Diamondback claims it is the 'consolidator' of choice in Permian as oil outlooks dim.

Diamondback Energy, a shale driller, said Tuesday that it should be the "consolidator" of choice in the Permian Basin as shale activities slow and the company concentrates on shareholder returns after its $26 billion merger.

In a call following earnings, a senior executive of the company said: "We should be the consolidation of choice because we are executing a better and lower-cost overall development strategy."

"Until someone can prove that they can do it more efficiently than we can, we should be your consolidator of first choice."

Diamondback shares dropped 3.6% in the morning to $142.67 after it reported a second-quarter loss below analyst's estimates. The company was hit by a 20% drop in Brent crude oil prices year-on-year amid weak global economic growth, OPEC+ production increases, and geopolitical tensions.

Midland, Texas based company, said that it is still focused on reducing its debt and share count by 2025. It may also lean more towards buybacks, if the market conditions deteriorate.

The company stated that it was difficult to be bullish about oil. They added that shale oil producers are increasingly running scenarios on $50-60 oil, as opposed to $60-$80 oil in recent years.

Diamondback reduced its activity from 14 to 13 rigs during the second quarter. It also lowered its capital budget for 2025 by around 3%, or $3.4 to $3.6 billion at midpoint. (Reporting by Arunima Kumar in Bengaluru; Editing by Shailesh Kuber)

(source: Reuters)