10-Q – 2026-08-05 – fang-20260630.htm

Future cash flows are subject to a number of variables, including the level of our oil and natural gas production and the volatility of commodity prices. In order to mitigate volatility in oil and natural gas prices, we enter into derivative contracts as discussed further in Note 12— Derivatives of the notes to the condensed consolidated financial statements of this report. The level of our hedging activity and duration of the financial instruments employed depend on our desired cash flow protection, available hedge prices, the magnitude of our capital program and our operating strategy.

37

Table of Contents

Cash Flow

Our cash flows for the six months ended June 30, 2026, and 2025 are presented below:

Six Months Ended June 30,
2026 2025
(In millions)
Net cash provided by (used in) operating activities $ 5,417  $ 4,032 
Net cash provided by (used in) investing activities (2,053) (5,632)
Net cash provided by (used in) financing activities (3,006) 1,657 
Net increase (decrease) in cash $ 358  $ 57 

Operating Activities

The increase in operating cash flows for the six months ended June 30, 2026, compared to the same period in 2025 primarily resulted from (i) $1.7 billion in additional revenues, excluding sales of purchased oil, (ii) an increase of $198 million in cash received on settlements of derivatives, and (iii) a decrease of $98 million in cash paid for taxes. These were partially offset by (i) changes in working capital accounts, excluding taxes payable, of $295 million due primarily to higher prices received for oil sales accrued at June 30, 2026 compared to June 30, 2025 and the timing of when payments are made or received, and (ii) higher cash operating expenses, excluding purchased oil expense, of approximately $241 million. See “ — Results of Operations ” for discussion of significant changes in our revenues and expenses.

Investing Activities

The majority of our net cash used in investing activities during the six months ended June 30, 2026, was for drilling and completion costs incurred in conjunction with our development program as well as the acquisition of properties and equipment. These cash expenditures were partially offset by the proceeds from the Viper Non-Permian Divestiture. See Note 4— Acquisitions and Divestitures for further discussion of the Viper Non-Permian Divestiture.

The majority of our net cash used in investing activities during the six months ended June 30, 2025, was for drilling and completion costs incurred in conjunction with our development program as well as the acquisition of properties and equipment for the Double Eagle Acquisition.

Capital Expenditure Activities

Our capital expenditures excluding acquisitions and equity method investments (on a cash basis) were as follows for the specified period:

Six Months Ended June 30,
2026 2025
(In millions)
Operated drilling and completion additions to oil and natural gas properties (1)
$ (1,626) $ (1,571)
Non-operated additions to oil and natural gas properties and other (303) (235)

Total $ (1,929) $ (1,806)

(1) See “— Transactions and Recent Developments—Upstream Operations ” above for additional detail on wells drilled and turned to production during the three and six months ended June 30, 2026.

Financing Activities

During the six months ended June 30, 2026, net cash used in financing activities was primarily attributable to (i) $1.1 billion for the repayment of our 2025 Term Loan and the Viper 2025 Term Loan, (ii) $917 million of repurchases as part of our and Viper’s share repurchase programs, (iii) $697 million in repurchases of senior notes, (iv) $609 million of dividends paid to stockholders, including dividend equivalent rights, (v) $279 million in dividends paid to non-controlling interest, (vi) $10 million in repayments on our credit facilities, net of borrowings, and (vii) various other individually insignificant costs. These cash outflows were partially offset by $589 million in proceeds from the Secondary Offering.

38

Table of Contents

During the six months ended June 30, 2025, net cash provided by financing activities was primarily attributable to (i) $1.5 billion of proceeds from the 2025 Term Loan Agreement, (ii) $1.2 billion of proceeds from the issuance of the 5.550% senior notes due in 2035, (iii) $1.2 billion in proceeds from Viper’s public offering of Class A common stock, and (iv) $659 million in borrowings under our credit facilities, net of repayments. These cash inflows were partially offset by (i) $983 million of repurchases as part of our and Viper’s share repurchase programs, (ii) $900 million in repayments in borrowings on a previously outstanding term loan, (iii) $584 million of dividends paid to our stockholders, including dividend equivalent rights, (iv) $244 million in repurchases of senior notes, (v) $177 million in dividends paid to non-controlling interest, and (vi) various other individually insignificant costs.

