Diamondback tops Q2 estimates but raises cost guidance on Texas power
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Diamondback Energy (FANG) -0.7% post-market Monday after beating Q2 adjusted earnings and revenue estimates, but raises its outlook for full-year lease operating expense due to the realized and expected increase in the cost of power in Texas.
The company also announced a variable cash dividend of $2.30/share; total base-plus-variable dividend of $3.05/share implies a 9.5% annualized yield based on the stock's July 29 closing share price of $128.02.
As previously announced, the company is increasing its quarterly return of capital commitment to at least 75% of free cash flow beginning in Q3, up from at least 50% of free cash flow.
Diamondback (FANG) said it generated a quarterly record $1.3B in free cash flow, exceeding the prior company record set in by 35%.
Q2 net income rose nearly five-fold to $1.41B, or $7.93/share, from $311M, or $1.70/share, in the year-earlier quarter, while revenues rose 65% Y/Y to $2.77B.
Q2 production volumes fell 5.2% Y/Y to 380,451 boe/day, including a less than 1% decline in oil production volumes to 221,099 bbl/day.
Q2 averaged realized prices for combined oil, natural gas and NGLs jumped to $79.49/boe from $45.63/boe in the year-ago quarter, including average oil price of $108.80/bbl from $63.22.bbl a year earlier.
Diamondback (FANG) raised guidance for both total and oil net production for the year to 374K-380K boe/day and 220K-222K bbl/day, respectively, due to YTD production outperformance and confidence in its forward outlook.
The company increased its full-year guidance for lease operating expense including workovers to $4.50-$5.00/boe.
Diamondback Energy's (FANG) stock price return shows a 14% YTD gain and a 67% increase during the past year.