Diamondback Energy Inc.
) has priced an upsized public offering of 6,000,000 common
shares - being sold by certain stockholders - at $34.75 a piece,
with an over-allotment option for an additional 869,222 shares.
The offering, announced Jun 18, is expected to close on Jun 24.
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The energy explorer will not get the net proceeds from this
offering, which will go to the sellers - Wexford Capital LP and
Gulfport Energy Corp.
) - Diamondback's top two shareholders.
Diamondback, which went public in Oct 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 $1.23, representing 105% earnings per share
growth over 2012. Next year's average forecast is $2.34,
corresponding with 91% growth.
However, shares of Diamondback - currently trading at $34.61 -
have already doubled since its public debut at around $17 in Oct.
Therefore, any upside from here may be limited.
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
Oasis Petroleum Inc.
PetroQuest Energy Inc.
) as good buying opportunities. These domestic upstream energy
operators - sporting a Zacks Rank #2 (Buy) - have solid secular
growth stories with potential to rise from current levels.