Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS


Diamondback Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
	Three Months Ended March 31,
		2026		2025
		(In millions, except per share amounts, shares in thousands)
Revenues:
Oil sales		$	3,445	$	3,039
Natural gas sales		21		212
Natural gas liquid sales		359		406

Sales of purchased oil		385		374
Other operating income		30		17
Total revenues		4,240		4,048
Costs and expenses:
Lease operating expenses		547		408
Production and ad valorem taxes		268		228
Gathering, processing and transportation		120		111
Purchased oil expense		393		382
Depreciation, depletion, amortization and accretion		1,293		1,097
Impairment of oil and natural gas properties		1,400		—

General and administrative expenses		79		73


Other operating expenses, net		24		76
Total costs and expenses		4,124		2,375
Income (loss) from operations		116		1,673
Other income (expense):
Interest expense, net		(63)		(40)
Other income (expense), net		7		35

Gain (loss) on derivative instruments, net		117		226



Gain (loss) on extinguishment of debt, net		(1)		—

Total other income (expense), net		60		221
Income (loss) before income taxes		176		1,894
Provision for (benefit from) income taxes		32		403
Net income (loss)		144		1,491
Net income (loss) attributable to non-controlling interest		119		86
Net income (loss) attributable to Diamondback Energy, Inc.		$	25	$	1,405

Earnings (loss) per common share:
Basic		$	0.08	$	4.83
Diluted		$	0.08	$	4.83
Weighted average common shares outstanding:
Basic		282,792		289,612
Diluted		282,792		289,612

See accompanying notes to condensed consolidated financial statements.

Diamondback Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)


	March 31,		December 31,
	2026		2025
	(In millions, except par values and share data)
Assets
Current assets:
Cash and cash equivalents ($28 million and $13 million related to Viper)	$	174	$	104
Restricted cash	2		2
Accounts receivable:
Joint interest and other, net	327		258
Oil and natural gas sales, net ($383 million and $262 million related to Viper)	1,834		1,128

Inventories	79		86

Prepaid expenses and other current assets	288		337
Total current assets	2,704		1,915
Property and equipment:
Oil and natural gas properties:
Proved properties ($9,514 million and $9,746 million related to Viper)	72,688		71,588
Unproved properties ($4,562 million and $4,910 million related to Viper)	23,497		23,941
Other property, equipment and land	889		874
Accumulated depletion, depreciation, amortization and impairment ($2,662 million and $2,455 million related to Viper)	(30,461)		(27,782)
Property and equipment, net	66,613		68,621






Other assets	763		523
Total assets	$	70,080	$	71,059
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued capital expenditures	1,181		1,168
Current maturities of debt	749		763
Other accrued liabilities	848		1,108
Revenues and royalties payable	1,459		1,397
Derivative instruments	62		15
Income taxes payable	517		149
Total current liabilities	4,816		4,600
Long-term debt ($1,603 million and $2,186 million related to Viper)	13,149		13,726


Deferred income taxes	8,914		9,141
Other long-term liabilities	561		625
Total liabilities	27,440		28,092
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, $0.01 par value; 800,000,000 shares authorized; 281,311,730 and 284,594,908 shares issued and outstanding at March 31, 2026, and December 31, 2025, respectively	3		3
Additional paid-in capital	32,010		32,236
Retained earnings (accumulated deficit)	4,467		4,740
Accumulated other comprehensive income (loss)	(7)		(7)
Total Diamondback Energy, Inc. stockholders’ equity	36,473		36,972
Non-controlling interest	6,167		5,995
Total equity	42,640		42,967
Total liabilities and stockholders’ equity	$	70,080	$	71,059

See accompanying notes to condensed consolidated financial statements.

Diamondback Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
	2026		2025
	(In millions)
Cash flows from operating activities:
Net income (loss)	$	144	$	1,491
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Provision for (benefit from) deferred income taxes	(242)		6



Depreciation, depletion, amortization and accretion	1,293		1,097
Impairment of oil and natural gas properties	1,400		—

(Gain) loss on extinguishment of debt, net	1		—

(Gain) loss on derivative instruments, net	(117)		(226)
Cash received (paid) on settlement of derivative instruments	133		85






Other	26		34
Changes in operating assets and liabilities:
Accounts receivable	(779)		(6)




Accounts payable and accrued liabilities	(257)		(374)


Income taxes payable	287		135
Revenues and royalties payable	70		84

Other	(131)		29
Net cash provided by (used in) operating activities	1,828		2,355
Cash flows from investing activities:
Additions to oil and natural gas properties	(933)		(942)




Property acquisitions	(314)		(750)


Proceeds from sale of assets	604		41







Other	(15)		(2)
Net cash provided by (used in) investing activities	(658)		(1,653)
Cash flows from financing activities:
Proceeds from debt	2,525		3,477
Repayment of debt	(3,124)		(2,538)












Repurchased shares under repurchase program	(39)		(575)
Repurchased shares - related party	(509)		—
Repurchased shares/units under Viper’s repurchase program	(97)		—


Net proceeds from Viper’s issuance of common stock	—		1,232
Proceeds from sale of Viper's common stock	589		—
Dividends paid to stockholders	(295)		(290)

Dividends/distributions to non-controlling interest	(120)		(95)



Other	(30)		(36)
Net cash provided by (used in) financing activities	(1,100)		1,175
Net increase (decrease) in cash, cash equivalents and restricted cash	70		1,877
Cash, cash equivalents and restricted cash at beginning of period	106		164
Cash, cash equivalents and restricted cash at end of period	$	176	$	2,041

See accompanying notes to condensed consolidated financial statements.

Diamondback Energy, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Non-Controlling Interest		Total
	Shares	Amount
	($ in millions, shares in thousands)
Balance at December 31, 2025	284,595	$	3	$	32,236	$	4,740	$	(7)	$	5,995	$	42,967
Viper stock-based compensation	—	—		—		—		—		2		2
Stock-based compensation	—	—		29		—		—		—		29
Cash paid for tax withholding on vested equity awards	(150)	—		(27)		—		—		—		(27)
Issuance of shares upon vesting of equity awards	134	—		—		—		—		—		—
Repurchased shares under repurchase program, including excise tax	(267)	—		(39)		—		—		—		(39)
Repurchased shares - related party, including excise tax	(3,000)	—		(514)		—		—		—		(514)
Repurchased shares under Viper’s repurchase program	—	—		—		—		—		(97)		(97)
Dividends to non-controlling interest	—	—		—		—		—		(120)		(120)
Dividends paid	—	—		—		(295)		—		—		(295)
Distribution equivalent rights payments	—	—		—		(3)		—		—		(3)





Proceeds from sale of Viper's common stock	—	—		219		—		—		308		527
Change in ownership of consolidated subsidiaries, net	—	—		106		—		—		(40)		66

Net income (loss)	—	—		—		25		—		119		144
Balance at March 31, 2026	281,312	3		32,010		4,467		(7)		6,167		42,640


