Diamondback Energy, Inc.
For the period ended Sep 30, 2025. Filed Nov 5, 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.
Sep 30, 2025 · Filed Nov 5, 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 2025-06-30; filed 2025-08-06.
0001539838-25-000127
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001539838-25-000147
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 179 previous paragraphs and 173 current paragraphs.
59 unchanged; 92 reworded; 21 added; 27 removed; 1 previous and 1 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 (21)
Current report
Acquisitions and Divestitures
Current report
Diamondback Divestitures
Current report
EPIC Divestiture
Current report
On October 31, 2025, we divested our 27.5% equity interest in EPIC pursuant to a definitive purchase and sale agreement with Plains for approximately $504 million in cash and an additional $96 million in contingent consideration. On October 31, 2025, we used $500 million of the cash proceeds received from the EPIC Divestiture to partially repay principal borrowings under the Company’s 2025 Term Loan.
Current report
Divestiture of Water Assets to Deep Blue
Current report
On October 1, 2025, we divested EDS to Deep Blue, which was originally acquired in connection with the Endeavor Acquisition, in exchange for upfront net cash proceeds of $694 million and the potential for us to earn up to an additional $200 million in contingent consideration based on the achievement of certain completion thresholds for the years 2026 through 2028. As part of the divestiture, the Company renewed its 15-year dedication to Deep Blue for its produced water and supply water within a 12-county area of mutual interest in the Midland Basin. The cash proceeds from the divestiture were used to repay borrowings under the Credit Agreement and for general corporate purposes.
Current report
Viper Acquisitions and Divestitures
Current report
Pending Viper Divestiture of Non-Permian Assets
Current report
On October 30, 2025, Viper entered into an equity interest purchase agreement to divest all its non-Permian assets, including those acquired from Sitio, for a purchase price of approximately $670 million, subject to customary purchase price adjustments. The properties to be divested consist of approximately 9,400 net royalty acres in the Denver-Julesburg, Eagle Ford and Williston basins with current production of approximately 4,750 BO/d. The Pending Viper Non-Permian Divestiture is subject to customary closing conditions and is expected to close in the first quarter of 2026.
Current report
Sitio Acquisition
Current report
Viper Term Loan
Current report
In connection with the closing of the Sitio Acquisition, Viper LLC entered into the $500 million Viper Term Loan, which Viper drew in a single borrowing to partially fund the retirement of Sitio’s debt.
Current report
See Note 9—Debt of the notes to the condensed consolidated financial statements for further discussion of the capital transactions above.
Current report
Commodity Prices and Impairment
Current report
Given the overall decline in SEC Prices through the first three quarters of 2025 and into the fourth quarter of 2025 as compared to 2024, we believe a material non-cash impairment of our assets is reasonably likely to occur in the fourth quarter of 2025. In addition to commodity prices, our production rates, levels of proved reserves, future development costs, transfers of unevaluated properties, income tax rate assumptions and other factors will determine our actual ceiling test calculation and impairment analysis in future periods. Based on the number of factors that may impact our future estimate of proved reserves, we are currently unable to determine an estimate of the amount or range of amounts of any potential impairment charge in the fourth quarter of 2025. Impairment charges affect our results of operations but do not reduce our cash flow.
Current report
Consistent with our previously announced expected levels of activity for the remainder of 2025, we ran 13 rigs and five completion crews during the third quarter of 2025 to execute on our capital and operating plan, including holding oil production volumes relatively flat. While our development plan during the first two quarters of 2025 had reduced capital expenditure budgets compared to our original 2025 guidance, capital expenditures are expected to increase moderately in the fourth quarter of 2025 as part of our effort to hold oil production relatively flat. A core tenet of our plan to remain disciplined on our expenditures and moderating oil production is maximizing the consistency of our ability to operate efficiently at scale.