Capital Resources

Our working capital requirements are primarily supported by our cash and cash equivalents and available borrowings under the Revolving Credit Facility. We may draw on the Revolving Credit Facility to meet short-term cash requirements, or issue debt or equity securities as part of our longer-term liquidity and capital management program. Because of the alternatives available to us, we believe that our short-term and long-term liquidity are adequate to fund not only our current operations, but also our near-term and long-term funding requirements.

Revolving Credit Facilities

Diamondback’s Revolving Credit Facility

As of June 30, 2026, our Revolving Credit Facility, which matures on June 12, 2031, had a maximum credit amount of $3.0 billion, which was fully available for future borrowings.

Viper’s Revolving Credit Facility

The Viper Revolving Credit Facility, which matures on June 12, 2031, provides for a commitment amount of $2.0 billion. As of June 30, 2026, the Viper Revolving Credit Facility had $95 million in outstanding borrowings and approximately $1.9 billion available for future borrowings.

For additional discussion of our revolving credit facilities as of June 30, 2026, see Note 8— Debt of the notes to the condensed consolidated financial statements.

Capital Requirements

2026 Capital Spending Plan

In support of our long-term strategy, we expect to continue adjusting our development activity in response to market conditions, including converting a portion of our drilled but uncompleted well inventory into producing wells. We expect our inventory of development locations to enhance operational flexibility by providing the ability to adjust capital allocation, activity levels and development timing as market conditions evolve. As previously announced, in the second quarter of 2026, our board of directors approved increasing our 2026 capital budget guidance by 4% to approximately $3.90 billion, which includes $3.31 billion for operated horizontal drilling and completions.

The amount and timing of our capital expenditures are largely discretionary and within our control. We could choose to defer a portion of these planned capital expenditures depending on a variety of factors, including but not limited to the success of our drilling activities, prevailing and anticipated prices for oil and natural gas, the availability of necessary equipment, infrastructure and capital, the receipt and timing of required regulatory permits and approvals, seasonal conditions, drilling and acquisition costs and the level of participation by other interest owners. We are currently operating 17 drilling rigs and five completion crews. We will continue monitoring commodity prices and overall market conditions and can adjust our rig cadence and our capital expenditure budget in response to changes in commodity prices and overall market conditions.

Debt Instruments

As of June 30, 2026, our debt, including the debt of Viper, consisted of approximately $12.7 billion in aggregate outstanding principal amount of senior notes and $95 million in aggregate outstanding borrowings under revolving credit facilities.

39

Table of Contents

Other Contractual Obligations and Commitments

We entered into a fixed price contract for the purchase of electrical power from 2028 through 2034 during the three and six months ended June 30, 2026. As a result, we expect to incur additional future electrical power costs of approximately $519 million in the aggregate through 2034. See Note 15— Commitments and Contingencies of the notes to the condensed consolidated financial statements for further information regarding this commitment.

Return of Capital Commitment

Beginning in the second quarter of 2026, our board of directors approved the removal of our minimum 50% return of capital quarterly commitment to allow the Company more discretion in the allocation of Free Cash Flow. Further, on July 30, 2026, our board of directors declared a base cash dividend for the second quarter of 2026 of $1.10 per share of common stock.

On July 30, 2026, our board of directors approved an increase in our common stock repurchase program, from $8.0 billion to $16.0 billion, excluding the 1% U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. corporations enacted as part of the IRA. Since the inception of the stock repurchase program through July 31, 2026, we have repurchased an aggregate of 43.0 million shares of our common stock for a total cost of $6.1 billion, which includes $814 million for the repurchase of 5.0 million shares from SGF, excluding excise tax, leaving approximately $9.9 billion for future repurchases under such stock repurchase program.

