Diamondback Energy, Inc. and Viper Energy Partners LP, a Subsidiary of Diamondback Energy, Inc., Provide Interim Q4 2014 Oper...
January 13 2015 - 4:01PM
Diamondback Energy, Inc. (Nasdaq:FANG) ("Diamondback" or the
"Company") and Viper Energy Partners LP (Nasdaq:VNOM) ("Viper"), a
subsidiary of Diamondback, today provided an operational update for
the quarter ended December 31, 2014, and announced preliminary
financial and operating guidance for the full year of 2015.
PRODUCTION
Diamondback's Q4 2014 production increased 25% to 25.7 Mboe/d,
from 20.6 Mboe/d in Q3 2014. Full year 2014 production increased
166% over full year 2013 to 19.5 Mboe/d, above the 2014 guidance
range of 17.0 to 19.0 Mboe/d.
"2014 was another outstanding year as we continued best in class
execution, continued to drive costs lower, and demonstrated the
tremendous potential for Lower Spraberry development across our
acreage. Diamondback's production grew 166% in 2014 as compared to
2013, surpassing the approximately 150% growth experienced in 2013
and the high end of 2014 guidance, which we had revised upward
twice," said Travis Stice, Chief Executive Officer of
Diamondback.
A breakdown of Diamondback's quarterly production is shown in
the table below.
Diamondback Energy,
Inc. |
Selected Operating
Data |
(unaudited) |
|
|
|
|
|
|
|
|
Three Months
Ended December 31, |
Twelve Months
Ended December 31, |
|
|
2014 |
2013 |
2014 |
2013 |
|
Production Data: |
|
|
|
|
|
Oil (MBbl) |
1,785 |
760 |
5,382 |
2,023 |
|
Natural gas (MMcf) |
1,447 |
525 |
4,346 |
1,730 |
|
Natural gas liquids
(MBbls) |
341 |
112 |
1,002 |
361 |
|
Oil Equivalents (1)(2)
(MBOE) |
2,367 |
959 |
7,108 |
2,672 |
|
Average daily production(2)
(BOE/d) |
25,724 |
10,426 |
19,474 |
7,321 |
|
% Oil |
75% |
79% |
76% |
76% |
|
|
|
|
|
|
|
(1) Bbl equivalents are
calculated using a conversion rate of six Mcf per one Bbl. |
|
(2) The volumes presented are
based on actual results and are not calculated using the rounded
numbers in the table above. |
Production attributable to Viper's interests during Q4 2014 was
4.2 Mboe/d, an increase of 24% from 3.4 Mboe/d in Q3 2014. Full
year 2014 production was 3.04 Mboe/d, which was above the high end
of 2014 guidance of 2.5 to 3.0 Mboe/d.
A breakdown of Viper's quarterly production is shown in the
table below.
Viper Energy Partners
LP |
Selected Operating
Data |
(unaudited) |
|
|
|
|
|
|
Three Months Ended December
31, |
Twelve Months Ended December
31, |
|
|
2014 |
2014 |
|
Production Data: |
|
|
|
Oil (Bbls) |
302,867 |
856,541 |
|
Natural gas (Mcf) |
209,899 |
648,807 |
|
Natural gas liquids (Bbls) |
44,863 |
144,073 |
|
Oil Equivalents(1)(2)
(boe) |
382,713 |
1,108,749 |
|
Average daily production(2)
(boe/d) |
4,160 |
3,038 |
|
% Oil |
79% |
77% |
|
|
|
|
|
(1) Bbl equivalents are
calculated using a conversion rate of six Mcf per one Bbl. |
|
(2) The volumes presented are
based on actual results and are not calculated using the rounded
numbers in the table above. |
Severe winter weather in late December 2014 and early January
2015 caused substantial production interruptions throughout the
Permian Basin for area operators, including Diamondback. While the
impact was minimal in 2014, the Company is still quantifying the
2015 volumes that were shut-in due to a lack of oil marketing or
power.
OPERATIONS
- The Company continues to see strong Lower Spraberry results:
- The UL Tawny 812 Unit 1LS, the Company's first Lower Spraberry
well in Andrews County, has a 7,585 ft lateral, completed with 33
stages, achieving an average peak 30-day 2-stream initial
production ("IP") rate of 1,239 boe/d (92% oil) on electric
submersible pump ("ESP"), or approximately 163 boe/d per 1,000 feet
of lateral. The Company believes that this well, combined with the
Mabee Breedlove 2301LS in northwest Martin County, derisks the
Lower Spraberry in a large portion of northwest Martin County and
northeast Andrews County.