Current report
Our revised development plan is presented below. Under the revised development plan, we target maintaining maximum operational flexibility in anticipation of the market revealing a stronger signal regarding the future of commodity prices. We currently plan to continue moderating oil production volumes through the end of 2025, while also improving per share metrics through increased efficiency and the use of our enhanced stock repurchase plan. As a result, we are raising our annual BOE guidance by approximately 2%, primarily to reflect the successful closing of the Sitio merger, coupled with continued improvements in gas capture efficiency. Additionally, we expect to reduce our debt in the fourth quarter of 2025 through the generation of cash flow from operations as well as from proceeds from the divestiture of non-core assets.
Current report
(1)Includes approximately $175 million in tax impacts from asset divestitures in the fourth quarter.
Current report
Lease operating expenses increased for the third quarter of 2025 compared to the second quarter of 2025 primarily due to $14 million in additional electrical generation and artificial lift costs and $10 million in additional well workover costs. The remainder of the change is primarily due to the second quarter of 2025 including reductions in prior period water disposal cost estimates for properties acquired in the Endeavor Acquisition.
Current report
The decrease in gathering, processing and transportation expenses primarily reflects a net reduction of $22 million due primarily to the second quarter of 2025 including $11 million of gathering and transportation charges related to the Double Eagle Acquisition, which were subsequently reclassified to revenue in the third quarter of 2025 as we integrated and conformed contracts to the Company’s financial statement presentation and other individually insignificant items.
Current report
Comparison of the Nine Months Ended September 30, 2025, and 2024
Removed paragraphs (27)
Previous report
2025 Drop Down Transaction
Previous 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 revolving credit facility. The mineral and royalty interests held and divested by the Endeavor Subsidiaries at closing of the 2025 Drop Down represented approximately 24,446 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.
Previous report
Double Eagle Acquisition
Previous 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 consisted 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.
Previous report
Viper Acquisition
Previous report
Pending Sitio Acquisition
Previous report
Repurchase of Notes
Previous report
Viper 2025 Term Loan
Previous report
On July 23, 2025, Viper LLC entered into the Viper 2025 Term Loan for a two-year senior unsecured delayed draw term loan facility in an aggregate principal amount of $500 million. Viper intends to draw on the term loan to partially redeem or repay, as applicable, Sitio’s debt at the closing of the pending Sitio Acquisition.
Previous report
On June 12, 2025, Viper and Viper LLC entered into the Viper LLC Revolving Credit Facility which replaced the previous revolving credit facility. As of June 30, 2025, the Viper LLC Revolving Credit Facility is guaranteed by certain subsidiaries of Viper LLC, and upon completion of the pending Sitio Acquisition, such subsidiary guarantee will be released and New Viper will become a guarantor under the Viper LLC Revolving Credit Facility. The Viper LLC Revolving Credit
Previous report
Facility provides for a senior unsecured revolving credit facility with a commitment amount of $1.5 billion and will mature on June 12, 2030, unless extended in accordance with the terms thereof.
Previous report
2025 Term Loan Agreement
Previous 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.
Previous report
Commodity Prices
Previous report
In the second quarter of 2025, we released four rigs, reducing our activity from 17 rigs to 13 rigs. We currently expect to run 13 to 14 rigs and five completion crews for the remainder of 2025 to execute on our capital and operating plan discussed below. We continue to test ways to maximize efficiency and reduce costs in all facets of our organization, fighting the headwinds of lower commodity prices and increased steel prices due to tariffs directly increasing our casing costs. We expect casing costs to increase almost 25% through the course of 2025, raising the breakeven cost of nearly every well drilled in the United States in 2025.
Previous report
Our revised development plan, which does not give effect to the pending Sitio Acquisition, is presented below. Under our revised development plan, given the volatility in commodity markets and macroeconomic uncertainty, we intend to hold oil production flat for the remainder of 2025, reduce capital expenditures while maintaining one of the highest drilled but uncompleted inventories in the Permian Basin and use free cash flow to pay down debt and repurchase stock under our enhanced stock repurchase program. We believe this plan will allow us to maintain flexibility at current commodity prices and when commodity prices improve.