Subject to regulatory restrictions and other factors discussed elsewhere in this report, we intend to continue to purchase shares under this repurchase program opportunistically with available funds primarily from cash flow from operations and liquidity events such as the sale of assets while maintaining sufficient liquidity to fund our capital expenditure programs; however, the stock repurchase program is at the discretion of our board of directors and can be amended, terminated or suspended at any time. Repurchases may be executed in privately negotiated or open-market transactions, consistent with Rule 10b-18 under the Securities Exchange Act of 1934 and other applicable requirements. All shares repurchased will be retired. See Note 9— Stockholders’ Equity and Earnings (Loss) Per Share of the notes to the condensed consolidated financial statements for further discussion of our stock repurchase program.

Guarantor Financial Information

Diamondback E&P is the sole guarantor under the indentures governing the outstanding Guaranteed Senior Notes.

Guarantees are “full and unconditional,” as that term is used in Regulation S-X, Rule 3-10(b)(3), except that such guarantees will be released or terminated in certain circumstances set forth in the indentures governing the Guaranteed Senior Notes, such as, with certain exceptions, (i) in the event Diamondback E&P (or all or substantially all of its assets) is sold or disposed of, (ii) in the event Diamondback E&P ceases to be a guarantor of or otherwise be an obligor under certain other indebtedness, and (iii) in connection with any covenant defeasance, legal defeasance or satisfaction and discharge of the relevant indenture.

Diamondback E&P’s guarantees of the Guaranteed Senior Notes are senior unsecured obligations and rank senior in right of payment to any of its future subordinated indebtedness, equal in right of payment with all of its existing and future senior indebtedness, including its obligations under the Revolving Credit Facility and effectively subordinated to any of its existing and future secured indebtedness, to the extent of the value of the collateral securing such indebtedness.

The rights of holders of the Guaranteed Senior Notes against Diamondback E&P may be limited under the U.S. Bankruptcy Code or state fraudulent transfer or conveyance law. Each guarantee contains a provision intended to limit Diamondback E&P’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its guarantee to be a fraudulent conveyance. However, there can be no assurance as to what standard a court will apply in making a determination of the maximum liability of Diamondback E&P. Moreover, this provision may not be effective to protect the guarantee from being voided under fraudulent conveyance laws. There is a possibility that the entire guarantee may be set aside, in which case the entire liability may be extinguished.

40

Table of Contents

The following tables present summarized financial information for Diamondback Energy, Inc., as the parent, and Diamondback E&P, as the guarantor subsidiary, on a combined basis after elimination of (i) intercompany transactions and balances between the parent and the guarantor subsidiary, and (ii) equity in earnings from and investments in any subsidiary that is a non-guarantor. The information is presented in accordance with the requirements of Rule 13-01 under the SEC’s Regulation S-X. The financial information may not necessarily be indicative of results of operations or financial position had the guarantor subsidiary operated as an independent entity.

June 30, 2026 December 31, 2025
Summarized Balance Sheets: (In millions)
Assets:
Current assets $ 1,111  $ 844 
Property and equipment, net $ 18,674  $ 19,670 
Other noncurrent assets $ 190  $ 142 
Liabilities:
Current liabilities $ 4,615  $ 3,304 
Intercompany accounts payable, non-guarantor subsidiary $ 8,524  $ 6,970 
Long-term debt $ 9,388  $ 11,540 
Other noncurrent liabilities $ 1,913  $ 2,186 

Six Months Ended June 30, 2026
Summarized Statement of Operations: (In millions)
Revenues $ 4,052 
Income (loss) from operations (1)
$ (119)
Net income (loss) $ (402)

(1) During the six months ended June 30, 2026, the Company recorded a non-cash impairment that is reflected in the summarized results of the guarantor group. This impairment is not indicative of cash flows available for debt service.

