false000153983800015398382025-02-242025-02-24

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): February 24, 2025
___________
DIAMONDBACK ENERGY, INC.
(Exact Name of Registrant as Specified in Charter)
DE
001-35700
45-4502447
(State or other jurisdiction of incorporation)
(Commission File Number)
(I.R.S. Employer
Identification Number)
500 West Texas Ave.
Suite 100
Midland, TX
79701
(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:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par Value
FANGThe Nasdaq Stock Market LLC
(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 February 24, 2025, Diamondback Energy, Inc. (the “Company”) issued a press release announcing financial and operating results for the fourth quarter and full year ended December 31, 2024, including the fourth quarter 2024 base cash dividend and an increase in the annual base dividend (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
  



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 thereunto duly authorized.
DIAMONDBACK ENERGY, INC.
Date:February 24, 2025
By:/s/ Teresa L. Dick
Name:Teresa L. Dick
Title:Executive Vice President, Chief Accounting Officer and Assistant Secretary




Exhibit 99.1

dblogo1.jpg

DIAMONDBACK ENERGY, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2024 FINANCIAL AND OPERATING RESULTS; INCREASES BASE DIVIDEND

Midland, TX (February 24, 2025) - Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the “Company”) today announced financial and operating results for the fourth quarter and full year ended December 31, 2024.

FOURTH QUARTER 2024 HIGHLIGHTS

•Average production of 475.9 MBO/d (883.4 MBOE/d)
•Net cash provided by operating activities of $2.3 billion; Operating Cash Flow Before Working Capital Changes (as defined and reconciled below) of $2.3 billion
•Cash capital expenditures of $933 million
•Free Cash Flow (as defined and reconciled below) of $1.3 billion; Adjusted Free Cash Flow (as defined and reconciled below) of $1.4 billion
•Increased annual base dividend by 11% to $4.00 per share; declared Q4 2024 base cash dividend of $1.00 per share payable on March 13, 2025; implies a 2.6% annualized yield based on February 21, 2025 closing share price of $156.12
•Repurchased 2,326,247 shares of common stock in Q4 2024 for $402 million, excluding excise tax (at a weighted average price of $172.91 per share); repurchased 1,254,600 shares of common stock to date in Q1 2025 for $210 million, excluding excise tax (at a weighted average price of $167.42 per share)
•Total Q4 2024 return of capital of $694 million; represents ~51% of Adjusted Free Cash Flow (as defined and reconciled below) from stock repurchases and the declared Q4 2024 base dividend
•Closed previously announced TRP Energy ("TRP") transaction in December 2024

FULL YEAR 2024 HIGHLIGHTS

•Average production of 337.0 MBO/d (598.3 MBOE/d)
•Net cash provided by operating activities of $6.4 billion; Operating Cash Flow Before Working Capital Changes (as defined and reconciled below) of $6.5 billion
•Cash capital expenditures of $2.9 billion
•Free Cash Flow (as defined and reconciled below) of $3.6 billion; Adjusted Free Cash Flow (as defined and reconciled below) of $4.0 billion
•Declared total base-plus-variable dividends of $6.21 per share for the full year 2024
•Repurchased 5,525,276 shares of common stock in 2024 for $959 million, excluding excise tax (at a weighted average price of $173.57 per share)
•Total full year 2024 return of capital of $2.3 billion; represents ~57% of FY 2024 Adjusted Free Cash Flow (as defined and reconciled below)


•As previously announced, closed merger with Endeavor Energy Resources, L.P. ("Endeavor") on September 10, 2024
•Proved reserves as of December 31, 2024 of 3,557 MMBOE (1,761 MMBO, 50% oil), up 63% year over year; proved developed producing ("PDP") reserves of 2,385 MMBOE (1,121 MMBO, 47% oil, 67% of proved reserves), up 59% year over year

2025 GUIDANCE HIGHLIGHTS

Please note the guidance below gives effect to the pending acquisition of Double Eagle IV Midco, LLC (“Double Eagle”) from April 1, 2025 onward.

•Full year 2025 oil production guidance of 485 - 498 MBO/d (883 - 909 MBOE/d)
•Full year 2025 cash capital expenditures guidance of $3.8 - $4.2 billion
•The Company expects to drill between 446 - 471 gross (406 - 428 net) wells and complete between 557 - 592 gross (526 - 560 net) wells with an average lateral length of approximately 11,500 feet in 2025
•Q1 2025 oil production guidance of 470 - 475 MBO/d (860 - 875 MBOE/d)
•Q1 2025 cash capital expenditures guidance of $900 million - $1.0 billion
•Implies Q2 2025 – Q4 2025 run-rate oil production of 490 – 505 MBO/d (891 – 920 MBOE/d)
•Full year 2025 Midland Basin well costs per lateral foot guidance of $555 - $605
•Implies full year 2025 oil production per million dollars of cash capital expenditures (“MBO per $MM of CAPEX”) of 44.8, 10% better than the Company’s original pro forma 2025 outlook provided in February 2024

OPERATIONS UPDATE

The tables below provide a summary of operating activity for the fourth quarter of 2024.

Total Activity (Gross Operated):
Number of Wells DrilledNumber of Wells Completed
Midland Basin131 124 
Delaware Basin6 4 
Total137 128 

Total Activity (Net Operated):
Number of Wells Drilled
Number of Wells Completed
Midland Basin124 113 
Delaware Basin5 4 
Total129 117 


During the fourth quarter of 2024, Diamondback drilled 131 gross wells in the Midland Basin and six gross wells in the Delaware Basin. The Company turned 124 operated wells to production in the Midland Basin and four gross wells in the Delaware Basin, with an average lateral length of 11,810 feet. Operated completions during the fourth quarter consisted of 26 Wolfcamp A wells, 26 Lower Spraberry wells, 24 Wolfcamp B wells, 19 Jo Mill wells, 15 Middle Spraberry wells, four Wolfcamp D wells, four Dean wells, three Upper Spraberry wells, three Barnett wells, two Second Bone Spring wells and two Third Bone Spring wells.



