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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2021
OR
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 001-35700
Diamondback Energy, Inc.
(Exact Name of Registrant As Specified in Its Charter)
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DE | | 45-4502447 |
(State or Other Jurisdiction of Incorporation or Organization) | | (I.R.S. Employer Identification Number) |
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500 West Texas | | |
Suite 1200 | | |
Midland, | TX | | 79701 |
(Address of principal executive offices) | | (Zip code) |
(432) 221-7400
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | FANG | The Nasdaq Stock Market LLC |
| | (NASDAQ Global Select Market) |
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 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. (Check One):
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Large Accelerated Filer | | ☒ | | Accelerated Filer | | ☐ |
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Non-Accelerated Filer | | ☐ | | Smaller Reporting Company | | ☐ |
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| | | | Emerging Growth Company | | ☐ |
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 October 29, 2021, the registrant had 181,174,549 shares of common stock outstanding.
DIAMONDBACK ENERGY, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 2021
TABLE OF CONTENTS
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”):
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Basin | A large depression on the earth’s surface in which sediments accumulate. |
Bbl or barrel | One stock tank barrel, or 42 U.S. gallons liquid volume, used in this report in reference to crude oil or other liquid hydrocarbons. |
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BO | One barrel of crude oil. |
BOE | One barrel of oil equivalent, with six thousand cubic feet of natural gas being equivalent to one barrel of oil. |
BOE/d | BOE per day. |
British Thermal Unit or Btu | The quantity of heat required to raise the temperature of one pound of water by one degree Fahrenheit. |
Completion | The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas or oil, or in the case of a dry hole, the reporting of abandonment to the appropriate agency. |
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Finding and development costs | Capital costs incurred in the acquisition, exploitation and exploration of proved oil and natural gas reserves divided by proved reserve additions and revisions to proved reserves. |
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Gross acres or gross wells | The total acres or wells, as the case may be, in which a working interest is owned. |
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Horizontal wells | Wells drilled directionally horizontal to allow for development of structures not reachable through traditional vertical drilling mechanisms. |
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MBbl | One thousand barrels of crude oil and other liquid hydrocarbons. |
MBO/d | One thousand BO per day. |
MBOE/d | One thousand BOE per day. |
Mcf | One thousand cubic feet of natural gas. |
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Mineral interests | The interests in ownership of the resource and mineral rights, giving an owner the right to profit from the extracted resources. |
MMBtu | One million British Thermal Units. |
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Net acres or net wells | The sum of the fractional working interest owned in gross acres. |
Net revenue interest | An owner’s interest in the revenues of a well after deducting proceeds allocated to royalty and overriding interests. |
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Oil and natural gas properties | Tracts of land consisting of properties to be developed for oil and natural gas resource extraction. |
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Plugging and abandonment | Refers to the sealing off of fluids in the strata penetrated by a well so that the fluids from one stratum will not escape into another or to the surface. Regulations of all states require plugging of abandoned wells. |
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Prospect | A specific geographic area which, based on supporting geological, geophysical or other data and also preliminary economic analysis using reasonably anticipated prices and costs, is deemed to have potential for the discovery of commercial hydrocarbons. |
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Proved reserves | The estimated quantities of oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating conditions. |
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Reserves | The estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to the market and all permits and financing required to implement the project. Reserves are not assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations). |
Reservoir | A porous and permeable underground formation containing a natural accumulation of producible natural gas and/or crude oil that is confined by impermeable rock or water barriers and is separate from other reservoirs. |