Critical Accounting Estimates

There have been no changes in our critical accounting estimates from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Pronouncements

See Note 2— Summary of Significant Accounting Policies of the notes to the condensed consolidated financial statements for recent accounting pronouncements not yet adopted, if any.

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Other than the repayment and termination of the Viper 2025 Term Loan in the first quarter of 2026 and the repayment and termination of the 2025 Term Loan in the second quarter of 2026, information regarding market risks for the six months ended June 30, 2026 did not differ materially from that disclosed in Part II. Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2025.

ITEM 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures . Under the direction of our Chief Executive Officer and Chief Financial Officer, we have established disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, as amended, or the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls
41

Table of Contents

and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

As of June 30, 2026, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2026, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting . Viper is in the process of integrating the entities acquired in the Sitio Acquisition. As a result of these integration activities, certain controls will be evaluated and may be changed. Except as noted above, there have not been any changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

42

Table of Contents

PART II. OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS

Diamondback has elected to use a $1 million threshold for disclosing certain environmental proceedings to which a federal, state or local governmental authority is a party .

We are a party to various routine legal proceedings, disputes and claims arising in the ordinary course of our business, including those that arise from interpretation of federal and state laws and regulations affecting the natural gas and crude oil industry, personal injury claims, title disputes, royalty disputes, contract claims, employment claims, claims alleging violations of antitrust laws, contamination claims relating to oil and natural gas exploration and development and environmental claims, including claims involving assets previously sold to third parties and no longer part of our current operations. While the ultimate outcome of the pending proceedings, disputes or claims and any resulting impact on us, cannot be predicted with certainty, we believe that none of these matters, if ultimately decided adversely, will have a material adverse effect on our financial condition, results of operations or cash flows. See Note 15— Commitments and Contingencies of the notes to the condensed consolidated financial statements.

ITEM 1A.    RISK FACTORS

Our business faces many risks. Any of the risks discussed in this report and our other SEC filings could have a material impact on our business, financial position or results of operations. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also materially impair our business operations, financial condition or future results.

As of the date of this filing, we continue to be subject to the risk factors previously disclosed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 25, 2026, and in subsequent filings we make with the SEC. There have been no material changes in our risk factors from those described in our Annual Report on Form 10-K for the year ended December 31, 2025.

ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None.

Issuer Repurchases of Equity Securities

Our common stock repurchase activity for the three months ended June 30, 2026, and amounts that may yet be purchased as of June 30, 2026 were as follows:

Period Total Number of Shares Purchased (1)
Average Price Paid Per Share (2)(4)
Total Number of Shares Purchased as Part of Publicly Announced Plan Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan (3)(4)

(In millions, except per share amounts, shares in thousands)
April 1, 2026 - April 30, 2026 — $ 189.10  — $ 2,117 
May 1, 2026 - May 31, 2026 108 $ 193.45  108 $ 2,096 
June 1, 2026 - June 30, 2026 648 $ 185.50  648 $ 1,976 
Total 756 $ 186.63  756

(1) Includes 444 shares of common stock repurchased from executives in order to satisfy tax withholding requirements. Such shares are canceled and retired immediately upon repurchase.
(2) The average price paid per share includes any commissions paid to repurchase stock.
(3) On July 30, 2026, our board of directors approved an increase in our common stock repurchase authorization from $8.0 billion to $16.0 billion, excluding excise tax. As of July 31, 2026, approximately $9.9 billion remains available for future repurchases under such stock repurchase program, excluding excise tax. The stock repurchase program has no time limit and may be suspended, modified, or discontinued by the board of directors at any time.
(4) The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. All dollar amounts presented exclude such excise taxes, as applicable.

43

Table of Contents

ITEM 5.    OTHER INFORMATION

Trading Arrangement s

None of the Company’s directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended June 30, 2026.

