Diamondback Energy: Not Much Of A Slowdown In 2016
Richard Zeits • 12 Comments
Richard Zeits • 12 Comments
Fri, Jul. 15, 3:30 PM
- Diamondback Energy's (FANG -1.8%) stock price target is raised to a Street-high $110 from $100 at Wunderlich after the company's recent positive developments in terms of its operations, financials and acquisitive plans.
- Wunderlich says FANG already has showed world class execution in the Midland Basin and believes the entrance into the Delaware Basin bodes well not only for the company in terms of increased potential, but also affirms that the "other" side of the Permian competes for capital.
- Barclays also lifts its price target - by $3 to $88 - following the Delaware move, saying it expects FANG to achieve double-digit growth in 2017 while spending within cash flow.
Wed, Jul. 13, 7:55 AM
- Diamondback Energy (NASDAQ:FANG) -2.1% premarket after agreeing to acquire more than 19K net acres and related assets in the Southern Delaware Basin for $560M.
- The assets, primarily located along the Pecos River in Reeves and Ward counties, include ~1K boe/day of current net production.
- FANG also raises its 2016 production guidance to 38K-40K boe/day, up 11% from the midpoint of earlier guidance of 32K-38K boe/day, due to increasing activity from 3-4 rigs in H2 2016 as well as continued strong well performance.
- FANG now plans to complete 60-75 gross horizontal wells this year, vs. its prior outlook for 35-70 gross horizontal wells; as a result, the company raises its 2016 capex guidance to $350M-$425M from $250M-$375M prior.
- To help fund the deal, FANG announces a public offering of 5.5M common shares, with an underwriters option to purchase up to an additional 825K shares.
Mon, Apr. 18, 2:47 PM
- Goldman Sachs expects energy investors will maintain a "buy the dip" mentality, and suggests focusing specifically on its Buy-rated shale productivity favorites such as Hess (HES +4.3%), EOG Resources (EOG +2.2%), Cenovus Energy (CVE +0.3%), PDC Energy (PDCE +4.3%) and Diamondback Energy (FANG +1.7%).
- Even after the Doha collapse, Goldman maintains its forecast for Q4 2016 WTI of $45/bbl and FY 2017 average of $58/bbl, as low near-term oil prices should ultimately enable mechanisms that will bring oil markets into better balance.
- Now read Goldman names nine favorites for Goldilocks ideal $35 oil
Thu, Apr. 7, 2:26 PM
- Goldman Sachs says crude oil at $35/bbl is the Goldilocks ideal - priced neither too high nor too low but just right - to make shares of U.S. explorers worth buying, suggesting investors and use volatility to add to positions of shale productivity winners.
- The $30-$35 range should keep behavior of U.S. oil producers unchanged and accommodate $55-$60 oil in 2017, Goldman says, providing opportunity for equities, while a near-term rally to $45-$50 oil would reduce 2017 upside but still be favorable for equities, at least temporarily.
- Goldman says it favors "secular productivity winners" EOG Resources (EOG -0.6%), Diamondback Energy (FANG +1.3%) and PDC Energy (PDCE -4.4%), as well as stocks in “the next rung down,” including Hess (HES -3.5%), Cenovus Energy (CVE -1.8%), Anadarko Petroleum (APC -1.1%), Encana (ECA -4%), Continental Resources (CLR -2.1%) and Whiting Petroleum (WLL -0.6%).
- Now read Oil, interest rates and game theory: Why prices have further to fall
Tue, Mar. 15, 12:28 PM
- Oasis Petroleum (OAS -5.1%) is upgraded to Overweight with a $9 price target, raised from $6, at J.P. Morgan, which believes OAS is well positioned operationally vs. peers and that the company’s enhanced completions in the Bakken generate top-tier returns.
- The firm also downgrades Whiting Petroleum (WLL -10.7%) to Neutral from Overweight with an $8 price target, primarily to reflect valuation after shares have surged 140% from their late-February low.
- J.P. Morgan favors companies that can sustain or quickly re-establish positive operating momentum as the industry begins fighting the decline curve; its top picks are Callon Petroleum (CPE -2.7%), Diamondback Energy (FANG -1%), Newfield Exploration (NFX -2.9%), Parsley Energy (PE -0.4%) and PDC Energy (PDCE -0.9%).
Dec. 9, 2015, 10:36 AM
- Concho Resources (CXO +2.3%) and Pioneer Natural Resources (PXD +4.3%) are named J.P. Morgan's top large-cap picks among E&P companies focused on the Permian Basin, which the firm says is positioned at the low end of the U.S. tight oil cost curve and thus poised to benefit from efficiency and productivity gains.
- CXO boasts a deep inventory of high rate of return locations in the Delaware Basin; given the company's success there, the firm sees the potential for a "positive rate of change" in the Midland Basin.
- Even though PXD has lagged its Permian peers over the past 12-18 months on a weaker capital efficiency metric, the firm expects the company to realize a positive turn in capital efficiency along with differential oil growth to drive outperformance.
- Parsley Energy (PE +4.2%) and Diamondback Energy (FANG +4.4%) are JPM's top small- and mid-cap picks; Cimarex (XEC +1.7%), Energen (EGN +1.8%) and RSP Permian (RSPP +2.6%) are rated Neutral, while Laredo Petroleum (LPI +4.7%) is tagged with an Underweight rating.
Dec. 2, 2015, 3:59 PM
- Diamondback Energy (FANG -1.8%) and Parsley Energy (PE -3.2%) are initiated with Buy ratings, and RSP Permian (RSPP -3.4%) is upgraded to Buy from Hold, at Deutsche Bank, although the stocks are snowed under by today's broad losses in energy sector.
