QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | ||||||||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
(NASDAQ Global Select Market) |
☒ | Accelerated Filer | ☐ | ||||||||||||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | ||||||||||||||||||
Emerging Growth Company |
Page | |||||
Argus WTI Houston | Grade of oil that serves as a benchmark price for oil at Houston, Texas. | ||||
Argus WTI Midland | Grade of oil that serves as a benchmark price for oil at Midland, Texas. | ||||
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. | ||||
BO | One barrel of crude oil. | ||||
BO/d | One BO per day. | ||||
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. | ||||
Brent | A major trading classification of light sweet oil that serves as a benchmark price for oil worldwide. | ||||
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. | ||||
Gross acres or gross wells | The total acres or wells, as the case may be, in which a working interest is owned. | ||||
Henry Hub | Natural gas gathering point that serves as a benchmark price for natural gas futures on the NYMEX. | ||||
Horizontal wells | Wells drilled directionally horizontal to allow for development of structures not reachable through traditional vertical drilling mechanisms. | ||||
MBbl | One thousand barrels of crude oil and other liquid hydrocarbons. | ||||
MBOE | One thousand BOE. | ||||
MBOE/d | One thousand BOE per day. | ||||
Mcf | One thousand cubic feet of natural gas. | ||||
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. | ||||
MMcf | Million cubic feet of natural gas. | ||||
Net acres | The sum of the fractional working interest owned in gross acres. | ||||
Oil and natural gas properties | Tracts of land consisting of properties to be developed for oil and natural gas resource extraction. | ||||
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. | ||||
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. | ||||
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. | ||||
Waha Hub | Natural gas gathering point that serves as a benchmark price for natural gas at western Texas and New Mexico. | ||||
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. | ||||
WTI | West Texas Intermediate, a light sweet blend of oil produced from fields in western Texas and is a grade of oil that serves as a benchmark for oil on the NYMEX. | ||||
ASU | Accounting Standards Update. | ||||
Equity Plan | The Company’s 2021 Amended and Restated 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. | ||||
LIBOR | The London interbank offered rate. | ||||
Nasdaq | The Nasdaq Global Select Market. | ||||
NYMEX | New York Mercantile Exchange. | ||||
OPEC | Organization of the Petroleum Exporting Countries. | ||||
SEC | United States Securities and Exchange Commission. | ||||
Securities Act | The Securities Act of 1933, as amended. | ||||
Guaranteed Senior Notes | The outstanding senior notes issued by Diamondback Energy, Inc. under indentures where Diamondback E&P is the sole guarantor, consisting of the 3.250% Senior Notes due 2026, 3.500% Senior Notes due 2029, 3.125% Senior Notes due 2031, 6.250% Senior Notes due 2033, 4.400% Senior Notes due 2051, 4.250% Senior Notes due 2052 and 6.250% Senior Notes due 2053. | ||||
SOFR | The secured overnight financing rate. | ||||
TSR | Total stockholder return of the Company’s common stock. | ||||
Wells Fargo | Wells Fargo Bank, National Association. |
Diamondback Energy, Inc. and Subsidiaries | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(Unaudited) | |||||||||||
September 30, | December 31, | ||||||||||
2023 | 2022 | ||||||||||
(In millions, except par values and share data) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable: | |||||||||||
Joint interest and other, net | |||||||||||
Oil and natural gas sales, net | |||||||||||
Inventories | |||||||||||
Derivative instruments | |||||||||||
Income tax receivable | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment: | |||||||||||
Oil and natural gas properties, full cost method of accounting ($ | |||||||||||
Other property, equipment and land | |||||||||||
Accumulated depletion, depreciation, amortization and impairment | ( | ( | |||||||||
Property and equipment, net | |||||||||||
Funds held in escrow | |||||||||||
Equity method investments | |||||||||||
Assets held for sale | |||||||||||
Derivative instruments | |||||||||||
Deferred income taxes, net | |||||||||||
Investment in real estate, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders’ Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable - trade | $ | $ | |||||||||
Accrued capital expenditures | |||||||||||
Current maturities of long-term debt | |||||||||||
Other accrued liabilities | |||||||||||
Revenues and royalties payable | |||||||||||
Derivative instruments | |||||||||||
Income taxes payable | |||||||||||
Total current liabilities | |||||||||||
Long-term debt | |||||||||||
Derivative instruments | |||||||||||
Asset retirement obligations | |||||||||||
Deferred income taxes | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 14) | |||||||||||
Stockholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings (accumulated deficit) | |||||||||||
Accumulated other comprehensive income (loss) | ( | ( | |||||||||
Total Diamondback Energy, Inc. stockholders’ equity | |||||||||||
Non-controlling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions, except per share amounts, shares in thousands) | |||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Oil sales | $ | $ | $ | $ | |||||||||||||||||||
Natural gas sales | |||||||||||||||||||||||
Natural gas liquid sales | |||||||||||||||||||||||
Sales of purchased oil | |||||||||||||||||||||||
Other operating income | |||||||||||||||||||||||
Total revenues | |||||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Lease operating expenses | |||||||||||||||||||||||
Production and ad valorem taxes | |||||||||||||||||||||||
Gathering and transportation | |||||||||||||||||||||||
Depreciation, depletion, amortization and accretion | |||||||||||||||||||||||
Purchased oil expense | |||||||||||||||||||||||
General and administrative expenses | |||||||||||||||||||||||
Merger and integration expenses | |||||||||||||||||||||||
Other operating expenses | |||||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||||
Income (loss) from operations | |||||||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense), net | ( | ( | |||||||||||||||||||||
Gain (loss) on derivative instruments, net | ( | ( | ( | ( | |||||||||||||||||||
Gain (loss) on extinguishment of debt | ( | ( | ( | ||||||||||||||||||||
Income (loss) from equity investments | |||||||||||||||||||||||
Total other income (expense), net | ( | ( | ( | ( | |||||||||||||||||||
Income (loss) before income taxes | |||||||||||||||||||||||
Provision for (benefit from) income taxes | |||||||||||||||||||||||
Net income (loss) | |||||||||||||||||||||||
Net income (loss) attributable to non-controlling interest | |||||||||||||||||||||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ | $ | $ | $ | |||||||||||||||||||
Earnings (loss) per common share: | |||||||||||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||||||||||
Diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Dividends declared per share | $ | $ | $ | $ | |||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interest | Total | ||||||||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
($ in millions, shares in thousands) | |||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2022 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||
Unit-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Distribution equivalent rights payments | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash paid for tax withholding on vested equity awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchased shares under buyback program | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchased units under buyback programs | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Common shares issued for acquisition | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Dividend paid | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options and issuance of restricted stock units and awards | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Change in ownership of consolidated subsidiaries, net | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance March 31, 2023 | ( | ||||||||||||||||||||||||||||||||||||||||
