Diamondback Energy, Inc.
For the period ended Mar 31, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
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 2025-09-30; filed 2025-11-05.
0001539838-25-000147
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001539838-26-000077
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 173 previous paragraphs and 147 current paragraphs.
59 unchanged; 52 reworded; 31 added; 59 removed; 3 previous and 5 current paragraphs rearranged.
Tables are not compared: 35 previous and 36 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 (31)
Current report
Divestiture
Current report
On February 9, 2026, Viper completed the Viper Non-Permian Divestiture for net cash proceeds of approximately $610 million, including transaction costs and customary post-closing adjustments. The divested properties consisted 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. Proceeds from the Viper Non-Permian Divestiture were used to repay amounts outstanding under the Viper 2025 Term Loan and the Viper Revolving Credit Facility and for general corporate purposes.
Current report
Commodity Prices
Current report
Outlook
Current report
In response to growing global oil supply constraints and the improved commodity pricing environment that began in March of 2026, we have increased our annual production guidance by 3% to approximately 972 MBOE/d, which we expect to achieve in part by working down our drilled but uncompleted well balance.
Current report
Lease operating expenses increased for the first quarter of 2026 compared to the fourth quarter of 2025 primarily due to additional costs incurred on non-operated properties, for weather-related events in January 2026 and other individually insignificant changes.
Current report
The decrease in depletion of proved oil and natural gas properties of $96 million for the first quarter of 2026 as compared to the fourth quarter of 2025 primarily consists of an $81 million reduction from the decline in depletion rate following the ceiling test impairment recorded in the fourth quarter of 2025 and a $15 million reduction due to the slight decline in quarterly production volumes.
Current report
Impairment of Oil and Natural Gas Properties. The following table shows impairment of oil and natural gas properties for the periods indicated:
Current report
The non-cash ceiling test impairment charges in both the first quarter of 2026 and the fourth quarter of 2025 primarily resulted from the decline in SEC Prices applicable to each period. Impairment charges affect our results of operations but do not reduce our cash flow.
Current report
General and Administrative Expenses. The following table shows the cash and non-cash general and administrative expenses incurred in the periods indicated:
Current report
Other Operating Expenses, Net. The following table shows other operating expenses for the periods indicated:
Current report
The change in other operating expenses, net during the first quarter of 2026 compared to the fourth quarter of 2025 was primarily due to (i) a reduction in the gain on sale of other property, plant and equipment of $140 million due largely to the fourth quarter of 2025 including the $167 million gain on the divestiture of the Company’s Environmental Disposal Systems, LLC subsidiary, (ii) a $13 million increase in impairment of certain midstream assets, and (iii) other insignificant activity.
Current report
The decrease in gain on derivative instruments for the first quarter of 2026 compared to the fourth quarter of 2025 primarily reflects a $145 million loss on our oil contracts due primarily to the value of our unsettled roll swap and put contracts declining as market prices for oil increased compared to our contract prices. This loss was partially offset by a net $77 million gain attributable to our natural gas contracts, which was comprised of an $83 million increase in cash received on the settlement of contracts primarily due to favorable differentials on our basis swaps, partially offset by a $6 million net decrease in the value of our unsettled natural gas contracts.
Current report
The decrease in interest expense, net for the first quarter of 2026 compared to the fourth quarter of 2025 primarily reflects $18 million in interest cost savings due to the repayment and termination of Viper’s 2025 Term Loan and a partial repayment of the 2025 Term Loan late in the fourth quarter of 2025 along with opportunistic repurchases of other senior notes and the net impact of other individually insignificant changes.
Current report
The decrease in other income for the first quarter of 2026 compared to the fourth quarter of 2025 was primarily due to the fourth quarter of 2025 including a gain of approximately $299 million recorded in connection with the EPIC Divestiture and other individually insignificant activity.
