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United States securities and exchange commission logo
May 25, 2022
Kaes Van't Hof
Chief Financial Officer
Diamondback Energy, Inc.
500 West Texas, Suite 1200
Midland, Texas 79701
Re: Diamondback Energy,
Inc.
Form 10-K For
Fiscal Year Ended December 31, 2021
Filed February 24,
2022
File No. 001-35700
Dear Mr. Van't Hof:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K Filed February 24, 2022
General
1. We note that you
provided more expansive disclosure in your Corporate Sustainability
Report than you
provided in your SEC filings. Please advise us what consideration you
gave to providing the
same type of climate-related disclosure in your SEC filings as you
provided in your
Corporate Sustainability Report.
Risk Factors, page 27
2. It appears that you
have identified technological advances in fuel economy and energy
generation devices,
growing alternative energy sources, and the transition to a lower-
carbon economy as
transition risks related to climate change. Explain how your
disclosure details the
effects of these transition risks on your business, financial condition,
and results of
operations.
Kaes Van't Hof
FirstName LastNameKaes
Diamondback Energy, Inc. Van't Hof
Comapany
May NameDiamondback Energy, Inc.
25, 2022
May 25,
Page 2 2022 Page 2
FirstName LastName
3. We note that you are a party to various routine legal proceedings,
disputes, and claims
arising in the ordinary course of your business, including those that
arise from
environmental claims. Disclose any material litigation risks related
to climate change and
explain the potential impact to the company.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
46
4. We note that your 2022 capital budget includes amounts that will be
spent on
infrastructure and environmental expenditures. We also note the
reference in your
Corporate Sustainability Report to projects designed to reduce your
carbon footprint. Tell
us how you considered providing more detailed disclosure regarding
past and future
capital expenditures for these types of projects. Include quantitative
information for each
of the periods covered by your Form 10-K and for future periods as
part of your response.
5. To the extent material, discuss the indirect consequences of
climate-related regulation or
business trends, such as the following;
increased competition to develop innovative new products that
result in lower
emissions;
any anticipated reputational risks resulting from operations or
products that produce
material greenhouse gas emissions; and
developments that create new opportunities such as the use of
lower-emission sources
of energy and increased revenues through gas captured rather than
flared.
6. We note that extreme weather conditions can interfere with your
production and increase
your costs and that damages resulting from extreme weather may not be
fully insured.
Disclose in greater detail the physical effects of climate change on
your operations and
results, including as it relates to the potential for indirect
weather-related impacts that
have affected or may affect your major customers or suppliers. In your
response, tell us
about and quantify weather-related damages to your property or
operations and any
weather-related impacts on the cost or availability of insurance for
each of the last three
fiscal years and explain whether changes are expected in future
periods.
7. You state on page 16 that you are in substantial compliance with
applicable
environmental laws and regulations. Tell us about and quantify
compliance costs related
to climate change for each of the periods covered by your most recent
Form 10-K and
whether increased amounts are expected to be incurred in future
periods.
8. We note that you have purchased carbon credits to offset emissions.
Provide us with
quantitative information regarding your purchase or sale of carbon
credits or offsets
during the last three fiscal years and amounts budgeted for future
periods.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Kaes Van't Hof
Diamondback Energy, Inc.
May 25, 2022
Page 3
Please contact Michael Purcell at 202-551-5351 or Ethan Horowitz at
202-551-3311 with
any questions.
FirstName LastNameKaes Van't Hof Sincerely,
Comapany NameDiamondback Energy, Inc.
Division of
Corporation Finance
May 25, 2022 Page 3 Office of Energy &
Transportation
FirstName LastName