UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 1, 2023
___________
(Exact Name of Registrant as Specified in Charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||||||||||
| (Address of principal executive offices) | (Zip code) | |||||||||||||
(432 ) 221-7400
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| (NASDAQ Global Select Market) | ||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 1, 2023, Diamondback Energy, Inc. (the "Company") issued a press release reporting financial and operating results for the first quarter ended March 31, 2023 and announcing the first quarter 2023 base and variable cash dividends (the "earnings release"). A copy of the earnings release is furnished to the Securities and Exchange Commission (the "SEC") as Exhibit 99.1 to this Current Report on Form 8-K. The Company also issued a letter to its stockholders as a supplement to the earnings release, which is furnished to the SEC as Exhibit 99.2 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | |||||||
| 99.1 | ||||||||
| 99.2 | ||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL). | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| DIAMONDBACK ENERGY, INC. | ||||||||||||||
| Date: | May 1, 2023 | |||||||||||||
| By: | /s/ Teresa L. Dick | |||||||||||||
| Name: | Teresa L. Dick | |||||||||||||
| Title: | Executive Vice President, Chief Accounting Officer and Assistant Secretary | |||||||||||||
Exhibit 99.1
DIAMONDBACK ENERGY, INC. ANNOUNCES FIRST QUARTER 2023 FINANCIAL AND OPERATING RESULTS
Midland, TX (May 1, 2023) - Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the “Company”) today announced financial and operating results for the first quarter ended March 31, 2023.
FIRST QUARTER 2023 HIGHLIGHTS
•Average production of 251.4 MBO/d (425.0 MBOE/d)
•Net cash provided by operating activities of $1.43 billion; Operating Cash Flow Before Working Capital Changes (as defined and reconciled below) of $1.30 billion
•Cash capital expenditures of $657 million
•Free Cash Flow (as defined and reconciled below) of $646 million
•Declared Q1 2023 base cash dividend of $0.80 per share and a variable cash dividend of $0.03 per share, in each case payable on May 18, 2023; implies a 2.3% annualized yield based on April 28, 2023 closing share price of $142.20
•Repurchased 2,530,646 shares of common stock in Q1 2023 for $332 million (at a weighted average price of $131.34/share); repurchased 511,200 shares of common stock to date in Q2 2023 for $72 million (at a weighted average price of $141.77/share)
•Total Q1 2023 return of capital of $485 million from stock repurchases and the declared base-plus-variable dividend; represents ~75% of Q1 2023 Free Cash Flow (as defined and reconciled below)
•As previously announced, closed acquisition of all leasehold interest and related assets of Lario Permian, LLC, a wholly owned subsidiary of Lario Oil & Gas Company, and certain associated sellers, on January 31, 2023
NON-CORE ASSET SALE UPDATE
•As previously announced, completed divestiture of 10% equity ownership in the Gray Oak crude oil pipeline
•Completed previously announced divestiture of ~4,900 net acres in Ward and Winkler counties
•Completed previously announced divestiture of ~19,000 net acres in Glasscock county
•Completed the divestiture of certain royalty interests to Viper Energy Partners LP for approximately $75 million, subject to customary closing adjustments, in a drop down transaction ("Drop Down")
•Excluding the Drop Down, have completed $773 million of gross proceeds in non-core asset sales and are on track to meet or exceed our $1 billion target by year end 2023
OPERATIONS UPDATE
The tables below provide a summary of operating activity for the first quarter of 2023.
| Total Activity (Gross Operated): | |||||||||||
| Number of Wells Drilled | Number of Wells Completed | ||||||||||
| Midland Basin | 70 | 69 | |||||||||
| Delaware Basin | 12 | 19 | |||||||||
| Total | 82 | 88 | |||||||||
| Total Activity (Net Operated): | |||||||||||
| Number of Wells Drilled | Number of Wells Completed | ||||||||||
| Midland Basin | 65 | 65 | |||||||||
| Delaware Basin | 11 | 18 | |||||||||
| Total | 76 | 83 | |||||||||
During the first quarter of 2023, Diamondback drilled 70 gross wells in the Midland Basin and 12 gross wells in the Delaware Basin. The Company turned 69 operated wells to production in the Midland Basin and 19 gross wells in the Delaware Basin with an average lateral length of 10,829 feet. Operated completions during the first quarter consisted of 23 Wolfcamp A wells, 20 Lower Spraberry wells, 15 Wolfcamp B wells, 11 Jo Mill wells, seven Third Bone Spring wells, six Second Bone Spring wells, five Middle Spraberry wells and one Barnett well.
FINANCIAL UPDATE
Diamondback's first quarter 2023 net income was $712 million, or $3.88 per diluted share. Adjusted net income (as defined and reconciled below) was $751 million, or $4.10 per diluted share.
First quarter 2023 net cash provided by operating activities was $1.43 billion.
During the first quarter of 2023, Diamondback spent $580 million on operated and non-operated drilling and completions, $42 million on infrastructure and environmental and $35 million on midstream, for total cash capital expenditures of $657 million.
First quarter 2023 Consolidated Adjusted EBITDA (as defined and reconciled below) was $1.49 billion. Adjusted EBITDA net of non-controlling interest (as defined and reconciled below) was $1.42 billion.
Diamondback's first quarter 2023 Free Cash Flow (as defined and reconciled below) was $646 million.
First quarter 2023 average unhedged realized prices were $73.11 per barrel of oil, $1.46 per Mcf of natural gas and $23.16 per barrel of natural gas liquids ("NGLs"), resulting in a total equivalent unhedged realized price of $49.72 per BOE.