- The Estes B Unit 1602LS, the Company's first Lower Spraberry
well in Dawson County, just started producing oil prior to
encountering electricity issues related to the recent severe
weather in the Permian Basin. The Company expects to have results
on its fourth quarter 2014 earnings call.
- The Gridiron S002LS, which targeted the Lower Spraberry and was
part of the Company's first operated stacked lateral test with the
Gridiron S001WB, continues to show strong production, achieving an
average peak 30-day 2-stream IP rate of 1,517 boe/d (88% oil) on
ESP and an average peak 60-day 2-stream IP rate of 1,472 boe/d (87%
oil).
- The Company brought on six additional Lower Spraberry
completions in Spanish Trail late in the fourth quarter of 2014.
Early results from the six wells indicate an average 24-hr IP rate
of 1,326 boe/d (93% oil) per well from an average lateral length of
5,939 feet.
- The Gridiron S001WB, which targeted the Wolfcamp B, also
continues to show encouraging results. The well achieved an average
peak 30-day 2-stream IP rate of 1,373 boe/d (87% oil).
- The Company has brought on its first two Wolfcamp B wells on
its Martin County acreage that was acquired in February 2014. Early
results indicate performance similar to the Wolfcamp B in Spanish
Trail.
- As a reminder, Viper owns the minerals underlying Diamondback's
Spanish Trail acreage.
HORIZONTAL DRILLING
- The Company is currently running five horizontal rigs and one
vertical rig. The Company will release two of its horizontal rigs
and its remaining vertical rig in February.
- 19 wells were completed in the fourth quarter of 2014, bringing
the year to date total to 65 wells. Fourth quarter 2014 completions
consisted of 10 Lower Spraberry wells and 9 Wolfcamp B wells.
FULL YEAR 2015 GUIDANCE
Diamondback forecasts 2015 production to average between 26.0
and 28.0 Mboe/d, of which 4.2 to 4.5 Mboe/d is
attributable to Viper. The 2015 production guidance range for
Diamondback represents approximately 40% growth at the midpoint as
compared to 2014 production. Consistent with comments on the third
quarter 2014 earnings call, the Company plans to defer acceleration
and run three horizontal rigs starting in February when the Company
releases two of its horizontal rigs and its remaining vertical rig.
Two of the remaining rigs will operate at Spanish Trail, where
Viper owns the underlying minerals. The Company intends to drill
and complete 50 to 60 gross horizontal wells in 2015, which
represents more than a 30% reduction from 80 gross wells
drilled in 2014 at the midpoint. The Company anticipates that
service costs will recalibrate to the current commodity environment
and expects costs for a 7,500 foot lateral horizontal well to range
from $6.2 to $6.7 million. Consistent with a slower drilling
program, Diamondback's board has approved a 2015 capital
expenditures budget for drilling, completion and infrastructure in
an estimated range of $400 to $450 million, which represents more
than a 40% reduction from the initial plan to run eight
rigs.
Travis Stice commented, "Following a successful 2014 acquisition
campaign in which we increased acreage nearly 30%, we initially
anticipated running eight rigs. Given the current commodity
situation, we now intend to operate less than half of that in 2015,
consistent with our commitment to capital discipline and prudent
allocation of resources. Oil prices are now less than half of what
they were at the peak this past summer, and we believe service
costs should also decline from those highs. We are aggressively
pursuing cost reductions and anticipate an overall reduction of at
least 20%. Currently, we have seen approximately 10% in reductions
but frac spreads have been slow to respond due to the backlog of
completions. Assuming that WTI stays flat at $50 this year, we
continue to expect to become cash flow positive in the second half
of 2015 with total outstanding borrowings under our
credit facility of under $300 million."
Mr. Stice added, "Diamondback's focus this year is on capital
discipline, stockholder returns, and maintaining a strong balance
sheet. With our focus on returns, we will continue to drill where
returns are the highest. Diamondback remains committed to looking
for opportunities to expand its business through accretive
transactions, not only through acquisitions but also through 'drill
to earn' and other joint venture opportunities. However, we will
not do a dilutive deal simply to get larger. I believe that
Diamondback remains an attractive investment as a low cost producer
in the highest return basin."
