Diamondback Energy, Inc.
For the period ended Jun 30, 2026. Filed Aug 5, 2026.
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.
Jun 30, 2026 · Filed Aug 5, 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 2026-03-31; filed 2026-05-06.
0001539838-26-000077
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-05.
0001539838-26-000142
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 147 previous paragraphs and 149 current paragraphs.
76 unchanged; 55 reworded; 17 added; 15 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 36 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 (17)
Current report
•Retired approximately $828 million in aggregate principal of our senior notes and $550 million in outstanding borrowings on our 2025 Term Loan, which was terminated upon repayment.
Current report
Pending 2026 Drop Down
Current report
On August 3, 2026, we entered into a definitive purchase agreement with Viper Energy Partners LP to divest certain mineral and royalty interests in exchange for 3.65 million Viper LLC Units and an equivalent number of shares of Viper’s Class B common stock (the pending “2026 Drop Down”), subject to transaction costs and certain customary post-closing adjustments. The pending 2026 Drop Down will be accounted for as a transaction between entities under common control with the acquired properties recorded at Diamondback’s historical carrying value in the Company’s condensed consolidated balance sheet.
Current report
Increase in Stock Repurchase Program Authorization
Current report
On July 30, 2026, our board of directors approved an increase in stock repurchase authorization under the Company’s existing stock repurchase program from $8.0 billion to $16.0 billion, excluding excise tax.
Current report
Viper Riverbend Acquisition
Current report
On July 1, 2026, Viper and Viper Energy Partners LP acquired all of the equity interests of Riverbend for consideration consisting of approximately (i) $339 million in cash and (ii) 3.69 million shares of Viper’s Class A common stock, in each case, subject to customary post-closing adjustments.
Current report
During the three and six months ended June 30, 2026, natural gas price realizations were adversely affected by widening basis differentials between natural gas prices at Waha Hub and prices at Henry Hub. The unfavorable differentials were primarily driven by regional natural gas takeaway constraints in the Permian Basin, which resulted in periods of negative pricing at Waha Hub. The Company expects the impact of these constraints to be reduced later in 2026 as its secured takeaway capacity is meaningfully increased through the execution of new contracts and expanded infrastructure build out in the region. However, realized prices are expected to continue to be influenced by, and subject to, future supply, demand, transportation availability and other market factors.
Current report
(2)The average lateral length for the wells completed during the six months ended June 30, 2026 was 11,679 feet. Operated completions during the six months ended June 30, 2026 consisted of 71 Wolfcamp B wells, 69 Wolfcamp A wells, 63 Lower Spraberry wells, 62 Jo Mill wells, 20 Middle Spraberry wells, 15 Wolfcamp D wells, 11 Dean wells, three Upper Spraberry wells and one Barnett well.
Current report
Lease operating expenses increased for the second quarter of 2026 compared to the first quarter of 2026 primarily due to higher production volumes, which was largely offset by the benefit of the Company’s cost discipline initiatives and other individually insignificant activity.
Current report
Comparison of the Six Months Ended June 30, 2026, and 2025
Current report
Other operating income increased for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to a $13 million increase in lease bonus income recorded by Viper following its Sitio Acquisition and the 2025 Drop Down, as well as other individually insignificant activity.
Current report
The decrease in gathering, processing and transportation expense for the six months ended June 30, 2026, compared to the same period in 2025 primarily relates to higher utilization of arrangements that require net presentation within related revenues in the second quarter of 2026, partially offset by an increase due to increased production volumes for the six months ended June 30, 2026.
Current report
The increase in gain on derivative instruments for the six months ended June 30, 2026, compared to the same period in 2025 primarily reflects (i) a $278 million gain attributable to our natural gas contracts, which was comprised of a $249 million increase in cash received upon settlement of contracts and a $29 million increase in the value of our unsettled natural gas costless collars and basis swaps, and (ii) other insignificant changes due to the termination of our interest rate swaps. These gains were partially offset by an additional loss of $124 million attributable to our oil contracts, which was comprised of (i) a $103 million decrease in the value of our unsettled contracts due primarily to basis puts and puts added between periods being in a liability position, (ii) an $85 million decrease in cash received for the settlement of contracts and (iii) a $64 million increase in the value of our unsettled roll swaps and basis swaps.
Current report
In support of our long-term strategy, we expect to continue adjusting our development activity in response to market conditions, including converting a portion of our drilled but uncompleted well inventory into producing wells. We expect our inventory of development locations to enhance operational flexibility by providing the ability to adjust capital allocation, activity levels and development timing as market conditions evolve. As previously announced, in the second quarter of 2026, our board of directors approved increasing our 2026 capital budget guidance by 4% to approximately $3.90 billion, which includes $3.31 billion for operated horizontal drilling and completions.
