Diamondback Energy’s Q1 2025 report signaled a clear shift in drilling strategy as the company responded to oil price volatility with calculated reductions in capital spending and activity levels. In the report, the company emphasized a disciplined approach:
“As a result of recent commodity price volatility, Diamondback is reducing activity in order to prioritize free cash flow generation… This revised plan enhances capital efficiency and provides flexibility to cut additional capital if prices weaken further or resume original plans if prices strengthen.”
This statement was followed by a planned reduction of three drilling rigs and one completion crew in Q2 2025, aligning with a $400 million cut to its full-year capital budget.
Quarterly Drilling Comparison – Key Insight
To assess the impact of this strategy, we analyzed Diamondback’s drilling activity using permitting data grouped by quarter.
A clear decline in Q1 2025 activity compared to Q1 2024 underscores Diamondback’s decision to focus on capital efficiency. While Q1 2024 saw robust drilling, Q1 2025 showed a notable slowdown.
Contractor and Rig Activity: Q1 Comparison
We examined rig-level detail to compare contractor contributions between Q1 2024 and Q1 2025. Below is a summary of the top-performing rig teams based on total activity over both quarters:
Contractor and Rig Q1 2024 Count Q1 2025 Count Total Activity Ensign T141 15 6 21 NorAm 30 12 8 20 Ensign 766 9 8 17 Ensign T138 12 4 16 Latshaw 14 11 5 16
The consistency of these contractors across quarters suggests a trusted vendor base, even as Diamondback moderates total rig activity.
Top Drilling Counties: Q1 2024 vs Q1 2025
Drilling activity remained concentrated in core Permian counties. Below are the top 5 counties by combined Q1 activity:
County Q1 2024 Count Q1 2025 Count Total Activity MARTIN 111 76 187 REAGAN 44 14 58 MIDLAND 31 11 42 ECTOR 13 2 15 GLASSCOCK 12 0 12
Martin County continues to dominate Diamondback’s development focus, despite the pullback in total drilling.
By grounding its operational strategy in market realities and prioritizing efficiency, Diamondback Energy is signaling a pragmatic approach for 2025. The company remains agile, ready to ramp up or pull back based on pricing signals while continuing to return capital to shareholders.
