FIRST ON CBS7: Coronavirus & dropping oil prices forcing Diamondback Energy to scale back operations
The recent drop in oil prices is causing Diamondback to reduce operations immediately.
In a news release Monday, the company says it is releasing three completion crews and expects to drop two drilling rigs next month and a third later in the second quarter.
It says it will also reduce its capital budget for the year.
“As a result of current and expected oil price weakness," said Travis Stice, Chief Executive Officer, "We have immediately reduced development activity and expect lower activity levels to continue until we see clear signs of commodity price recovery.
"While this decision is expected to result in lower 2020 oil production than originally forecast, we will maintain positive cash flow and protect our balance sheet and dividend.
"We have made these decisions before and they are driven by the goal of protecting shareholder returns over the long term. "