Current report
Other Contractual Obligations and Commitments
Current report
We entered into a fixed price contract for the purchase of electrical power from 2028 through 2034 during the three and six months ended June 30, 2026. As a result, we expect to incur additional future electrical power costs of approximately $519 million in the aggregate through 2034. See Note 15—Commitments and Contingencies of the notes to the condensed consolidated financial statements for further information regarding this commitment.
Removed paragraphs (15)
Previous report
Divestiture
Previous report
Viper Divestiture of Non-Permian Assets
Previous 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.
Previous 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.
Previous report
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 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.
Previous 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.
Previous 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.
Previous report
See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for further details regarding the Company’s divestiture activity.
Previous 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.
Previous 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.
Previous report
As we pursue our business and financial strategy, we regularly consider which capital resources, including cash flow and debt and equity financings, are available to meet our future financial obligations, planned capital expenditure activities and liquidity requirements. Our future ability to grow proved reserves and production will be highly dependent on the capital resources available to us. Any prolonged volatility in the capital, financial and/or credit markets and/or adverse macroeconomic conditions may limit our access to, or increase our cost of capital or make capital unavailable on terms acceptable to us or at all.
Previous report
In addition to future operating expenses and working capital commitments discussed in “—Transactions and Recent Developments—Upstream Operations,” our primary short and long-term liquidity requirements, excluding those of Viper, consist primarily of (i) capital expenditures, (ii) payments of principal and interest on the Revolving Credit Facility, 2025 Term Loan and senior notes, (iii) payments of other contractual obligations, and (iv) cash used to pay for dividends and repurchases of securities.
Previous 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.
Previous 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.
Reworded paragraphs (55)
Previous wording
First Quarter 2026 Financial and Operating Highlights
Current wording
Second Quarter 2026 Financial and Operating Highlights
Previous wording
•Recorded net income of $25 million, which includes impairment of approximately $1.4 billion recorded on our proved oil and natural gas properties.
Current wording
•Recorded net income of $1.9 billion.
Previous 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.
Current wording
•Our cash operating costs were $10.96 per BOE, including lease operating expenses of $5.96 per BOE, cash general and administrative expenses of $0.52 per BOE, production and ad valorem taxes of $3.26 per BOE and gathering, processing and transportation expenses of $1.22 per BOE.
Previous wording
•Incurred cash capital expenditures, excluding acquisitions, of $933 million.
Current wording
•Incurred cash capital expenditures, excluding acquisitions, of $996 million.
Previous 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.
Current wording
•Paid dividends to stockholders, including dividend equivalent rights, of $311 million, or $1.10 per share, during the second quarter of 2026 and declared a base cash dividend payable in the third quarter of 2026 of $1.10 per share of common stock.
Previous wording
•Repurchased $548 million of our common stock, excluding excise taxes, leaving approximately $2.1 billion available for future repurchases at March 31, 2026.
Current wording
•Repurchased $141 million of our common stock, excluding excise taxes.
Previous wording
•Our average production was 979.4 MBOE/d.
Current wording
•Our average production was 1,017.7 MBOE/d, surpassing the 1.0 million BOE/d milestone.
Previous wording
•Drilled 118 gross horizontal wells in the Midland Basin and turned 147 gross operated horizontal wells in the Midland Basin to production.
Current wording
•Drilled 97 gross horizontal wells in the Midland Basin and turned 168 gross operated horizontal wells in the Midland Basin to production.
Previous 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.
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, changes in OPEC+ production levels and other substantially variable factors influence market conditions for these products. For example, as a result of the ongoing conflict in the Middle East, in 2026 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. During the six months ended June 30, 2026 and 2025, WTI prices averaged $83.00 and $70.81 per Bbl, respectively, and Henry Hub prices averaged $3.20 and $3.69 per MMBtu, respectively.
Previous 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.
Current wording
Our activities are primarily directed at the horizontal development of the Wolfcamp, Spraberry and Barnett 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.
Previous 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.
Current wording
As of June 30, 2026, we had approximately 902,005 net acres in the Permian Basin, which included approximately 808,401 net acres in the Midland Basin and 93,604 net acres in the Delaware Basin.
Previous 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.
