WEB NEWS Comments & Business Outlook
MIDLAND, Texas, March 19, 2020 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (FANG) ("Diamondback" or the "Company") today provided an update to the operational press release it issued on March 9, 2020, as well as an update to the Company’s 2020 and 2021 oil hedge positions.
Following last week's release, Diamondback has reduced activity further, including a minimum one-month break for all completion crews operating for the Company. After that break, the Company expects to judiciously reactivate crews and run between three and five completion crews, down from nine crews, for the rest of 2020 dependent upon future commodity price, with the primary goal of protecting the Company’s balance sheet and cash flow. Diamondback plans to reduce its operated drilling rig count to ten by early in the third quarter as contracts roll off over the next few months, and plans to run between six and ten rigs thereafter dependent upon future commodity price, representing more than a 50% reduction in rigs from earlier this year.
As a result of this reduction in activity, the Company is expected to reduce its capital budget for 2020 by $1.2 billion at the midpoint to $1.5 - $1.9 billion from its previously announced $2.8 - $3.0 billion capital budget, and is prepared to decrease its budget further should commodity prices remain weak. The Company’s 2020 infrastructure budget will be reduced to $90 - $120 million from the $150 - $175 million previously announced. The Company’s midstream budget will be reduced to $100 - $150 million from the $200 - $225 million previously announced.
The Company intends to release revised production guidance in the coming weeks, but expects production to decline from the first quarter of 2020 through the end of the year, with full year oil production lower than fourth quarter 2019 oil production of 195,000 barrels per day.
“We are in an unprecedented and uncertain market driven by fear and panic. In this environment where we do not get paid adequately for the product we produce, we will reduce activity and focus on maintaining our financial strength. Diamondback is protecting its downside by hedging almost all of its expected 2020 production and has added significant hedges for 2021 since our last update ten days ago. We are pulling out our 2016 playbook by high-grading locations to where we have mineral ownership through Viper and minimal midstream and infrastructure capital requirements, and have shifted over 70% of our planned future activity to the Midland Basin, where we have better returns through our cost structure,” stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “Cost structure has never been more important in our business as we are in an all-out price war and Diamondback is focused on protecting its balance sheet, dividend and people. Our consolidated cash interest expense is $220 million per year and our cash general and administrative expense is ~$80 million per year, with all other costs on the table for removal or further reduction, including lease operating expenses and all capital. We have reduced activity dramatically and swiftly, and are prepared to reduce it further for an extended period of time to maintain our strength and be prepared to thrive again like we have in the past. We will use this slowdown to further improve our best in class execution processes, and reduce expenses to the lowest and most efficient cost structure.”
DERIVATIVES UPDATE
The Company now has a total of 148.8 thousand barrels per day protected in 2020, with 91% of those hedges having unlimited downside protection as a swap, put or collar. The Company has added 73.5 thousand barrels per day of hedges in 2021 through a combination of collars and swaps.
Below is Diamondback’s hedge position as of March 18, 2020. The Company has restructured a significant number of its 2020 contracts, increased 2020 hedge protection to cover a majority of expected production, and built a position to protect 2021 cash flow.
As of March 18, 2020, the Company had the following outstanding derivative contracts. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing and Crude Oil Brent and with natural gas derivative settlements based on the New York Mercantile Exchange Henry Hub pricing. When aggregating multiple contracts, the weighted average contract price is disclosed.
MIDLAND, Texas, March 19, 2020 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (NASDAQ: VNOM) (“Viper” or the “Company”) today announced that it is updating its average daily production guidance for the full year 2020 to a range of 14,000 to 17,000 bo/d (22,500 to 27,000 boe/d). Given the current global headwinds and fluid commodity price environment, this guidance reflects the Company’s current estimated production given Diamondback’s updated development plans and contemplates only limited contribution from further development by third-party operators.
Additionally, given the dramatic decline in commodity prices and expected continued weakness, the Board of Directors of Viper’s general partner authorized the Company to hedge a majority of its 2020 and 2021 estimated oil production primarily through WTI collars to limit downside to the Company’s cash flow.
“Viper is reducing production expectations for the year due to significantly lower expected activity levels on third-party operated properties and slightly lower activity levels from Diamondback. Times like these emphasize the value of the Diamondback and Viper relationship, as Diamondback has focused its drilling on areas where Viper’s mineral ownership lowers consolidated breakeven economics. Viper has also now hedged the majority of its production, primarily through collars, to protect cash flow downside through an anticipated weak commodity price environment for an extended period of time,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.
DERIVATIVES UPDATE
Below is Viper’s hedge position as of March 18, 2020. The Company continues to actively manage its hedge position by increasing downside protection and monitoring basis differentials.
As of March 18, 2020, the Company had the following outstanding derivative contracts. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing. When aggregating multiple contracts, the weighted average contract price is disclosed.
MIDLAND, Texas, March 19, 2020 (GLOBE NEWSWIRE) -- Rattler Midstream LP (NASDAQ: RTLR) (“Rattler” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback”), today provided the following update. Given recent commodity price volatility, Rattler’s 2020 Guidance given on February 18, 2020 is being withdrawn, and the items specified below are updated as follows:
Comments & Business Outlook
MIDLAND, Texas, March 09, 2020 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) ("Diamondback" or the "Company") today provided an operational update given recent commodity price volatility.
Diamondback is reducing activity immediately from nine completion crews to six and expects to drop two drilling rigs in April 2020 and a third later in the second quarter of 2020. The Company has already dropped one completion crew as part of its original 2020 plan, but is now releasing two more completion crews as a result of the recent and expected oil price weakness.
As a result of this reduction in activity, the Company will reduce its capital budget for the year. Drill, complete and equip (“D,C&E”) spend for 2020 is expected to decrease through the combination of a lower completed well count and lower expected well costs, and corresponding infrastructure and midstream capital budgets are expected to decrease as well.
“As a result of current and expected oil price weakness, we have immediately reduced development activity and expect lower activity levels to continue until we see clear signs of commodity price recovery. While this decision is expected to result in lower 2020 oil production than originally forecast, we will maintain positive cash flow and protect our balance sheet and dividend. We have made these decisions before and they are driven by the goal of protecting shareholder returns over the long term. Our balance sheet is stronger than ever having recently been upgraded to investment grade. We believe that while this is clearly a challenging time for our industry, these are the conditions that Diamondback is prepared for,” stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “Diamondback has never been about growth for growth’s sake, which we have publicly emphasized consistently since 2015. Because the expected returns of our 2020 program have decreased, we have decided to wait for higher commodity prices to return to growth. We have flexibility on all of our rig and completion crew contracts, and are well-protected with hedges this year for a majority of our production, all of which will allow us to exit this downturn from a position of strength. The ability to develop resources at best in class efficiencies is clearly a differentiator in challenging environments, and since its inception Diamondback has been a leader in this regard. We are well positioned to be a long-term winner in this business due to our inventory depth and quality, best in class cost structure, return of capital program and quality balance sheet.”
Comments & Business Outlook
MIDLAND, Texas, Feb. 11, 2020 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), today announced financial and operating results for the fourth quarter and full year ended December 31, 2019.
FOURTH QUARTER HIGHLIGHTS
Q4 2019 cash distribution of $0.45 per common unit; implies an 8.1% annualized yield based on the February 7, 2020 unit closing price of $22.11
FULL YEAR 2019 HIGHLIGHTS
Full year 2019 cash distribution of $1.76; implies an 8.0% yield based on the February 7, 2020 unit closing price of $22.11
“2019 was an important year for Viper as we successfully leveraged our size and scale to acquire more than 9,000 net royalty acres across 108 separate transactions. Critically, these acquisitions more than doubled Viper’s exposure to Diamondback-operated acreage and now provide Viper with concentrated exposure to six of Diamondback’s seven core operating areas. Based on Diamondback’s current completion schedule, Viper expects to have exposure to roughly 70% of Diamondback’s expected 2020 gross completions with an average net revenue interest of greater than 5%, translating to at least 12 Diamondback-operated net 100% royalty interest wells turned to production this year versus less than eight in 2019,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.
Mr. Stice continued, “Outside of Diamondback-operated acreage, we continue to see strong activity levels across our acreage position, as highlighted by 4.2 net 100% royalty interest wells that are currently in the process of active development and a further 2.7 net wells that have been permitted but not yet spud. In an effort to be conservative, we have contemplated slower than normal timing assumptions for both spud-to-first production and permit-to-first production in our production forecast for 2020. Even on that basis, Viper is initiating full year 2020 oil production guidance that implies 28% growth relative to full year 2019 oil production. In a difficult energy landscape, Diamondback’s continued focus on developing Viper’s acreage, as well as exposure to other well-capitalized operators in the best parts of the Permian Basin, underscores our confidence in Viper’s ability to generate significant organic production growth in 2020 and beyond.”
FINANCIAL UPDATE
Viper’s fourth quarter 2019 average realized prices were $53.90 per barrel of oil, $1.29 per Mcf of natural gas and $14.53 per barrel of natural gas liquids, resulting in a total equivalent realized price of $38.20/boe. Based on current market differentials and estimated in-basin gathering costs, Viper expects to realize between 97% and 100% of WTI in 2020.
During the fourth quarter of 2019, the Company recorded total operating income of $92.7 million and consolidated net income (including non-controlling interest) of $48.5 million.
As of December 31, 2019, the Company had a cash balance of $3.6 million and $678.5 million available under its revolving credit facility.
FOURTH QUARTER 2019 CASH DISTRIBUTION
The Board of Directors of Viper’s General Partner declared a cash distribution for the three months ended December 31, 2019 of $0.45 per common unit. The distribution is payable on February 28, 2020 to eligible common unitholders of record at the close of business on February 21, 2020.
On November 15, 2019, Viper made a cash distribution to its unitholders and subsequently has reasonably estimated that such distribution, as well as the distribution payable on February 28, 2020, should not constitute dividends for U.S. federal income tax purposes. Rather, these distributions should generally constitute non-taxable reductions to the tax basis of each distribution recipient’s ownership interest in Viper. The Form 8937 containing additional information may be found on www.viperenergy.com under the “Investor Relations” section of the site.
YEAR END RESERVES UPDATE
Ryder Scott Company, L.P. prepared an estimate of Viper’s proved reserves as of December 31, 2019. Reference prices of $55.69 per barrel of oil and natural gas liquids and $2.58 per MMbtu of natural gas were used in accordance with applicable rules of the Securities and Exchange Commission. Realized prices with applicable differentials were $52.86 per barrel of oil, $0.51 per Mcf of natural gas and $15.79 per barrel of natural gas liquids.
Proved reserves at year-end 2019 of 88.9 MMboe (54.4 MMbo) represent a 41% increase over year-end 2018 reserves. The year-end 2019 proved reserves have a PV-10 value (as defined and reconciled below) of approximately $1.4 billion.