Diamondback and Viper will release more details on guidance with
the announcement of earnings for the fourth quarter of 2014. As a
reminder, Viper has no capital expenditure requirements.
DERIVATIVES
Approximately 10,700 Bbls/d of Diamondback's 2015 production is
hedged with a combination of Brent, WTI, and LLS fixed price swaps
at an average of $88.14/Bbl.
Diamondback Energy,
Inc. |
Derivatives
Information |
(unaudited) |
|
|
|
The table below provides data
regarding the details of Diamondback's current price swap contracts
through 2015. |
|
|
|
|
Average Bbls |
Average |
Oil Swaps |
Per Day |
Price per Bbl |
2015 |
|
|
First Quarter-LLS |
6,344 |
$ 95.57 |
First Quarter-WTI |
5,000 |
$ 84.10 |
First Quarter-Brent |
1,000 |
$ 88.83 |
Second Quarter-LLS |
3,330 |
$ 91.89 |
Second Quarter-WTI |
5,000 |
$ 84.10 |
Second Quarter-Brent |
2,000 |
$ 88.78 |
Third Quarter-LLS |
3,000 |
$ 90.99 |
Third Quarter-WTI |
5,000 |
$ 84.10 |
Third Quarter-Brent |
2,000 |
$ 88.78 |
Fourth Quarter-LLS |
3,000 |
$ 90.99 |
Fourth Quarter-WTI |
5,000 |
$ 84.10 |
Fourth Quarter-Brent |
2,000 |
$ 88.78 |
2015 Average |
10,660 |
$ 88.14 |
CONFERENCE CALL
Diamondback Energy, Inc. and Viper Energy Partners LP will host
a joint conference call and webcast for investors and analysts to
discuss their plans for 2015 on Wednesday, January 14, 2015 at 7:30
a.m. CT. Participants should call (877) 440-7573 (United
States/Canada) or (253) 237-1144 (International) and utilize the
confirmation code 64169469. A telephonic replay will be available
for anyone unable to participate in the live call. To access the
replay, call (855) 859-2056 (United States/Canada) or (404)
537-3406 (International) and enter confirmation code 64169469. The
recording will be available from 10:30 a.m. CT on Wednesday,
January 14, 2015 through Monday, January 19, 2015 at 10:59 p.m. CT.
A live broadcast of the conference call will also be available via
the internet at www.diamondbackenergy.com under the "Investor
Relations" section of the site. The webcast will be archived on the
site.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas Company
headquartered in Midland, Texas focused on the acquisition,
development, exploration and exploitation of unconventional,
onshore oil and natural gas reserves in the Permian Basin in West
Texas. Diamondback's activities are primarily focused on the
horizontal exploitation of multiple intervals within the Wolfcamp,
Spraberry, Clearfork and Cline formations.
About Viper Energy Partners LP
Viper Energy Partners LP (Nasdaq:VNOM) is a limited partnership
formed by Diamondback Energy, Inc. (Nasdaq:FANG) to, among other
things, own, acquire and exploit oil and natural gas properties in
North America, with an initial focus on the Permian Basin.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the federal securities laws. All statements, other than
historical facts, that address activities that Diamondback or Viper
assume, plan, expect, believe, intend or anticipate (and other
similar expressions) will, should or may occur in the future are
forward-looking statements. The forward-looking statements are
based on management's current beliefs, based on currently available
information, as to the outcome and timing of future events. These
forward-looking statements involve certain risks and uncertainties
that could cause the results to differ materially from those
expected by the management of Diamondback and Viper. Information
concerning these risks and other factors can be found in
Diamondback's and Viper's filings with the Securities and Exchange
Commission, including their respective Forms 10-K, 10-Q and 8-K,
which can be obtained free of charge on the Securities and Exchange
Commission's web site at http://www.sec.gov. Diamondback and Viper
undertake no obligation to update or revise any forward-looking
statement.
CONTACT: Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com
Viper Energy (NASDAQ:VNOM)
Historical Stock Chart
From Jun 2024 to Jul 2024
Viper Energy (NASDAQ:VNOM)
Historical Stock Chart
From Jul 2023 to Jul 2024