Current wording
(1)The average lateral length for the wells completed during the second quarter of 2026 was 11,983 feet. Operated completions during the second quarter of 2026 consisted of 41 Wolfcamp B wells, 38 Wolfcamp A wells, 31 Jo Mill wells, 31 Lower Spraberry wells, 13 Middle Spraberry wells, seven Wolfcamp D wells, five Dean wells, one Barnett well and one Upper Spraberry well.
Previous 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.
Current wording
As of June 30, 2026, we and Viper held interests in 44,314 gross (9,810 net) wells, including 1,909 gross (331 net) wells in which we have a non-operated working interest.
Previous wording
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 wording
We have increased our annual production guidance by 3% to approximately 1,000 MBOE/d based on our assessment of current market fundamentals, including global oil supply constraints that began in the first quarter of 2026 and their continuing impact on crude oil inventory levels. We expect to achieve this increase in part by continuing to convert portions of our drilled but uncompleted well balance and building upon our improved operational efficiencies.
Previous 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.
Current wording
Our oil, natural gas and natural gas liquids revenues for the second quarter of 2026 increased by $961 million to $4.8 billion compared to the first quarter of 2026. The increase consisted of an additional $861 million attributable largely to higher average prices received for our oil production and an additional $100 million attributable to higher oil and natural gas production volumes during the second quarter of 2026.
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 fourth quarter of 2025 to the first quarter of 2026.
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 first quarter of 2026 to the second 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 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.
Current wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes as a percentage of oil, natural gas and natural gas liquids revenue decreased in the second quarter of 2026 due primarily to current valuations reflecting lower 2025 commodity prices.
Previous wording
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 wording
The decrease in depletion of proved oil and natural gas properties of $25 million for the second quarter of 2026 as compared to the first quarter of 2026 consists of an $89 million reduction attributable to the decline in depletion rate following the ceiling test impairment recorded in the first quarter of 2026, partially offset by a $64 million increase due to higher quarterly production volumes.
Previous wording
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 wording
The non-cash ceiling test impairment charge in the first quarter of 2026 primarily resulted from a decline in SEC Prices applicable to the period. Impairment charges affect our results of operations but do not reduce our cash flow.
Previous 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.
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 the current quarter, we may have material write-downs in subsequent quarters. Currently, we do not expect to record additional impairment of our assets in the third quarter of 2026.
Previous wording
Other Operating Expenses, Net. The following table shows other operating expenses for the periods indicated:
Current wording
Other Operating Expenses, Net. The following table shows other insignificant operating expenses for the periods indicated:
Previous 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.
Current wording
(1)The three months ended June 30, 2026 includes cash received to terminate commodity contracts prior to their contractual maturity of $1 million, and 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
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 wording
The decrease in gain on derivative instruments for the second quarter of 2026 compared to the first quarter of 2026 primarily reflects (i) a net loss of $262 million attributable to our natural gas contracts, which was comprised of a $290 million decrease in the value of our unsettled natural gas contracts largely due to unfavorable basis differentials on our natural gas basis swap contracts, partially offset by a $28 million increase in cash received for the settlement of contracts, (ii) a net gain of $194 million attributable to our oil contracts, which was comprised of a $270 million increase in the value of our unsettled positions as market prices declined compared to our contract prices at June 30, 2026 compared to March 31, 2026, and a $76 million decrease in cash received for the settlement of contracts, and (iii) other insignificant activity.
Previous wording
See Note 8—Debt and Note 16—Subsequent Events of the notes to the condensed consolidated financial statements for details regarding outstanding borrowings.
Current wording
The gain on extinguishment of debt, net for the second quarter of 2026 primarily relates to the tender offer in which we repurchased $777 million of aggregate principal value on our senior notes at an average of 81.1% of par value. See Note 8—Debt of the notes to the condensed consolidated financial statements for details regarding outstanding borrowings and retirements of senior notes.
Previous 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.
Current wording
The increase in our provision for income taxes for the second quarter of 2026 compared to the first quarter of 2026 was primarily due to the increase in pre-tax income between periods, which resulted largely from the first quarter of 2026 including a non-cash ceiling test impairment charge and an increase in our oil, natural gas and natural gas liquids revenues in the second quarter of 2026 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 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.
Current wording
Our oil, natural gas and natural gas liquids revenues for the six months ended June 30, 2026, increased by $1.6 billion, or 23%, to $8.6 billion from the same period in 2025. This net increase consisted of an additional $973 million from higher average prices received for our oil production, offset partially by lower natural gas and natural gas liquids prices received in 2026 and an additional $665 million from the 13% growth in our combined production volumes.