Proved developed reserves increased by 51% to 69.3 MMboe as of December 31, 2019, reflecting continued horizontal development by the operators of Viper’s acreage.
Net proved reserve additions of 33.7 MMboe resulted in a reserve replacement ratio of 428% (defined as the sum of extensions, discoveries, revisions and purchases, divided by annual production). The organic reserve replacement ratio was 150% (defined as the sum of extensions, discoveries and revisions, divided by annual production).
Extensions and discoveries of 17.1 MMboe are primarily attributable to the drilling of 829 new wells and from 97 new proved undeveloped locations added. The Company’s negative revisions of previous estimated quantities of 5.3 MMboe were primarily due to 2.1 MMboe of negative price revisions and 3.2 MMboe of PUD downgrades. 1.1 MMboe of PUDs were downgraded from non-operated properties and 2.1 MMboe of PUDs were downgraded from Diamondback-operated properties, with the Diamondback-operated downgrades due to changes in the development plan and optimization of the inventory. The purchase of reserves in place of 21.9 MMboe was due to multiple acquisitions, primarily the drop down transaction from Diamondback and the acquisition of certain mineral and royalty interests from Santa Elena Minerals, LP.
Comments & Business Outlook
MIDLAND, Texas, Jan. 07, 2020 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (FANG) ("Diamondback" or the "Company") today announced that its average daily production for the fourth quarter of 2019 was 301.3 MBOE/d (195.0 MBO/d), an increase of 5% from Q3 2019 average daily production of 287.1 MBOE/d and up 65% from Q4 2018 average daily production of 182.8 MBOE/d.
Average daily production for the full year 2019 was 283.0 MBOE/d (187.7 MBO/d), an increase of 27% from combined 2018 average daily volumes of 222.1 MBOE/d, with oil volumes increasing 26% year over year, after adjusting for the full year 2018 impact of the Energen transaction which closed on November 29, 2018.
Viper Energy Partners LP (VNOM) ("Viper"), a subsidiary of Diamondback, also announced today its fourth quarter 2019 average daily production volumes of 26.1 MBOE/d (16.5 MBO/d), an increase of 23% from Q3 2019 average daily production of 21.3 MBOE/d and up 29% from 20.2 MBOE/d in Q4 2018.
"Diamondback achieved ~5% sequential oil production growth in the fourth quarter of 2019, returning to growth after a dip in the third quarter, and setting the Company up well for our 2020 plan. The impact of offset frac interference experienced in the third quarter subsided in the fourth quarter with field level production in Howard County rebounding as expected. For the full year 2019, Diamondback grew oil production pro forma for the Energen acquisition over 26% year over year,“ stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, "Following our recent investment grade upgrade and debt refinancing, Diamondback ended 2019 meeting or exceeding every major synergy target laid out with the Energen transaction. With the focus now on 2020, we believe Diamondback is well-positioned to execute on our previously announced plan to deliver 10% - 15% year over year oil growth, while generating robust free cash flow at current commodity prices."
Deal Flow
MIDLAND, Texas, Nov. 20, 2019 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) (“Diamondback”) announced today that it has priced an offering of $1.0 billion of 2.875% senior notes that will mature on December 1, 2024 (“the 2024 notes”), $800 million of 3.250% senior notes that will mature on December 1, 2026 (“the 2026 notes”) and $1.2 billion of 3.500% senior notes that will mature on December 1, 2029 (“the 2029 notes” and, collectively with the 2024 notes and the 2026 notes, the “Notes”). The prices to the public for the 2024 notes, the 2026 notes and the 2029 notes are 99.959%, 99.858% and 99.741% of the principal amounts, respectively.
Diamondback intends to use the net proceeds from the offering (i) to repay a portion of the outstanding borrowings under its revolving credit facility, (ii) to redeem all of the outstanding $1.25 billion aggregate principal amount of its 4.750% senior notes at an aggregate purchase price of approximately $1.3 billion, including the redemption premium and accrued and unpaid interest to the date of the redemption and (iii) for general corporate purposes. The offering is expected to close on December 5, 2019, subject to customary closing conditions.
The Notes will be sold in a registered offering pursuant to an effective shelf registration statement on Form S-3ASR that was previously filed with the Securities and Exchange Commission, a prospectus supplement and related base prospectus for the offering.
Comments & Business Outlook
Third Quarter 2019 Financial Results
Q3 2019 net income of $368 million, or $2.26 per diluted share; adjusted net income (as defined and reconciled below) of $239 million, or $1.47 per diluted share
"After growing significantly during the first two quarters of the year, Diamondback’s oil production declined in the third quarter due to the sale of our Central Basin Platform assets effective July 1, 2019, which removed ~5,800 barrels per day of low margin oil production from our asset base. Notwithstanding the effect of this sale, Diamondback’s overall production grew, but the oil percentage declined in the third quarter due to the completion of 18 wells in our Vermejo area in Reeves County and 14 wells in Glasscock County, five of which were DUCs drilled prior to the closing of the Energen merger. Wells in these two areas on average begin production with oil cuts of ~65% and made up over 35% of total gross wells completed in the third quarter, versus 12% of wells completed in the first half of 2019 and ~15% of expected fourth quarter wells. This completion mix, along with the return of significant oil volumes that were impacted by offset completions in the third quarter, is expected to result in fourth quarter 2019 oil production growth of ~3% from third quarter volumes. As a result of the change in our portfolio asset mix due to the Energen merger, we now expect to average 66% - 67% oil for full year 2019 and ~66% oil in 2020," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “Our per lateral foot well costs continue to decline and we expect that a combination of continued efficiency gains and service cost tailwinds will drive well costs lower into 2020. As a result, we are initiating a capital efficient 2020 capital plan of $2.8 - $3.0 billion, which includes all facilities, midstream and infrastructure spending along with drilling and completion capital. We plan to complete over 10% more net lateral feet and over 20 more gross total wells within the same consolidated budget framework as 2019. This plan is expected to result in 10% - 15% estimated year over year oil production growth, while generating free cash flow after paying our dividend, based on a commodity price deck of $45 per Bbl WTI for oil, a realized price of $13 per Bbl for NGLs and a realized price of $1.50 for natural gas. Should commodity prices decline in 2020, we will be prepared to act responsibly and cut capital spending as we have done multiple times over the past few years. If commodity prices rally, we plan to use excess free cash flow to complete our buyback program or pay down debt. Over the long term, Diamondback intends to continue to grow production and free cash flow on a per share basis, while maintaining our best in class cost structure."
PRELIMINARY 2020 GUIDANCE
Diamondback expects full year 2020 average daily production of 310.0 - 325.0 MBOE/d and average daily oil production of 205.0 - 215.0 MBO/d with an estimated capital spend of $2.8 - $3.0 billion. The capital budget includes $200 - $225 million of midstream capital and $150 - $175 million of infrastructure capital. During 2020, Diamondback expects to complete between 320 - 360 gross operated wells from a 20 - 23 rig drilling program. Full year 2020 well costs are expected to be between $720 - $750 per lateral foot in the Midland Basin and between $1,075 - $1,125 per lateral foot in the Delaware Basin.
Note the 2020 capital program includes 100% working interest capital for 15 - 17 wells on the San Pedro joint venture acreage with Carlyle due to the accounting treatment of the joint venture, resulting in over $175 million of gross capital for these projects in the consolidated budget. Per the joint development agreement, Diamondback's net capital contribution to these wells will be less than 20% of the total capital ($35 million). The majority of the working interest associated with this development reverts back to Diamondback should certain return thresholds be met.
Comments & Business Outlook
MIDLAND, Texas, Oct. 29, 2019 (GLOBE NEWSWIRE
THIRD QUARTER HIGHLIGHTS
Q3 2019 cash distribution of $0.46 per common unit; implies a 6.8% annualized yield based on the October 25, 2019 unit closing price of $27.04
Q3 2019 consolidated net income (including non-controlling interest) of $51.1 million, consolidated adjusted EBITDA (as defined and reconciled below) of $66.3 million and cash available for distribution to Limited Partner units (as defined below) of $29.0 million
Q3 2019 production of 21,266 boe/d (64% oil), an increase of 9% from Q2 2019 and 16% year over year
171 total gross (4.7 net 100% royalty interest) horizontal wells turned to production during Q3 2019 on existing acreage with an average lateral length of 8,898 feet; acquired interests in an additional 240 gross (1.9 net 100% royalty interest) producing horizontal wells during the quarter
Closed 25 acquisitions for an aggregate purchase price of approximately $193.6 million in Q3 2019, increasing Viper's mineral interests to a total of 17,151 net royalty acres at September 30, 2019, up 23% year over year; during first nine months of 2019, have closed 99 acquisitions for an aggregate purchase price of approximately $320.5 million, increasing Viper's acreage position by 2,309 net royalty acres
Pro forma asset base as of October 17, 2019 of 23,999 net royalty acres (51% of which are operated by Diamondback), after giving effect to the recently closed drop down transaction ("Drop Down") and pending acquisition from Santa Elena Minerals, LP ("Santa Elena")
On October 16, 2019, closed $500.0 million 5.375% notes due 2027 with proceeds used to pay down borrowings on revolving credit facility
Initiating average production guidance for Q4 2019/Q1 2020 of 25,000 to 27,000 boe/d (65% - 68% oil), the midpoint of which is up 22% from Q3 2019 production
As of October 17, 2019, there were approximately 445 gross horizontal wells currently in the process of active development on Viper's pro forma acreage, in which Viper expects to own an average 1.9% net royalty interest (8.6 net 100% royalty interest wells)
Approximately 326 gross (9.3 net 100% royalty interest) line-of-sight wells which are expected to be turned to production within the next 12 months, but which have not yet begun the process of active development; based on Diamondback's current completion schedule and third party operators' permits
Q2 2019 and Q3 2019 distributions reasonably estimated to not constitute dividends for U.S. federal income tax purposes; instead should generally constitute non-taxable reductions to the tax basis
“During the third quarter, Viper continued to expand its footprint in the most attractive areas of the Permian Basin via multiple large strategic acquisitions and, after giving pro forma effect to the Santa Elena acquisition, will have acquired over 9,000 net royalty acres to date in 2019. We believe these assets, due to their tier one location and active, well-capitalized operators, will enhance the durability of Viper’s asset base and drive sustained long-term production growth. However, in the near-term, activity on Viper’s asset base is expected to be driven primarily by Diamondback operations as growth across the Permian Basin has slowed. As a result of this broad slowdown, as well as operators now preparing their budgets for 2020, there is currently less visibility into third party operators’ activity levels than in previous quarters and, therefore, Viper is guiding conservatively until we see more clarity on the completion cadence across the basin,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.
