Diamondback Energy Inc
For the period ended Mar 31, 2025. Filed May 7, 2025.
View on SEC.govAbout this filing
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.
Mar 31, 2025 · Filed May 7, 2025
FANG$178.96-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001539838-24-000198
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001539838-25-000066
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 162 previous paragraphs and 164 current paragraphs.
59 unchanged; 71 reworded; 32 added; 32 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 35 previous and 35 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (32)
Current report
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto presented in this report as well as our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. See Part II. Item 1A. Risk Factors and Cautionary Statement Regarding Forward-Looking Statements.
Current report
2025 Drop Down Transaction
Current report
On May 1, 2025, our wholly owned subsidiary EER LP divested the Endeavor Subsidiaries to Viper and Viper LLC in exchange for consideration consisting of (i) 1.0 billion in cash, and (ii) the issuance of 69.63 million Viper LLC units and an equal number of shares of Viper’s Class B common stock (which securities are exchangeable for an equal number of Viper’s Class A common stock), subject to transaction costs and certain customary post-closing adjustments. Viper funded the cash consideration for the 2025 Drop Down with a portion of the proceeds from the Viper 2025 Equity Offering and borrowings under Viper LLC’s credit agreement. The mineral and royalty interests held and divested by the Endeavor Subsidiaries at closing of the 2025 Drop Down represent approximately 22,847 net royalty acres located primarily in the Permian Basin. The Endeavor Subsidiaries sold in the 2025 Drop Down were acquired by us in the recently completed Endeavor Acquisition. On May 5, 2025, we used the cash proceeds received from the 2025 Drop Down to repay in full and terminate the $900 million Tranche A Loans.
Current report
Double Eagle Acquisition
Current report
On April 1, 2025, we completed the Double Eagle Acquisition for consideration of $3.0 billion in cash and approximately 6.84 million shares of our common stock, subject to transaction costs and certain customary post-closing adjustments. The Double Eagle Acquisition consists of approximately 67,700 gross (40,000 net) acres, which are primarily located in the Midland Basin, and approximately 407 gross (342 net) horizontal locations in primary development targets. We funded the cash portion of the Double Eagle Acquisition through a combination of proceeds from the 2035 Notes, proceeds from the 2025 Term Loan Agreement and borrowings under our credit facility.
Current report
In the second quarter of 2025, we opportunistically repurchased principal amounts of $111 million of our 4.400% Senior Notes due 2051, $89 million of our 4.250% Senior Notes due 2052 and $20 million of our 5.750% Senior Notes due 2054 in open market transactions for total cash consideration of $167 million, including accrued interest paid, at an average of 75.3% of par value.
Current report
See Note 17—Subsequent Events of the notes to the condensed consolidated financial statements for further discussion of the transactions above.
Current report
Capital Transactions
Current report
Term Loan Agreement
Current report
In connection with the Double Eagle Acquisition, we entered into the 2025 Term Loan Agreement. The 2025 Term Loan Agreement provided the Company with the ability to borrow up to $1.5 billion, which we drew in a single borrowing to fund a portion of the cash consideration for the Double Eagle Acquisition on April 1, 2025.
Current report
2035 Notes Offering
Current report
On March 20,2025, we issued the 2035 Notes for net proceeds of $1.2 billion, after underwriters’ discounts and transaction costs, which we used to fund a portion of the cash consideration for the Double Eagle Acquisition.
Current report
See Note 9—Debt of the notes to the condensed consolidated financial statements for further discussion of the transactions above.
Current report
See Note 10—Stockholders' Equity and Earnings (Loss) Per Share of the notes to the condensed consolidated financial statements for further discussion of the transactions above.
Current report
Given recent weakness in commodity prices, we have reduced our activity levels and lowered our capital budget to prioritize free cash flow generation. We believe that our revised development plan enhances capital efficiency and provides flexibility to adjust our activity levels up or down, as appropriate, if commodity prices strengthen or weaken further.
Current report
(1) Includes approximately $170 million of cash taxes related to the Viper dropdown transaction.
Current report
The increase in gathering, processing and transportation expenses is primarily attributable to (i) a $6 million increase from the restructuring of certain sales contracts acquired from Endeavor in the first quarter of 2025, for which gathering and transportation charges were previously recorded as a reduction to revenue, (ii) increases in the contractual pricing of our gathering, processing and transportation costs, and (iii) other individually insignificant items.