Distribution equivalent rights payments | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash paid for tax withholding on vested equity awards | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchased shares under buyback program | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchased units under buyback programs | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Dividend paid | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options and vesting of restricted stock units and awards | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Change in ownership of consolidated subsidiaries, net | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance June 30, 2023 | ( | ||||||||||||||||||||||||||||||||||||||||
Distribution equivalent rights payments | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Cash paid for tax withholding on vested equity awards | (1) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchased shares under buyback program | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||
Repurchased units under buyback programs | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
Dividend paid | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Exercise of stock options and vesting of restricted stock units and awards | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Change in ownership of consolidated subsidiaries, net | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Balance September 30, 2023 | $ | $ | $ | $ | ( | $ | $ |
Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Non-Controlling Interest | Total | |||||||||||||||||||||||||||||||
Shares | Amount | ||||||||||||||||||||||||||||||||||
($ in millions, shares in thousands) | |||||||||||||||||||||||||||||||||||
Balance December 31, 2021 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
Unit-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Distribution equivalent rights payments | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Cash paid for tax withholding on vested equity awards | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchased shares under buyback program | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchased units under buyback programs | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividend paid | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Exercise of stock options and issuance of restricted stock units and awards | — | — | — | ||||||||||||||||||||||||||||||||
Change in ownership of consolidated subsidiaries, net | — | — | ( | — | |||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ||||||||||||||||||||||||||||||||
Balance March 31, 2022 | ( | ||||||||||||||||||||||||||||||||||
Unit-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Distribution equivalent rights payments | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Cash paid for tax withholding on vested equity awards | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Repurchased shares under buyback program | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchased units under buyback programs | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividend paid | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Exercise of stock options and vesting of restricted stock units and awards | — | — | — | — | — | ||||||||||||||||||||||||||||||
Change in ownership of consolidated subsidiaries, net | — | — | ( | — | |||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ||||||||||||||||||||||||||||||||
Balance June 30, 2022 | ( | ||||||||||||||||||||||||||||||||||
Unit-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Distribution equivalent rights payments | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Repurchased shares under buyback program | ( | — | ( | — | — | ( | |||||||||||||||||||||||||||||
Repurchased units under buyback programs | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Common shares issued for acquisition | — | — | ( | ||||||||||||||||||||||||||||||||
Distributions to non-controlling interest | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Dividend paid | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Change in ownership of consolidated subsidiaries, net | — | — | ( | — | |||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | ||||||||||||||||||||||||||||||||
Balance September 30, 2022 | $ | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | $ | |||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Provision for (benefit from) deferred income taxes | |||||||||||
Depreciation, depletion, amortization and accretion | |||||||||||
(Gain) loss on extinguishment of debt | |||||||||||
(Gain) loss on derivative instruments, net | |||||||||||
Cash received (paid) on settlement of derivative instruments | ( | ( | |||||||||
(Income) loss from equity investment | ( | ( | |||||||||
Equity-based compensation expense | |||||||||||
Other | ( | ||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Income tax receivable | ( | ||||||||||
Prepaid expenses and other | ( | ||||||||||
Accounts payable and accrued liabilities | ( | ||||||||||
Income tax payable | |||||||||||
Revenues and royalties payable | |||||||||||
Other | ( | ( | |||||||||
Net cash provided by (used in) operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Drilling, completions and infrastructure additions to oil and natural gas properties | ( | ( | |||||||||
Additions to midstream assets | ( | ( | |||||||||
Property acquisitions | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Other | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings under credit facilities | |||||||||||
Repayments under credit facilities | ( | ( | |||||||||
Proceeds from senior notes | |||||||||||
Repayment of senior notes | ( | ( | |||||||||
Proceeds from (repayments to) joint venture | ( | ||||||||||
Premium on extinguishment of debt | ( | ||||||||||
Repurchased shares under buyback program | ( | ( | |||||||||
Repurchased units under buyback program | ( | ( | |||||||||
Dividends paid to stockholders | ( | ( | |||||||||
Distributions to non-controlling interest | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ( | |||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Oil sales | $ | $ | $ | $ | |||||||||||||||||||
Natural gas sales | |||||||||||||||||||||||
Natural gas liquid sales | |||||||||||||||||||||||
Total oil, natural gas and natural gas liquid revenues | |||||||||||||||||||||||
Sales of purchased oil | |||||||||||||||||||||||
Midstream and marketing services | |||||||||||||||||||||||
Total revenue from contracts with customers | $ | $ | $ | $ |
Three Months Ended September 30, 2023 | Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Midland Basin | Delaware Basin | Other | Total | Midland Basin | Delaware Basin | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Oil sales | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Natural gas sales | |||||||||||||||||||||||||||||||||||||||||||||||
Natural gas liquid sales | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Midland Basin | Delaware Basin | Other | Total | Midland Basin | Delaware Basin | Other | Total | ||||||||||||||||||||||||||||||||||||||||
(In millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Oil sales | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||
Natural gas sales | |||||||||||||||||||||||||||||||||||||||||||||||
Natural gas liquid sales | |||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ |
Consideration: | |||||
Shares of Diamondback common stock issued at closing | |||||
Closing price per share of Diamondback common stock on the closing date | $ | ||||
Fair value of Diamondback common stock issued | $ | ||||
Cash consideration | |||||
Total consideration (including fair value of Diamondback common stock issued) | $ |
Total consideration | $ | ||||
Fair value of liabilities assumed: | |||||
Other long-term liabilities | |||||
Fair value of assets acquired: | |||||
Oil and natural gas properties | |||||
Inventories | |||||
Other property, equipment and land | |||||
Amount attributable to assets acquired | |||||
Net assets acquired and liabilities assumed | $ |
Consideration: | |||||
Shares of Diamondback common stock issued at closing | |||||
Closing price per share of Diamondback common stock on the closing date | $ | ||||
Fair value of Diamondback common stock issued | $ | ||||
Cash consideration | |||||
Total consideration (including fair value of Diamondback common stock issued) | $ |
Total consideration | $ | ||||