Mr. Stice continued, "Importantly, with the Drop Down closed on October 1 and the Santa Elena acquisition expected to close on October 31, Viper will have materially increased its exposure to Diamondback operations in both the Midland and Delaware Basins. Looking ahead to 2020, Viper expects to have a mineral interest in approximately 70% of Diamondback’s planned gross completions, including large scale projects on both ranches to be acquired in the pending Santa Elena acquisition which are expected to begin production in the middle of 2020. Diamondback’s continued focus on developing Viper’s acreage due to the enhanced consolidated returns underscores our confidence in Viper being able to generate sustainable production and distribution growth for the long-term."
FINANCIAL UPDATE
Viper's third quarter 2019 average realized prices were $51.53 per barrel of oil, $1.28 per Mcf of natural gas and $9.84 per barrel of natural gas liquids, resulting in a total equivalent realized price of $36.33/boe. Based on current market differentials and estimated in-basin gathering costs, Viper continues to expect to realize approximately 88% to 92% of WTI for the remainder of 2019 and close to 100% of WTI in 2020.
During the third quarter of 2019, the Company recorded total operating income of $71.8 million and consolidated net income (including non-controlling interest) of $51.1 million.
As of September 30, 2019, the Company had a cash balance of $20.0 million and $190.5 million available under its revolving credit facility. In connection with the closing of the Drop Down, completed on October 1, 2019, Viper's borrowing base increased to $725.0 million from $600.0 million. Pro forma for this increase in the borrowing base and the $190.2 million cash component of the Drop Down paid to Diamondback, Viper would have had $138.5 million available under the revolving credit facility as of September 30, 2019.
On October 16, 2019, Viper completed its offering of $500.0 million aggregate principal amount of its Senior Notes due 2027 and received a total of approximately $492.0 million in net proceeds. Viper loaned the gross proceeds from its senior notes offering to its operating subsidiary, which used it to pay down borrowings under the revolving credit facility. Additionally, in connection with its Fall redetermination, expected to close in November 2019, Viper's lead bank has recommended a borrowing base increase to $775.0 from the current $725.0 million, resulting in $679.0 million of pro forma credit facility availability and pro forma liquidity.
THIRD QUARTER 2019 CASH DISTRIBUTION
The Board of Directors of Viper's General Partner declared a cash distribution for the three months ended September 30, 2019 of $0.46 per common unit. The distribution is payable on November 15, 2019 to eligible common unitholders of record at the close of business on November 8, 2019. Diamondback received Class B units and units in Viper's operating subsidiary upon the closing of the Drop Down on October 1, 2019 and Viper will issue common units to Santa Elena at the closing of the pending Santa Elena acquisition. Each of Diamondback and Santa Elena has waived its right to receive distributions for the third quarter of 2019 in respect of the equity interests issued in these transactions and the cash distribution for the third quarter of 2019 has been calculated on this basis.
On August 21, 2019, Viper made a cash distribution to its unitholders and subsequently has reasonably estimated that such distribution, as well as the distribution payable on November 15, 2019, should not constitute dividends for U.S. federal income tax purposes. Rather, these distributions should generally constitute non-taxable reductions to the tax basis of each distribution recipient's ownership interest in Viper. The Form 8937 containing additional information may be found on www.viperenergy.com under the "Investor Relations" section of the site.
OPERATIONS AND ACQUISITIONS UPDATE
During the third quarter 2019, Viper estimates that 171 gross (4.7 net 100% royalty interest) horizontal wells with an average royalty interest of 2.7% had been turned to production on its existing acreage position with an average lateral of 8,898 feet. Of these 171 gross wells, Diamondback is the operator of 41 with an average royalty interest of 8.1%, and the remaining 130 gross wells, which had an average royalty interest of 1.0%, are operated by third parties.
Additionally, during the third quarter 2019, Viper acquired 1,281 net royalty acres for an aggregate purchase price of approximately $193.6 million. These transactions brought Viper's footprint of mineral interests to a total of 17,151 net royalty acres. Viper funded these acquisitions with cash on hand and borrowings under its revolving credit facility. These acquisitions added an additional 240 producing gross horizontal wells with an average royalty interest of 0.8%.
During the first nine months of 2019, Viper acquired 2,309 net royalty acres for an aggregate purchase price of approximately $320.5 million across 99 separate transactions. These acquisitions contributed a total of 313 gross horizontal producing wells with an average royalty interest of 1.4%.
In total, as of September 30, 2019, Viper had 1,682 vertical wells and 3,166 horizontal wells producing on its acreage with a combined average net royalty interest of 3.6%. There continues to be active development on Viper's mineral acreage as represented by approximately 445 gross horizontal wells currently in the process of active development, in which Viper expects to own an average 1.9% net royalty interest (8.6 net 100% royalty interest wells). These wells currently in the process of active development include wells currently being drilled by the 57 active rigs that were on the Company's mineral acreage as of October 15, 2019, in addition to other wells currently waiting to be completed, actively in the process of being completed or waiting to be turned to production. Additionally, based on Diamondback's current completion schedule and third party operators' permits, there is line-of-sight to a further 326 gross (9.3 net 100% royalty interest) wells which Viper expects to be turned to production within the next 12 months, but which have not yet begun the process of active development.
GUIDANCE UPDATE
Below is Viper's updated guidance for the full year 2019, as well as average production guidance for Q4 2019 and Q1 2020.
Viper Energy Partners
Q4 2019/Q1 2020 Net Production – MBoe/d
25,000 - 27,000
Total 2019 Net Production – MBoe/d
21,000 - 21,500
Total 2019 Oil Production - % of Net Production
66% - 67%
Unit Costs ($/boe)
Depletion
$9.00 - $10.50
G&A
Cash G&A
Under $1.00
Non-Cash Unit-Based Compensation
$0.30 - $0.40
Production and Ad Valorem Taxes (% of Revenue) (a)
7%
Deal Flow
MIDLAND, Texas, Oct. 10, 2019 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (FANG) (“Diamondback”), announced today that it has priced at par an offering of $500 million aggregate principal amount of its 5.375% Senior Notes due 2027 (the “Notes”), representing a $100 million upsize from the previously announced size of the offering. The Notes are being sold to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons outside the United States in accordance with Regulation S under the Securities Act (the “Notes Offering”). The Notes will be issued under a new indenture and will rank equally with Viper’s other senior indebtedness. The Notes Offering is expected to close on October 16, 2019, subject to customary closing conditions. Net proceeds to Viper from the Notes Offering will be approximately $492 million. Viper intends to loan the proceeds from the Notes Offering to Viper Energy Partners LLC (the “Viper Operating Company”). The Viper Operating Company will use the proceeds from the Notes Offering to repay outstanding borrowings under its revolving credit facility.
The Notes will be senior unsecured obligations of Viper, initially will be guaranteed on a senior unsecured basis by the Viper Operating Company, Viper’s sole subsidiary, and will pay interest semi-annually. Neither Viper’s parent Diamondback nor Viper’s general partner will guarantee the Notes. In the future, each of Viper’s restricted subsidiaries that either (1) guarantees any of its or a guarantor’s other indebtedness or (2) is a domestic restricted subsidiary and is an obligor with respect to any indebtedness under any credit facility will be required to guarantee the Notes.
The Notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements. Viper is under no obligation, and has no intention, to register the Notes under the Securities Act or any state securities laws in the future.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Comments & Business Outlook
MIDLAND, Texas, Oct. 07, 2019 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (VNOM) ("Viper" or the “Partnership”), a subsidiary of Diamondback Energy, Inc. (FANG) ("Diamondback"), today provided an update on production and acquisitions for the third quarter of 2019.
HIGHLIGHTS
Q3 2019 production of 21,265 boe/d (64% oil), an increase of 9% quarter over quarter
Closed 25 acquisitions for an aggregate purchase price of approximately $193.6 million in Q3 2019, increasing Viper’s mineral interests by 1,272 net royalty acres to a total of 17,142 net royalty acres
On October 1, 2019, closed previously announced drop down transaction (“Drop Down”) from subsidiaries of Diamondback for $740.2 million, including $190.2 million in cash, after giving effect to closing adjustments for net title benefits; further increases Viper’s mineral interests by 5,490 net royalty acres versus previously announced expectations of 5,090 net royalty acres
As previously announced, entered into definitive purchase and sale agreement to acquire 1,358 net royalty acres from Santa Elena Minerals, LP (“Santa Elena”) in an all-equity transaction valued at $150 million; expected to close in the fourth quarter of 2019
Pro forma asset base as of October 4, 2019 of 23,990 net royalty acres, after giving effect to the recent acquisitions and the pending acquisition of assets from Santa Elena, approximately 12,356, or 52%, of which are operated by Diamondback; up 72% and 136% year over year, respectively
Pro forma Q3 2019 production of 27,890 boe/d (65% oil), assuming all closed and committed acquisitions were owned for the entire quarter
As of September 30, 2019, there were approximately 387 gross horizontal wells currently in the process of active development on Viper’s pro forma asset base, in which Viper expects to own an average 2.1% net royalty interest (8.3 net 100% royalty interest wells)
“During the third quarter, Viper achieved strong quarter over quarter production growth due to continued organic growth across our asset base, accretive acquisitions closed in the quarter and concentrated development in Spanish Trail. The acquisitions closed during the third quarter, along with the previously announced Drop Down and the pending acquisition of assets from Santa Elena, highlight Viper’s unique ability to leverage our scale to aggressively consolidate the fragmented private minerals market in the Permian Basin. To date in 2019, our acquisition machine has now acquired over 9,000 net royalty acres for approximately $1.2 billion across more than 100 transactions, and importantly, we have more than doubled our exposure to Diamondback-operated properties,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.
Mr. Stice continued, “In regard to Viper’s organic asset base, production increased 7% quarter over quarter, driven primarily by ten wells turned to production in Spanish Trail in which Viper owned an average net royalty interest of 22%. Looking ahead, following the closing of the Drop Down and Santa Elena acquisitions, Diamondback will continue to drive growth on Viper’s properties as a significant portion of Diamondback’s expected 2020 completions will be wells on Viper’s acreage.”
OPERATIONS AND ACQUISITION DETAILS
During the third quarter of 2019, Viper acquired 1,272 net royalty acres for an aggregate purchase price of approximately $193.6 million. Additionally, the Drop Down, which closed on October 1, 2019, and the acquisition from Santa Elena, which is expected to close later during the fourth quarter, will further increase Viper’s mineral footprint by 6,848 net royalty acres. Viper intends to finance the cash portion of the recent acquisitions with cash on hand and borrowings under its revolving credit facility.