Previous report
(1) Includes approximately $20-25 million from gains on sales of assets expected to close in the third quarter.
Previous report
Lease operating expenses increased for the second quarter of 2025 compared to the first quarter of 2025 primarily due to (i) a $14 million increase due to higher production volumes primarily driven by the Double Eagle Acquisition and to a lesser extent, legacy wells, (ii) $13 million in additional well workover costs, and (iii) a $10 million increase related to changes in cost estimates for water disposal associated with the Endeavor Acquisition, and (iv) other individually insignificant offsetting changes.
Previous report
The increase in gathering, processing and transportation expenses is primarily attributable to (i) a $15 million increase associated with transportation costs incurred to meet our minimum volume commitments on certain pipelines, (ii) an $11 million increase related to production volumes from properties acquired in connection with the Double Eagle Acquisition, (iii) a $7 million increase due to a new firm transportation contract that became effective in the second quarter of 2025, and (iv) other individually insignificant items.
Previous report
Depletion of proved oil and natural gas properties increased by $165 million in the second quarter of 2025 compared to the first quarter of 2025. This change was comprised of a $100 million increase due to growth in production volumes and a $65 million increase due to the higher depletion rate in the second quarter of 2025 following the Double Eagle Acquisition.
Previous report
General and administrative expenses decreased in the second quarter of 2025 compared to the first quarter of 2025 primarily due to a reduction in anticipated discretionary employee compensation.
Previous report
Comparison of the Six Months Ended June 30, 2025 and 2024
Previous report
Viper LLC’s Revolving Credit Facility and Other Viper Debt Instruments
Previous report
On July 23, 2025, Viper LLC entered into the Viper 2025 Term Loan for a two-year senior unsecured delayed draw term loan facility in an aggregate principal amount of $500 million. Viper intends to draw on the term loan to partially redeem or repay, as applicable, Sitio’s debt at the closing of the pending Sitio Acquisition.
Previous report
On July 23, 2025, Viper issued $1.6 billion in aggregate principal amount of the Viper 2025 Notes for net proceeds of approximately $1.58 billion, after underwriters’ discounts and transaction costs. Viper used a portion of the net proceeds to redeem or satisfy and discharge, as applicable, $780 million in aggregate principal amount of their previously outstanding senior notes. Viper intends to use the remaining net proceeds (i) if the pending Sitio Acquisition is consummated, to redeem Sitio’s 7.875% senior notes due 2028, repay borrowings under Sitio’s revolving credit facility and pay any fees, costs and expenses related to the redemption or repayment of such debt, and (ii) for general corporate purposes. Viper LLC is not obligated to redeem or repurchase the Viper 2025 Notes if the pending Sitio Acquisition is not consummated.
Previous report
Viper Redemption of Notes
Previous report
On July 23, 2025, Viper redeemed all of their Viper 2031 Notes and satisfied and discharged all of their Viper 2027 Notes using proceeds from the Viper 2025 Notes Offering. Viper intends to use the remaining proceeds from the Viper 2025 Notes Offering and borrowings under the Viper 2025 Term Loan (i) if the pending Sitio Acquisition is consummated, to redeem Sitio’s 7.875% senior notes due 2028, repay borrowings under Sitio’s revolving credit facility and pay any fees, costs and expenses related to the redemption or repayment of such debt, and (ii) for general corporate purposes. The pending Sitio Acquisition is expected to close in the third quarter of 2025, subject to the satisfaction or waiver of closing conditions.
Reworded paragraphs (92)
Previous wording
Second Quarter 2025 Financial and Operating Highlights
Current wording
Third Quarter 2025 Financial and Operating Highlights
Previous wording
•Recorded net income of $699 million.
Current wording
•Recorded net income of $1.0 billion.
Previous wording
•Paid dividends to stockholders of $291 million during the second quarter of 2025 and declared a base cash dividend payable in the third quarter of 2025 of $1.00 per share of common stock.
