Diamondback Energy, Inc. Provides Third Quarter Update
HIGHLIGHTS
- Q3 2020 average production of 170.0 MBO/d (287.3 MBOE/d)
- Q3 2020 average realized hedged prices of
$38.17 per barrel of oil,$12.09 per barrel of natural gas liquids and$0.95 per Mcf of natural gas, resulting in a total equivalent price of$26.22 per BOE; hedged pricing excludes$5.8 million of realized gains from the early termination of 6.55 MBO/d of Q4 2020 oil hedges - Q3 2020 average unhedged realized prices of
$38.75 per barrel of oil,$12.09 per barrel of natural gas liquids and$1.11 per Mcf of natural gas, resulting in a total equivalent price of$26.75 per BOE - Q3 2020 cash CAPEX of
$281 million . Q3 2020 activity-based CAPEX incurred of approximately$206 million - Exited the third quarter with
$0 drawn on the Company’s revolving credit facility and over$2 billion of liquidity - Drilled 32 gross operated horizontal wells and turned 41 wells to production in the third quarter
- Reiterating Q4 2020 production guidance of 170 – 175 MBO/d (280 – 290 MBOE/d), full year 2020 production guidance of 178 – 182 MBO/d (290 – 305 MBOE/d) and full year 2020 cash CAPEX of
$1.8 -$1.9 billion - Diamondback continues to believe it can maintain Q4 2020 oil production through full year 2021 with a capital budget 25% – 35% less than 2020’s capital budget
“After returning curtailed production in a second quarter that included minimal completion activity due to a historic decline in commodity prices, Diamondback returned to work in the third quarter to stem production declines and stabilize our production base. As expected, production bottomed in the third quarter and is set to rise slightly in the fourth quarter to meet our fourth quarter production target of between 170,000 and 175,000 barrels of oil per day. This production level is the proposed baseline for our future activity plans, and we anticipate we can hold this production flat in 2021 while spending 25% - 35% less capital than in 2020. We exited the quarter with no balance on our revolving credit facility, implying true free cash flow generation in the third quarter. Diamondback is expected to continue to generate free cash flow at current forward commodity prices, with excess free cash flow above our dividend to be used for debt retirement,” stated
DERIVATIVES UPDATE
The Company now has an average of 162.2 thousand barrels of oil per day protected in the fourth quarter of 2020, with 98% of those hedges having unlimited downside protection as a swap, put or collar. The Company has an average of 87.4 thousand barrels per day of hedge protection in 2021 through a combination of collars and swaps. These hedge positions are consolidated to include hedges in place at
As of
| Crude Oil (Bbls/day, $/Bbl) | |||||||||||||||||||||||
| Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | FY 2022 | ||||||||||||||||||
| Swaps - WTI ( |
11,000 | — | — | — | — | — | |||||||||||||||||
| $ | 43.47 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Swaps - WTI (Magellan East Houston) |
4,000 | 5,000 | 5,000 | 5,000 | 5,000 | — | |||||||||||||||||
| $ | 61.95 | $ | 37.78 | $ | 37.78 | $ | 37.78 | $ | 37.78 | $ | — | ||||||||||||
| Swaps - Crude Brent Oil(1) |
24,200 | 10,000 | 10,000 | 5,000 | 5,000 | — | |||||||||||||||||
| $ | 47.62 | $ | 41.56 | $ | 41.56 | $ | 41.62 | $ | 41.62 | $ | — | ||||||||||||
| Long Puts - WTI ( |
4,700 | — | — | — | — | — | |||||||||||||||||
| $ | 46.51 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| — | — | — | — | — | 5,000 | ||||||||||||||||||
| $ | — | $ | — | $ | — | $ | — | $ | — | $ | 35.00 | ||||||||||||
| Calls - WTI ( |
8,000 | — | — | — | — | — | |||||||||||||||||
| $ | 45.00 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Costless Collars - WTI ( |