Current report
Depletion of proved oil and natural gas properties decreased by $56 million for the first quarter of 2025 compared to the fourth quarter of 2024. This change was comprised of a $65 million decrease due to the decline in production volumes, and a $9 million increase due to a slightly higher depletion rate in the first quarter of 2025.
Current report
Merger and integration expenses for the first quarter of 2025 were primarily comprised of $23 million of employee severance costs and $2 million of IT and other integration service costs incurred in connection with the Endeavor Acquisition, $10 million in advisory and legal fees incurred as part of the TRP Exchange, and other individually insignificant costs. Merger and integration expenses for the three months ended December 31, 2024 were primarily comprised of employee severance costs related to the Endeavor Acquisition. See Note 5—Endeavor Energy Resources, LP Acquisition and Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for further details regarding the Endeavor Acquisition and the TRP Exchange, respectively.
Current report
Lease operating expenses increased in total for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to costs associated with operating wells acquired as part of the Endeavor Acquisition.
Current report
The increase in gathering, processing and transportation expenses for the three months ended March 31, 2025 compared to the same period in 2024 is attributable primarily to (i) $7 million from the restructuring in 2025 of certain revenue contracts acquired from Endeavor, for which gathering and transportation charges were previously recorded as a reduction to revenue, and (ii) growth in legacy production volumes.
Current report
Additionally, depreciation and amortization of other property and equipment increased as a result of the acquisition of other property and equipment in connection with the Endeavor Acquisition.
Current report
Merger and integration expenses for the three months ended March 31, 2025 were primarily comprised of (i) $23 million of employee severance costs and $2 million of IT and other integration service costs incurred in connection with the Endeavor Acquisition, (ii) $10 million in advisory and legal fees related to the TRP Exchange, and (iii) other individually insignificant costs. Merger and integration expenses for the three months ended March 31, 2024 relate to costs incurred for the Endeavor Acquisition.
Current report
See Note 5—Endeavor Energy Resources, LP Acquisition and Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for further details regarding the Endeavor Acquisition and TRP Exchange, respectively.
Current report
Other income (expense), net for the three months ended March 31, 2025 increased compared to the three months ended March 31, 2024, primarily due to a gain of $42 million from additional proceeds received related to the WTG Midstream Transaction as discussed further in Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements. This gain was partially offset by a loss of $10 million on the remeasurement of an investment recorded at fair value and other individually insignificant items.
Current report
At March 31, 2025, we had approximately $900 million of Tranche A Loans and $14 million of senior notes maturing in the next 12 months. On May 5, 2025, the Company used the cash proceeds received from the 2025 Drop Down to repay in full and terminate the $900 million Tranche A Loans.
Current report
As of March 31, 2025, the maximum credit amount available under our 2025 Term Loan Agreement was $1.5 billion, which was drawn in a single borrowing on April 1, 2025 to fund a portion of the cash consideration for the Double Eagle Acquisition. Our 2025 Term Loan Agreement matures on the second anniversary of the initial funding date.
Current report
2035 Notes Offering
Current report
On March 20, 2025, we issued the 2035 Notes for net proceeds of $1.2 billion, after underwriters’ discounts and transaction costs, which we used to fund a portion of the cash consideration for the Double Eagle Acquisition.
Current report
During the first quarter of 2025, Viper completed the Viper 2025 Equity Offering for total net proceeds of approximately $1.2 billion, after the underwriters’ discount and transaction costs. For additional discussion of the Viper 2025 Equity Offering, see Note 10—Stockholders' Equity and Earnings (Loss) Per Share of the notes to the condensed consolidated financial statements.
Current report
In the second quarter of 2025, we opportunistically repurchased $220 million in principal amounts of our senior notes in open market transactions for total cash consideration of $167 million, at an average of 75.3% of par value. We may continue to opportunistically repurchase principal amounts of our and Viper’s senior notes in future periods.
Current report
See Note 17—Subsequent Events of the notes to the condensed consolidated financial statements for further discussion of these transactions.
Removed paragraphs (32)
Previous report
TRP Energy, LLC Asset Exchange
Previous report
On November 3, 2024, we entered into an exchange agreement with TRP, pursuant to which we agreed to exchange certain of our assets consisting of approximately 35,000 net acres located in the Delaware Basin and $238 million in cash, subject to customary regulatory approvals and closing conditions, for certain of TRP’s assets consisting of approximately 15,000 net acres located in the Midland Basin. This transaction is expected to close by the end of 2024. We intend to fund the cash portion of the exchange with cash on hand and borrowings under our revolving credit facility.