Current report
Lease operating expenses increased for the three months ended March 31, 2026, compared to the same period in 2025 primarily due to (i) the first quarter of 2025 including a $38 million reduction in cost estimates related to producing properties acquired in the Endeavor Acquisition, (ii) an additional $27 million in water services costs following the divestiture of the Company’s Environmental Disposal Systems, LLC subsidiary in the fourth quarter of 2025, (iii) $24 million of costs attributable to operating wells acquired in the Double Eagle Acquisition, (iv) a $21 million increase in workover costs, (v) an additional $11 million in costs due to an increase in legacy production, and (vi) an increase in various other weather related costs due to a winter storm in January 2026.
Current report
Impairment of Oil and Natural Gas Properties. The following table shows impairment of oil and natural gas properties for the periods indicated:
Current report
The non-cash ceiling test impairment charge of $1.4 billion for the three months ended March 31, 2026 primarily resulted from the decline in SEC Prices during the preceding twelve months.
Current report
General and Administrative Expenses. The following table shows the cash and non-cash general and administrative expenses incurred in the periods indicated:
Current report
The decrease in other operating expenses for the three months ended March 31, 2026, compared to the same period in 2025 primarily resulted from a $33 million reduction in merger and transaction costs due to the first quarter of 2025 including costs incurred for the Endeavor Acquisition and other individually insignificant transactions, and a $17 million decrease in midstream service expense following the divestiture of the Company’s Environmental Disposal Systems, LLC subsidiary in the fourth quarter of 2025.
Current report
The decrease in gain on derivative instruments for the three months ended March 31, 2026, compared to the same period in 2025 reflects (i) a $132 million decrease in the gain on our oil contracts primarily due to reductions in the value of unsettled put and roll swap contracts, (ii) an $11 million net loss on our interest rate derivatives, which were terminated prior to their maturity, and (iii) other insignificant activity. These losses were partially offset by a net gain of $36 million on our natural gas contracts, comprised of an $80 million increase in cash received on the settlement of contracts primarily due to favorable differentials on our basis swaps and a $44 million net decrease in the value of our unsettled contracts due primarily to unfavorable movements in our basis swap differentials, partially offset by lower market prices compared to contract prices on our costless collars.
Current report
Interest expense, net increased by $23 million for the three months ended March 31, 2026, compared to the same period in 2025. This increase primarily consisted of (i) $22 million of additional interest expense related to the 2035 Notes and the 2025 Term Loan, (ii) a net increase of $9 million related to Viper’s issuance of its 4.900% Senior Notes due 2030 and 5.700% Senior Notes due 2035 and Viper’s redemption of its 5.375% Senior Notes due 2027 and 7.375% Senior Notes due 2031, and (iii) a $6 million reduction in interest income, which reduces interest expense. These increases were partially offset by a $13 million reduction in interest expense following the repayment of $900 million in borrowings on a previously outstanding term loan in May 2025 and other individually insignificant changes.
Current report
Other income (expense), net for the three months ended March 31, 2026, decreased compared to the same period in 2025, primarily due to the first quarter of 2025 including $42 million of proceeds received from an equity method investee divesting its assets. This decrease was partially offset by a $7 million increase in income from equity method investees and other individually insignificant items.
Current report
The decrease in our income tax provision for the three months ended March 31, 2026, compared to the same period in 2025 was primarily due to the decrease in pre-tax income resulting largely from the non-cash ceiling test impairment charge recorded in the first quarter of 2026, partially offset by additional revenues from oil, natural gas and natural gas liquids as discussed above.
Current report
Revolving Credit Facilities
Current report
Diamondback’s Revolving Credit Facility
Current report
Viper’s Revolving Credit Facility
Current report
In order to capitalize on higher oil prices, we have made the decision to work down our drilled but uncompleted well inventory to bring incremental barrels to the market immediately and add two or three rigs to maintain a healthy backlog of projects to maintain operational flexibility in 2026. As a result, our board of directors has approved an increase of 4% to our 2026 capital budget guidance to approximately $3.90 billion, which includes $3.31 billion for operated horizontal drilling and completions.
