Diamondback Energy Warns of Lower Q3 Oil and Gas Prices
(Reuters) — Diamondback Energy on Thursday signaled lower prices for its third-quarter oil and gas production, making it the third U.S. shale producer to do so in just a week.
Oil prices declined in the July-September quarter due to concerns about global oil demand growth.
Meanwhile, U.S. natural gas prices have collapsed to multi-year lows in 2024, with prices in the Waha hub NG-WAH-WTX-SNL in West Texas turning negative a record number of times.
Diamondback said average hedged realized prices for the third-quarter oil production were $72.32 per barrel, down from $78.55 in the second quarter.
The company realized 60 cents per thousand cubic feet (Mcf) of natural gas sales after hedging in the three months ended Sept. 30, compared with $1.03 per Mcf in the April-June period.
However, it realized a loss of 26 cents Mcf of unhedged natural gas sales during the third quarter.
Diamondback's warning comes just a day after Occidental Petroleum flagged lower prices for its production. Industry bellwether Exxon Mobil warned last week that it could take a hit of up to $1 billion to its upstream profits.
The company reported a non-cash gain of $135 million from derivatives during the third quarter, compared with a non-cash gain of $46 million in the prior quarter.
Earlier this month, Diamondback had raised its third-quarter production forecast to reflect the $26 billion acquisition of Endeavor Energy.
It expects to produce between 565,000 to 569,000 barrels of oil equivalent per day in the quarter.
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