Diamondback Energy (NASDAQ: FANG) boosts dividend, ups 2026 output guidance
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Diamondback Energy reported first-quarter 2026 results showing very strong cash generation but weak GAAP earnings due to a large non-cash impairment. Total revenues were $4.24 billion and net income attributable to Diamondback was $25 million, or $0.08 per diluted share, after a $1.4 billion impairment of oil and natural gas properties.
The company generated $3.0 billion of consolidated Adjusted EBITDA and $1.7 billion of Free Cash Flow, supported by average oil production of 521 MBO/d and 979 MBOE/d in total. Diamondback raised its base cash dividend to $1.10 per share for the quarter (a 10% year-over-year increase), repurchased 3.3 million shares for $548 million and returned $859 million to stockholders, equal to about half of Adjusted Free Cash Flow. It also increased 2026 production guidance and lifted its full-year cash capital budget to approximately $3.9 billion while continuing to reduce net debt.
Positive
- None.
Negative
- None.
Insights
Strong cash flow and higher guidance offset by a large non-cash impairment and a more flexible capital return framework.
Diamondback Energy delivered robust operating performance in Q1 2026. Oil production averaged 521 MBO/d and combined volumes reached 979 MBOE/d, helping drive consolidated Adjusted EBITDA of $3,001 million and Free Cash Flow of $1,705 million, despite weather-related disruptions.
GAAP results were muted by a non-cash impairment of oil and natural gas properties of $1,400 million, which reduced net income attributable to Diamondback to $25 million and diluted EPS to $0.08. Adjusted net income was much higher at $1,198 million, or $4.23 per diluted share, illustrating the gap between reported and underlying profitability under the SEC pricing-based ceiling test.
The company increased 2026 oil production guidance to at least 520 MBO/d and total production guidance to at least 972 MBOE/d, while raising its full-year cash capital budget to about $3.90 billion. It also boosted the annualized base dividend to $4.40 per share and returned $859 million, around 50% of Adjusted Free Cash Flow, via dividends and buybacks. Looking ahead, management plans to drop its fixed percentage-of-free-cash-flow return framework in favor of a more flexible approach that prioritizes the base dividend, opportunistic repurchases and accelerated debt reduction when appropriate.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total revenues: $4,240 million
Net income attributable to Diamondback: $25 million
Adjusted net income attributable to Diamondback: $1,198 million
+5 more
8 metrics
Total revenues
$4,240 million
Three months ended March 31, 2026
Net income attributable to Diamondback
$25 million
Three months ended March 31, 2026; diluted EPS $0.08
Adjusted net income attributable to Diamondback
$1,198 million
Q1 2026; $4.23 adjusted diluted EPS
Consolidated Adjusted EBITDA
$3,001 million
Three months ended March 31, 2026
Free Cash Flow
$1,705 million
Q1 2026, after $933 million cash capital expenditures
Non-cash impairment
$1,400 million
Impairment of oil and natural gas properties in Q1 2026
Average oil production
521.0 MBO/d
First quarter 2026
Quarterly base dividend
$1.10 per share
Q1 2026 base cash dividend; 10% year-over-year increase
Key Terms
Adjusted EBITDA, Free Cash Flow, drilled but uncompleted well, costless collars, +2 more
6 terms
Adjusted EBITDA financial
"Consolidated Adjusted EBITDA | | | $ | 3,001 |"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Free Cash Flow financial
"Free Cash Flow | | | $ | 1,705 |"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
drilled but uncompleted well technical
"work down our drilled but uncompleted well (“DUC”) balance"
A drilled but uncompleted well is an oil or gas well where the hole has been drilled but the final equipment and operations needed to begin production have not yet been finished. Think of it as a house with walls and plumbing in place but no appliances — it represents potential output that can be brought online relatively quickly, so investors watch DUC counts as a gauge of near-term supply, required future spending, and the speed at which a producer can grow revenue.
costless collars financial
"Costless Collars - Henry Hub | 840,000"
A costless collar is a hedging strategy where an investor buys a protective option that limits losses and simultaneously sells an option that caps gains so the two premiums roughly cancel out. Think of it like buying insurance on a car while agreeing to share any big windfall from its sale with the insurer — it protects your downside without an upfront payment, but it also limits how much you can profit. Investors use it to reduce risk on a position while preserving capital and avoiding immediate cash outlay.
ceiling test financial
"impacting our ceiling test"
non-controlling interest financial
"Net income (loss) attributable to non-controlling interest"
Non-controlling interest represents the portion of ownership in a company held by investors who do not have a controlling stake, meaning they do not have enough voting power to make major decisions. It is similar to owning a minority share of a business partner’s company—while they benefit from profits, they cannot control how the company is run. This matters to investors because it shows how much of the company's value is owned by outside shareholders and affects overall financial reporting.
Earnings Snapshot
Total revenues: $4,240 million · Guidance included
Q1 2026
Total revenues
$4,240 million
vs $4,048 million in Q1 2025
Net income attributable to Diamondback
$25 million
vs $1,405 million in Q1 2025
Adjusted EBITDA
$3,001 million
vs $2,947 million in Q1 2025
Adjusted net income attributable to Diamondback
$1,198 million
Q1 2026 adjusted diluted EPS $4.23
Free Cash Flow
$1,705 million
vs $1,545 million in Q1 2025
Guidance
For 2026, Diamondback increased oil production guidance to at least 520 MBO/d and total production to at least 972 MBOE/d, and raised its estimated full-year cash capital budget to approximately $3.90 billion, with Q2 2026 cash capex guided to $925–$1,025 million.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 4, 2026
___________
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
(432 ) 221-7400
Registrant's telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| (NASDAQ Global Select Market) | ||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 4, 2026, Diamondback Energy, Inc. (the “Company”) issued a press release announcing financial and operating results for the first quarter ended March 31, 2026, including the first quarter 2026 base cash dividend and an increase in the annual base dividend and production guidance (the “earnings release”). A copy of the earnings release is furnished to the Securities and Exchange Commission (the “SEC”) as Exhibit 99.1 to this Current Report on Form 8-K. The Company also issued a letter to its stockholders as a supplement to the earnings release, which is furnished to the SEC as Exhibit 99.2 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 99.1 | Press release, dated May 4, 2026, entitled “Diamondback Energy, Inc. Announces First Quarter 2026 Financial and Operating Results; Increases Base Dividend and Production Guidance.” | |||||||
| 99.2 | Letter to Stockholders, dated May 4, 2026, issued by the Company. | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DIAMONDBACK ENERGY, INC. | ||||||||||||||
| Date: | May 4, 2026 | |||||||||||||
| By: | /s/ Teresa L. Dick | |||||||||||||
| Name: | Teresa L. Dick | |||||||||||||
| Title: | Executive Vice President, Chief Accounting Officer and Assistant Secretary | |||||||||||||
Exhibit 99.1
DIAMONDBACK ENERGY, INC. ANNOUNCES FIRST QUARTER 2026 FINANCIAL AND OPERATING RESULTS; INCREASES BASE DIVIDEND AND PRODUCTION GUIDANCE
Midland, TX (May 4, 2026) - Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback,” “we,” “our” or the “Company”) today announced financial and operating results for the first quarter ended March 31, 2026.