Current wording
•Paid dividends to stockholders of $289 million during the third quarter of 2025 and declared a base cash dividend payable in the fourth quarter of 2025 of $1.00 per share of common stock.
Previous wording
•Repurchased $398 million of our common stock, excluding excise taxes, and had approximately $1.7 billion available for future repurchases under our common stock repurchase program at June 30, 2025.
Current wording
•Increased our common stock repurchase program authorization to $8.0 billion, excluding excise taxes, repurchased $603 million of our common stock, excluding excise taxes, and had approximately $3.1 billion available for future repurchases under our common stock repurchase program at September 30, 2025.
Previous wording
•Our cash operating costs were $10.10 per BOE, including lease operating expenses of $5.26 per BOE, cash general and administrative expenses of $0.55 per BOE and production and ad valorem taxes of $2.56 per BOE and gathering, processing and transportation expenses of $1.73 per BOE.
Current wording
•Our cash operating costs were $10.05 per BOE, including lease operating expenses of $5.65 per BOE, cash general and administrative expenses of $0.55 per BOE and production and ad valorem taxes of $2.44 per BOE and gathering, processing and transportation expenses of $1.41 per BOE.
Previous wording
•Our average production was 919.9 MBOE/d.
Current wording
•Our average production was 942.9 MBOE/d.
Previous wording
•Drilled 121 gross horizontal wells in the Midland Basin and one gross horizontal well in the Delaware Basin, and turned 116 gross operated horizontal wells (108 in the Midland Basin and eight in the Delaware Basin) to production.
Current wording
•Drilled 107 gross horizontal wells in the Midland Basin and one gross horizontal well in the Delaware Basin and turned 137 gross operated horizontal wells (137 in the Midland Basin and none in the Delaware Basin) to production.
Previous wording
•Cash capital expenditures, excluding acquisitions, of $864 million.
Current wording
•Cash capital expenditures, excluding acquisitions, were $774 million.
Previous wording
On June 2, 2025, Viper and Viper LLC entered into the Sitio Merger Agreement with Sitio and Sitio OpCo in an all-equity transaction valued at approximately $4.1 billion, including the redemption of Sitio’s net debt of approximately $1.1 billion as of June 30, 2025. The mineral and royalty interests to be acquired in the pending Sitio Acquisition represent approximately 25,300 net royalty acres in the Permian Basin and approximately 9,000 net royalty acres in the Denver-Julesburg, Eagle Ford and Williston basins, for total acreage of approximately 34,300 net royalty acres. Upon completion of the pending Sitio Acquisition, Viper expects to own 85,700 net royalty acres in the Permian Basin, approximately 43% of which will be operated by us and an average 1.8% net royalty interest in approximately 33,300 gross producing horizontal wells (approximately 608 net wells) with estimated average production of 64 - 68 MBO/d (122 - 130 MBOE/d) in the fourth quarter of 2025. The pending Sitio Acquisition is expected to close in the third quarter of 2025, subject to approval by a majority of the stockholders of Sitio and the satisfaction or waiver of other closing conditions. On June 2, 2025, Diamondback, Diamondback E&P and EER LLP, who together hold a majority of the voting power of Viper’s common stock, delivered a written consent approving the Sitio Merger Agreement, which constitutes the requisite approval of Viper’s stockholders under the Sitio Merger Agreement.
Current wording
On August 19, 2025, Viper and Viper LLC completed the Sitio Acquisition in an all-equity transaction valued at approximately $4.0 billion, subject to further adjustments for transaction costs and certain customary post-closing adjustments, including the retirement of Sitio’s net debt of $1.2 billion. The mineral and royalty interests acquired in the Sitio Acquisition represent approximately 25,300 net royalty acres in the Permian Basin and approximately 9,000 net royalty acres in the Denver-Julesburg, Eagle Ford and Williston basins, for total acreage of approximately 34,300 net royalty acres.