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Royalty interest | An interest that gives an owner the right to receive a portion of the resources or revenues without having to carry any costs of development, which may be subject to expiration. |
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Working interest | An operating interest that gives the owner the right to drill, produce and conduct operating activities on the property and receive a share of production and requires the owner to pay a share of the costs of drilling and production operations. |
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GLOSSARY OF CERTAIN OTHER TERMS
The following is a glossary of certain other terms that are used in this report:
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2019 Indenture | The indenture, dated as of December 5, 2019, among the Company and Wells Fargo, as the trustee, as supplemented by the first supplemental indenture dated as of December 5, 2019, the second supplemental indenture dated as of May 26, 2020, the third supplemental indenture dated as of March 24, 2021, and the fourth supplemental indenture dated as of June 30, 2021, relating to the December 2019 Notes (defined above), the May 2020 Notes (defined below) and the March 2021 Notes (defined below). |
2025 Indenture | The indenture relating to the 2025 Senior Notes (defined below), dated as of December 20, 2016, among the Company, the subsidiary guarantor party thereto and Wells Fargo, as the trustee, as supplemented. |
2025 Senior Notes | The Company’s 5.375% senior unsecured notes due 2025 issued under the 2025 Indenture. |
ASC | Accounting Standards Codification. |
ASU | Accounting Standards Update. |
December 2019 Notes | The Company’s 2.875% senior unsecured notes due 2024, the Company’s 3.250% senior unsecured notes due 2026 and the Company’s 3.500% senior unsecured notes due 2029 issued under the 2019 Indenture. |
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Equity Plan | The Company’s Equity Incentive Plan. |
Exchange Act | The Securities Exchange Act of 1934, as amended. |
FASB | Financial Accounting Standards Board. |
GAAP | Accounting principles generally accepted in the United States. |
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LIBOR | The London interbank offered rate. |
May 2020 Notes | The Company’s 4.750% Senior Notes due 2025 issued under the 2019 Indenture. |
March 2021 Notes | The Company’s 0.900% Senior Notes due 2023, the Company’s 3.125% Senior Notes due 2031 and the Company’s 4.400% Senior Notes due 2051 issued under the 2019 Indenture. |
NYMEX | New York Mercantile Exchange. |
OPEC | Organization of the Petroleum Exporting Countries. |
Rattler | Rattler Midstream LP, a Delaware limited partnership. |
Rattler’s General Partner | Rattler Midstream GP LLC, a Delaware limited liability company; the general partner of Rattler Midstream LP and a wholly owned subsidiary of the Company. |
Rattler LLC | Rattler Midstream Operating LLC, a Delaware limited liability company and a subsidiary of Rattler. |
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SEC | United States Securities and Exchange Commission. |
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Senior Notes | The 2025 Senior Notes, the December 2019 Notes, the May 2020 Notes and the March 2021 Notes. |
Viper | Viper Energy Partners LP, a Delaware limited partnership. |
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Viper LLC | Viper Energy Partners LLC, a Delaware limited liability company and a subsidiary of Viper. |
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Wells Fargo | Wells Fargo Bank, National Association. |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Various statements contained in this report are “forward-looking statements” as defined by the SEC. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, many of which are beyond our control. All statements, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. 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, 2020 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.
Forward-looking statements may include statements about:
•the volatility of realized oil and natural gas prices;
•the implications and logistical challenges of epidemic or pandemic diseases, including the COVID-19 pandemic and its impact on the oil and natural gas industry, pricing and demand for oil and natural gas and supply chain logistics;
•logistical challenges and the supply chain disruptions;
•changes in general economic, business or industry conditions, including conditions of the U.S. oil and natural gas industry and the effect of U.S. energy, environmental, monetary and trade policies;
•conditions in the capital, financial and credit markets and our ability to obtain capital needed for development and exploration operations on favorable terms or at all;
•conditions of the U.S. oil and natural gas industry and the effect of U.S. energy, monetary and trade policies on our industry and business;
•our ability to execute our business and financial strategies;
•exploration and development drilling prospects, inventories, projects and programs;
•levels of production;
•the impact of reduced drilling activity on our exploration and development drilling prospects, inventories, projects and programs;
