Diamondback expects flat output in 2021

US shale oil and gas company Diamondback Energy said April 12 it would keep production in 2021 on par with the level in the fourth quarter of 2020, but would rein in its capital expenditures by 10%.

Diamondback in the first quarter took on 32,500 net acres in the Midland basin, located within the eastern region of the Permian shale in Texas, in a $375mn acquisition from Guidon Operating. It also acquired shale rival QEP Resources in an all-stock merger. Looking forward, however, the company said it expected production levels for the year to be stable relative to Q4.

“Our updated 2021 guidance announced today reflects our commitment to capital discipline and capital efficiency, as we expect to keep pro forma fourth quarter 2020 production flat in 2021 with about 10% less capital spent than standalone Diamondback in 2020,” CEO Travis Stice said.

Diamondback expects to realise average production of 307,000 barrels of oil equivalent (boe)/d during the first quarter, including 184,200 b/d of oil. Full-year 2021 production is expected to range between 360,000 and 370,000 boe/d. Between 275 and 285 wells are expected to be completed at its assets during the year.

Reflecting on the extraordinary plunge in commodity prices last year, Stice said the situation has improved but there are no plans to increase production in what he said was an “artificially undersupplied market.”

OPEC and a handful of allies have embraced voluntary production restraint as a way to keep the broader market in check.