Diamondback's cash operating costs for the first quarter of 2023 were $11.61 per BOE, including lease operating expenses ("LOE") of $5.02 per BOE, cash general and administrative ("G&A") expenses of
$0.76 per BOE, production and ad valorem taxes of $4.05 per BOE and gathering and transportation expenses of $1.78 per BOE.
As of March 31, 2023, Diamondback had $37 million in standalone cash and $589 million of borrowings outstanding under its revolving credit facility, with approximately $1.01 billion available for future borrowing under the facility and approximately $1.05 billion of total liquidity. As of April 28, 2023, Diamondback had approximately $1.5 billion of total liquidity.
DIVIDEND DECLARATIONS
Diamondback announced today that the Company's Board of Directors declared a base cash dividend of $0.80 per common share for the first quarter of 2023 payable on May 18, 2023, to stockholders of record at the close of business on May 11, 2023.
The Company's Board of Directors also declared a variable cash dividend of $0.03 per common share for the first quarter of 2023 payable on May 18, 2023, to stockholders of record at the close of business on May 11, 2023.
Future base and variable dividends remain subject to review and approval at the discretion of the Company's Board of Directors.
COMMON STOCK REPURCHASE PROGRAM
On September 15, 2021 the Board of Directors of Diamondback authorized the Company to acquire up to $2.0 billion of common stock. On July 28, 2022, Diamondback's Board of Directors approved increasing total authorized common stock repurchases to $4.0 billion. During the first quarter of 2023, Diamondback repurchased 2,530,646 shares of common stock at an average share price of $131.34 for a total cost of approximately $332 million. To date, Diamondback has repurchased 15,862,452 shares of common stock at an average share price of $121.85 for a total cost of approximately $1.9 billion. Diamondback intends to purchase common stock under the common stock repurchase program opportunistically with cash on hand, free cash flow from operations and proceeds from potential liquidity events such as the sale of assets. This repurchase program has no time limit and may be suspended from time to time, modified, extended or discontinued by the Board at any time. Purchases under the repurchase program may be made from time to time in privately negotiated transactions or open market transactions in compliance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and will be subject to market conditions, applicable legal requirements and other factors. Any common stock purchased as part of this program will be retired.
FULL YEAR 2023 GUIDANCE
Below is Diamondback's guidance for the full year 2023, which includes second quarter production, cash tax and capital guidance.
| 2023 Guidance | 2023 Guidance | |||||||
| Diamondback Energy, Inc. | Viper Energy Partners LP | |||||||
| Net production - MBOE/d | 430 - 440 | 35.25 - 38.75 | ||||||
| Oil production - MBO/d | 256 - 262 | 20.50 - 22.50 | ||||||
| Q2 2023 oil production - MBO/d (total - MBOE/d) | 258 - 261 (430 - 436) | |||||||
| Unit costs ($/BOE) | ||||||||
| Lease operating expenses, including workovers | $5.00 - $5.50 | |||||||
| G&A | ||||||||
| Cash G&A | $0.65 - $0.80 | $0.60 - $0.80 | ||||||
| Non-cash equity-based compensation | $0.40 - $0.50 | $0.10 - $0.20 | ||||||
| DD&A | $9.25 - $10.25 | $9.75 - $10.75 | ||||||
| Interest expense (net of interest income) | $1.30 - $1.40 | $3.00 - $3.50 | ||||||
| Gathering and transportation | $1.80 - $2.00 | |||||||
| Production and ad valorem taxes (% of revenue) | 7% - 8% | 7% - 8% | ||||||
| Corporate tax rate (% of pre-tax income) | 23% | 20% - 22% | ||||||
| Cash tax rate (% of pre-tax income) | 10% - 15% | |||||||
| Q2 2023 Cash taxes ($ - million) | $140 - $180 | $8.0 - $12.0 | ||||||
| Capital Budget ($ - million) | ||||||||
| Drilling, completion, capital workovers, and non-operated properties | $2,250 - $2,410 | |||||||
| Midstream (ex. equity method investments) | $80 - $100 | |||||||
| Infrastructure and environmental | $170 - $190 | |||||||
| 2023 Capital expenditures | $2,500 - $2,700 | |||||||
| Q2 2023 Capital expenditures | $675 - $725 | |||||||
| Gross horizontal wells drilled (net) | 325 - 345 (293 - 311) | |||||||
| Gross horizontal wells completed (net) | 330 - 350 (297 - 315) | |||||||
| Average lateral length (Ft.) | ~10,500' | |||||||
| FY 2023 Midland Basin well costs per lateral foot | $620 - $680 | |||||||
| FY 2023 Delaware Basin well costs per lateral foot | $900 - $1,000 | |||||||
| Midland Basin net lateral feet (%) | ~85% | |||||||
| Delaware Basin net lateral feet (%) | ~15% | |||||||
CONFERENCE CALL
Diamondback will host a conference call and webcast for investors and analysts to discuss its results for the first quarter of 2023 on Tuesday, May 2, 2023 at 8:00 a.m. CT. Access to the webcast, and replay which will be available following the call, may be found here. The live webcast of the earnings conference call will also be available via Diamondback’s website at www.diamondbackenergy.com under the “Investor Relations” section of the site.
About Diamondback Energy, Inc.
