DIAMONDBACK ENERGY, INC. PROVIDES REVISED 2020 GUIDANCE AND UPDATED HEDGE POSITIONS
REVISED 2020 GUIDANCE HIGHLIGHTS
- Full year revised 2020 production guidance of 295.0 - 310.0 MBOE/d
- Full year revised 2020 oil production guidance of 183.0 - 193.0 MBO/d
- Q4 2020 exit rate production guidance of 170.0 – 180.0 MBO/d (275.0 – 290.0 MBOE/d)
- Full year 2020 CAPEX guidance of
$1.5 -$1.9 billion , including drill, complete and equip ("D,C&E") spend of$1.31 -$1.63 billion ,$100 -$150 million of midstream capital and$90 -$120 million of infrastructure capital - The Company plans to exit the third quarter of 2020 operating eight drilling rigs, and exit 2020 operating seven drilling rigs, and will cut further should conditions warrant
- After returning from a one to three month frac holiday, the Company plans to operate between three and five completion crews, and complete between 170 - 200 gross (153 – 180 net) wells with an average lateral length of approximately 10,000 feet in 2020
- Diamondback believes it can maintain Q4 2020 exit rate oil production through 2021 with a four to five completion crew cadence, six to eight operated drilling rigs and a capital budget 20% - 30% less than 2020’s
$1.5 -$1.9 billion capital budget
“Diamondback’s revised 2020 capital budget and operating plan reflects the swift changes we have made in short order as our industry deals with a market that is changing daily due to an unprecedented global demand shock. Size, scale and cost structure are paramount in this market, and Diamondback’s cost structure is built to withstand commodity price shocks. Almost all of our anticipated 2020 production is now hedged and we have built downside protection in 2021 to prepare for lower for longer oil prices,” stated
REVISED FULL YEAR 2020 GUIDANCE
| Revised | ||
| 2020 Guidance | ||
| Total net production – MBOE/d | 295.0 - 310.0 | |
| Oil production – MBO/d | 183.0 - 193.0 | |
| Unit costs ($/BOE) | ||
| Lease operating expenses, including workovers | ||
| G&A | ||
| Cash G&A | ||
| Non-cash equity-based compensation | ||
| D,D&A | ||
| Interest expense (net of interest income) | ||
| Gathering and transportation | (Q1 |
|
| Production and ad valorem taxes (% of revenue)(a) | 7% | |
| Gross horizontal D,C&E/Ft. - |
||
| Gross horizontal D,C&E/Ft. - |
||
| Gross horizontal wells completed (net) | 170 - 200 (153 - 180) | |
| Average lateral length (Ft.) | ~10,000' | |
| ~60% | ||
| ~40% | ||
| Capital Budget ($ - million) | ||
| Horizontal drilling and completion | ||
| Midstream (ex. long-haul pipeline investments) | ||
| Infrastructure | ||
| 2020 Capital Spend | ||
(a) Includes production taxes of 4.6% for crude oil and 7.5% for natural gas and NGLs and ad valorem taxes.