Previous report
Viper TWR Acquisition
Previous report
On October 1, 2024 Viper and Viper LLC completed the Viper TWR Acquisition for consideration consisting of approximately $459 million of cash and 10.09 million Viper LLC units, subject to customary post-closing adjustments, and the TWR Class B Option. Additionally, the Viper TWR Acquisition contemplates contingent cash consideration of up to $41 million payable in January of 2026, based on the WTI 2025 Average. The mineral and royalty interests acquired in the Viper TWR Acquisition represent approximately 3,067 net royalty acres located primarily in the Permian Basin.
Previous report
See Note 17—Subsequent Events of the condensed notes to the consolidated financial statements for further discussion of the transactions above.
Previous report
Endeavor Acquisition
Previous report
On September 10, 2024, we completed the Endeavor Acquisition for consideration consisting of $7.3 billion in cash, subject to certain customary post-closing adjustments, and approximately 117.27 million shares of our common stock. The Endeavor Acquisition included approximately 500,849 gross (361,927 net) acres, which are primarily located in the Permian Basin.
Previous report
See Note 5—Endeavor Energy Resources, LP Acquisition of the condensed notes to the consolidated financial statements for further discussion of the Endeavor Acquisition.
Previous report
Viper Q&M Acquisitions
Previous report
On September 3, 2024 Viper and Viper LLC completed the Viper Q Acquisition which consisted of approximately 406 net royalty acres primarily in the Permian Basin for a purchase price of $114 million in cash, subject to transaction costs and customary post-closing adjustments, and contingent cash consideration of up to $5 million payable in January of 2026.
Previous report
On September 3, 2024 Viper and Viper LLC completed the Viper M Acquisition which consisted of approximately 267 net royalty acres primarily in the Permian Basin for a purchase price of $76 million in cash, subject to transaction costs and customary post-closing adjustments, and contingent cash consideration of up to $4 million payable in January of 2026.
Previous report
WTG Midstream Transaction
Previous report
On July 15, 2024, the WTG joint venture completed the WTG Midstream Transaction, resulting in proceeds to us of 10.1 million common units of Energy Transfer LP and $190 million in cash, subject to customary closing adjustments. At the closing of the WTG Midstream Transaction, the value attributable to us for the 10.1 million common units was approximately $135 million, of which we received approximately $81 million and $54 million was held in escrow pursuant to an escrow agreement entered into by the WTG joint venture in connection with the initial transaction. The WTG Midstream Transaction resulted in a gain of approximately $76 million in the third quarter of 2024.
Previous report
See Note 4—Acquisitions and Divestitures of the condensed notes to the consolidated financial statements for further discussion of the transactions above.
Previous report
Viper 2024 Equity Offering
Previous report
See Note 10—Stockholders' Equity and Earnings (Loss) Per Share of the condensed notes to the consolidated financial statements for further discussion of the Viper 2024 Equity Offering.
Previous report
(1)Includes two additional net wells drilled and nine net wells completed, respectively, from interests acquired in the Endeavor Acquisition during the first six months of 2024.
Previous report
(3)The average lateral length for the wells completed during the first nine months of 2024 was 11,645 feet. Operated completions during the first nine months of 2024 consisted of 72 Lower Spraberry wells, 61 Wolfcamp A wells, 45 Wolfcamp B wells, 40 Jo Mill wells, 34 Middle Spraberry wells, nine Wolfcamp D wells, nine Dean wells, six Upper Spraberry wells, four Third Bone Spring wells, one Second Bone Spring well and one Barnett well.
Previous report
We expect production and capital expenditures to increase in the fourth quarter of 2024 due to the Endeavor Acquisition and to a lesser extent the Viper Q&M Acquisitions and the Viper TWR Acquisition. Well performance continues to meet or exceed expectations in our core Midland Basin position, which we believe will allow us to continue to execute on our plan and achieve additional capital efficiency gains.
Previous report
The increase in gathering, processing and transportation expenses is primarily attributable to the growth in production volumes in the third quarter of 2024 compared to the second quarter of 2024.
Previous report
The increase in depletion of proved oil and natural gas properties of $256 million for the third quarter of 2024 compared to the second quarter of 2024 consists primarily of (i) $155 million due to an increase in the depletion rate, and (ii) $101 million from the growth in production volumes. The increase in depletion rate was due primarily to the addition of proved properties acquired in the Endeavor Acquisition and to a lesser extent, the Viper Q&M Acquisitions.
