Diamondback Energy Inc.
) has announced the closure of its previously declared
underwritten public offering of 4,000,000 common shares priced at
$40.25 a piece, with a 30-day over-allotment option for an
additional 600,000 shares.
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The energy explorer plans to use the proceeds from this offering
- approximately $154.3 million after the underwriting discount
and estimated offering expenses - to finance its previously
declared acquisition of additional Permian Basin acreage. Any
remaining amount may be utilized towards capital expenditures
associated with exploration and development projects, and for
general corporate purposes.
Diamondback, which went public in October of last year, is an
independent exploration and production company engaged in the
acquisition, finding and development of unconventional onshore
oil and gas properties. The company's operations are concentrated
primarily in the Permian Basin of West Texas.
Having done a stellar job at raising production and reserves from
its assets, analysts are predicting strong earnings growth for
Diamondback over the next couple of years. The 2013 Zacks
Consensus Estimate is $1.31, representing 118% earnings per share
growth over 2012. Next year's average forecast is $2.40,
corresponding with 84% growth.
However, shares of Diamondback - currently trading at $40.12 -
have already climbed more than 100% since its public debut at
around $17 in Oct. Therefore, any upside from here may be
As a result, Diamondback currently retains a Zacks Rank #3
(Hold), implying that it is expected perform in line with the
broader U.S. equity market over the next one to three months.
Meanwhile, one can look at
Range Resources Corp.
Clayton Williams Energy Inc.
Matador Resources Co.
) as good buying opportunities. These domestic upstream energy
operators - sporting a Zacks Rank #1 (Strong Buy) - have solid
secular growth stories with potential to rise significantly from