Previous wording
On July 23, 2025, Viper LLC issued the Viper 2025 Notes for an aggregate principal amount of $1.6 billion. Viper used a portion of the net proceeds from the Viper 2025 Notes to redeem or satisfy and discharge, as applicable, $780 million in aggregate principal amount of their previously outstanding senior notes, including accrued interest paid and redemption premiums. Viper intends to use the remaining net proceeds (i) if the pending Sitio Acquisition is consummated, to redeem Sitio’s 7.875% senior notes due 2028, repay borrowings under Sitio’s revolving credit facility and pay any fees, costs and expenses related to the redemption or repayment of such debt, and (ii) for general corporate purposes. Viper LLC is not obligated to redeem or repurchase the Viper 2025 Notes if the pending Sitio Acquisition is not consummated.
Current wording
On July 23, 2025, Viper LLC issued the Viper 2025 Notes for an aggregate principal amount of $1.6 billion. Viper used a portion of the net proceeds from the issuance of the Viper 2025 Notes to redeem or satisfy and discharge, as applicable, approximately $780 million in aggregate principal amount of their previously outstanding senior notes, including accrued interest paid and redemption premiums. The Viper 2027 Notes were subsequently redeemed in full on November 1, 2025. Viper used the remaining net proceeds (i) to retire Sitio’s 7.875% senior notes due 2028, (ii) to repay borrowings under Sitio’s revolving credit facility, (iii) to pay fees, costs and expenses related to the redemption or repayment of such debt, and (iv) for general corporate purposes.
Previous wording
In the second quarter of 2025, we opportunistically repurchased an aggregate principal amount of approximately $252 million of our outstanding senior notes, which consisted of $27 million of our 3.125% Senior Notes due 2031, $111 million of our 4.400% Senior Notes due 2051, $94 million of our 4.250% Senior Notes due 2052 and $20 million of our 5.750% Senior Notes due 2054, all in open market transactions for total cash consideration of $196 million, including accrued interest paid, at an average of 76.8% of par value. Further, Viper also opportunistically repurchased principal amounts of $50 million of its Viper 2027 Notes in open market transactions for total cash consideration of $50 million, at an average of 99.7% of par value. We may in the future opportunistically repurchase outstanding debt securities, in open market or privately negotiated transactions.
Current wording
In the fourth quarter of 2025, we opportunistically repurchased principal amounts of $152 million of our 4.400% Senior Notes due 2051 and $51 million of our 4.250% Senior Notes due 2052 in open market transactions for total cash consideration of $167 million, including accrued interest paid, at an average of 82.3% of par value.
Previous wording
See Note 9—Debt and Note 17—Subsequent Events of the notes to the condensed consolidated financial statements for further discussion of the transactions above.
Current wording
See Note 4—Acquisitions and Divestitures and Note 17—Subsequent Events of the notes to the condensed consolidated financial statements for further discussion of the transactions above.
Previous 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 six months ended June 30, 2025 and 2024, WTI prices averaged $70.81 and $78.81 per Bbl, respectively, and Henry Hub prices averaged$3.69 and $2.21 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 first nine months of 2025 and 2024, WTI prices averaged $66.65 and $77.61 per Bbl, respectively, and Henry Hub prices averaged $3.48 and $2.22 per MMBtu, respectively.
Previous wording
As of June 30, 2025, we had approximately 859,203 net acres, which primarily consisted of approximately 742,522 net acres in the Midland Basin and 116,681 net acres in the Delaware Basin.
Current wording
As of September 30, 2025, we had approximately 862,019 net acres in the Permian Basin, which primarily consisted of approximately 751,146 net acres in the Midland Basin and 110,873 net acres in the Delaware Basin.
Previous wording
(1)The average lateral length for the wells completed during the second quarter of 2025 was 13,402 feet. Operated completions during the second quarter of 2025 consisted of 31 Wolfcamp B wells, 21 Lower Spraberry wells, 14 Wolfcamp A wells, 13 Middle Spraberry wells, 11 Jo Mill wells, eight Dean wells, eight Upper Spraberry wells, five Third Bone Spring wells, three Wolfcamp D wells and two Barnett wells.