Current report
Debt Instruments
Current report
In April 2026, we (i) repaid in full the $550 million in outstanding borrowings and terminated the 2025 Term Loan, and (ii) completed a tender offer to repurchase an aggregate principal amount of $777 million of our senior notes, which consisted of $283 million of the 4.400% Senior Notes due 2051 and $494 million of the 4.250% Senior Notes due 2052 for total cash consideration, including accrued interest paid, of approximately $632 million, at an average of 81.1% of par value.
Current report
(1)During the three months ended March 31, 2026, the Company recorded a noncash impairment that is reflected in the summarized results of the guarantor group. This impairment is not indicative of cash flows available for debt service.
Removed paragraphs (59)
Previous report
Acquisitions and Divestitures
Previous report
Diamondback Divestitures
Previous report
EPIC Divestiture
Previous 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.
Previous report
Divestiture of Water Assets to Deep Blue
Previous 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.
Previous report
Viper Acquisitions and Divestitures
Previous 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.
Previous report
Sitio Acquisition
Previous report
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 report
Capital Transactions
Previous report
Viper 2025 Notes Offering and Redemption of Notes
Previous report
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 report
Viper Term Loan
Previous 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.
Previous report
See Note 9—Debt of the notes to the condensed consolidated financial statements for further discussion of the capital transactions above.
Previous report
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 report
Commodity Prices and Impairment
Previous report
For additional information around risks related to commodity prices, see Part II. Item 3. Quantitative and Qualitative Disclosures About Market Risk—Commodity Price Risk.
Previous report
(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 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.
Previous report
Guidance
Previous 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.
Previous report
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 report
(1)Includes approximately $175 million in tax impacts from asset divestitures in the fourth quarter.
Previous report
(2)Includes estimated favorable impact on the year-to-date period of tax legislation enacted in the third quarter.
Previous 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.
Previous 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.
Previous report
General and Administrative Expenses. The following table shows general and administrative expenses for the periods indicated:
Previous report
Other Operating Costs and Expenses. The following table shows other operating costs and expenses for the periods indicated:
Previous report
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 report
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 report
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 report
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.
Previous report
The loss on extinguishment of debt in the third quarter of 2025 of $32 million was recorded on the redemption of the Viper 2031 Notes. The gain on extinguishment of debt in the second quarter of 2025 is due to the Company opportunistically repurchasing an aggregate principal amount of $252 million of its senior notes for total cash consideration, including accrued interest paid, of approximately $196 million.
Previous report
See Note 9—Debt of the notes to the condensed consolidated financial statements for further details regarding the Company’s retirement of a portion of its senior notes during the third quarter of 2025.
Previous report
Comparison of the Nine Months Ended September 30, 2025, and 2024
Previous report
Other operating income increased for the nine months ended September 30, 2025, compared to the same period in 2024 primarily due to (i) recording $30 million in midstream and service revenues attributable to assets acquired in the Endeavor Acquisition, and (ii) a $17 million increase in lease bonus income received during 2025. These increases were partially offset by a $13 million reduction in midstream revenues following the divestiture of certain midstream assets in connection with the TRP Exchange that closed in the fourth quarter of 2024.
Previous report
Lease operating expenses increased for the nine months ended September 30, 2025, compared to the same period in 2024 primarily due to (i) $368 million of costs associated with operating wells acquired in the Endeavor Acquisition, (ii) an additional $55 million of costs from higher legacy production volumes, (iii) $44 million in additional well workover costs, (iv) $34 million of costs attributable to operating wells acquired in the Double Eagle Acquisition, (v) a $25 million increase in maintenance costs, and (vi) individually insignificant offsetting changes. The decrease in the overall rate per BOE for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily the result of lower disposal costs associated with properties acquired in connection with the Endeavor Acquisition and the Double Eagle Acquisition.
Previous report
Additionally, depreciation and amortization of other property and equipment increased in connection with the acquisition of other assets in the Endeavor Acquisition.
Showing the first 40 of 59 passages. Open the source sections for the rest.
