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    Diamondback Energy Inc (FANG)

    New Share Buyback Program

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    Diamondback Energy, Inc. is an independent oil and natural gas company that focuses on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves, primarily in the Permian Basin in West Texas . The company's main business activities revolve around the horizontal development of the Spraberry and Wolfcamp formations of the Midland Basin and the Wolfcamp and Bone Spring formations of the Delaware Basin . Diamondback Energy operates through its upstream segment, which is engaged in oil and natural gas production, and also has midstream operations that include gathering, compression, water handling, disposal, and treatment services .

    1. Oil Sales - Engages in the production and sale of oil, with significant contributions from both the Midland and Delaware Basins.
    2. Natural Gas Sales - Involves the production and sale of natural gas, contributing to the company's overall revenue.
    3. Natural Gas Liquids (NGL) Sales - Produces and sells natural gas liquids, adding to the company's diverse energy product offerings.
    4. Midstream Operations - Provides services such as gathering, compression, water handling, disposal, and treatment, supporting the company's upstream activities.
    NamePositionStart DateShort Bio
    Al BarkmannExecutive Vice President and Chief EngineerFebruary 2024Al Barkmann has served as the Executive Vice President and Chief Engineer since February 2024. He was previously the Senior Vice President of Reservoir Engineering from November 2021 to February 2024, and Vice President of Reservoir Engineering from February 2019 to November 2021. He joined Diamondback in November 2018 .
    Teresa L. DickExecutive Vice President, Chief Accounting Officer and Assistant SecretaryMarch 2019Teresa L. Dick has served as the Executive Vice President and Chief Accounting Officer since March 2019 and as Assistant Secretary since October 2012. She was previously the Executive Vice President and Chief Financial Officer from February 2017 to February 2019 .
    Travis D. SticeChief Executive OfficerJanuary 2012Travis D. Stice has been the Chief Executive Officer since January 2012 and a director since November 2012. He has served as Chairman of the Board since February 2022. Mr. Stice has extensive experience in the oil and gas industry, starting his career at Mobil Oil in 1985 .
    Jere W. Thompson IIIExecutive Vice President – Strategy and Corporate DevelopmentFebruary 2024Jere W. Thompson III has served as the Executive Vice President – Strategy and Corporate Development since February 2024. He was previously the Senior Vice President of Strategy and Corporate Development from February 2023 and Vice President of Strategy and Corporate Development since March 2021 .
    M. Kaes Van’t HofPresident and Chief Financial OfficerFebruary 2022M. Kaes Van’t Hof has served as the President and Chief Financial Officer since February 2022. He was previously the Chief Financial Officer and Executive Vice President of Business Development from March 2019 to February 2022 .
    Daniel N. WessonExecutive Vice President and Chief Operating OfficerFebruary 2022Daniel N. Wesson has served as the Executive Vice President and Chief Operating Officer since February 2022. He was previously the Executive Vice President of Operations from March 2020 to February 2022 .
    P. Matt ZmigroskyExecutive Vice President, Chief Legal and Administrative Officer and SecretaryFebruary 2023P. Matt Zmigrosky has served as the Executive Vice President, Chief Legal and Administrative Officer, and Secretary since February 2023. He was previously the Executive Vice President, General Counsel, and Secretary from February 2019 to February 2023 .
    1. Given the accelerated synergy realization and cost savings achieved ahead of schedule, will you revise your 2025 CapEx guidance downward from the original $4.1 to $4.4 billion range, and how sustainable are these cost reductions?
    2. With the plan to reduce operational rigs from 22-24 to 18 while maintaining the same lateral footage, do you foresee any risks to production levels or well performance due to the significant decrease in operational capacity?
    3. Can you elaborate on the strategic rationale behind your investments in the EPIC pipeline, Deep Blue, and data center projects, and how these non-core investments align with your main business and contribute to shareholder value?
    4. Regarding the integration of the Endeavor assets, are there any one-time or ongoing costs required to bring these assets up to your operational standards, and how might these impact your CapEx and efficiency targets in 2025 and beyond?
    5. As the family shareholders reduce their ownership from 35% to 25% to align voting rights with their stake, what implications does this have for corporate governance, and how might it affect your strategic decision-making and relationship with public shareholders?
    Program DetailsProgram 1
    Approval DateSeptember 18, 2024
    End Date/DurationNo specific end date
    Total additional amount$6.0 billion
    Remaining authorization amount$3.1 billion (as of September 30, 2024)
    DetailsThe program can be suspended, modified, or discontinued by the board at any time.
    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    20241,000 Tranche A Loans N/A 7.7% = (1,000 / 12,923) * 100
    2026750 Senior Notes 3.250 5.8% = (750 / 12,923) * 100
    202614 Senior Notes 5.625 0.1% = (14 / 12,923) * 100
    2027850 Senior Notes 5.200 6.6% = (850 / 12,923) * 100
    202873 Medium-term Notes, Series B 7.125 0.6% = (73 / 12,923) * 100
    2029915 Senior Notes 3.500 7.1% = (915 / 12,923) * 100
    2030850 Senior Notes 5.150 6.6% = (850 / 12,923) * 100
    2031767 Senior Notes 3.125 5.9% = (767 / 12,923) * 100
    20331,100 Senior Notes 6.250 8.5% = (1,100 / 12,923) * 100
    20341,300 Senior Notes 5.400 10.1% = (1,300 / 12,923) * 100
    2051650 Senior Notes 4.400 5.0% = (650 / 12,923) * 100
    2052750 Senior Notes 4.250 5.8% = (750 / 12,923) * 100
    2053650 Senior Notes 6.250 5.0% = (650 / 12,923) * 100
    20541,500 Senior Notes 5.750 11.6% = (1,500 / 12,923) * 100
    20641,000 Senior Notes 5.900 7.7% = (1,000 / 12,923) * 100
    CustomerRelationshipSegmentDetails
    Vitol Inc.
    Major purchaser of oil and natural gas
    All
    In 2023: 22% of revenue, 2022: 23%, 2021: 21%.
    DK Trading & Supply LLC
    Major purchaser of oil and natural gas
    All
    In 2023: 18% of revenue.
    Shell Trading (USA) Company
    Major purchaser of oil and natural gas
    All
    In 2023: 14% of revenue, 2022: 20%, 2021: 19%.
    Enterprise Crude Oil LLC
    Major purchaser of oil and natural gas
    All
    In 2023: 13% of revenue.
    Plains Marketing, L.P.
    Major purchaser of oil and natural gas
    All
    In 2021: 12% of revenue.
    NameStart DateEnd DateReason for Change
    Grant Thornton LLP2009 PresentCurrent auditor

