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2Q 2018 Earnings Presentation – Diamondback Energy, Inc.

Diamondback Energy, Inc. · Aug 9, 2018 · 37 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 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 1
    Investor Presentation August 2018 1
  2. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 2
    Diamondback Energy: Leading Pure-play Permian Operator Permian pure-play with 230,000 pro forma net acres Diamondback Pro Forma Acreage Map Six core areas with 1,000 Mboe+ EURs in multiple intervals normalized to 7,500 feet 4,700…
  3. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 3
    Diamondback: Investment Highlights Q2 2018 production of 112.6 Mboe/d (73% oil), up 10% q/q and 46% year over year Realized cash margins of over 82% in Q2 2018 Q2 Highlights Q2 annualized ROACE of 16.5%, up over 70% year over year…
  4. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 4
    Second Quarter Execution and 2018 Activity Overview Year Over Year Execution 2018 Production and Activity Outlook Q2 2017 Q1 2018 Q2 2018 102,607 112,592 Targeting 45% y/y production growth within cash flow 76,977 Daily Production…
  5. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 5
    Acquisition Track Record and Subsequent Per Share Value Creation Q1 2015 Q2 2015 Q3 2015 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2…
  6. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 6
    1. Ajax Acquisition 7
  7. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 7
    Expanding Permian Footprint with Acquisition of Ajax Resources Acquisition Overview: Pro Forma Martin / Andrews Acreage Map 900MM cash consideration and 2.58MM FANG shares 25,493 net acres (21,000 in Martin / Andrews counties)…
  8. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 8
    Prolific Well Results Across Three Proven Zones 1 2 3 x UL Comanche Unit A4144 2 Vineyard Hz B Unit 0601WA Vineyard Hz O Unit 1701WA UL MS Hz Blk 6 Unit 4106 EXL Petroleum Ajax Resources Ajax Resources EnergyQuest II IP30/1k: 190…
  9. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 9
    Expanding Core Inventory in the Northern Midland Basin NW Martin / Andrews Inventory Expansion Pro Forma Gross Locations Across Core Areas Gross Locations Ajax Acquisition Average Lateral 1,000 8,734' 9,000' Glasscock 8% 800 NW…
  10. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 10
    Ajax Acquisition : Lower Spraberry Performance 88 net potential locations with an Martin / Andrews LS Performance Normalized to 10,000 (Mbo) average lateral length of 9,600 feet 400 Assumes 660 spacing with upside from 350…
  11. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 11
    Ajax Acquisition: Middle Spraberry Performance 95 net potential locations with an Martin / Andrews MS Performance Normalized to 10,000 (Mbo) average lateral length of 9,200 feet 400 UL MUSTANG 13 4 350 Prior well results imply…
  12. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 12
    Ajax Acquisition: Wolfcamp A Performance 88 net potential locations with an Martin / Andrews WCA Performance Normalized to 10,000 (Mbo) average lateral length of 9,600 feet 400 350 Recent completions imply robust Cumulative…
  13. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 13
    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 Ajax 7,000 1.25 billion 125,000 6,000…
  14. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 14
    2. Marketing and Midstream Update 15
  15. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 15
    Out of Basin Oil Takeaway Strategy Update Downstream Firm Transportation: 2H 2018: FT agreements cover majority of gross production at fixed discounts to Gulf Coast pricing Remainder on term sales priced at Midland market At current…
  16. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 16
    In Basin Oil Takeaway Position Over 92% of current oil production on pipe; continuing to increase Gatherer: Reliance Volume-weighted average transport cost to Midland market: 1.00 - 1.25/Bbl (ex-Rattler) Firm to Midland market on…
  17. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 17
    Gas Takeaway Position Gatherer: EnLink Pipelines: Primary gatherers (% of production): EPNG, Oasis, ONEOK EnLink 40% Targa 25% WTG 15% Gatherer: WTG Brazos / EagleClaw 20% Gatherers: Pipelines: Various EnLink, WTG Pipelines:…
  18. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 18
    Build-out of Midstream Assets Through Rattler Midstream Rattler Midstream: Rattler Midstream Asset Map Wholly-owned midstream subsidiary created by Diamondback Martin / Andrews: Fresh Water Interests fully aligned with upstream…
  19. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 19
