U.S. oil and gas producer Diamondback Energy Inc. on Nov. 7 reported better-than-expected third-quarter profit, helped by a surge in crude prices due to tighter energy supplies following Russia’s invasion of Ukraine.
Energy companies are posting strong profits as crude and natural gas prices have soared following Western sanctions against major exporter Russia and OPEC+’s decision to tighten an already squeezed global supply. U.S. crude has risen nearly 20% so far this year.
Oil volumes for the quarter decreased to 224,300 bbl/d of oil, down from 239,800 bbl/d a year earlier.
Diamondback’s average unhedged realized price for oil, however, rose to $89.79/bbl in the reported quarter, up from $68.27/bbl a year earlier.
Last month, Diamondback said it will buy all leasehold interest and related assets of FireBird Energy LLC for $1.6 billion in cash and stock.
The deal was Diamondback’s biggest since its acquisition of QEP Resources and Guidon Operating in 2020 for a combined $3.2 billion, including debt, at a time when a pandemic-driven fallout in commodity prices spurred a wave of consolidation.
Diamondback raised its full-year net production guidance to 385,000-386,000 boe/d, to reflect the additional 7,400 boe/d the FireBird acquisition is expected to add. It also raised its capex for the year to $1.94 billion-$1.95 billion from $1.82 billion-$1.9 billion as a result of the acquisition.
The Midland, Texas-based company’s adjusted net income stood at $6.48 per share, beating average analysts’ estimate of $6.33.