For the year ended December 31, 2024, Diamondback drilled 342 gross wells in the Midland Basin and 30 gross wells in the Delaware Basin. The Company turned 391 operated wells to production in the Midland Basin and 19 operated wells to production in the Delaware Basin. The average lateral length for wells completed during the year ended December 31, 2024 was 11,719 feet, and consisted of 98 Lower Spraberry wells, 87 Wolfcamp A wells, 69 Wolfcamp B wells, 59 Jo Mill wells, 49 Middle Spraberry wells, 13 Wolfcamp D wells, 13 Dean wells, nine Upper Spraberry wells, six Third Bone Spring wells, four Barnett wells and three Second Bone Spring wells.

FINANCIAL UPDATE

Diamondback's fourth quarter 2024 net income was $1.1 billion, or $3.67 per diluted share. Adjusted net income (as defined and reconciled below) for the fourth quarter was $1.1 billion, or $3.64 per diluted share. For the full year ended December 31, 2024, Diamondback’s net income was $3.3 billion, or $15.53 per diluted share. Adjusted net income for the full year was $3.6 billion, or $16.57 per diluted share.

Fourth quarter 2024 net cash provided by operating activities was $2.3 billion. For the full year ended December 31, 2024, Diamondback's net cash provided by operating activities was $6.4 billion.

During the fourth quarter of 2024, Diamondback spent $834 million on operated and non-operated drilling and completions, $93 million on infrastructure and environmental and $6 million on midstream, for total cash capital expenditures of $933 million. For the full year ended 2024, Diamondback spent $2.6 billion on operated and non-operated drilling and completions, $221 million on infrastructure and environmental and $14 million on midstream, for total cash capital expenditures of $2.9 billion.

Fourth quarter 2024 Consolidated Adjusted EBITDA (as defined and reconciled below) was $2.6 billion. Adjusted EBITDA net of non-controlling interest (as defined and reconciled below) for the fourth quarter was $2.5 billion. For the full year ended December 31, 2024, Consolidated Adjusted EBITDA was $7.7 billion. Adjusted EBITDA net of non-controlling interest for the full year was $7.3 billion.

Diamondback's fourth quarter 2024 Free Cash Flow (as defined and reconciled below) was $1.3 billion. Adjusted Free Cash Flow (as reconciled and defined below) for the fourth quarter was $1.4 billion. For the full year ended December 31, 2024, Diamondback's Free Cash Flow was $3.6 billion, with $4.0 billion of Adjusted Free Cash Flow over the same period.

Fourth quarter 2024 average unhedged realized prices were $69.48 per barrel of oil, $0.48 per Mcf of natural gas and $19.27 per barrel of natural gas liquids ("NGLs"), resulting in a total equivalent unhedged realized price of $42.71 per BOE.

Diamondback's cash operating costs for the fourth quarter of 2024 were $10.30 per BOE, including lease operating expenses ("LOE") of $5.67 per BOE, cash general and administrative ("G&A") expenses of $0.69 per BOE, production and ad valorem taxes of $2.77 per BOE and gathering, processing and transportation expenses of $1.17 per BOE.

As of December 31, 2024, Diamondback had $134 million in standalone cash and no borrowings outstanding under its revolving credit facility, with approximately $2.5 billion available for future borrowings under the facility and approximately $2.6 billion of total liquidity. As of December 31, 2024, the Company had consolidated total debt of $13.2 billion and consolidated net debt (as defined and


reconciled below) of $13.0 billion, up from consolidated total debt of $13.1 billion and consolidated net debt of $12.7 billion as of September 30, 2024.

DIVIDEND DECLARATIONS

Diamondback announced today that the Company's Board of Directors declared a base cash dividend of $1.00 per common share for the fourth quarter of 2024 payable on March 13, 2025 to stockholders of record at the close of business on March 6, 2025.

Future base and variable dividends remain subject to review and approval at the discretion of the Company's Board of Directors.

COMMON STOCK REPURCHASE PROGRAM

During the fourth quarter of 2024, Diamondback repurchased ~2.3 million shares of common stock at an average share price of $172.91 for a total cost of approximately $402 million, excluding excise tax. To date, Diamondback has repurchased ~25.8 million shares of common stock at an average share price of $136.82 for a total cost of approximately $3.5 billion and has approximately $2.5 billion remaining on its current share buyback authorization. Subject to factors discussed below, Diamondback intends to continue to purchase common stock under the common stock repurchase program opportunistically with cash on hand, free cash flow from operations and proceeds from potential liquidity events such as the sale of assets. This repurchase program has no time limit and may be suspended from time to time, modified, extended or discontinued by the Board at any time. Purchases under the repurchase program may be made from time to time in privately negotiated transactions, or in open market transactions in compliance 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. Any common stock purchased as part of this program will be retired.

RESERVES

Estimates of Diamondback's proved reserves as of December 31, 2024 were prepared by Diamondback's internal reservoir engineers and audited by Ryder Scott Company, L.P., an independent petroleum engineering firm. Reference prices of $75.48 per barrel of oil and $2.13 per Mmbtu of natural gas were used in accordance with applicable rules of the Securities and Exchange Commission. Realized prices with applicable differentials were $76.15 per barrel of oil, $0.54 per Mcf of natural gas and $22.02 per barrel of natural gas liquids.