•regional supply and demand factors, any delays, curtailment delays or interruptions of production, and any governmental order, rule or regulation that may impose production limits;
•our ability to replace our oil and natural gas reserves;
•acquisitions and sales of assets and our anticipated synergies and cost savings from these transactions;
•competition in the oil and natural gas industry;
•uncertainties with respect to identified drilling locations and estimates of reserves;
•the impact of severe weather conditions on our production;
•our ability to comply with applicable governmental laws and regulations and to obtain permits and governmental approvals;
•our environmental initiatives and targets;
•future operating results;
•future dividends to our stockholders;
•impact of any impairment charges;
•lease operating expenses, general and administrative costs and finding and development costs;
•capital expenditure plans;
•use of proceeds from divestiture of assets;
•the conditions impacting the timing and amount of common stock repurchases under our common stock repurchase program;
•other plans, objectives, expectations and intentions; and
•certain other factors discussed elsewhere 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 securities laws. You should not place undue reliance on these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to 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 contained in any forward-looking statements we may make. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements we make in this report are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved or occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
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Diamondback Energy, Inc. and Subsidiaries |
Condensed Consolidated Balance Sheets |
(Unaudited) |
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| September 30, | | December 31, |
| 2021 | | 2020 |
| (In millions, except par values and share data) |
Assets |
Current assets: | | | |
Cash and cash equivalents | $ | 457 | | | $ | 104 | |
Restricted cash | 18 | | | 4 | |
Accounts receivable: | | | |
Joint interest and other, net | 99 | | | 56 | |
Oil and natural gas sales, net | 712 | | | 281 | |
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Inventories | 53 | | | 33 | |
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Derivative instruments | 14 | | | 1 | |
Income tax receivable | — | | | 100 | |
Assets held for sale | 83 | | | — | |
Prepaid expenses and other current assets | 28 | | | 23 | |
Total current assets | 1,464 | | | 602 | |
Property and equipment: | | | |
Oil and natural gas properties, full cost method of accounting ($8,214 million and $7,493 million excluded from amortization at September 30, 2021 and December 31, 2020, respectively) | 32,554 | | | 27,377 | |
Midstream assets | 922 | | | 1,013 | |
Other property, equipment and land | 164 | | | 138 | |
Accumulated depletion, depreciation, amortization and impairment | (13,234) | | | (12,314) | |
Property and equipment, net | 20,406 | | | 16,214 | |
Funds held in escrow | 66 | | | 51 | |
Equity method investments | 509 | | | 533 | |
Derivative instruments | 4 | | | — | |
Deferred income taxes, net | 25 | | | 73 | |
Investment in real estate, net | 89 | | | 101 | |
Other assets | 76 | | | 45 | |
Total assets | $ | 22,639 | | | $ | 17,619 | |
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See accompanying notes to condensed consolidated financial statements.
Diamondback Energy, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets - (Continued)
(Unaudited)
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| September 30, | | December 31, | |
| 2021 | | 2020 | |
Liabilities and Stockholders’ Equity | (In millions, except par values and share data) | |
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Current liabilities: | | | | |
Accounts payable - trade | $ | 21 | | | $ | 71 | | |
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Accrued capital expenditures | 308 | | | 186 | | |
Current maturities of long-term debt | 20 | | | 191 | | |
Other accrued liabilities | 476 | | | 302 | | |
Revenues and royalties payable | 561 | | | 237 | | |
Derivative instruments | 610 | | | 249 | | |
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Total current liabilities | 1,996 | | | 1,236 | | |
Long-term debt | 6,925 | | | 5,624 | | |
Derivative instruments | 36 | | | 57 | | |
Asset retirement obligations | 178 | | | 108 | | |
Deferred income taxes | 1,068 | | | 783 | | |
Other long-term liabilities | 14 | | | 7 | | |
Total liabilities | 10,217 | | | 7,815 | | |
Commitments and contingencies (Note 13) | | | | |
Stockholders’ equity: | | | | |
Common stock, $0.01 par value; 400,000,000 shares authorized; 180,791,028 and 158,088,182 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 2 | | | 2 | | |
Additional paid-in capital | 14,389 | | | 12,656 | | |
Retained earnings (accumulated deficit) | (2,908) | | | (3,864) | | |
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Total Diamondback Energy, Inc. stockholders’ equity | 11,483 | | | 8,794 | | |
Non-controlling interest | 939 | | | 1,010 | | |
Total equity | 12,422 | | | 9,804 | | |
Total liabilities and equity | $ | 22,639 | | | $ | 17,619 | | |
See accompanying notes to condensed consolidated financial statements.