Fair value of liabilities assumed: | |||||
Other long-term liabilities | |||||
Fair value of assets acquired: | |||||
Oil and natural gas properties | |||||
Inventories | |||||
Other property, equipment and land | |||||
Amount attributable to assets acquired | |||||
Net assets acquired and liabilities assumed | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||||||||||
Income (loss) from operations | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) | $ | $ | $ | $ | |||||||||||||||||||
Basic earnings (loss) per common share | $ | $ | $ | $ | |||||||||||||||||||
Diluted earnings (loss) per common share | $ | $ | $ | $ |
September 30, | December 31, | ||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
Oil and natural gas properties: | |||||||||||
Subject to depletion | $ | $ | |||||||||
Not subject to depletion | |||||||||||
Gross oil and natural gas properties | |||||||||||
Accumulated depletion | ( | ( | |||||||||
Accumulated impairment | ( | ( | |||||||||
Oil and natural gas properties, net | |||||||||||
Other property, equipment and land | |||||||||||
Accumulated depreciation, amortization, accretion and impairment | ( | ( | |||||||||
Total property and equipment, net | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
Asset retirement obligations, beginning of period | $ | $ | |||||||||
Additional liabilities incurred | |||||||||||
Liabilities acquired | |||||||||||
Liabilities settled and divested | ( | ( | |||||||||
Accretion expense | |||||||||||
Revisions in estimated liabilities | ( | ||||||||||
Asset retirement obligations, end of period | |||||||||||
Less current portion(1) | |||||||||||
Asset retirement obligations - long-term | $ | $ |
September 30, | December 31, | ||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
$ | $ | ||||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Unamortized discount costs | ( | ( | |||||||||
Unamortized premium costs | |||||||||||
Unamortized basis adjustment of dedesignated interest rate swap agreements(1) | ( | ( | |||||||||
Revolving credit facility | |||||||||||
Viper revolving credit facility | |||||||||||
Viper | |||||||||||
Total debt, net | |||||||||||
Less: current maturities of long-term debt | |||||||||||
Total long-term debt | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Net income (loss) attributable to the Company | $ | $ | $ | $ | |||||||||||||||||||
Change in ownership of consolidated subsidiaries | ( | ( | ( | ( | |||||||||||||||||||
Change from net income (loss) attributable to the Company's stockholders and transfers to non-controlling interest | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
($ in millions, except per share amounts, shares in thousands) | |||||||||||||||||||||||
Net income (loss) attributable to common stock | $ | $ | $ | $ | |||||||||||||||||||
Less: distributed and undistributed earnings allocated to participating securities(1) | |||||||||||||||||||||||
Net income (loss) attributable to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic weighted average common shares outstanding | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Weighted-average potential common shares issuable | |||||||||||||||||||||||
Diluted weighted average common shares outstanding | |||||||||||||||||||||||
Basic net income (loss) attributable to common stock | $ | $ | $ | $ | |||||||||||||||||||
Diluted net income (loss) attributable to common stock | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
General and administrative expenses | $ | $ | $ | $ | |||||||||||||||||||
Equity-based compensation capitalized pursuant to full cost method of accounting for oil and natural gas properties | $ | $ | $ | $ | |||||||||||||||||||
Restricted Stock Units | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at December 31, 2022 | $ | ||||||||||
Granted | $ | ||||||||||
Vested | ( | $ | |||||||||
Forfeited | ( | $ | |||||||||
Unvested at September 30, 2023 | $ |
Performance Restricted Stock Units | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at December 31, 2022 | $ | ||||||||||
Granted | $ | ||||||||||
Forfeited | ( | $ | |||||||||
Unvested at September 30, 2023(1) | $ |
March 2023 | July 2023 | ||||||||||
Grant-date fair value | $ | $ | |||||||||
Risk-free rate | % | % | |||||||||
Company volatility | % | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions, except for tax rate) | |||||||||||||||||||||||
Provision for (benefit from) income taxes | $ | $ | $ | $ | |||||||||||||||||||
Effective income tax rate | % | % | % | % |
Swaps | Collars | ||||||||||||||||||||||
Settlement Month | Settlement Year | Type of Contract | Bbls/MMBtu Per Day | Index | Weighted Average Differential | Weighted Average Floor Price | Weighted Average Ceiling Price | ||||||||||||||||
OIL | |||||||||||||||||||||||
Oct. - Dec. | 2023 | Basis Swap(1) | Argus WTI Midland | $ | $ | $ | |||||||||||||||||
Jan. - Dec. | 2024 | Basis Swap(1) | Argus WTI Midland | $ | $ | $ | |||||||||||||||||
Jan. - Jun. | 2024 | Costless Collar | WTI Cushing | $ | $ | $ | |||||||||||||||||
Jan. - Dec. | 2024 | Roll Swap | WTI | $ | $ | $ | |||||||||||||||||
NATURAL GAS | |||||||||||||||||||||||
Oct. - Dec. | 2023 | Costless Collar | Henry Hub | $ | $ | $ | |||||||||||||||||
Jan. - Dec. | 2024 | Costless Collar | Henry Hub | $ | $ | $ | |||||||||||||||||
Oct. - Dec. | 2023 | Basis Swap(1) | Waha Hub | $( | $ | $ | |||||||||||||||||
Jan. - Dec. | 2024 | Basis Swap(1) | Waha Hub | $( | $ | $ | |||||||||||||||||
Jan. - Dec. | 2025 | Basis Swap(1) | Waha Hub | $( | $ | $ |
Settlement Month | Settlement Year | Type of Contract | Bbls Per Day | Index | Strike Price | Deferred Premium | ||||||||||||||
OIL | ||||||||||||||||||||
Oct. - Dec. | 2023 | Put | Brent | $ | $ | |||||||||||||||
Oct. - Dec. | 2023 | Put | Argus WTI Houston | $ | $ | |||||||||||||||
Oct. - Dec. | 2023 | Put | WTI Cushing | $ | $ | |||||||||||||||
Jan. - Mar. | 2024 | Put | Brent | $ | $ | |||||||||||||||
Jan. - Mar. | 2024 | Put | Argus WTI Houston | $ | $ | |||||||||||||||
Jan. - Mar. | 2024 | Put | WTI Cushing | $ | $ | |||||||||||||||
Apr. - Jun. | 2024 | Put | Brent | $ | $ | |||||||||||||||
Apr. - Jun. | 2024 | Put | Argus WTI Houston | $ | $ | |||||||||||||||
Apr. - Jun. | 2024 | Put | WTI Cushing | $ | $ | |||||||||||||||
Jul. - Sep. | 2024 | Put | Brent | $ | $ | |||||||||||||||
Jul. - Sep. | 2024 | Put | Argus WTI Houston | $ | $ | |||||||||||||||
Oct. - Dec. | 2024 | Put | Brent | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Gain (loss) on derivative instruments, net: | |||||||||||||||||||||||
Commodity contracts | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Interest rate swaps | ( | ( | ( | ( | |||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net cash received (paid) on settlements: | |||||||||||||||||||||||
Commodity contracts(1) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Interest rate swaps | ( | ||||||||||||||||||||||
Total | $ | ( | $ | ( | $ | ( | $ | ( |
As of September 30, 2023 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Gross Fair Value | Gross Amounts Offset in Balance Sheet | Net Fair Value Presented in Balance Sheet | |||||||||||||||
(In millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Current assets- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Non-current assets- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Non-current assets- Other assets: | ||||||||||||||||||||
Investment | $ | $ | $ | $ | $ | $ | ||||||||||||||
Liabilities: | ||||||||||||||||||||
Current liabilities- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ | ||||||||||||||
Non-current liabilities- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ |
As of December 31, 2022 | ||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total Gross Fair Value | Gross Amounts Offset in Balance Sheet | Net Fair Value Presented in Balance Sheet | |||||||||||||||
(In millions) | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Current assets- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Non-current assets- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Liabilities: | ||||||||||||||||||||
Current liabilities- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ | ||||||||||||||
Non-current liabilities- Derivative instruments: | ||||||||||||||||||||
Commodity derivative instruments | $ | $ | $ | $ | $ | ( | $ | |||||||||||||
Interest rate swaps | $ | $ | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||
Carrying | Carrying | ||||||||||||||||||||||