Previous 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.
Current wording
Approximately 33% of the increase in our combined production volumes was attributable to Viper’s Sitio Acquisition and 16% was attributable to the Double Eagle Acquisition. The remainder of production growth is largely attributable to new wells added between periods.
Previous 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:
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
Other Revenues. The following table shows the other insignificant revenues for the periods indicated:
Current wording
Other Revenues. The following table shows other revenues for the periods indicated:
Previous wording
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 wording
Lease operating expenses increased for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to (i) a $54 million increase in water disposal costs following the divestiture of the Company’s Environmental Disposal Systems, LLC subsidiary in the fourth quarter of 2025, (ii) recording a $43 million reduction in estimated prior period water related costs during the six months ended June 30, 2025, (iii) a $36 million increase to operate wells acquired in the Double Eagle Acquisition, (iv) a $35 million increase in workover and maintenance costs and (v) a $34 million increase attributable to higher production volumes during the six months ended June 30, 2026, (vi) a downward adjustment to initial cost estimates related to producing properties acquired in connection with the Endeavor Acquisition during the six months ended June 30, 2025, and (vii) other individually insignificant activity.
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 remained consistent in the first quarter of 2026 compared to the first 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 revenue from sales of oil, natural gas and natural gas liquids remained consistent in the first half of 2026 compared to the first half 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 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.
Current wording
Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Ad valorem taxes remained relatively consistent per BOE and as a percentage of revenue from sales of oil, natural gas and natural gas liquids for the six months ended June 30, 2026, compared to the same period in 2025.
Previous 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.
Current wording
The increase in depletion of proved oil and natural gas properties of $214 million for the six months ended June 30, 2026, compared to the same period in 2025 consists of $293 million from growth in production volumes, which was partially offset by a $79 million reduction attributable to a decrease in the depletion rate. The depletion rate declined due to a reduction in the depletable asset base, which was caused by the ceiling test impairment recorded in the fourth quarter of 2025 and the first quarter of 2026 as discussed below. This reduction was partially offset by the addition of higher value leasehold costs and proved reserves to the depletable base from the Double Eagle Acquisition and, to a lesser extent, Viper’s Sitio Acquisition.
Previous wording
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 wording
The non-cash ceiling test impairment charge of $1.4 billion for the six months ended June 30, 2026 primarily resulted from the decline in SEC Prices during the preceding twelve months.
Previous wording
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 wording
The decrease in other operating expenses for the six months ended June 30, 2026, compared to the same period in 2025 primarily resulted from (i) a $72 million reduction in merger and transaction costs due to the 2025 period, including costs incurred for the Endeavor Acquisition, the 2025 Drop Down and other individually insignificant transactions, and (ii) a $45 million decrease in midstream service expense following the divestiture of the Company’s Environmental Disposal Systems, LLC subsidiary in the fourth quarter of 2025.
Previous 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.
Current wording
(1)The six months ended June 30, 2026, includes cash paid on interest rate swaps terminated prior to their contractual maturity of $27 million and cash received for the early termination of commodity contracts of $1 million.
Previous wording
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 wording
Interest expense, net increased by $23 million for the six months ended June 30, 2026, compared to the same period in 2025. This increase primarily consisted of (i) a $32 million decrease in capitalized interest costs, which increased interest expense, (ii) a net increase of $18 million related to the issuance of Viper’s 4.900% Senior Notes due 2030 and 5.700% Senior Notes due 2035 and the redemption of its 5.375% Senior Notes due 2027 and 7.375% Senior Notes due 2031 in the third quarter of 2025, and (iii) a $15 million increase attributable to the 2035 Notes issued in April 2025. These increases were partially offset by a $50 million reduction in interest expense due to retirements of the Company’s debt during 2026 and 2025 and other individually insignificant activity.
Previous wording
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 wording
Other income (expense), net for the six months ended June 30, 2026, decreased compared to the same period in 2025, primarily due to receiving a $42 million distribution from an equity method investee during the six months ended June 30, 2025, partially offset by a $10 million increase in income from equity method investees and other individually insignificant items.
Previous 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.
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.
Previous 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.
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. In order to mitigate volatility in oil and natural gas prices, we enter into derivative contracts 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.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
At June 30, 2026, we had approximately $3.4 billion of liquidity consisting of $385 million in standalone cash and cash equivalents and $3.0 billion available under our credit facility. At June 30, 2026, we had approximately $1.5 billion of senior notes maturing in the next 12 months.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Comparison of the Three Months Ended March 31, 2026, and 2025