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2Q 2017 Earnings Update – Diamondback Energy, Inc.

Diamondback Energy, Inc. · Aug 1, 2017 · 29 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 1
    Investor Presentation August 2017 1
  2. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 2
    Diamondback Q2 2017 Highlights Increased production 25% q/q to 77.0 Mboe/d (15% quarterly organic production growth) Raising full year production guidance by 5% while reducing guidance for full year CAPEX by 3%, LOE by 19% and cash…
  3. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 3
    Diamondback Energy: Leading Pure-play Permian Operator Permian pure-play with 191,000 net acres Diamondback Acreage Map Six core areas with 1,000 Mboe+ EURs in multiple intervals Significant resource upside from zone delineation and…
  4. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 4
    Inventory Strength Promotes Years of Economic Growth Diamondbacks strategy has not changed: Well positioned to increase or decrease activity as cash flow dictates Relentless focus on cost control and full-cycle economics More than…
  5. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 5
    Leading Track Record of Accretive Acquisitions and Execution Combination of best in class efficiency and accretive acquisitions of Tier 1 assets has consistently driven shareholder value 6,000 Southern Delaware 90,000 2.55 billion…
  6. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 6
    1. Delaware Basin Update 7
  7. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 7
    Southern Delaware Basin Execution Delaware Basin Well Performance Infrastructure: IP30 WELL COUNTY TARGET LATERAL (Boe/d / 1k) Maximizing netbacks by building / upgrading: STATE MCGARY 16-1H Pecos U WCA 4,799 219 (85% oil) Oil…
  8. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 8
    Southern Delaware Well Results Continue to Impress EUR Data (MBOE) Frac…
  9. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 9
    Southern Delaware Basin Wolfcamp A Update 2017 Development Activity - Production Normalized to 7,500' 280,000 Central Type Log and Landing Targets Sabine 10S-2 1H (LWR WCA) 260,000 OATES 10N-2 1H (LWR WCA) FANG 240,000 NEAL LETHCO…
  10. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 10
    Wolfcamp A Targeting in ReWard vs. Pecos County Recent geoscience efforts have resulted in high-graded landing zones and improved in-zone steering while drilling Results in Pecos County suggest stack and stagger approach; offers better…
  11. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 11
    New Bone Spring Target in Pecos County Kelley State Type Log and Landing Target Kelley State 22-1H (Upper Second Bone Spring) Kelley State 22-2H (Lower Second Bone Spring) Oil-In-Place 2nd & 3rd BSPG OOIP FANG 95 MMbbls/sec.…
  12. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 12
    13 2. Midland Basin & Operations Update 13
  13. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 13
    Midland Basin: Continued Best in Class Execution Currently running six rigs: Andrews County LS Performance Normalized to 7,500 (Mbo) 3 in Midland / SW Martin counties 500 inter-lateral spacing test in Andrews County performing…
  14. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 14
    Howard County Results Continue to Improve Successful completion optimization; significant Howard County Wolfcamp A Well Performance improvement from first operated pad 12 months ago IP30 WELL LATERAL IP30(1) (Boe/d / 1k) Optimized…
  15. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 15
    Capital and Operating Cost Control Fundamental to Strategy Estimated 1H 2017 cost per completed lateral foot of 683; current estimated Midland Basin well costs of 225 to 250 per foot for drilling and 350 to 400 per foot for completion…
  16. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 16
    Strong Margins and Value Creation Operating Expenses Below Peer Average (/boe)(1) Diamondback Q1 2017 Cash Margins Led Peers(2) NetPeers Debt to Annualized Q2 2017 EBITDA(3) FY2015 Peers FY2015 FANG 15.47 32.62 Peer Avg: 1.7x…
  17. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 17
    Efficiently Converting Resource Into Cash Flow Well productivity and low cost operations promote timely payback At 50/Bbl NYMEX oil prices, cash flow from 7,500 ft. Midland County Lower Spraberry and Southern Delaware Basin Wolfcamp A…
  18. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 18
    Current Hedge Summary Crude Oil (Bbls/day, /Bbl) Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2019 14,000 14,000 22,000 20,000 16,000 16,000 2,000 Swaps 53.43 53.37 51.42 50.92 50.07 50.12 49.65 24,000 24,000 15,000 15,000…
  19. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 19
    Liquidity Strength Creates Capital Flexibility Net Debt to Q2 2017 Annualized Adjusted FANGs Liquidity and Capitalization EBITDA of 1.3x(2); continue to target leverage FANG's Consolidated Capitalization 6/30/2017 below 2.0x (MM)…
  20. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 20
    Updated 2017 Guidance Increasing full year production guidance by Diamondback Viper Energy Energy, Inc. Partners LP 5% from prior midpoint to 74 78 Mboe/d Net Production Mboe/d 74.0 78.0 10.0 11.0 while reducing CAPEX guidance (from…
  21. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 21
    Viper Update Q2 2017 production up 23% and cash operating costs down 15% from Q1 2017; cash distribution of 0.332 per unit, up 76% over Q2 2016 and the highest in Vipers history Variable Rate MLP structure: 100% of all available cash…
  22. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 22
    Rate of Return Driven Strategy Significant Resource Potential Conservative Financial Management Strategic Acquisitions Efficient Conversion of Resource to Cash Flow 23
  23. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 23
    APPENDIX 24
  24. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 24
    High Growth, Oil Weighted Reserves 2016 total proved reserves increased 31% y/y Total Reserves Growth (MMboe) (1) to 205.5 MMboe FANG Standalone VNOM FANG standalone reserves increased 33% y/y to 205.5 174.0 MMboe 156.9 31.4 58%…
  25. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 25
    Conservatively Spaced, Balanced Inventory in Midland and Delaware Basins Inventory reflects conservative spacing assumptions; continue to test downspacing and monitor industry activity 85% of horizontal well locations have lateral…
  26. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 26
    Focus on the Most Economic Plays Reduces Commodity Risk Oil Breakevens by Basin (30% BTAX IRR)(1) Diamondback Core 71.89 66.90 66.36 Permian 61.16 60.33 Development Areas 58.11 57.30 55.50 55.12 55.04 75…
  27. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 27
    Southern Delaware Reservoir Quality: Basin Axis, Thickness, Overpressure, High Oil Cut Wolfcamp A Structure Map (SSTVD) Wolfcamp A Shale Isopach Map Acreage located in Southern Delaware Basin, along the structural axis Wolfcamp A…
  28. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 28
    Pecos County Compares Favorably to Midland Basin and Reeves Co. 1 Brigham Type Log 2 ReWard Type Log(1) 3 Spanish Trail Type Log Avalon Shale Avalon Shale Lower Clearfork Shale Upper 1st Bone Spring 2,150 of hydrocarbon…
  29. 2Q 2017 Earnings Update – Diamondback Energy, Inc. – slide 29
    Diamondback Energy Corporate Headquarters Adam Lawlis, Director, Investor Relations 500 West Texas Ave., Suite 1200 (432) 221-7400 Midland, TX 79701 irdiamondbackenergy.com www.diamondbackenergy.com 30

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