Reworded paragraphs (52)
Previous wording
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 wording
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, 2025. 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, Part I. Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025 and Cautionary Statement Regarding Forward-Looking Statements.
Previous wording
Third Quarter 2025 Financial and Operating Highlights
Current wording
First Quarter 2026 Financial and Operating Highlights
Previous wording
•Recorded net income of $1.0 billion.
Current wording
•Recorded net income of $25 million, which includes impairment of approximately $1.4 billion recorded on our proved oil and natural gas properties.
Previous 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.
Current wording
•Our cash operating costs were $11.26 per BOE, including lease operating expenses of $6.21 per BOE, cash general and administrative expenses of $0.65 per BOE, production and ad valorem taxes of $3.04 per BOE and gathering, processing and transportation expenses of $1.36 per BOE.
Previous wording
•Cash capital expenditures, excluding acquisitions, were $774 million.
Current wording
•Incurred cash capital expenditures, excluding acquisitions, of $933 million.
Previous 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.
Current wording
•Paid dividends to stockholders of $295 million, or $1.05 per share, during the first quarter of 2026 and declared a base cash dividend payable in the second quarter of 2026 of $1.10 per share of common stock.
Previous 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.
Current wording
•Repurchased $548 million of our common stock, excluding excise taxes, leaving approximately $2.1 billion available for future repurchases at March 31, 2026.
Previous wording
•Our average production was 942.9 MBOE/d.
Current wording
•Our average production was 979.4 MBOE/d.
Previous 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.
Current wording
•Drilled 118 gross horizontal wells in the Midland Basin and turned 147 gross operated horizontal wells in the Midland Basin to production.
Previous wording
Pending Viper Divestiture of Non-Permian Assets
Current wording
Viper Divestiture of Non-Permian Assets
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 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.
Current wording
Prices for oil, natural gas and natural gas liquids are determined primarily by prevailing market conditions. Geopolitical global conflicts, tariffs or other trade barriers and any resulting trade tensions, regional and worldwide economic activity, changes in trade or other government policies or regulations, including with respect to U.S. energy and monetary policies, extreme weather conditions and other substantially variable factors influence market conditions for these products. For example, in the last quarter the global crude oil market shifted from a supply-demand surplus to a deficit, materially reducing crude oil and refined products from the markets, and increasing benchmark crude oil prices. These factors are beyond our control and are difficult to predict. OPEC+ continues to meet regularly to evaluate the state of global oil supply, demand and inventory levels and can heavily influence volatility in oil prices. During the three months ended March 31, 2026 and 2025, WTI prices averaged $72.67 and $71.42 per Bbl, respectively, and Henry Hub prices averaged $3.47 and $3.87 per MMBtu, respectively.
Previous wording
Our activities are primarily directed at the horizontal development of the Wolfcamp and Spraberry formations in the Midland Basin and the Wolfcamp and Bone Spring formations in the Delaware Basin within the Permian Basin. Additionally, our publicly-traded subsidiary, Viper, is focused on owning and acquiring mineral interests and royalty interests in oil and natural gas properties primarily in the Permian Basin and derives royalty income and lease bonus income from such interests.
Current wording
Our activities are primarily directed at the horizontal development of the Wolfcamp and Spraberry formations with exploratory development in the Barnett and Woodford shales in the Midland Basin and the Wolfcamp and Bone Spring formations in the Delaware Basin within the Permian Basin. Additionally, our publicly-traded subsidiary, Viper, is focused on owning and acquiring mineral interests and royalty interests in oil and natural gas properties primarily in the Permian Basin and derives royalty income and lease bonus income from such interests.
Previous 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.
Current wording
As of March 31, 2026, we had approximately 890,496 net acres in the Permian Basin, which primarily consisted of approximately 797,074 net acres in the Midland Basin and 93,422 net acres in the Delaware Basin.
Previous 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.