Proved reserves at year-end 2024 of 3,557 MMBOE represent a 63% increase over year-end 2023 reserves. Proved developed reserves increased by 59% to 2,385 MMBOE (67% of total proved reserves) as of December 31, 2024, reflecting the continued development of the Company's horizontal well inventory. Proved undeveloped reserves ("PUD" or "PUDs") increased to 1,173 MMBOE, a 72% increase over year-end 2023, and are comprised of 1,381 horizontal locations in which we have a working interest, of which 1,310 are in the Midland Basin. Crude oil represents 50% of Diamondback's total proved reserves.

Net proved reserve additions of 1,599 MMBOE resulted in a reserve replacement ratio of 730% (defined as the sum of extensions and discoveries, revisions, purchases and divestitures, divided by annual production). The organic reserve replacement ratio was 68% (defined as the sum of extensions and discoveries and revisions, divided by annual production).



Net purchases of reserves were the primary contributor to the increase in reserves totaling 1,449 MMBOE followed by Extensions and discoveries of reserves totaling 279 MMBOE, with downward revisions of 129 MMBOE. PDP extensions were the result of 1,172 new wells in which the Company has an interest, and PUD extensions were the result of 445 new locations in which the Company has a working interest. Net purchases of reserves of 1,449 MMBOE were the net result of acquisitions of 1,569 MMBOE and divestitures of 121 MMBOE. Downward revisions of 129 MMBOE were primarily the result of negative revisions of 89 MMBOE associated with lower commodity prices, 49 MMBOE due to PUD downgrades related to changes in the corporate development plan and 17 MMBOE due to a decline in well performance. These were partially offset by positive performance revisions of 26 MMBOE related to ownership and acquisition variance revisions.

The SEC PUD guidelines allow a company to book PUD reserves associated with projects that are to occur within the next five years. With its current development plan, the Company expects to continue its strong PUD conversion ratio in 2025 by converting an estimated 33% of its PUDs to a Proved Developed category, and develop approximately 78% of the consolidated 2024 year-end PUD reserves by the end of 2027.

Oil (MBbls)Gas (MMcf)Liquids (MBbls)MBOE
As of December 31, 20231,143,944 2,997,422534,2472,177,761 
Extensions and discoveries168,375 310,42158,696278,808 
Revisions of previous estimates(78,142)(158,468)(24,518)(129,071)
Purchase of reserves in place697,702 2,391,264473,2361,569,482 
Divestitures(47,505)(240,044)(33,080)(120,592)
Production(123,325)(275,680)(49,700)(218,972)
As of December 31, 20241,761,049 5,024,915958,8813,557,416 

Diamondback's exploration and development costs in 2024 were $3.2 billion. PD F&D costs were $10.51/BOE. PD F&D costs are defined as exploration and development costs, excluding midstream, divided by the sum of reserves associated with transfers from proved undeveloped reserves at year-end 2023 including any associated revisions in 2024 and extensions and discoveries placed on production during 2024. Drill bit F&D costs were $19.12/BOE including the effects of all revisions including pricing revisions. Drill bit F&D costs are defined as the exploration and development costs, excluding midstream, divided by the sum of extensions, discoveries and revisions.

Year Ended December 31,
202420232022
(In millions)
Acquisition costs:
Proved properties$21,275 $1,314 $778 
Unproved properties15,568 1,701 1,536 
Development costs2,992 1,962 566 
Exploration costs194 768 1,698 
Total$40,029 $5,745 $4,578 



FULL YEAR 2025 GUIDANCE

Below is Diamondback's guidance for the full year 2025, which includes first quarter production, cash tax and capital guidance. This guidance gives effect to the estimated contribution related to the pending Double Eagle acquisition, which is expected to close on April 1, 2025, subject to the satisfaction of customary closing conditions and regulatory approval.

2025 Guidance2025 Guidance
Diamondback Energy, Inc.
Viper Energy, Inc.
2025 Net production - MBOE/d
883 - 909
2025 Oil production - MBO/d
485 - 498
Q1 2025 Oil production - MBO/d (total - MBOE/d)
470 - 475 (860 - 875)
30.0 - 31.0 (54.0 - 56.0)
Unit costs ($/BOE)
Lease operating expenses, including workovers
$5.90 - $6.30
G&A
Cash G&A
$0.60 - $0.75
Non-cash equity-based compensation
$0.25 - $0.35
DD&A$14.00 - $15.00
Interest expense (net of interest income)$0.25 - $0.50
Gathering, processing and transportation
$1.20 - $1.40
Production and ad valorem taxes (% of revenue)~7%
Corporate tax rate (% of pre-tax income)23%
Cash tax rate (% of pre-tax income)
17% - 20%
Q1 2025 Cash taxes ($ - million)
$280 - $340
Capital Budget ($ - million)
Operated drilling and completion
$3,130 - $3,440
Capital workovers, non-operated properties and science
$280 - $320
Infrastructure, environmental and midstream(1)
$390 - $440
2025 Total capital expenditures
$3,800 - $4,200
Q1 2025 Capital expenditures
$900 - $1,000
Gross horizontal wells drilled (net)
446 - 471 (406 - 428)
Gross horizontal wells completed (net)
557 - 592 (526 - 560)
Average lateral length (Ft.)
~11,500'
FY 2025 Midland Basin well costs per lateral foot
$555 - $605
FY 2025 Delaware Basin well costs per lateral foot
$860 - $910
Midland Basin completed net lateral feet (%)
~95%
Delaware Basin completed net lateral feet (%)
~5%
(1) Includes approximately $60 million in estimated midstream capital expenditures for the full year 2025.



CONFERENCE CALL

Diamondback will host a conference call and webcast for investors and analysts to discuss its results for the fourth quarter of 2024 on Tuesday, February 25, 2025 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.