	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)		Non-Controlling Interest		Total
	Shares	Amount
	($ in millions, shares in thousands)
Balance at December 31, 2024	290,984	$	3	$	33,501	$	4,238	$	(6)	$	2,126	$	39,862
Viper stock-based compensation	—	—		—		—		—		1		1
Stock-based compensation	—	—		22		—		—		—		22
Cash paid for tax withholding on vested equity awards	(155)	—		(25)		—		—		—		(25)
Issuance of shares upon vesting of equity awards	115	—		—		—		—		—		—
Repurchased shares under repurchase program, including excise tax	(3,656)	—		(580)		—		—		—		(580)


Dividends to non-controlling interest	—	—		—		—		—		(95)		(95)
Dividends paid	—	—		—		(290)		—		—		(290)
Distribution equivalent rights payments	—	—		—		(1)		—		—		(1)


Viper LLC’s units issued for acquisition	—	—		—		—		—		119		119
Net proceeds from Viper’s issuance of common stock	—	—		—		—		—		1,232		1,232

Change in ownership of consolidated subsidiaries, net	—	—		206		—		—		(199)		7
Other comprehensive income (loss)	—	—		1		—		(1)		—		—
Net income (loss)	—	—		—		1,405		—		86		1,491
Balance at March 31, 2025	287,288	3		33,125		5,352		(7)		3,270		41,743

See accompanying notes to condensed consolidated financial statements.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Organization and Description of the Business

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

As of March 31, 2026, the wholly owned subsidiaries of Diamondback include Diamondback E&P, a Delaware limited liability company, Rattler Midstream GP LLC, a Delaware limited liability company, Rattler Midstream LP, a Delaware limited partnership, QEP Resources, Inc., a Delaware corporation, Diamondback RE Holdco LLC, a Delaware limited liability company and Eclipse Merger Sub II, LLC, a Delaware limited liability company.

Basis of Presentation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries, including its publicly-traded subsidiary, Viper Energy, Inc., after all significant intercompany balances and transactions have been eliminated upon consolidation. As of March 31, 2026, the Company is managed as one operating and reportable segment, the upstream segment, which is engaged in the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas and includes the activities of Viper as well as the Company’s remaining midstream operations.

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

As of March 31, 2026, the Company owned approximately 39% of Viper’s combined outstanding Class A common stock and Class B common stock on a fully diluted basis, after giving effect to an option for certain Viper LLC equity holders to purchase and exchange up to 6,746,384 of Class B common stock paired with an equivalent number of units representing limited liability company interests in Viper’s operating subsidiary (“Viper LLC Units”) into Viper Class A common stock. The Company determined that it controls the activities of Viper in accordance with the guidance for variable interest entities in Accounting Standards Codification (“ASC”) Topic 810, “Consolidation,” and therefore continues to consolidate Viper in the Company’s financial statements at March 31, 2026. See further discussion of the Company’s determination that Viper is a variable interest entity (“VIE”) in Note 2—Summary of Significant Accounting Policies. The results of operations attributable to the non-controlling interest in Viper are presented within equity and net income and are shown separately from the equity and net income attributable to the Company.

These condensed consolidated financial statements have been prepared by the Company without audit, pursuant to the rules and regulations of the SEC. They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to SEC rules and regulations, although the Company believes the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10–Q should be read in conjunction with the Company’s most recent Annual Report on Form 10–K for the fiscal year ended December 31, 2025, which contains a summary of the Company’s significant accounting policies and other disclosures.

Reclassifications

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

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Certain amounts included in or affecting the Company’s condensed consolidated financial statements and related disclosures must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the condensed consolidated financial statements are prepared. These estimates and assumptions affect the amounts the Company reports for assets and liabilities and the Company’s disclosure of contingent liabilities as of the date of the condensed consolidated financial statements. Actual results could differ from those estimates.

Making accurate estimates and assumptions is particularly difficult in the oil and natural gas industry given the challenges resulting from volatility in oil and natural gas prices. For instance, geopolitical conflicts, elevated interest rates, effects of tariffs, actions taken by OPEC and its non-OPEC allies, global supply chain disruptions, measures to combat persistent inflation and instability in the financial sector have contributed to recent economic and pricing volatility. The financial results of companies in the oil and natural gas industry have been and may continue to be impacted materially as a result of these events and changing market conditions. Such circumstances generally increase uncertainty in the Company’s accounting estimates, particularly those involving financial forecasts.

The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, the fair value determination of assets acquired and liabilities assumed and estimates of income taxes, including deferred tax valuation allowances.

Variable Interest Entity

Viper is a publicly traded corporation formed by the Company in 2014 to provide an attractive return to its stockholders (the largest of which is Diamondback) by focusing on business results, maximizing dividends through organic growth and pursuing accretive growth opportunities through acquisitions of mineral, royalty, overriding royalty, net profits and similar interests from the Company and from third parties. Viper has no employees and the Company provides management, operating and administrative services to Viper under a services and secondment agreement, including the services of the executive officers and other employees.

Viper meets the definition of a VIE under ASC Topic 810, “Consolidation,” and the Company continues to be the primary beneficiary of the VIE through its ability, via existing contractual agreements, to direct the activities that most significantly affect Viper’s economic performance. The Company also has the obligation to absorb losses and the right to receive benefits that could be significant to Viper. As such, the Company continues to consolidate the activity of Viper.

On March 4, 2026, Viper completed a secondary public offering with the Company and certain other Viper stockholders, along with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC as underwriters (the “Underwriters”) (the “Secondary Offering”). The Company exchanged approximately 12.39 million shares of Viper Class B common stock and an equivalent number of Viper LLC Units for an equivalent number of shares of Viper Class A common stock and subsequently sold such shares in the Secondary Offering. On March 19, 2026, the Underwriters exercised an option to purchase approximately 0.51 million additional shares of Viper Class A common stock from the Company for aggregate cash proceeds of approximately $589 million. The Company’s proceeds from the Secondary Offering were used for general corporate purposes and to accelerate debt reduction.

The 2025 Drop Down, the Sitio Acquisition (each as defined and discussed in Note 4—Acquisitions and Divestitures) and the Secondary Offering were evaluated and determined not to be events that would cause the Company to change its conclusion regarding Viper’s status as a VIE, and the Company continues to be the primary beneficiary.

Viper maintains its own capital structure that is separate from the Company, and the Company is not under any obligation to provide additional financial support or investment to Viper. Viper’s assets cannot be used by the Company for general corporate purposes and the creditors of Viper’s liabilities do not have recourse to the Company’s assets. The assets and

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

liabilities of Viper are included in the Company’s condensed consolidated balance sheets and disclosed parenthetically, if material.

Recent Accounting Pronouncements

Recently Adopted Pronouncements

There were no new accounting pronouncements adopted during the three months ended March 31, 2026.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses,” which requires additional disclosure about specified categories of expenses included in relevant expense captions presented on the income statement. The amendments are effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures. Adoption of the update will not impact the Company’s financial position, results of operations or liquidity.

