Diamondback (NASDAQ:FANG) Energy, Inc. (NASDAQ:FANG) disclosed its financial and operational results for the second quarter of 2024, revealing a combination of realized and hedged commodity prices along with derivative activity outcomes.
The Midland, Texas-based crude petroleum and natural gas company reported average unhedged realized prices of $79.51 per barrel of oil, $0.10 per Mcf of natural gas, and $17.97 per barrel of natural gas liquids (NGLs).
When accounting for hedging activities, the average realized prices were slightly lower for oil at $78.55 per barrel, but notably higher for natural gas at $1.03 per Mcf, with NGLs remaining unchanged. Diamondback anticipates a net loss of $28 million on cash settlements for derivative instruments, contrasted by a net gain of $46 million on non-cash derivative instruments.
The company's derivative activity for the quarter includes a net gain of $18 million, comprising a $54 million gain on commodity contracts offset by losses on interest rate swaps and treasury locks. The latter reflects a $25 million loss on 30-year treasury locks settled in April 2024, which will be excluded from Diamondback's second quarter return of capital calculation.
For the second quarter, Diamondback reported that both basic and diluted weighted average shares outstanding remained at 178,360 thousand shares.
The company also provided forward-looking statements, cautioning that various factors such as market conditions, regulatory changes, and operational risks could affect future performance and results. Diamondback emphasized its focus on strategic transactions and environmental strategies while acknowledging the competitive and rapidly changing industry environment.
This financial update is based on a press release statement filed with the Securities and Exchange Commission (SEC) on July 11, 2024. Diamondback Energy, Inc. is listed on the NASDAQ Global Select Market under the trading symbol FANG.
In other recent news, Diamondback Energy has seen significant developments. The company recently held its 2024 Annual Meeting of Stockholders, where shareholders elected all nine nominated directors and approved the compensation of Diamondback Energy's executive officers. Furthermore, the company's independent auditors, Grant Thornton LLP, were ratified for the fiscal year ending December 31, 2024.
In terms of strategic moves, Diamondback Energy has been active with mergers and acquisitions. The company entered a stock+cash transaction with Endeavor Energy Resources, enhancing its growth potential. Also, Diamondback Energy agreed to sell a 25% stake in WTG Midstream for $375 million, with proceeds allocated for debt reduction associated with the Endeavor deal.
Analysts from Bernstein, Barclays (LON:BARC), RBC Capital Markets, and KeyBanc have provided their ratings and price targets for Diamondback Energy. Bernstein initiated coverage with an Outperform rating and a price target of $243.00, while RBC Capital Markets raised the company's stock price target from $195 to $220.
Projected growth is evident in analysts' forecasts for the company's EBITDA and CFO, with a Compound Annual Growth Rate (CAGR) of 37.4% and 29.4% respectively, from fiscal year 2023 to 2025. The free cash flow is expected to see an even larger increase, with a CAGR of 45.6% over the same period. These are recent developments and investors are advised to monitor these changes.
InvestingPro Insights
Diamondback Energy's recent financial and operational results for Q2 2024 have been closely watched by investors, particularly as the company navigates the volatile oil and gas market. Reflecting on Diamondback's performance, InvestingPro data shows a solid market capitalization of $36.89 billion and a Price to Earnings (P/E) Ratio of 11.63, which is in line with industry standards.
The company's revenue for the last twelve months as of Q1 2024 stands at $8.274 billion, with a robust gross profit margin of 82.49%. Despite a slight decline in revenue growth of -4.58% during the same period, the quarterly revenue growth for Q1 2024 was notably higher at 17.4%, indicating a potential turnaround in earnings.
Investors looking at dividend stability will find Diamondback's consistent dividend payments for 7 consecutive years reassuring, along with a high dividend yield of 4.63%. Additionally, the company's stock has shown a strong return over the last year, with a 55.72% total price return, and is trading near its 52-week high at 97.6% of the peak price.
For those interested in further insights, there are additional InvestingPro Tips available, which could provide a deeper understanding of Diamondback's financial health and investment potential. For instance, Diamondback's moderate level of debt and the fact that analysts predict the company will be profitable this year are factors worth considering.
To explore more tips and in-depth analysis, visit the company's page on InvestingPro: https://www.investing.com/pro/FANG. Don't forget to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking access to a wealth of financial data and expert analysis, including 10 additional InvestingPro Tips for Diamondback Energy.
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