Current wording
(1)The average lateral length for the wells completed during the first quarter of 2026 was 11,332 feet. Operated completions during the first quarter of 2026 consisted of 32 Lower Spraberry wells, 31 Wolfcamp A wells, 31 Jo Mill wells, 30 Wolfcamp B wells, eight Wolfcamp D wells, seven Middle Spraberry wells, six Dean wells and two Upper Spraberry wells.
Previous 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.
Current wording
As of March 31, 2026, we and Viper held interests in 44,552 gross (9,679 net) wells, including 1,863 gross (319 net) wells in which we have a non-operated working interest.
Previous 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.
Current wording
Our oil, natural gas and natural gas liquids revenues for the first quarter of 2026 increased by $792 million to $3.8 billion compared to the fourth quarter of 2025. The increase consisted of an additional $811 million attributable to higher average prices received primarily for our oil production, which was partially offset by a $19 million reduction attributable to two fewer days of production during the first quarter of 2026.
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 periods indicated:
Current wording
Net Sales of Purchased Oil. We enter 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
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.
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 2025 to the first quarter of 2026.
Previous 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.
Current wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes during the first quarter of 2026 compared to the fourth quarter of 2025 reflect a slight increase in expected tax rates for 2026 compared to 2025 as well as a $13 million adjustment recorded in the first quarter of 2026 for actual billings received related to prior years.
Previous wording
The increase in gathering, processing and transportation expenses for the nine months ended September 30, 2025, compared to the same period in 2024 is attributable primarily to (i) $36 million incurred on additional production acquired in the Endeavor Acquisition, (ii) $30 million associated with production from new wells completed between the nine months ended September 30, 2025, and September 30, 2024, (iii) $29 million associated with transportation costs incurred to meet our minimum volume commitments on certain pipelines, (iv) $19 million related to new firm transportation contracts that became effective during the nine months ended September 30, 2025, (v) $10 million related to properties acquired in the TRP Exchange, and (vi) other individually insignificant changes. The decrease in the overall rate per BOE for the nine months ended September 30, 2025, compared to the same period in 2024 was driven by recording gathering, processing and transportation charges for the majority of production from the Endeavor Acquisition, and to a lesser extent, the Double Eagle Acquisition, as a reduction to revenue in accordance with the terms of the acquired contracts.
Current wording
The decrease in gathering, processing and transportation expenses primarily reflects a $19 million reduction in transportation costs incurred to meet our minimum volume commitments on certain pipelines, partially offset by other individually insignificant changes.
Previous wording
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 wording
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. If the trailing 12-month commodity prices fall as compared to the commodity prices used in prior quarters, we may have material write-downs in subsequent quarters. We currently do not expect to record additional impairment of our assets in the second quarter of 2026.
Previous 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.
Current wording
(1)The three months ended March 31, 2026, includes cash paid on interest rate swaps terminated prior to their contractual maturity of $27 million.
Previous wording
See Note 9—Debt of the notes to the condensed consolidated financial statements for further details regarding outstanding borrowings.
Current wording
See Note 8—Debt and Note 16—Subsequent Events of the notes to the condensed consolidated financial statements for details regarding outstanding borrowings.
Previous wording
The change in our income tax provision for the third quarter of 2025 compared to the second quarter of 2025 was primarily due to the increase in pre-tax income between the periods which resulted largely from gains on derivative contracts and gains on the divestiture of equity method investments recorded during the third quarter of 2025 as discussed above. See Note 12—Income Taxes of the notes to the condensed 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 2026 compared to our income tax benefit in the fourth quarter of 2025 was primarily due to the increase in pre-tax income between the periods, which resulted largely from a reduction in the non-cash ceiling test impairment charge and an increase in our oil, natural gas and natural gas liquids revenues recorded in the first quarter of 2026 compared to the fourth quarter of 2025 as discussed above. See Note 11—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of our income tax expense.
Previous wording
Our oil, natural gas and natural gas liquids revenues for the nine months ended September 30, 2025, increased by $3.8 billion, or 57%, to $10.4 billion from the same period in 2024 primarily due to a $4.7 billion increase driven by the 79% growth in our combined production volumes. This increase was partially offset by a net reduction of $924 million primarily due to lower average prices received for our oil production for the nine months ended September 30, 2025.