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 primarily in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding Diamondback’s: future performance; business strategy; future operations (including drilling plans and capital plans); estimates and projections of revenues, losses, costs, expenses, returns, cash flow, and financial position; reserve estimates and its ability to replace or increase reserves; anticipated benefits of strategic transactions (including acquisitions and divestitures); and plans and objectives of management (including plans for future cash flow from operations and for executing environmental strategies) are forward-looking statements. When used in this news release, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to Diamondback are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Diamondback believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond Diamondback’s control. Accordingly, forward-looking statements are not guarantees of future performance and Diamondback’s actual outcomes could differ materially from what Diamondback has expressed in its forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; the impact of public health crises, including epidemic or pandemic diseases such as the COVID-19 pandemic, and any related company or government policies or actions; actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments, including any impact of the ongoing war in Ukraine on the global energy markets and geopolitical stability; instability in the financial sector; concerns over a potential economic slowdown or recession; inflationary pressures; rising interest rates and their impact on the cost of capital; regional supply and demand factors, including delays, curtailment delays or interruptions of production, or governmental orders, rules or regulations that impose production limits; federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations; physical and transition risks relating to climate change and the risks and other factors disclosed in Diamondback’s filings with the Securities and Exchange Commission, including its Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the Securities and Exchange Commission’s web site at http://www.sec.gov.
In light of these factors, the events anticipated by Diamondback’s forward-looking statements may not occur at the time anticipated or at all. Moreover, Diamondback operates in a very competitive and rapidly changing environment and new risks emerge from time to time. Diamondback cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements made in this news release. All forward-looking statements speak only as of the date of this news release or, if earlier, as of the date they were made. Diamondback does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
| Diamondback Energy, Inc. | |||||||||||
| Condensed Consolidated Balance Sheets | |||||||||||
| (unaudited, in millions, except share amounts) | |||||||||||
| March 31, | December 31, | ||||||||||
| 2023 | 2022 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 46 | $ | 157 | |||||||
| Restricted cash | 7 | 7 | |||||||||
| Accounts receivable: | |||||||||||
| Joint interest and other, net | 148 | 104 | |||||||||
| Oil and natural gas sales, net | 606 | 618 | |||||||||
| Inventories | 69 | 67 | |||||||||
| Derivative instruments | 60 | 132 | |||||||||
| Income tax receivable | 188 | 284 | |||||||||
| Prepaid expenses and other current assets | 36 | 23 | |||||||||
| Total current assets | 1,160 | 1,392 | |||||||||
| Property and equipment: | |||||||||||
Oil and natural gas properties, full cost method of accounting ($8,711 million and $8,355 million excluded from amortization at March 31, 2023 and December 31, 2022, respectively) | 39,321 | 37,122 | |||||||||
| Other property, equipment and land | 1,431 | 1,481 | |||||||||
| Accumulated depletion, depreciation, amortization and impairment | (15,238) | (14,844) | |||||||||
| Property and equipment, net | 25,514 | 23,759 | |||||||||
| Funds held in escrow | — | 119 | |||||||||
| Equity method investments | 573 | 566 | |||||||||
| Assets held for sale | 143 | 158 | |||||||||
| Derivative instruments | 8 | 23 | |||||||||
| Deferred income taxes, net | 62 | 64 | |||||||||
| Investment in real estate, net | 86 | 86 | |||||||||
| Other assets | 43 | 42 | |||||||||
| Total assets | $ | 27,589 | $ | 26,209 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable - trade | $ | 241 | $ | 127 | |||||||
| Accrued capital expenditures | 466 | 480 | |||||||||
| Current maturities of long-term debt | 10 | 10 | |||||||||
| Other accrued liabilities | 350 | 399 | |||||||||
| Revenues and royalties payable | 716 | 619 | |||||||||
| Derivative instruments | 52 | 47 | |||||||||
| Income taxes payable | 51 | 34 | |||||||||
| Total current liabilities | 1,886 | 1,716 | |||||||||
| Long-term debt | 6,950 | 6,238 | |||||||||
| Derivative instruments | 150 | 148 | |||||||||
| Asset retirement obligations | 306 | 336 | |||||||||
| Deferred income taxes | 2,161 | 2,069 | |||||||||
| Other long-term liabilities | 13 | 12 | |||||||||
| Total liabilities | 11,466 | 10,519 | |||||||||
| Stockholders’ equity: | |||||||||||
Common stock, $0.01 par value; 400,000,000 shares authorized; 181,604,781 and 179,840,797 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 2 | 2 | |||||||||
| Additional paid-in capital | 14,502 | 14,213 | |||||||||
| Retained earnings (accumulated deficit) | 967 | 801 | |||||||||
| Accumulated other comprehensive income (loss) | (7) | (7) | |||||||||
| Total Diamondback Energy, Inc. stockholders’ equity | 15,464 | 15,009 | |||||||||