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 recently completed Endeavor merger, the pending Double Eagle acquisition and other acquisitions or divestitures); 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) 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: changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; the impact of public health crises, including epidemic or pandemic diseases and any related company or government policies or actions; actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments, including any impact of the ongoing war in Ukraine and the Israel-Hamas war on the global energy markets and geopolitical stability; instability in the financial markets; inflationary pressures; higher interest rates and their impact on the cost of capital; 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; those risks described in Item 1A of Diamondback’s Annual Report on Form 10-K, filed with the SEC on February 22, 2024, 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 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.



Diamondback Energy, Inc.
Consolidated Balance Sheets
(unaudited, in millions, except share amounts)
December 31,December 31,
20242023
Assets
Current assets:
Cash and cash equivalents ($27 million and $26 million related to Viper)$161 $582 
Restricted cash3 3 
Accounts receivable:
Joint interest and other, net198 192 
Oil and natural gas sales, net ($149 million and $109 million related to Viper)
1,387 654 
Inventories116 63 
Derivative instruments168 17 
Prepaid expenses and other current assets77 110 
Total current assets2,110 1,621 
Property and equipment:
Oil and natural gas properties, full cost method of accounting ($22,666 million and $8,659 million excluded from amortization at December 31, 2024 and December 31, 2023, respectively) ($5,713 million and $4,629 million related to Viper and $2,180 million and $1,769 million excluded from amortization related to Viper)
82,240 42,430 
Other property, equipment and land1,440 673 
Accumulated depletion, depreciation, amortization and impairment ($1,081 million and $866 million related to Viper)
(19,208)(16,429)
Property and equipment, net64,472 26,674 
Funds held in escrow1 — 
Equity method investments375 529 
Derivative instruments2 1 
Deferred income taxes, net ($185 million and $57 million related to Viper)173 45 
Other assets159 131 
Total assets$67,292 $29,001 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable - trade$253 $261 
Accrued capital expenditures690 493 
Current maturities of debt900 — 
Other accrued liabilities1,020 475 
Revenues and royalties payable1,491 764 
Derivative instruments43 86 
Income taxes payable414 29 
Total current liabilities4,811 2,108 
Long-term debt ($1,083 million and $1,083 million related to Viper)
12,075 6,641 
Derivative instruments106 122 
Asset retirement obligations573 239 
Deferred income taxes9,826 2,449 
Other long-term liabilities39 12 
Total liabilities27,430 11,571 
Stockholders’ equity:
Common stock, $0.01 par value; 800,000,000 shares authorized; 290,984,373 and 178,723,871 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively
3 2 
Additional paid-in capital33,501 14,142 
Retained earnings (accumulated deficit)4,238 2,489 
Accumulated other comprehensive income (loss)(6)(8)
Total Diamondback Energy, Inc. stockholders’ equity37,736 16,625 
Non-controlling interest2,126 805 
Total equity39,862 17,430 
Total liabilities and stockholders' equity$67,292 $29,001 


Diamondback Energy, Inc.
Consolidated Statements of Operations
(unaudited, $ in millions except per share data, shares in thousands)
Three Months Ended December 31,Year Ended December 31,
2024202320242023
Revenues:
Oil, natural gas and natural gas liquid sales$3,471 $2,165 $10,100 $8,228 
Sales of purchased oil225 52 923 111 
Other operating income15 11 43 73 
Total revenues3,711 2,228 11,066 8,412 
Costs and expenses:
Lease operating expenses461 254 1,286 872 
Production and ad valorem taxes225 104 638 525 
Gathering, processing and transportation95 78 356 287 
Purchased oil expense225 52 921 111 
Depreciation, depletion, amortization and accretion1,156 469 2,850 1,746 
General and administrative expenses72 39 213 150 
Merger and integration expense30 — 303 11 
Other operating expenses35 27 103 140 
Total costs and expenses2,299 1,023 6,670 3,842 
Income (loss) from operations1,412 1,205 4,396 4,570 
Other income (expense):
Interest expense, net(34)(29)(135)(159)
Other income (expense), net(7)(9)80 52 
Gain (loss) on derivative instruments, net36 99 137 (259)
Gain (loss) on extinguishment of debt— — 2 (4)
Income (loss) from equity investments, net(2)9 21 48 
Total other income (expense), net(7)70 105 (322)
Income (loss) before income taxes1,405 1,275 4,501 4,248 
Provision for (benefit from) income taxes115 264 800 912 
Net income (loss) 1,290 1,011 3,701 3,336 
Net income (loss) attributable to non-controlling interest216 51 363 193 
Net income (loss) attributable to Diamondback Energy, Inc.$1,074 $960 $3,338 $3,143 
Earnings (loss) per common share:
Basic$3.67 $5.34 $15.53 $17.34 
Diluted$3.67 $5.34 $15.53 $17.34 
Weighted average common shares outstanding:
Basic291,851178,811213,545179,999
Diluted291,851178,811213,545179,999