FIRST QUARTER 2026 HIGHLIGHTS
•Average oil production of 521.0 MBO/d (979.4 MBOE/d)
•Net cash provided by operating activities of $1.8 billion; Operating Cash Flow Before Working Capital Changes1 of $2.6 billion
•Cash capital expenditures of $933 million
•Free Cash Flow1 of $1.7 billion; Adjusted Free Cash Flow1 of $1.7 billion
•Repurchased 3.3 million shares of common stock for approximately $548 million
•Raised Q1 2026 base cash dividend to $1.10 per share; marks a 10% year-over-year increase and an implied 2.1% annualized yield2
•Total return of capital of $859 million from stock repurchases and the declared Q1 2026 base dividend; represents ~50% of Adjusted Free Cash Flow
UPDATED 2026 GUIDANCE HIGHLIGHTS
•Increasing annual oil production guidance to 520+ (from 500 - 510) MBO/d and total BOE production to 972+ (from 926 - 962) MBOE/d; implying ~5% organic year-over-year growth
•Raising full year cash capital expenditures to ~$3.90 billion (from ~$3.75 billion)
•Q2 2026 oil production guidance of 515 - 525 MBO/d (950 - 990 MBOE/d)
•Q2 2026 cash capital expenditures guidance of $925 - $1,025 million
1 NON-GAAP DISCLOSURES - For a definition of Operating Cash Flow Before Working Capital Changes, Free Cash Flow, Adjusted Free Cash Flow, Adjusted Net Income, Adjusted EBITDA, Adjusted Net Income per Diluted Share, Net Debt and reconciliations of such non-GAAP financial metrics to their respective most directly comparable GAAP metrics, please see “Non-GAAP Financial Measures” below.
2 Cash dividend payable on May 21, 2026; annualized yield based on May 1, 2026 closing share price of $207.65
RECENT HIGHLIGHTS
•Successfully completed a cash-funded tender offer, retiring approximately $777 million in principal of 2051 and 2052 Senior Notes for approximately $632 million including accrued interest (81.1% of par value)
•Fully repaid the remaining $550 million outstanding on the Company's $1.5 billion term loan due 2027; pro forma gross debt of $12.7 billion at the end of April 2026
FIRST QUARTER 2026 OPERATIONS UPDATE
The following tables provide a summary of Diamondback’s key operational updates:
Wells Drilled and Completed:
Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| Drilled | Completed | ||||||||||||||||||||||
| Area: | Gross | Net | Gross | Net | |||||||||||||||||||
| Midland Basin | 118 | 111 | 147 | 137 | |||||||||||||||||||
| Total | 118 | 111 | 147 | 137 | |||||||||||||||||||
Gross Wells Drilled and Completed By Zone:
Three Months Ended March 31, 2026 | |||||||||||
| Number of Wells Drilled | Number of Wells Completed | ||||||||||
| Midland Basin: | |||||||||||
| Upper Spraberry | 1 | 2 | |||||||||
| Middle Spraberry | 7 | 7 | |||||||||
| Jo Mill | 16 | 31 | |||||||||
| Lower Spraberry | 24 | 32 | |||||||||
| Dean | 1 | 6 | |||||||||
| Wolfcamp A | 26 | 31 | |||||||||
| Wolfcamp B | 29 | 30 | |||||||||
| Wolfcamp D | 11 | 8 | |||||||||
| Barnett | 3 | — | |||||||||
Midland Basin Total | 118 | 147 | |||||||||
Average Completed Lateral Length (in feet) | 11,332 | ||||||||||
Realized Average Prices:
| Three Months Ended | |||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||
| Oil ($ per Bbl) | $ | 73.47 | $ | 58.00 | $ | 70.95 | |||||||||||
| Natural gas ($ per Mcf) | $ | 0.18 | $ | 0.03 | $ | 2.11 | |||||||||||
| Natural gas liquids ($ per Bbl) | $ | 16.68 | $ | 13.51 | $ | 23.94 | |||||||||||
| Combined ($ per BOE) | $ | 43.40 | $ | 34.02 | $ | 47.77 | |||||||||||
Oil, hedged ($ per Bbl)(1) | $ | 72.53 | $ | 57.07 | $ | 70.06 | |||||||||||
Natural gas, hedged ($ per Mcf)(1) | $ | 1.90 | $ | 1.03 | $ | 3.34 | |||||||||||
Natural gas liquids, hedged ($ per Bbl)(1) | $ | 16.68 | $ | 13.51 | $ | 23.94 | |||||||||||
Average price, hedged ($ per BOE)(1) | $ | 45.21 | $ | 34.88 | $ | 48.89 | |||||||||||
(1)Hedged prices reflect the effect of our commodity derivative transactions on our average sales prices and include gains and losses on cash settlements for matured commodity derivatives, which we do not designate for hedge accounting. Hedged prices exclude gains or losses resulting from the early settlement of commodity derivative contracts.
Average Cash Costs per BOE:
| Three Months Ended | |||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||
| Lease operating expenses | $ | 6.21 | $ | 5.91 | $ | 5.33 | |||||||||||
| Production and ad valorem taxes | 3.04 | 2.21 | 2.98 | ||||||||||||||
| Gathering, processing and transportation expense | 1.36 | 1.54 | 1.45 | ||||||||||||||
| General and administrative - cash component | 0.65 | 0.65 | 0.72 | ||||||||||||||
| Total operating expense - cash | $ | 11.26 | $ | 10.31 | $ | 10.48 | |||||||||||
FINANCIAL UPDATE
Earnings Attributable to Diamondback Energy, Inc.:
Three Months Ended March 31, 2026 | |||||
| (in millions, except per share amounts) | |||||
| Net income (loss) attributable to Diamondback Energy, Inc. | $ | 25 | |||
Earnings (loss) per common share attributable to Diamondback Energy, Inc. - Diluted(1) | $ | 0.08 | |||
Adjusted net income(1) | $ | 1,198 | |||
Adjusted net income per common share - Diluted(1) | $ | 4.23 | |||
(1)The Company’s earnings (loss) per diluted share amount has been computed using the two-class method in accordance with GAAP. The two-class method is an earnings allocation which reflects the respective ownership among holders of common stock and participating securities. Diluted earnings per share using the two-class method is calculated as (i) net income attributable to Diamondback Energy, Inc., (ii) less the reallocation of $3 million in earnings attributable to participating securities, (iii) divided by diluted weighted average common shares outstanding for the respective periods.
Cash Capital Expenditures:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in millions) | |||||||||||
| Operated drilling and completion additions to oil and natural gas properties | $ | 784 | $ | 864 | |||||||
Non-operated additions to oil and natural gas properties and other | 149 | 78 | |||||||||
| Total | $ | 933 | $ | 942 | |||||||
Adjusted EBITDA and Free Cash Flow - Non-GAAP:
| Three Months Ended March 31, 2026 | |||||
| (in millions) | |||||
| Net income (loss) attributable to Diamondback Energy, Inc. | $ | 25 | |||
| Consolidated Adjusted EBITDA | $ | 3,001 | |||
| Adjusted EBITDA attributable to Diamondback Energy, Inc. | $ | 2,704 | |||
| Net cash provided by operating activities | $ | 1,828 | |||
| Free Cash Flow | $ | 1,705 | |||
| Adjusted Free Cash Flow | $ | 1,737 | |||
Debt & Liquidity:
| March 31, 2026 | |||||
| (in millions) | |||||
Standalone cash | $ | 146 | |||
| Borrowings outstanding under the credit facility | $ | — | |||
Remaining availability under the credit facility | $ | 2,500 | |||
Total standalone liquidity | $ | 2,646 | |||
Consolidated total debt | $ | 14,068 | |||
| Consolidated total net debt | $ | 13,894 | |||
RETURN OF CAPITAL UPDATE
Diamondback announced today that the Company’s Board of Directors (the “Board”) approved a 5% increase to the Company's base cash dividend, raising it to $1.10 per common share for the first quarter of 2026, payable on May 21, 2026, to stockholders of record at the close of business on May 14, 2026.
Diamondback's share repurchase authorization totals $8.0 billion (excluding excise tax), with $2.1 billion remaining as of May 1, 2026. During the first quarter, the Company repurchased 3.3 million shares of common stock for approximately $548 million at a weighted average price of $167.61 per share (excluding excise tax), including the repurchase of 3.0 million shares for $509 million from SGF FANG Holdings, LP. The Company expects to continue repurchases opportunistically using cash on hand, free cash flow and potential asset sale proceeds. The program has no time limit and may be suspended, modified or discontinued at the Board’s discretion. Repurchases may be executed in privately negotiated or open-market transactions, consistent with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and will be subject to market conditions, applicable regulatory and legal requirements and other factors. All shares repurchased will be retired.
