Diamondback Energy Inc (FANG) Reports Strong Free Cash Flow and Increased Dividends in Q4 and ...
Production: Average Q4 production of 273.1 MBO/d and full-year average of 263.5 MBO/d.
Financials: Q4 net income of $960 million, FY net cash from operating activities at $5.9 billion.
Free Cash Flow: Generated $910 million in Q4 and $2.9 billion for the full year.
Dividends: Increased annual base dividend by 7% to $3.60 per share, with a Q4 base cash dividend of $0.90 per share and a variable cash dividend of $2.18 per share.
Stock Repurchase: Repurchased 872,667 shares in Q4 for $129 million, with a total of 6,237,893 shares bought back in 2023.
Reserves: Proved reserves increased by 7% year over year to 2,178 MMBOE.
Guidance: 2024 oil production guidance of 270 - 275 MBO/d with cash capital expenditures of $2.30 - $2.55 billion.
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
On February 20, 2024, Diamondback Energy Inc (NASDAQ:FANG) released its 8-K filing, detailing its financial and operational results for the fourth quarter and full year ended December 31, 2023. The independent oil and gas producer, operating exclusively in the Permian Basin, reported a robust increase in production and significant free cash flow generation, alongside a strong commitment to returning capital to shareholders through dividends and stock repurchases.
Operational and Financial Summary
Diamondback Energy's Q4 production averaged 273.1 thousand barrels of oil per day (MBO/d), contributing to a full-year average of 263.5 MBO/d. This production level underpins the company's financial strength, with Q4 net income reaching $960 million, or $5.34 per diluted share. Adjusted net income for the same period was $854 million, or $4.74 per diluted share, reflecting the company's operational efficiency and market positioning.
The company's financial achievements are underscored by a substantial free cash flow of $910 million in Q4 and $2.9 billion for the full year. This financial health has enabled Diamondback Energy to increase its annual base dividend by 7% to $3.60 per share, with a Q4 base cash dividend of $0.90 per share and a variable cash dividend of $2.18 per share, payable on March 12, 2024.
Throughout 2023, Diamondback repurchased 6,237,893 shares of common stock for $838 million, demonstrating a strong commitment to enhancing shareholder value. The company's total return of capital for the year amounted to $2.3 billion, representing approximately 79% of the FY 2023 free cash flow.
Reserves and Future Outlook
As of December 31, 2023, Diamondback's proved reserves stood at 2,178 million barrels of oil equivalent (MMBOE), a 7% increase from the previous year. The company's development strategy is reflected in the growth of proved developed producing (PDP) reserves, which also rose by 7% year over year.
Looking ahead, Diamondback Energy has set its full-year 2024 oil production guidance at 270 - 275 MBO/d, with cash capital expenditures projected between $2.30 and $2.55 billion. The company expects to drill between 265 - 285 gross wells and complete between 300 - 320 gross wells in 2024, maintaining a focus on operational excellence and cost efficiency.
Investor Considerations
For value investors, Diamondback Energy's strong free cash flow generation, disciplined capital expenditure, and commitment to returning capital to shareholders are key indicators of the company's financial health and management's strategic focus. The increase in proven reserves and the clear guidance for 2024 further bolster investor confidence in the company's growth trajectory and operational capabilities within the oil and gas industry.
Diamondback Energy's earnings report demonstrates a balance between growth and capital discipline, positioning the company as a potentially attractive investment for those seeking exposure to the energy sector with a focus on shareholder returns.
For further details on Diamondback Energy Inc's financial performance and operational outlook, investors are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Diamondback Energy Inc for further details.
This article first appeared on GuruFocus.
