Strong second half in 2016 transformed Diamondback Energy
In response to improved oil prices, Texas-based Diamondback Energy Inc. reported a 40 percent increase in production growth during the second half of 2016.
Headquartered in Midland, Diamondback’s fourth quarter 2016 production of 51,900 barrels of oil equivalent per day was a 16 percent increase over the previous quarter and a 38 percent increase from the same period a year ago.
“2016 was a transformational year for Diamondback with two halves of the year that could not have been more different,” said CEO Travis Stice during Diamondback’s fourth quarter report. “We reacted appropriately to the unprecedented decline in commodity price in the first half of the year by deferring completion activity and subsequently responded quickly with increased activity and asset acquisitions in the second half of the year.”
During the fourth quarter of 2016, Diamondback averaged five operated rigs, drilled 25 gross horizontal wells and completed 23 operated horizontal wells with an average of two completion crews.
In the Permian Basin, operated completions consisted of 14 Lower Spraberry wells, six Wolfcamp A wells, two Middle Spraberry wells and one Wolfcamp B well. In January 2017, Diamondback added a sixth operated horizontal rig to begin development on the company's previously acquired southern Delaware Basin acreage.
Diamondback anticipates closing its previously announced acquisition of leasehold interests and related assets from Brigham Resources at the end of February. Before the transaction close, the company plans to operate two additional rigs in the southern Delaware Basin.
“We are working diligently to close the second acquisition of a $2.4 billion purchase of the assets of Brigham Resources,” Stice said. “Upon the closing of this acquisition at the end of this month, Diamondback will have more than doubled our Tier 1 acreage and added our sixth and largest core operating area of 1 million-barrel EUR wells. Our confidence in the potential of this resource asset is based on more than 50 producing horizontal wells positioned across the acreage.”
According to Diamondback, it continues to decrease drilling times, lower costs and achieve new company records. During the fourth quarter of 2016, the company drilled an 8,200-foot lateral well in Glasscock County in less than nine days from spud to total depth, a new Diamondback record. The company also drilled a 13,500-foot lateral in Midland County in 20.3 days, also a Diamondback record.
Diamondback is increasing its pro forma full year 2017 production guidance to between 69 and 76 Mboe/d, the midpoint of which is up more than 65 percent from 2016 average daily production. The company expects to complete 130 to 165 gross wells with an average lateral length of approximately 8,500 feet.
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