Diamondback Energy, Inc.
Consolidated Statements of Cash Flows
(unaudited, in millions)
Three Months Ended December 31,Year Ended December 31,
2024202320242023
Cash flows from operating activities:
Net income (loss) $1,290 $1,011 $3,701 $3,336 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for (benefit from) deferred income taxes(165)193 15 378 
Depreciation, depletion, amortization and accretion1,156 469 2,850 1,746 
(Gain) loss on extinguishment of debt— — (2)4 
(Gain) loss on derivative instruments, net(36)(99)(137)259 
Cash received (paid) on settlement of derivative instruments(15)(48)(51)(110)
(Income) loss from equity investment, net2 (9)(21)(48)
Equity-based compensation expense16 14 65 54 
Other12 28 89 5 
Changes in operating assets and liabilities:
Accounts receivable(103)147 (42)(71)
Income tax receivable(3)16 9 283 
Prepaid expenses and other current assets(24)(94)54 (89)
Accounts payable and accrued liabilities114 11 (376)57 
Income taxes payable138 (9)87 (5)
Revenues and royalties payable59 (16)168 123 
Other(100)10 4 (2)
Net cash provided by (used in) operating activities2,341 1,624 6,413 5,920 
Cash flows from investing activities:
Drilling, completions, infrastructure and midstream additions to oil and natural gas properties(933)(649)(2,867)(2,701)
Property acquisitions(926)(820)(8,920)(2,013)
Proceeds from sale of assets8 7 467 1,407 
Other(4)(2)99 (16)
Net cash provided by (used in) investing activities(1,855)(1,464)(11,221)(3,323)
Cash flows from financing activities:
Proceeds under term loan agreement— — 1,000 — 
Repayments under term loan agreement(100)— (100)— 
Proceeds from borrowings under credit facilities2,190 313 3,375 4,779 
Repayments under credit facilities(2,044)(300)(3,377)(4,668)
Proceeds from senior notes— 400 5,500 400 
Repayment of senior notes— — (25)(134)
Repurchased shares under buyback program(402)(131)(959)(840)
Repurchased shares/units under Viper's buyback program— (28)— (95)
Proceeds from partial sale of investment in Viper Energy, Inc.— — 451 — 
Net proceeds from Viper's issuance of common stock— — 476 — 
Dividends paid to stockholders(262)(603)(1,578)(1,444)
Dividends/distributions to non-controlling interest(70)(45)(227)(129)
Other(7)(11)(149)(45)
Net cash provided by (used in) financing activities(695)(405)4,387 (2,176)
Net increase (decrease) in cash and cash equivalents(209)(245)(421)421 
Cash, cash equivalents and restricted cash at beginning of period373 830 585 164 
Cash, cash equivalents and restricted cash at end of period$164 $585 $164 $585 



Diamondback Energy, Inc.
Selected Operating Data
(unaudited)
Three Months Ended December 31,Year Ended December 31,
2024202320242023
Production Data:
Oil (MBbls)43,785 25,124 123,325 96,176 
Natural gas (MMcf)107,249 50,497 275,680 198,117 
Natural gas liquids (MBbls)19,615 9,016 49,700 34,217 
Combined volumes (MBOE)(1)
81,275 42,556 218,972 163,413 
Daily oil volumes (BO/d)475,924 273,087 336,954 263,496 
Daily combined volumes (BOE/d)883,424 462,565 598,284 447,707 
Average Prices:
Oil ($ per Bbl)$69.48 $76.42 $73.52 $75.68 
Natural gas ($ per Mcf)$0.48 $1.29 $0.32 $1.32 
Natural gas liquids ($ per Bbl)$19.27 $19.96 $18.99 $20.08 
Combined ($ per BOE)$42.71 $50.87 $46.12 $50.35 
Oil, hedged ($ per Bbl)(2)
$68.72 $75.59 $72.68 $74.72 
Natural gas, hedged ($ per Mcf)(2)
$0.82 $1.31 $0.91 $1.48 
Natural gas liquids, hedged ($ per Bbl)(2)
$19.27 $19.96 $18.99 $20.08 
Average price, hedged ($ per BOE)(2)
$42.76 $50.40 $46.38 $49.98 
Average Costs per BOE:
Lease operating expenses$5.67 $5.97 $5.87 $5.34 
Production and ad valorem taxes2.77 2.44 2.91 3.21 
Gathering, processing and transportation expense1.17 1.83 1.63 1.76 
General and administrative - cash component0.69 0.59 0.68 0.59 
Total operating expense - cash$10.30 $10.83 $11.09 $10.90 
General and administrative - non-cash component$0.20 $0.33 $0.30 $0.33 
Depreciation, depletion, amortization and accretion$14.22 $11.02 $13.02 $10.68 
Interest expense, net$0.42 $0.68 $0.62 $0.97 
(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, if any, non-cash equity-based compensation expense, capitalized equity-based compensation expense, merger and integration expenses, other non-cash transactions and provision for (benefit from) income taxes, if any. 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 more effectively 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 adds the items listed above to 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 or liquidity. 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 December 31,Year Ended December 31,
2024202320242023
Net income (loss) attributable to Diamondback Energy, Inc.$1,074 $960 $3,338 $3,143 
Net income (loss) attributable to non-controlling interest216 51 363 193 
Net income (loss)1,290 1,011 3,701 3,336 
Non-cash (gain) loss on derivative instruments, net(51)(147)(188)149 
Interest expense, net34 29 135 159 
Depreciation, depletion, amortization and accretion1,156 469 2,850 1,746 
Depreciation and interest expense related to equity method investments30 18 91 70 
(Gain) loss on extinguishment of debt— — (2)4 
Non-cash equity-based compensation expense24 21 95 80 
Capitalized equity-based compensation expense(8)(7)(30)(26)
Merger and integration expenses30 — 303 11 
Other non-cash transactions2 12 (62)(52)
Provision for (benefit from) income taxes115 264 800 912 
Consolidated Adjusted EBITDA2,622 1,670 7,693 6,389 
Less: Adjustment for non-controlling interest118 82 411 290 
Adjusted EBITDA attributable to Diamondback Energy, Inc.$2,504 $1,588 $7,282 $6,099 



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, if any, merger and integration expense, other non-cash transactions and related income tax adjustments, if any. 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 December 31, 2024Year Ended December 31, 2024
AmountsAmounts Per Diluted ShareAmountsAmounts Per Diluted Share
Net income (loss) attributable to Diamondback Energy, Inc.(1)
$1,074 $3.67 $3,338 $15.53 
Net income (loss) attributable to non-controlling interest216 0.74 363 1.70 
Net income (loss)(1)
1,290 4.41 3,701 17.23 
Non-cash (gain) loss on derivative instruments, net(51)(0.17)(188)(0.88)
(Gain) loss on extinguishment of debt— — (2)(0.01)
Merger and integration expense30 0.10 303 1.42 
Other non-cash transactions2 — (62)(0.29)
Adjusted net income excluding above items(1)
1,271 4.34 3,752 17.47 
Income tax adjustment for above items2 0.01 (9)(0.04)
Adjusted net income(1)
1,273 4.35 3,743 17.43 
Less: Adjusted net income attributable to non-controlling interest206 0.71 183 0.86 
Adjusted net income attributable to Diamondback Energy, Inc.(1)
$1,067 $3.64 $3,560 $16.57 
Weighted average common shares outstanding:
Basic291,851 213,545 
Diluted291,851 213,545 
(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 $4 million and $21 million in earnings attributable to participating securities for the three months ended December 31, 2024 and the year ended December 31, 2024, respectively, (iii) divided by diluted weighted average common shares outstanding for the respective periods.



