Diamondback got straight to the point, accompanying its financial statement with a written warning in black and white confirming what many analysts have suspected for years: in short, despite the prowess of new drilling technologies, oil production is not economical at current prices — the lowest in twenty years when adjusted for inflation.

The US president's famous "drill, baby drill" slogan therefore remains nothing more than empty rhetoric. There are fewer new wells drilled, and already a fifth of the contract workers employed at various production sites—the "frac crews"—have been laid off since the beginning of the year. At the same time, Diamondback admits that the best reserves—the most profitable ones—are now depleted, raising fears of higher development and production costs.

In this context, the group is reducing its investments and announcing that it will redirect its cash flow towards share buybacks and debt reduction. The latter seems urgent, as net debt stands at $15bn, or between four and five years of operating profit at current oil and natural gas prices in North America.

Diamondback is one of the most spectacular American entrepreneurial success stories in the energy sector. Focused on the prolific Permian Basin in Texas, the group was producing 3,000 barrels and equivalents per day when it went public in 2012. It now produces 850,000 per day. However, this spectacular expansion has not yet really translated into hard cash profits for its shareholders.

CEO Travis Stice insists that a new era has begun: one of maturity and returns to shareholders, following a period of rapid expansion and consolidation in the Texas basin. On paper, Diamondback is one of North America's lowest-cost producers, capable of covering its maintenance investments and dividend payments, even with oil at $50 a barrel.

Analysts at MarketScreener are waiting to see. At current prices, the group's valuation seems to factor in a rebound in WTI prices to around $70. In theory, this would allow Diamondback to generate between $5bn and $6bn in free cash flow: the current enterprise value of $55bn would thus represent a multiple of 11x this potential profit... unless WTI fails to rebound, in which case free cash flow in 2025 would be well below these forecasts.

Eleven is also the number of years of proven reserves — half oil, half gas — that Diamondback has at current production levels.