Diamondback Energy 10-Q 2026-06-30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended June 30, 2026

or

Commission File Number 001-35700

Diamondback Energy, Inc.

(Exact name of registrant as specified in its charter)

(432) 221-7400

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2026, the registrant had 280,024,353 shares of common stock outstanding.

DIAMONDBACK ENERGY, INC.

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2026

TABLE OF CONTENTS

i

GLOSSARY OF OIL AND NATURAL GAS TERMS

The following is a glossary of certain oil and natural gas industry terms that are used in this Quarterly Report on Form 10-Q (this “report”) and our other periodic reports under the Exchange Act:

ii

iii

GLOSSARY OF CERTAIN OTHER TERMS

The following is a glossary of certain other terms that are used in this report and our other periodic reports under the Exchange Act:

iv

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Various statements contained in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties and assumptions. All statements, other than statements of historical fact, including statements regarding our: future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of revenues, losses, costs, expenses, returns, cash flow and financial position; reserve estimates and our ability to replace or increase reserves; anticipated benefits or other effects of strategic transactions (including the Double Eagle Acquisition and Viper’s Sitio Acquisition (in each case, as defined below) discussed in this report and other acquisitions or divestitures); and plans and objectives of management (including plans for future cash flow from operations and for executing environmental strategies) are forward-looking statements. When used in this report, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to the Company are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although we believe that the expectations and assumptions reflected in our forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond our control. In particular, the factors discussed in this report and detailed under Part II, Item 1A. Risk Factors in this report and our Annual Report on Form 10–K for the year ended December 31, 2025, could affect our actual results and cause our actual results to differ materially from expectations, estimates or assumptions expressed, forecasted or implied in such forward-looking statements. Unless the context requires otherwise, references to “we,” “us,” “our” or the “Company” are intended to mean the business and operations of the Company and its consolidated subsidiaries.

Factors that could cause our outcomes to differ materially include (but are not limited to) the following:

• geopolitics and market conditions, including changes in supply and demand levels for oil, natural gas and natural gas liquids and the resulting impact on the price for those commodities;

• changes in U.S. energy, environmental, monetary and trade policies, including with respect to tariffs or other trade barriers and any resulting trade tensions;

• actions taken by the members of OPEC and its non-OPEC allies (“OPEC+”) affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments;

• changes in general economic, business or industry conditions, including changes in foreign currency exchange rates, interest rates, inflation rates and instability in the financial sector;

• regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits;

• federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations;

• physical and transition risks relating to climate change, changing political and social perspectives on climate change and other environmental, social and governance factors, and risks from our publicly disclosed targets related to sustainability and emissions reduction initiatives;

• challenges in developing our existing leasehold acreage and finding, developing or acquiring additional reserves;

• restrictions on the use of water, including limits on the use of produced water and a moratorium on new produced water disposal well permits recently imposed by the Texas Railroad Commission in an effort to control induced seismicity in the Permian Basin;

• significant declines in prices for oil, natural gas, or natural gas liquids, which could require recognition of significant impairment charges;

• conditions in the capital, financial and credit markets, including the availability and pricing of capital for acquisitions, exploration and development operations;

• challenges with employee retention and an increasingly competitive labor market;

• changes in availability or cost of rigs, equipment, raw materials, supplies and oilfield services;

• changes in safety, health, environmental, tax and other regulations or requirements (including those addressing air emissions, water management, or the impact of global climate change);

• security threats, including cybersecurity threats and disruptions to our business and operations from breaches of our information technology systems, or from breaches of information technology systems of third parties with whom we transact business;

v

• lack of, or disruption in, access to adequate and reliable electrical power, internet and telecommunication infrastructure, information and computer systems, transportation, processing, storage and other facilities for our oil, natural gas and natural gas liquids;

• failures or delays in achieving expected reserve or production levels from existing and future oil and natural gas developments, including due to operating hazards, drilling risks, or the inherent uncertainties in predicting reserve and reservoir performance;

• inability to keep pace with technological developments in our industry;

• failure to meet our obligations under our oil purchase contracts;

• loss of one or more customers or their inability to meet their obligations;

• geographical concentration of our primary operations;

• risks from our return of capital commitment, and uncertainties over our future dividends and share repurchases;

• difficulty in obtaining necessary approvals and permits;

• severe weather conditions and natural disasters;

• changes in the financial strength of counterparties to our credit facilities and hedging contracts;

• our substantial indebtedness and restrictions to our operating and financial flexibility;

• changes in our credit rating;

• failure to identify, complete and successfully integrate acquisitions, including Viper’s Riverbend Acquisition and Sitio Acquisition;

• the Endeavor equityholders’ ability to significantly influence our business and potential conflicts of interest; and

• other risks and factors disclosed or incorporated by reference under Part II, Item 1A. Risk Factors and our Annual Report on Form 10–K for the year ended December 31, 2025.

In light of these factors, the events anticipated by our forward-looking statements may not occur at the time anticipated or at all. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. We cannot predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements we may make. Accordingly, you should not place undue reliance on any forward-looking statements made in this report. All forward-looking statements speak only as of the date of this report or, if earlier, as of the date they were made. We do not intend to, and disclaim any obligation to, update or revise any forward-looking statements unless required by applicable law.

vi

PART I. FINANCIAL INFORMATION

See accompanying notes to condensed consolidated financial statements.

Diamondback Energy, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Unaudited)

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The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto presented in this report as well as our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. See Part II. Item 1A. Risk Factors**, Part I. Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2025 and Cautionary Statement Regarding Forward-Looking Statements**.