The table below summarizes Diamondback’s return of capital program, including dividends and share repurchases, with future actions subject to Board approval.
Q1 2026 | Q2 2026 to date | Cumulative | |||||||||||||||
| (in millions, except per share amounts, shares in thousands) | |||||||||||||||||
| Base dividend | $ | 1.10 | |||||||||||||||
Shares repurchased | 3,267 | — | 41,688 | ||||||||||||||
Weighted average repurchase price | $ | 167.61 | $ | — | $ | 141.11 | |||||||||||
| Total repurchase cost | $ | 548 | $ | — | $ | 5,884 | |||||||||||
Total return of capital | $ | 859 | |||||||||||||||
| Return of capital % free cash flow | 50 | % | |||||||||||||||
| Return of capital % adjusted free cash flow | 50 | % | |||||||||||||||
UPDATED 2026 GUIDANCE
Below is Diamondback's and Viper's updated guidance for the full year 2026, which includes second quarter production and capital guidance.
2026 Guidance | 2026 Guidance | |||||||
| Diamondback Energy, Inc. | Viper Energy, Inc. | |||||||
2026 Net production - MBOE/d | 972+ (from 926 - 962) | 126.0 - 130.0 | ||||||
2026 Oil production - MBO/d | 520+ (from 500 - 510) | 64.5 - 66.5 | ||||||
Q2 2026 Oil production - MBO/d (total - MBOE/d) | 515 - 525 (950 - 990) | 64.0 - 65.0 (124.0 - 126.0) | ||||||
| Unit costs ($/BOE) | ||||||||
| Lease operating expenses, including workovers | $5.90 - $6.40 | |||||||
| G&A | ||||||||
| Cash G&A | $0.55 - $0.70 | $0.70 - $0.90 | ||||||
| Non-cash equity-based compensation | $0.20 - $0.30 | $0.10 - $0.20 | ||||||
| DD&A | $14.00 - $15.00 (from $14.50- $15.50) | $16.25 - $18.25 | ||||||
| Interest expense (net of interest income) | $0.50 - $0.70 (from $0.70- $0.90) | $1.90 - $2.40 | ||||||
Gathering, processing and transportation | $1.50 - $1.70 | |||||||
| Production and ad valorem taxes (% of revenue) | ~7% | ~7% | ||||||
| Corporate tax rate (% of pre-tax income) | 23% | |||||||
Cash tax rate (% of pre-tax income)(1) | 18% - 21% | 27% - 30% | ||||||
Q2 2026 Cash taxes ($ - million) | $440 - $500 | $40.0 - $48.0 | ||||||
Cash Capital Budget ($ - million) | ||||||||
Operated drilling and completion | ~$3,310 (from ~$3,160 ) | |||||||
2026 Total capital expenditures(2) | ~$3,900 (from ~$3,750) | |||||||
Q2 2026 Capital expenditures | $925 - $1,025 | |||||||
Average lateral length (Ft.) | ~12,900' | |||||||
Net lateral footage completed (1,000's of Ft.) | 6,100' - 6,500' (from 5,900' - 6,300') | |||||||
(1)Pre-tax income attributable to the Company is a non-GAAP measure. We are not able to forecast the most directly comparable GAAP measure - Income (loss) before income taxes - due to high variability and difficulty in predicting certain items that affect Income (loss) before income taxes, such as future commodity prices, pace of and costs of developing, producing and operating our interests in oil and natural gas properties, future changes in interest rates and various other business factors impacting our financial results.
(2)Includes non-operated drilling and completion, capital workovers, science, infrastructure, midstream and environmental.
CONFERENCE CALL
Diamondback will host a conference call and webcast for investors and analysts to discuss its results for the first quarter of 2026 on Tuesday, May 5, 2026 at 8:00 a.m. CT. Access to the webcast, and replay which will be available following the call, may be found here. The live webcast of the earnings conference call will also be available via Diamondback’s website at www.diamondbackenergy.com under the “Investor Relations” section of the site. Investors and others should note that Diamondback announces material financial and operational information to our investors using our investor relations website, press releases, SEC filings and public conference calls and webcasts. The information we post through our investor relations website may be deemed material. Accordingly, investors should monitor our investor relations website in addition to following our press releases, SEC filings and public conference calls and webcasts.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding Diamondback’s: future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position; reserve estimates and its ability to replace or increase reserves; anticipated benefits or other effects of strategic transactions (including the Double Eagle Acquisition, and the Sitio Acquisition completed by Viper and other acquisitions, divestitures or reorganizations); and plans and objectives of management (including plans for future cash flow from operations and for executing environmental strategies) are forward-looking statements. When used in this news release, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Diamondback believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond Diamondback’s control. Accordingly, forward-looking statements are not guarantees of future performance and Diamondback’s actual outcomes could differ materially from what Diamondback has expressed in its forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: geopolitics and market conditions, including changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; changes in U.S. energy, environmental, monetary and trade policies, including with respect to tariffs or other trade barriers and any resulting trade tensions; actions taken by the members of OPEC and its non-OPEC allies (OPEC+) affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments; changes in general economic, business or industry conditions, including changes in foreign currency exchange rates, interest rates, inflation rates, and instability in the financial
markets; regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits; federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations; physical and transition risks relating to climate change, changing political and social perspectives on climate change and other environmental, social and governance factors, and risks from our publicly disclosed targets related to sustainability and emissions reduction initiatives; challenges in developing our existing leasehold acreage and finding, developing or acquiring additional reserves; restrictions on the use of water, including limits on the use of produced water and a moratorium on new produced water disposal well permits recently imposed by the Texas Railroad Commission in an effort to control induced seismicity in the Permian Basin; significant declines in prices for oil, natural gas, or natural gas liquids, which could require recognition of significant impairment charges; conditions in the capital, financial and credit markets, including the availability and pricing of capital for acquisitions, exploration and development operations; challenges with employee retention and an increasingly competitive labor market; changes in availability or cost of rigs, equipment, raw materials, supplies and oilfield services; changes in safety, health, environmental, tax and other regulations or requirements (including those addressing air emissions, water management, or the impact of global climate change); security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or from breaches of information technology systems of third parties with whom we transact business; lack of, or disruption in, access to adequate and reliable electrical power, internet and telecommunication infrastructure, information and computer systems, transportation, processing, storage and other facilities for our oil, natural gas and natural gas liquids; failures or delays in achieving expected reserve or production levels from existing and future oil and natural gas developments, including due to operating hazards, drilling risks, or the inherent uncertainties in predicting reserve and reservoir performance; inability to keep pace with technological developments in our industry; failure to meet our obligations under our oil purchase contracts; loss of one or more customers or their inability to meet their obligations; geographical concentration of our primary operations; risks from our return of capital commitment, and uncertainties over our future dividends and share repurchases; difficulty in obtaining necessary approvals and permits; severe weather conditions and natural disasters; changes in the financial strength of counterparties to our credit facilities and hedging contracts; our substantial indebtedness and restrictions to our operating and financial flexibility; changes in our credit rating; failure to identify, complete and successfully integrate acquisitions, including the recently completed Double Eagle Acquisition and Viper’s Sitio Acquisition; the Endeavor stockholders’ ability to significantly influence our business and potential conflicts of interest; and other risks described in Item 1A of Diamondback’s Annual Report on Form 10-K, filed with the SEC on February 25, 2026, and those risks disclosed in its subsequent filings on Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the SEC’s website at http://www.sec.gov and Diamondback’s website at www.diamondbackenergy.com/investors.