Executive Retirement Policy

On August 1, 2026, the compensation committee (the “Compensation Committee”) of the board of directors of the Company adopted the Diamondback Energy, Inc. Executive Retirement Policy (the “Executive Retirement Policy”), effective as of August 1, 2026, to provide for certain payments and benefits upon the qualifying retirement of an eligible employee of the Company, Diamondback E&P LLC, or any other subsidiary or affiliate designated by the Compensation Committee, including the following named executive officers of the Company: Kaes Van’t Hof (Chief Executive Officer), Jere W. Thompson III (Chief Financial Officer), Teresa L. Dick (Executive Vice President of Accounting), Daniel Wesson (Chief Operating Officer) and Matt Zmigrosky (Chief Legal and Administrative Officer).

Pursuant to the Executive Retirement Policy, a qualifying retirement generally occurs when a participant voluntarily retires from employment on or after the date on which (i) the participant has attained at least 55 years of age, (ii) the sum of the participant’s age and years of employment equals or exceeds 65, and (iii) the participant has completed at least 10 years of employment; in addition, the participant must provide at least six months’ advance written notice of his or her retirement.

Upon a qualifying retirement, a participant will be entitled to:

• full accelerated vesting of all outstanding and unvested restricted stock units held by the participant that were granted on or after the effective date of the Executive Retirement Policy;
• continued eligibility to vest in all outstanding performance stock units held by the participant, based on actual achievement of applicable performance goals, for up to 12 months following the participant’s retirement date (or 24 months for participants with at least 15 years of employment);
• a prorated target annual bonus for the year in which the retirement date occurs; and
• a lump-sum cash payment equal to the participant’s monthly COBRA premium multiplied by the lesser of 18 and the number of months (including full and partial months) between the participant’s retirement date and the date on which the participant attains age 65.

The foregoing qualifying retirement payments and benefits are subject to the participant’s execution of a general release of claims and continued compliance with applicable restrictive covenants.

The foregoing description of the Executive Retirement Policy does not purport to be complete and is qualified in its entirety by reference to the text of the Executive Retirement Policy, a copy of which is filed as an exhibit to this report.

44

Table of Contents

ITEM 6.    EXHIBITS

EXHIBIT INDEX
Exhibit Number Description

3.1 Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 001-35700, filed by the Company with the SEC on June 14, 2023).

3.2 Certificate of Amendment No. 1 to Second Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 001-35700, filed by the Company with the SEC on September 10, 2024).

10.1# Seventeenth Amendment to Second Amended and Restated Credit Agreement, dated as of June 12, 202 6 , by and among the Company, as borrower, the lenders and other parties party thereto, and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No 001-35700, filed by the Company with the SEC on June 1 5 , 202 6 ).

10.2# First Amendment to Credit Agreement, dated as of June 12, 2026, by and among, New Viper, Former Viper, Viper Energy Partners LP, as borrower, the lenders and guarantors party thereto, and Wells Fargo Bank, National Association, as Administrative Agent (incorporated by reference to Exhibit 10.1 of New Viper’s Form 8-K (File No. 001-42807), filed on June 15, 2026).

10.3+* D iamondback Energy, Inc. Executive Retirement Policy

22.1 List of Issuers and Subsidiary Guarantors (incorporated by reference to Exhibit 22.1 to the Form 10-Q, File No. 001-35700, filed by the Company with the SEC on August 5, 2021).

31.1* Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

31.2* Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

32.1** Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

32.2** Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.

101 The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements.

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

______________

*
Filed herewith.

**
The certifications attached as Exhibit 32.1 and Exhibit 32.2 accompany this Quarterly Report on Form 10-Q pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed “filed” by the Registrant for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
# Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K promulgated by the SEC. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
+
Management contract, compensatory plan or arrangement.

45

Table of Contents

SIGNATURES

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: August 5, 2026 /s/ Kaes Van’t Hof
Kaes Van’t Hof
Chief Executive Officer
(Principal Executive Officer)

Date: August 5, 2026 /s/ Jere W. Thompson III
Jere W. Thompson III
Chief Financial Officer
(Principal Financial Officer)

46