| Non-controlling interest | 659 | 681 | |||||||||
| Total equity | 16,123 | 15,690 | |||||||||
| Total liabilities and equity | $ | 27,589 | $ | 26,209 | |||||||
| Diamondback Energy, Inc. | |||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||
| (unaudited, $ in millions except per share data, shares in thousands) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Revenues: | |||||||||||
| Oil, natural gas and natural gas liquid sales | $ | 1,902 | $ | 2,389 | |||||||
| Other operating income | 23 | 19 | |||||||||
| Total revenues | 1,925 | 2,408 | |||||||||
| Costs and expenses: | |||||||||||
| Lease operating expenses | 192 | 149 | |||||||||
| Production and ad valorem taxes | 155 | 161 | |||||||||
| Gathering and transportation | 68 | 59 | |||||||||
| Depreciation, depletion, amortization and accretion | 403 | 313 | |||||||||
| General and administrative expenses | 40 | 36 | |||||||||
| Merger and integration expense | 8 | — | |||||||||
| Other operating expenses | 34 | 30 | |||||||||
| Total costs and expenses | 900 | 748 | |||||||||
| Income (loss) from operations | 1,025 | 1,660 | |||||||||
| Other income (expense): | |||||||||||
| Interest expense, net | (46) | (40) | |||||||||
| Other income (expense), net | 53 | 1 | |||||||||
| Gain (loss) on derivative instruments, net | (93) | (552) | |||||||||
| Gain (loss) on extinguishment of debt | — | (54) | |||||||||
| Income (loss) from equity investments | 14 | 9 | |||||||||
| Total other income (expense), net | (72) | (636) | |||||||||
| Income (loss) before income taxes | 953 | 1,024 | |||||||||
| Provision for (benefit from) income taxes | 207 | 221 | |||||||||
| Net income (loss) | 746 | 803 | |||||||||
| Net income (loss) attributable to non-controlling interest | 34 | 24 | |||||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | $ | 712 | $ | 779 | |||||||
| Earnings (loss) per common share: | |||||||||||
| Basic | $ | 3.88 | $ | 4.35 | |||||||
| Diluted | $ | 3.88 | $ | 4.35 | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 181,988 | 177,565 | |||||||||
| Diluted | 181,988 | 177,567 | |||||||||
| Dividends declared per share | $ | 0.83 | $ | 3.05 | |||||||
| Diamondback Energy, Inc. | |||||||||||
| Condensed Consolidated Statements of Cash Flows | |||||||||||
| (unaudited, in millions) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income (loss) | $ | 746 | $ | 803 | |||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
| Provision for (benefit from) deferred income taxes | 97 | 89 | |||||||||
| Depreciation, depletion, amortization and accretion | 403 | 313 | |||||||||
| (Gain) loss on extinguishment of debt | — | 54 | |||||||||
| (Gain) loss on derivative instruments, net | 93 | 552 | |||||||||
| Cash received (paid) on settlement of derivative instruments | 1 | (420) | |||||||||
| (Income) loss from equity investment | (14) | (9) | |||||||||
| Equity-based compensation expense | 11 | 15 | |||||||||
| Other | (34) | 14 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (36) | (403) | |||||||||
| Income tax receivable | 95 | 1 | |||||||||
| Prepaid expenses and other | — | 2 | |||||||||
| Accounts payable and accrued liabilities | (26) | (13) | |||||||||
| Income tax payable | 17 | 132 | |||||||||
| Revenues and royalties payable | 60 | 125 | |||||||||
| Other | 12 | (3) | |||||||||
| Net cash provided by (used in) operating activities | 1,425 | 1,252 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Drilling, completions and infrastructure additions to oil and natural gas properties | (622) | (418) | |||||||||
| Additions to midstream assets | (35) | (19) | |||||||||
| Property acquisitions | (880) | (284) | |||||||||
| Proceeds from sale of assets | 264 | 35 | |||||||||
| Other | (6) | (30) | |||||||||
| Net cash provided by (used in) investing activities | (1,279) | (716) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from borrowings under credit facilities | 1,696 | 79 | |||||||||
| Repayments under credit facilities | (989) | (100) | |||||||||
| Proceeds from senior notes | — | 750 | |||||||||
| Repayment of senior notes | — | (1,500) | |||||||||
| Proceeds from (repayments to) joint venture | — | 5 | |||||||||
| Premium on extinguishment of debt | — | (47) | |||||||||
| Repurchased shares under buyback program | (332) | (7) | |||||||||
| Repurchased units under buyback program | (34) | (42) | |||||||||
| Dividends paid to stockholders | (542) | (107) | |||||||||
| Distributions to non-controlling interest | (34) | (47) | |||||||||
| Other | (22) | (25) | |||||||||
| Net cash provided by (used in) financing activities | (257) | (1,041) | |||||||||
| Net increase (decrease) in cash and cash equivalents | (111) | (505) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 164 | 672 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 53 | $ | 167 | |||||||
| Diamondback Energy, Inc. | |||||||||||||||||
| Selected Operating Data | |||||||||||||||||
| (unaudited) | |||||||||||||||||
| Three Months Ended March 31, 2023 | Three Months Ended December 31, 2022 | Three Months Ended March 31, 2022 | |||||||||||||||
| Production Data: | |||||||||||||||||
| Oil (MBbls) | 22,624 | 20,803 | 20,055 | ||||||||||||||
| Natural gas (MMcf) | 47,388 | 45,020 | 42,645 | ||||||||||||||
| Natural gas liquids (MBbls) | 7,730 | 7,703 | 7,161 | ||||||||||||||
Combined volumes (MBOE)(1) | 38,252 | 36,009 | 34,324 | ||||||||||||||
| Daily oil volumes (BO/d) | 251,378 | 226,120 | 222,833 | ||||||||||||||
| Daily combined volumes (BOE/d) | 425,022 | 391,402 | 381,378 | ||||||||||||||
| Average Prices: | |||||||||||||||||
| Oil ($ per Bbl) | $ | 73.11 | $ | 80.37 | $ | 97.03 | |||||||||||
