Diamondback Energy Is One To Keep An Eye On Should Crude Oil Price Strengthen

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Roth Capital Partners analyst, John White, believes that Diamondback Energy Inc
FANG
is one stock that investors should keep an eye on especially should the crude oil price get strengthened. The analyst changed the rating to Hold on the shares of the company. However, it retained the price target of $85.00 on the stock. The comments come on the heels of a strong quarter. White said, "Our net asset value and target price are based on proved and probable reserves, financial position, and historical and expected drilling and completion results. Successful development drilling during 2015-2016 has, in our view, de- risked large portions of FANG's acreage positions. Our target price remains $85 however, with Friday's close of $85.46 our rating is changed to Neutral. Consistent with management's previously stated focus on returns to stockholders, and due to drastically lower crude oil prices in 1Q 2016, returns were lower and thus, FANG slowed activity accordingly. FANG completed fewer horizontal wells during 1Q 2016 than in any quarter since the first half of 2013." He cited the recent enhancement in the crude oil prices and said that Diamondback Energy would retain its third operated horizontal rig apart from adding a second dedicated completion crew to complete its back of close to 30 wells waiting on completion. White said that "In turn, FANG is increasing the mid-point of its 2016 production guidance to from 35,000 BOE per day to 36,000 BOE per day. Additionally, FANG stands ready, should crude oil prices strengthen further add a fourth horizontal rig early in the third quarter of 2016." Roth Capital Partners thinks that FANG continued to put up impressive operating results. He pointed out that FANG has lowered its full year 2016 LOE guidance range to $5.50/BOE to $6.50/BOE from a prior range of $6.00/BOE to $7.00/BOE. The brokerage said that its estimates for EBITDA/CFPS/Operating EPS improve slightly to "$39.3 million/$0.51/$(0.13)" for the second quarter "from $38.6 million/$$0.45/$(0.14)." Shares of the company closed Friday's trading at $85.46.
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