Each one in plain English, with the numbers worked through for a shareholder.
12 Oct 2022capital raising announcement▲ GoodMajor
On Oct 11, 2022, Diamondback agreed to buy FireBird Energy's roughly 75,000 gross (68,000 net) Midland Basin acres for $775 million cash plus 5.86 million shares, expected to close late in Q4 2022. The company says it expects to cut its operated rigs on the asset from three to one after closing, and announced a target to sell at least $500 million of non-core assets by end of 2023, with proceeds for debt reduction. This continues the run of Midland Basin bolt-ons after the 2021 Guidon deal.
Diamondback Energy filed its quarterly report for the period ended June 30, 2022, covering the second quarter, and noted the pending Rattler Midstream merger expected to close in the third quarter.
Diamondback reported second quarter 2022 net income of $1.4 billion ($7.93 per diluted share) and free cash flow of $1.3 billion, with production of 380.5 MBOE/d. It also raised its share repurchase authorization to $4 billion and declared a $2.30 variable dividend.
Diamondback posted a record $1.3 billion in quarterly free cash flow, raised its dividend 7% and expanded its share buyback authorization to $4 billion, while confirming its Rattler Midstream buyout was on track to close within weeks.
Diamondback filed the final prospectus and information statement for its merger with Rattler Midstream. Rattler's public unitholders will receive 0.113 Diamondback share per unit, and the merger was already approved by written consent of Diamondback's subsidiary.
Amendment No. 1 to the Rattler buy-in carries two things the June filing did not. A unitholder has sued Rattler and the general partner's directors over the deal since it was first filed, and the updated price table shows the offer had almost stopped being a premium: Diamondback stock had fallen from $133.43 to $112.52, cutting the value of the fixed 0.113-share ratio from $15.08 to $12.71 a unit against Rattler's own $12.64 market price.
Diamondback Energy, Inc. shareholders approved the routine matters put to a vote at the company's annual meeting (director elections, auditor ratification, and the executive-pay advisory vote).
Diamondback moved to buy in the public units of Rattler Midstream, the gathering and water business it had spun off in 2019, offering 0.113 Diamondback shares per public unit - about $15.08 a unit on the day before announcement. Because Diamondback already held roughly 74% of the economics and controlled the general partner, this went to unitholders as an information statement rather than a vote they could lose; Evercore advised the conflicts committee, which had negotiated the ratio up through successive Diamondback proposals.
Diamondback Energy, Inc. announced its upcoming annual shareholder meeting, covering the routine agenda (director elections, auditor ratification, executive-pay advisory vote).
