Shale producer Diamondback Energy on Monday topped Wall Street estimates and said it would cut 10 percent to 15 percent of expected May oil output, as it battles an unprecedented slump in oil prices and a global supply glut.
The Texas-based company also maintained its cash dividend of $0.375 per common share for the first quarter, which was raised in the previous quarter, at a time when its peers are cutting or suspending dividends to shore up their cash reserves.
Diamondback was one of the first shale producers to announce it was scaling back activity and cutting its annual budget after oil prices slumped due to a month-long feud between top producers Saudi Arabia and Russia and compounded by the COVID-19 pandemic.
The company has since cut its budget by $1.2 billion at the midpoint to between $1.5 billion and $1.9 billion. It now plans to produce about 295,000 to 310,000 barrels of oil equivalent per day (boepd) for 2020, down 4.7 percent from the midpoint of its previous forecast.
“Diamondback is prepared to operate in a lower-for-longer oil price environment, and our cost structure will prove to be a differentiator through this downturn,” Chief Executive Officer Travis Stice said in a statement.
Diamondback’s first quarter average production jumped to 321,057 barrels of oil equivalent per day (boepd) from 262,633 boepd a year earlier.
The jump in output drove the company to report an adjusted profit beat of $1.45 per share, beating analysts’ average estimates of $1.29 per share, according to IBES data from Refinitiv.
Net loss attributable to the company was $272 million, or $1.72 per share, in the quarter ended March 31, compared with a profit of $10 million, or 6 cents per share, a year earlier.