The Zacks Analyst Blog Highlights Diamondback Energy, Pioneer Natural Resources and Matador Resources

Zacks Equity Research
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For Immediate Release

Chicago, IL – September 6, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Diamondback Energy, Inc. FANG, Pioneer Natural Resources Co. PXD and Matador Resources Co.'s MTDR.

Here are highlights from Friday’s Analyst Blog:

3 Permian Explorers to Gain from Continued Oil Price Strength

So far this year, West Texas Intermediate oil price has soared more than 27%. Exploration and production businesses will continue to witness gains as the crude price trajectory is expected to remain healthy.

Oil Price Still High

West Texas Intermediate crude price, trading at more than $85 per barrel, has risen drastically in the past year. Possibilities of weak global economic growth, as central banks will continue to rise interest rates, could hurt oil demand. This bearish factor will probably get outweighed by the looming winter, which could increase the demand for heating oil, supporting crude price, at least in the short run.

Shale Oil Production to Rise

In September, total oil production from shale resources in the United States will likely increase by 141,000 barrels per day to 9,049 thousand barrels per day (MBbl/D), per the U.S. Energy Information Administration ("EIA"). The shale resources comprise Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian.

Of all the resources, Permian will witness the highest increase in daily oil production this month, according to the EIA's drilling productivity report. In the Permian, the EIA projects oil production to rise by 79,000 barrels per day to 5,408 MBbls/D in September.

Permian Explorers in the Spotlight

It has been crystal clear that a favorable crude pricing scenario is backing higher production volumes. Improving Permian production amid healthy oil prices has raised the incentive to keep an eye on stocks of companies operating in the most prolific basin.

3 Stocks to Gain

Diamondback Energy, Inc. is a leading pure-play Permian operator, having a solid footprint in 421,000 net acres in the prolific Midland and Delaware sub-basins. Diamondback Energy, carrying a Zacks Rank #3 (Hold), projects its oil production for 2022 to be almost flat compared with 2021 and expects its free cash flow to increase more than 90%.

The Zacks Consensus Estimate for Diamondback Energy's earnings per share for 2022 and 2023 has been revised upward in the past seven days.

Pioneer Natural Resources Co. has a strong presence in the low-cost oil-rich Midland basin — a sub-basin of the broader Permian. The #3 Ranked upstream energy player has a massive inventory of premium wells that will likely generate significant returns for the company.

Pioneer Natural is focused on returning capital to shareholders. This includes a substantial variable dividend along with a strong base dividend. PXD is also employing opportunistic share repurchases to reward shareholders.

Pioneer Natural has considerably lower exposure to debt capital than the composite stocks belonging to the industry. This reflects PXD's strong balance sheet on which the firm can rely to sail through the volatile energy businesses. You can see the complete list of today's Zacks #1 Rank stocks here.

Solid oil prices are a boon for Matador Resources Co.'s upstream operations. This is because MTDR has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin. Favorable oil price is likely to aid it in increasing production volumes. For 2022, the upstream energy player with a Zacks Rank of 3 expects total production of 36.9-38.3 million barrels of oil equivalent (MMBoE), higher than 31.5 MMBoE in 2021.

On another positive note, Matador plans to turn to sales a net of 71.2 wells this year, including operated and non-operated wells. Among the prime priorities that MTDR has set for this year are lowering debt levels, delivering free cashflows and maintaining or increasing dividends.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
Diamondback Energy, Inc. (FANG) : Free Stock Analysis Report
 
Matador Resources Company (MTDR) : Free Stock Analysis Report
 
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