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Diamondback Energy, Inc. Announces Third Quarter 2013 Financial And Operating Results

MIDLAND, Texas, Nov. 4, 2013 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (Nasdaq:FANG) ("Diamondback" or the "Company") today announced financial and operating results for the third quarter ended September 30, 2013.

During the third quarter of 2013, net income was $14.6 million, or $0.33 per diluted share. Net income for the third quarter includes a non-cash loss on commodity derivatives of $1.7 million ($1.0 million net of tax), or $0.02 per diluted share. Without the impact of this item, net income for the third quarter of 2013 would have been $15.6 million, or $0.35 per diluted share.

HIGHLIGHTS

  • The Company's first horizontal Middle Spraberry test well, the Sarah Ann 3814H, a non-operated well in Midland County, had a peak 24 hour initial production ("IP") rate of 733 Boe/d (90% oil) on electric submersible pump. The well was completed with a 16 stage 5,041' lateral. Early oil production rates are comparable to Wolfcamp B rates. This Middle Spraberry test defines a new horizontal bench that has meaningfully increased the Company's identified potential horizontal drilling Spraberry locations to 360 gross (276 net) from 181 gross (139 net).  
  • The ST S 501H well in Midland County, with a 36 stage 8,926' lateral, achieved a peak naturally flowing 24 hour IP rate of 1,033 Boe/d (90% oil). This well has flowed for 38 days, which is encouraging since the natural flowback period is longer than any horizontal well Diamondback has completed to date. Diamondback typically experiences a significant increase in IP rates from artificial lift.   
  • The ST NW 3602H well in Midland County, with a 21 stage 5,020' lateral, achieved a peak 24 hour IP rate of 1,069 Boe/d (94% oil). This well is currently on gas lift.  
  • The ST NW 3603H well in Midland County, with a 21 stage 5,105' lateral, achieved a peak 24 hour IP rate of 934 Boe/d (89% oil). This well is currently on gas lift.   
  • The ST 4105H and ST 4106H wells, drilled from the Company's first two well pad, were completed with a total drilling and completion cost for both wells in the range of $10.5 million to $11.0 million.  These wells were completed using the "zipper" frac technique with no operational issues. The ST 4105H well was completed with a 5,041' lateral length and 22 stages while the ST 4106H well was completed with a 4,801' lateral length and 21 stages. Flowback operations on both wells are underway.  
  • Continued progress lowering lease operating expense ("LOE") by 21% to $7.27/Boe during the third quarter of 2013 from $9.16/Boe in the second quarter of 2013 (after giving effect to the reclassification described in notes (a) and (b) in the guidance table below).  
  • EBITDA (as defined below) was $47.7 million.

"I'm proud of the quarterly results as we again demonstrated our ability to reduce total well costs, reduce drilling cycle time, reduce our operating expenses, and continue our production ramp. Our cash margins during the third quarter were almost $70/boe and I believe we are delivering results and returns to our stockholders that are among the best in the Midland Basin. We are extremely excited about the early results from a test in the Middle Spraberry zone in Midland County as a non-operated partner furthering our belief that multiple shale benches are viable development horizons. These results have meaningfully increased our identified potential Spraberry horizontal drilling locations from 181 gross locations to 360 gross locations.  Finally, our first 9,000 foot lateral was drilled and completed in Midland County for $8.5 million and has the potential to be the best horizontal well to date for Diamondback once placed on artificial lift. We have now drilled over 200,000 feet of horizontal laterals and remain encouraged by the success of our development program. Our average production from these wells is performing at or above the type curve we predicted," stated Travis Stice, Chief Executive Officer of Diamondback. 

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