Value | Fair Value | Value | Fair Value | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Debt | $ | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid (received) for income taxes | $ | $ | |||||||||
Supplemental disclosure of non-cash transactions: | |||||||||||
Accrued capital expenditures included in accounts payable and accrued expenses | $ | $ | |||||||||
Common stock issued for acquisitions | $ | $ | |||||||||
Equity method investment received in exchange for contributed assets | $ | $ | |||||||||
Upstream | All Other | Eliminations | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Three Months Ended September 30, 2023: | |||||||||||||||||||||||
Third-party revenues | $ | $ | $ | — | $ | ||||||||||||||||||
Intersegment revenues | — | ( | — | ||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ | ||||||||||||||||||
Depreciation, depletion, amortization and accretion | $ | $ | $ | $ | |||||||||||||||||||
Income (loss) from operations | $ | $ | $ | ( | $ | ||||||||||||||||||
Interest expense, net | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Other income (expense) | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Provision for (benefit from) income taxes | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to non-controlling interest | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ | $ | $ | ( | $ | ||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||
Total assets | $ | $ | $ | ( | $ |
Upstream | All Other | Eliminations | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Three Months Ended September 30, 2022: | |||||||||||||||||||||||
Third-party revenues | $ | $ | $ | — | $ | ||||||||||||||||||
Intersegment revenues | — | ( | — | ||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ | ||||||||||||||||||
Depreciation, depletion, amortization and accretion | $ | $ | $ | $ | |||||||||||||||||||
Income (loss) from operations | $ | $ | $ | ( | $ | ||||||||||||||||||
Interest expense, net | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other income (expense) | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Provision for (benefit from) income taxes | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to non-controlling interest | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ | $ | $ | ( | $ | ||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||
Total assets | $ | $ | $ | ( | $ |
Upstream | All Other | Eliminations | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Nine Months Ended September 30, 2023: | |||||||||||||||||||||||
Third-party revenues | $ | $ | $ | — | $ | ||||||||||||||||||
Intersegment revenues | — | ( | — | ||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ | ||||||||||||||||||
Depreciation, depletion, amortization and accretion | $ | $ | $ | $ | |||||||||||||||||||
Income (loss) from operations | $ | $ | $ | ( | $ | ||||||||||||||||||
Interest expense, net | $ | ( | $ | $ | $ | ( | |||||||||||||||||
Other income (expense) | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Provision for (benefit from) income taxes | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to non-controlling interest | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ | $ | $ | ( | $ | ||||||||||||||||||
As of September 30, 2023: | |||||||||||||||||||||||
Total assets | $ | $ | $ | ( | $ |
Upstream | All Other | Eliminations | Total | ||||||||||||||||||||
(In millions) | |||||||||||||||||||||||
Nine Months Ended September 30, 2022: | |||||||||||||||||||||||
Third-party revenues | $ | $ | $ | — | $ | ||||||||||||||||||
Intersegment revenues | — | ( | — | ||||||||||||||||||||
Total revenues | $ | $ | $ | ( | $ | ||||||||||||||||||
Depreciation, depletion, amortization and accretion | $ | $ | $ | $ | |||||||||||||||||||
Income (loss) from operations | $ | $ | $ | ( | $ | ||||||||||||||||||
Interest expense, net | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other income (expense) | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Provision for (benefit from) income taxes | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to non-controlling interest | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ | $ | $ | ( | $ | ||||||||||||||||||
As of December 31, 2022: | |||||||||||||||||||||||
Total assets | $ | $ | $ | ( | $ |
Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Drilled | Completed(1) | Drilled | Completed(2) | ||||||||||||||||||||||||||||||||||||||||||||
Area: | Gross | Net | Gross | Net | Gross | Net | Gross | Net | |||||||||||||||||||||||||||||||||||||||
Midland Basin | 79 | 69 | 73 | 70 | 235 | 215 | 213 | 201 | |||||||||||||||||||||||||||||||||||||||
Delaware Basin | 7 | 6 | 1 | 1 | 31 | 27 | 38 | 35 | |||||||||||||||||||||||||||||||||||||||
Total | 86 | 75 | 74 | 71 | 266 | 242 | 251 | 236 |
As of September 30, 2023 | |||||||||||||||||||||||||||||||||||
Vertical Wells | Horizontal Wells | Total | |||||||||||||||||||||||||||||||||
Area: | Gross | Net | Gross | Net | Gross | Net | |||||||||||||||||||||||||||||
Midland Basin | 2,667 | 2,525 | 2,219 | 2,048 | 4,886 | 4,573 | |||||||||||||||||||||||||||||
Delaware Basin | 39 | 36 | 700 | 649 | 739 | 685 | |||||||||||||||||||||||||||||
Total | 2,706 | 2,561 | 2,919 | 2,697 | 5,625 | 5,258 |
Three Months Ended | |||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||
Revenues (In millions): | |||||||||||
Oil sales | $ | 1,997 | $ | 1,708 | |||||||
Natural gas sales | 80 | 48 | |||||||||
Natural gas liquid sales | 188 | 140 | |||||||||
Total oil, natural gas and natural gas liquid revenues | $ | 2,265 | $ | 1,896 | |||||||
Production Data: | |||||||||||
Oil (MBbls) | 24,482 | 23,946 | |||||||||
Natural gas (MMcf) | 49,423 | 50,809 | |||||||||
Natural gas liquids (MBbls) | 8,943 | 8,528 | |||||||||
Combined volumes (MBOE)(1) | 41,662 | 40,942 | |||||||||
Daily oil volumes (BO/d) | 266,109 | 263,143 | |||||||||
Daily combined volumes (BOE/d) | 452,848 | 449,912 | |||||||||
Average Prices: | |||||||||||
Oil ($ per Bbl) | $ | 81.57 | $ | 71.33 | |||||||
Natural gas ($ per Mcf) | $ | 1.62 | $ | 0.94 | |||||||
Natural gas liquids ($ per Bbl) | $ | 21.02 | $ | 16.42 | |||||||
Combined ($ per BOE) | $ | 54.37 | $ | 46.31 | |||||||
Oil, hedged ($ per Bbl)(2) | $ | 80.51 | $ | 70.41 | |||||||
Natural gas, hedged ($ per Mcf)(2) | $ | 1.62 | $ | 1.08 | |||||||
Natural gas liquids, hedged ($ per Bbl)(2) | $ | 21.02 | $ | 16.42 | |||||||
Average price, hedged ($ per BOE)(2) | $ | 53.74 | $ | 45.94 |
Three Months Ended | |||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||
Oil (MBbls) | 59 | % | 58 | % | |||||||
Natural gas (MMcf) | 20 | % | 21 | % | |||||||
Natural gas liquids (MBbls) | 21 | % | 21 | % | |||||||
100 | % | 100 | % |
Three Months Ended September 30, 2023 | Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
Midland Basin | Delaware Basin | Other(1) | Total | Midland Basin | Delaware Basin | Other(1) | Total | ||||||||||||||||||||||||||||||||||||||||
Production Data: | |||||||||||||||||||||||||||||||||||||||||||||||
Oil (MBbls) | 19,400 | 5,058 | 24 | 24,482 | 18,528 | 5,410 | 8 | 23,946 | |||||||||||||||||||||||||||||||||||||||
Natural gas (MMcf) | 34,661 | 14,696 | 66 | 49,423 | 35,515 | 15,232 | 62 | 50,809 | |||||||||||||||||||||||||||||||||||||||
Natural gas liquids (MBbls) | 6,705 | 2,232 | 6 | 8,943 | 6,326 | 2,197 | 5 | 8,528 | |||||||||||||||||||||||||||||||||||||||
Total (MBOE) | 31,882 | 9,739 | 41 | 41,662 | 30,773 | 10,146 | 23 | 40,942 |
Three Months Ended | |||||||||||
(In millions) | September 30, 2023 | June 30, 2023 | |||||||||
Sales of purchased oil | $ | 59 | $ | — | |||||||
Purchased oil expense | 59 | — | |||||||||
Net sales of purchased oil | $ | — | $ | — |
Three Months Ended | |||||||||||
(In millions) | September 30, 2023 | June 30, 2023 | |||||||||
Other operating income | $ | 16 | $ | 23 |
Three Months Ended | |||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
Lease operating expenses | $ | 226 | $ | 5.42 | $ | 200 | $ | 4.88 |
Three Months Ended | |||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
Production taxes | $ | 108 | $ | 2.59 | $ | 87 | $ | 2.12 | |||||||||||||||
Ad valorem taxes | 10 | 0.24 | 61 | 1.49 | |||||||||||||||||||
Total production and ad valorem expense | $ | 118 | $ | 2.83 | $ | 148 | $ | 3.61 | |||||||||||||||
Production taxes as a % of oil, natural gas and natural gas liquids revenue | 4.8 | % | 4.6 | % |
Three Months Ended | |||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