OPERATING CASH FLOW BEFORE WORKING CAPITAL CHANGES AND 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 operating assets and liabilities. 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 operating assets and liabilities 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.

Free Cash Flow, which is a non-GAAP financial measure, is cash flow from operating activities before changes in working capital in excess of cash capital expenditures. The Company believes that Free Cash Flow is useful to investors as it provides measures to compare both cash flow from operating activities and additions to oil and natural gas properties across periods on a consistent basis as adjusted for non-recurring tax impacts from divestitures, merger and integration 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 operating performance. The Company's computation of Free Cash Flow may not be comparable to other similarly titled measures of other companies. The Company uses Free Cash Flow to reduce debt, as well as return capital to stockholders as determined by the Board of Directors.



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 measure of Free Cash Flow:

Diamondback Energy, Inc.
Operating Cash Flow Before Working Capital Changes and Free Cash Flow
(unaudited, in millions)
Three Months Ended December 31,Year Ended December 31,
2024202320242023
Net cash provided by operating activities$2,341 $1,624 $6,413 $5,920 
Less: Changes in cash due to changes in operating assets and liabilities:
Accounts receivable(103)147 (42)(71)
Income tax receivable(3)16 9 283 
Prepaid expenses and other current assets(24)(94)54 (89)
Accounts payable and accrued liabilities114 11 (376)57 
Income taxes payable138 (9)87 (5)
Revenues and royalties payable59 (16)168 123 
Other(100)10 4 (2)
Total working capital changes81 65 (96)296 
Operating cash flow before working capital changes2,260 1,559 6,509 5,624 
Drilling, completions, infrastructure and midstream additions to oil and natural gas properties(933)(649)(2,867)(2,701)
Total Cash CAPEX(933)(649)(2,867)(2,701)
Free Cash Flow1,327 910 3,642 2,923 
Tax impact from divestitures(1)
— — — 64 
Merger and integration expenses30 — 303 — 
Early termination of derivatives— — 37 — 
Treasury locks— — 25 — 
Adjusted Free Cash Flow$1,357 $910 $4,007 $2,987 
(1) Includes the tax impact for the disposal of certain Midland Basin water assets and Delaware Basin oil gathering assets.


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. 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)
December 31, 2024
Net Q4 Principal Borrowings/(Repayments)
September 30, 2024June 30, 2024March 31, 2024December 31, 2023
(in millions)
Diamondback Energy, Inc.(1)
$12,069 $(215)$12,284 $11,169 $5,669 $5,697 
Viper Energy, Inc.(1)
1,091 261 830 1,007 1,103 1,093 
Total debt13,160 $46 13,114 12,176 6,772 6,790 
Cash and cash equivalents(161)(370)(6,908)(896)(582)
Net debt$12,999 $12,744 $5,268 $5,876 $6,208 
(1)    Excludes debt issuance costs, discounts, premiums and unamortized basis adjustments.



DERIVATIVES

As of February 21, 2025, the Company had the following outstanding consolidated derivative contracts, including derivative contracts at Viper Energy, Inc. 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, $/Bbl)
Q1 2025Q2 2025Q3 2025Q4 2025
FY2026
Long Puts - Crude Brent Oil52,00048,00027,00012,000—
Long Put Price ($/Bbl)$60.00$58.44$56.85$55.00—
Deferred Premium ($/Bbl)$-1.48$-1.50$-1.54$-1.56—
Long Puts - WTI (Magellan East Houston)83,00086,00072,00035,000—
Long Put Price ($/Bbl)$55.84$55.12$55.00$55.00—
Deferred Premium ($/Bbl)$-1.59$-1.58$-1.60$-1.62—
Long Puts - WTI (Cushing)142,000137,000101,00041,000—
Long Put Price ($/Bbl)$56.58$55.58$55.00$55.00—
Deferred Premium ($/Bbl)$-1.59$-1.58$-1.58$-1.61—
Costless Collars - WTI (Cushing)13,000————
Long Put Price ($/Bbl)$60.00————
Short Call Price ($/Bbl)$89.55————
Basis Swaps - WTI (Midland)64,00066,00066,00066,000—
$1.09$1.05$1.05$1.05—
Roll Swaps - WTI
16,38925,00025,00025,000—
$0.93$0.93$0.93$0.93—

Natural Gas (Mmbtu/day, $/Mmbtu)
Q1 2025Q2 2025Q3 2025Q4 2025
FY 2026
FY 2027
Costless Collars - Henry Hub750,000690,000690,000690,000500,000—
Long Put Price ($/Mmbtu)$2.52$2.49$2.49$2.49$2.64—
Ceiling Price ($/Mmbtu)$5.26$5.28$5.28$5.28$6.31—
Natural Gas Basis Swaps - Waha Hub670,000610,000610,000610,000230,000200,000
$-0.82$-0.84$-0.84$-0.84$-1.41$-1.42



Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com


Exhibit 99.2

dblogo.jpg

LETTER TO STOCKHOLDERS ISSUED BY DIAMONDBACK ENERGY, INC.