    Rattler Infrastructure Investment: Pecos County Oil: gathering system in service SWD Capacity: 225,000 bpd across nine wells, 325,000 bpd by YE 2018 across 13 wells; ability to flow barrels throughout leasehold Gas: low pressure…
  20. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 20
    Rattler Infrastructure Investment: ReWard Oil: gathering system in service SWD Capacity: 57,000 bpd across three wells, moving to 82,000 bpd by YE 2018 Gas: gathering system complete, owned and operated by EagleClaw Fresh Water: line…
  21. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 21
    3. Operations and Financial Update 22
  22. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 22
    Corporate Level Full-Cycle Economics and Returns Matter Diamondbacks cost structure and disciplined approach to investment facilitates greater per share EBITDA and earnings growth, and is reflected in an industry-leading ROACE Return…
  23. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 23
    Capital Discipline Creates Long-Term Value Growth within cash flow aligns Company strategy with shareholder interests; no growth for growths sake Dividend initiated to begin return of capital, rewarding shareholders for support of…
  24. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 24
    Multi-Year Growth Within Cash Flow FANG has a track record of achieving robust production growth while spending within cash flow Cumulative cash flow has more than offset D,C&E and Infrastructure spending since the beginning of 2015…
  25. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 25
    Balanced, Capital Efficient Development Completed Lateral Footage by Quarter Completed Lateral Footage Average Lateral Length per Well 12,000 500,000 464,995 450,000 10,000 383,458 400,000 350,000 Completed Lateral…
  26. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 26
    Southern Delaware Basin Wolfcamp A Update Southern Delaware WCA Performance Normalized to 7,500 (Mbo) Central Type Log and Landing Targets 200 FANG Primary 175 Targets CUM OIL PRODUCTION, MBBL 150 U WC A 125 1,100 MBOE…
  27. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 27
    Current Hedge Summary Crude Oil (Bbls/day, /Bbl)(1) Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 27,000 26,000 7,000 4,000 4,000 3,000 Swaps - WTI 51.27 51.27 55.29 51.86 51.59 49.82 5,000 5,000 Swaps - MEH 69.64 68.17…
  28. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 28
    Liquidity Strength Creates Capital Flexibility Net Debt to Q2 2018 Annualized Adjusted EBITDA of FANGs Liquidity and Capitalization 1.3x(1); continue to target leverage below 2.0x FANG's Consolidated Capitalization 6/30/2018 (MM) FANG…
  29. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 29
    2018 Guidance Diamondback Viper Energy Targeting annual production growth of over Energy, Inc. Partners LP 45% in 2018 Net Production Mboe/d 115.0 119.0 16.5 17.0 2018 D,C&E CAPEX budget of 1,225 1,300 Oil Production (% of Net 73%…
  30. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 30
    Return On and Return Of Capital Significant Resource Potential Conservative Financial Management Strategic Acquisitions Efficient Conversion of Resource to Cash Flow 31
  31. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 31
    APPENDIX 32
  32. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 32
    Peer-Leading Cash Margins and Operating Costs Q2 2018 Cash Margins Versus Extended Peer Group (/Boe)(1) 90% % of Realized Price (/Boe) Cash Margin (/Boe) 50 Cash Margin (% of Realized /Boe) 82% 80% 78% 78% 80% 75% 75% 74% 40…
  33. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 33
    Conservatively Spaced, Balanced Inventory Across Zones Gross Midland Basin Locations By Zone / Lateral(1) Gross Delaware Basin Locations By Zone / Lateral 5,000'+ 7,500'+ 10,000'+ Total Avg. Lateral 5,000'+ 7,500'+ 10,000'+ Total Avg.…
  34. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 34
    Viper Update Q2 2018 cash distribution of 0.600 per unit, up 81% over Q2 2017 and the highest in Vipers history Recently completed tax status election change to a taxable entity; effective May 10, 2018 Focused on mineral acquisitions…
  35. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 35
    Limelight Prospect Emerging Mississippian Oil Potential Diamondback Limelight Acreage Map Limelight Type Log Atoka-Bend Early geologic Springer assessments indicate Seal the target to be a Limelight significant oil source…
  36. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 36
    High Growth, Oil Weighted Reserves Total Reserves Growth (MMboe) (1) FANG Standalone VNOM 2017 total proved reserves increased 63% y/y 335.4 to 335.4 MMboe 38.2 FANG standalone reserves increased 71% y/y to 205.5 297.1 MMboe…
  37. 2Q 2018 Earnings Presentation – Diamondback Energy, Inc. – slide 37
    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 38

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