    Recent developments and announcements about FANG.

    Financial Actions

      New Share Buyback Program

      ·
      Sep 23, 2024, 12:00 AM

      Diamondback Energy has announced a new buyback program as part of its existing stock repurchase initiative. The company has authorized the purchase of 2,000,000 shares of common stock from the underwriters involved in the recent secondary offering. This repurchase will be funded from the company's existing cash on hand and is expected to be completed without any compensation to the underwriters for the shares being repurchased .

      Strategic Assets

      ·
      Sep 10, 2024, 12:00 AM

      Summary of Diamondback Energy's Acquisition of Endeavor Energy Resources

      On September 10, 2024, Diamondback Energy, Inc. (NASDAQ: FANG) announced the completion of its merger with Endeavor Energy Resources, L.P. This significant transaction involved Diamondback acquiring 100% of the Endeavor Interests from the Endeavor Stockholders. The acquisition was executed for a total consideration of approximately $7.1 billion in cash and 117.3 million shares of Diamondback's common stock .

      Transaction Details

      • Cash Consideration: Approximately $7.1 billion, subject to customary post-closing adjustments.
      • Stock Consideration: 117.3 million shares of Diamondback's common stock were issued to Endeavor Stockholders, who now hold about 39.7% of the outstanding shares of Diamondback .

      Strategic Impact

      Travis Stice, Chairman and CEO of Diamondback, described the merger as transformative, positioning Diamondback as a leading independent oil company in North America. The acquisition enhances Diamondback's inventory in the Permian Basin, which is expected to drive future cash flow and operational efficiency .

      Financial and Operational Effects

      • Increased Scale: The merger significantly increases Diamondback's scale and operational footprint in the Permian Basin, a key area for oil and gas production.
      • Synergies and Cost Efficiency: The integration of Endeavor's assets is anticipated to yield operational synergies and cost efficiencies, bolstering Diamondback's low-cost operational model.
      • Long-term Growth: The acquisition is expected to support Diamondback's long-term growth strategy by expanding its high-quality asset base and enhancing its ability to generate cash flow .

      Governance Changes

      As part of the merger agreement, three former Endeavor executives, Lance Robertson, Charles Meloy, and Robert K. Reeves, have been appointed to Diamondback's board of directors, expanding the board to twelve members. These appointments are expected to bring valuable industry experience and insights to Diamondback's leadership team .

      Conclusion

      The merger with Endeavor Energy Resources marks a pivotal step for Diamondback Energy, enhancing its position in the oil and gas sector and providing a robust platform for future growth and value creation for shareholders .

      Dividend Policy

      ·
      Feb 12, 2024, 12:00 AM

      Diamondback Energy, Inc. has announced a 7% increase in its base dividend to $3.60 per share annually, which equates to $0.90 per share quarterly. This change is effective for the fourth quarter of 2023 .