45,779 | 10,000 | 10,000 | 10,000 | 10,000 | — | |||||||||||||||||
| Long Put Price ($/Bbl) | $ | 35.92 | $ | 30.00 | $ | 30.00 | $ | 30.00 | $ | 30.00 | $ | — | |||||||||||
| Ceiling Price ($/Bbl) | $ | 42.29 | $ | 43.05 | $ | 43.05 | $ | 43.05 | $ | 43.05 | $ | — | |||||||||||
| Costless Collars - WTI (Magellan East Houston) | 4,000 | — | — | — | — | — | |||||||||||||||||
| Long Put Price ($/Bbl) | $ | 39.00 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Ceiling Price ($/Bbl) | $ | 49.00 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Costless Collars - Crude Brent Oil | 64,710 | 70,000 | 70,000 | 60,000 | 60,000 | — | |||||||||||||||||
| Long Put Price ($/Bbl) | $ | 37.59 | $ | 39.09 | $ | 39.09 | $ | 39.43 | $ | 39.43 | $ | — | |||||||||||
| Ceiling Price ($/Bbl) | $ | 45.63 | $ | 48.57 | $ | 48.57 | $ | 48.12 | $ | 48.12 | $ | — | |||||||||||
| Costless Put Spreads - WTI (Magellan East Houston) | 3,800 | — | — | — | — | — | |||||||||||||||||
| $ | 25.00 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Long Put Price ($/Bbl) | $ | 50.00 | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Basis Swaps - WTI ( |
45,087 | — | — | — | — | — | |||||||||||||||||
| $ | (1.33 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Basis Swaps - Argus WTL |
8,000 | — | — | — | — | — | |||||||||||||||||
| $ | (1.31 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
| Roll Swaps - WTI |
120,000 | — | — | — | — | — | |||||||||||||||||
| $ | (1.05 | ) | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
| (1) | Includes of 5,000 of swaps in the first half of 2021 whereby the counterparty has the right to extend the hedge into the second half of 2021 at an average price of $51/Bbl | |
| (2) | Includes a deferred premium at a weighted-average price of |
| Natural Gas (Mmbtu/day, $/Mmbtu) | |||||||||||||||||||||||
| Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | FY 2022 | ||||||||||||||||||
| Natural Gas Swaps - |
60,000 | 190,000 | 190,000 | 190,000 | 190,000 | — | |||||||||||||||||
| $ | 2.48 | $ | 2.62 | $ | 2.62 | $ | 2.62 | $ | 2.62 | $ | — | ||||||||||||
| Natural Gas Swaps - Waha Hub |
90,000 | — | — | — | — | — | |||||||||||||||||
| $ | 1.58 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Natural Gas Basis Swaps - Waha Hub |
145,000 | 230,000 | 230,000 | 230,000 | 230,000 | 100,000 | |||||||||||||||||
| $ | (1.57 | ) | $ | (0.69 | ) | $ | (0.69 | ) | $ | (0.69 | ) | $ | (0.69 | ) | $ | (0.42 | ) | ||||||
| Natural Gas Liquids (Bbls/day, $/Bbl) | |||||||||||||||||||||||
| Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Q4 2021 | FY 2022 | ||||||||||||||||||
| Natural Gas Liquids Swaps - Mont Belvieu Ethane |
7,000 | — | — | — | — | — | |||||||||||||||||
| $ | 8.43 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
| Natural Gas Liquids Swaps - Mont Belvieu Propane |
5,000 | — | — | — | — | — | |||||||||||||||||
| $ | 21.76 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||
About
Diamondback is an independent oil and natural gas company headquartered in
Forward Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than historical facts, that address activities that Diamondback assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events, including domestic and global industry conditions, oil and natural gas inventories, cost structure and liquidity position, capital allocation philosophy, future dividends, production, drilling and capital expenditure plans, commodity prices, effects of hedging arrangements and the impact of the ongoing COVID-19 pandemic. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Diamondback. Information concerning these risks and other factors can be found in Diamondback’s filings with the
Investor Contact:
+1 432.221.7467
alawlis@diamondbackenergy.com
Source: Diamondback Energy, Inc.