Diamondback misses its profit forecast as lower oil prices weigh

Diamondback Energy missed Wall 'Street's expectations for the fourth quarter profit on Monday as it struggled to cope with lower oil prices. Its shares fell more than 3% during extended trading.

The global crude oil price has been impacted by the growing fears of an oversupply and the prospect of more Venezuelan barrels coming back onto the market. WTI crude oil prices fell by about 20% between 2025 and the third quarter of this year.

Benchmark Brent crude was about $63.13 a barrel in the period between October and December, a drop of more than 9%.

The average price for a barrel of oil was $58 during the fourth quarter. This compares to $69.48 a barrel compared to a year ago.

The record production of oil in the U.S. The 'country's production will average about 13.6 million barrels per day by 2025, helping to cushion the impact of lower prices.

Diamondback reported that it produced 969.120 barrels equivalent to oil per day compared to 883.424 boepd one year ago.

Diamondback expects its current-year production net to range between 926,000 and 962,000 Boepd. Capital expenditure is expected to range between $3.6 billion and $3.9billion.

Capex will include $100-$150 millions for exploration and tests in the Barnett, Woodford and Woodford basins.

Mark Lear, Piper Sandler analyst, said that the plan to spend money on exploration is a "pivot" to "organic resource expansion," from its historical focus on M&A.

After hedging, the average realized price for natural gas in the fourth quarter was $1.03 per 1,000 cubic feet (Mcf), compared to 82 cents a Mcf one year ago.

According to LSEG, the Midland, Texas based company?reported an adjusted profit per?share of $1.74 for the three-month period ended December 31 compared with analyst expectations of $2.08, according data compiled by LSEG. (Reporting from Bengaluru by Sumit Saha; Editing by Maju Sam)

(source: Reuters)