Current wording
(1)The average lateral length for the wells completed during the third quarter of 2025 was 11,020 feet. Operated completions during the third quarter of 2025 consisted of 28 Lower Spraberry wells, 27 Wolfcamp A wells, 27 Wolfcamp B wells, 26 Jo Mill wells, 11 Middle Spraberry wells, 10 Dean wells, four Barnett wells, three Upper Spraberry wells and one Wolfcamp D.
Previous wording
(2)The average lateral length for the wells completed during the six months ended June 30, 2025 was 12,656 feet. Operated completions during the six months ended June 30, 2025 consisted of 53 Wolfcamp B wells, 49 Lower Spraberry wells, 44 Wolfcamp A wells, 28 Jo Mill wells, 21 Middle Spraberry wells, 12 Dean wells, 10 Upper Spraberry wells, eight Third Bone Spring wells, six Wolfcamp D wells, six Barnett wells and two Second Bone Spring wells.
Current wording
(2)The average lateral length for the wells completed during the nine months ended September 30, 2025, was 12,060 feet. Operated completions during the nine months ended September 30, 2025, consisted of 80 Wolfcamp B wells, 77 Lower Spraberry wells, 71 Wolfcamp A wells, 54 Jo Mill wells, 32 Middle Spraberry wells, 22 Dean wells, 13 Upper Spraberry wells, 10 Barnett wells, eight Third Bone Spring wells, seven Wolfcamp D wells and two Second Bone Spring wells.
Previous wording
As of June 30, 2025, we and Viper held interests in 33,922 gross (9,687 net) wells, including 2,499 gross (378 net) wells in which we have a non-operated working interest.
Current wording
As of September 30, 2025, we and Viper held interests in 54,868 gross (9,571 net) wells, including 1,988 gross (332 net) wells in which we have a non-operated working interest.
Previous wording
The following table presents our updated estimates of certain financial and operating results for the full year of 2025 and the third quarter of 2025:
Current wording
The following table presents our updated estimates of certain financial and operating results for the full year of 2025 and the fourth quarter of 2025:
Previous wording
(2) Includes estimated favorable impact on the year-to-date period of tax legislation enacted in the third quarter.
Current wording
(2)Includes estimated favorable impact on the year-to-date period of tax legislation enacted in the third quarter.
Previous wording
The following table sets forth selected operating data for the three months ended June 30, 2025 and March 31, 2025:
Current wording
The following table sets forth selected operating data for the periods indicated:
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 provide information on the mix of our production for the three months ended June 30, 2025 and March 31, 2025:
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 provide information on the mix of our production for the periods indicated:
Previous wording
Our oil, natural gas and natural gas liquids revenues for the second quarter of 2025 decreased by $0.3 billion to $3.3 billion compared to the first quarter of 2025. The net decrease was due to a $601 million reduction related to lower average prices received for our oil, natural gas and natural gas liquids production, which was partially offset by a $260 million increase attributable to the 9% growth in our combined production volumes.
Current wording
Our oil, natural gas and natural gas liquids revenues for the third quarter of 2025 increased by $131 million to $3.4 billion compared to the second quarter of 2025. The increase consisted of $100 million attributable to the 4% growth in our combined production volumes, and $31 million attributable to higher average prices received primarily for our oil production.
Previous wording
Approximately 65% of the increase in our combined production volumes is attributable to the Double Eagle Acquisition. The remainder of production growth is largely attributable to new wells added between periods.
Current wording
Approximately 53% of the increase in our combined production volumes is attributable to Viper’s Sitio Acquisition. The remainder of production growth is largely attributable to new wells added between periods.