In light of these factors, the events anticipated by Diamondback’s forward-looking statements may not occur at the time anticipated or at all. Moreover, Diamondback operates in a very competitive and rapidly changing environment and new risks emerge from time to time. Diamondback cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this release or, if earlier, as of the date they were made. Diamondback does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
| Diamondback Energy, Inc. | |||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||
| (unaudited, $ in millions except per share data, shares in thousands) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenues: | |||||||||||
| Oil, natural gas and natural gas liquid sales | $ | 3,825 | $ | 3,657 | |||||||
| Sales of purchased oil | 385 | 374 | |||||||||
| Other operating income | 30 | 17 | |||||||||
| Total revenues | 4,240 | 4,048 | |||||||||
| Costs and expenses: | |||||||||||
| Lease operating expenses | 547 | 408 | |||||||||
| Production and ad valorem taxes | 268 | 228 | |||||||||
| Gathering, processing and transportation | 120 | 111 | |||||||||
| Purchased oil expense | 393 | 382 | |||||||||
| Depreciation, depletion, amortization and accretion | 1,293 | 1,097 | |||||||||
| Impairment of oil and natural gas properties | 1,400 | — | |||||||||
| General and administrative expenses | 79 | 73 | |||||||||
| Other operating expenses, net | 24 | 76 | |||||||||
| Total costs and expenses | 4,124 | 2,375 | |||||||||
| Income (loss) from operations | 116 | 1,673 | |||||||||
| Other income (expense): | |||||||||||
| Interest expense, net | (63) | (40) | |||||||||
| Other income (expense), net | 7 | 35 | |||||||||
| Gain (loss) on derivative instruments, net | 117 | 226 | |||||||||
| Gain (loss) on extinguishment of debt, net | (1) | — | |||||||||
| Total other income (expense), net | 60 | 221 | |||||||||
| Income (loss) before income taxes | 176 | 1,894 | |||||||||
| Provision for (benefit from) income taxes | 32 | 403 | |||||||||
| Net income (loss) | 144 | 1,491 | |||||||||
| Net income (loss) attributable to non-controlling interest | 119 | 86 | |||||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | $ | 25 | $ | 1,405 | |||||||
| Earnings (loss) per common share: | |||||||||||
| Basic | $ | 0.08 | $ | 4.83 | |||||||
| Diluted | $ | 0.08 | $ | 4.83 | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 282,792 | 289,612 | |||||||||
| Diluted | 282,792 | 289,612 | |||||||||
| Diamondback Energy, Inc. | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| (unaudited, in millions, except share amounts) | |||||||||||
| March 31, | December 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents ($28 million and $13 million related to Viper) | $ | 174 | $ | 104 | |||||||
| Restricted cash | 2 | 2 | |||||||||
| Accounts receivable: | |||||||||||
| Joint interest and other, net | 327 | 258 | |||||||||
Oil and natural gas sales, net ($383 million and $262 million related to Viper) | 1,834 | 1,128 | |||||||||
| Inventories | 79 | 86 | |||||||||
| Prepaid expenses and other current assets | 288 | 337 | |||||||||
| Total current assets | 2,704 | 1,915 | |||||||||
| Property and equipment: | |||||||||||
| Oil and natural gas properties: | |||||||||||
Proved properties ($9,514 million and $9,746 million related to Viper) | 72,688 | 71,588 | |||||||||
Unproved properties ($4,562 million and $4,910 million related to Viper) | 23,497 | 23,941 | |||||||||
| Other property, equipment and land | 889 | 874 | |||||||||
Accumulated depletion, depreciation, amortization and impairment ($2,662 million and $2,455 million related to Viper) | (30,461) | (27,782) | |||||||||
| Property and equipment, net | 66,613 | 68,621 | |||||||||
| Other assets | 763 | 523 | |||||||||
| Total assets | $ | 70,080 | $ | 71,059 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued capital expenditures | 1,181 | 1,168 | |||||||||
| Current maturities of debt | 749 | 763 | |||||||||
| Other accrued liabilities | 848 | 1,108 | |||||||||
| Revenues and royalties payable | 1,459 | 1,397 | |||||||||
| Derivative instruments | 62 | 15 | |||||||||
| Income taxes payable | 517 | 149 | |||||||||
| Total current liabilities | 4,816 | 4,600 | |||||||||
Long-term debt ($1,603 million and $2,186 million related to Viper) | 13,149 | 13,726 | |||||||||
| Deferred income taxes | 8,914 | 9,141 | |||||||||
| Other long-term liabilities | 561 | 625 | |||||||||
| Total liabilities | 27,440 | 28,092 | |||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $0.01 par value; 800,000,000 shares authorized; 281,311,730 and 284,594,908 shares issued and outstanding at March 31, 2026, and December 31, 2025, respectively | 3 | 3 | |||||||||
| Additional paid-in capital | 32,010 | 32,236 | |||||||||
| Retained earnings (accumulated deficit) | 4,467 | 4,740 | |||||||||
| Accumulated other comprehensive income (loss) | (7) | (7) | |||||||||
| Total Diamondback Energy, Inc. stockholders’ equity | 36,473 | 36,972 | |||||||||
| Non-controlling interest | 6,167 | 5,995 | |||||||||
| Total equity | 42,640 | 42,967 | |||||||||
| Total liabilities and stockholders’ equity | $ | 70,080 | $ | 71,059 | |||||||
| Diamondback Energy, Inc. | |||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| (unaudited, in millions) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 144 | $ | 1,491 | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Provision for (benefit from) deferred income taxes | (242) | 6 | |||||||||
| Depreciation, depletion, amortization and accretion | 1,293 | 1,097 | |||||||||
| Impairment of oil and natural gas properties | 1,400 | — | |||||||||
| (Gain) loss on extinguishment of debt, net | 1 | — | |||||||||
| (Gain) loss on derivative instruments, net | (117) | (226) | |||||||||
| Cash received (paid) on settlement of derivative instruments | 133 | 85 | |||||||||
| Other | 26 | 34 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (779) | (6) | |||||||||
| Accounts payable and accrued liabilities | (257) | (374) | |||||||||
| Income taxes payable | 287 | 135 | |||||||||
| Revenues and royalties payable | 70 | 84 | |||||||||
| Other | (131) | 29 | |||||||||
| Net cash provided by (used in) operating activities | 1,828 | 2,355 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to oil and natural gas properties | (933) | (942) | |||||||||
| Property acquisitions | (314) | (750) | |||||||||
| Proceeds from sale of assets | 604 | 41 | |||||||||
| Other | (15) | (2) | |||||||||
| Net cash provided by (used in) investing activities | (658) | (1,653) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from debt | 2,525 | 3,477 | |||||||||
| Repayment of debt | (3,124) | (2,538) | |||||||||
| Repurchased shares under repurchase program | (39) | (575) | |||||||||
| Repurchased shares - related party | (509) | — | |||||||||
| Repurchased shares/units under Viper’s repurchase program | (97) | — | |||||||||
| Net proceeds from Viper’s issuance of common stock | — | 1,232 | |||||||||
| Proceeds from sale of Viper's common stock | 589 | — | |||||||||
| Dividends paid to stockholders | (295) | (290) | |||||||||
| Dividends/distributions to non-controlling interest | (120) | (95) | |||||||||
| Other | (30) | (36) | |||||||||
| Net cash provided by (used in) financing activities | (1,100) | 1,175 | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 70 | 1,877 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 106 | 164 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 176 | $ | 2,041 | |||||||
| Diamondback Energy, Inc. | |||||||||||||||||
| Selected Operating Data | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended | |||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||
| Production Data: | |||||||||||||||||
| Oil (MBbls) | 46,889 | 47,174 | 42,835 | ||||||||||||||
| Natural gas (MMcf) | 118,402 | 121,805 | 100,578 | ||||||||||||||
| Natural gas liquids (MBbls) | 21,519 | 21,684 | 16,961 | ||||||||||||||
Combined volumes (MBOE)(1) | 88,142 | 89,159 | 76,559 | ||||||||||||||
| Daily oil volumes (BO/d) | 520,989 | 512,761 | 475,944 | ||||||||||||||
| Daily combined volumes (BOE/d) | 979,356 | 969,120 | 850,656 | ||||||||||||||
| Average Prices: | |||||||||||||||||
| Oil ($ per Bbl) | $ | 73.47 | $ | 58.00 | $ | 70.95 | |||||||||||
| Natural gas ($ per Mcf) | $ | 0.18 | $ | 0.03 | $ | 2.11 | |||||||||||
| Natural gas liquids ($ per Bbl) | $ | 16.68 | $ | 13.51 | $ | 23.94 | |||||||||||
| Combined ($ per BOE) | $ | 43.40 | $ | 34.02 | $ | 47.77 | |||||||||||
