DiamondBack Energy Inc. on April 12 raised its full-year production outlook as the shale oil and gas producer accounted for its acquisition of rival QEP Resources and benefited from a recovery in crude prices.
Commodity prices are picking up as the global roll-out of vaccines against COVID-19 gains momentum, after a year where the health crisis decimated demand in the energy sector and hammered debt-laden shale companies.
Diamondback, which closed its $2.2 billion acquisition of Denver-based producer QEP Resources last month, said it expects 2021 net oil production of 360,000 to 370,000 boe/d, compared with its earlier estimate of 308,000 to 325,000 boe/d.
The Permian Basin producer also raised its 2021 capex forecast to between $1.6 billion and $1.75 billion versus its previous forecast of $1.35 billion to $1.55 billion.
Diamondback also predicted average production of 307,400 boe/d in the first quarter, compared with 299,000 boe/d in the previous quarter.
For the week ahead, Stratas Advisors expect prices to be range bound. Statements from the White House will likely dampen hopes of a U.S.-China trade deal but rumors out of OPEC are that an extension likely will lend support.
The home state of the Permian Basin, Texas, is also the anchor state for an expanding domestic refining industry.
Crude inventories rose by 2 million barrels in the week to Sept. 4 to 500.4 million barrels, according to an EIA report, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop.