Investors in the energy sector have been keenly eyeing the stock performance of Diamondback Energy for some time now. The company has been rising to the top of the energy stocks for the past few years and its growth has been impressive. The performance of Diamondback Energy has been largely attributed to its focus on oil and natural gas developments in the Wolfcamp and Spraberry areas of the Permian Basin in Texas.
The company has extensive portfolio of assets including, over 121,000 net acres in the Permian Basin, covering much of Reeves, Ward, Loving, and Winkler counties. This area has seen a tremendous increase in production over the past several years and Diamondback Energy is well poised to take advantage of this opportunity. The company’s drilling program for 2020 is expected to focus on mostly horizontal wells with an emphasis on Wolfcamp and Spraberry wells.
Diamondback’s management team has historically had a positive outlook for oil and gas prices in 2020.
In 2019, they raised their guidance for cash flow and production growth. This optimism is based on the company’s midstream infrastructure and its ability to monetize it quickly, allowing for additional cash flow and support for operations. The infrastructure allows Diamondback’s field operators to begin production of wells more quickly than some of its peers.
Diamondback Energy has also made a conscious effort to be fiscally responsible and has one of the lowest debt-to-equity ratios in its industry. This in turn could provide much needed stability in a sector that has seen a significant price crash over the past months.
Investors may be able to capitalize on the potential of Diamondback Energy if they believe in the company’s strategy and long-term outlook. The management team’s commitment to maintaining strong cash flows and conservative financial practices in 2020 could prove favorable to investors’ portfolios. Additionally, the company’s focus on the Wolfcamp and Spraberry areas may provide insight into upcoming trends in the energy sector and how Diamondback Energy may contribute to it.