Previous report
Merger and integration expenses for the third quarter of 2024 include (i) approximately $171 million in severance and accelerated incentive compensation payments to former Endeavor employees, (ii) approximately $78 million in investment banking and legal costs incurred upon the closing of the Endeavor Acquisition, and (iii) other individually insignificant items including SEC filing fees and other professional fees. See Note 5—Endeavor Energy Resources, LP Acquisition of the condensed notes to the consolidated financial statements for further details regarding the Endeavor Acquisition.
Previous report
(1)The three months ended September 30, 2024 includes cash paid on interest rate swaps terminated prior to their contractual maturity of $37 million.
Previous report
Comparison of the Nine Months Ended September 30, 2024 and 2023
Previous report
The decrease in other operating income for the nine months ended September 30, 2024 compared to the same period in 2023 primarily resulted from a reduction in revenue from midstream services due to the sale of the Deep Blue Water Assets in the third quarter of 2023.
Previous report
Lease operating expenses increased in total and on a per BOE basis for the nine months ended September 30, 2024 compared to the same period in 2023 primarily due to (i) $74 million of additional costs incurred for water services as a result of divesting the Deep Blue Water Assets in the third quarter of 2023, (ii) $46 million due to an increase in legacy production volumes, (iii) a $38 million increase attributable to wells acquired as part of the Endeavor Acquisition, (iv) a $30 million increase in workover expense, (v) $14 million in increased spend on electrical generation, and (vi) other individually insignificant changes.
Previous report
The increase in gathering, processing and transportation expenses for the nine months ended September 30, 2024 compared to the same period in 2023 is attributable to (i) a $29 million increase from the growth in production volumes discussed above, and (ii) a $17 million increase due to contractual pricing increases on our gathering, processing and transportation costs, and (iii) an additional $5 million in shortfall penalties related to certain minimum volume commitments.
Previous report
Merger and integration expenses for the nine months ended September 30, 2024 include costs incurred in connection with the Endeavor Acquisition as discussed in the quarterly comparisons above.
Previous report
See Note 5—Endeavor Energy Resources, LP Acquisition of the condensed notes to the consolidated financial statements for further details regarding the Endeavor Acquisition.
Previous report
(1)The nine months ended September 30, 2024 includes cash paid on interest rate swaps terminated prior to their contractual maturity of $37 million.
Previous report
Other income (expense), net for the nine months ended September 30, 2024 includes a gain recorded on the WTG Midstream Transaction of approximately $76 million compared to the nine months ended September 30, 2023 including a $53 million gain on the sale of our equity method investment in Gray Oak as discussed further in Note 4—Acquisitions and Divestitures to the condensed notes to the consolidated financial statements.
Previous report
On August 2, 2024, we terminated our undrawn Tranche B Loans under the Term Loan Agreement.
Reworded paragraphs (71)
Previous wording
We are an independent oil and natural gas company currently focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. As discussed in Note 1—Description of the Business and Basis of Presentation and Note 18—Segment Information of the condensed notes to the consolidated financial statements, as of September 30, 2024, we have one reportable segment, the upstream segment.
Current wording
We are an independent oil and natural gas company currently focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. As discussed in Note 1—Description of the Business and Basis of Presentation and Note 18—Segment Information of the notes to the condensed consolidated financial statements, as of March 31, 2025, we have one reportable segment, the upstream segment.
Previous wording
Third Quarter 2024 Financial and Operating Highlights
Current wording
First Quarter 2025 Financial and Operating Highlights
Previous wording
•Recorded net income of $659 million.
Current wording
•Recorded net income of $1.4 billion.
Previous wording
•Paid dividends to stockholders of $416 million during the third quarter of 2024 and declared a base cash dividend payable in the fourth quarter of 2024 of $0.90 per share of common stock.
Current wording
•Increased our annual base dividend to $4.00 per share of common stock, paid dividends to stockholders of $290 million during the first quarter of 2025 and declared a base cash dividend payable in the second quarter of 2025 of $1.00 per share of common stock.
Previous wording
•Increased our common stock repurchase program authorization to $6.0 billion, excluding excise taxes, repurchased $515 million of our common stock and had approximately $3.1 billion available for future repurchases under our common stock repurchase program at September 30, 2024.
Current wording
•Repurchased $575 million of our common stock, excluding excise taxes, and had approximately $2.1 billion available for future repurchases under our common stock repurchase program at March 31, 2025.