Two notable acquisitions which closed during the third quarter include a $100 million deal for 682 net royalty acres across the Midland Basin (the “Midland Basin Acquisition”) as well as a $68 million deal for 363 net royalty acres concentrated in Southeast Lea County (the “Delaware Basin Acquisition”). The Midland Basin Acquisition provides broad exposure to the most active operators in the Midland Basin with an average net royalty interest of approximately 0.9%, and the Delaware Basin Acquisition provides concentrated exposure to primarily Concho and Matador operated acreage in the heart of the Northern Delaware Basin. The acquisitions contributed a combined 1,167 boe/d (78% oil) to September volumes and provide clear visibility to future development and production growth to be driven by a sizable DUC inventory.
Pro forma for all closed and committed acquisitions, Viper’s acreage position now represents 23,990 net royalty acres, approximately 52% of which is operated by Diamondback. Q3 2019 production, assuming Viper owned all closed and committed acquisitions for the entire quarter, would have totaled 27,890 boe/d (65% oil). There continues to be active development across the pro forma acreage position as represented by 387 gross horizontal wells currently in the process of active development, in which Viper expects to own an average 2.1% net royalty interest (8.3 net 100% royalty interest wells).
Deal Flow
MIDLAND, Texas, Oct. 07, 2019 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (FANG) (“Diamondback”), announced today that it proposes to offer, subject to market conditions and other factors, $400 million aggregate principal amount of its senior notes due 2027 (the “Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons outside the United States in accordance with Regulation S under the Securities Act (the “Notes Offering”). The Notes will be issued under a new indenture and will rank equally with Viper’s other senior indebtedness.
Viper intends to loan the proceeds from the Notes Offering to Viper Energy Partners LLC (the “Viper Operating Company”). The Viper Operating Company will use the proceeds from the Notes Offering to repay outstanding borrowings under its revolving credit facility.
The Notes will be senior unsecured obligations of Viper, initially will be guaranteed on a senior unsecured basis by the Viper Operating Company, Viper’s sole subsidiary, and will pay interest semi-annually. Neither Viper’s parent Diamondback nor Viper’s general partner will guarantee the Notes. In the future, each of Viper’s restricted subsidiaries that either (1) guarantees any of its or a guarantor’s other indebtedness or (2) is a domestic restricted subsidiary and is an obligor with respect to any indebtedness under any credit facility will be required to guarantee the Notes.
Joint Venture
MIDLAND, Texas, Oct. 03, 2019 (GLOBE NEWSWIRE) -- Rattler Midstream LP (Nasdaq: RTLR) ("Rattler"), a subsidiary of Diamondback Energy, Inc. (Nasdaq: FANG) ("Diamondback"), and Oryx Midstream (“Oryx”), a portfolio company of Stonepeak Infrastructure Partners, announced today that their newly-formed joint venture entity has entered into a definitive purchase and sale agreement to acquire Reliance Gathering, LLC (“Reliance Gathering”) for $355 million in cash, subject to certain adjustments under the purchase and sale agreement. The transaction is anticipated to close in the fourth quarter of 2019, subject to certain closing conditions.
Acquisition Highlights:
Crude oil gathering system includes over 230 miles of gathering and regional transportation pipelines and approximately 200,000 barrels of crude oil storage in Midland, Martin, Andrews, and Ector counties
Current system throughput of over 110,000 barrels per day from six substantial oil and gas operators, including Diamondback and other top-tier operators
Over 160,000 gross acres in Northern Midland Basin dedicated under long-term, fixed-fee agreements, some of which benefit from minimum volume commitments
Top three producers contributing over 85% of 2019 throughput through July have, on average, over 10 years of dedication remaining
Diamondback operates approximately 38% of the dedicated acreage and produced approximately 35% of the volumes on the system in 2019 through July
$355 million purchase price; ownership split 60/40 between Rattler and Oryx
Oryx to operate the system following closing
“This strategic acquisition demonstrates Rattler’s ability to leverage its relationship with Diamondback to invest in attractive projects underpinned by Diamondback’s operations, providing unique visibility into the growth in volumes expected on this system. Continuing its wellhead to water strategy, Diamondback, through Rattler, will now participate in transporting these crude oil barrels from the wellhead through the Reliance Gathering system and the Epic Crude Pipeline to docks and refineries around Corpus Christi. Moreover, the acreage dedicated to Reliance Gathering encompasses some of Diamondback’s highest rate of return projects and deepest levels of inventory at current activity levels, which we expect will support continued production growth for years to come,” stated Travis Stice, Chief Executive Officer of Rattler’s general partner.
Mr. Stice continued, “We are excited to partner with Oryx in the Midland Basin after having had a very productive relationship since Diamondback’s entry into the Delaware Basin in 2016. Oryx’s track record of building leading crude oil gathering and regional transportation platforms in the Permian Basin is well established, and their reputation as a reliable partner to oil and gas operators is well deserved. Accordingly, we look forward to growing this business and our relationship in the coming years.”
“We are excited about this acquisition as it marks our entry into the Midland Basin, solidifies Oryx as a pure-play, crude oil pipeline operator, and further enhances our ability to serve strong, high-quality producer customers, both new and existing,” said Brett Wiggs, Chief Executive Officer of Oryx. “Additionally, we look forward to working closely with Rattler and continuing our relationship with Diamondback, and we appreciate the confidence they have placed in us to operate this significant asset. We continue to be focused on aggressively growing our midstream footprint in the Delaware and Midland basins, providing the highest level of customer service in the business.”
Jefferies LLC is acting as exclusive financial advisor, and Sidley Austin LLP is acting as legal counsel to Reliance Gathering in connection with the transaction. Akin Gump Strauss Hauer & Feld LLP is acting as legal counsel to Rattler. Shearman & Sterling LLP is acting as legal counsel to Oryx.
Acquisition Activity
MIDLAND, Texas, Sept. 13, 2019 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (VNOM) ("Viper" or the “Partnership”), a subsidiary of Diamondback Energy, Inc. (FANG) ("Diamondback"), today announced it has entered into a definitive purchase and sale agreement (“the Purchase and Sale Agreement”) to acquire certain mineral and royalty interests (“the Assets”) from Santa Elena Minerals, LP (“Santa Elena”) for approximately 5.2 million common units representing limited partner interests in Viper (“Common Units”), subject to certain adjustments (the “Pending Acquisition”). The transaction is valued at $150 million and will have an effective date of October 1, 2019 with closing anticipated in the fourth quarter of 2019, subject to continued diligence and closing conditions.
ACQUISITION HIGHLIGHTS
1,358 net royalty acres across two ranches primarily in Glasscock and Martin counties; over 65% of acreage is operated by Diamondback
Acreage has a ~5.6% average NRI that will provide concentrated exposure to contiguous leasehold which Diamondback plans to actively develop
Combined Q2 2019 production of ~1,400 boe/d with multiple years of active development ahead on current Diamondback drilling and completion schedules; further upside provided by third-party operators not included in underwriting assumptions
Assuming no purchase price adjustments, Viper will issue Common Units to Santa Elena valued at $150 million based on the $29.02 volume weighted average sales price of Common Units for the five-trading day period ended September 5, 2019, or approximately 5.2 million Common units
Effective date of October 1, 2019 with anticipated closing in the fourth quarter of 2019, subject to continued diligence and closing conditions
“Viper’s announced acquisition of primarily Diamondback-operated properties, which will be immediately accretive upon closing, further distinguishes Viper’s business model in the minerals market due to the clear visibility into future development of this acreage. This acquisition is another step in Viper’s strategy to continue to consolidate the fragmented private minerals market in the Permian Basin, both through our normal ground game of smaller deals, as well as larger acquisitions such as this deal announced today. Viper continues to use its size, scale and expertise to accumulate Tier 1 acreage, and we believe there remain significant opportunities ahead for us to continue this consolidation, which will supplement the robust production growth of our existing asset base,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.
Austen Campbell, Co-CEO of Santa Elena, stated, “Santa Elena is excited about this transaction and our continuing relationship with Viper. With Diamondback’s significant operatorship in these properties, Viper is the right strategic partner for these assets. We look forward to working with the Viper team as an equity holder as they continue their impressive consolidation of the Permian minerals market.”
TRANSACTION DETAILS
At closing, Viper will issue to Santa Elena Common Units as consideration for the Assets, and Viper Energy Partners LLC, Viper’s operating subsidiary (the “Operating Company”) will issue to Viper an equal number of new units of the Operating Company, in each case in a number equal to the quotient of (a) $150 million (as adjusted pursuant to the Purchase and Sale Agreement) divided by (b) $29.02, which represents the volume weighted average sale price as traded on Nasdaq of the Common Units calculated for the five-trading day period ended September 5, 2019. With respect to the Common Units it receives under the Purchase and Sale Agreement, Santa Elena has agreed to waive its right to receive any distributions for which the record date falls in the fourth quarter of 2019. Santa Elena has also agreed to a restriction on transfer, sale, pledging, hedging and certain other transactions in the Common Units it receives in the Pending Acquisition, subject to certain limited exceptions, during a period beginning on the closing date of the Pending Acquisition and ending on the 180th day after such closing (the “Restricted Period”). Viper has granted to Santa Elena certain piggyback registration rights during the Restricted Period.
Notable Share Transactions
BEIJING, June 25, 2019 /PRNewswire / -- Fang Holdings Limited (SFUN) ("Fang" or "we"), a leading real estate Internet portal in China, today announced that the ratio of American depositary shares ("ADSs") representing its Class A ordinary shares is being amended from five (5) ADSs representing one (1) Class A ordinary share to one (1) ADS representing one (1) Class A ordinary share.
For Fang's ADS holders, this ratio change will have the same effect as a 1-for-5 reverse ADS split. There will be no change to Fang's Class A ordinary shares. Furthermore, no physical action by ADS holders will be required to effect the ratio change, as the change will be effected on the books of the depositary. The effect of the ratio change on the ADS trading price on New York Stock Exchange is expected to take place at the open of business on July 8, 2019 (U.S. Eastern Time). Any fractional ADSs will be sold and the net proceeds from the sale of fractional ADSs will be distributed to the holders entitled thereto.
As a result of the change in the ADS ratio, the ADS price is expected to increase proportionally, although Fang can give no assurance that the ADS price after the change in the ADS ratio will be equal to or greater than five times the ADS price before the change.
Notable Share Transactions
MIDLAND, Texas, May 30, 2019 (GLOBE NEWSWIRE) -- Rattler Midstream LP (RTLR) ("Rattler"), a subsidiary of Diamondback Energy, Inc. (FANG) ("Diamondback"), and Diamondback today announced that underwriters of its underwritten initial public offering of 38,000,000 common units representing limited partnership interests in Rattler, which closed on May 28, 2019, have exercised in full their option to purchase an additional 5,700,000 common units at a price to the public of $17.50 per common unit pursuant to their over-allotment option. The common units began trading on the Nasdaq Global Select Market on May 23, 2019 under the ticker symbol "RTLR."
As a result of this exercise of the over-allotment option, the public now owns an approximate 29% limited partner interest in Rattler. Diamondback owns the remaining approximate 71% limited partner interest in Rattler and the general partner of Rattler.
