Permian Basin shale producer Diamondback Energy Inc (FANG.O) surpassed market expectations for quarterly profit on Monday as the rollout of the COVID-19 vaccine and easing travel restrictions pushed oil prices higher.
A 27% rise in crude oil prices this year boosted profits for U.S. oil companies after the pandemic led to one of the worst recessions in the industry’s history.
Midland, Texas-based Diamondback, Texas-based average oil and gas prices, excluding hedging, rose 54.5% sequentially in the first quarter to $ 42.36 per barrel of oil equivalent.
The company’s quarterly production was 307,422 barrels of oil equivalent per day (boe per day), up 2.8% from the previous quarter.
Diamondback also said Monday it would sell its Williston Basin assets in North Dakota and Montana for approximately $ 745 million and several properties in the South Midlands Basin for $ 87 million, without disclosing a buyer.
He had previously indicated he could sell Williston’s businesses, which he acquired in March in a $ 2.2 billion acquisition of Denver-based QEP Resources.
Oasis Petroleum Inc (OAS.O) said in a separate statement that it will buy Williston’s assets from Diamondback.
The asset sale pushed Diamondback to cut its annual production forecast to 350,000 to 360,000 barrels of oil equivalent per day from 360,000 to 370,000 barrels of oil equivalent per day earlier.
Adjusted net income attributable to the company was $ 379 million, or $ 2.30 per share, for the three months ended March 31, compared to $ 130 million, or 82 cents per share, in the fourth quarter.
According to Refinitiv IBES, analysts had expected the share price to be $ 1.80.
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