| Natural gas ($ per Mcf) | $ | 1.46 | $ | 3.20 | $ | 3.61 | |||||||||||
| Natural gas liquids ($ per Bbl) | $ | 23.16 | $ | 24.93 | $ | 40.36 | |||||||||||
| Combined ($ per BOE) | $ | 49.72 | $ | 55.76 | $ | 69.60 | |||||||||||
Oil, hedged ($ per Bbl)(2) | $ | 72.05 | $ | 79.08 | $ | 83.47 | |||||||||||
Natural gas, hedged ($ per Mcf)(2) | $ | 1.96 | $ | 3.20 | $ | 3.31 | |||||||||||
Natural gas liquids, hedged ($ per Bbl)(2) | $ | 23.16 | $ | 24.93 | $ | 40.36 | |||||||||||
Average price, hedged ($ per BOE)(2) | $ | 49.72 | $ | 55.01 | $ | 61.30 | |||||||||||
| Average Costs per BOE: | |||||||||||||||||
| Lease operating expenses | $ | 5.02 | $ | 4.47 | $ | 4.34 | |||||||||||
| Production and ad valorem taxes | 4.05 | 3.22 | 4.69 | ||||||||||||||
| Gathering and transportation expense | 1.78 | 1.86 | 1.72 | ||||||||||||||
| General and administrative - cash component | 0.76 | 0.61 | 0.61 | ||||||||||||||
| Total operating expense - cash | $ | 11.61 | $ | 10.16 | $ | 11.36 | |||||||||||
| General and administrative - non-cash component | $ | 0.29 | $ | 0.36 | $ | 0.44 | |||||||||||
| Depletion | $ | 9.96 | $ | 9.50 | $ | 8.33 | |||||||||||
| Interest expense, net | $ | 1.20 | $ | 1.03 | $ | 1.17 | |||||||||||
(1)Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
(2)Hedged prices reflect the effect of our commodity derivative transactions on our average sales prices and include gains and losses on cash settlements for matured commodity derivatives, which we do not designate for hedge accounting. Hedged prices exclude gains or losses resulting from the early settlement of commodity derivative contracts.
NON-GAAP FINANCIAL MEASURES
ADJUSTED EBITDA
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as net income (loss) attributable to Diamondback Energy, Inc., plus net income (loss) attributable to non-controlling interest ("net income (loss)") before non-cash (gain) loss on derivative instruments, net, interest expense, net, depreciation, depletion, amortization and accretion, depreciation and interest expense related to equity method investments, (gain) loss on extinguishment of debt, non-cash equity-based compensation expense, capitalized equity-based compensation expense, merger and integration expense, other non-cash transactions and provision for (benefit from) income taxes, if any. Adjusted EBITDA is not a measure of net income as determined by United States generally accepted accounting principles ("GAAP"). Management believes Adjusted EBITDA is useful because the measure allows it to more effectively evaluate the Company’s operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company adds the items listed above to net income (loss) to determine Adjusted EBITDA because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets. The Company’s computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.
The following tables present a reconciliation of the GAAP financial measure of net income (loss) attributable to Diamondback Energy, Inc. to the non-GAAP financial measure of Adjusted EBITDA:
| Diamondback Energy, Inc. | |||||||||||||||||
| Reconciliation of Net Income (Loss) to Adjusted EBITDA | |||||||||||||||||
| (unaudited, in millions) | |||||||||||||||||
| Three Months Ended March 31, 2023 | Three Months Ended December 31, 2022 | Three Months Ended March 31, 2022 | |||||||||||||||
| Net income (loss) attributable to Diamondback Energy, Inc. | $ | 712 | $ | 1,007 | $ | 779 | |||||||||||
| Net income (loss) attributable to non-controlling interest | 34 | 21 | 24 | ||||||||||||||
| Net income (loss) | 746 | 1,028 | 803 | ||||||||||||||
| Non-cash (gain) loss on derivative instruments, net | 94 | (125) | 132 | ||||||||||||||
| Interest expense, net | 46 | 37 | 40 | ||||||||||||||
| Depreciation, depletion, amortization and accretion | 403 | 365 | 313 | ||||||||||||||
| Depreciation and interest expense related to equity method investments | 18 | 16 | 14 | ||||||||||||||
| (Gain) loss on extinguishment of debt | — | 40 | 54 | ||||||||||||||
| Non-cash equity-based compensation expense | 16 | 18 | 19 | ||||||||||||||
| Capitalized equity-based compensation expense | (5) | (5) | (4) | ||||||||||||||
| Merger and integration expenses | 8 | 3 | — | ||||||||||||||
Other non-cash transactions(1) | (46) | 1 | 8 | ||||||||||||||
| Provision for (benefit from) income taxes | 207 | 261 | 221 | ||||||||||||||
| Consolidated Adjusted EBITDA | 1,487 | 1,639 | 1,600 | ||||||||||||||
| Less: Adjustment for non-controlling interest | 67 | 33 | 49 | ||||||||||||||
| Adjusted EBITDA attributable to Diamondback Energy, Inc. | $ | 1,420 | $ | 1,606 | $ | 1,551 | |||||||||||
(1) Includes a gain on sale of the Company's 10% non-operating equity investment in Gray Oak of approximately $53 million.
ADJUSTED NET INCOME
Adjusted net income is a non-GAAP financial measure equal to net income (loss) attributable to Diamondback Energy, Inc. plus net income (loss) attributable to non-controlling interest ("net income (loss)") adjusted for non-cash (gain) loss on derivative instruments, net, (gain) loss on extinguishment of debt, merger and integration expense; other non-cash transactions and related income tax adjustments, if any. The Company’s computation of adjusted net income may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts. Management believes adjusted net income helps investors in the oil and natural gas industry to measure and compare the Company's performance to other oil and natural gas companies by excluding from the calculation items that can vary significantly from company to company depending upon accounting methods, the book value of assets and other non-operational factors.