Current wording
Our oil, natural gas and natural gas liquids revenues for the three months ended March 31, 2026, increased by $168 million, or 5%, to $3.8 billion from the same period in 2025. This net increase consisted of an additional $434 million from the 15% growth in our combined production volumes, partially offset by a net reduction of $266 million primarily due to lower average prices received for our natural gas and natural gas liquids production for the three months ended March 31, 2026.
Previous wording
Approximately 56% of the increase in our combined production volumes is attributable to the Endeavor Acquisition and 8% is attributable to the Double Eagle Acquisition. The remainder of production growth is largely attributable to new wells added between periods.
Current wording
Approximately 37% of the increase in our combined production volumes was attributable to the Double Eagle Acquisition and 31% was 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 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 periods indicated:
Current wording
Net Sales of Purchased Oil. We enter 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 periods indicated:
Previous wording
Other Revenues. The following table shows the other revenues for the periods indicated:
Current wording
Other Revenues. The following table shows the other insignificant revenues 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 revenue from sales of oil, natural gas and natural gas liquids increased in 2025 compared to 2024 due primarily to the 2024 period including a $17 million refund for the settlement of an audit, which reduced production taxes in the prior year period.
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 revenue from sales of oil, natural gas and natural gas liquids remained consistent in the first quarter of 2026 compared 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 for the nine months ended September 30, 2025, as compared to the same period in 2024 increased by $45 million, primarily due to additional taxes incurred on properties acquired since September 30, 2024. The rate of ad valorem taxes per BOE and as a percentage of revenue declined due to a reduction in expected ad valorem tax rates on legacy properties for 2025 compared to the rates during 2024.
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, 2026, compared to the same period in 2025 increased by $25 million, primarily due to taxes incurred on properties acquired in the Double Eagle Acquisition and Viper’s Sitio Acquisition.
Previous wording
The increase in depletion of proved oil and natural gas properties of $1.9 billion for the nine months ended September 30, 2025, as compared to the same period in 2024 consists primarily of $1.3 billion from growth in production volumes and $605 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, the Double Eagle Acquisition and, to a lesser extent, Viper’s Sitio Acquisition and TWR Acquisition subsequent to the third quarter of 2024.
Current wording
The increase in depletion of proved oil and natural gas properties of $202 million for the three months ended March 31, 2026, compared to the same period in 2025 consists of $161 million from growth in production volumes and $41 million attributable to an increase in the depletion rate from the addition of higher value leasehold costs and proved reserves from the Double Eagle Acquisition and, to a lesser extent, Viper’s Sitio Acquisition subsequent to the first quarter of 2025.
Previous wording
Other Operating Costs and Expenses. The following table shows the other operating costs and expenses for the periods indicated:
Current wording
Other Operating Expenses, Net. The following table shows the other operating expenses for the periods indicated:
Previous wording
(1)The nine months ended September 30, 2025, and 2024 include cash paid on interest rate swaps terminated prior to their contractual maturity of $67 million and $37 million, respectively.
Current wording
(1)The three months ended March 31, 2026, includes cash paid on interest rate swaps terminated prior to their contractual maturity of $27 million.
Previous wording
Historically, our primary sources of liquidity have included cash flows from operations, proceeds from our public equity offerings, borrowings under our revolving credit facility, borrowings under term loans, proceeds from the issuance of senior notes and sales of non-core assets. Our primary uses of capital have been for the acquisition, development and exploration of oil and natural gas properties, repayment of debt and returning capital to stockholders. At September 30, 2025, we had approximately $2.4 billion of liquidity consisting of $106 million in standalone cash and cash equivalents and $2.3 billion available under our credit facility. As discussed above, we have revised our capital budget guidance for 2025 to $3.45 billion to $3.55 billion to prioritize free cash flow generation. At September 30, 2025, we had approximately $14 million of senior notes, excluding the Viper 2027 Notes, maturing in the next 12 months.