Diamondback Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2021 | | 2020 | | 2021 | | 2020 |
| (In millions, except per share amounts, shares in thousands) |
Revenues: | | | | | | | |
Oil sales | $ | 1,506 | | | $ | 606 | | | $ | 3,845 | | | $ | 1,785 | |
Natural gas sales | 152 | | | 36 | | | 363 | | | 61 | |
Natural gas liquid sales | 239 | | | 65 | | | 528 | | | 156 | |
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Midstream services | 12 | | | 12 | | | 35 | | | 37 | |
Other operating income | 1 | | | 1 | | | 4 | | | 5 | |
Total revenues | 1,910 | | | 720 | | | 4,775 | | | 2,044 | |
Costs and expenses: | | | | | | | |
Lease operating expenses | 156 | | | 102 | | | 415 | | | 332 | |
Production and ad valorem taxes | 124 | | | 55 | | | 304 | | | 148 | |
Gathering and transportation | 67 | | | 33 | | | 154 | | | 105 | |
Midstream services expense | 19 | | | 26 | | | 70 | | | 81 | |
Depreciation, depletion, amortization and accretion | 341 | | | 288 | | | 955 | | | 1,041 | |
Impairment of oil and natural gas properties | — | | | 1,451 | | | — | | | 4,999 | |
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General and administrative expenses | 38 | | | 20 | | | 99 | | | 64 | |
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Merger and integration expense | — | | | — | | | 77 | | | — | |
Other operating expense | 1 | | | 1 | | | 11 | | | 4 | |
Total costs and expenses | 746 | | | 1,976 | | | 2,085 | | | 6,774 | |
Income (loss) from operations | 1,164 | | | (1,256) | | | 2,690 | | | (4,730) | |
Other income (expense): | | | | | | | |
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Interest expense, net | (57) | | | (53) | | | (170) | | | (147) | |
Other income (expense), net | 2 | | | (2) | | | (4) | | | (8) | |
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Gain (loss) on derivative instruments, net | (234) | | | (99) | | | (895) | | | 82 | |
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Gain (loss) on sale of equity method investments | — | | | — | | | 23 | | | — | |
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Gain (loss) on extinguishment of debt | (12) | | | (2) | | | (73) | | | (5) | |
Income (loss) from equity investments | 4 | | | 3 | | | 6 | | | (10) | |
Total other income (expense), net | (297) | | | (153) | | | (1,113) | | | (88) | |
Income (loss) before income taxes | 867 | | | (1,409) | | | 1,577 | | | (4,818) | |
Provision for (benefit from) income taxes | 193 | | | (304) | | | 352 | | | (902) | |
Net income (loss) | 674 | | | (1,105) | | | 1,225 | | | (3,916) | |
Net income (loss) attributable to non-controlling interest | 25 | | | 8 | | | 45 | | | (138) | |
Net income (loss) attributable to Diamondback Energy, Inc. | $ | 649 | | | $ | (1,113) | | | $ | 1,180 | | | $ | (3,778) | |
Earnings (loss) per common share: | | | | | | | |
Basic | $ | 3.59 | | | $ | (7.05) | | | $ | 6.73 | | | $ | (23.91) | |
Diluted | $ | 3.56 | | | $ | (7.05) | | | $ | 6.68 | | | $ | (23.91) | |
Weighted average common shares outstanding: | | | | | | | |
Basic | 181,027 | | | 157,833 | | | 175,464 | | | 157,984 | |
Diluted | 182,149 | | | 157,833 | | | 176,553 | | | 157,984 | |
Dividends declared per share | $ | 0.50 | | | $ | 0.375 | | | $ | 1.35 | | | $ | 1.125 | |
See accompanying notes to condensed consolidated financial statements.
Diamondback Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
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| Common Stock | | Additional Paid-in Capital | | Retained Earnings (Accumulated Deficit) | | | Non-Controlling Interest | | Total |
| Shares | | Amount | | | | |
| ($ in millions, shares in thousands) |
Balance December 31, 2020 | 158,088 | | | $ | 2 | | | $ | 12,656 | | | $ | (3,864) | | | | $ | 1,010 | | | $ | 9,804 | |
Unit-based compensation | — | | | — | | | — | | | — | | | | 3 | | | 3 | |
Distribution equivalent rights payments | — | | | — | | | — | | | (1) | | | | — | | | (1) | |
Common units issued for acquisitions | 22,795 | | | — | | | 1,727 | | | — | | | | — | | | 1,727 | |
Stock-based compensation | — | | | — | | | 11 | | | — | | | | — | | | 11 | |
Cash paid for tax withholding on vested equity awards | — | | | — | | | (6) | | | — | | | | — | | | (6) | |
Repurchased units under buyback programs | — | | | — | | | — | | | — | | | | (24) | | | (24) | |
Distributions to non-controlling interest | — | | | — | | | — | | | — | | | | (17) | | | (17) | |
Dividend paid | — | | | — | | | — | | | (68) | | | | — | | | (68) | |
Exercise of stock options and issuance of restricted stock units and awards | 101 | | | — | | | — | | | — | | | | — | | | — | |
Change in ownership of consolidated subsidiaries, net | — | | | — | | | (4) | | | — | | | | 4 | | | — | |
Net income (loss) | — | | | — | | | — | | | 220 | | | | 3 | | | 223 | |
