Diamondback Energy to Slash Budget as U.S. Oil Output Faces Decline

Published 47 minutes agoFANG

Diamondback Energy to Slash Budget as U.S. Oil Output Faces Decline

Travis Stice, CEO of Diamondback Energy, has suggested that U.S. oil production may have reached its peak and could soon decline due to falling prices. This comes as Diamondback plans significant financial cutbacks, reducing its 2025 capital expenditures by $400 million to a range of $3.8 billion to $4.2 billion. Additionally, the company will cut three drilling rigs. The Financial Times reports this move is reflective of declining drilling activities across the industry.

The reduction in rigs is expected to lead to a 10% decrease in U.S. drilling activity by the end of June, with further reductions anticipated into the third quarter. Other major shale companies, like Coterra Energy, are following suit with similar cutbacks in response to the drop in oil prices. The price of Brent crude has slumped to $60.23 per barrel, reaching a four-year low. This price drop is largely driven by OPEC+ production increases and broader global economic challenges.

As prices remain low, U.S. shale producers face difficulties maintaining profitability, which may lead to curtailed operations or workforce reductions. While the current price of Diamondback Energy’s stock sits at $133.66, reflecting minimal change, the company and the broader industry continue to feel the pressure from the current market dynamics.

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Diamondback Energy to Slash Budget as U.S. Oil Output Faces Decline

Diamondback Energy to Slash Budget as U.S. Oil Output Faces Decline

47 minutes agoFANG

Travis Stice, CEO of Diamondback Energy, has suggested that U.S. oil production may have reached its peak and could soon decline due to falling prices. This comes as Diamondback plans significant financial cutbacks, reducing its 2025 capital expenditures by $400 million to a range of $3.8 billion to $4.2 billion. Additionally, the company will cut three drilling rigs. The Financial Times reports this move is reflective of declining drilling activities across the industry. The reduction in rigs is expected to lead to a 10% decrease in U.S. drilling activity by the end of June, with further reductions anticipated into the third quarter. Other major shale companies, like Coterra Energy, are following suit with similar cutbacks in response to the drop in oil prices. The price of Brent crude has slumped to $60.23 per barrel, reaching a four-year low. This price drop is largely driven by OPEC+ production increases and broader global economic challenges. As prices remain low, U.S. shale producers face difficulties maintaining profitability, which may lead to curtailed operations or workforce reductions. While the current price of Diamondback Energy’s stock sits at $133.66, reflecting minimal change, the company and the broader industry continue to feel the pressure from the current market dynamics.