The U.S. energy explorer
Diamondback Energy
FANG
reported first-quarter 2022 adjusted earnings per share of $5.20, beating the Zacks Consensus Estimate of $4.74, significantly more than the year-earlier period’s profit of $2.30.
The outperformance can be attributed to the surge in energy prices in the first quarter, which lead to higher oil, natural gas and natural gas liquid sales. Diamondback’s average first-quarter output came in at 381,378 barrels of oil equivalent per day (BOE/d), ahead of the consensus mark of 374,957 BOE/d.
Revenues of $2.41 billion outpaced the Zacks Consensus Estimate by approximately 25% and surged 103.4% from the year-ago quarter’s sales of $1.18 billion.
In good news for investors, FANG raised its regular quarterly payout by almost 17% to 70 cents a share and also declared a variable dividend of $2.35, bringing the total distribution to $3.05. The payout will be made on May 23. The company also executed $6.7 million of share repurchases in the first quarter of 2022 at $117.34 apiece.
Production & Realized Prices
Diamondback’s production of oil and natural gas averaged 381,378 BOE/d, which comprised about 58.4% oil. The figure rose 24% from the year-ago quarter and also surpassed the Zacks Consensus Estimate of 374,957 BOE/d. While the crude output was up 21% year over year, natural gas volumes improved by about 25% year over year.
The average realized oil price in the first quarter was $97.03 per barrel, 70.4% higher than the year-ago realization of $56.94 and also more than the consensus mark of $91. Meanwhile, the average realized natural gas price jumped to $3.61 per thousand cubic feet (Mcf) from $3.05 in the year-ago period but missed the Zacks Consensus Estimate of $4.02. Overall, the company fetched $69.60 per barrel compared with $42.36 a year ago.
Diamondback Energy, Inc. Price, Consensus and EPS Surprise
Diamondback Energy, Inc. price-consensus-eps-surprise-chart
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Diamondback Energy, Inc. Quote
Costs & Financial Position
Diamondback’s first-quarter cash operating cost was $11.36 per barrel of oil equivalent (BOE), up 41% from the prior-year quarter. Lease operating expenses were $4.34 per BOE, compared with $3.69 in the first quarter of 2021. FANG’s production taxes rose 73% year over year to $4.69 per BOE. Gathering and transportation expenses increased in the first quarter of 2022 to $1.72 per BOE from $1.12 in the first quarter of 2021.
Diamondback spent $437 million on capital expenditure, $374 million on drilling and completion, $44 million on infrastructure and $19 million on midstream. The company booked $974 million of free cash flows in the first quarter.
As of Mar 31, the Permian-focused operator had approximately $149 million in cash and cash equivalents and $5.8 billion in long-term debt, representing a debt-to-capitalization of 29.5%.
Guidance
For 2022, Diamondback maintained its total net production guidance in the range of 369,000-376,000 BOE/d and also maintained that its oil volumes are likely to be in the 218,000-222,000 barrels per day band. The company forecast the capital spending budget between $1.75 billion and $1.9 billion. In the second quarter of 2022, the company expects capital spending between $435 and $475 million.
As a consequence of the rise in commodity prices, FANG increased its expected cash tax rate to 10-15% of the pre-tax income from the previous 6-11%.
Zacks Rank & Other Stocks to Consider
Diamondback currently sports a Zacks Rank #1 (Strong Buy). Other similar-ranked stocks from the energy space that warrant a look include
Earthstone Energy
ESTE
,
PDC Energy
PDCE
and
Devon Energy
DVN
. You can see
the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Earthstone’s 2022 earnings has been revised upward by about 20.4% over the past 60 days from $2.80 to $3.37 per share. Earthstone’s stock has increased 84.2% in a year.
The Zacks Consensus Estimate for ESTE’s 2022 earnings is projected at $3.37 per share, up about 169.6% from the projected year-ago earnings of $1.25.
PDC Energy’s stock price has gone up 89.8% in a year. The Zacks Consensus Estimate for PDC Energy’s 2022 earnings has been revised about 32% upward over the past 60 days from $12.32 per share to $16.27.
The Zacks Consensus Estimate for PDCE’s 2022 earnings is pegged at $16.27 per share, up 103.6% from the projected year-ago earnings of $7.99.
The Zacks Consensus Estimate for Devon Energy’s 2022 earnings is projected at $8.46 per share, up about 139.6% from the projected year-ago earnings of $3.53. Devon Energy’s stock has rallied 163.8% in a year.
Devon Energy beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, the average being around 18.5%. DVN is valued at around $38.5 billion.
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