Diamondback Energy (FANG) topped Q2 operating and financial expectations and raised its full-year production outlook, TPH Energy Research said in a Tuesday note.
The company produced 1.018 million barrels of oil equivalent per day, exceeding TPH Energy Research's 971,000 Boe/d estimate and the Street consensus of 979,000 Boe/d.
Oil production reached 525,000 barrels per day, ahead of TPH Energy Research's 524,000 b/d estimate and the Street's 523,000 b/d forecast, according to the note.
Operating cash flow before working capital totaled $3.326 billion, topping TPH Energy Research's $3.212 billion estimate and the Street's $3.157 billion forecast.
Capital spending came in at $996 million, matching consensus and slightly above TPH Energy Research's $992 million estimate, the note said.
TPH Energy Research said gas and natural gas liquids drove most of the quarterly outperformance, while oil production largely matched expectations. Midstream interconnections increased marketing flexibility during the quarter, according to the note.
Diamondback completed more wells than expected, reducing its inventory of drilled but uncompleted wells below TPH Energy Research's forecast. The pace of turn-in-line activity accelerated late in the quarter alongside the fifth completion crew.
Net debt declined $1.6 billion during the quarter to $12.3 billion, moving closer to the company's $10 billion target.
Diamondback also doubled its share repurchase authorization to $16.0 billion, leaving about $9.9 billion available, according to TPH Energy Research.
TPH said investors will likely focus on free cash flow allocation as leverage declines, along with industry activity levels, inflation for fixed-cost items such as casing and discussions tied to power demand and data centers.
For Q3, Diamondback expects total production of 995,000 Boe/d to 1.015 million Boe/d, above TPH Energy Research's estimate of 968,000 Boe/d and the Street forecast of 984,000 Boe/d.
The company guided Q3 oil production to 517,000 b/d to 527,000 b/d, compared with TPH Energy Research's estimate of 527,000 b/d and the Street expectation of 526,000 b/d.
Diamondback also raised its full-year outlook, targeting total production of more than 1 million Boe/d, up from more than 972,000 Boe/d previously and above TPH Energy Research's estimate of 973,000 Boe/d and the Street forecast of 983,000 Boe/d.
The company also increased its oil production target to over 522,000 b/d, from over 520,000 b/d previously, compared with TPH Energy Research's estimate of 526,000 b/d and the Street forecast of 524,000 b/d, according to the note.
Price: $192.43, Change: $-6.32, Percent Change: -3.18%