Gathering and transportation | $ | 73 | $ | 1.75 | $ | 68 | $ | 1.66 |
Three Months Ended | |||||||||||
(In millions, except BOE amounts) | September 30, 2023 | June 30, 2023 | |||||||||
Depletion of proved oil and natural gas properties | $ | 426 | $ | 410 | |||||||
Depreciation and amortization of other property and equipment | 12 | 16 | |||||||||
Other amortization | — | 1 | |||||||||
Asset retirement obligation accretion | 4 | 5 | |||||||||
Depreciation, depletion, amortization and accretion | $ | 442 | $ | 432 | |||||||
Oil and natural gas properties depletion rate per BOE | $ | 10.23 | $ | 10.01 | |||||||
Depreciation, depletion, amortization and accretion per BOE | $ | 10.61 | $ | 10.55 |
Three Months Ended | |||||||||||||||||||||||
September 30, 2023 | June 30, 2023 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
General and administrative expenses | $ | 21 | $ | 0.51 | $ | 21 | $ | 0.51 | |||||||||||||||
Non-cash stock-based compensation | 13 | 0.31 | 16 | 0.39 | |||||||||||||||||||
Total general and administrative expenses | $ | 34 | $ | 0.82 | $ | 37 | $ | 0.90 |
Three Months Ended | |||||||||||
(In millions) | September 30, 2023 | June 30, 2023 | |||||||||
Merger and integration expenses | $ | 1 | $ | 2 | |||||||
Other operating expenses | $ | 47 | $ | 32 |
Three Months Ended | |||||||||||
(In millions) | September 30, 2023 | June 30, 2023 | |||||||||
Gain (loss) on derivative instruments, net | $ | (76) | $ | (189) | |||||||
Net cash received (paid) on settlements | $ | (24) | $ | (39) |
Three Months Ended | |||||||||||
(In millions) | September 30, 2023 | June 30, 2023 | |||||||||
Interest expense, net | $ | (41) | $ | (51) | |||||||
Other income (expense), net | $ | 37 | $ | (21) | |||||||
Gain (loss) on extinguishment of debt | $ | — | $ | (4) | |||||||
Income (loss) from equity investments | $ | 9 | $ | 16 |
Three Months Ended | |||||||||||
(In millions) | September 30, 2023 | June 30, 2023 | |||||||||
Provision for (benefit from) income taxes | $ | 276 | $ | 165 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Revenues (In millions): | |||||||||||
Oil sales | $ | 5,359 | $ | 5,988 | |||||||
Natural gas sales | 197 | 714 | |||||||||
Natural gas liquid sales | 507 | 856 | |||||||||
Total oil, natural gas and natural gas liquid revenues | $ | 6,063 | $ | 7,558 | |||||||
Production Data: | |||||||||||
Oil (MBbls) | 71,052 | 60,813 | |||||||||
Natural gas (MMcf) | 147,620 | 131,356 | |||||||||
Natural gas liquids (MBbls) | 25,201 | 22,177 | |||||||||
Combined volumes (MBOE)(1) | 120,856 | 104,883 | |||||||||
Daily oil volumes (BO/d) | 260,264 | 222,758 | |||||||||
Daily combined volumes (BOE/d) | 442,696 | 384,187 | |||||||||
Average Prices: | |||||||||||
Oil ($ per Bbl) | $ | 75.42 | $ | 98.47 | |||||||
Natural gas ($ per Mcf) | $ | 1.33 | $ | 5.44 | |||||||
Natural gas liquids ($ per Bbl) | $ | 20.12 | $ | 38.60 | |||||||
Combined ($ per BOE) | $ | 50.17 | $ | 72.06 | |||||||
Oil, hedged ($ per Bbl)(2) | $ | 74.41 | $ | 89.39 | |||||||
Natural gas, hedged ($ per Mcf)(2) | $ | 1.54 | $ | 4.43 | |||||||
Natural gas liquids, hedged ($ per Bbl)(2) | $ | 20.12 | $ | 38.60 | |||||||
Average price, hedged ($ per BOE)(2) | $ | 49.83 | $ | 65.54 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Oil (MBbls) | 59 | % | 58 | % | |||||||
Natural gas (MMcf) | 20 | % | 21 | % | |||||||
Natural gas liquids (MBbls) | 21 | % | 21 | % | |||||||
100 | % | 100 | % |
Nine Months Ended September 30, 2023 | Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||
Midland Basin | Delaware Basin | Other(1) | Total | Midland Basin | Delaware Basin | Other(2) | Total | ||||||||||||||||||||||||||||||||||||||||
Production Data: | |||||||||||||||||||||||||||||||||||||||||||||||
Oil (MBbls) | 55,648 | 15,360 | 44 | 71,052 | 43,344 | 17,370 | 99 | 60,813 | |||||||||||||||||||||||||||||||||||||||
Natural gas (MMcf) | 103,724 | 43,716 | 180 | 147,620 | 86,198 | 44,817 | 341 | 131,356 | |||||||||||||||||||||||||||||||||||||||
Natural gas liquids (MBbls) | 18,889 | 6,303 | 9 | 25,201 | 15,323 | 6,805 | 49 | 22,177 | |||||||||||||||||||||||||||||||||||||||
Total (MBOE) | 91,824 | 28,949 | 83 | 120,856 | 73,033 | 31,645 | 205 | 104,883 |
Nine Months Ended September 30, | |||||||||||
(In millions) | 2023 | 2022 | |||||||||
Sales of purchased oil | $ | 59 | $ | — | |||||||
Purchased oil expense | 59 | — | |||||||||
Net sales of purchased oil | $ | — | $ | — |
Nine Months Ended September 30, | |||||||||||
(In millions) | 2023 | 2022 | |||||||||
Other operating income | $ | 62 | $ | 55 |
Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
Lease operating expenses | $ | 618 | $ | 5.11 | $ | 491 | $ | 4.68 |
Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
Production taxes | $ | 287 | $ | 2.37 | $ | 384 | $ | 3.66 | |||||||||||||||
Ad valorem taxes | 134 | 1.11 | 111 | 1.06 | |||||||||||||||||||
Total production and ad valorem expense | $ | 421 | $ | 3.48 | $ | 495 | $ | 4.72 | |||||||||||||||
Production taxes as a % of oil, natural gas and natural gas liquids revenue | 4.7 | % | 5.1 | % |
Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
Gathering and transportation | $ | 209 | $ | 1.73 | $ | 191 | $ | 1.82 |
Nine Months Ended September 30, | |||||||||||
(In millions, except BOE amounts) | 2023 | 2022 | |||||||||
Depletion of proved oil and natural gas properties | $ | 1,217 | $ | 908 | |||||||
Depreciation and amortization of other property and equipment | 45 | 58 | |||||||||
Other amortization | 2 | 3 | |||||||||
Asset retirement obligation accretion | 13 | 10 | |||||||||
Depreciation, depletion, amortization and accretion | $ | 1,277 | $ | 979 | |||||||
Oil and natural gas properties depletion rate per BOE | $ | 10.07 | $ | 8.66 | |||||||
Depreciation, depletion, amortization and accretion per BOE | $ | 10.57 | $ | 9.33 |
Nine Months Ended September 30, | |||||||||||||||||||||||
2023 | 2022 | ||||||||||||||||||||||
(In millions, except per BOE amounts) | Amount | Per BOE | Amount | Per BOE | |||||||||||||||||||
General and administrative expenses | $ | 71 | $ | 0.59 | $ | 67 | $ | 0.64 | |||||||||||||||
Non-cash stock-based compensation | 40 | 0.33 | 42 | 0.40 | |||||||||||||||||||
Total general and administrative expenses | $ | 111 | $ | 0.92 | $ | 109 | $ | 1.04 |
Nine Months Ended September 30, | |||||||||||
(In millions) | 2023 | 2022 | |||||||||
Merger and integration expenses | $ | 11 | $ | 11 | |||||||
Other operating expenses | $ | 113 | $ | 85 |
Nine Months Ended September 30, | |||||||||||
(In millions) | 2023 | 2022 | |||||||||
Gain (loss) on derivative instruments, net | $ | (358) | $ | (677) | |||||||
Net cash received (paid) on settlements(1) | $ | (62) | $ | (816) |
Nine Months Ended September 30, | |||||||||||
(In millions) | 2023 | 2022 | |||||||||
Interest expense, net | $ | (138) | $ | (122) | |||||||
Other income (expense), net | $ | 69 | $ | (3) | |||||||
Gain (loss) on extinguishment of debt | $ | (4) | $ | (59) | |||||||
Income (loss) from equity investments | $ | 39 | $ | 56 |
Nine Months Ended September 30, | |||||||||||
(In millions) | 2023 | 2022 | |||||||||
Provision for (benefit from) income taxes | $ | 648 | $ | 913 |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
Net cash provided by (used in) operating activities | $ | 4,296 | $ | 4,884 | |||||||
Net cash provided by (used in) investing activities | (1,859) | (1,952) | |||||||||
Net cash provided by (used in) financing activities | (1,771) | (3,570) | |||||||||
Net increase (decrease) in cash | $ | 666 | $ | (638) |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
(In millions) | |||||||||||
Drilling, completions and non-operated additions to oil and natural gas properties(1) | $ | 1,826 | $ | 1,203 | |||||||
Infrastructure additions to oil and natural gas properties | 122 | 124 | |||||||||
Additions to midstream assets | 104 | 69 | |||||||||
Total | $ | 2,052 | $ | 1,396 |
September 30, 2023 | December 31, 2022 | ||||||||||
Summarized Balance Sheets: | (In millions) | ||||||||||
Assets: | |||||||||||
Current assets | $ | 1,490 | $ | 1,191 | |||||||
Property and equipment, net | $ | 20,482 | $ | 18,252 | |||||||
Other noncurrent assets | $ | 30 | $ | 164 | |||||||
Liabilities: | |||||||||||
Current liabilities | $ | 1,966 | $ | 1,547 | |||||||
Intercompany accounts payable, non-guarantor subsidiary | $ | 2,102 | $ | 2,253 | |||||||
Long-term debt | $ | 5,540 | $ | 5,647 | |||||||
Other noncurrent liabilities | $ | 2,686 | $ | 2,509 |