The Company considers the applicability and impact of all ASUs. ASUs not listed above were assessed and determined to be either not applicable, previously disclosed, or not material upon adoption.

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue from Contracts with Customers

The following tables present the Company’s revenue from contracts with customers:


	Three Months Ended March 31,
		2026		2025
		(In millions)
Oil sales		$	3,445	$	3,039
Natural gas sales		21		212
Natural gas liquid sales		359		406
Total oil, natural gas and natural gas liquid revenues		3,825		3,657
Sales of purchased oil		385		374
Other service revenues		13		15
Total revenue from contracts with customers		$	4,223	$	4,046

The following tables present the Company’s revenue from oil, natural gas and natural gas liquids disaggregated by basin:


	Three Months Ended March 31, 2026								Three Months Ended March 31, 2025
	Midland Basin		Delaware Basin		Other		Total		Midland Basin		Delaware Basin		Other		Total
	(In millions)
Oil sales	$	3,183	$	247	$	15	$	3,445	$	2,801	$	236	$	2	$	3,039
Natural gas sales	11		7		3		21		191		20		1		212
Natural gas liquid sales	324		33		2		359		374		31		1		406
Total	$	3,518	$	287	$	20	$	3,825	$	3,366	$	287	$	4	$	3,657

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

4. ACQUISITIONS AND DIVESTITURES

2026 Activity

Viper Divestiture

Viper Divestiture of Non-Permian Assets

On February 9, 2026, Viper divested all of its non-Permian assets, including those acquired from Sitio Royalties Corp. (“Sitio”), to an affiliate of GRP Energy Capital LLC and Warwick Capital Partners LLP for net cash proceeds of approximately $610 million, including transaction costs and customary post-closing adjustments (the “Viper Non-Permian Divestiture”). 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 divestiture were used to (i) repay the Viper 2025 Term Loan (as defined and discussed in Note 8—Debt) of $500 million in full, (ii) repay the outstanding borrowings under the Viper Revolving Credit Facility (as defined and discussed in Note 8—Debt), and (iii) for general corporate purposes.

2025 Activity

Diamondback Acquisitions and Divestitures

EPIC Divestiture

On October 31, 2025, the Company divested its 27.5% equity interest in EPIC Crude Holdings, LP (“EPIC”) pursuant to a definitive purchase and sale agreement with Plains All American Pipeline, L.P. and Plains GP Holdings for approximately $504 million in cash and an additional $96 million in unrecognized potential contingent consideration (the “EPIC Divestiture”). The EPIC Divestiture resulted in a gain on the sale of equity method investments of approximately $299 million. The contingent cash payment is due to the Company should the capacity expansion of EPIC be formally sanctioned before year-end 2027.

Divestiture of Water Assets to Deep Blue

On October 1, 2025, the Company divested its subsidiary, Environmental Disposal Systems, LLC, to Deep Blue Midland Basin LLC (“Deep Blue”), in exchange for upfront net cash proceeds of $694 million, subject to transaction costs and customary post-closing adjustments, and approximately $34 million of additional equity interests issued by Deep Blue as non-cash consideration. The transaction provides for the potential for the Company to earn up to an additional $200 million. If certain completion thresholds are not met, the Company could owe up to $150 million in contingent consideration for the years 2026 through 2028. The Company will recognize any contingent gains when realizable at the end of each annual measurement period, or will accrue a contingent loss if at any time a payable to Deep Blue becomes probable and reasonably estimable. The divestiture resulted in an aggregate gain of approximately $167 million, which includes a loss of approximately $1 million recognized during the three months ended March 31, 2026 as a result of customary post-closing adjustments. The gain (loss) is included in the caption “Other income (expense), net” in the condensed consolidated statement of operations. 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 Company’s equity ownership interest in Deep Blue remained at 30% following the closing of the transaction. The cash proceeds from the divestiture were used to repay borrowings under the Revolving Credit Facility (as defined and discussed in Note 8—Debt) and for general corporate purposes.

2025 Drop Down

On May 1, 2025, the Company’s wholly owned subsidiary Endeavor Energy Resources, LP divested all of the issued and outstanding equity interests in 1979 Royalties, LP and 1979 Royalties GP, LLC, each of which was a subsidiary of the Company, pursuant to a definitive equity purchase agreement with Viper and Viper LLC in exchange for consideration consisting of (i) $873 million in cash, including customary post-closing adjustments, and (ii) the issuance of 69.63 million Viper LLC Units and an equivalent number of shares of Viper’s Class B common stock (the “2025 Drop Down”). The 2025 Drop Down was accounted for as a transaction between entities under common control.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Double Eagle Acquisition

On April 1, 2025, the Company completed its acquisition of all of the issued and outstanding interests of DE Permian, LLC, DE IV Combo, LLC and DE IV Operating, LLC, each of which were wholly owned subsidiaries of Double Eagle IV Midco, LLC (the “Double Eagle Acquisition”) for consideration of $3.1 billion in cash and approximately 6.84 million shares of the Company’s common stock, including transaction costs and subject to customary post-closing adjustments. The assets acquired in the Double Eagle Acquisition consisted of approximately 67,700 gross (40,000 net) acres, which are primarily located in the Midland Basin and approximately 407 gross (342 net) horizontal locations in primary development targets. The Company funded the cash portion of the Double Eagle Acquisition through a combination of proceeds from the issuance of the $1.2 billion aggregate principal amount of 5.550% Senior Notes due 2035 (the “2035 Notes”), proceeds from the 2025 Term Loan (as defined and discussed in Note 8—D e b t) and borrowings under the Revolving Credit Facility. The Double Eagle Acquisition was accounted for as an asset acquisition in accordance with ASC Topic 805, “Business Combinations.”

Viper Acquisition

Sitio Acquisition

On August 19, 2025, Viper completed a series of transactions in which New Viper acquired Sitio, Sitio Royalties Operating Partnership, LP (“Sitio OpCo”) and their respective subsidiaries, pursuant to the Agreement and Plan of Merger, dated June 2, 2025, by and among Former Viper, Viper LLC, Sitio, Sitio OpCo, New Viper, Cobra Merger Sub, Inc. and Scorpion Merger Sub, Inc. (the “Sitio Acquisition”). The Sitio Acquisition was an all-equity transaction valued at approximately $4.0 billion, including transaction costs and customary post-closing adjustments and the retirement of Sitio’s net debt of approximately $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. See “—Viper Divestiture of Non-Permian Assets**” above for discussion of the divestiture of Viper’s non-Permian acreage in the first quarter of 2026. The Sitio Acquisition was accounted for as an asset acquisition in accordance with ASC Topic 805, “Business Combinations.”

5. PROPERTY AND EQUIPMENT

Property and equipment includes the following as of the dates indicated:


	March 31,		December 31,
	2026		2025
	(In millions)
Oil and natural gas properties:
Proved properties	$	72,688	$	71,588
Unproved properties(1)	23,497		23,941
Gross oil and natural gas properties	96,185		95,529
Accumulated depletion	(17,240)		(15,974)
Accumulated impairment	(13,006)		(11,606)
Oil and natural gas properties, net	65,939		67,949
Other property, equipment and land	889		874
Accumulated depreciation, amortization, accretion and impairment	(215)		(202)
Total property and equipment, net	$	66,613	$	68,621

(1) Unevaluated properties not subject to depletion under full cost accounting.

Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter which determines a limit, or ceiling, on the book value of proved oil and natural gas properties. The Company recorded a non-cash ceiling test impairment of $1.4 billion during the three months ended March 31, 2026, which is included in the caption “Accumulated depletion, depreciation, amortization and impairment” on the condensed consolidated balance sheet. No impairment expense was recorded for the three months ended March 31, 2025.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

In addition to commodity prices, the Company’s production rates, levels of proved reserves, future development costs, transfers of unevaluated properties and other factors will determine its actual ceiling test calculation and impairment analysis in future periods. If the future trailing 12-month commodity prices decline as compared to the commodity prices used in prior quarters, the Company may have material write downs in subsequent quarters. It is possible that circumstances requiring additional impairment testing will occur in future interim periods, which could result in potentially material impairment charges being recorded.

6. ASSET RETIREMENT OBLIGATIONS

The following table describes the changes to the Company’s asset retirement obligations liability for the following periods:


	Three Months Ended March 31,
	2026		2025
	(In millions)
Asset retirement obligations, beginning of period	$	542	$	592
Additional liabilities incurred	1		16
Liabilities acquired	1		1
Liabilities settled and divested	(5)		(12)
Accretion expense	8		9
Revisions in estimated liabilities	—		1
Asset retirement obligations, end of period	547		607
Less current portion(1)	41		21
Asset retirement obligations - long-term(2)	$	506	$	586

(1) The current portion of the asset retirement obligation is included in the caption “Other accrued liabilities” in the Company’s condensed consolidated balance sheets.

(2) The long-term portion of the asset retirement obligation is included in the caption “Other long-term liabilities” in the Company’s condensed consolidated balance sheets.

The Company’s asset retirement obligations primarily relate to the future plugging and abandonment of wells and related facilities. The Company estimates the future plugging and abandonment costs of wells, the ultimate productive life of the properties, a risk-adjusted discount rate and an inflation factor in order to determine the current present value of this obligation. To the extent future revisions to these assumptions impact the present value of the existing asset retirement obligation liability, a corresponding adjustment is made to the oil and natural gas property balance.

7. RELATED PARTY TRANSACTIONS

Deep Blue

The Company and Five Point Energy LLC have a joint venture, Deep Blue, in which the Company owned a 30% equity ownership interest as of March 31, 2026. The equity ownership interest is included in the caption “Other assets” on the Company’s consolidated balance sheets. Additionally, the Company has other related party transactions with Deep Blue in the ordinary course of business, which result in (i) certain accounts receivable from Deep Blue, (ii) accrued capital expenditures and other accrued payables related to a commitment to fund certain capital expenditures on projects that were in process at the time of the Deep Blue transaction, and (iii) lease operating expenses and capitalized expenses related to fees paid to Deep Blue under a 15-year dedication for its produced water and supply water within a 12-county area of mutual interest in the Midland Basin.

For further discussion on the additional transaction with Deep Blue, see Note 4—Acquisitions and Divestitures.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

The following table presents related party balances that pertain to Deep Blue which are included in the condensed consolidated balance sheets as of the dates indicated:


	March 31,		December 31,
	2026		2025
	(In millions)
Assets:
Accounts receivable	$	1	$	1
Other assets	$	211	$	197
Liabilities:
Accounts payable and accrued capital expenditures	$	85	$	71
Other accrued liabilities	$	59	$	82

During the three months ended March 31, 2026, and 2025, the Company incurred approximately $67 million and $47 million, respectively, for water services provided by Deep Blue, which were capitalized and are included in the caption “Proved properties” on the condensed consolidated balance sheets.

The following table presents the significant related party transactions included in the condensed consolidated statements of operations for the periods indicated:


	Three Months Ended March 31,
		2026		2025
		(In millions)
Lease operating expenses		$	75	$	37

Viper

For discussion on related party transactions with Viper, see Note 4—Acquisitions and Divestitures - 2025 Drop Down.

SGF Common Stock Repurchases and Secondary Offering

In 2024, the Company completed the acquisition of 100% of the equity interests of Endeavor Parent, LLC (“Endeavor”) (the “Endeavor Acquisition”). As partial consideration for the Endeavor Acquisition, the Company issued 117.27 million shares, or 39.8% of its then-outstanding common stock to the former owners of Endeavor (the “Endeavor equityholders”), the majority of which are currently held by SGF FANG Holdings, LP (“SGF”). Additionally, pursuant to a stockholders agreement executed with the Endeavor equityholders, the Endeavor equityholders have the right to propose for nomination between one and four directors for election to the Company’s board of directors as long as certain established ownership thresholds are maintained. As a result, SGF is considered a related party of the Company under ASC Topic 850 “Related Party Disclosures.”

On November 28, 2025, the Company entered into a letter agreement with SGF, which provides SGF with the right, but not the obligation, to sell up to 3.0 million shares of the Company’s common stock to the Company per quarter through December 31, 2026 at the most recent Nasdaq closing price of such transaction, pursuant to the letter agreement. During the three months ended March 31, 2026, the Company repurchased 3.0 million shares from SGF for approximately $509 million, excluding excise taxes. Repurchases under the letter agreement are pursuant to the Company’s existing share repurchase program, and have been approved by the audit committee of the Company’s board of directors. For details on the Company’s existing share repurchase program, see Note 9—Stockholders’ Equity and Earnings (Loss) Per Share.

On March 12, 2026, SGF completed a secondary public offering with Evercore Group L.L.C., Citigroup Global Markets Inc., and J.P. Morgan Securities LLC, as representatives of the several underwriters named therein (the “SGF Underwriters”), providing for the sale of 12.65 million shares of the Company’s common stock to the SGF Underwriters at $170.18875 per share.

Giving effect to the repurchases and secondary offering discussed above, as of March 31, 2026, the Endeavor equityholders held approximately 30.2% of the Company’s outstanding common stock.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

8. DEBT

Long-term debt consisted of the following as of the dates indicated:


	March 31,		December 31,
	2026		2025
	(In millions)
3.250% Senior Notes due 2026	$	749	$	749
5.625% Senior Notes due 2026	—		14
5.200% Senior Notes due 2027	850		850
7.125% Medium-term Notes, Series B, due 2028	73		73
3.500% Senior Notes due 2029	915		915
5.150% Senior Notes due 2030	850		850
3.125% Senior Notes due 2031	740		740
6.250% Senior Notes due 2033	1,100		1,100
5.400% Senior Notes due 2034	1,300		1,300
5.550% Senior Notes due 2035	1,200		1,200
4.400% Senior Notes due 2051	386		386
4.250% Senior Notes due 2052	605		605
6.250% Senior Notes due 2053	650		650
5.750% Senior Notes due 2054	1,480		1,480
5.900% Senior Notes due 2064	1,000		1,000
2025 Term Loan	550		550
Unamortized debt issuance costs	(95)		(99)
Unamortized discount costs	(22)		(22)
Unamortized premium costs	2		2
Unamortized basis adjustment of dedesignated interest rate swap agreements	(55)		(59)

Viper Revolving Credit Facility	20		105
Viper 4.900% Senior Notes due 2030	500		500
Viper 5.700% Senior Notes due 2035	1,100		1,100
Viper 2025 Term Loan	—		500
Total debt, net	13,898		14,489
Less: current maturities of debt	749		763
Total long-term debt	$	13,149	$	13,726

References in this section to the Company shall mean Diamondback Energy, Inc. and Diamondback E&P, collectively, unless otherwise specified.