Oil, hedged ($ per Bbl)(2) | $ | 72.53 | $ | 57.07 | $ | 70.06 | |||||||||||
Natural gas, hedged ($ per Mcf)(2) | $ | 1.90 | $ | 1.03 | $ | 3.34 | |||||||||||
Natural gas liquids, hedged ($ per Bbl)(2) | $ | 16.68 | $ | 13.51 | $ | 23.94 | |||||||||||
Average price, hedged ($ per BOE)(2) | $ | 45.21 | $ | 34.88 | $ | 48.89 | |||||||||||
Average Cash Costs ($/BOE): | |||||||||||||||||
| Lease operating expenses | $ | 6.21 | $ | 5.91 | $ | 5.33 | |||||||||||
| Production and ad valorem taxes | 3.04 | 2.21 | 2.98 | ||||||||||||||
| Gathering, processing and transportation expense | 1.36 | 1.54 | 1.45 | ||||||||||||||
| General and administrative - cash component | 0.65 | 0.65 | 0.72 | ||||||||||||||
| Total operating expense - cash | $ | 11.26 | $ | 10.31 | $ | 10.48 | |||||||||||
| General and administrative - non-cash component | $ | 0.25 | $ | 0.22 | $ | 0.24 | |||||||||||
| Depreciation, depletion, amortization and accretion | $ | 14.67 | $ | 15.58 | $ | 14.33 | |||||||||||
| Interest expense, net | $ | 0.71 | $ | 0.87 | $ | 0.52 | |||||||||||
(1)Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
(2)Hedged prices reflect the effect of our commodity derivative transactions on our average sales prices and include gains and losses on cash settlements for matured commodity derivatives, which we do not designate for hedge accounting. Hedged prices exclude gains or losses resulting from the early settlement of commodity derivative contracts.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as net income (loss) attributable to Diamondback Energy, Inc., plus net income (loss) attributable to non-controlling interest ("net income (loss)") before non-cash (gain) loss on derivative instruments, net, interest expense, net, depreciation, depletion, amortization and accretion, depreciation and interest expense related to equity method investments, (gain) loss on extinguishment of debt, impairment of oil and natural gas properties, non-cash equity-based compensation expense, capitalized equity-based compensation expense, other non-cash transactions and provision for (benefit from) income taxes. Adjusted EBITDA is not a measure of net income as determined by United States generally accepted accounting principles ("GAAP"). Management believes Adjusted EBITDA is useful because the measure allows it to evaluate the Company’s operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company excludes the items listed above from net income (loss) to determine Adjusted EBITDA because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Further, the Company excludes the effects of significant transactions that may affect earnings but are unpredictable in nature, timing and amount, although they may recur in different reporting periods. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company’s operating performance. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets. The Company’s computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.
The following tables present a reconciliation of the GAAP financial measure of net income (loss) attributable to Diamondback Energy, Inc. to the non-GAAP financial measure of Adjusted EBITDA:
| Diamondback Energy, Inc. | |||||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA | |||||||||||
| (unaudited, in millions) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, 2026 | March 31, 2025 | ||||||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | $ | 25 | $ | 1,405 | |||||||
| Net income (loss) attributable to non-controlling interest | 119 | 86 | |||||||||
| Net income (loss) | 144 | 1,491 | |||||||||
| Non-cash (gain) loss on derivative instruments, net | 16 | (141) | |||||||||
| Interest expense, net | 63 | 40 | |||||||||
| Depreciation, depletion, amortization and accretion | 1,293 | 1,097 | |||||||||
| Depreciation and interest expense related to equity method investments | 14 | 21 | |||||||||
| (Gain) loss on extinguishment of debt | 1 | — | |||||||||
| Impairment of oil and natural gas properties | 1,400 | — | |||||||||
| Non-cash equity-based compensation expense | 31 | 23 | |||||||||
| Capitalized equity-based compensation expense | (9) | (5) | |||||||||
| Other non-cash transactions | 16 | 18 | |||||||||
| Provision for (benefit from) income taxes | 32 | 403 | |||||||||
| Consolidated Adjusted EBITDA | 3,001 | 2,947 | |||||||||
| Less: Adjustment for non-controlling interest | 297 | 146 | |||||||||
| Adjusted EBITDA attributable to Diamondback Energy, Inc. | $ | 2,704 | $ | 2,801 | |||||||
ADJUSTED NET INCOME
Adjusted net income is a non-GAAP financial measure equal to net income (loss) attributable to Diamondback Energy, Inc. plus net income (loss) attributable to non-controlling interest ("net income (loss)") adjusted for non-cash (gain) loss on derivative instruments, net, (gain) loss on extinguishment of debt, impairment of oil and natural gas properties, other non-cash transactions and related income tax adjustments. The Company’s computation of adjusted net income may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts. Management believes adjusted net income helps investors in the oil and natural gas industry to measure and compare the Company's performance to other oil and natural gas companies by excluding from the calculation items that can vary significantly from company to company depending upon accounting methods, the book value of assets and other non-operational factors. Further, in order to allow investors to compare the Company's performance across periods, the Company excludes the effects of significant transactions that may affect earnings but are unpredictable in nature, timing and amount, although they may recur in different reporting periods.
The following table presents a reconciliation of the GAAP financial measure of net income (loss) attributable to Diamondback Energy, Inc. to the non-GAAP measure of adjusted net income:
| Diamondback Energy, Inc. | |||||||||||
| Adjusted Net Income | |||||||||||
| (unaudited, $ in millions except per share data, shares in thousands) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, 2026 | |||||||||||
| Amounts | Amounts Per Diluted Share | ||||||||||
Net income (loss) attributable to Diamondback Energy, Inc.(1) | $ | 25 | $ | 0.08 | |||||||
| Net income (loss) attributable to non-controlling interest | 119 | 0.42 | |||||||||
Net income (loss)(1) | 144 | 0.50 | |||||||||
| Non-cash (gain) loss on derivative instruments, net | 16 | 0.06 | |||||||||
| (Gain) loss on extinguishment of debt | 1 | — | |||||||||
| Impairment of oil and natural gas properties | 1,400 | 4.95 | |||||||||
| Other non-cash transactions | 16 | 0.06 | |||||||||
Adjusted net income excluding above items(1) | 1,577 | 5.57 | |||||||||
| Income tax adjustment for above items | (261) | (0.93) | |||||||||
Adjusted net income(1) | 1,316 | 4.64 | |||||||||
| Less: Adjusted net income attributable to non-controlling interest | 118 | 0.41 | |||||||||
Adjusted net income attributable to Diamondback Energy, Inc.(1) | $ | 1,198 | $ | 4.23 | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 282,792 | ||||||||||
| Diluted | 282,792 | ||||||||||
(1)The Company’s earnings (loss) per diluted share amount has been computed using the two-class method in accordance with GAAP. The two-class method is an earnings allocation which reflects the respective ownership among holders of common stock and participating securities. Diluted earnings per share using the two-class method is calculated as (i) net income attributable to Diamondback Energy, Inc, (ii) less the reallocation of $3 million in earnings attributable to participating securities, (iii) divided by diluted weighted average common shares outstanding for the respective periods.
OPERATING CASH FLOW BEFORE WORKING CAPITAL CHANGES, FREE CASH FLOW AND ADJUSTED FREE CASH FLOW
Operating cash flow before working capital changes, which is a non-GAAP financial measure, represents net cash provided by operating activities as determined under GAAP without regard to changes in working capital. The Company believes operating cash flow before working capital changes is a useful measure of an oil and natural gas company’s ability to generate cash used to fund exploration, development and acquisition activities and service debt or pay dividends. The Company also uses this measure because changes in working capital relate to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. This allows the Company to compare its operating performance with that of other companies without regard to financing methods and capital structure.