The following table presents a reconciliation of the GAAP financial measure of net income (loss) attributable to Diamondback Energy, Inc. to the non-GAAP measure of adjusted net income:
| Diamondback Energy, Inc. | |||||||||||
| Adjusted Net Income | |||||||||||
| (unaudited, $ in millions except per share data, shares in thousands) | |||||||||||
| Three Months Ended March 31, 2023 | |||||||||||
| Amounts | Amounts Per Diluted Share | ||||||||||
Net income (loss) attributable to Diamondback Energy, Inc.(1) | $ | 712 | $ | 3.88 | |||||||
| Net income (loss) attributable to non-controlling interest | 34 | 0.19 | |||||||||
Net income (loss)(1) | 746 | 4.07 | |||||||||
| Non-cash (gain) loss on derivative instruments, net | 94 | 0.52 | |||||||||
| Merger and integration expense | 8 | 0.04 | |||||||||
| Other non-cash transactions | (46) | (0.25) | |||||||||
Adjusted net income excluding above items(1) | 802 | 4.38 | |||||||||
| Income tax adjustment for above items | (12) | (0.07) | |||||||||
Adjusted net income(1) | 790 | 4.31 | |||||||||
| Less: Adjusted net income attributable to non-controlling interest | 39 | 0.21 | |||||||||
Adjusted net income attributable to Diamondback Energy, Inc.(1) | $ | 751 | $ | 4.10 | |||||||
| Weighted average common shares outstanding: | |||||||||||
| Basic | 181,988 | ||||||||||
| Diluted | 181,988 | ||||||||||
(1) The Company’s earnings (loss) per diluted share amount has been computed using the two-class method in accordance with GAAP. The two-class method is an earnings allocation which reflects the respective ownership among holders of common stock and participating securities. Diluted earnings per share using the two-class method is calculated as (i) net income attributable to Diamondback Energy, Inc, (ii) plus the reallocation of $5 million in earnings attributable to participating securities, divided by (iii) diluted weighted average common shares outstanding.
OPERATING CASH FLOW BEFORE WORKING CAPITAL CHANGES, FREE CASH FLOW AND ADJUSTED FREE CASH FLOW
Operating cash flow before working capital changes, which is a non-GAAP financial measure representing net cash provided by operating activities as determined under GAAP without regard to changes in operating assets and liabilities. The Company believes operating cash flow before working capital changes is a useful measure of an oil and natural gas company’s ability to generate cash used to fund exploration, development and acquisition activities and service debt or pay dividends. The Company also uses this measure because adjusted operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. This allows the Company to compare its operating performance with that of other companies without regard to financing methods and capital structure.
Free Cash Flow, which is a non-GAAP financial measure, is cash flow from operating activities before changes in working capital in excess of cash capital expenditures. Adjusted Free Cash Flow, which is a non-GAAP financial measure, is Free Cash Flow adjusted for early termination of commodity derivative contracts. The Company believes that Free Cash Flow and Adjusted Free Cash Flow are useful to investors as they provide measures to compare both cash flow from operating activities and additions to oil and natural gas properties across periods on a consistent basis as adjusted for non-recurring early settlements of commodity derivative contracts. These measures should not be considered as an alternative to, or more meaningful than, net cash provided by operating activities as an indicator of operating performance. The Company's computation of operating cash flow before working capital changes, Free Cash Flow and Adjusted Free Cash Flow may not be comparable to other similarly titled measures of other companies. The Company uses Free Cash Flow to reduce debt, as well as return capital to stockholders as determined by the Board of Directors.
The following tables present a reconciliation of the GAAP financial measure of net cash provided by operating activities to the non-GAAP measure of operating cash flow before working capital changes and to the non-GAAP measure of Free Cash Flow:
| Diamondback Energy, Inc. | |||||||||||
| Operating Cash Flow Before Working Capital Changes, Free Cash Flow and Adjusted Free Cash Flow | |||||||||||
| (unaudited, in millions) | |||||||||||
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Net cash provided by operating activities | $ | 1,425 | $ | 1,252 | |||||||
| Less: Changes in cash due to changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (36) | (403) | |||||||||
| Income tax receivable | 95 | 1 | |||||||||
| Prepaid expenses and other | — | 2 | |||||||||
| Accounts payable and accrued liabilities | (26) | (13) | |||||||||
| Income tax payable | 17 | 132 | |||||||||
| Revenues and royalties payable | 60 | 125 | |||||||||
| Other | 12 | (3) | |||||||||
| Total working capital changes | 122 | (159) | |||||||||
| Operating cash flow before working capital changes | 1,303 | 1,411 | |||||||||
| Drilling, completions and infrastructure additions to oil and natural gas properties | (622) | (418) | |||||||||
| Additions to midstream assets | (35) | (19) | |||||||||
| Total Cash CAPEX | (657) | (437) | |||||||||
| Free Cash Flow | 646 | 974 | |||||||||
| Early termination of derivatives | — | 135 | |||||||||
| Adjusted Free Cash Flow | $ | 646 | $ | 1,109 | |||||||
NET DEBT
The Company defines the non-GAAP measure of net debt as total debt less cash and cash equivalents. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Management uses net debt to determine the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. The Company believes this metric is useful to analysts and investors in determining the Company's leverage position because the Company has the ability to, and may decide to, use a portion of its cash and cash equivalents to reduce debt.