Credit Agreement

Diamondback E&P, as borrower, and Diamondback Energy, Inc., as parent guarantor, have a credit agreement (as amended, the “Credit Agreement”), which provides the Company with a credit facility with a maximum credit amount of $2.5 billion and a maturity date of June 12, 2030 (such facility, the “Revolving Credit Facility”). As of March 31, 2026, the Company had no outstanding borrowings under the Revolving Credit Facility and approximately $2.5 billion available for future borrowings. During the three months ended March 31, 2026 and March 31, 2025, the weighted average interest rate on borrowings under the Revolving Credit Facility was 5.00% and 5.92%, respectively.

As of March 31, 2026, the Company was in compliance with all financial maintenance covenants under the Credit Agreement.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Viper’s Revolving Credit Agreement

Former Viper, as guarantor, has a credit agreement with Viper LLC, as borrower, and Wells Fargo, as the administrative agent (as amended, the “Viper Revolving Credit Agreement”). The Viper Revolving Credit Agreement provides the borrower with a senior unsecured revolving credit facility with a commitment of $1.5 billion and a maturity date of June 12, 2030 (such facility, the “Viper Revolving Credit Facility”). As of March 31, 2026, there were $20 million in outstanding borrowings and approximately $1.48 billion available for future borrowings under the Viper Revolving Credit Facility. The weighted average interest rates on borrowings under Viper LLC’s respective revolving credit facilities were 5.19% and 6.57% for the three months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, Viper LLC was in compliance with all financial maintenance covenants under the Viper Revolving Credit Agreement.

Term Loan Agreements

Diamondback Term Loan Agreement

In connection with the Double Eagle Acquisition, Diamondback Energy, Inc., as guarantor, entered into a term loan credit agreement with Diamondback E&P, as borrower, and Bank of America, N.A., as administrative agent (the “2025 Term Loan”) on March 21, 2025.

The 2025 Term Loan provided the Company with the ability to borrow up to $1.5 billion on an unsecured basis to fund a portion of the cash consideration and expenses for the Double Eagle Acquisition. On April 1, 2025, the date of closing of the Double Eagle Acquisition, the 2025 Term Loan was fully drawn in a single borrowing. Any then-outstanding amounts will mature and be payable in full on the second anniversary of the initial funding date. During the three months ended March 31, 2026, the weighted average interest rate on borrowings under the 2025 Term Loan was 5.03%.

Viper Term Loan Agreement

On July 23, 2025, in connection with the Sitio Acquisition, Former Viper, as guarantor, entered into a $500 million term loan credit agreement with Viper LLC, as borrower, and Goldman Sachs Bank USA, as administrative agent (the “Viper 2025 Term Loan”). On August 19, 2025, the Viper 2025 Term Loan was fully drawn and New Viper became a co-guarantor of the Viper 2025 Term Loan. On February 13, 2026, Viper used the cash proceeds received from the Viper Non-Permian Divestiture to repay in full the $500 million remaining outstanding and terminate the Viper 2025 Term Loan.

9. STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE

Common Stock Repurchase Program

The Company’s board of directors has approved a common stock repurchase program to acquire up to $8.0 billion of the Company’s outstanding common stock, excluding excise tax. Purchases under the repurchase program may be made from time to time in open market or privately negotiated transactions and are subject to market conditions, applicable regulatory and legal requirements, contractual obligations and other factors. The repurchase program does not require the Company to acquire any specific number of shares. This repurchase program may be suspended from time to time, modified, extended or discontinued by the board of directors at any time. During the three months ended March 31, 2026, and 2025, the Company repurchased approximately $548 million of common stock, which includes approximately $509 million for the repurchases from SGF, and $575 million of common stock under the repurchase program, respectively, in each case excluding excise tax. For further discussion on the repurchases from SGF, see Note 7—Related Party Transactions. As of March 31, 2026, approximately $2.1 billion remained available for future repurchases under the Company’s common stock repurchase program, excluding excise tax.

Change in Ownership of Consolidated Subsidiaries

Non-controlling interests in the accompanying condensed consolidated financial statements represent ownership interests in Viper, which are held by parties other than the Company and are presented as a component of equity. When the Company’s relative ownership interests in Viper change, adjustments to non-controlling interest and additional paid-in-capital, tax effected, will occur.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

The following table summarizes changes in the ownership interest in consolidated subsidiaries during the respective periods presented:


	Three Months Ended March 31,
		2026		2025
		(In millions)
Net income (loss) attributable to the Company		$	25	$	1,405
Transfers (to) from the non-controlling interests:
Increase in additional paid-in-capital due to proceeds from the sale of Viper's common stock, net		219		—
Other transfers (to) from the non-controlling interests		106		206
Change from net income (loss) attributable to the Company’s stockholders and transfers with non-controlling interest		$	350	$	1,611

Dividends

The following table presents dividends and distribution equivalent rights paid on the Company’s common stock during the respective periods:


	Dividend Per Share		Total
	(In millions, except per share amounts)
2026
First quarter	$	1.05	$	298




2025
First quarter	$	1.00	$	291

Earnings (Loss) Per Share

The Company’s earnings (loss) per share amounts have been computed using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of common stock and participating securities. Basic earnings (loss) per share amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share include the effect of potentially dilutive shares outstanding for the period, if any. Additionally, the per share earnings of Viper are included in the consolidated earnings per share computation based on the consolidated group’s holdings of the subsidiaries.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

A reconciliation of the components of basic and diluted earnings (loss) per common share is presented below:


	Three Months Ended March 31,
		2026		2025
		(In millions, except per share amounts, shares in thousands)
Net income (loss) attributable to common shares		$	25	$	1,405
Less: distributed and undistributed earnings allocated to participating securities(1)		3		6
Net income (loss) attributable to common stockholders		$	22	$	1,399
Weighted average common shares outstanding:
Basic weighted average common shares outstanding		282,792		289,612
Effect of dilutive securities:
Weighted-average potential common shares issuable		—		—
Diluted weighted average common shares outstanding		282,792		289,612
Basic net income (loss) attributable to common shares		$	0.08	$	4.83
Diluted net income (loss) attributable to common shares		$	0.08	$	4.83

(1) Unvested restricted stock units and performance-based restricted stock unit awards that contain non-forfeitable distribution equivalent rights are considered participating securities and therefore are included in the earnings per share calculation pursuant to the two-class method.