Overview

We are an independent oil and natural gas company currently focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. As discussed in Note 1—Description of the Business and Basis of Presentation and Note 17—Segment Information of the notes to the condensed consolidated financial statements, as of June 30, 2026, we have one reportable segment, the upstream segment.

Second Quarter 2026 Financial and Operating Highlights

• Recorded net income of $1.9 billion.

• 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.

• Incurred cash capital expenditures, excluding acquisitions, of $996 million.

• 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.

• Repurchased $141 million of our common stock, excluding excise taxes.

• 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.

• Our average production was 1,017.7 MBOE/d, surpassing the 1.0 million BOE/d milestone.

• Drilled 97 gross horizontal wells in the Midland Basin and turned 168 gross operated horizontal wells in the Midland Basin to production.

Transactions and Recent Developments

Pending 2026 Drop Down

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.

Increase in Stock Repurchase Program Authorization

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.

Viper Riverbend Acquisition

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.

Commodity Prices

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.

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.

Upstream Operations

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.

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.

The following table sets forth the total number of operated horizontal wells drilled and completed during the periods indicated:

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Other than the repayment and termination of the Viper 2025 Term Loan in the first quarter of 2026 and the repayment and termination of the 2025 Term Loan in the second quarter of 2026, information regarding market risks for the six months ended June 30, 2026 did not differ materially from that disclosed in Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2025.

Evaluation of Disclosure Controls and Procedures. Under the direction of our Chief Executive Officer and Chief Financial Officer, we have established disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls

and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

As of June 30, 2026, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2026, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting. Viper is in the process of integrating the entities acquired in the Sitio Acquisition. As a result of these integration activities, certain controls will be evaluated and may be changed. Except as noted above, there have not been any changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Diamondback has elected to use a $1 million threshold for disclosing certain environmental proceedings to which a federal, state or local governmental authority is a party**.**

We are a party to various routine legal proceedings, disputes and claims arising in the ordinary course of our business, including those that arise from interpretation of federal and state laws and regulations affecting the natural gas and crude oil 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 our current operations. While the ultimate outcome of the pending proceedings, disputes or claims and any resulting impact on us, cannot be predicted with certainty, we believe that none of these matters, if ultimately decided adversely, will have a material adverse effect on our financial condition, results of operations or cash flows. See Note 15—Commitments and Contingencies of the notes to the condensed consolidated financial statements.

Our business faces many risks. Any of the risks discussed in this report and our other SEC filings could have a material impact on our business, financial position or results of operations. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also materially impair our business operations, financial condition or future results.

As of the date of this filing, we continue to be subject to the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 25, 2026, and in subsequent filings we make with the SEC. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Issuer Repurchases of Equity Securities

Our common stock repurchase activity for the three months ended June 30, 2026, and amounts that may yet be purchased as of June 30, 2026 were as follows:

(1)Includes 444 shares of common stock repurchased from executives in order to satisfy tax withholding requirements. Such shares are canceled and retired immediately upon repurchase.

(2)The average price paid per share includes any commissions paid to repurchase stock.

(3)On July 30, 2026, our board of directors approved an increase in our common stock repurchase authorization from $8.0 billion to $16.0 billion, excluding excise tax. As of July 31, 2026, approximately $9.9 billion remains available for future repurchases under such stock repurchase program, excluding excise tax. The stock repurchase program has no time limit and may be suspended, modified, or discontinued by the board of directors at any time.

(4)The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. All dollar amounts presented exclude such excise taxes, as applicable.

Trading Arrangements

None of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended June 30, 2026.

Executive Retirement Policy

On August 1, 2026, the compensation committee (the “Compensation Committee”) of the board of directors of the Company adopted the Diamondback Energy, Inc. Executive Retirement Policy (the “Executive Retirement Policy”), effective as of August 1, 2026, to provide for certain payments and benefits upon the qualifying retirement of an eligible employee of the Company, Diamondback E&P LLC, or any other subsidiary or affiliate designated by the Compensation Committee, including the following named executive officers of the Company: Kaes Van’t Hof (Chief Executive Officer), Jere W. Thompson III (Chief Financial Officer), Teresa L. Dick (Executive Vice President of Accounting), Daniel Wesson (Chief Operating Officer) and Matt Zmigrosky (Chief Legal and Administrative Officer).

Pursuant to the Executive Retirement Policy, a qualifying retirement generally occurs when a participant voluntarily retires from employment on or after the date on which (i) the participant has attained at least 55 years of age, (ii) the sum of the participant’s age and years of employment equals or exceeds 65, and (iii) the participant has completed at least 10 years of employment; in addition, the participant must provide at least six months’ advance written notice of his or her retirement.

Upon a qualifying retirement, a participant will be entitled to:

• full accelerated vesting of all outstanding and unvested restricted stock units held by the participant that were granted on or after the effective date of the Executive Retirement Policy;

• continued eligibility to vest in all outstanding performance stock units held by the participant, based on actual achievement of applicable performance goals, for up to 12 months following the participant’s retirement date (or 24 months for participants with at least 15 years of employment);

• a prorated target annual bonus for the year in which the retirement date occurs; and

• a lump-sum cash payment equal to the participant’s monthly COBRA premium multiplied by the lesser of 18 and the number of months (including full and partial months) between the participant’s retirement date and the date on which the participant attains age 65.

The foregoing qualifying retirement payments and benefits are subject to the participant’s execution of a general release of claims and continued compliance with applicable restrictive covenants.

The foregoing description of the Executive Retirement Policy does not purport to be complete and is qualified in its entirety by reference to the text of the Executive Retirement Policy, a copy of which is filed as an exhibit to this report.

EXHIBIT INDEX

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.