Oil prices could average in the mid-$50s in 2019 which will hurt Diamondback Energy's earnings and cash flows.
Diamondback Energy's production mix is heavily tilted towards crude oil and it hasn’t hedged a vast majority of oil production for 2019.
However, Diamondback Energy is targeting 28% growth in production and has shown that it can turn profits in a $50 a barrel oil price environment.
The company lives within its cash flows and has a solid balance sheet with a debt-to-equity ratio of just 34%.
The dip in oil prices is going to hurt Diamondback Energy (FANG) which is one of Permian Basin's leading operators. However, the Midland, Texas-based oil producer is well positioned to weather the slump,