Previous wording
Net Sales of Purchased Oil. We have entered into purchase transactions and separate sales 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 June 30, 2025 and March 31, 2025:
Current wording
Net Sales of Purchased Oil. We have entered into purchase transactions and separate sales 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 periods indicated:
Previous wording
Other Revenues. The following table presents other insignificant revenue for the three months ended June 30, 2025 and March 31, 2025:
Current wording
Other Revenues. The following table presents other insignificant revenue for the periods indicated:
Previous wording
Lease Operating Expenses. The following table shows lease operating expenses for the three months ended June 30, 2025 and March 31, 2025:
Current wording
Lease Operating Expenses. The following table shows lease operating expenses for the periods indicated:
Previous wording
Production and Ad Valorem Tax Expense. The following table shows production and ad valorem tax expense for the three months ended June 30, 2025 and March 31, 2025:
Current wording
Production and Ad Valorem Tax Expense. The following table shows production and ad valorem tax expense for the periods indicated:
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 first quarter of 2025 to the second quarter of 2025.
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 second quarter of 2025 to the third 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 during the second quarter of 2025 compared to the first quarter of 2025.
Current wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes during the third quarter of 2025 compared to the second quarter of 2025 reflect a $14 million reduction to the accrual for 2024 based on actual assessments received in the third quarter of 2025 and other individually insignificant changes, which were partially offset by a $2 million increase related to properties acquired in Viper’s Sitio Acquisition.
Previous wording
Gathering, Processing and Transportation Expense. The following table shows gathering, processing and transportation expense for the three months ended June 30, 2025 and March 31, 2025:
Current wording
Gathering, Processing and Transportation Expense. The following table shows gathering, processing and transportation expenses for the periods indicated:
Previous 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 June 30, 2025 and March 31, 2025:
Current wording
Depreciation, Depletion, Amortization and Accretion. The following table provides the components of our depreciation, depletion, amortization and accretion expense for the periods indicated:
Previous wording
General and Administrative Expenses. The following table shows general and administrative expenses for the three months ended June 30, 2025 and March 31, 2025:
Current wording
General and Administrative Expenses. The following table shows general and administrative expenses for the periods indicated:
Previous wording
Other Operating Costs and Expenses. The following table shows other operating costs and expenses for the three months ended June 30, 2025 and March 31, 2025:
Current wording
Other Operating Costs and Expenses. The following table shows other operating costs and expenses for the periods indicated:
Previous wording
Merger and transaction expenses for the second quarter of 2025 primarily consisted of (i) $29 million of advisory, legal and filing fees related to the 2025 Drop Down, and (ii) $13 million of employee severance and other costs incurred in connection with the Endeavor Acquisition. Merger and transaction expenses for the first quarter of 2025 primarily consisted of (i) $23 million of employee severance costs and $2 million of information technology 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.
Current wording
Merger and transaction expenses for the third quarter of 2025 primarily consisted of (i) approximately $15 million of employee severance payments made in connection with Viper’s Sitio Acquisition, and (ii) other individually insignificant items. Merger and transaction expenses for the second quarter of 2025 primarily consisted of (i) $29 million of advisory, legal and filing fees related to the 2025 Drop Down, and (ii) $13 million of employee severance and other costs incurred in connection with the Endeavor Acquisition.
Previous wording
Derivative Instruments. The following table shows the net gain (loss) on derivative instruments and the net cash receipts (payments) on settlements of derivative instruments for the three months ended June 30, 2025 and March 31, 2025:
Current wording
Derivative Instruments. The following table shows the net gain (loss) on derivative instruments and the net cash receipts (payments) on settlements of derivative instruments for the periods indicated:
Previous wording
(1)The three months ended June 30, 2025 includes cash paid on interest rate swaps terminated prior to their contractual maturity of $52 million.
Current wording
(1)The three months ended September 30, 2025, and June 30, 2025, include cash paid on interest rate swaps terminated prior to their contractual maturity of $15 million, and $52 million, respectively.
