Diamondback Energy’s first quarter 2024 saw strong financial performance, with average production of 273.3 MBO/d and net cash provided by operating activities totaling $1.3 billion.
The company declared a base cash dividend of $0.90 per share and a variable cash dividend of $1.07 per share for Q1 2024. Diamondback drilled 69 gross wells in the Midland Basin and ten gross wells in the Delaware Basin, turning 101 operated wells to production, primarily in the Midland Basin. Infrastructure and environmental expenditures amounted to $25 million during the quarter.
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Diamondback Energy Wells Drilled Since 2023
Completions
Diamondback Energy’s completion activities, emphasizing efficiency and cost-effectiveness. It mentions the use of four simulfrac crews, including both diesel-powered and e-fleets, to enhance efficiency. Diamondback reports an average of over 3,200 completed lateral feet per day and highlights cost savings of approximately $10 per foot when comparing e-fleets to diesel fleets. Moreover, the company mentions powering e-fleets with residue gas to further reduce costs, indicating a commitment to operational optimization and financial prudence in completion operations.
The report provides details about Diamondback Energy’s completions during the first quarter of 2024:
- Operated completions: The company completed a total of 101 operated wells during the quarter, all located in the Midland Basin.
- Types of completions: The completed wells represented various formations, including:
- 30 Lower Spraberry wells
- 19 Wolfcamp A wells
- 16 Jo Mill wells
- 15 Wolfcamp B wells
- 12 Middle Spraberry wells
- 6 Wolfcamp D wells
- 3 Upper Spraberry wells.
- Average lateral length: The completed wells in the Midland Basin had an average lateral length of 11,463 feet.
Drilling
- During the first quarter of 2024, Diamondback drilled a total of 69 gross wells in the Midland Basin and ten gross wells in the Delaware Basin.
- Average rig fleet rates now down nearly 20% since the peak in the first quarter of 2023.
Infrastructure Expenditures:
- During the first quarter of 2024, Diamondback Energy spent $25 million on infrastructure.
Production
- Average production: The company achieved an average production of 273.3 thousand barrels of oil per day (MBO/d) or 461.1 thousand barrels of oil equivalent per day (MBOE/d).
Budget
Diamondback Energy’s budgeting and capital expenditure plans. It mentions that cash capital expenditures for the first quarter were near the high end of the quarterly guidance range, indicating the company’s commitment to investment in its operations. Additionally, Diamondback expresses confidence in maintaining its full-year capital expenditure guidance range of $2.30 – $2.55 billion, reflecting disciplined spending and a focus on capital efficiency. Despite market challenges, the company aims to optimize its budget to support its strategic objectives and maximize value for shareholders.
Natural Gas Prices
Diamondback Energy’s natural gas operations, noting a decrease in natural gas realizations quarter over quarter due to lower pricing, particularly in the context of declining WAHA basis pricing. Despite this, the company has the majority of its basis exposure hedged to protect its cash flow stream. Diamondback expresses confidence in its ability to transport its gas products to market without experiencing takeaway issues, with a significant portion of its gas production exiting the basin via pipeline space. Additionally, the company aims to support new gas pipeline projects to address increasing demand for takeaway capacity from the basin.
Endeavor
Diamondback Energy’s merger with Endeavor Energy Resources, L.P. as a transformative move that positions the company as a premier North American independent oil company. It emphasizes the combined business’s unmatched depth of high-quality inventory in the core of the Midland Basin and its potential to generate significant long-term Free Cash Flow accretion for shareholders. Additionally, the letter mentions that the merger received approval from shareholders and provides an update on the regulatory process, stating that the company received a second request for information and documents from the Federal Trade Commission. Diamondback reiterates its expectation for the merger to close in the fourth quarter of the year, pending further information.