Nine Months Ended September 30, 2023 | |||||
Summarized Statement of Operations: | (In millions) | ||||
Revenues | $ | 5,251 | |||
Income (loss) from operations | $ | 2,737 | |||
Net income (loss) | $ | 1,719 |
Period | Total Number of Shares Purchased(1) | Average Price Paid Per Share(2) | 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) | ||||||||||||||||||||||||||
July 1, 2023 - July 31, 2023 | 398 | $ | 136.40 | 398 | $ | 1,764 | ||||||||||||||||||||
August 1, 2023 - August 31, 2023 | 10 | $ | 145.17 | 9 | $ | 1,763 | ||||||||||||||||||||
September 1, 2023 - September 30, 2023 | — | $ | — | — | $ | 1,763 | ||||||||||||||||||||
Total | 408 | $ | 136.61 | 407 |
* | 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. | ||||
DIAMONDBACK ENERGY, INC. | ||||||||
Date: | November 8, 2023 | /s/ Travis D. Stice | ||||||
Travis D. Stice | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) | ||||||||
Date: | November 8, 2023 | /s/ Kaes Van’t Hof | ||||||
Kaes Van’t Hof | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
Date: | November 8, 2023 | /s/ Travis D. Stice | |||||||||
Travis D. Stice | |||||||||||
Chief Executive Officer |
Date: | November 8, 2023 | /s/ Kaes Van't Hof | |||||||||
Kaes Van't Hof | |||||||||||
Chief Financial Officer |
Date: | November 8, 2023 | /s/ Travis D. Stice | |||||||||
Travis D. Stice | |||||||||||
Chief Executive Officer |
Date: | November 8, 2023 | /s/ Kaes Van't Hof | |||||||||
Kaes Van't Hof | |||||||||||
Chief Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Oil and natural gas properties, amortization excluded | $ 8,239 | $ 8,355 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Shares authorized (in shares) | 400,000,000 | 400,000,000 |
Shares issued (in shares) | 178,815,302 | 179,840,797 |
Shares outstanding (in shares) | 178,815,302 | 179,840,797 |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Organization and Description of the Business Diamondback Energy, Inc., together with its subsidiaries (collectively referred to as “Diamondback” or the “Company” unless the context otherwise requires), is an independent oil and natural gas company currently focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. As of September 30, 2023, the wholly owned subsidiaries of Diamondback include Diamondback E&P LLC (“Diamondback E&P”), a Delaware limited liability company, Viper Energy Partners GP LLC, a Delaware limited liability company (“Viper’s General Partner”), Rattler Midstream GP LLC, a Delaware limited liability company (“Rattler’s GP”), Rattler Midstream LP, a Delaware limited partnership (“Rattler”) and QEP Resources, Inc. (“QEP”), a Delaware corporation. Rattler Merger On August 24, 2022 (the “Effective Date”), the Company completed the merger with Rattler pursuant to which the Company acquired all of the approximately 38.51 million publicly held outstanding common units of Rattler in exchange for approximately 4.35 million shares of the Company’s common stock (the “Rattler Merger”). Rattler continued as the surviving entity. Following the Rattler Merger, the Company owns all of Rattler’s outstanding common units and Class B units, and Rattler GP remains the general partner of Rattler. Following the closing of the Rattler Merger, Rattler’s common units were delisted from Nasdaq and Rattler filed a certification on Form 15 with the SEC requesting the deregistration of its common units and suspension of Rattler’s reporting obligations under the Exchange Act. The Rattler Merger was accounted for as a non-cash equity transaction resulting in increases to common stock of $44 thousand, additional paid-in-capital of $344 million, merger and integration expense of $11 million and a decrease in noncontrolling interests in consolidated subsidiaries of $344 million. For periods prior to the Effective Date, the results of operations attributable to the non-controlling interest in Rattler are presented within equity and net income and are shown separately from the equity and net income attributable to the Company. Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries after all significant intercompany balances and transactions have been eliminated upon consolidation. The Company has one reportable segment, the upstream segment. Diamondback’s publicly traded subsidiary Viper Energy Partners LP (“Viper”) is consolidated in the Company’s financial statements. As of September 30, 2023, the Company owned approximately 57% of Viper’s total units outstanding. The Company’s wholly owned subsidiary, Viper Energy Partners GP LLC, is the general partner of Viper. The results of operations attributable to the non-controlling interest in Viper are presented within equity and net income and are shown separately from the equity and net income attributable to the Company. These condensed consolidated financial statements have been prepared by the Company without audit, pursuant to the rules and regulations of the SEC. They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to SEC rules and regulations, although the Company believes the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10–Q should be read in conjunction with the Company’s most recent Annual Report on Form 10–K for the fiscal year ended December 31, 2022, which contains a summary of the Company’s significant accounting policies and other disclosures. Reclassifications Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had an immaterial effect on the previously reported total assets, total liabilities, stockholders’ equity, results of operations or cash flows.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates Certain amounts included in or affecting the Company’s condensed consolidated financial statements and related disclosures must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the condensed consolidated financial statements are prepared. These estimates and assumptions affect the amounts the Company reports for assets and liabilities and the Company’s disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements. Actual results could differ from those estimates. Making accurate estimates and assumptions is particularly difficult in the oil and natural gas industry given the challenges resulting from volatility in oil and natural gas prices. For instance, the war in Ukraine and Israel-Hamas war, rising interest rates, global supply chain disruptions, concerns about a potential economic downturn or recession, recent measures to combat persistent inflation and instability in the financial sector have contributed to recent economic and pricing volatility. The financial results of companies in the oil and natural gas industry have been impacted materially as a result of these events and changing market conditions. Such circumstances generally increase uncertainty in the Company’s accounting estimates, particularly those involving financial forecasts. The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, fair value estimates of derivative instruments, the fair value determination of acquired assets and liabilities assumed and estimates of income taxes, including deferred tax valuation allowances. Net Sales of Purchased Oil The Company enters into pipeline capacity commitments in order to secure available transportation capacity from the Company's areas of production for its commodities. Beginning in the third quarter of 2023, the Company has also entered into purchase transactions with third parties and separate sale transactions with third parties to satisfy certain of its unused oil pipeline capacity commitments. Revenues and expenses from these transactions are generally presented on a gross basis in the captions “Sales of purchased oil” and “Purchased oil expense” in the accompanying condensed consolidated statements of operations as the Company acts as a principal in the transaction by assuming both the risks and rewards of ownership, including credit risk, of the oil volumes purchased and the responsibility to deliver the oil volumes sold. See Note 3—Revenue from Contracts with Customers for additional information. Recent Accounting Pronouncements Recently Adopted Pronouncements In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This update required the acquirer in a business combination to record contract assets and liabilities following Topic 606 – “Revenue from Contracts with Customers” at acquisition as if it had originated the contract, rather than at fair value. The Company adopted this update effective January 1, 2023. The adoption of this update did not have a material impact on its financial position, results of operations or liquidity. Accounting Pronouncements Not Yet Adopted The Company considers the applicability and impact of all ASUs. ASUs not discussed above were assessed and determined to be either not applicable, the effects of adoption are not expected to be material or are clarifications of ASUs previously disclosed.