Previous wording
•Our cash operating costs were $11.49 per BOE, including lease operating expenses of $6.01 per BOE, cash general and administrative expenses of $0.63 per BOE and production and ad valorem taxes and gathering, processing and transportation expenses of $4.85 per BOE.
Current wording
•Our cash operating costs were $10.48 per BOE, including lease operating expenses of $5.33 per BOE, cash general and administrative expenses of $0.72 per BOE and production and ad valorem taxes of $2.98 per BOE and gathering, processing and transportation expenses of $1.45 per BOE.
Previous wording
•Our average production was 571.1 MBOE/d.
Current wording
•Our average production was 850.7 MBOE/d.
Previous wording
•Drilled 71 gross horizontal wells in the Midland Basin and five gross horizontal wells in the Delaware Basin, and turned 95 gross operated horizontal wells (87 in the Midland Basin and eight in the Delaware Basin) to production.
Current wording
•Drilled 124 gross horizontal wells in the Midland Basin and two gross horizontal wells in the Delaware Basin, and turned 123 gross operated horizontal wells (116 in the Midland Basin and seven in the Delaware Basin) to production.
Previous wording
•Incurred capital expenditures, excluding acquisitions, of $688 million.
Current wording
•Cash capital expenditures, excluding acquisitions, of $942 million.
Previous wording
On September 13, 2024, Viper completed an underwritten public offering of approximately 11.50 million shares of its Class A Common Stock, which included 1.50 million shares issued pursuant to an option to purchase additional shares of Class A Common Stock granted to the underwriters, at a price to the public of $42.50 per share for total net proceeds to Viper of approximately $476 million, after the underwriters’ discount and transaction costs.
Current wording
On February 3, 2025, Viper completed an underwritten public offering of approximately 28.34 million shares of its Class A common stock, which included 3.70 million shares issued pursuant to an option to purchase additional shares of its Class A common stock granted to the underwriters at a price to the public of $44.50 per share for total net proceeds to Viper of approximately 1.2 billion, after the underwriters’ discount and estimated transaction costs.
Previous wording
Prices for oil, natural gas and natural gas liquids are determined primarily by prevailing market conditions. Regional and worldwide economic activity, extreme weather conditions and other substantially variable factors influence market conditions for these products. These factors are beyond our control and are difficult to predict. During the nine months ended 2024 and 2023, WTI prices averaged $77.61 and $77.28 per Bbl, respectively, and Henry Hub prices averaged $2.22 and $2.58 per MMBtu, respectively.
Current wording
Prices for oil, natural gas and natural gas liquids are determined primarily by prevailing market conditions. Regional and worldwide economic activity, changes in trade or other government policies or regulations, including with respect to tariffs or other trade barriers, and any resulting trade tensions, extreme weather conditions and other substantially variable factors influence market conditions for these products. These factors are beyond our control and are difficult to predict. During the three months ended March 31, 2025 and 2024, WTI prices averaged $71.42 and $76.91 per Bbl, respectively, and Henry Hub prices averaged $3.87 and $2.10 per MMBtu, respectively.
Previous wording
As of September 30, 2024, we had approximately 870,303 net acres, which primarily consisted of approximately 715,956 net acres in the Midland Basin and 154,026 net acres in the Delaware Basin.
Current wording
As of March 31, 2025, we had approximately 859,484 net acres, which primarily consisted of approximately 737,736 net acres in the Midland Basin and 121,748 net acres in the Delaware Basin.
Previous wording
(2)The average lateral length for the wells completed during the third quarter of 2024 was 12,238 feet. Operated completions during the third quarter of 2024 consisted of 22 Wolfcamp A wells, 21 Lower Spraberry wells, 15 Jo Mill wells, 14 Wolfcamp B wells, 12 Middle Spraberry wells, four Dean wells, four Third Bone Spring wells and three Upper Spraberry wells.
Current wording
(1)The average lateral length for the wells completed during the first quarter of 2025 was 11,978 feet. Operated completions during the first quarter of 2025 consisted of 30 Wolfcamp A wells, 28 Lower Spraberry wells, 22 Wolfcamp B wells, 17 Jo Mill wells, eight Middle Spraberry wells, four Dean wells, four Barnett wells, three Third Bone Spring wells, three Wolfcamp D wells, two Second Bone Spring wells and two Upper Spraberry wells.
Previous wording
As of September 30, 2024, we held interests in 28,920 gross (7,774 net) wells, including 2,051 gross (267 net) wells in which we have a non-operated working interest.
