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Diamondback Boosts Q3 Production & CapEx Guidance After Acquisition
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Diamondback Energy, Inc. (FANG - Free Report) , a leading Texas-based oil and gas producer, recently increased the company’s third-quarter production forecast following the completion of its $26 billion acquisition of Endeavor Energy Resources. This strategic move has not only increased FANG’s production capacity but also positioned the company as the third-largest producer in the Permian Basin, trailing only behind ExxonMobil (XOM - Free Report) and Chevron (CVX - Free Report) .
FANG's Bold Production Forecast for Third Quarter
In its updated forecast, the oil and gas exploration and production company expects to produce between 565,000 barrels of oil equivalent per day (boepd) and 569,000 boepd in the third quarter, marking a significant increase from the prior guidance of 459,000 boepd to 466,000 boepd. This growth is driven by the integration of Endeavor’s vast assets in the Permian Basin, which boasts some of the most prolific shale reserves in the United States.
Boost in Oil Production Exceeding Analyst Expectations
One of the highlights of FANG’s revised forecast is the increase in oil production. The company now expects to produce between 319,000 barrels of oil per day (bpd) and 321,000 bpd, well above the 284,630 bpd forecasted by industry analysts. This boost in oil production highlights FANG’s ability to swiftly capitalize on its newly acquired assets, optimizing production efficiency.
This increase in output should contribute to stronger revenue growth in the upcoming quarter, further enhancing FANG’s financial performance and investors’ confidence.
Increased Capital Expenditure to Support Growth
Along with the raised production forecast, the U.S. shale producer has also increased its capital expenditure (“CapEx”) for the third quarter to a range of $675 million to $700 million, up from the previous estimate of $570 million to $610 million. This uptick in spending reflects the company’s aggressive investment in developing and integrating Endeavor’s assets into its operations.
Acquisition of Endeavor Energy and Its Impact on FANG
The $26 billion acquisition of Endeavor Energy Resources represents a game-changing moment for FANG. By adding Endeavor’s assets, FANG now controls a substantial portfolio in the Permian Basin, particularly in Midland County, TX, which is known for its high-quality oil reserves. Endeavor’s operations span thousands of acres, making the deal highly lucrative for FANG.
Competitive Landscape in the Permian Basin
With the acquisition of Endeavor Energy, FANG is now in a more competitive position, trailing only XOM and CVX in terms of production output in the Permian Basin. The region’s significance has grown exponentially in the past decade and securing a larger share of production here places FANG in a position of strength, particularly in a market where efficiency and scale are critical.
Financial and Operational Outlook for FANG
FANG’s decision to raise its production and CapEx forecasts demonstrates the company’s commitment to growth and operational excellence. By boosting production in the third quarter, the company is poised to capture additional market share and increase profitability.
Overall, FANG’s raised third-quarter production forecast, driven by its acquisition of Endeavor Energy, marks a pivotal moment for the company. The integration of Endeavor’s assets has allowed FANG to increase its production capacity, significantly exceed oil production expectations and solidify the company’s position as a top producer in the Permian Basin. With its enhanced CapEx plan and aggressive growth strategy, FANG is well-positioned for continued success in the U.S. shale market.
Zacks Rank & Key Picks
CVX, through its subsidiaries, engages in integrated energy and chemicals operations in the United States and internationally. XOM engages in the exploration and production of crude oil and natural gas in the United States and internationally. Currently, FANG, CVX and XOM each has a Zacks Rank #3 (Hold).
TechnipFMC is valued at $11.24 billion. In the past year, its shares have risen 37.9%. FTI is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry.
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Diamondback Boosts Q3 Production & CapEx Guidance After Acquisition
Diamondback Energy, Inc. (FANG - Free Report) , a leading Texas-based oil and gas producer, recently increased the company’s third-quarter production forecast following the completion of its $26 billion acquisition of Endeavor Energy Resources. This strategic move has not only increased FANG’s production capacity but also positioned the company as the third-largest producer in the Permian Basin, trailing only behind ExxonMobil (XOM - Free Report) and Chevron (CVX - Free Report) .
FANG's Bold Production Forecast for Third Quarter
In its updated forecast, the oil and gas exploration and production company expects to produce between 565,000 barrels of oil equivalent per day (boepd) and 569,000 boepd in the third quarter, marking a significant increase from the prior guidance of 459,000 boepd to 466,000 boepd. This growth is driven by the integration of Endeavor’s vast assets in the Permian Basin, which boasts some of the most prolific shale reserves in the United States.
Boost in Oil Production Exceeding Analyst Expectations
One of the highlights of FANG’s revised forecast is the increase in oil production. The company now expects to produce between 319,000 barrels of oil per day (bpd) and 321,000 bpd, well above the 284,630 bpd forecasted by industry analysts. This boost in oil production highlights FANG’s ability to swiftly capitalize on its newly acquired assets, optimizing production efficiency.
This increase in output should contribute to stronger revenue growth in the upcoming quarter, further enhancing FANG’s financial performance and investors’ confidence.
Increased Capital Expenditure to Support Growth
Along with the raised production forecast, the U.S. shale producer has also increased its capital expenditure (“CapEx”) for the third quarter to a range of $675 million to $700 million, up from the previous estimate of $570 million to $610 million. This uptick in spending reflects the company’s aggressive investment in developing and integrating Endeavor’s assets into its operations.
Acquisition of Endeavor Energy and Its Impact on FANG
The $26 billion acquisition of Endeavor Energy Resources represents a game-changing moment for FANG. By adding Endeavor’s assets, FANG now controls a substantial portfolio in the Permian Basin, particularly in Midland County, TX, which is known for its high-quality oil reserves. Endeavor’s operations span thousands of acres, making the deal highly lucrative for FANG.
Competitive Landscape in the Permian Basin
With the acquisition of Endeavor Energy, FANG is now in a more competitive position, trailing only XOM and CVX in terms of production output in the Permian Basin. The region’s significance has grown exponentially in the past decade and securing a larger share of production here places FANG in a position of strength, particularly in a market where efficiency and scale are critical.
Financial and Operational Outlook for FANG
FANG’s decision to raise its production and CapEx forecasts demonstrates the company’s commitment to growth and operational excellence. By boosting production in the third quarter, the company is poised to capture additional market share and increase profitability.
Overall, FANG’s raised third-quarter production forecast, driven by its acquisition of Endeavor Energy, marks a pivotal moment for the company. The integration of Endeavor’s assets has allowed FANG to increase its production capacity, significantly exceed oil production expectations and solidify the company’s position as a top producer in the Permian Basin. With its enhanced CapEx plan and aggressive growth strategy, FANG is well-positioned for continued success in the U.S. shale market.
Zacks Rank & Key Picks
CVX, through its subsidiaries, engages in integrated energy and chemicals operations in the United States and internationally. XOM engages in the exploration and production of crude oil and natural gas in the United States and internationally. Currently, FANG, CVX and XOM each has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like TechnipFMC plc (FTI - Free Report) , which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
TechnipFMC is valued at $11.24 billion. In the past year, its shares have risen 37.9%. FTI is a leading manufacturer and supplier of products, services and fully integrated technology solutions for the energy industry.