Diamondback Energy, Inc.

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Organization and Description of the Business

Diamondback Energy, Inc., together with its subsidiaries (collectively referred to as “Diamondback,” the “Company,” “we” or “our” unless the context otherwise requires), is an independent oil and natural gas company currently focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas.

As of December 31, 2025, the wholly owned subsidiaries of Diamondback include Diamondback E&P LLC, a Delaware limited liability company, Rattler Midstream GP LLC, a Delaware limited liability company, Rattler Midstream LP, a Delaware limited partnership, QEP Resources, Inc. (“QEP”), a Delaware corporation, Diamondback RE Holdco LLC, a Delaware limited liability company and Eclipse Merger Sub II, LLC, a Delaware limited liability company.

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its subsidiaries, including its publicly-traded subsidiary, Viper Energy, Inc., after all significant intercompany balances and transactions have been eliminated upon consolidation. As of December 31, 2025, the Company is managed asone operating and reportable segment, the upstream segment, which is engaged in the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas and includes the activities of Viper as well as the Company’s remaining midstream operations.

On August 19, 2025, upon completion of Viper’s Sitio Acquisition (as defined and discussed in Note 4—Acquisitions and Divestitures), VNOM Sub, Inc., (formerly Viper Energy, Inc., “Former Viper”) became a wholly owned subsidiary of Viper Energy Inc., (formerly New Cobra Pubco, Inc., “New Viper”).

As of December 31, 2025, the Company owned approximately 42% of Viper’s combined outstanding Class A common stock and Class B common stock on a fully diluted basis, after giving effect to the outstanding TWR Class B Option (as defined and discussed in Note 4—Acquisitions and Divestitures). The Company determined that it controls the activities of Viper in accordance with the guidance for variable interest entities in Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” and therefore continues to consolidate Viper in the Company’s financial statements at December 31, 2025. See further discussion of the Company’s determination that Viper is a variable interest entity (“VIE”) in Note 2—Summary of Significant Accounting Policies. The results of operations attributable to the non-controlling interest in Viper are presented within equity and net income and are shown separately from the equity and net income attributable to the Company.

On November 13, 2023, the Company’s publicly traded subsidiary, Viper Energy Partners LP, completed its conversion from a Delaware limited partnership into a Delaware corporation, Viper Energy, Inc. (the “Viper Conversion”). At the time of the Viper Conversion, Viper was a “controlled company” under the Nasdaq rules because the Company owned more than 50% of the voting power of Viper’s common stock. On October 31, 2023, pursuant to a common unit purchase and sale agreement entered into on September 4, 2023, Viper issued approximately 7.22 million of its common units, which were converted to shares of Viper Class A common stock at the time of the Viper Conversion, to the Company at a price of $27.72 per unit for total consideration to Viper of approximately $200 million. On March 5, 2024, the Company exercised certain of its demand rights, pursuant to a registration rights agreement amended and restated on November 10, 2023, and on March 8, 2024, completed a public offering of approximately 13.23 million shares of Viper’s Class A common stock at a price of $35.00 per share for proceeds, net of underwriters’ discount, of approximately $451 million. After this offering, the Company owned less than 50% of Viper’s combined outstanding Class A common stock and Class B common stock, resulting in Viper no longer being a controlled company under the Nasdaq rules. References to “Viper” refer to (i) New Viper following the Sitio Acquisition, (ii) Former Viper prior to the Sitio Acquisition but after the Viper Conversion, and (iii) Viper Energy Partners LP prior to the Viper Conversion. For definition and details on Viper’s Sitio Acquisition, see Note 4—Acquisitions and Divestitures.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had an immaterial effect on the previously reported total assets, total liabilities, stockholders’ equity, results of operations or cash flows.