The total gross proceeds from the offering, including the sale of the additional common units, were approximately $764.8 million (before underwriters’ discounts and commissions and estimated offering expenses). The net proceeds from the offering of approximately $721.3 million will be distributed to Diamondback, in part to reimburse Diamondback for certain capital expenditures.
Notable Share Transactions
MIDLAND, Texas, May 28, 2019 (GLOBE NEWSWIRE ) -- Rattler Midstream LP (RTLR) ("Rattler"), a subsidiary of Diamondback Energy, Inc. (FANG) ("Diamondback"), and Diamondback today announced the closing of Rattler’s previously announced initial public offering of 38,000,000 common units representing limited partner interests at a price to the public of $17.50 per common unit. In addition, Rattler has granted the underwriters a 30-day option to purchase up to an additional 5,700,000 common units at the initial public offering price. The common units began trading on the Nasdaq Global Select Market on May 23, 2019 under the ticker symbol "RTLR."
The common units sold at closing represent an approximate 25% limited partner interest in Rattler (or an approximate 29% limited partner interest if the underwriters exercise in full their option to purchase additional common units). Diamondback owns the remaining approximate 75% limited partner interest in Rattler (or approximate 71% limited partner interest if the underwriters exercise in full their option to purchase additional common units) and the general partner of Rattler.
The total gross proceeds from the offering were $665.0 million (before underwriters’ discounts and commissions and estimated offering expenses). The net proceeds from the offering of approximately $631.8 million, excluding estimated offering expenses, will be distributed to Diamondback, in part to reimburse Diamondback for certain capital expenditures.
IPO Activity
MIDLAND, Texas, May 13, 2019 (GLOBE NEWSWIRE ) -- Rattler Midstream LP ("Rattler"), a subsidiary of Diamondback Energy, Inc. (FANG) ("Diamondback"), and Diamondback today announced the launch of Rattler’s initial public offering of 33,333,333 common units representing limited partner interests at an anticipated initial offering price between $16.00 and $19.00 per common unit, pursuant to a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission (the "SEC"). Rattler expects to list its common units on the NASDAQ Global Select Market under the ticker symbol "RTLR." Rattler anticipates granting the underwriters an option to purchase up to an additional 5,000,000 common units at the initial public offering price to cover over-allotments. The net proceeds from the offering will be distributed to Diamondback, in part to reimburse for certain capital expenditures.
The common units being offered represent an approximate 22% limited partner interest in Rattler (or an approximate 25% limited partner interest if the underwriters exercise in full their option to purchase additional common units). Diamondback and its subsidiaries will own the remaining approximate 78% limited partner interest in Rattler (or approximate 75% limited partner interest if the underwriters exercise in full their option to purchase additional common units) and the general partner of Rattler.
Comments & Business Outlook
First Quarter 2019 Financial Results
"After closing the Energen acquisition in the fourth quarter of 2018, we ensured that Diamondback get off to a fast start in 2019 and showcase the strength of our operations organization and low-cost structure on a larger scale. During the first quarter of 2019, we successfully integrated the addition of almost 300 employees and displayed our best in class execution metrics on a larger capital plan. During the quarter, we drilled almost twice as much lateral footage in the Midland Basin as the fourth quarter of 2018 at 15% lower cost per lateral foot, while completing 50 wells at an average per well cost 9% cheaper than the average cost of 20 wells completed in the fourth quarter of 2018. In the Delaware Basin, we are now completing over 50% more lateral footage per day compared to the first quarter of 2018, and overall well costs continue to trend down year over year," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “We navigated a $30 drop in fourth quarter oil prices by immediately cutting activity to start 2019 while still growing production over 5% from our December 2018 exit rate of approximately 250 Mboe/d. Additionally, Diamondback executed on our “grow and prune” strategy introduced at the time of the Energen acquisition by announcing $322 million of conventional and non-core asset divestitures, which will both lower our cost structure and consolidate our Tier 1 acreage."
FULL YEAR 2019 GUIDANCE
Giving effect to the announced asset divestitures expected to close by July 1, 2019, the Company expects full year production to be between 272.0 and 287.0 Mboe/d. Additionally, Diamondback is lowering full year 2019 guidance for LOE to $4.25 - $4.75 per boe from $4.50 - $5.00 per boe previously due to the anticipated sale of the Central Basin Platform assets expected to close by July 1, 2019. Diamondback is also increasing average lateral length completed for the year by 100 feet to 9,500 feet and is lowering Midland Basin well costs to $740 to $780 per completed lateral foot from $770 to $800 per completed lateral foot previously. Finally, Diamondback is lowering midstream service expense (net of revenue) to $0 to $10 million from $35 million to $45 million.
Notable Share Transactions
MIDLAND, Texas, Feb. 26, 2019 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (NASDAQ:VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), announced today the pricing of Viper’s public offering of 9,500,000 common units representing limited partner interests at a public offering price of $32.00 per unit. The 9,500,000 offering of common units represents a 1,500,000 unit upsize to the originally proposed 8,000,000 offering of common units. The total gross proceeds of the offering (before underwriters’ discounts and commissions and estimated offering expenses) will be approximately $304.0 million. The underwriters have a 30 day option to purchase up to an additional 1,425,000 common units from Viper.
The offering is expected to close on March 1, 2019, subject to customary closing conditions. Viper intends to use the net proceeds from the offering, including any net proceeds from the underwriters’ exercise of their option to purchase additional common units, to purchase units of Viper Energy Partners LLC (“Viper Operating Company”). Viper Operating Company will use the net proceeds from the offering to repay a portion of the outstanding borrowings under Viper’s revolving credit facility. Viper Operating Company will use any net proceeds received in connection with the underwriters’ exercise of their option to purchase additional common units to repay additional outstanding borrowings under Viper’s revolving credit facility and for general partnership purposes, which may include additional acquisitions.
Comments & Business Outlook
Fourth Quarter 2018 Financial Results
Q4 2018 net income of $307 million, or $2.50 per diluted share; adjusted net income (as defined and reconciled below) of $148 million, or $1.21 per diluted share
Q$ 2018 EPS Diluted was $2.50 vs last years $1.16.
“2018 was another transformational year for Diamondback Energy. We successfully closed three acquisitions in the fourth quarter, including our acquisition of Energen, which, combined, almost doubled our core acreage position. During the fourth quarter, Diamondback outspent cash flow due to the dramatic decline in commodity prices and one time merger related expenses. However, outspending cash flow is against our operating philosophy, and therefore we addressed the issue as quickly as possible by announcing a reduction in activity levels in late 2018 and acting on that plan immediately in 2019. As investor sentiment shifts from growth to capital discipline and free cash flow generation, Diamondback is positioned to offer an unmatched combination of both due to our asset quality and peer leading capital and operating costs. In 2019, we expect to grow production by over 27% year over year within cash flow while paying a 50% larger dividend and setting ourself up for significant free cash flow generation in 2020 and beyond at today’s strip prices while still continuing to grow production at industry leading rates," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “As we look ahead, we could not be more excited about the opportunities we have ahead of us. Our 2019 capital plan and cost per completed lateral foot guidance for the Midland Basin is reflective of the synergies we presented when we first announced the Energen acquisition last August, with the midpoint of our D,C&E well cost guidance of $785 per completed lateral foot being nearly equivalent to Diamondback’s standalone second quarter 2018 well costs. Our estimates for our Delaware Basin costs per completed lateral foot are significantly better than presented in our August announcement, and we expect overall well costs in the Delaware Basin to decline year over year. Further, our general and administrative cost guidance also reflects the projected synergies presented with our merger announcement as we expect to maintain cash G&A costs of less than $1.00 per boe in 2019. In addition to the cost synergies presented, we are actively executing on our grow and prune strategy as we consolidate our acreage position, increase our average lateral length and work to divest assets deemed non-core to our current development plan. We look forward to crystallizing the midstream and mineral synergies presented, with a priority to drop down the remaining mineral and royalty assets held at Diamondback to Viper.”
Regular Dividend News
MIDLAND, Texas, Feb. 08, 2019 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the “Company”) today announced that its Board of Directors has declared a cash dividend of $0.125 per common outstanding share for the fourth quarter of 2018. The dividend is payable on February 28, 2019, to all common stockholders of record at the close of business on February 21, 2019.
Comments & Business Outlook
MIDLAND, Texas, Dec. 18, 2018 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) (“Diamondback” or the “Company”) today announced its 2019 capital and production guidance, reflecting an operating plan focused on disciplined growth within cash flow and a growing dividend in the current commodity price environment.
HIGHLIGHTS
2019 estimated annual production guidance of 275 – 290 MBoe/d (68% – 70% oil), midpoint implies over 28% pro forma year over year production growth and over 30% pro forma year over year oil production growth within cash flow at current commodity prices
Mr. Stice continued, “If commodity prices continue to decline, we will further reduce activity to match our budget to expected annual operating cash flow. Conversely, and most importantly, if commodity prices improve dramatically and we have significant free cash flow above our base dividend and capital budget, our capital allocation strategy will reflect a mix of growth and an increasing return of capital, getting ahead of our anticipated increase in 2020 free cash flow at nearly any commodity price. This strategy reflects the next step in capital discipline for Diamondback, where we will not focus solely on maximizing growth within cash flow, but rather deliver both growth and increasing return of capital to shareholders. Long term, Diamondback expects to consistently grow production at industry leading rates while significantly increasing our free cash flow per share and using that free cash for shareholder-friendly initiatives, including a durable and sustainable return of capital program through the cycle while maintaining our low cost structure and minimal leverage.”
Mr. Stice further stated, “After closing the Energen merger in November, we remain excited about our significant early progress in delivering on the well cost synergies presented with the merger announcement, including having already implemented regional sand use and simultaneous completion operations, as well as improvements to drilling times and well design. These synergies are reflected in the capital efficiencies presented in our 2019 budget and we look forward to updating the market with our progress in the coming year.”
Regular Dividend News
Diamondback announced today that the Company's Board of Directors has declared a cash dividend for the third quarter of 12.5 cents per common share payable on November 26, 2018, to stockholders of record at the close of business on November 19, 2018.
Comments & Business Outlook
Third Quarter 2018 Financial Results
Revenues of $538.03 million for the quarter ended September 2018, this compares to year-ago revenues of $301.25 million.
Q3 2018 net income of $157 million, or $1.59 per diluted share; adjusted net income (as defined and reconciled below) of $165 million, or $1.67 per diluted share.
