Here's Why Diamondback Energy Could See 38% Production Growth Next Year

Canaccord Genuity said in a research note on Tuesday that it sees 38 percent production growth for
Diamondback Energy Inc FANG
in 2017 to 58.4 million barrels per of oil equivalents per day, or MBoe/day, which is at the high end of the company's guidance range. The firm premised the expectation on having six rigs, one higher than its earlier estimate.

Analyst Sam Burwell noted that the company plans to add the fifth rig in Midlands in the coming week and its sixth in Delaware early next year. The company had estimated WTI prices of $45 for meeting the capital expenditure and had indicated that at current strip prices, it would not outspend cash low next year.

Related Link: Russia Wants To Freeze Oil Output...At Its Historical High Level

Canaccord noted that the company's third-quarter volumes were very strong at 44.9 MBoe/day and it raised its 2016 production guidance to show sequential growth in the fourth quarter. Preliminary 2017 guidance was also above consensus and nearly topped the firm's very optimistic estimate, it noted.

Given the impressive guidance, the firm said the company continues to be one of the top performers in the Permian. According to the firm, the growth was made possible by a depth of quality inventory, top-tier corporate level capital efficiency and a sterling balance sheet.

Canaccord has a Buy rating on the shares of the company, while it raised its price target to $116 from $103.

At time of writing, Diamondback Energy shares were up 0.14 percent at $105.36.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorLong IdeasNewsGuidancePrice TargetCommoditiesPreviewsReiterationMarketsAnalyst RatingsTrading IdeasReviewsCanaccord GenuitycrudeCrude OilOiloil pricesoil rigSam BurwellWTI
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...