10. EQUITY-BASED COMPENSATION

Under the Equity Plan approved by the board of directors, the Company is authorized to issue up to 11.8 million shares of incentive and non-statutory stock options, restricted stock awards and restricted stock units, performance awards and stock appreciation rights to eligible employees. The Company currently has outstanding restricted stock units and performance-based restricted stock units under the Equity Plan. At March 31, 2026, approximately 3.0 million shares of common stock remain available for future grants under the Equity Plan. The Company classifies its restricted stock units and performance-based restricted stock units as equity-based awards and estimates the fair values of restricted stock awards and units as the closing price of the Company’s common stock on the grant date of the award, which is expensed over the applicable vesting period.

In addition to the Equity Plan, Viper maintains its own long-term incentive plan, which is not significant to the Company.

The following table presents the financial statement impacts of equity compensation plans and related costs on the Company’s financial statements:


	Three Months Ended March 31,
		2026		2025
		(In millions)
General and administrative expenses		$	22	$	18
Equity-based compensation capitalized pursuant to full cost method of accounting for oil and natural gas properties		$	9	$	5

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Restricted Stock Units

The following table presents the Company’s restricted stock unit activity during the three months ended March 31, 2026, under the Equity Plan:


	Restricted Stock Units	Weighted Average Grant-Date Fair Value
Unvested at December 31, 2025	890,062	$	153.87
Granted	535,716	$	177.83
Vested	(118,272)	$	166.14
Forfeited	(14,398)	$	161.37
Unvested at March 31, 2026	1,293,108	$	162.59

The aggregate grant date fair value of restricted stock units that vested during the three months ended March 31, 2026, was $20 million. As of March 31, 2026, the Company’s unrecognized compensation cost related to unvested restricted stock units was $179 million, which is expected to be recognized over a weighted-average period of 2.4 years.

Performance-Based Restricted Stock Units

The following table presents the Company’s performance-based restricted stock units activity under the Equity Plan for the three months ended March 31, 2026:


	Performance-Based Restricted Stock Units	Weighted Average Grant-Date Fair Value
Unvested at December 31, 2025	327,931	$	254.50
Granted	170,279	$	235.63
Vested	(16,072)	$	205.83
Forfeited	(2,426)	$	254.31
Unvested at March 31, 2026(1)	479,712	$	249.43

(1)A maximum of 1,172,580 units could be awarded based upon the Company’s final TSR ranking.

As of March 31, 2026, the Company’s unrecognized compensation cost related to unvested performance-based restricted stock units was $74 million, which is expected to be recognized over a weighted-average period of 1.9 years.

In March 2026, eligible employees received performance-based restricted stock unit awards totaling 170,279 units from which a minimum of 0% and a maximum of 200% of the units could be awarded based upon the measurement of TSR of the Company’s common stock as compared to a designated peer group during the three-year performance period of January 1, 2026, to December 31, 2028, and cliff vest at December 31, 2028, subject to continued employment. The initial payout of the March 2026 awards will be further adjusted by a TSR modifier that may reduce the payout or increase the payout up to a maximum of 250%.

The fair value of each performance-based restricted stock unit issuance is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of units to be earned during the performance period.

The following table presents a summary of the grant-date fair values of performance-based restricted stock units granted and the related assumptions for the awards granted during the periods presented:


	March 2026
Grant-date fair value	$	235.63
Risk-free rate	3.4		%
Company volatility	32.0		%

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

11. INCOME TAXES

The following table provides the Company’s provision for (benefit from) income taxes and the effective income tax rate for the periods indicated:


	Three Months Ended March 31,
		2026			2025
		(In millions, except for tax rate)
Provision for (benefit from) income taxes		$	32		$	403
Effective income tax rate		18.2		%	21.3		%

Total income tax expense from continuing operations for the three months ended March 31, 2026, differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income primarily due to (i) state income taxes, net of federal benefit, (ii) the effect of research and development tax credits, and (iii) other permanent differences between book and taxable income. For the three months ended March 31, 2025, total income tax expense from continuing operations differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income primarily due to (i) state income taxes, net of federal benefit, (ii) the effect of research and development tax credits, (iii) limitations on the deduction of certain permanent items, and (iv) other permanent differences between book and taxable income.

In connection with the Secondary Offering, the Company recognized an $88 million increase in income taxes payable and a $26 million decrease in its liability for deferred income taxes through additional paid-in capital, as well as a $61 million increase in Viper’s deferred tax asset through non-controlling interest on the Company’s condensed consolidated balance sheet as of March 31, 2026.

12. DERIVATIVES

At March 31, 2026, the Company only had commodity derivative contracts outstanding, which are recorded at fair value in the condensed consolidated balance sheet.

Commodity Contracts

The Company has entered into multiple crude oil and natural gas derivatives, indexed to the respective indices as noted in the table below, to reduce price volatility associated with certain of its oil and natural gas sales. The Company has not designated its commodity derivative instruments as hedges for accounting purposes and, as a result, marks its commodity derivative instruments to fair value and recognizes the cash and non-cash changes in fair value in the condensed consolidated statements of operations under the caption “Gain (loss) on derivative instruments, net.”

By using derivative instruments to economically hedge exposure to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company has entered into commodity derivative instruments only with counterparties that are also lenders under its credit facility and have been deemed an acceptable credit risk. As such, collateral is not required from either the counterparties or the Company on its outstanding commodity derivative contracts.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

As of March 31, 2026, the Company had the following outstanding commodity derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed.


					Swaps	Collars
Settlement Month	Settlement Year	Type of Contract	Bbls/MMBtu Per Day	Index	Weighted Average Differential		Weighted Average Sub-Floor Price	Weighted Average Floor Price	Weighted Average Ceiling Price
OIL
Apr. - Jun.	2026	Basis Swap(1)	45,000	Argus WTI Midland	$0.92		$—	$—	$—
Apr. - Jun.	2026	Roll Swap	135,055	WTI Cushing	$2.69		$—	$—	$—
Apr. - Dec.	2026	Three-Way Collar	5,000	Argus WTI Houston	$—		$50.00	$60.00	$155.00
Apr. - Dec.	2026	Three-Way Collar	40,000	WTI Cushing	$—		$50.00	$60.00	$121.20
Jul. - Dec.	2026	Basis Swap(1)	70,000	Argus WTI Midland	$0.97		$—	$—	$—
Jul. - Dec.	2026	Roll Swap	140,000	WTI Cushing	$2.71		$—	$—	$—
NATURAL GAS
Apr. - Sep.	2026	Basis Swap(1)	650,000	Waha Hub	$(1.87)		$—	$—	$—
Apr. - Dec.	2026	Two-Way Collar	840,000	Henry Hub	$—		$—	$2.87	$6.35
Apr. - Dec.	2026	Basis Swap(1)	100,000	HSC Hub	$(0.35)		$—	$—	$—
Oct. - Dec.	2026	Basis Swap(1)	650,000	Waha Hub	$(1.75)		$—	$—	$—
Jan. - Dec.	2027	Two-Way Collar	720,000	Henry Hub	$—		$—	$2.88	$6.37
Jan. - Dec.	2027	Basis Swap(1)	360,000	Waha Hub	$(1.26)		$—	$—	$—
Jan. - Dec.	2027	Basis Swap(1)	280,000	HSC Hub	$(0.30)		$—	$—	$—

(1) The Company has fixed price basis swaps for the spread between the Cushing crude oil price and the Midland WTI crude oil price as well as the spread between the Henry Hub natural gas price, the Waha Hub and the HSC Hub natural gas price. The weighted average differential represents the amount of reduction to the Cushing, Oklahoma oil price and the Waha Hub and HSC Hub natural gas price for the notional volumes covered by the basis swap contracts.