DERIVATIVES UPDATE
The Company now has a total of 178.8 thousand barrels per day protected in 2020, with 98% of those hedges having unlimited downside protection as a swap, put or collar. The Company has an average of 83.5 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) | |||||||||||||||||||
| Q2 2020 | Q3 2020 | Q4 2020 | 1H 2021 | 2H 2021 | |||||||||||||||
| Swaps - WTI ( |
15,000 | 11,000 | 11,000 | — | — | ||||||||||||||
| $ | 46.77 | $ | 43.47 | $ | 43.47 | $ | — | $ | — | ||||||||||
| Swaps - WTI (Magellan East Houston)(1) | 14,000 | 14,000 | 14,000 | 5,000 | 5,000 | ||||||||||||||
| $ | 56.98 | $ | 56.98 | $ | 56.98 | $ | 37.78 | $ | 37.78 | ||||||||||
| Swaps - Crude Brent Oil(2) | 30,200 | 24,200 | 24,200 | 16,000 | 5,000 | ||||||||||||||
| $ | 50.27 | $ | 47.62 | $ | 47.62 | $ | 43.79 | $ | 41.62 | ||||||||||
| Puts - WTI ( |
4,700 | 4,700 | 4,700 | — | — | ||||||||||||||
| $ | 46.51 | $ | 46.51 | $ | 46.51 | $ | — | $ | — | ||||||||||
| Costless Collars - WTI ( |
51,029 | 51,029 | 51,029 | 10,000 | 10,000 | ||||||||||||||
| Long Put Price ($/Bbl) | $ | 35.56 | $ | 35.56 | $ | 35.56 | $ | 30.00 | $ | 30.00 | |||||||||
| Ceiling Price ($/Bbl) | $ | 41.54 | $ | 41.54 | $ | 41.54 | $ | 43.05 | $ | 43.05 | |||||||||
| Costless Collars - WTI (Magellan East Houston) | 4,000 | 4,000 | 4,000 | — | — | ||||||||||||||
| Long Put Price ($/Bbl) | $ | 39.00 | $ | 39.00 | $ | 39.00 | $ | — | $ | — | |||||||||
| Ceiling Price ($/Bbl) | $ | 49.00 | $ | 49.00 | $ | 49.00 | $ | — | $ | — | |||||||||
| Costless Collars - Crude Brent Oil | 62,710 | 62,710 | 62,710 | 58,000 | 58,000 | ||||||||||||||
| Long Put Price ($/Bbl) | $ | 37.74 | $ | 37.74 | $ | 37.74 | $ | 39.52 | $ | 39.52 | |||||||||
| Ceiling Price ($/Bbl) | $ | 45.87 | $ | 45.87 | $ | 45.87 | $ | 48.26 | $ | 48.26 | |||||||||
| Costless Put Spreads - WTI (Magellan East Houston) | 3,800 | 3,800 | 3,800 | — | — | ||||||||||||||
| $ | 25.00 | $ | 25.00 | $ | 25.00 | $ | — | $ | — | ||||||||||
| Long Put Price ($/Bbl) | $ | 50.00 | $ | 50.00 | $ | 50.00 | $ | — | $ | — | |||||||||
| Midland-Cushing Basis Swaps - WTI | 45,538 | 45,087 | 45,087 | — | — | ||||||||||||||
| $ | (1.57 | ) | $ | (1.57 | ) | $ | (1.57 | ) | $ | — | $ | — | |||||||
| Roll Swaps - WTI | 20,000 | 20,000 | 20,000 | — | — | ||||||||||||||
| $ | 0.44 | $ | 0.44 | $ | 0.44 | $ | — | $ | — | ||||||||||
(1) Includes 10,000 Bo/d of swaps whereby the Company receives
(2) Includes of 11,000 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
| Natural Gas (Mmbtu/day, $/Mmbtu) | |||||||||||||||||||
| Q2 2020 | Q3 2020 | Q4 2020 | 1H 2021 | 2H 2021 | |||||||||||||||
| Natural Gas Swaps - |
30,000 | 30,000 | 30,000 | 30,000 | 30,000 | ||||||||||||||
| $ | 2.55 | $ | 2.55 | $ | 2.55 | $ | 2.46 | $ | 2.46 | ||||||||||
| Natural Gas Swaps - |
80,000 | 90,000 | 90,000 | — | — | ||||||||||||||
| $ | 1.68 | $ | 1.58 | $ | 1.58 | $ | — | $ | — | ||||||||||
| Natural Gas Basis Swaps - |
145,000 | 145,000 | 145,000 | 170,000 | 170,000 | ||||||||||||||
| $ | (1.57 | ) | $ | (1.57 | ) | $ | (1.57 | ) | $ | (0.71 | ) | $ | (0.71 | ) | |||||
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 proposed sales of assets, future dividends, production, drilling and capital expenditure plans and effects of hedging arrangements. 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.