- Deutsche Bank views FANG as one of the best positioned producers in the Permian Basin, complete with top-tier margins, growth, inventory, and liquidity; "It’s all systems go for FANG’s returns focused development program to continue generating peer-leading results," the firm writes.
- PE recently posted 52-week highs but the firm says it is well positioned to remain the fastest growing company in its oil-focused producer group "while generating strong returns from an enviable Wolfcamp position that is still in the early stages of horizontal development."
- The firm says RSPP offers the best combination of core acreage, debt adjusted growth and margins among mid-cap Permian focused producers and has executed its multi-year growth plan with minimal leverage, and it likes RSPP’s leverage to an improving crude outlook as it remains mostly unhedged in 2016.
Aug. 25, 2015, 12:18 PM
- Occidental Petroleum (OXY +3.7%), Diamondback Energy (FANG +1.2%), Gulfport Energy (GPOR +3.3%) and Rice Energy (RICE +1.3%) are recommended by Sterne Agee CRT analyst Tim Rezvan as "high conviction long ideas" in the energy sector for investors wary of the group amid structural issues facing global oil markets that appear unlikely to abate this year.
- OXY shares are "an attractive port amid the current oil volatility storm," Rezvan writes, believing the sustainable 4.6% yield - vs. other less stable, higher yielding energy equities - should provide a floor for the shares near the current level.
- FANG is seen as an underlevered pure-play in a premier oil shale basin with no legacy assets to weigh on operating expenses, which the firm says maintains the lowest full-cycle costs in its coverage group.
Aug. 17, 2015, 12:15 PM
Aug. 13, 2015, 2:29 PM
- At least some E&P companies are still able to sell shares despite the oil price swoon, as Diamondback Energy (FANG -1.3%) raises $176M through a stock offering - its third this year.
- FANG has completed more follow-on stock sales than any other U.S. E&P firm this year, although at $623M it has not raised the most; Noble Energy (NBL +1.6%) and Whiting Petroleum (WLL -4.5%) each have sold more than $1B.
- Crude oil’s collapse has not stopped the sector raising more money so far in 2015 - $11.6B so far - than any entire year in at least two decades, which may indicate optimism about oil nearing a bottom and that at least some E&P companies are using capital more productively.
- If a FANG investor bought its three stock sales this year, weighted by the size of each, he actually would have gained 2%; while the shares of only 10 of 35 issues YTD are higher than the price at which they sold, the group as a whole has beaten the E&P sector average by almost eight percentage points this year, adjusted for size and offer date, WSJ's Liam Denning writes.
Aug. 12, 2015, 4:33 PM
- Diamondback Energy (NASDAQ:FANG) -2% AH after announcing a public offering of 2M common shares, with an underwriters option to purchase up to an additional 300K shares.
- FANG says it plans to use the proceeds to repay part of the outstanding borrowings under its revolving credit facility.
Apr. 15, 2015, 2:56 PM
- The oil price recovery may not be as strong as expected, Goldman Sachs says as it recommends buying stocks that do not need a V-shaped rebound such as Diamondback Energy (FANG +2.2%), Rice Energy (RICE +5.9%) and RSP Permian (RSPP +3.6%).
- Goldman expects the $55-$65/bbl WTI crude price level at which producers begin adding rigs ultimately will surprise the market and cause prices to stagnate at sub-$70 levels, so instead of positioning in high beta producers, hoping to capitalize on the sector’s historic 70%-80% correlation with the commodity, the firm recommends gaining exposure to low-cost E&Ps capable of strong growth absent a commodity recovery.
- Goldman tags stocks that are more dependent on further gains in oil prices, such as Denbury Resources (DNR +7.3%), Oasis Petroleum (OAS +3%) and SandRidge Energy (SD +5.8%), with Sell ratings.
Mar. 26, 2015, 10:49 AM
- Diamondback Energy (FANG +3.4%) is initiated with an Overweight rating and $90 price target at Morgan Stanley, which says FANG warrants a substantial premium given its superior assets, management and balance sheet.
- FANG offers oil exposure that should outperform in a sustained downturn and participate in any rebound if prices improve, the firm says.
- At the Howard Weil Energy Conference this week, FANG provided an investor presentation that included a 2015 capital budget of $325M-$375M; FANG says it is aggressively pursuing cost reductions and anticipates an overall reduction of at least 20%.
Jan. 21, 2015, 7:49 AM
- Diamondback Energy (NASDAQ:FANG) -3.9% premarket after launching a public offering of 1.5M common shares of its common stock, with an underwriter's option to purchase up to an additional 225K shares.
- FANG says it intends to use the proceeds to repay a portion of the outstanding borrowings under its revolving credit facility.
Dec. 2, 2014, 3:13 PM
- Apache (APA -1%), Bill Barrett (BBG -5.6%) and Laredo Petroleum (LPI -4.9%) are downgraded to Neutral from Buy at Mizuho, as the firm lowers its crude oil price deck and views OPEC's decision not to cut production as a structural shift in crude oil markets.
- Although the current excess supply/weak demand situation will be resolved gradually, market fundamentals will increasingly drive crude prices in a ~$70/bbl world, the firm says; in the E&P space, it prefers APC, MRO, FANG, RSPP and RICE.
Nov. 11, 2014, 4:53 PM
- Diamondback Energy (NASDAQ:FANG) -3.1% AH as it launches a public offering of 2M common shares by certain selling stockholders, with an underwriters option to purchase up to an additional 300K shares.
- Entities controlled by Wexford Capital intend to sell 1.058M shares and Gulfport Energy (NASDAQ:GPOR) plans to sell 942k shares.
- All net proceeds will go to the selling stockholders.
Diamondback Energy, Inc. engages in acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. The company's activities are primarily focused on the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka... More
Sector: Basic Materials
Industry: Oil & Gas Drilling & Exploration
Country: United States
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