Diamondback Energy to Return 50% of Free Cash Flow to Shareholders

The follow-through by Diamondback Energy’s commitment of returning 50% of free cash flow to equity holders should drive the name higher, according to analysts with Tudor, Pickering, Holt & Co.

Hart Energy Staff

Diamondback Energy Inc. will return 50% of the free cash flow (FCF) it generates to stockholders by the fourth quarter, accelerating previously announced plans which analysts believe will likely boost the Permian Basin operator’s stock.

“Diamondback is accelerating its previously announced capital return program due to continued strong operational performance and improved capital efficiency, a supportive macro backdrop and increasing financial strength,” commented Diamondback CEO Travis Stice in a company release announcing the move on Sept. 16.

To complement the acceleration of its capital return program, Diamondback also said Sept. 16 it had initiated a share repurchase program for the company to acquire up to $2 billion of its common stock, effective immediately.

Already have an account? Log In

Sign up for FREE access to view this article now!

Unlock Free Access