Current wording
Historically, our primary sources of liquidity have included cash flows from operations, proceeds from our public equity offerings, borrowings under the Revolving Credit Facility and term loan agreements, proceeds from the issuance of senior notes and sales of non-core assets. Our primary uses of capital have been for the acquisition, development and exploration of oil and natural gas properties, repayment of debt and returning capital to stockholders. At March 31, 2026, we had approximately $2.6 billion of liquidity consisting of $146 million in standalone cash and cash equivalents and $2.5 billion available under our credit facility. At March 31, 2026, we had approximately $749 million of senior notes maturing in the next 12 months.
Previous wording
Future cash flows are subject to a number of variables, including the level of oil and natural gas production and volatility of commodity prices. Further, significant additional capital expenditures will be required to more fully develop our properties. Prices for our commodities are determined primarily by prevailing market conditions, regional and worldwide economic activity, weather and other substantially variable factors. These factors are beyond our control and are difficult to predict as discussed further in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024, andin our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, filed with the SEC on May 7, 2025. In order to mitigate this volatility, we enter into derivative contracts with a number of financial institutions, all of which are participants in our credit facility, to economically hedge a portion of our estimated future crude oil and natural gas production as discussed further in Note 13—Derivatives of the notes to the condensed consolidated financial statements and Item 3. Quantitative and Qualitative Disclosures About Market Risk—Commodity Price Risk. The level of our hedging activity and duration of the financial instruments employed depend on our desired cash flow protection, available hedge prices, the magnitude of our capital program and our operating strategy.
Current wording
Future cash flows are subject to a number of variables, including the level of our oil and natural gas production and the volatility of commodity prices. Further, significant additional capital expenditures will be required to more fully develop our properties. Prices for our commodities are determined primarily by prevailing market conditions, regional and worldwide economic activity, weather and other substantially variable factors. These factors are beyond our control and are difficult to predict, as discussed further in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025. In order to mitigate this volatility, we enter into derivative contracts with a number of financial institutions, all of which are participants in our credit facility, to economically hedge a portion of our estimated future crude oil and natural gas production as discussed further in Note 12—Derivatives of the notes to the condensed consolidated financial statements of this report. The level of our hedging activity and duration of the financial instruments employed depend on our desired cash flow protection, available hedge prices, the magnitude of our capital program and our operating strategy.
Previous wording
Our cash flows for the nine months ended September 30, 2025, and 2024 are presented below:
Current wording
Our cash flows for the three months ended March 31, 2026, and 2025 are presented below:
Previous wording
The increase in operating cash flows for the nine months ended September 30, 2025, compared to the same period in 2024 primarily resulted from (i) $3.8 billion in additional revenue, excluding sales of purchased oil, and (ii) an increase of $144 million in cash received on settlements of derivatives. These cash inflows were partially offset by (i) higher cash operating expenses, excluding purchased oil expense, of approximately $792 million, (ii) an increase of $1.0 billion in cash paid for taxes, and (iii) fluctuations in other working capital balances due primarily to the timing of when collections were made on accounts receivable and payments were made on accounts payable. See “—Results of Operations” for discussion of significant changes in our revenues and expenses.
Current wording
The decrease in operating cash flows for the three months ended March 31, 2026, compared to the same period in 2025 primarily resulted from (i) an increase in the change in accounts receivable of $773 million due primarily to higher prices received for our oil and natural gas sales in March 2026, (ii) higher cash operating expenses, excluding purchased oil expense, of approximately $138 million, (iii) changes in other working capital accounts including taxes payable and accounts payable and accrued liabilities due to the timing of when payments are made. These were partially offset by (i) a decrease of $259 million in cash paid for taxes, (ii) $181 million in additional revenues, excluding sales of purchased oil, and (iii) an increase of $48 million in cash received on settlements of derivatives. See “—Results of Operations” for discussion of significant changes in our revenues and expenses.