Current wording
As of March 31, 2025, we held interests in 31,344 gross (9,290 net) wells, including 2,390 gross (367 net) wells in which we have a non-operated working interest.
Previous wording
The following table presents our current estimates, which give effect to the Endeavor Acquisition, of certain financial and operating results for the full year of 2024 and the fourth quarter of 2024:
Current wording
The following table presents our updated estimates of certain financial and operating results for the full year of 2025 and the second quarter of 2025:
Previous wording
Our oil, natural gas and natural gas liquids revenues for the third quarter of 2024 increased by $180 million to $2.4 billion compared to the second quarter of 2024. The net increase was due to an additional $395 million attributable to the 22% increase in our combined volumes sold due primarily to the Endeavor Acquisition, which was partially offset by a $215 million decrease attributable to lower average prices received primarily for our oil, and to a lesser extent our natural gas and natural gas liquids production.
Current wording
Our oil, natural gas and natural gas liquids revenues for the first quarter of 2025 increased by $186 million to $3.7 billion compared to the fourth quarter of 2024. The net increase was due to an additional $306 million related to improved average prices received for our oil, natural gas and natural gas liquids production, which was partially offset by a $120 million decrease attributable to the 6% decline in our combined production volumes.
Previous wording
Lease operating expenses increased in total and on a per BOE basis for the third quarter of 2024 compared to the second quarter of 2024 primarily due to (i) a $38 million increase attributable to wells acquired as part of the Endeavor Acquisition, (ii) a $12 million increase in workover expense in the third quarter of 2024, (iii) a $9 million increase from higher legacy production volumes, and (iv) insignificant electrical generation and winterization costs.
Current wording
Lease operating expenses decreased in total and on a per BOE basis for the first quarter of 2025 compared to the fourth quarter of 2024 primarily due to (i) a $38 million reduction in cost estimates related to producing properties acquired in the Endeavor Acquisition, (ii) a $7 million decrease due to applying a contingent volume discount for water services from Deep Blue in the first quarter of 2025, (iii) a $6 million reduction in well workover expenses, and (iv) other individually insignificant changes.
Previous wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices. Production taxes as a percentage of oil, natural gas and natural gas liquids revenue remained consistent from the second quarter of 2024 to the third quarter of 2024.
Current wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices. Production taxes as a percentage of oil, natural gas and natural gas liquids revenue remained consistent from the fourth quarter of 2024 to the first quarter of 2025.
Previous wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes remained relatively consistent in total and per BOE during the third quarter of 2024 compared to the second quarter of 2024.
Current wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes remained relatively consistent in total and per BOE during the first quarter of 2025 compared to the fourth quarter of 2024.
Previous wording
The change in gain (loss) on derivative instruments for the third quarter of 2024 compared to the second quarter of 2024 primarily reflects (i) a net increase in the value of interest rate swaps of $53 million due primarily to a decrease in future SOFR rates, (ii) a net increase in the value of our commodity contracts of $36 million due to changes in commodity futures pricing compared to our contract prices, (iii) a net $15 million decrease in cash paid on the settlement and early termination of interest rate derivatives, and (iv) an increase of $9 million in cash received primarily on settlements of natural gas contracts.
Current wording
The change in gain (loss) on derivative instruments for the first quarter of 2025 compared to the fourth quarter of 2024 primarily reflects (i) an increase of $87 million in cash received on the settlement of natural gas contracts, (ii) an increase of $59 million in the value of our unsettled oil and natural gas contracts due to a decline in market prices for oil and natural gas compared to our contract prices, (iii) a $26 million increase in the value of our interest rate swap contracts driven by a decline in expected future interest rates, (iv) a $19 million decrease in cash paid on the settlement of interest rate swaps, and (v) other individually insignificant changes.
Previous wording
See Note 13—Derivatives of the condensed notes to the consolidated financial statements for further details regarding our derivative instruments.
Current wording
See Note 13—Derivatives of the notes to the condensed consolidated financial statements for further details regarding our derivative instruments.
Previous wording
The decrease in interest expense, net for the third quarter of 2024 compared to the second quarter of 2024 primarily consists of (i) a $25 million increase in capitalized interest costs, which reduces interest expense, and (ii) an $18 million decrease in debt amortization costs primarily due to expensing costs associated with the Company’s terminated Bridge Facility during the second quarter of 2024. These decreases were partially offset by (i) an additional $15 million in interest expense on senior notes due to the April 2024 Notes being outstanding for the full third quarter of 2024, (ii) a $5 million increase in interest expense related to the Company’s draws on its Tranche A Loans and revolving credit facility during the third quarter of 2024, and (ii) other individually insignificant changes.
