | 938 | 12,176 | 6,772 | 6,790 | 6,377 | ||||||||||||||||
Cash and cash equivalents | (370 | ) | (6,908 | ) | (896 | ) | (582 | ) | (827 | ) | |||||||||||||
Net debt | $ | 12,744 | $ | 5,268 | $ | 5,876 | $ | 6,208 | $ | 5,550 |
(1) Excludes debt issuance costs, discounts, premiums and unamortized basis adjustments.
DERIVATIVES
As of November 1, 2024, the Company had the following outstanding consolidated derivative contracts, including derivative contracts at Viper Energy, Inc. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing and Crude Oil Brent pricing and with natural gas derivative settlements based on the New York Mercantile Exchange Henry Hub pricing. When aggregating multiple contracts, the weighted average contract price is disclosed.
Crude Oil (Bbls/day, $/Bbl) | |||||||||||
Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | FY2026 | ||||||
Long Puts - Crude Brent Oil | 82,000 | 52,000 | 33,000 | 10,000 | — | — | |||||
Long Put Price ($/Bbl) | — | — | |||||||||
Deferred Premium ($/Bbl) | — | — | |||||||||
Long Puts - WTI (Magellan East Houston) | 35,000 | 58,000 | 46,000 | 22,000 | — | — | |||||
Long Put Price ($/Bbl) | — | — | |||||||||
Deferred Premium ($/Bbl) | — | — | |||||||||
Long Puts - WTI (Cushing) | 125,000 | 138,000 | 109,000 | 38,000 | — | — | |||||
Long Put Price ($/Bbl) | — | — | |||||||||
Deferred Premium ($/Bbl) | — | — | |||||||||
Costless Collars - WTI (Cushing) | 46,000 | 13,000 | — | — | — | — | |||||
Long Put Price ($/Bbl) | — | — | — | — | |||||||
Short Call Price ($/Bbl) | — | — | — | — | |||||||
Basis Swaps - WTI (Midland) | 43,000 | 58,000 | 45,000 | 45,000 | 45,000 | — | |||||
— | |||||||||||
Roll Swaps - WTI | 40,000 | — | — | — | — | — | |||||
— | — | — | — | — |
Natural Gas (Mmbtu/day, $/Mmbtu) | |||||||||||
Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | FY 2026 | ||||||
Costless Collars - Henry Hub | 398,261 | 690,000 | 630,000 | 630,000 | 630,000 | 80,000 | |||||
Long Put Price ($/Mmbtu) | |||||||||||
Ceiling Price ($/Mmbtu) | |||||||||||
Natural Gas Swaps - Henry Hub | 13,370 | — | — | — | — | — | |||||
— | — | — | — | — | |||||||
Natural Gas Basis Swaps - Waha Hub | 471,630 | 650,000 | 590,000 | 590,000 | 590,000 | 10,000 | |||||
Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com
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