| Diamondback Energy, Inc. | |||||||||||||||||||||||||||||||||||
| Net Debt | |||||||||||||||||||||||||||||||||||
| (unaudited, in millions) | |||||||||||||||||||||||||||||||||||
| March 31, 2023 | Net Q1 Principal Borrowings/(Repayments) | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
Diamondback Energy, Inc.(1) | $ | 6,426 | $ | 589 | $ | 5,837 | $ | 4,340 | $ | 4,206 | $ | 4,533 | |||||||||||||||||||||||
Viper Energy Partners LP(1) | 700 | 118 | 582 | 675 | 680 | 728 | |||||||||||||||||||||||||||||
Rattler Midstream LP(a) | — | — | — | 500 | 732 | 730 | |||||||||||||||||||||||||||||
| Total debt | 7,126 | $ | 707 | 6,419 | 5,515 | 5,618 | 5,991 | ||||||||||||||||||||||||||||
| Cash and cash equivalents | (46) | (157) | (27) | (43) | (149) | ||||||||||||||||||||||||||||||
| Net debt | $ | 7,080 | $ | 6,262 | $ | 5,488 | $ | 5,575 | $ | 5,842 | |||||||||||||||||||||||||
(1) Excludes debt issuance costs, discounts, premiums and fair value hedges.
DERIVATIVES
As of April 28, 2023, the Company had the following outstanding consolidated derivative contracts, including derivative contracts at Viper Energy Partners LP. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing and Crude Oil Brent pricing and with natural gas derivative settlements based on the New York Mercantile Exchange Henry Hub pricing. When aggregating multiple contracts, the weighted average contract price is disclosed.
| Crude Oil (Bbls/day, $/Bbl) | ||||||||||||||||||||||||||||||||||||||
| Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | ||||||||||||||||||||||||||||||||
| Costless Collars - Crude Brent Oil | 6,000 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Long Put Price ($/Bbl) | $60.00 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Ceiling Price ($/Bbl) | $114.57 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
| Long Puts - WTI (Cushing) | 12,000 | 12,000 | 8,000 | — | — | — | — | |||||||||||||||||||||||||||||||
| Long Put Price ($/Bbl) | $55.00 | $55.00 | $55.00 | — | — | — | — | |||||||||||||||||||||||||||||||
| Deferred Premium ($/Bbl) | $-1.82 | $-1.80 | $-1.89 | — | — | — | — | |||||||||||||||||||||||||||||||
| Long Puts - WTI (Magellan East Houston) | 36,000 | 28,000 | 20,000 | — | — | — | — | |||||||||||||||||||||||||||||||
| Long Put Price ($/Bbl) | $54.17 | $55.00 | $55.00 | — | — | — | — | |||||||||||||||||||||||||||||||
| Deferred Premium ($/Bbl) | $-1.71 | $-1.65 | $-1.63 | — | — | — | — | |||||||||||||||||||||||||||||||
| Long Puts - Crude Brent Oil | 99,000 | 97,000 | 68,000 | 16,000 | — | — | — | |||||||||||||||||||||||||||||||
| Long Put Price ($/Bbl) | $54.04 | $54.64 | $55.00 | $55.00 | — | — | — | |||||||||||||||||||||||||||||||
| Deferred Premium ($/Bbl) | $-1.68 | $-1.63 | $-1.54 | $-1.62 | — | — | — | |||||||||||||||||||||||||||||||
| Basis Swaps - WTI (Midland) | 24,000 | 24,000 | 24,000 | — | — | — | — | |||||||||||||||||||||||||||||||
| $0.90 | $0.90 | $0.90 | — | — | — | — | ||||||||||||||||||||||||||||||||
| Natural Gas (Mmbtu/day, $/Mmbtu) | ||||||||||||||||||||||||||||||||||||||
| Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | ||||||||||||||||||||||||||||||||
| Costless Collars - Henry Hub | 330,000 | 310,000 | 310,000 | 200,000 | 200,000 | 200,000 | 200,000 | |||||||||||||||||||||||||||||||
| Long Put Price ($/Mmbtu) | $3.17 | $3.18 | $3.18 | $3.00 | $3.00 | $3.00 | $3.00 | |||||||||||||||||||||||||||||||
| Ceiling Price ($/Mmbtu) | $9.13 | $9.22 | $9.22 | $8.42 | $8.42 | $8.42 | $8.42 | |||||||||||||||||||||||||||||||
| Natural Gas Basis Swaps - Waha Hub | 350,000 | 330,000 | 330,000 | 380,000 | 380,000 | 380,000 | 380,000 | |||||||||||||||||||||||||||||||
| $-1.20 | $-1.24 | $-1.24 | $-1.18 | $-1.18 | $-1.18 | $-1.18 | ||||||||||||||||||||||||||||||||
Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com
Exhibit 99.2
LETTER TO STOCKHOLDERS ISSUED BY DIAMONDBACK ENERGY, INC.
Midland, TX (May 1, 2023)
Diamondback Stockholders,
This letter is meant to be a supplement to our earnings release and is being furnished to the Securities and Exchange Commission (SEC) and released to our stockholders simultaneously with our earnings release. The intent of this new form of communication is to increase transparency with our stockholders and add additional color as to how management is thinking about the business outside of the numbers presented in the earnings release. Instead of beginning tomorrow morning’s earnings call with prepared remarks, we will instead move straight to Q&A. I hope you enjoy this new form of stockholder communication. Please see the information regarding forward-looking statements and non-GAAP financial information included at the end of this letter.