The Company defines Free Cash Flow, which is a non-GAAP financial measure, as cash flow from operating activities before changes in working capital in excess of cash capital expenditures. The Company defines Adjusted Free Cash Flow, which is a non-GAAP financial measure, as Free Cash Flow before the tax impact from divestitures (if any), merger and transaction expenses, costs of early termination of derivatives and settlements of any treasury locks. The Company believes that Free Cash Flow and Adjusted Free Cash Flow are useful to investors as they provide a measure to compare both cash flow from operating activities and additions to oil and natural gas properties across periods on a consistent basis, adjusted, as applicable, for non-recurring impacts from divestitures, merger and transaction expenses, the early termination of derivative contracts and settlements of treasury locks. These measures should not be considered as an alternative to, or more meaningful than, net cash provided by operating activities as an indicator of liquidity. The Company's computation of Free Cash Flow may not be comparable to other similarly titled measures of other companies.
The following tables present a reconciliation of the GAAP financial measure of net cash provided by operating activities to the non-GAAP measure of operating cash flow before working capital changes and to the non-GAAP measures of Free Cash Flow and Adjusted Free Cash Flow:
| Diamondback Energy, Inc. | |||||||||||
| Operating Cash Flow Before Working Capital Changes, Free Cash Flow and Adjusted Free Cash Flow | |||||||||||
| (unaudited, in millions) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by operating activities | $ | 1,828 | $ | 2,355 | |||||||
| Less: Changes in cash due to changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (779) | (6) | |||||||||
| Accounts payable and accrued liabilities | (257) | (374) | |||||||||
| Income taxes payable | 287 | 135 | |||||||||
| Revenues and royalties payable | 70 | 84 | |||||||||
| Other | (131) | 29 | |||||||||
| Total working capital changes | (810) | (132) | |||||||||
| Operating cash flow before working capital changes | 2,638 | 2,487 | |||||||||
| Additions to oil and natural gas properties | (933) | (942) | |||||||||
| Total Cash CAPEX | (933) | (942) | |||||||||
| Free Cash Flow | 1,705 | 1,545 | |||||||||
Merger and transaction expenses(1) | 5 | 37 | |||||||||
| Early termination of derivatives | 27 | — | |||||||||
| Treasury locks | — | 1 | |||||||||
| Adjusted Free Cash Flow | $ | 1,737 | $ | 1,583 | |||||||
(1)Includes $4 million of Viper's transaction expenses related to the Sitio Acquisition for the three months ended March 31, 2026.
NET DEBT
The Company defines the non-GAAP measure of net debt as total debt (excluding debt issuance costs, discounts, premiums and unamortized basis adjustments) less cash and cash equivalents and restricted cash that has been irrevocably deposited for the redemption of principal amounts of outstanding senior notes. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Management uses net debt to determine the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. The Company believes this metric is useful to analysts and investors in determining the Company's leverage position because the Company has the ability to, and may decide to, use a portion of its cash and cash equivalents to reduce debt.
| Diamondback Energy, Inc. | |||||||||||||||||||||||||||||||||||
| Net Debt | |||||||||||||||||||||||||||||||||||
| (unaudited, in millions) | |||||||||||||||||||||||||||||||||||
| March 31, 2026 | Net Q1 Principal Borrowings/(Repayments) | December 31, 2025 | September 30, 2025 | June 30, 2025 | March 31, 2025 | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
Diamondback Energy, Inc.(1) | $ | 12,448 | $ | (14) | $ | 12,462 | $ | 13,792 | $ | 14,212 | $ | 13,269 | |||||||||||||||||||||||
Viper Energy, Inc.(1) | 1,620 | (585) | 2,205 | 2,640 | 1,105 | 830 | |||||||||||||||||||||||||||||
| Total debt | 14,068 | $ | (599) | 14,667 | 16,432 | 15,317 | 14,099 | ||||||||||||||||||||||||||||
| Cash and cash equivalents | (174) | (104) | (539) | (219) | (1,816) | ||||||||||||||||||||||||||||||
| Net debt | $ | 13,894 | $ | 14,563 | $ | 15,893 | $ | 15,098 | $ | 12,283 | |||||||||||||||||||||||||
(1)Excludes debt issuance costs, discounts, premiums and unamortized basis adjustments.
DERIVATIVES
As of May 1, 2026, the Company had the following outstanding consolidated derivative contracts, including derivative contracts at Viper. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing and Crude Oil Brent pricing and with natural gas derivative settlements based on the New York Mercantile Exchange Henry Hub pricing. When aggregating multiple contracts, the weighted average contract price is disclosed.
| Crude Oil (Bbls/day, $/Bbl) | |||||||||||||||||||||||||||||
Q2 2026 | Q3 2026 | Q4 2026 | Q1 2027 | Q2 2027 | |||||||||||||||||||||||||
| Long Puts - Crude Brent Oil | 37,000 | 20,000 | 10,000 | 5,000 | — | ||||||||||||||||||||||||
| Long Put Price ($/Bbl) | $52.50 | $52.50 | $55.00 | $55.00 | — | ||||||||||||||||||||||||
| Deferred Premium ($/Bbl) | $-1.70 | $-1.60 | $-1.33 | $-1.40 | — | ||||||||||||||||||||||||
| Long Puts - WTI (Magellan East Houston) | 115,000 | 95,000 | 50,000 | 25,000 | 10,000 | ||||||||||||||||||||||||
| Long Put Price ($/Bbl) | $50.00 | $50.53 | $51.00 | $50.00 | $50.00 | ||||||||||||||||||||||||
| Deferred Premium ($/Bbl) | $-1.57 | $-1.43 | $-1.34 | $-1.31 | $-1.43 | ||||||||||||||||||||||||
| Long Puts - WTI (Cushing) | 210,000 | 190,000 | 155,000 | 55,000 | 25,000 | ||||||||||||||||||||||||
| Long Put Price ($/Bbl) | $52.44 | $52.57 | $50.65 | $50.00 | $50.00 | ||||||||||||||||||||||||
| Deferred Premium ($/Bbl) | $-1.57 | $-1.30 | $-1.28 | $-1.34 | $-1.31 | ||||||||||||||||||||||||
Costless 3-Way Collars - WTI (Cushing) | 15,000 | 15,000 | 15,000 | — | — | ||||||||||||||||||||||||
| Ceiling Price ($/Bbl) | 115.07 | 115.07 | 115.07 | — | — | ||||||||||||||||||||||||
Long Put Price ($/Bbl) | $60.00 | $60.00 | $60.00 | — | — | ||||||||||||||||||||||||
Short Put Price ($/Bbl) | $50.00 | $50.00 | $50.00 | — | — | ||||||||||||||||||||||||
Put Spreads WTI (Cushing) | — | 15,000 | — | — | — | ||||||||||||||||||||||||
| Long Put Price ($/Bbl) | — | $50.00 | — | — | — | ||||||||||||||||||||||||
| Short Put Price ($/Bbl) | — | $55.00 | — | — | — | ||||||||||||||||||||||||
| Basis Swaps - WTI (Midland) | 45,000 | 75,000 | 75,000 | — | — | ||||||||||||||||||||||||
| $0.92 | $0.98 | $0.98 | — | — | |||||||||||||||||||||||||
WTI / Brent Basis Puts | 255,330 | 290,000 | — | — | — | ||||||||||||||||||||||||
Spread ($/Bbl) | $-41.67 | $-42.76 | — | — | — | ||||||||||||||||||||||||
| Deferred Premium ($/Bbl) | $-1.24 | $-1.52 | — | — | — | ||||||||||||||||||||||||
| Roll Swaps - WTI | 141,758 | 150,000 | 150,000 | — | — | ||||||||||||||||||||||||
| $2.82 | $2.89 | $2.89 | — | — | |||||||||||||||||||||||||
| Natural Gas (Mmbtu/day, $/Mmbtu) | |||||||||||||||||||||||
Q2 2026 | Q3 2026 | Q4 2026 | FY 2027 | ||||||||||||||||||||
| Costless Collars - Henry Hub | 840,000 | 840,000 | 840,000 | 720,000 | |||||||||||||||||||
| Floor Price ($/Mmbtu) | $2.87 | $2.87 | $2.87 | $2.88 | |||||||||||||||||||
| Ceiling Price ($/Mmbtu) | $6.35 | $6.35 | $6.35 | $6.37 | |||||||||||||||||||
| Natural Gas Basis Swaps - Waha Hub | 650,000 | 650,000 | 650,000 | 360,000 | |||||||||||||||||||
| $-1.87 | $-1.87 | $-1.75 | $-1.26 | ||||||||||||||||||||
| Natural Gas Basis Swaps - Houston Ship Channel | 100,000 | 100,000 | 100,000 | 300,000 | |||||||||||||||||||
| $-0.35 | $-0.35 | $-0.35 | $-0.31 | ||||||||||||||||||||
Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com
Exhibit 99.2
LETTER TO STOCKHOLDERS ISSUED BY DIAMONDBACK ENERGY, INC.
