Diamondback Energy continues to grow Permian production

By Patrick C. Miller | November 14, 2017

During the third quarter of 2017, Diamondback Energy—an independent oil and gas company in Midland, Texas—reported a 10 percent production increase over the previous quarter and an 89 percent increase over the previous year.

CEO Travis Stice said the Permian pure play producer has grown production more than 175 percent for the past 11 quarters while operating within its cash flow. For the past quarter, Diamondback reported net income of $73 million. The company expects to turn 35 to 40 wells to production during the fourth quarter.

"Diamondback continues to confirm the productive capacity of its southern Delaware assets through strong extended well performance, while continuing to grow production in the Midland Basin at peer-leading capital efficiency,” Stice said. “We expect to add our tenth operated rig in the coming weeks, and as we look into 2018, our strategy has not changed in that we expect to match our capital budget to our projected operating cash flow."

Diamondback's third quarter production was 85,000 barrels of oil equivalent per day, up from nearly 45,000 boepd a year ago and 77,000 boepd in the second quarter of 2017. During the last quarter, Diamondback drilled 42 horizontal wells and turned 24 operated horizontal wells to production.

The average completed lateral length for third quarter wells was 9,603 feet, up from 7,716 feet in the second quarter. Operated completions during the third quarter consisted of 10 Wolfcamp A wells, seven Lower Spraberry wells, six Wolfcamp B wells, and one Middle Spraberry well. The company operated nine rigs throughout the quarter and recently added its fourth dedicated frack spread.

As of Sept. 30, Diamondback drilled 106 gross horizontal wells year to date, with 85 gross operated horizontal wells turned to production over the same period. The company plans to add a tenth rig to the Midland Basin in the coming weeks, and maintain this cadence until year end. As a result, Diamondback expects to turn between 35 and 40 gross operated horizontal wells to production during the fourth quarter and 120 to 125 operated horizontal wells for the full year 2017.