2019 Capital Budget

Time to start thinking about the future.

So far, from SEA we have "dated" forward guidance and the just recently offered "uncertain" as to what we are going to do or not do.

US E&P are beginning to put out their 2019 budgets. One to watch is FANG (Diamondback Energy) a pure Permian play. Highlights:

1) Planned Capex + Dividend is to match 2019 operating cash flow at current commodity pricesand Dividend will increase by 50%

2) Capex of $2.7B - $3.1B of which D&C is $2.35B - $2.7B remaining is for midstream & infrastructure

3) 2019 Production guidance  275 - 290 Mboepd (68%-70% oil) >30% of 2018 yoy production on pro-forma basis (made acquisition)

4) Reduction in rigs count to 18 -22 from present 24

5) Believe they can maintain a flat exit 2018 to exit 2019 production of 250MBoepd with just 14 rigs.

So much for the big guys slowing down

Something to keep an eye on. FANG also track adjusted EBITDA per share growth as a mgmt metric(might be better as Debt Adjusted though). Interesting side note ... Cash Margin 81% (as % of avg realized BoE price $37.89). AVg lateral length of 9,200 feet.

Highly efficient company.