Midland, TX (May 4, 2026)
Diamondback Stockholders,
This letter is meant to be a supplement to our earnings release and is being furnished to the Securities and Exchange Commission (SEC) and released to our stockholders simultaneously with our earnings release. Please see the information regarding forward-looking statements and non-GAAP financial information included at the end of this letter.
Macro Update and Activity Plan
Over the last year, we have spent more time than ever discussing the macroeconomic environment with our stakeholders – a trend we do not expect to change any time soon. Since our last stockholder letter just 70 days ago, the oil market has completely flipped from a projected supply-demand surplus to a historic global deficit. We do not believe it is our job to comment on geopolitical events and will therefore focus on the fundamental analysis and how that fundamental analysis is shaping our capital allocation decisions during these volatile times.
Last quarter we closed our macro update with the following sentence:
“Therefore, we remain positioned with ultimate flexibility: we have the inventory depth and operational capacity to accelerate activity quickly if the market tightens and we also retain the flexibility to moderate activity if conditions significantly soften from current levels.”
Since that statement, front month oil prices have increased by over 50% and the 2-year oil strip has moved by over 20%. Global oil production declined by over 8 million barrels per day in March (almost 8% of global production), a number that further increased in April. For reference, the prior projected oversupply that sent prices down over $20 per barrel last year was expected to be between a 1% and 2% mismatch of supply and demand. The oversupply projections pale in comparison to the current situation. Prices for physical delivery of crude oil and refined products have increased even further, with some regions around the world already seeing shortages and demand destruction. Therefore, we believe there is a legitimate supply-demand imbalance and that the associated price signal is the catalyst to begin to grow production.
Because of our positioning, our preparation and this price signal, we are bringing incremental barrels to the market immediately. We have made the decision to begin to work down our drilled but uncompleted well (“DUC”) balance to maintain our current production level of over 520,000 Bo/d - up 3% from our original 2026 guidance. Diamondback is capturing the production response now and will subsequently backfill activity to maintain our future operational flexibility.
To execute this plan, we expect to run 5 completion crews consistently for the remainder of the year and to add two or three rigs to preserve a healthy backlog of projects to maintain operational flexibility. This level of incremental activity maintains our current level of capital efficiency and puts Diamondback in a differentiated position.
On top of increasing Cash Flow per share, this revised plan generates more Free Cash Flow per share in 2026 assuming WTI averages over $60 for the rest of the year. This gives us the ability to maintain current activity levels even if oil prices decline. While our “stoplight” analogy for the macro environment served its purpose over the last year, we are going to put it on the sidelines for now as the light has turned green, and Diamondback is well-positioned to respond to the current macro environment.
First Quarter 2026 Operational Performance
We delivered a strong first quarter, driven by solid execution despite weather-related impacts from Winter Storm Fern in January. Oil production averaged 521 MBO/d, exceeding the high end of our 502 - 512 MBO/d guidance range. Importantly, this beat was not a result of higher cash capital expenditures as we invested $933 million for the quarter, below the midpoint of our $900 - $975 million guidance range.
Lease operating expenses (“LOE”) and other cash operating costs were also in line with our guidance. LOE averaged $6.21 per BOE, an increase over LOE costs in Q4 2025 primarily due to one-time charges associated with production recovery efforts following Winter Storm Fern. We continue to work tirelessly to minimize cash costs, and our operations team and field organization are currently scaling automation and data‑driven predictive maintenance (including through Artificial Intelligence initiatives), which we expect to increase uptime and reduce LOE in the coming years.
Our drilling and completion teams continue to manufacture wellbores with industry-leading execution through consistent, repeatable performance across the program. Importantly, executing ahead of plan was a key contributor to the production beat this quarter, fueled by the compounding efficiency gains our teams are delivering quarter after quarter versus the base plan. Drilling performance was a standout this quarter, with 11% of wells reaching total depth in less than five days and new internal speed records on the fastest ~2, ~3 and ~4-mile wells. Notably, the team drilled the fastest Barnett well in company history (~18 days) at the lowest Barnett cost to date (under $400 per lateral foot), supporting our belief that Barnett development is trending toward competitiveness with the rest of our portfolio. On the completions side, continuous pumping is compounding improvements in utilization and reducing non-productive time. In addition, with roughly 80% of the frac fleet electrified, we view electrification as a strategic advantage in this environment, as it meaningfully reduces exposure to diesel-driven cost inflation while also supporting more consistent execution through lower fuel logistics intensity and improved operating efficiency.
First Quarter 2026 Financial Performance
In the first quarter, we generated $1.8 billion in net cash from operating activities, which translated into $1.7 billion of Free Cash Flow and Adjusted Free Cash Flow.
We recorded a $1.4 billion non-cash impairment in the first quarter. As discussed in detail in our previous letter, the charge was mechanically driven by trailing twelve‑month, first‑of-month SEC pricing, with weaker January and February oil prices this year rolling through the SEC price deck and impacting our ceiling test. Looking ahead, we expect this to be the last impairment related to this price roll‑through.
Return of Capital and Capital Allocation Update
Today we are announcing a change to the structure of how we return Free Cash Flow to our stockholders. Since late 2021, we have maintained a commitment to return a minimum percentage of our quarterly Adjusted Free Cash Flow to stockholders through a base dividend, share repurchases and variable dividends. Over the past four years, we have returned approximately $12.1 billion to stockholders through $3.4 billion of base dividends, $5.9 billion of share repurchases and $2.8 billion of variable dividends.
Next quarter, we plan to remove our quarterly percentage of Adjusted Free Cash Flow return commitment and instead retain the flexibility to allocate our post-dividend Free Cash Flow to the opportunity that best creates long-term stockholder value.
The formulaic return of capital commitment served an important purpose to instill capital discipline into the E&P sector after COVID. The downside to the formulaic return mechanism was its restrictive structure on a highly cyclical business (as exemplified this quarter). The quarterly aspect meant that we had to make capital allocation decisions within a 90 day window, rather than making decisions through a cyclical lens.
We will continue to prioritize our stable and growing base dividend, which we expect to remain protected below $40 per barrel at maintenance production levels. Today, we are increasing our base dividend by 5% to $4.40 per share annually, now up 10% this year. We will also continue an active repurchase program focused on buying back shares below our estimated intrinsic value at mid-cycle commodity prices just as we have over the last five years. Currently, we do not see value in paying out variable dividends, so we have put that mechanism aside for now.
There will be times (like today) where commodity prices are high and we use excess Free Cash Flow to accelerate debt pay down or build cash. On the other hand, there will be periods where we outspend cash flow and lean on our balance sheet to buy back shares because our equity is undervalued. Capital allocation, both human and financial, is the most important thing we do – preserving the flexibility to make the correct capital allocation decision at the right point in the commodity cycle is paramount to long-term value creation for Diamondback stockholders.
Balance Sheet
We have made significant progress on debt reduction in 2026. Quarter-over-quarter, consolidated gross debt decreased by $0.6 billion and consolidated net debt decreased by roughly $0.7 billion. We ended the quarter with consolidated gross debt of approximately $14.1 billion and consolidated net debt of $13.9 billion.
