FANG · Diamondback Energy, Inc.

Diamondback Energy delivered strong Q1 2026 operational results with oil production of 521 MBO/d, surpassing the high end of guidance despite disruptions from Winter Storm Fern, achieved through drilling efficiency gains like 11% of wells reaching total depth in under five days and record Barnett well performance. Financially, revenues rose to $4.24B from $4.05B year-over-year, but operating income fell to $116M due to a $1.4B non-cash impairment from SEC ceiling test mechanics tied to weak early-year pricing, alongside higher lease operating expenses at $6.21/BOE from storm recovery. Net income attributable dropped sharply to $25M ($0.08/share) from $1.405B ($4.83/share), but adjusted metrics showed resilience with $2.7B Adjusted EBITDA and $1.7B Adjusted Free Cash Flow. Cash from operations was $1.8B, supporting $933M capex below guidance midpoint. Management highlighted execution ahead of plan and electrification reducing costs. In response to improved macro with oil prices up over 50%, they raised 2026 oil guidance to 520+ MBO/d (3% above original), total volumes to 972+ MBOE/d, and capex to ~$3.9B, planning 5 completion crews and 2-3 additional rigs while working down DUCs. Balance sheet strengthened with net debt at $13.9B, further reduced post-quarter by retiring $777M notes at 81% par and repaying $550M term loan. Capital return shifted from formulaic to flexible post-dividend allocation, raising base dividend 5% to $4.40 annual ($1.10 Q1), repurchasing $548M shares, with $2.1B buyback capacity remaining, emphasizing long-term value in cyclical environment.