“Diamondback continued to deliver on both our near-term objectives and long-term strategic initiatives through the third quarter and into the fourth quarter of 2018. First, we were able to deliver significant quarter over quarter production growth while maintaining our best in class margins and operational efficiencies. Second, we closed multiple highly complementary asset acquisitions in the Northern Midland Basin and have since taken over operations. Finally, we continued executing on our midstream and long-haul takeaway strategy through our commitment to, and ownership interest in, the Gray Oak Pipeline project. With our commitment to Gray Oak and EPIC, Diamondback has secured waterborne pricing and "wellhead to water" solutions for all of the current and expected production from our existing asset base, while also building value for our midstream business through strategic joint ventures," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, "Since the beginning of the year, Diamondback has been able to generate $12 million in free cash flow while growing production 45% over the last 12 months. Our existing 14 operated rigs, along with the 10 rigs currently operated by Energen, will provide the baseline for our 2019 operating plan assuming the approval of the merger by the shareholders of both companies on November 27 and the closing of the merger shortly thereafter. With respect to capital, we are raising our infrastructure budget for 2018 due to the continued growth of our midstream operations and the added infrastructure costs related to the signing of our joint development agreement with Carlyle, along with staying ahead of our accelerated rig count. As we look ahead into 2019, we look forward to delivering on the synergies presented from our merger with Energen while growing production at industry-leading rates, maintaining our best in class operating metrics, generating free cash flow and increasing our return of capital program."
FULL YEAR 2018 GUIDANCE
Giving effect to the Ajax, ExL and EnergyQuest acquisitions that closed on October 31, 2018, as well as continued outperformance of Diamondback's legacy assets, Diamondback is increasing its full year 2018 production guidance to a range of 118.5 Mboe/d to 119.5 Mboe/d, up 2% from the midpoint of the prior range. This guidance increase does not take into effect the Energen merger, which is expected to close in the fourth quarter subject to shareholder approvals.
Additionally, Diamondback is increasing full year 2018 CAPEX guidance to a range of $1.5 to $1.575 billion from $1.4 to $1.5 billion previously. This increase is due to the added infrastructure costs related to the signing of Diamondback's joint development agreement with Carlyle, as well as the accelerated build out and upgrade of midstream assets in the Southern Delaware through its subsidiary Rattler Midstream. Diamondback expects to exit the year operating 14 drilling rigs, excluding the pending Energen merger, which is above its original expectations of 10 to 12 rigs for the year. This acceleration requires up front infrastructure capital as Diamondback continues operational momentum into 2019, thus increasing its overall infrastructure budget.
Comments & Business Outlook
MIDLAND, Texas, Oct. 29, 2018 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (VNOM) ("Viper" or the “Company”), a subsidiary of Diamondback Energy, Inc. (FANG) ("Diamondback"), today announced financial and operating results for the third quarter ended September 30, 2018.
HIGHLIGHTS
Q3 2018 cash distribution of $0.58 per common unit , up 72% year over year; implies a 6.4% annualized yield based on the October 26, 2018 unit closing price of $36.29
Mr. Stice continued, “As a direct result of Viper's accretive acquisitions, as well as continued organic growth on our legacy assets, Viper once again achieved significant quarter over quarter production growth. We have raised our full year production guidance so that the midpoint now represents 54% year over year growth. Looking ahead to 2019, we are excited about our organic growth profile as well as the continued execution of our acquisition strategy, including further drop downs from Diamondback.”
FINANCIAL UPDATE
Viper's third quarter 2018 average realized prices were $54.51 per barrel of oil, $2.42 per Mcf of natural gas and $27.05 per barrel of natural gas liquids, resulting in a total equivalent price of $43.98/boe, up 21% year over year from $36.38/boe in Q3 2017.
During the third quarter of 2018, the Company recorded total operating income of $78.6 million and consolidated net income (including non-controlling interest) of $50.8 million. Operating income was up 4% quarter over quarter and 85% year over year.
As of September 30, 2018, the Company had a cash balance of $16.8 million and $178.5 million available under its revolving credit facility. In connection with its Fall redetermination, which closed in October 2018, Viper's borrowing base increased to $555.0 million from $475.0 million prior, resulting in $258.5 million of pro forma credit facility availability.
THIRD QUARTER 2018 CASH DISTRIBUTION
The Board of Directors of Viper's general partner declared a cash distribution for the three months ended September 30, 2018 of $0.58 per common unit, up 72% year over year. The distribution is payable on November 19, 2018 to unitholders of record at the close of business on November 12, 2018.
ACQUISITION UPDATE
During the third quarter of 2018, Viper acquired 760 net royalty acres for an aggregate purchase price of $85 million from unrelated third parties. Also during the quarter, Viper closed the previously announced drop down of 1,696 net royalty acres from Diamondback for $175.0 million. These transactions brought Viper's footprint of mineral interests to a total of 13,908 net royalty acres. Viper funded the recent acquisitions with cash on hand, borrowings under its revolving credit facility and proceeds from its July 2018 offering of 10,080,000 common units.
GUIDANCE UPDATE
Below is Viper's updated guidance for the full year 2018, as well as average production guidance for Q4 2018 and Q1 2019.
Acquisition Activity
MIDLAND, Texas, Aug. 14, 2018 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (FANG) (“Diamondback” or the “Company”) and Energen Corporation (EGN) or (“Energen”), today announced that they have entered into a definitive agreement under which Diamondback will acquire Energen in an all-stock transaction valued at approximately $9.2 billion, including Energen’s net debt of $830 million as of June 30, 2018. The consideration will consist of 0.6442 shares of Diamondback common stock for each share of Energen common stock, representing an implied value to each Energen shareholder of $84.95 per share based on the closing price of Diamondback common stock on August 13, 2018. The transaction was unanimously approved by the Board of Directors of each company.
TRANSACTION HIGHLIGHTS:
Creates the premier large cap Permian independent with peer-leading production growth, cost structure and capital efficiency
Mr. Stice continued, “We look forward to welcoming Energen’s employees as members of the Diamondback team, and applaud them for the hard work and dedication they have put forth to create this opportunity for the two teams to become one. The synergies provided in this transaction, as well as the opportunities for capital improvements provided by increased size and scale, create a truly outstanding value proposition. The combined company’s expected production growth, capital productivity and cost structure will enhance our free cash flow profile to grow our long-term capital return program.”
James McManus, Chairman and Chief Executive Officer of Energen, stated, “We are very pleased about this transaction and believe the combination of the two companies’ quality assets, track record of execution, and peer-leading cost structures will form an even stronger, large-cap independent producer uniquely positioned to drive growth and development in the Permian Basin. This transaction is the outcome of a comprehensive strategic review by Energen’s Board with the assistance of our outside advisors. The process examined our business plan, competitive positioning, and strategic alternatives. We believe this all-stock transaction with Diamondback is the best path forward for our company and provides Energen shareholders with an excellent value for their investment, now and in the future.”
Mr. McManus added, “I also want to take this opportunity to recognize Energen’s biggest strength, our employees, and publicly thank them for their dedication and hard work in driving Energen’s success.”
Acquisition Activity
MIDLAND, Texas, Aug. 08, 2018 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback” or the “Company”) today announced financial and operating results for the second quarter ended June 30, 2018.
Additionally, Diamondback today announced it has entered into a definitive purchase agreement to acquire all leasehold interests and related assets of Ajax Resources, LLC (“the Seller” or “Ajax”) for $900 million in cash and 2.58 million shares of Diamondback common stock, subject to certain adjustments. The cash portion of this transaction is expected to be funded through a combination of cash on hand, cash proceeds from the previously announced drop down sale ("drop down") of mineral interests to Viper Energy Partners LP ("Viper"), borrowings under the Company's revolving credit facility and/or proceeds from one or more capital markets transactions, which may include a debt offering.
AJAX ACQUISITION
25,493 net leasehold acres in the Northern Midland Basin, including ~21,000 net acres in Northwest Martin and Northeast Andrews counties; ~89% held by production (“HBP”)
Comments & Business Outlook
Second Quarter 2018 Financial Results
Total revenues for the quarter was $514,937 Million vs. last years same quarter of $499,932 Million.
Q2 2018 net income of $219 million, or $2.22 per diluted share; adjusted net income (as defined and reconciled below) of $158 million, or $1.59 per diluted share
“Diamondback extended its track record of successful execution in the second quarter, growing production 10% quarter over quarter, while maintaining its peer leading cash margins and return on average capital employed. Additionally, I am extremely pleased with our organization's continued ability to deliver on securing firm takeaway out of the Permian as we look to maximize our exposure to international pricing. Diamondback's oil marketing strategy in the near term is to secure firm transportation at fixed discounts to Gulf Coast pricing while not compromising realizations over the long term," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, "Diamondback’s announced acquisition of high quality assets from Ajax Resources provides additional Tier 1 resource directly adjacent to our existing acreage in Northwest Martin and Northeast Andrews counties. With approximately 220 net locations capable of generating 100% or greater IRRs at $60/Bbl across three zones, this transaction is accretive to our top quartile inventory, NAV and 2019 financial metrics. We expect the transaction to close at the end of October 2018, with interim Ajax development focused on large multi-well, multi-zone pad development to be assumed by Diamondback in November. Credit is due to the Ajax team for displaying impressive results in two emerging zones for the area, the Wolfcamp A and Middle Spraberry. These results highlight the value of this acreage in our existing portfolio, and more than doubles Diamondback's inventory to 680 net pro forma locations in this area."
Rich Little, Chief Executive Officer of Ajax Resources stated, “This transaction represents a logical transition for the Ajax asset base, as it complements Diamondback’s acreage position very well and further consolidates the Northern Midland Basin. I am extremely proud of what the Ajax team accomplished over the past three years. With the strong sponsorship and support of our private equity partner, Kelso, we were able to deploy the necessary resources and capital to delineate and strategically develop an underexploited asset base.”
PRO FORMA FULL YEAR 2018 GUIDANCE
Pro forma for the pending Ajax acquisition, Diamondback is increasing its full year 2018 production guidance to a range of 115.0 Mboe/d to 119.0 Mboe/d, up 4% from the midpoint of the prior range.
Additionally, Diamondback is narrowing full year 2018 CAPEX guidance to a range of $1.4 to $1.5 billion from $1.3 to $1.5 billion previously.
Notable Share Transactions
MIDLAND, Texas, July 31, 2018 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (FANG) (“Diamondback”), announced today the pricing of Viper’s public offering of 9,000,000 common units representing limited partner interests at a public offering price of $31.25 per unit. The total gross proceeds of the offering (before underwriters’ discounts and commissions and estimated offering expenses) will be approximately $281.3 million. The underwriters have a 30-day option to purchase up to an additional 1,080,000 common units from Viper.
The offering is expected to close on August 3, 2018, subject to customary closing conditions. Viper intends to use the net proceeds from the offering, including any net proceeds from the underwriters’ exercise of their option to purchase additional common units, to purchase units of Viper Energy Partners LLC (“Viper Operating Company”). Viper Operating Company will use the net proceeds from the offering to repay a portion of the outstanding borrowings under Viper’s revolving credit facility. Viper Operating Company will use any net proceeds received in connection with the underwriters’ exercise of their option to purchase additional common units to repay additional outstanding borrowings under Viper’s revolving credit facility and for general partnership purposes, which may include additional acquisitions.