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REVENUE FROM CONTRACTS WITH CUSTOMERS |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE FROM CONTRACTS WITH CUSTOMERS | REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from Contracts with Customers The following tables present the Company’s revenue from contracts with customers:
The following tables present the Company’s revenue from oil, natural gas, and natural gas liquids disaggregated by basin:
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ACQUISITIONS AND DIVESTITURES |
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Acquisitions And Divestitures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS AND DIVESTITURES | ACQUISITIONS AND DIVESTITURES 2023 Activity Deep Blue Acquisition and Divestiture of Water Assets On September 1, 2023, the Company closed on a joint venture agreement with Five Point Energy LLC (“Five Point”) to form Deep Blue Midland Basin LLC (“Deep Blue”). At closing, the Company contributed certain treated water, fresh water and salt water disposal assets (the “Water Assets”) with a net carrying value of $681 million and Five Point contributed $251 million in cash, including customary closing adjustments, to Deep Blue. In exchange for these contributions, Deep Blue issued the Company a one-time cash distribution of approximately $516 million and issued to the Company a 30% equity ownership and voting interest, and issued to Five Point a 70% equity ownership and voting interest. Under a separate agreement with Deep Blue, the Company is continuing to operate the Water Assets on a short-term basis before transferring operations to Deep Blue, which is anticipated to happen in 2024. Contingent upon the successful transfer of operations, the Company will receive approximately $47 million in cash to be contributed by Five Point in 2024. This contingent consideration does not meet the criteria to be accounted for as a derivative. As such, at September 30, 2023, approximately $43 million has been recorded as a receivable in the condensed consolidated balance sheet for the fair value of the additional consideration to be received when operation of the Water Assets transfers to Deep Blue. The Company recorded its 30% equity interest in Deep Blue at fair value based on the cash consideration contributed by Five Point to Deep Blue in exchange for its 70% equity ownership and the estimated fair value of contingent consideration to be contributed by Five Point in future years. As of September 30, 2023, the Company’s equity method investment in Deep Blue has a carrying value equal to its initial fair value of $126 million and is included in the caption “Equity method investments” in the condensed consolidated balance sheet. The Company’s proportionate share of the income or loss from Deep Blue will be recognized on a two-month lag. For the three and nine months ended September 30, 2023, the Company recognized a $2 million loss on the sale of its Water Assets, which is included in the caption “Other operating expenses” in the condensed consolidated statement of operations. The Company and Five Point currently anticipate collectively contributing $500 million in follow-on capital to fund future growth projects and acquisitions. As part of the transaction, the Company also entered into a 15-year dedication with Deep Blue for its produced water and supply water within a 12-county area of mutual interest in the Midland Basin. Fees paid to Deep Blue for produced water and supply water services and fees received from Deep Blue for operating services provided by the Company during the three and nine months ended September 30, 2023 were insignificant. Lario Acquisition On January 31, 2023, the Company closed on its acquisition of all leasehold interests and related assets of Lario Permian, LLC, a wholly owned subsidiary of Lario Oil and Gas Company, and certain associated sellers (collectively “Lario”). The acquisition included approximately 25,000 gross (16,000 net) acres in the Midland Basin and certain related oil and gas assets (the “Lario Acquisition”), in exchange for 4.33 million shares of the Company’s common stock and $814 million in cash, including certain customary post-closing adjustments. Approximately $113 million of the cash consideration was deposited in an indemnity holdback escrow account at closing to be distributed upon satisfactory settlement of any potential title defects on the acquired properties. The cash portion of the consideration for the Lario Acquisition was funded through a combination of cash on hand, a portion of the net proceeds from the Company’s offering of 6.250% Senior Notes due 2053 and borrowings under the Company’s revolving credit facility. The following table presents the acquisition consideration paid in the Lario Acquisition (in millions, except per share data, shares in thousands):
Purchase Price Allocation The Lario Acquisition has been accounted for as a business combination using the acquisition method. The following table represents the allocation of the total purchase price paid in the Lario Acquisition to the identifiable assets acquired and the liabilities assumed based on the fair values at the acquisition date. Although the purchase price allocation is substantially complete as of the date of this filing, there may be further adjustments to the fair value of certain assets acquired and liabilities assumed, including but not limited to the Company’s oil and natural gas properties. The Company expects to complete the purchase price allocation during the 12-month period following the acquisition date and may revise the value of the assets and liabilities as appropriate within that time frame. There have been no material changes to the purchase price allocation for the Lario Acquisition through September 30, 2023. The following table sets forth the Company’s preliminary purchase price allocation (in millions):
Oil and natural gas properties were valued using an income approach utilizing the discounted cash flow method, which takes into account production forecasts, projected commodity prices and pricing differentials, and estimates of future capital and operating costs which were then discounted utilizing an estimated weighted-average cost of capital for industry market participants. The fair value of acquired midstream assets, vehicles and a field office were based on the cost approach, which utilized asset listings and cost records with consideration for the reported age, condition, utilization and economic support of the assets and were included in the Company’s condensed consolidated balance sheets under the caption “Other property, equipment and land.” The majority of the measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and are therefore considered Level 3 inputs in the fair value hierarchy. With the completion of the Lario Acquisition, the Company acquired proved properties of $924 million and unproved properties of $536 million. The results of operations attributable to the Lario Acquisition since the acquisition date have been included in the condensed consolidated statements of operations and include $134 million and $345 million of total revenue and $53 million and $140 million of net income for the three and nine months ended September 30, 2023, respectively. Divestitures On July 28, 2023, the Company divested its 43% limited liability company interest in OMOG JV LLC (“OMOG”) for $225 million in cash received at closing. This divestiture resulted in a gain on the sale of equity method investments of approximately $35 million for the three and nine months ended September 30, 2023, which is included in the caption “Other income (expense), net” in the condensed consolidated statement of operations. The Company used its net proceeds from this transaction for debt reduction and other general corporate purposes. On April 28, 2023, the Company divested non-core assets to an unrelated third-party buyer consisting of approximately 19,000 net acres in Glasscock County, TX for net cash proceeds at closing of $269 million, including customary post-closing adjustments. The Company used its net proceeds from this transaction for debt reduction and other general corporate purposes. On March 31, 2023, the Company divested non-core assets consisting of approximately 4,900 net acres in Ward and Winkler counties to unrelated third-party buyers for $78 million in net cash proceeds, including customary post-closing adjustments. The divestitures of non-core oil and gas assets did not result in a significant alteration of the relationship between the Company’s capitalized costs and proved reserves and, accordingly, the Company recorded the proceeds as a reduction of its full cost pool with no gain or loss recognized on the sale. On January 9, 2023, the Company divested its 10% non-operating equity investment in Gray Oak Pipeline, LLC (“Gray Oak”) for $172 million in net cash proceeds and recorded a gain on the sale of equity method investments of approximately $53 million in the first quarter of 2023 that is included in the caption “Other income (expense), net” on the condensed consolidated statement of operations for the nine months ended September 30, 2023. 