Exploring the Pros and Cons of Diamondback Energy and Occidental Petroleum for Oil Stock Investors

Diamondback Energy: A Strategic Approach

Diamondback Energy boasts an impressive position in the Permian, offering 463,000 BOE/d across 494,000 net acres. The company's acquisition of Endeavor Energy Resources is set to propel it further as a premier pure-play Permian producer, showcasing a focus on scale and cost efficiency.

Key Points:

• Scale Expansion: With a proposed 838,000 net acres post-acquisition.
• Cost Savings: Anticipating $550 million annually through synergies.
• Financial Strength: Maintaining prudence by repaying debt with retained cash.

Occidental Petroleum: Leveraging Permian Dominance

Occidental Petroleum leads in oil and gas production within the Permian, holding 2.8 million net acres. The recent acquisition of CrownRock looks to boost its free cash flow by $1 billion annually, although concerns arise due to increased debt load following the transaction.

Key Considerations:

1. Growth Potential: Expanding its production with the 170,000 BOE/d addition.
2. Debt Risk: Mitigating concerns by planning asset sales and debt repayment.
3. Competitive Landscape: Facing Diamondback Energy's strategic moves in the region.