Balance March 31, 2021 | 180,984 | | | 2 | | | 14,384 | | | (3,713) | | | | 979 | | | 11,652 | |
Unit-based compensation | — | | | — | | | — | | | — | | | | 3 | | | 3 | |
Distribution equivalent rights payments | — | | | — | | | — | | | (1) | | | | (1) | | | (2) | |
Stock-based compensation | — | | | — | | | 15 | | | — | | | | — | | | 15 | |
Cash paid for tax withholding on vested equity awards | — | | | — | | | — | | | — | | | | (2) | | | (2) | |
Repurchased units under buyback programs | — | | | — | | | — | | | — | | | | (12) | | | (12) | |
Distributions to non-controlling interest | — | | | — | | | — | | | — | | | | (24) | | | (24) | |
Dividend paid | — | | | — | | | — | | | (72) | | | | — | | | (72) | |
Exercise of stock options and vesting of restricted stock units and awards | 65 | | | — | | | 3 | | | — | | | | — | | | 3 | |
Change in ownership of consolidated subsidiaries, net | — | | | — | | | (3) | | | — | | | | 4 | | | 1 | |
Net income (loss) | — | | | — | | | — | | | 311 | | | | 17 | | | 328 | |
Balance June 30, 2021 | 181,049 | | | 2 | | | 14,399 | | | (3,475) | | | | 964 | | | 11,890 | |
Unit-based compensation | — | | | — | | | — | | | — | | | | 3 | | | 3 | |
Distribution equivalent rights payments | — | | | — | | | — | | | — | | | | (1) | | | (1) | |
Stock-based compensation | — | | | — | | | 17 | | | — | | | | — | | | 17 | |
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Repurchased shares under buyback program | (268) | | | — | | | (22) | | | — | | | | — | | | (22) | |
Repurchased units under buyback programs | — | | | — | | | — | | | — | | | | (27) | | | (27) | |
Distributions to non-controlling interest | — | | | — | | | — | | | — | | | | (31) | | | (31) | |
Dividend paid | — | | | — | | | — | | | (82) | | | | — | | | (82) | |
Exercise of stock options and vesting of restricted stock units and awards | 10 | | | — | | | 1 | | | — | | | | — | | | 1 | |
Change in ownership of consolidated subsidiaries, net | — | | | — | | | (6) | | | — | | | | 6 | | | — | |
Net income (loss) | — | | | — | | | — | | | 649 | | | | 25 | | | 674 | |
Balance September 30, 2021 | 180,791 | | | $ | 2 | | | $ | 14,389 | | | $ | (2,908) | | | | $ | 939 | | | $ | 12,422 | |
See accompanying notes to condensed consolidated financial statements.
Diamondback Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity - (Continued)
(Unaudited)
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| Common Stock | | Additional Paid-in Capital | | Retained Earnings (Accumulated Deficit) | | | Non-Controlling Interest | | Total |
| Shares | | Amount | | | | |
| ($ in millions, shares in thousands) |
Balance December 31, 2019 | 159,002 | | | $ | 2 | | | $ | 12,357 | | | $ | 890 | | | | $ | 1,657 | | | $ | 14,906 | |
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Unit-based compensation | — | | | — | | | — | | | — | | | | 5 | | | 5 | |
Distribution equivalent rights payments | — | | | — | | | — | | | — | | | | (1) | | | (1) | |
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Stock-based compensation | — | | | — | | | 10 | | | — | | | | — | | | 10 | |
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Cash paid for tax withholding on vested equity awards | — | | | — | | | (5) | | | — | | | | — | | | (5) | |
Repurchased shares for share buyback program | (1,280) | | | — | | | (98) | | | — | | | | — | | | (98) | |
Distribution to non-controlling interest | — | | | — | | | — | | | — | | | | (43) | | | (43) | |
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Dividend paid | — | | | — | | | — | | | (59) | | | | — | | | (59) | |
Exercise of stock options and vesting of restricted stock units | 93 | | | — | | | 1 | | | — | | | | — | | | 1 | |
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Net income (loss) | — | | | — | | | — | | | (272) | | | | (128) | | | (400) | |
Balance March 31, 2020 | 157,815 | | | 2 | | | 12,265 | | | 559 | | | | 1,490 | | | 14,316 | |
Distribution equivalent rights payments | — | | | — | | | — | | | — | | | | (1) | | | (1) | |
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Stock-based compensation | — | | | — | | | 11 | | | — | | | | — | | | 11 | |
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Repurchased shares for share buyback program | — | | | — | | | — | | | — | | | | (2) | | | (2) | |
Distribution to non-controlling interest | — | | | — | | | — | | | — | | | | (19) | | | (19) | |
Dividend paid | — | | | — | | | — | | | (59) | | | | — | | | (59) | |
Exercise of stock options and vesting of restricted stock units | 9 | | | — | | | — | | | — | | | | — | | | — | |
Change in ownership of consolidated subsidiaries, net | — | | | — | | | 329 | | | — | | | | (329) | | | — | |
Net income (loss) | — | | | — | | | — | | | (2,393) | | | | (18) | | | (2,411) | |
Balance June 30, 2020 | 157,824 | | | 2 | | | 12,605 | | | (1,893) | | | | 1,121 | | | 11,835 | |