Midland, TX (February 24, 2025)

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.

2024: Year in Review
2024 was arguably the most transformational year in the Company’s history. In February, we announced the $26 billion merger with Endeavor Energy, creating the must own Permian Pure Play. The merger not only made Diamondback bigger, with a combined ~722,000 net acres in the core of the Midland Basin, but better, giving Diamondback the ability to bring its industry leading operational structure onto a world class asset with differentiated inventory quality and duration. The deal closed on September 10th, and since then the combined Diamondback team has seamlessly integrated, sharing best practices and immediately delivering on the operational synergies we highlighted to the market at deal announcement.

Even considering the potential challenges that come with a large integration, our team was able to remain focused and execute each quarter. In 2024, our daily average production was 598 MBOE/d (56% oil) with capital expenditures of $2.9 billion. We generated $6.4 billion of net cash provided by operating activities and $4.0 billion of Adjusted Free Cash Flow of which $2.3 billion, or approximately 57%, was returned to stockholders through our stable and growing base dividend, variable dividends and buyback program. We repurchased nearly $1 billion worth of stock in 2024 as our buyback program allowed us to effectively buy during periods of market weakness and be an anchor order in the secondary offering completed last September.

Operational Update
Over the past year, the team has seen a step change in efficiency improvements in the field. We pushed well costs lower every quarter last year, and today we are announcing a new Midland Basin well cost range of $555 - $605 per foot, down approximately $45 per foot (over 7%) year over year. This is a testament to our drilling, completions and production groups who continue to strive to be the best at what they do, day in and day out.

On the drilling side, our use of clear fluids combined with an improved downhole assembly has allowed us to consistently achieve record drilling times. We drilled over 1.6 million lateral feet in the fourth quarter and are now averaging approximately 7 days from spud to target depth on our average Midland Basin


13,000’ lateral. We set a basin record in the fourth quarter by drilling 20,386 total feet (vertical section, curve and lateral) in one bit run.

Our completions teams continue to utilize SimulFrac fleets for nearly all of our completions, which speed up cycle times and reduce ancillary rental days. We are running four electric SimulFrac fleets today and expect to average five completion crews this year. Each crew can now complete approximately 100 wells per year at an average of over 3,700 lateral feet per day, up from 80 wells and ~3,000 lateral feet per day at this time last year. These electric fleets have enabled us to realize meaningful value through higher uptimes and fuel cost savings.

Since closing the Endeavor merger, we have also started to see the benefits of some un-modeled synergies. We expect a new standardized facility design, comprised of best practices from Diamondback and Endeavor, to save us ~10% versus our prior design. We are also seeing improved efficiencies and cycle times in our drillout process, courtesy of the legacy Endeavor team. Lastly, we are starting to see the benefit of size and scale in our procurement process, with an estimated per well savings of 2% - 3%. We believe we will continue to capture synergies, particularly on the production side of our business, through shared learning as the integration process continues.

Fourth Quarter Performance
For the quarter, Diamondback produced 475.9 MBO/d (883.4 MBOE/d), above the high end of the guidance range of 470 - 475 MBO/d (840 - 850 MBOE/d). Well performance continued to impress with strong results in our Sale and Robertson Ranch areas and on the recently acquired TRP acreage in Upton County. Capital expenditures were $933 million, below the low end of our guidance range of $950 million to $1.05 billion. This beat was primarily driven by Midland Basin well costs continuing to move lower, settling below our stated fourth quarter $600 per lateral foot estimate.

We generated $2.3 billion of net cash provided by operating activities and $1.4 billion of Adjusted Free Cash Flow of which approximately $694 million, or approximately 51%, was delivered to stockholders through our base dividend and buyback program. We leaned into buybacks in the fourth quarter as we felt our share price was below the intrinsic value of our business, particularly during the volatility witnessed in December. We have continued to buy back shares in January and February, and through last Friday had repurchased 1,254,600 of shares at a weighted average price of $167.42.

This quarter, we announced an 11% increase to the base dividend, moving the dividend from $0.90 per share to $1.00 per share per quarter ($4.00 per share annually). As we continue to lower costs and develop our highest quality inventory, our capital efficiency improves and lowers our corporate break even (the dollar per barrel of oil needed for us to maintain our current production levels and protect our dividend). Today, we are confident we can protect the increased dividend and our base level of activity below $40 a barrel at our current cost structure.

Drop Down Acquisition
In January, we announced a significant mineral and override drop down of legacy Endeavor assets to our subsidiary, Viper Energy, Inc. in a transaction valued at approximately $4.45 billion. Diamondback will receive $1 billion in cash and 69.6 million units of Viper’s operating subsidiary. The cash proceeds will be used to pay down near-term debt and the units received will push Diamondback’s ownership in Viper back above 50%, increasing Diamondback’s exposure to Viper’s differentiated growth profile and robust minerals position. We view Viper as a one-of-a-kind mineral company, with an exciting trajectory that includes unique insight into the Diamondback drill-bit. We believe in the long term distribution growth potential at Viper, and our pro forma position is worth approximately $7.5 billion assuming Friday’s stock price.



Double Eagle Acquisition
Last week, we announced a unique transaction with Double Eagle IV. We agreed to purchase the northern portion of their acreage position for approximately $4.1 billion. Consideration mix is made up of approximately 6.9 million shares of Diamondback common stock and $3 billion of cash.

We felt that this asset was the most attractive remaining position in our backyard, public or private. The Double Eagle team did an impressive job putting together undrilled units in the highest returning parts of the Basin, and the roughly 400 core locations we expect to acquire immediately slot into our near-term drilling profile. The acreage is also adjacent to our existing position and we expect additional synergies from over 20 lateral length extensions and infrastructure sharing. We also entered into a partnership to accelerate development on the southernmost acreage we acquired from Endeavor, which is expected to add significantly to Free Cash Flow in 2026 at no cost to Diamondback.

