Permian Basin-focused shale producer Diamondback Energy Inc. topped market expectations for quarterly profit on May 3 as COVID-19 vaccine rollouts and easing travel restrictions boosted oil prices.
A 27% surge in crude prices this year has lifted earnings of U.S. oil firms after the pandemic led to one of the worst downturns in the sector’s history.
Midland, Texas-based Diamondback’s average price for its oil and gas, excluding hedges, rose 54.5% sequentially in the first quarter to $42.36 per boe.
The company posted quarterly production of 307,422 boe/d, 2.8% higher than the previous quarter.
Diamondback also said on May 3 it would sell its Williston Basin assets in North Dakota and Montana for about $745 million and some Southern Midland Basin acreage for $87 million without disclosing the buyer.
The company had previously signaled that it could sell the Williston operations, which it had acquired in its $2.2 billion acquisition of Denver-based rival QEP Resources in March.
Oasis Petroleum Inc. said in a separate statement it would buy the Williston assets from Diamondback.
The asset sales promoted Diamondback to trim its full-year production forecast to between 350,000 boe/d and 360,000 boe/d, from 360,000 boe/d to 370,000 boe/d previously.
Adjusted net income attributable to the company came in at $379 million, or $2.30 per share, for the three months ended March 31, compared with $130 million, or 82 cents per share, in the fourth quarter.
Analysts were expecting a figure of $1.80 per share, according to Refinitiv IBES data.
In his appointment, Bernie G. Wolford Jr. succeeds Marc Edwards, Diamond Offshore’s former chairman, president and CEO who retired from the company following its emergence from Chapter 11 bankruptcy last month.
In connection with its emergence from Chapter 11, Diamond Offshore also announced that Marc Edwards has retired as chairman, president and CEO, effective immediately.
The companies that operate offshore drilling rigs for major oil producers face a second wave of bankruptcies in four years amid a historic drop in energy prices that likely will leave surviving drillers more closely tied to big oil firms.