							Put Spread
Settlement Month	Settlement Year	Type of Contract	Bbls Per Day	Index	Strike Price	Deferred Premium	Floor Price	Short Put Price
OIL
Apr. - Jun.	2026	Put	37,000	Brent	$52.50	$1.70	$—	$—
Apr. - Jun.	2026	Put	115,000	Argus WTI Houston	$50.00	$1.57	$—	$—
Apr. - Jun.	2026	Put	190,000	WTI Cushing	$51.64	$1.60	$—	$—
Apr. - Jun.	2026	Basis Put	115,000	WTI - Brent	$(41.09)	$1.16	$—	$—
Jul. - Sep.	2026	Put	20,000	Brent	$52.50	$1.60	$—	$—
Jul. - Sep.	2026	Put	85,000	Argus WTI Houston	$50.00	$1.42	$—	$—
Jul. - Sep.	2026	Put	160,000	WTI Cushing	$51.80	$1.29	$—	$—
Jul. - Sep.	2026	Put Spread	15,000	WTI Cushing	$—	$—	$50.00	$55.00
Oct. - Dec.	2026	Put	5,000	Brent	$55.00	$1.25	$—	$—
Oct. - Dec.	2026	Put	35,000	Argus WTI Houston	$50.00	$1.31	$—	$—
Oct. - Dec.	2026	Put	120,000	WTI Cushing	$50.00	$1.29	$—	$—
Jan. - Mar.	2027	Put	15,000	Argus WTI Houston	$50.00	$1.28	$—	$—
Jan. - Mar.	2027	Put	35,000	WTI Cushing	$50.00	$1.39	$—	$—
Apr. - Jun.	2027	Put	5,000	Argus WTI Houston	$50.00	$1.40	$—	$—
Apr. - Jun.	2027	Put	10,000	WTI Cushing	$50.00	$1.40	$—	$—

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Interest Rate Swaps and Treasury Locks

Interest Rate Swaps

The Company had two receive-fixed, pay-variable interest rate swap agreements for notional amounts of $150 million each, which were considered economic hedges of the Company’s 3.500% fixed rate senior notes due 2029. During the three months ended March 31, 2026, the Company fully terminated and settled the remaining aggregate $300 million notional amount of interest rate swaps for cash payments of approximately $27 million. The loss on the termination of interest rate swaps is recognized in the caption “Gain (loss) on derivative instruments, net” on the condensed consolidated statement of operations for the three months ended March 31, 2026.

Balance Sheet Offsetting of Derivative Assets and Liabilities

The fair value of derivative instruments is generally determined using established index prices and other sources which are based upon, among other things, futures prices and time to maturity. These fair values are recorded by netting asset and liability positions, including any deferred premiums, that are with the same counterparty and are subject to contractual terms which provide for net settlement. See Note 13—Fair Value Measurements for further details.

Gains and Losses on Derivative Instruments

The following table summarizes the gains and losses on derivative instruments included in the condensed consolidated statements of operations:


	Three Months Ended March 31,
		2026		2025
		(In millions)
Gain (loss) on derivative instruments, net:
Commodity contracts		$	117	$	214
Interest rate swaps		—		11
2026 WTI Contingent Liability		—		2
Treasury locks		—		(1)
Total		$	117	$	226

Net cash received (paid) on settlements:
Commodity contracts		$	160	$	86
Interest rate swaps		(27)		—
Treasury locks		—		(1)
Total		$	133	$	85

13. FAIR VALUE MEASUREMENTS

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As discussed in Note 1 3 —Fair Value Measurements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, certain financial instruments of the Company are reported at fair value on the Company’s condensed consolidated balance sheets. The net amounts of derivative instruments are classified as current or noncurrent based on their anticipated settlement dates. The Company has an immaterial investment in the Class A common stock of Verde Clean Fuels, Inc., which is reported at fair value using observable, quoted stock prices and is included in “Other assets” on the Company’s condensed consolidated balance sheets at March 31, 2026, and December 31, 2025.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Viper LLC completed multiple acquisitions during 2024 with Tumbleweed Royalty IV, LLC, TWR IV SellCo Parent, LLC, Tumbleweed-Q Royalties, LLC, MC TWR Royalties, LP and MC TWR Intermediate, LLC. The terms of these acquisitions included provisions for contingent cash consideration based on the average price of WTI sweet crude oil prompt month futures contracts for the calendar year 2025 (the “2026 WTI Contingent Liability”), which resulted in an aggregate payment of $20 million in January 2026. The 2026 WTI Contingent Liability was reported at fair value using observable market data inputs and a Monte Carlo pricing model, which are considered Level 2 inputs within the fair value hierarchy.

The following table provides the fair value of financial instruments that are recorded at fair value in the condensed consolidated balance sheets as of March 31, 2026, and December 31, 2025:


	As of March 31, 2026
	Level 1		Level 2		Level 3		Total Gross Fair Value		Gross Amounts Offset in Balance Sheet		Net Fair Value Presented in Balance Sheet
	(In millions)
Assets:
Current assets- Prepaid expenses and other assets:

Commodity derivative instruments	$	—	$	403	$	—	$	403	$	(238)	$	165

Other assets
Commodity derivative instruments	$	—	$	89	$	—	$	89	$	(37)	$	52
Non-current assets- Other assets:
Investment	$	25	$	—	$	—	$	25	$	—	$	25

Liabilities:
Derivative instruments
Commodity derivative instruments	$	—	$	300	$	—	$	300	$	(238)	$	62
Other long-term liabilities
Commodity derivative instruments	$	—	$	37	$	—	$	37	$	(37)	$	—


	As of December 31, 2025
	Level 1		Level 2		Level 3		Total Gross Fair Value		Gross Amounts Offset in Balance Sheet		Net Fair Value Presented in Balance Sheet
	(In millions)
Assets:
Prepaid expenses and other current assets:
Commodity derivative instruments	$	—	$	335	$	—	$	335	$	(101)	$	234

Other assets:
Commodity derivative instruments	$	—	$	49	$	—	$	49	$	(42)	$	7
Investment	$	30	$	—	$	—	$	30	$	—	$	30

