Diamondback Rises After Accelerating Returns
(Bloomberg) -- Diamondback Energy Inc. rose in after-hours trading after pledging to accelerate cash returns to shareholders in the fourth quarter.
The shale oil producer had pledged to return half its free cash flow to investors in 2022 but will now begin doing so in the fourth quarter, the Midland, Texas-based company said in a statement Thursday. The board approved a $2 billion share buyback program to support the plan.
Increasing the base dividend will be the preferred method of cash return but shares will also be purchased “opportunistically” on the open market, Chief Executive Officer Travis Stice said in a statement.
The company will consider implementing a so-called variable dividend “when we expect the return on that repurchase to be less than our cost of capital at mid-cycle commodity prices,” Stice said.
The stock rose 3% to $82.45 in after-house trading in New York, after earlier falling 1.9%.
© 2021 Bloomberg L.P.
What do you think? We’d love to hear from you, join the conversation on the
Rigzone Energy Network.
The Rigzone Energy Network is a new social experience created for you and all energy professionals to Speak Up about our industry, share knowledge, connect with peers and industry insiders and engage in a professional community that will empower your career in energy.