Production:
Diamondback continued to execute in the first quarter, with oil production near the high end of our first quarter guidance and total production above the high end of our guidance. Production is expected to continue to increase in the second quarter as we will have a full quarter of contribution from our Lario acquisition in our numbers, as well as some expected organic growth. This trend is expected to continue through 2023 as we bring on large pads with high net revenue interest in our core development areas in the Northern Midland Basin. Therefore, we are guiding to second quarter production of 258 – 261 MBO/d (430 – 436 MBOE/d), and remain confident in our full year production projection of 256 – 262 MBO/d (430 – 440 MBOE/d).
Oil realizations were slightly lower than prior quarters at 96% of WTI, as WTI declined in the quarter and we had one-time true up payments for our Brent-linked marketing contracts. We still expect to realize at least 95% of WTI when WTI is at least $65 per barrel, with some quarters above that number. Gas realizations were also weaker than expected and hit by one-time items, but we expect unhedged realizations to normalize around Waha less $0.60 - $0.80 per mcf. We expect periodic continued price weakness at the Waha pricing hub through 2024, and have therefore hedged most of our price exposure.
Capital Expenditures:
Cash capex for the first quarter was $657 million. We expect capex to increase in the second quarter to $675 - $725 million as we will be paying for peak activity and well costs, primarily from the second half of the first quarter, in the second quarter. We believe well costs peaked over the last two quarters and have line of sight to meaningful decreases in the upcoming quarters. Both raw materials (including steel, diesel, sand) and service costs are now decreasing. We also expect lower completion costs in the coming quarters
through increased efficiencies with the start-up of our second simulfrac e-fleet. The majority of our wells will be completed with either a simulfrac or simulfrac e-fleet beginning in the second quarter, reducing our exposure to spot frac prices. Our operated rig count for the year peaked at 16 - 17 rigs and we expect to average 14 - 15 rigs in the second half of the year. Therefore we remain confident in our $2.5 - $2.7 billion annual capex budget with our capex burden decreasing in the second half of the year.
Operating Costs:
Lease operating expenses were lower than guidance expectations in the first quarter, primarily due to power costs that were lower than expectations. We have fixed price contracts covering a significant percentage of our expected power use to reduce our exposure to power price spikes which are particularly prevalent in the summer months in Texas. Cash G&A and gathering, processing and transportation costs continue to trend in line with expectations. Production and ad valorem taxes as a percentage of revenue were slightly higher than expectations in the first quarter as commodity prices decreased through the quarter, but we expect that to level out through the remainder of the year at current strip prices.
Balance Sheet:
Total debt increased to just over $7.1 billion, and net debt increased to just over $7 billion in the first quarter, with net debt to last twelve months adjusted EBITDA of 1.0x. This quarterly increase is primarily attributable to the cash portion of the Lario acquisition, which closed in the first quarter. Also, our fourth quarter base plus variable dividend payment of $542 million plus our first quarter share repurchases of $332 million were significant calls on cash in the quarter. We expect net debt to decrease in the second quarter through Free Cash Flow generation, proceeds from asset sales closing in the quarter, a smaller cash dividend relative to the first quarter (as highlighted below) and the continued reduction of our income tax receivable.
Return of Capital:
We generated $646 million of Free Cash Flow in the first quarter. With our commitment to return at least 75% of our Free Cash Flow to stockholders on a quarterly basis, this means we are going to return $485 million of Free Cash Flow for the quarter. Of this, $147 million is attributable to our quarterly base dividend of $0.80 / share. Secondly, we repurchased $332 million worth of stock in the first quarter, which encompasses the majority of our post-dividend Free Cash Flow. This leaves $6 million, or $0.03 per share, for our variable dividend for the quarter.
The first quarter is exactly the reason we elected to implement a return of capital program with flexibility to allocate capital between share repurchases and a variable dividend. During the banking crisis and Silicon Valley Bank collapse, we took advantage of volatility and repurchased a significant amount of stock. In total, we repurchased 2.53 million shares for $332 million ($131.34 / share average) in the first quarter. Since the inception of our share repurchase program, we have repurchased 15.86 million shares for $1.93 billion ($121.85 / share average).
Other Business:
We continue to make progress on our non-core asset sale target that we increased to at least $1.0 billion by the end of 2023. We closed both the sale of our 10% interest in the Gray Oak crude oil pipeline and the divestiture of approximately 4,900 net acres in Ward and Winkler counties in the first quarter. In April, we closed the divestiture of approximately 19,000 net acres in Glasscock County. We have executed on transactions involving gross proceeds of $773 million. As a result, we expect to meet or exceed our divestiture target through the sale of other midstream or upstream non-core assets throughout the remainder of this year. As shown in our investor presentation, we own significant interests in multiple midstream joint ventures.
Thank you for your interest in Diamondback Energy,
Travis D. Stice
Chairman of the Board and Chief Executive Officer
Important Information Regarding Forward-Looking Statements and Non-GAAP Financial Measures
This letter contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks, uncertainties and assumptions. Important information regarding forward-looking statements is included in our earnings release furnished to the SEC simultaneously with this letter.
This letter also contains certain Non-GAAP financial measures. For definitions and reconciliations of the Non-GAAP financial measures to the most directly comparable GAAP financial measures, please see our earnings release furnished to the SEC simultaneously with this letter.
Investor Contact:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com