Liabilities:
Derivative instruments:
Commodity derivative instruments	$	—	$	109	$	—	$	109	$	(101)	$	8
Interest rate swaps	$	—	$	7	$	—	$	7	$	—	$	7
Other accrued liabilities:
2026 WTI Contingent Liability	$	—	$	20	$	—	$	20	$	—	$	20
Other long-term liabilities:
Commodity derivative instruments	$	—	$	77	$	—	$	77	$	(42)	$	35
Interest rate swaps	$	—	$	20	$	—	$	20	$	—	$	20

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Assets and Liabilities Not Recorded at Fair Value

The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets:


	March 31, 2026				December 31, 2025
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(In millions)
Debt	$	13,898	$	13,799	$	14,489	$	14,497

The fair values of the Company’s borrowings under the Revolving Credit Facility, the Viper Revolving Credit Facility, the 2025 Term Loan and Viper 2025 Term Loan (prior to repayment and termination) approximate their carrying values based on borrowing rates available to the Company for bank loans with similar terms and maturities and are classified as Level 2 in the fair value hierarchy. The fair values of the outstanding notes were determined using the quoted market price at each period end, a Level 1 classification in the fair value hierarchy.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances. These assets and liabilities can include those acquired in a business combination, inventory, proved and unproved oil and natural gas properties, equity method investments, asset retirement obligations and other long-lived assets that are written down to fair value when impaired or held for sale. Refer to Note 4—Acquisitions and Divestitures and Note 5—Property and Equipment for additional discussion of nonrecurring fair value adjustments.

Fair Value of Financial Assets

The carrying amount of cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued capital expenditures and other accrued liabilities approximate their fair value because of the short-term nature of the instruments.

14. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2026		2025
	(In millions)
Supplemental disclosure of cash flow information:

Cash (paid) received for income taxes, net of refunds:
Federal	$	—	$	(254)
State:
Texas	$	7	$	—
Other	$	—	$	2
Supplemental disclosure of non-cash transactions:
Accrued capital expenditures included in accounts payable and accrued expenses	$	962	$	746


Viper LLC Units issued for acquisition	$	—	$	119

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

15. COMMITMENTS AND CONTINGENCIES

The Company is a party to various routine legal proceedings, disputes and claims arising in the ordinary course of its business, including those that arise from interpretation of federal and state laws and regulations affecting the crude oil and natural gas industry, personal injury claims, title disputes, royalty disputes, contract claims, employment claims, claims alleging violations of antitrust laws, contamination claims relating to oil and natural gas exploration and development and environmental claims, including claims involving assets previously sold to third parties and no longer part of the Company’s current operations. While the ultimate outcome of the pending proceedings, disputes or claims and any resulting impact on the Company, cannot be predicted with certainty, the Company’s management believes that none of these matters, if ultimately decided adversely, will have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company’s assessment is based on information known about the pending matters and its experience in contesting, litigating and settling similar matters. Actual outcomes could differ materially from the Company’s assessment. The Company records accrued liabilities for contingencies related to outstanding legal proceedings, disputes or claims when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated.

Environmental Matters

The United States Department of the Interior, Bureau of Safety and Environmental Enforcement, ordered several oil and gas operators, including a corporate predecessor of Energen Corporation, to perform decommissioning and reclamation activities related to a Louisiana offshore oil and gas production platform and related facilities. In response to the insolvency of the operator of record, the government ordered the former operators and/or alleged former lease record title owners to decommission the platform and related facilities. The Company has agreed to an arrangement with other operators to contribute to a trust to fund the decommissioning costs, however, the Company’s portion of such costs are not expected to be material.

Several coastal Louisiana parishes and the State of Louisiana have filed numerous lawsuits under Louisiana’s State and Local Coastal Resources Management Act (“SLCRMA”) against numerous oil and gas producers seeking damages for coastal erosion in or near oil fields located within Louisiana’s coastal zone. The Company is a defendant in five of these cases. The Company has exercised contractual indemnification rights where applicable. Plaintiffs’ SLCRMA theories are unprecedented and there remains significant uncertainty about the claims (both as to scope and damages). Although the Company cannot predict the ultimate outcome of these matters, the Company believes the claims lack merit and intends to continue vigorously defending these lawsuits.

16. SUBSEQUENT EVENTS

Pending Viper Riverbend Acquisition

On May 1, 2026, Viper entered into a definitive purchase and sale agreement to acquire all of the equity interests of Riverbend Oil & Gas IX, L.L.C., an entity owning certain mineral and royalty interests, from Riverbend Oil & Gas IX (AIV), L.L.C. and ROG IX, L.L.C. (collectively, “Riverbend”) for consideration consisting of approximately (i) $337 million in cash and (ii) 3.69 million shares of Viper’s Class A Common Stock, in each case, subject to customary closing adjustments (the pending “Viper Riverbend Acquisition”). The pending Viper Riverbend Acquisition is expected to close during the third quarter of 2026, subject to customary closing conditions.

First Quarter 2026 Dividend Declaration

On April 29, 2026, the board of directors of the Company approved an increase in the Company’s annual base dividend to $4.40 per share of common stock and declared a base cash dividend for the first quarter of 2026 of $1.10 per share of common stock, payable on May 21, 2026, to its stockholders of record at the close of business on May 14, 2026. Future dividends are at the discretion of the Company’s board of directors.

Repayments of Debt

On April 22, 2026, the Company paid in full the remaining $550 million outstanding principal and terminated the 2025 Term Loan.

Diamondback Energy, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

On April 13, 2026, the Company completed a tender offer to repurchase an aggregate principal amount of $777 million of its 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, of approximately $632 million, at an average of 81.1% of par value.

17. SEGMENT INFORMATION

The Company is managed on a consolidated basis as one operating segment and one reportable segment, the upstream segment, which is engaged in the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. This singular operating and reportable segment is comprised of (i) the Company and its wholly owned subsidiaries, and (ii) Viper and its consolidated subsidiaries, which have been aggregated due to the similarity in their economic characteristics, products and services, processes, type of customers, method of distribution for their products and the regulatory environment in which they operate. The upstream segment derives its revenue from customers through the sale of oil and natural gas products as well as other immaterial service contracts. See Note 3—Revenue from Contracts with Customers for further discussion of the Company’s sources of revenue.

The Chief Operating Decision Maker (“CODM”), a senior executive committee that is comprised of the Company’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, uses the Company’s condensed consolidated financial results to make key operating decisions, assess performance and to allocate resources. The measures of segment profit or loss and total assets utilized by the CODM are net income and total assets as reported on the condensed consolidated statements of operations and the condensed consolidated balance sheets, respectively. The significant expense categories, their amounts and other segment items that are regularly provided to the CODM are those that are reported in the Company’s condensed consolidated statements of operations.

The CODM uses consolidated net income as a measure of profitability to evaluate segment performance and to make capital allocation decisions such as reinvestment in the business or return of capital through the payment of base and variable dividends or repurchases under the share repurchase program.

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