Diamondback Energy Playbook

About

Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. Diamondback’s activities are primarily focused on the horizontal exploitation of multiple intervals within the Wolfcamp, Spraberry, Clearfork, Bone Spring and Cline formations.

Wells Drilled Last Two Years

Air Permits Last 365 Days

2021 GUIDANCE UPDATE

  • Increasing full year 2021 oil production guidance to 219 – 222 MBO/d (363 – 370 MBOE/d), up from 212 – 216 MBO/d (350 – 360 MBOE/d) previously
  • Lowering full year 2021 cash CAPEX guidance to $1.525 – $1.625 billion, down 6% at the midpoint from $1.60 – $1.75 billion previously
  • Initiating Q3 2021 oil production guidance of 233 – 239 MBO/d (388 – 398 MBOE/d); includes 15 – 17 MBO/d (25 – 29 MBOE/d) attributable to a full quarter of estimated net Q3 2021 Williston Basin production
  • Initiating Q3 2021 Permian Basin oil production guidance of 218 – 222 MBO/d (363 – 370 MBOE/d)
  • Q3 2021 cash CAPEX guidance of $430 – $480 million
  • Diamondback believes it can maintain Q4 2021 Permian Basin oil production through full year 2022 with 10% – 15% more capital than the midpoint of its revised 2021 capital budget

“Diamondback built on its track record of execution in the second quarter, generating $578 million of Free Cash Flow. Operationally, capital efficiency continues to improve. As a result, we are cutting our 2021 capital budget by $100 million due to cost control and volume outperformance. Put simply, we are doing more with less: producing more barrels with less capital, fewer completed wells and fewer drilling rigs,” stated Travis Stice, Chief Executive Officer of Diamondback.

Mr. Stice continued, “From a macro perspective, the world oil market is still artificially undersupplied and there is not a call on shale production growth today. Therefore, Diamondback will maintain capital discipline by holding oil production flat for the foreseeable future. If this maintenance plan continues into 2022, we expect to be able to hold fourth quarter 2021 Permian oil production flat with 10 – 15% more capital than our current 2021 plan, demonstrating our improved capital efficiency that incorporates a full year of spend on the assets we acquired in the first quarter. We still believe the best path to long term value creation for stockholders today is achieved through flat oil production, lower costs and return of Free Cash Flow.”

Mr. Stice continued, “As we have stated in the past, an increased return will not hinder our efforts to continue to pay down gross debt, and we have proven that again today with our second dividend increase this year, bringing our year-to-date dividend growth to 20%. Additionally, beginning in 2022, we plan to return 50% of our Free Cash Flow to our stockholders. The form of this additional capital return will be decided by the Board at the appropriate time, but we intend to be flexible based on which opportunities we believe present the best return to our stockholders at that time.”

Lateral Completions Dissolvable Frac Plug

Areas of Operation

Midland Basin – focus has been on the Spraberry and Wolfcamp formations. Midland Basin is located just east of the Central Basin Platform and runs north to south from Crockett County to counties Lamb and Hale. Midland Basin geology is highly variable by location and zone, as the typical well completion in the basin involves commingling production from multiple stacked pay zones. Depending on the geographic region within the Basin, operators are targeting a variety of zones with vertical and horizontal completions. 

Delaware Basin  – Delaware Basin is a hydrocarbon rich sedimentary basin that lies within the Permian Basin. The Delaware Basin covers around 6.4 million acres in far West Texas and South Eastern New Mexico. It is located in an arid southwestern portion of the United States of America

Williston Basin  –   Williston Basin is a large intracratonic sedimentary basin in eastern Montana, western North Dakota, South Dakota, and southern Saskatchewan, that is known for its rich deposits of petroleum and potash.

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