Previous wording
The change from a gain to a loss on derivative instruments for the second quarter of 2025 compared to the first quarter of 2025 primarily reflects (i) a $407 million decrease in the value of our unsettled natural gas contracts due to an increase in market prices for natural gas compared to our contract prices, (ii) a $62 million decrease in cash received on the settlement of natural gas contracts, (iii) $59 million in additional cash payments made on our interest rate swaps, primarily due to the $52 million early termination of an aggregate $450 million of notional interest rate swaps during the second quarter of 2025, and (iv) other individually insignificant changes. These losses were partially offset by gains attributable to (i) a $56 million increase in the value of our remaining interest rate swap contracts driven by a decline in expected future interest rates, and (ii) a $55 million increase in the value of our unsettled oil contracts due to a decline in market prices for oil compared to our contract prices.
Current wording
The change from a loss to a gain on derivative instruments for the third quarter of 2025 compared to the second quarter of 2025 primarily reflects (i) a $330 million increase in the value of our unsettled natural gas contracts due to a decrease in market prices for natural gas compared to our contract prices, (ii) a $51 million increase in cash received on the settlement of natural gas contracts, (iii) a $37 million reduction in cash payments made to partially terminate $150 million of notional amount of our interest rate swaps during the third quarter of 2025 compared to partially terminating $450 million of notional amount of interest rate swaps during the second quarter of 2025, and (iv) other individually insignificant changes. These gains were partially offset by losses attributable to (i) a $64 million decrease in the value of our unsettled oil contracts due to an increase in market prices for oil compared to our contract prices, and (ii) a $53 million reduction in the value of our remaining interest rate swap contracts due to the early termination of additional notional value discussed above.
Previous wording
Other Income (Expense). The following table shows other income and expenses for the three months ended June 30, 2025 and March 31, 2025:
Current wording
Other Income (Expense). The following table shows other income and expenses for the periods indicated:
Previous wording
The increase in interest expense, net for the second quarter of 2025 compared to the first quarter of 2025 primarily consists of (i) $22 million in additional interest expense from the 2025 Term Loan Agreement that was drawn on the closing date of the Double Eagle Acquisition, (ii) $15 million in additional interest expense from the 2035 Notes issued in March 2025, and (iii) a $10 million increase in interest expense on our and Viper LLC’s revolving credit facilities due to higher average outstanding borrowings during the second quarter of 2025. These increases were partially offset by a (i) a $24 million increase in capitalized interest costs, which decreased interest expense, (ii) an $8 million decrease due to the termination of our Tranche A Loans in May of 2025, and (iii) other individually insignificant changes.
Current wording
The increase in interest expense, net for the third quarter of 2025 compared to the second quarter of 2025 primarily consists of (i) $16 million from the Viper 2025 Notes issued in July 2025, (ii) an $8 million decrease in capitalized interest costs, which increased interest expense, and (iii) $3 million of interest expense on the Viper Term Loan issued in connection with Viper’s Sitio Acquisition. These increases were partially offset by reductions of (i) $6 million attributable to Viper’s redemption of the Viper 2031 Notes, (ii) $5 million attributable to the repayment of the Tranche A Loans in May 2025, (iii) $5 million on the Company’s revolving credit facility due to lower average outstanding borrowings during the third quarter of 2025, and (iv) other individually insignificant changes.
Previous wording
The decrease in other income (expense), net for the second quarter of 2025 compared to the first quarter of 2025 is primarily due to the first quarter of 2025 including a gain of $42 million related to the receipt of additional proceeds in connection with the WTG Midstream Transaction, which was partially offset by an $11 million increase in the loss on the remeasurement of an investment recorded at fair value, and other individually insignificant items.
Current wording
The increase in other income (expense), net for the third quarter of 2025 compared to the second quarter of 2025 is primarily due to the third quarter of 2025 including (i) a $99 million gain on the sale of an equity method investment, (ii) a net gain of $23 million related to the receipt of additional proceeds in connection with the WTG Midstream Transaction, and (iii) other individually insignificant offsetting items.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
In the fourth quarter of 2025, we opportunistically repurchased principal amounts of $152 million of our 4.400% Senior Notes due 2051 and $51 million of our 4.250% Senior Notes due 2052 in open market transactions for total cash consideration of $167 million, including accrued interest paid, at an average of 82.3% of par value.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for further discussion of the transactions above.