UBS Investment Bank and Credit Suisse are acting as joint book-running managers for the offering. When available, a copy of the final prospectus for the offering may be obtained from:
Comments & Business Outlook
MIDLAND, Texas, April 10, 2018 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) (“Diamondback” or the “Company”) today announced that production for the first quarter of 2018 was 102.6 Mboe/d (75.6 Mbo/d; 74% oil), an increase of over 10% from Q4 2017 average daily production of 92.9 Mboe/d.
First quarter 2018 average realized prices were $61.66 per barrel of oil, $2.20 per Mcf of natural gas and $24.64 per barrel of natural gas liquids, resulting in a total equivalent unhedged price of $50.55/boe, up 12% from $45.31/boe in Q4 2017.
Viper Energy Partners LP (“Viper”), a subsidiary of Diamondback, also announced today its first quarter 2018 production volumes of 14.1 Mboe/d (10.1 Mbo/d; 71% oil), an increase of approximately 14% from Q4 2017 average daily production of 12.4 Mboe/d.
Diamondback is currently running eleven drilling rigs and five dedicated completion crews.
"In just over five years as a public company, Diamondback has grown production volumes to over 100,000 barrels of oil equivalent production per day from a starting point of ~2,500 boe/d. Since our IPO in October 2012, our industry has experienced oil prices as high as $110 and as low as $26 per barrel, and Diamondback has grown production over 40 times in spite of these challenges while maintaining a fortress balance sheet. This growth has been a direct result of an unwavering focus on low cost operations, accretive growth through a disciplined returns-focused acquisition strategy and, above all, best in class execution of our operating plan," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “Diamondback will remain disciplined and committed to full-cycle economics for both our forward operating plan and acquisition strategy. The Company has a proven track record of disciplined, accretive acquisitions, as well as a significant runway of premium inventory highly economic at today’s commodity prices. We will continue to demonstrate best in class production growth within cash flow and add rigs as operating cash flow allows, with our 11th operated rig recently beginning operations in the Delaware Basin.”
Comments & Business Outlook
Fourth Quarter 2017 Financial Results
Fourth quarter 2017 revenues were $399 million, up 33% from $301 million in Q3 2017.
Diluted EPS was $1.16 vs last year $0.32.
“In a year where investor focus shifted from resource capture to resource execution and capital discipline in the Permian Basin, Diamondback delivered on its promises by achieving 84% year over year production growth within cash flow. After successfully integrating multiple large acquisitions and doubling our asset base, we decreased cash costs by over 10% year over year and increased proved reserves by over 60% while maintaining peer-leading capital efficiency. Capital discipline and growth within cash flow are not new concepts to Diamondback, with our 2018 plan calling for over 40% growth within cash flow at current commodity prices," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, "Diamondback continues to increase its focus on return on and return of capital, with our return on average capital employed nearly doubling in 2017 and expected to continue to rise given current commodity prices and our continued development of undeveloped acreage. We are also taking our first step toward rewarding shareholders for their support of our growth these last five years by initiating a $0.50 annual cash dividend to be payable quarterly beginning with the first quarter of 2018. Diamondback is now in a position to generate industry-leading organic growth as well as return capital to shareholders while continuing to reduce leverage. Our commitment to robust production growth at the highest margins and efficiencies of our peer group has not changed, and we will continue to be opportunistic through multiple avenues to maximize shareholder returns.”
FULL YEAR 2018 GUIDANCE
Below is Diamondback's guidance for the full year 2018. The Company expects full year production to be between 108.0 and 116.0 Mboe/d with an estimated capital spend for drilling, completion, infrastructure and non-operated properties of $1,300 to $1,500 million. During 2018, Diamondback expects to complete between 170 and 190 gross operated horizontal wells from a 10 to 12 rig program.
Comments & Business Outlook
Third Quarter 2017 Financial Results
Total revenues was 301,25. vs last years $142,131.
Q3 2017 net income of $73 million, or $0.74 per diluted share; adjusted net income (as defined and reconciled below) of $131 million, or $1.33 per diluted share
“Over the past five years as a publicly traded company, Diamondback has remained committed to a strategy of best-in-class execution, low cost operations and transparency. In an industry that often rewards 'growth for growth’s sake', Diamondback has maintained strict capital discipline, growing production over 175% within operating cash flow over the past 11 quarters," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “Diamondback continues to confirm the productive capacity of its Southern Delaware assets through strong extended well performance, while continuing to grow production in the Midland Basin at peer-leading capital efficiency. We expect to add our 10th operated rig in the coming weeks, and as we look into 2018, our strategy has not changed in that we expect to match our capital budget to our projected operating cash flow."
Notable Share Transactions
MIDLAND, Texas, Aug. 09, 2017 (
GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”) announced today the pricing of an underwritten public offering of 3,000,000 shares of its common stock by certain selling stockholders. The underwriter intends to offer the shares from time to time for sale in one or more transactions on the NASDAQ Global Select Market, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. The gross proceeds from the sale of the shares by the selling stockholders will be approximately $277.8 million. Diamondback will not receive any proceeds for the sale of the shares by the selling stockholders. The underwriter has a 30-day option to purchase up to an additional 450,000 shares of common stock from the selling stockholders.
Comments & Business Outlook
Second Quarter 2017 Financial Results
Total Revenues was $269 million vs. last years same quarter of $112 million.
Q2 2017 net income of $158 million, or $1.61 per diluted share (adjusted net income of $123 million, or $1.25 per diluted share; corrected from prior released adjusted net income of $137 million, or $1.40 per diluted share)
“Diamondback has continued to build on its strong execution track record by increasing full year production guidance while decreasing CAPEX and cash cost guidance. We believe these results continue to affirm the strength of our business plan. Today we are positioned with acreage and well locations that provide many years of visible production growth. Our growth rate is determined by returns to shareholders, without reliance on the capital markets to fund our development plan. Our balance sheet remains strong and provides us the operational flexibility to increase and decrease activity as commodity price dictates, allowing us to grow differentially within cash flow," stated Travis Stice, Chief Executive Officer of Diamondback.
Mr. Stice continued, “We are impressed with the initial operated results out of the Wolfcamp A in the Southern Delaware Basin, and are extremely excited about our initial Second Bone Spring result on our Pecos acreage, providing us another zone that can compete for capital in our current portfolio. We will continue to lower well costs in the Delaware Basin with our organization’s relentless focus on capital efficiency and full cycle economics."
Notable Share Transactions
MIDLAND, Texas, July 17, 2017 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (FANG) (“Diamondback”), announced today that Viper has commenced an underwritten public offering of 11,000,000 common units representing limited partner interests, subject to market and other conditions. Viper anticipates granting the underwriters a 30-day option to purchase up to an additional 1,650,000 common units from Viper. All of the common units to be sold in this offering will be sold by Viper.
Viper intends to use the net proceeds from the offering, including any net proceeds from the underwriters’ exercise of their option to purchase additional common units, to repay the outstanding borrowings under Viper’s revolving credit facility, to fund a portion of the purchase price for its pending acquisitions and for general partnership purposes, which may include additional acquisitions.
Diamondback has indicated its interest in purchasing up to a total of 3,330,000 common units offered by Viper. In addition, an affiliate of Viper’s general partner has indicated its interest in purchasing up to a total of 3,000,000 common units and certain officers and directors of Diamondback and Viper’s general partner have indicated their interest in purchasing approximately 114,000 common units offered by Viper. These common units would be purchased directly from the underwriters at the price per common unit paid by the underwriters to Viper.
MIDLAND, Texas, July 17, 2017 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (NASDAQ:VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), announced today the pricing of Viper’s upsized public offering of 14,000,000 common units representing limited partner interests. The total gross proceeds of the offering (before underwriters’ discounts and commissions and estimated offering expenses) will be approximately $206.5 million. The underwriters have a 30-day option to purchase up to an additional 2,100,000 common units from Viper.
The offering is expected to close on July 21, 2017, subject to customary closing conditions. Viper intends to use the net proceeds from the offering, including any net proceeds from the underwriters’ exercise of their option to purchase additional common units, to repay the outstanding borrowings under Viper’s revolving credit facility, to fund a portion of the purchase price for its pending acquisitions and for general partnership purposes, which may include additional acquisitions.
In the public offering, Diamondback has agreed to purchase from the underwriters 700,000 common units, an affiliate of Viper’s general partner has agreed to purchase from the underwriters 3,000,000 common units and certain officers and directors of Diamondback and Viper’s general partner have agreed to purchase from the underwriters 114,000 common units, in each case at the price per common unit paid by the underwriters to Viper.
Credit Suisse is acting as a sole book-running manager for the offering. Barclays, Citigroup, UBS Investment Bank and Wells Fargo Securities served as senior co-managers for the offering. When available, a copy of the final prospectus for the offering may be obtained from:
Comments & Business Outlook
First Quarter 2017 Financial Results
Total revenues were $109.8 million, a decrease of 46.3% from the corresponding period in 2016.
Net loss attributable to Fang's shareholders was $12.0 million in the first quarter of 2017, compared to net loss of $113.7 million in the corresponding period of 2016. Loss per fully-diluted ordinary share and ADS were $0.14 and $0.03 in the first quarter of 2017, compared to loss of $1.20 and $0.24, respectively, in the corresponding period of 2016.
Business Outlook
The Company is undergoing adjustments to its transformations and is returning to open-platform strategy. Before these changes are finalized, the company will see a decrease in its top line revenue.
Comments & Business Outlook
Fourth Quarter 2016 Financial Results
Fang reported total revenues of $174.7 million in the fourth quarter of 2016, a 42% decrease from $300.7 million in the corresponding period of 2015.
Loss per fully-diluted ordinary share and ADS were $0.11 and $0.02 in the fourth quarter of 2016, compared to loss of $0.44 and $0.09, respectively, in the corresponding period of 2015.
"I admit that our two-year long transformation is a failure up to today. We did not know in depth of the new markets and new business lines. We were too aggressive in transformations at the same time with all of our business lines," said Vincent Mo, Chairman and CEO of Fang.com. "We are making adjustments to our transformations. We will return to open-platform strategy in which we will support and facilitate businesses of our partners including developers, brokers and agents, property owners and buyers, and other home related companies and professionals."
Business Outlook
The Company is undergoing adjustments to its transformations and the company is planning to return to open-platform strategy. Before these changes are finalized, the company will see a decrease in its top line revenue but will expect to be profitable for the whole year 2017.