Through this transaction, we continue to high-grade our inventory base in the most productive parts of the Midland Basin, maximize near-term Free Cash Flow generation and extend inventory duration. While we recognize this deal was done shortly after closing the Endeavor merger, we don’t often control deal timing, and we prepare our organization to always “be ready” when an opportunity arises. That said, the opportunity set is shrinking, particularly for remaining quality private opportunities in the Basin. As we have proven time and again, we expect to seamlessly integrate this asset and execute flawlessly. We are positioning Diamondback to have the best long-term capital efficiency in the Permian Basin through a combination of inventory quality, duration and execution cost structure.

2025 Guidance: Maximizing Capital Efficiency
In 2025, we have again chosen capital efficiency and Free Cash Flow generation over volume growth for our capital plan. This is a decision we have consistently made over the last four years, and it has been consistently rewarded by the market and applauded by our stockholders, who own the Company. The output of this year's plan is the most capital efficient drilling program in the Company’s history.

We measure our capital efficiency using oil barrels produced divided by every dollar of capital spent. When we announced the Endeavor transaction a year ago, we expected to be able to produce approximately 470 - 480 MBO/d with a capital budget of approximately $4.1 - $4.4 billion in 2025, which equated to approximately 40.8 MBO per million dollars of capex spend. Today, we are announcing a 2025 capital plan that generates 485 - 498 MBO/d with a capital budget of approximately $3.8 - $4.2 billion, or approximately 44.8 MBO per million dollars of capex spend.

This ~10% improvement in capital efficiency is the direct result of applying the lowest cost structure in the Basin on top of our differentiated asset base. We plan to drill approximately 460 wells and complete approximately 575 wells this year, continuing to draw down on the DUC backlog we acquired from Endeavor, TRP and Double Eagle. At this pace, we are confident we can maintain this level of capital efficiency for nearly a decade, once again highlighting Diamondback’s differentiated inventory quality.

Balance Sheet
At year-end we had approximately $13.2 billion of gross debt and $13.0 billion of net debt on a consolidated basis. We ended the year with ~$2.6 billion of liquidity at Diamondback, with an undrawn credit facility. This equated to a consolidated fourth quarter leverage ratio of approximately 1.2x.

As we stated previously, we expect to fund the $3 billion cash portion of the Double Eagle transaction through a combination of cash on hand, borrowings under the Company’s credit facility and/or proceeds from term loans and senior notes offerings.

This increase in our total debt will be partially offset by $1 billion of cash received from Viper upon the anticipated closing of the drop-down acquisition in the second quarter. In addition, we have committed to


at least $1.5 billion of near-term asset sales, which we expect to include sales of our equity method investments, Endeavor’s water infrastructure and non-operated assets.

We pride ourselves on our balance sheet strength and continue to reiterate our intent to reduce net debt to $10 billion and maintain long-term leverage of $6 billion to $8 billion. We expect to achieve this de-leveraging naturally through robust Free Cash Flow generation, dedicating approximately 50% of Free Cash Flow to debt paydown, with acceleration from proceeds from non-core asset sales as noted above.

Leadership Transition
On Thursday last week, we announced our leadership transition plan where I will move from CEO to Executive Chairman effective as of the Company’s 2025 Annual Meeting. At that time, Kaes Van’t Hof will assume the CEO role and join the Board of Directors. This is the culmination of a thorough succession planning process and Kaes has my full support, as well as support from the Board of Directors in taking on his new role.

I will remain close to the Company in my new role as Executive Chairman as well as my future role on the Board of Directors. While this is not my final stockholder letter, I would like to say that representing the employees of Diamondback as CEO over the last 13 years has been an incredible privilege. I always believed in the growth opportunity for Diamondback, even when we were a small cap oil producer that no one had ever heard of. The success of this Company since the IPO in 2012 has never been about any individual, but rather the collective efforts of an extremely talented employee base with a strong culture based on trust and a well-defined strategy.

Closing
2024 was an incredible year for Diamondback. We are uniquely positioned to succeed for the long term, and continue to focus, day in and day out, on making our company better. I am so proud of our team and the work they have put in over the past 13 years to turn Diamondback into what it is today.

Thank you for your ongoing support and interest in Diamondback Energy.

tdssignature.jpg

Travis D. Stice
Chairman of the Board and Chief Executive Officer










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 of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding 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 recently completed Endeavor merger and other acquisitions or divestitures); the expected amount and timing of synergies from the Endeavor merger; 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) 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 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: changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; the impact of public health crises, including epidemic or pandemic diseases and any related company or government policies or actions; actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments, including any impact of the ongoing war in Ukraine and the Israel-Hamas war on the global energy markets and geopolitical stability; instability in the financial markets; concerns over a potential economic slowdown or recession; inflationary pressures; higher interest rates and their impact on the cost of capital; 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; those risks described in Item 1A of Diamondback’s Annual Report on Form 10-K, filed with the SEC on February 22, 2024, 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), including free cash flow. 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 posted on Diamondback's website at www.diamondbackenergy.com/investors/. 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.


v3.25.0.1
DEI Document
Feb. 24, 2025
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Feb. 24, 2025
Entity Registrant Name DIAMONDBACK ENERGY, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-35700
Entity Tax Identification Number 45-4502447
Entity Address, Address Line One 500 West Texas Ave.
Entity Address, Address Line Two Suite 100
Entity Address, City or Town Midland
Entity Address, State or Province TX
Entity Address, Postal Zip Code 79701
City Area Code 432
Local Phone Number 221-7400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.01 Par Value
Trading Symbol FANG
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001539838
Diamondback Energy (NASDAQ:FANG)
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