Previous wording
The majority of our net cash used in investing activities during the nine months ended September 30, 2025, was for drilling and completion costs incurred in conjunction with our development program as well as the acquisition of properties and equipment for the Double Eagle Acquisition and Viper’s Sitio Acquisition. The majority of our net cash used in investing activities during the nine months ended September 30, 2024, was for the Endeavor Acquisition.
Current wording
The majority of our net cash used in investing activities during the three months ended March 31, 2025, was for drilling and completion costs incurred in conjunction with our development program as well as the acquisition of properties and equipment including the $208 million escrow deposit for the Double Eagle Acquisition.
Previous wording
(1) See “—Transactions and Recent Developments—Upstream Operations” above for additional detail on wells drilled and turned to production during the three and nine months ended September 30, 2025.
Current wording
(1) See “—Transactions and Recent Developments—Upstream Operations” above for additional detail on wells drilled and turned to production during the three months ended March 31, 2026.
Previous wording
During the nine months ended September 30, 2024, net cash provided by financing activities was primarily attributable to (i) $5.5 billion of proceeds from the issuance of the April 2024 Notes, (ii) $1.0 billion in borrowings under the Tranche A Loans, (iii) $476 million in proceeds from the Viper 2024 Equity Offering, and (iv)$451 million in proceeds from the public offering of Viper’s Class A common stock. These cash inflows were partially offset by (i) $1.3 billion of dividends paid to stockholders, (ii) $557 million of repurchases as part of the share repurchase programs, (iii) $157 million in dividends paid to non-controlling interest, (iv) $148 million in repayments under our credit facilities, net of borrowings, (v) $95 million of debt issuance costs primarily associated with the April 2024 Notes, Tranche A Loans and bridge facility, and (vi) $37 million in cash paid for tax withholdings on vested employee stock awards.
Current wording
During the three months ended March 31, 2026, net cash used in financing activities was primarily attributable to (i) $645 million of repurchases as part of our and Viper’s share repurchase programs, (ii) $500 million for the repayment of the Viper 2025 Term Loan, (iii) $295 million of dividends paid to stockholders, (iv) $120 million in dividends paid to non-controlling interest, (v) $85 million in repayments on our credit facilities, net of borrowings, and (vi) various other individually insignificant costs. These cash outflows were partially offset by $589 million in proceeds from the Secondary Offering.
Showing the first 40 of 52 pairs. Open the source sections for the rest.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Comparison of the Three Months Ended March 31, 2026, and 2025
Current report — wording carried from elsewhere
See Note 12—Derivatives of the notes to the condensed consolidated financial statements for further details regarding our derivative instruments.
Current report — wording carried from elsewhere
See Note 11—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of our income tax expense.
Current report — wording carried from elsewhere
The majority of our net cash used in investing activities during the three months ended March 31, 2026, was for drilling and completion costs incurred in conjunction with our development program as well as the acquisition of properties and equipment. These cash expenditures were partially offset by the proceeds from the Viper Non-Permian Divestiture. See Note 4—Acquisitions and Divestitures for further discussion of the Viper Non-Permian Divestiture.
Current report — wording carried from elsewhere
On July 31, 2025, our board of directors approved an increase in our common stock repurchase program, from $6.0 billion to $8.0 billion, excluding the 1% U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. corporations enacted as part of the IRA. Since the inception of the stock repurchase program through May 1, 2026, we have repurchased an aggregate of 41.7 million shares of our common stock for a total cost of $5.9 billion, which includes $814 million for the repurchase of 5.0 million shares from SGF, excluding excise tax, leaving approximately $2.1 billion for future repurchases under such stock repurchase program.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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 report — wording carried elsewhere
The change in our income tax provision for the nine months ended September 30, 2025, compared to the same period in 2024 was primarily due to the increase in pre-tax income resulting largely from higher revenues attributable to properties acquired in connection with the Endeavor Acquisition. See Note 12—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of our income tax expense.