Diamondback Energy Inc.
) has priced an underwritten public offering of 4,000,000 common
shares at $40.25 a piece, with an over-allotment option for an
additional 600,000 shares. The offering, announced Aug 14, is
expected to close on Aug 20.
The energy explorer plans to use the proceeds from this offering
- expected to be 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 $1.30, representing 117% 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 $40.50 -
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
WILLIAMS(C)ENGY (CWEI): Free Stock Analysis
DIAMONDBACK EGY (FANG): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
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