Diamondback Energy Inc
For the period ended Jun 30, 2024. Filed Aug 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 7, 2024
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13. Fair Value Measurements
- FAIR VALUE MEASUREMENTS
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As discussed in Note 13—Fair Value Measurements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, certain financial instruments of the Company are reported at fair value on the Company’s condensed consolidated balance sheets. The net amounts of derivative instruments are classified as current or noncurrent based on their anticipated settlement dates. The Company has an immaterial investment that is reported at fair value using observable, quoted stock prices and is included in “Other assets” on the Company’s condensed consolidated balance sheets at June 30, 2024 and December 31, 2023.
The following table provides the fair value of financial instruments that are recorded at fair value in the condensed consolidated balance sheetsas of June 30, 2024 and December 31, 2023:
| As of June 30, 2024 | ||||||
|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total Gross Fair Value | Gross Amounts Offset in Balance Sheet | Net Fair Value Presented in Balance Sheet | |
| (In millions) | ||||||
| Assets: | ||||||
| Current assets- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $84 | $— | $84 | $(80) | $4 |
| Non-current assets- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $33 | $— | $33 | $(18) | $15 |
| Non-current assets- Other assets: | ||||||
| Investment | $8 | $— | $— | $8 | $— | $8 |
| Liabilities: | ||||||
| Current liabilities- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $104 | $— | $104 | $(80) | $24 |
| Interest rate swaps | $— | $48 | $— | $48 | $— | $48 |
| Non-current liabilities- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $20 | $— | $20 | $(18) | $2 |
| Interest rate swaps | $— | $132 | $— | $132 | $— | $132 |
| As of December 31, 2023 | ||||||
|---|---|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total Gross Fair Value | Gross Amounts Offset in Balance Sheet | Net Fair Value Presented in Balance Sheet | |
| (In millions) | ||||||
| Assets: | ||||||
| Current assets- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $88 | $— | $88 | $(71) | $17 |
| Non-current assets- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $8 | $— | $8 | $(7) | $1 |
| Non-current assets- Other assets: | ||||||
| Investment | $5 | $— | $— | $5 | $— | $5 |
| Liabilities: | ||||||
| Current liabilities- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $111 | $— | $111 | $(71) | $40 |
| Interest rate swaps | $— | $46 | $— | $46 | $— | $46 |
| Non-current liabilities- Derivative instruments: | ||||||
| Commodity derivative instruments | $— | $12 | $— | $12 | $(7) | $5 |
| Interest rate swaps | $— | $117 | $— | $117 | $— | $117 |
Assets and Liabilities Not Recorded at Fair Value
The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets:
| June 30, 2024 · December 31, 2023 | ||||
|---|---|---|---|---|
| Carrying | Carrying | |||
| Value | Fair Value | Value | Fair Value | |
| (In millions) | ||||
| Debt | $11,980 | $11,664 | $6,641 | $6,507 |
The fair values of the Company’s credit agreement and the Viper credit agreement approximate their carrying values based on borrowing rates available to the Company for bank loans with similar terms and maturities and are classified as Level 2 in the fair value hierarchy. The fair values of the outstanding notes were determined using the quoted market price at each period end, a Level 1 classification in the fair value hierarchy.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances. These assets and liabilities can include those acquired in a business combination, inventory, proved and unproved oil and gas properties, equity method investments, asset retirement obligations and other long-lived assets that are written down to fair value when they are impaired or held for sale. Refer to Note 4—Acquisitions and Divestitures and Note 5—Property and Equipment for additional discussion of nonrecurring fair value adjustments.
Fair Value of Financial Assets
The carrying amount of cash and cash equivalents, receivables, prepaid expenses and other current assets, payables and other accrued liabilities approximate their fair value because of the short-term nature of the instruments.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.