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Unit-based compensation | — | | | — | | | — | | | — | | | | 3 | | | 3 | |
Stock-based compensation | — | | | — | | | 10 | | | — | | | | — | | | 10 | |
Cash paid for tax withholding on vested equity awards | — | | | — | | | — | | | — | | | | — | | | — | |
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Distribution to non-controlling interest | — | | | — | | | — | | | — | | | | (15) | | | (15) | |
Dividend paid | — | | | — | | | — | | | (59) | | | | — | | | (59) | |
Exercise of stock options and vesting of restricted stock units | 26 | | | — | | | — | | | — | | | | — | | | — | |
Net income (loss) | — | | | — | | | — | | | (1,113) | | | | 8 | | | (1,105) | |
Balance September 30, 2020 | 157,850 | | | $ | 2 | | | $ | 12,615 | | | $ | (3,065) | | | | $ | 1,117 | | | $ | 10,669 | |
See accompanying notes to condensed consolidated financial statements.
Diamondback Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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| Nine Months Ended September 30, |
| 2021 | | 2020 |
| (In millions) |
Cash flows from operating activities: | | | |
Net income (loss) | $ | 1,225 | | | $ | (3,916) | |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | | | |
Provision for (benefit from) deferred income taxes | 348 | | | (840) | |
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Impairment of oil and natural gas properties | — | | | 4,999 | |
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Depreciation, depletion, amortization and accretion | 955 | | | 1,041 | |
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(Gain) loss on extinguishment of debt | 73 | | | 5 | |
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(Gain) loss on derivative instruments, net | 895 | | | (82) | |
Cash received (paid) on settlement of derivative instruments | (847) | | | 288 | |
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Equity-based compensation expense | 37 | | | 27 | |
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(Gain) loss on sale of equity method investments | (23) | | | — | |
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Other | 39 | | | 31 | |
Changes in operating assets and liabilities: | | | |
Accounts receivable | (307) | | | 265 | |
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Income tax receivable | 152 | | | (62) | |
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Prepaid expenses and other | 23 | | | (1) | |
Accounts payable and accrued liabilities | (39) | | | (18) | |
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Revenues and royalties payable | 257 | | | (59) | |
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Other | (11) | | | 37 | |
Net cash provided by (used in) operating activities | 2,777 | | | 1,715 | |
Cash flows from investing activities: | | | |
Drilling, completions and infrastructure additions to oil and natural gas properties | (1,030) | | | (1,500) | |
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Additions to midstream assets | (23) | | | (133) | |
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Property acquisitions | (438) | | | (154) | |
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Proceeds from sale of assets | 112 | | | 2 | |
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Contributions to equity method investments | (7) | | | (90) | |
Distributions from equity method investments | 9 | | | 27 | |
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Other | 54 | | | (7) | |
Net cash provided by (used in) investing activities | (1,323) | | | (1,855) | |
Cash flows from financing activities: | | | |
Proceeds from borrowings under credit facilities | 759 | | | 917 | |
Repayments under credit facilities | (853) | | | (1,238) | |
Proceeds from senior notes | 2,200 | | | 997 | |
Repayment of senior notes | (2,540) | | | (239) | |
Premium on extinguishment of debt | (178) | | | (2) | |
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Proceeds from (repayments to) joint venture | (14) | | | 47 | |
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Repurchased shares under buyback program | (22) | | | (98) | |
Repurchased units under buyback program | (63) | | | — | |
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Dividends to stockholders | (221) | | | (177) | |
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Distributions to non-controlling interest | (72) | | | (77) | |
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Financing portion of net cash received (paid) for derivative instruments | 25 | | | — | |
Other | (42) | | | (19) | |
Net cash provided by (used in) financing activities | (1,021) | | | 111 | |
Net increase (decrease) in cash and cash equivalents | 433 | | | (29) | |
Cash, cash equivalents and restricted cash at beginning of period | 108 | | | |