In April, we repurchased some of our long‑dated notes at an attractive discount by successfully retiring $777 million in principal of our 2051 and 2052 Senior Notes for $632 million including accrued interest, or 81.1% of par value. We also fully repaid the remaining $550 million outstanding on our term loan due in 2027. Since the end of the third quarter of 2025, we have reduced total debt by ~$3.7 billion (a 23% reduction). We believe that accelerating deleveraging in a high commodity price environment strengthens our downside durability and gives us significant flexibility and optionality through the next cycle.
Closing
We are grateful for the trust you have put in Diamondback and our ability to appropriately allocate capital. With the operational and financial momentum we have today, we are well positioned to deliver strong outcomes through 2026 and beyond.
Thank you for your interest in Diamondback Energy.
Sincerely,
Kaes Van't Hof
Chief Executive Officer and Director
Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com
Forward-Looking Statements:
This letter contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding Diamondback’s: future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position; reserve estimates and its ability to replace or increase reserves; anticipated benefits or other effects of strategic transactions (including the Double Eagle Acquisition and the Sitio acquisition completed by Diamondback's subsidiary, Viper Energy, Inc., and other acquisitions, divestitures or reorganizations); and plans and objectives of management (including plans for future cash flow from operations and for executing environmental strategies) are forward-looking statements. When used in this letter, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to Diamondback are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Diamondback believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond Diamondback’s control. Accordingly, forward-looking statements are not guarantees of future performance and Diamondback’s actual outcomes could differ materially from what Diamondback has expressed in its forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: geopolitics and market conditions, including changes in supply and demand levels for oil, natural gas and natural gas liquids and the resulting impact on the price for those commodities; changes in U.S. energy, environmental, monetary and trade policies, including with respect to tariffs or other trade barriers and any resulting trade tensions; actions taken by the members of OPEC and its non-OPEC allies (OPEC+) affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments; changes in general economic, business or industry conditions, including changes in foreign currency exchange rates, interest rates, inflation rates, and instability in the financial sector; regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits; federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations; physical and transition risks relating to climate change, changing political and social perspectives on climate change and other ESG factors, and risks from our publicly disclosed targets related to sustainability and emissions reduction initiatives; challenges in
developing our existing leasehold acreage and finding, developing or acquiring additional reserves; restrictions on the use of water, including limits on the use of produced water and a moratorium on new produced water disposal well permits recently imposed by the Texas Railroad Commission in an effort to control induced seismicity in the Permian Basin; significant declines in prices for oil, natural gas, or natural gas liquids, which could require recognition of significant impairment charges; conditions in the capital, financial and credit markets, including the availability and pricing of capital for acquisitions, exploration and development operations; challenges with employee retention and an increasingly competitive labor market; changes in availability or cost of rigs, equipment, raw materials, supplies and oilfield services; changes in safety, health, environmental, tax and other regulations or requirements (including those addressing air emissions, water management, or the impact of global climate change); security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or from breaches of information technology systems of third parties with whom we transact business; lack of, or disruption in, access to adequate and reliable electrical power, internet and telecommunication infrastructure, information and computer systems, transportation, processing, storage and other facilities for our oil, natural gas and natural gas liquids; failures or delays in achieving expected reserve or production levels from existing and future oil and natural gas developments, including due to operating hazards, drilling risks, or the inherent uncertainties in predicting reserve and reservoir performance; inability to keep pace with technological developments in our industry; failure to meet our obligations under our oil purchase contracts; loss of one or more customers or their inability to meet their obligations; geographical concentration of our primary operations; risks from our return of capital commitment, and uncertainties over our future dividends and share repurchases; difficulty in obtaining necessary approvals and permits; severe weather conditions and natural disasters; changes in the financial strength of counterparties to our credit facilities and hedging contracts; our substantial indebtedness and restrictions to our operating and financial flexibility; changes in our credit rating; failure to identify, complete and successfully integrate acquisitions, including the recently completed Double Eagle Acquisition and Viper’s Sitio Acquisition; the Endeavor stockholders’ ability to significantly influence our business and potential conflicts of interest; and other risks described in Part I, Item 1A of Diamondback’s Annual Report on Form 10-K, filed with the SEC on February 25, 2026, and those risks disclosed in its subsequent filings on Forms 10-Q and 8-K, which can be obtained free of charge on the SEC’s website at http://www.sec.gov and Diamondback’s website at www.diamondbackenergy.com/investors.
In light of these factors, the events anticipated by Diamondback’s forward-looking statements may not occur at the time anticipated or at all. Moreover, Diamondback operates in a very competitive and rapidly changing environment and new risks emerge from time to time. Diamondback cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this letter or, if earlier, as of the date they were made. Diamondback does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
Non-GAAP Financial Measures
This letter includes financial information not prepared in conformity with generally accepted accounting principles (GAAP), such as Free Cash Flow, Adjusted Free Cash Flow, Adjusted Free Cash Flow per share and net debt. The non-GAAP information should be considered by the reader in addition to, but not instead of, financial information prepared in accordance with GAAP. A reconciliation of the differences between these non-GAAP financial measures and the most directly comparable GAAP financial measures
can be found in Diamondback's quarterly results, which are posted on Diamondback's website at www.diamondbackenergy.com/investors and included as Exhibit 99.1 to the Current Report on Form 8-K filed by Diamondback with the SEC that also includes this letter as Exhibit 99.2. Furthermore, this letter includes or references certain forward-looking, non-GAAP financial measures. Because Diamondback provides these measures on a forward-looking basis, it cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP financial measures, such as future impairments and future changes in working capital. Accordingly, Diamondback is unable to present a quantitative reconciliation of such forward-looking, non-GAAP financial measures to the respective most directly comparable forward-looking GAAP financial measures. Diamondback believes that these forward-looking, non-GAAP measures may be a useful tool for the investment community in comparing Diamondback's forecasted financial performance to the forecasted financial performance of other companies in the industry.
FAQ
How did Diamondback Energy (FANG) perform financially in Q1 2026?
Diamondback generated strong cash flow in Q1 2026, with total revenues of $4.24 billion and consolidated Adjusted EBITDA of $3.00 billion. Free Cash Flow reached $1.71 billion and Adjusted Free Cash Flow was $1.74 billion, supporting higher dividends and substantial share repurchases.
What were Diamondback Energy’s Q1 2026 earnings and impairment charges?
Net income attributable to Diamondback Energy was $25 million in Q1 2026, or $0.08 per diluted share. Results included a non-cash $1.40 billion impairment of oil and natural gas properties tied to SEC pricing, while adjusted net income reached $1.20 billion, or $4.23 per diluted share.
How much cash flow and capital spending did Diamondback Energy report for Q1 2026?
Diamondback reported net cash provided by operating activities of $1.83 billion and Operating Cash Flow Before Working Capital Changes of $2.64 billion in Q1 2026. Cash capital expenditures totaled $933 million, leading to Free Cash Flow of $1.71 billion and Adjusted Free Cash Flow of $1.74 billion.
What production levels did Diamondback Energy achieve in Q1 2026?
In Q1 2026, Diamondback’s oil production averaged 521,000 barrels per day, with total production of 979,000 barrels of oil equivalent per day. Combined quarterly volumes were 88.1 million BOE, reflecting continued operational execution across its Midland Basin development program.
What guidance did Diamondback Energy provide for 2026 production and capital spending?
Diamondback increased 2026 oil production guidance to at least 520 MBO/d and total production guidance to at least 972 MBOE/d. It raised its full-year cash capital expenditures outlook to approximately $3.90 billion and guided Q2 2026 cash capex to $925–$1,025 million.
What is Diamondback Energy’s debt and liquidity position after Q1 2026?
At March 31, 2026, Diamondback reported consolidated total debt of $14.07 billion and consolidated total net debt of $13.89 billion. Standalone liquidity was $2.65 billion, including $146 million of standalone cash and $2.50 billion of remaining availability under the company’s credit facility.