Acquisition Activity
MIDLAND, Texas, March 01, 2017 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (NASDAQ:FANG) ("Diamondback" or the "Company") today announced the closing of its previously announced acquisition of leasehold interests and related assets from Brigham Resources Operating, LLC and Brigham Resources Midstream, LLC ("the Sellers" or "Brigham Resources") for an aggregate purchase price of $2.55 billion. The incremental purchase price is attributable to the acquisition of additional leasehold acreage as well as mineral interests on the properties and other post effective date adjustments.
On February 28, 2017, the Company completed the acquisition of 80,185 net leasehold acres in Pecos and Reeves counties, which includes an incremental 3,866 net leasehold acres from the 76,319 net leasehold acres previously announced in December 2016. Also included are mineral interests covering 1,321 net royalty acres, including an incremental 172 net royalty acres from the 1,149 net royalty acres initially disclosed.
"Diamondback's successful completion of this transaction represents the collective efforts of our team to secure a leading resource footprint in the Southern Delaware Basin. With the transaction completed, our focus now shifts to developing this asset and expanding our track record of achieving efficient, low-cost operations from the Midland Basin into the Delaware Basin,” stated Travis Stice, Chief Executive Officer of Diamondback.
Comments & Business Outlook
MIDLAND, Texas, March 01, 2017 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) ("Diamondback" or the "Company") today announced the closing of its previously announced acquisition of leasehold interests and related assets from Brigham Resources Operating, LLC and Brigham Resources Midstream, LLC ("the Sellers" or "Brigham Resources") for an aggregate purchase price of $2.55 billion. The incremental purchase price is attributable to the acquisition of additional leasehold acreage as well as mineral interests on the properties and other post effective date adjustments.
On February 28, 2017, the Company completed the acquisition of 80,185 net leasehold acres in Pecos and Reeves counties, which includes an incremental 3,866 net leasehold acres from the 76,319 net leasehold acres previously announced in December 2016. Also included are mineral interests covering 1,321 net royalty acres, including an incremental 172 net royalty acres from the 1,149 net royalty acres initially disclosed.
"Diamondback's successful completion of this transaction represents the collective efforts of our team to secure a leading resource footprint in the Southern Delaware Basin. With the transaction completed, our focus now shifts to developing this asset and expanding our track record of achieving efficient, low-cost operations from the Midland Basin into the Delaware Basin,” stated Travis Stice, Chief Executive Officer of Diamondback.
Deal Flow
MIDLAND, Texas, Dec. 14, 2016 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) (“Diamondback”) today announced that it proposes to offer, subject to market conditions and other factors, $250 million aggregate principal amount of its senior notes due 2025 (the “Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Notes will be issued under a new indenture and will rank equally with Diamondback’s other senior indebtedness. Diamondback expects to use the net proceeds of the Notes offering, together with the net proceeds from its concurrent equity offering, cash on hand and other financing sources, to fund the cash consideration for its previously announced pending acquisition of certain oil and natural gas assets of Brigham Resources Operating, LLC and Brigham Resources Midstream, LLC.
The Notes will be general unsecured senior obligations of Diamondback, will be guaranteed on a senior unsecured basis by certain of Diamondback’s subsidiaries and will pay interest semi-annually.
The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from such registration requirements.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Notable Share Transactions
MIDLAND, Texas, Dec. 14, 2016 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) (“Diamondback”) announced today the pricing of an underwritten public offering of 10,500,000 shares of its common stock. The underwriters intend to offer the shares from time to time for sale in one or more transactions on the NASDAQ Global Select Market, in the over-the-counter market, through negotiated transactions or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. The total gross proceeds of the offering (before underwriters’ discounts and commissions and estimated offering expenses) will be approximately $1,019 million. The underwriters have a 30-day option to purchase up to an additional 1,575,000 shares of common stock from Diamondback.
Diamondback intends to use the net proceeds from this offering, together with the net proceeds from its concurrent debt offering, cash on hand and other financing sources, to fund the cash consideration for its previously announced pending acquisition of certain oil and natural gas assets of Brigham Resources Operating, LLC and Brigham Resources Midstream, LLC (the “Pending Acquisition”). Diamondback intends to use any net proceeds received upon exercise of the underwriters’ 30-day option to purchase additional shares (plus any additional proceeds that may become available if the Pending Acquisition is not consummated or the purchase price is reduced because it acquires less than all of the oil and natural gas assets subject to the purchase agreement) to fund a portion of its exploration and development activities and for general corporate purposes, which may include leasehold interest and property acquisitions and working capital.
Regular Dividend News
MIDLAND, Texas, Oct. 27, 2016 (GLOBE NEWSWIRE ) -- Viper Energy Partners LP (VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (FANG) (“Diamondback”), today announced its third quarter 2016 cash distribution. Diamondback and Viper today also announced that they plan to release their respective third quarter 2016 financial results on November 7, 2016 after the market closes.
Viper Cash Distribution
The third quarter 2016 cash distribution increased 10% to $0.207 per unit from $0.189 per unit in the second quarter of 2016. When annualized, this distribution represents an approximate 5% yield based on the closing price for Viper’s common units on October 27, 2016.
Deal Flow
MIDLAND, Texas, Oct. 27, 2016 (GLOBE NEWSWIRE ) -- Diamondback Energy, Inc. (FANG) (“Diamondback”) today announced that its previously announced cash tender offer to purchase any and all of the outstanding aggregate principal amount of its 7.625% Senior Notes due 2021 (the “Notes”) expired at 5:00 p.m., New York City time, on October 27, 2016 (the “Expiration Time”). As of the Expiration Time, $330,128,000 aggregate principal amount of the Notes (73.36%) were validly tendered, which excludes $4,148,000 aggregate principal amount of the Notes that remain subject to guaranteed delivery procedures. Diamondback expects to accept for payment all Notes validly tendered and not validly withdrawn in the tender offer and expects to make payment for the Notes on October 28, 2016. Pursuant to the terms of the tender offer, Notes not tendered in the tender offer will remain outstanding. Tomorrow, October 28, 2016, Diamondback expects to deliver a redemption notice for any and all outstanding Notes pursuant to the terms of the indenture, as amended and supplemented, governing the Notes, and all remaining outstanding Notes will be redeemed (subject to the terms thereof) on November 27, 2016 (with settlement on November 28, 2016).
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Deal Flow
MIDLAND, Texas, Oct. 21, 2016 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (FANG) (Diamondback or the Company) today announced that it has commenced a cash tender offer to purchase any and all of its 7.625% Senior Notes due 2021. As of October 20, 2016, Diamondback had $450 million aggregate principal amount of the notes outstanding. The tender offer is being made pursuant to an offer to purchase and a related letter of transmittal, each dated as of October 21, 2016, and a notice of guaranteed delivery. The tender offer will expire at 5:00 p.m., New York City time, on October 27, 2016, unless extended (the �Expiration Time�). Tendered notes may be withdrawn at any time before the Expiration Time unless extended.
Holders of notes that are validly tendered and accepted at or prior to the Expiration Time, or who deliver to the depositary and information agent a properly completed and duly executed Notice of Guaranteed Delivery and subsequently deliver such notes, each in accordance with the instructions described in the Offer to Purchase, will receive total cash consideration of $1,059.69 per $1,000 principal amount of notes, plus any accrued and unpaid interest up to, but not including, the settlement date, which is expected to occur on October 28, 2016.
The tender offer is contingent upon, among other things, Diamondback�s successful completion of a proposed debt financing transaction, the proceeds of which will be sufficient to fund the purchase of all outstanding notes and to pay all fees and expenses associated with such financing and the tender offer. The tender offer is not conditioned on any minimum amount of notes being tendered. Diamondback may amend, extend or terminate the tender offer in its sole discretion. The Company currently intends to redeem any and all notes that are not validly tendered and purchased by the Company in the tender offer and that remain outstanding.
The tender offer is being made pursuant to the terms and conditions contained in the Offer to Purchase, related Letter of Transmittal and Notice of Guaranteed Delivery, copies of which may be obtained from D.F. King & Co., Inc., the information agent for the offer, by telephone at (800) 864-1460 (toll-free) or for banks and brokers, at (212) 269-5550 (Banks and Brokers only), at the following web address: www.dfking.com/fang.
Persons with questions regarding the tender offer should contact the following dealer manager: J.P. Morgan Securities LLC, by telephone at (866) 834-4666 (U.S. toll-free) or (212) 834-4811 (call collect).
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Comments & Business Outlook
XI'AN, China , Oct. 20, 2016 /PRNewswire / -- SkyPeople Fruit Juice, Inc. (NASDAQ: SPU) ("SkyPeople" or "the Company"), a producer of fruit juice concentrates, fruit juice beverages and other fruit-related products, today announced that it has requested a hearing before the NASDAQ Hearings Panel to appeal the delisting determination from the staff of the Listing Qualifications Department of NASDAQ (the "NASDAQ Staff"). In response, Company has received notification from the NASDAQ Stock Market that the delisting of its common stock has been stayed for a period of 15 calendar days, or until November 3, 2016, and its hearing before the NASDAQ Hearings Panel has been scheduled for December 15, 2016.
The delisting determination Letter, received on October 12, 2016, notified the Company that since it had not filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2016 and June 30, 2016, respectively, by October 11, 2016, the deadline by which the Company was to file all reports in order to regain compliance with NASDAQ Listing Rule 5250(c)(1), the Company's common stock is subject to delisting from the NASDAQ Global Market.
On October 19, 2016, the Company submitted a request for a hearing before the NASDAQ Hearings Panel under Listing Rule 5815(a) to present its plan to regain compliance with Rule 5250(c)(1). As the request will only stay the delisting action for 15 calendar days from yesterday's deadline to request a hearing, the Company also requested a further stay of the suspension of trading and delisting of the Company's common stock while its appeals process is pending with the NASDAQ Hearings Panel.
Comments & Business Outlook
Second Quarter 2016 Financial Results
Total Revenue increased by 34.2% year-on-year to $287.0 million. Revenue from e-commerce services increased by 77.4% year-on-year to $189.5 million.
Non-GAAP net loss attributable to Fang's shareholders was $39.5million. Non-GAAP fully diluted loss per ADS was $0.08. A description of the adjustments from GAAP to non-GAAP net loss attributable to Fang's shareholders and fully diluted loss per ADS is detailed in the Reconciliation Statement following this earnings release.
"I am happy to announce another strong quarter with 34.2% growth rate for the top-line while at the same time put the cost under control" Vincent Mo, Chairman and CEO of Fang, commented. "Our transformation is on track with a healthier and sustainable growth path. We expect that Fang will return to high growth and profitability before the end of the year."
Business Outlook
Fang reiterated its total revenue guidance for 2016 of around $1,148.6 million, representing a year-on-year increase of 30.0%. We are confident that Fang is on track to achieve the target. This forecast reflects Fang's current and preliminary view, which is subject to change.
