Diamondback Energy reported better-than-expected first-quarter earnings and revenue late Tuesday even as the Permian Basin outfit's production lagged analysts expectations. FANG shares fell Wednesday.
Diamondback Energy Q1 EPS came in at $4.50, up 9% compared to first quarter 2023, while revenue increased 16% to $2.23 billion. The company's average production was 461,100 barrels of oil equivalent per day in Q1. Analysts predicted earnings of $4.46 per share and sales totaling $2.1 billion.
Wall Street also expected production of 462,400 barrels of oil equivalent per day, according to FactSet. Meanwhile, Diamondback Energy had forecast production of 458,000-464,000 barrels of oil equivalent per day in Q1.
Diamondback also reaffirmed earlier full-year guidance from late February. The company forecasts full-year production between 458,000-466,000 barrels of oil equivalent per day. Diamondback also expects drilling between 265-285 gross, 244-263 net, wells and completing between 300-320 gross, 273-291 net, wells with an average lateral length of approximately 11,500 feet in 2024.
The company sees 2024 capital expenditures of $2.3 billion-$2.55 billion.
Supermajors Exxon Mobil and Chevron reported first-quarter earnings and revenue declines Friday as lower refining margins and natural gas prices took a toll on the energy giants.
Diamondback Energy stock dropped 2.5% to 196.01 during market action on Wednesday. Shares hit an all-time high of 211.96 on April 12 and have advanced around 30% in 2024.
Diamondback Energy Stock
Like most oil producers, Diamondback's sales and earnings pulled back over the past year. Oil producers are now running into easier comparisons than they had last year, with Diamondback facing a mixed outlook for the remainder of 2024.
Diamondback agreed on Feb. 12 to swap 117.3 million FANG shares, plus $8 billion cash, for privately held Endeavor Energy, founded by wildcatter Autry Stephens. Existing Diamondback holders will own 60.5% of the combined company. Shareholders approved this plan on April 26.
Diamondback Energy is one of the top Permian Basin producers along with Occidental Petroleum, EOG, ConocoPhillips, Exxon Mobil and Chevron.
Meanwhile, geopolitical risk in the Middle East, uncertain signals of demand growth in China and rising U.S. stockpiles have had a push-pull effect on oil prices in recent weeks. U.S. prices have settled back around $83 per barrel as concerns eased over direct confrontation between Israel and Iran. Futures for Brent crude, the international benchmark, traded below $89 per barrel Monday.
Switzerland-based UBS expects fossil fuels, including crude oil, will be an important part of the globe's energy mix for years to come. The bank recently wrote that oil demand will likely rise into the 2030s even as the overall market share will "increasingly give way" to renewables.
Diamondback Energy stock has a 91 Composite Rating out of a best-possible 99. Shares also have a 92 Relative Strength Rating and an 85 EPS Rating.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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