Diamondback Energy has raised its dividend and increased its full-year oil production forecast after reporting stronger third-quarter earnings and generating more than $2.1 billion in free cash flow from its Permian Basin operations.
The Midland, Texas-based oil and gas producer reported net income attributable to the company of $1.6 billion, or $5.69 per diluted share, for the third quarter of 2026. That compares with $1.02 billion, or $3.51 per share, in the same period last year.
Total revenue climbed to $5.43 billion from $3.92 billion a year earlier, while adjusted net income reached $1.65 billion, equivalent to $5.86 per diluted share.
Diamondback generated $2.6 billion in operating cash flow during the quarter and reported $2.15 billion in free cash flow, a non-GAAP measure calculated using operating cash flow before working capital changes.
The company increased its quarterly base dividend by 7.3% to $1.18 per share, bringing its annualized payout to $4.72 per share, an 18% increase from a year earlier.
Diamondback also repurchased approximately 1.35 million shares for $251 million during the quarter, bringing total capital returned to shareholders to $582 million.
Diamondback raised its full-year oil production guidance to approximately 524,000 barrels per day (bpd), up from its previous forecast of more than 522,000 bpd.
The company also increased its total production outlook to approximately 1.015 million barrels of oil equivalent per day (boe/d), compared with its earlier guidance of more than 1 million boe/d.
Average third-quarter oil production reached approximately 525,000 bpd, compared with 503,750 bpd a year earlier. Total production averaged 1.034 million boe/d, up from approximately 943,000 boe/d in the third quarter of 2025.
Diamondback drilled 105 gross wells and completed 135 gross wells during the quarter, with operations concentrated in the Midland Basin.
The company now expects full-year capital expenditures of $3.95 billion to $4 billion, up from approximately $3.9 billion previously. Fourth-quarter spending is forecast at between $1 billion and $1.05 billion.
For the final quarter of 2026, Diamondback expects oil production of between 518,000 and 528,000 bpd.
The improved earnings came despite a decline in realized oil prices from the previous quarter.
Diamondback received an average of $87.30 per barrel of oil during the third quarter, down from $96.82 in the second quarter but substantially above the $64.60 realized a year earlier.
Average cash operating costs were $10.91 per boe, compared with $10.96 in the previous quarter.
Diamondback also continued reducing its standalone debt. Its net debt, excluding that of Viper Energy, declined to approximately $10.42 billion at the end of September from $10.69 billion at the end of June.
The company separately acquired a 7.5% equity interest in the Solitude Pipeline System, a natural gas pipeline connecting the Permian Basin with Katy, Texas.
The investment adds exposure to natural gas transportation infrastructure as Diamondback continues expanding its operations in one of the United States’ most important oil-producing regions.
With production guidance moving higher and substantial cash flow supporting dividends and buybacks, Diamondback’s third-quarter results underscore the company’s ability to generate shareholder returns while maintaining its investment in Permian Basin development.
By Charles Kennedy for Oilprice.com
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Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
