Diamondback Energy sees oilfield inflation easing

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DENVER (Reuters) – U.S. shale producer Diamondback (NASDAQ:FANG) Energy on Tuesday said rig prices are falling and steel costs are set to decline by about $20-$25 per foot, a sign the inflationary pressures that plagued the oilfield in the past year are easing.

Diamondback’s second-quarter average rig dayrate is down from the first quarter, the company told investors. It did not specify how much the rate had declined.

The company also said it anticipated dealmaking to pick up in the oil patch, as private firms look to monetize.

“I really think the next couple of years are going to be interesting in the M&A landscape,” CEO Travis Stice told investors on an earnings call.

He added that there are “some small-cap public companies that are going to need to figure out some form of exit strategy to continue to be relevant in the future.”