Current wording
The increase in interest expense, net for the first quarter of 2025 compared to the fourth quarter of 2024 primarily consists of (i) a $15 million decrease in capitalized interest costs, which increased interest expense, and (ii) a $3 million increase in interest expense on senior notes primarily related to the newly issued 2035 Notes. These increases were partially offset by (i) a $5 million increase in interest income due to holding proceeds from the 2035 Notes in short-term interest bearing accounts until the closing date of the Double Eagle Acquisition, (ii) a $3 million decrease in interest expense on our Tranche A loans due to a $100 million repayment of principal in the fourth quarter of 2024, (iii) a $2 million decrease in interest expense on Viper’s revolving credit facility due to a lower average quarterly outstanding balance during the first quarter of 2025, and (iv) other individually insignificant changes.
Previous wording
See Note 9—Debt of the condensed notes to the consolidated financial statements for further details regarding outstanding borrowings.
Current wording
See Note 9—Debt of the notes to the condensed consolidated financial statements for further details regarding outstanding borrowings.
Previous wording
The increase in other income (expense), net for the third quarter of 2024 compared to the second quarter of 2024 is primarily attributable to a gain recorded on the WTG Midstream Transaction of approximately $76 million during the third quarter of 2024.
Current wording
The increase in other income (expense), net for the first quarter of 2025 compared to the fourth quarter of 2024 is primarily due to a gain of $42 million related to the receipt of additional proceeds in connection with the WTG Midstream Transaction, which was partially offset by a $10 million loss on the remeasurement of an investment recorded at fair value and other individually insignificant items.
Previous wording
See Note 4—Acquisitions and Divestitures of the condensed notes to the consolidated financial statements for further details regarding the Company’s divestiture activity.
Current wording
See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for further details regarding the Company’s divestiture activity.
Previous wording
The change in our income tax provision for the third quarter of 2024 compared to the second quarter of 2024 was primarily due to the decrease in pre-tax income between the periods which resulted largely from changes in revenues and operating expenses as discussed above. See Note 12—Income Taxes of the condensed notes to the consolidated financial statements for further discussion of our income tax expense.
Current wording
The change in our income tax provision for the first quarter of 2025 compared to the fourth quarter of 2024 was primarily due to the increase in pre-tax income between the periods which resulted largely from changes in revenues, operating expenses, and the gain on derivative contracts as discussed above. In addition to the increase in pre-tax income for the first quarter of 2025, the income tax provision for the fourth quarter of 2024 included a partially offsetting net tax benefit of $156 million due to the release of Viper’s remaining valuation allowance. See Note 12—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of our income tax expense.
Previous wording
The following table sets forth selected operating data for the nine months ended September 30, 2024 and 2023:
Current wording
The following table sets forth selected operating data for the three months ended March 31, 2025 and 2024:
Previous wording
Production Data. Substantially all of our revenues are generated through the sale of oil, natural gas and natural gas liquids production. The following tables set forth the mix of our production data by product and basin for the nine months ended September 30, 2024 and 2023:
Current wording
Production Data. Substantially all of our revenues are generated through the sale of oil, natural gas and natural gas liquids production. The following tables set forth the mix of our production data by product and basin for the three months ended March 31, 2025 and 2024:
Previous wording
Our oil, natural gas and natural gas liquids revenues for the nine months ended September 30, 2024 increased by $566 million, or 9%, to $6.6 billion from the same period in 2023 primarily due to an increase of $766 million attributable to the 14% growth in our combined volumes, which was partially offset by a $200 million net decrease attributable to lower average prices received for our natural gas and natural gas liquids production.
Current wording
Our oil, natural gas and natural gas liquids revenues for the three months ended March 31, 2025 increased by $1.6 billion, or 74%, to $3.7 billion from the same period in 2024 primarily due to the 82% growth in our combined production volumes.
Previous wording
Approximately 47% of the increase in production is attributable to the Endeavor Acquisition and 14% is attributable to Viper’s GRP Acquisition. The remainder of the production growth comes from new wells added between periods.
Current wording
Approximately 73% of the increase in our combined production volumes is attributable to the Endeavor Acquisition. The remainder of production growth is largely attributable to new wells added between periods.
Previous wording
Net Sales of Purchased Oil. Beginning in the third quarter of 2023, we entered into purchase transactions and separate sale transactions with third parties to satisfy certain of our unused oil pipeline capacity commitments. The following table presents the net sales of purchased oil from third parties for the nine months ended September 30, 2024 and 2023:
Current wording
Net Sales of Purchased Oil. We entered into purchase transactions and separate sale transactions with third parties to satisfy certain of our unused oil pipeline capacity commitments. The following table presents the net sales of purchased oil from third parties for the three months ended March 31, 2025 and 2024:
Previous wording
Other Revenues. The following table shows the other insignificant revenues for the nine months ended September 30, 2024 and 2023:
Current wording
Other Revenues. The following table shows the other insignificant revenues for the three months ended March 31, 2025 and 2024:
Previous wording
Lease Operating Expenses. The following table shows lease operating expenses for the nine months ended September 30, 2024 and 2023:
Current wording
Lease Operating Expenses. The following table shows lease operating expenses for the three months ended March 31, 2025 and 2024:
Previous wording
Production and Ad Valorem Tax Expense. The following table shows production and ad valorem tax expense for the nine months ended September 30, 2024 and 2023:
Current wording
Production and Ad Valorem Tax Expense. The following table shows production and ad valorem tax expense for the three months ended March 31, 2025 and 2024:
Previous wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices. Production taxes as a percentage of oil, natural gas and natural gas liquids revenue for the 2024 period decreased compared to the same period in 2023, primarily due to a refund of $17 million received for settlement of an audit in the first quarter of 2024.
Current wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices. Production taxes increased by $89 million compared to the same period in 2024, due primarily to (i) $70 million in additional taxes related to production from the Endeavor Acquisition, and (ii) a refund recorded during the three months ended March 31, 2024 of $17 million for the settlement of an audit, which reduced production taxes in the prior year period.
Previous wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes for the nine months ended September 30, 2024 as compared to the same period in 2023 decreased by $15 million, primarily due to a reduction in our expected ad valorem tax rates for 2024 compared to the expected rates during the nine months ended 2023.
Current wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes for the three months ended March 31, 2025 as compared to the same period in 2024 increased by $20 million, primarily due to $28 million of additional taxes incurred on properties from the Endeavor Acquisition, which was partially offset by an $8 million decrease caused by a decline in expected ad valorem tax rates on legacy properties for 2025 compared to the rates during 2024.
Previous wording
Gathering, Processing and Transportation Expense. The following table shows gathering, processing and transportation expense for the nine months ended September 30, 2024 and 2023:
Current wording
Gathering, Processing and Transportation Expense. The following table shows gathering, processing and transportation expense for the three months ended March 31, 2025 and 2024:
Previous wording
Depreciation, Depletion, Amortization and Accretion. The following table provides the components of our depreciation, depletion, amortization and accretion expense for the nine months ended September 30, 2024 and 2023:
Current wording
Depreciation, Depletion, Amortization and Accretion. The following table provides the components of our depreciation, depletion, amortization and accretion expense for the three months ended March 31, 2025 and 2024:
Previous wording
The increase in depletion of proved oil and natural gas properties of $421 million for the nine months ended September 30, 2024 as compared to the same period in 2023 consists primarily of (i) $252 million due to an increase in the depletion rate resulting largely from the addition of leasehold costs and reserves from the Endeavor Acquisition and to a lesser extent, Viper’s GRP Acquisition and the Viper Q&M Acquisitions, and (ii) $169 million from the growth in production volumes.
Current wording
The increase in depletion of proved oil and natural gas properties of $613 million for the three months ended March 31, 2025 as compared to the same period in 2024 consists primarily of $373 million from growth in production volumes and $240 million due to an increase in the depletion rate resulting largely from the addition of higher value leasehold costs and proved reserves from the Endeavor Acquisition and, to a lesser extent, Viper’s Tumbleweed Acquisitions subsequent to the first quarter of 2024.
Previous wording
General and Administrative Expenses. The following table shows general and administrative expenses for the nine months ended September 30, 2024 and 2023:
Current wording
General and Administrative Expenses. The following table shows general and administrative expenses for the three months ended March 31, 2025 and 2024:
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Comparison of the Three Months Ended March 31, 2025 and 2024
Current report — wording carried from elsewhere
During the three months ended March 31, 2025, net cash provided by financing activities was primarily attributable to $1.2 billion of proceeds from the issuance of the 2035 Notes and $1.2 billion in proceeds from the Viper 2025 Equity Offering.