2022 Activity FireBird Energy LLC On November 30, 2022, the Company closed on its acquisition of all leasehold interests and related assets of FireBird Energy LLC, which included approximately 75,000 gross (68,000 net) acres in the Midland Basin and certain related oil and gas assets, in exchange for 5.92 million shares of the Company’s common stock and $787 million in cash, including certain customary post-closing adjustments. Approximately $125 million of the cash consideration was deposited in an indemnity holdback escrow account at closing to be distributed upon satisfactory settlement of any potential title defects on the acquired properties. The cash portion of the consideration for the FireBird Acquisition was funded through a combination of cash on hand and borrowings under the Company’s revolving credit facility. As a result of the FireBird Acquisition, the Company added approximately 854 gross producing wells. The following table presents the acquisition consideration paid in the FireBird Acquisition (in millions, except per share data, shares in thousands):
Purchase Price Allocation The FireBird Acquisition has been accounted for as a business combination using the acquisition method. The following table represents the allocation of the total purchase price paid in the FireBird Acquisition to the identifiable assets acquired and the liabilities assumed based on the fair values at the acquisition date. Although the purchase price allocation is substantially complete as of the date of this filing, there may be further adjustments to the fair value of certain assets acquired and liabilities assumed, including but not limited to the Company’s oil and natural gas properties and other property, equipment and land. The Company expects to complete the purchase price allocation during the 12-month period following the acquisition date and may revise the value of the assets and liabilities as appropriate within that time frame. During the three months ended September 30, 2023, the Company decreased the fair value allocated to certain midstream assets by $36 million and; increased the fair value allocated to the acquired oil and natural gas properties by $36 million based on new information that became available related to the fair value of these assets on the acquisition date. The following table sets forth the Company’s preliminary purchase price allocation (in millions):
Oil and natural gas properties were valued using an income approach utilizing the discounted cash flow method, which takes into account production forecasts, projected commodity prices and pricing differentials, and estimates of future capital and operating costs which were then discounted utilizing an estimated weighted-average cost of capital for industry market participants. The fair value of acquired midstream assets was based on the cost approach, which utilized asset listings and cost records with consideration for the reported age, condition, utilization and economic support of the assets and was included in the Company’s condensed consolidated balance sheets under the caption “Other property, equipment and land.” The majority of the measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and are therefore considered Level 3 inputs. With the completion of the FireBird Acquisition, the Company acquired proved properties of $648 million and unproved properties of $950 million. Delaware Basin Acquisition On January 18, 2022, the Company acquired, from an unrelated third-party seller, approximately 6,200 net acres in the Delaware Basin for $232 million in cash, including customary post-closing adjustments. The acquisition was funded through cash on hand. Other 2022 Acquisitions Additionally during the year ended December 31, 2022, the Company acquired, from unrelated third-party sellers, approximately 4,000 net acres and over 200 gross wells in the Permian Basin for an aggregate purchase price of approximately $220 million in cash, including customary post-closing adjustments. The acquisitions were funded through cash on hand. Divestitures of Certain Non-Core Assets In October 2022, the Company completed the divestiture of non-core Delaware Basin acreage consisting of approximately 3,272 net acres, with net production of approximately 550 BO/d (800 BOE/d) for $155 million of net proceeds. The Company used the net proceeds from this transaction towards debt reduction. Pro Forma Financial Information The following unaudited summary pro forma financial information for the three and nine months ended September 30, 2023 and 2022 has been prepared to give effect to the FireBird Acquisition and the Lario Acquisition as if they had occurred on January 1, 2022. The unaudited pro forma financial information does not purport to be indicative of what the combined company’s results of operations would have been if these transactions had occurred on the dates indicated, nor is it indicative of the future financial position or results of operations of the combined company. The below information reflects pro forma adjustments for the issuance of the Company’s common stock as consideration for the FireBird Acquisition and the Lario Acquisition, as well as pro forma adjustments based on available information and certain assumptions that the Company believes are reasonable, including adjustments to depreciation, depletion and amortization based on the full cost method of accounting. Additionally, pro forma earnings for the three and nine months ended September 30, 2023 were adjusted to exclude acquisition-related costs incurred by the Company of $1 million and $8 million for the Lario Acquisition, respectively, and $3 million for the FireBird Acquisition during the nine months ended September 30, 2023, which consist primarily of legal and advisory fees. The pro forma results of operations do not include any cost savings or other synergies that may result from the Firebird Acquisition and the Lario Acquisition or any estimated costs that have been or will be incurred by the Company to integrate the acquired assets. The pro forma financial data does not include the results of operations for any other acquisitions made during the periods presented, as they were primarily acreage acquisitions, and their results were not deemed material.
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PROPERTY AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment includes the following as of the dates indicated:
Under the full cost method of accounting, the Company is required to perform a ceiling test each quarter which determines a limit, or ceiling, on the book value of proved oil and natural gas properties. No impairment expense was recorded for the three and nine months ended September 30, 2023 or 2022 based on the results of the respective quarterly ceiling tests. In addition to commodity prices, the Company’s production rates, levels of proved reserves, future development costs, transfers of unevaluated properties and other factors will determine its actual ceiling test calculation and impairment analysis in future periods. If the future trailing 12-month commodity prices decline as compared to the commodity prices used in prior quarters, the Company may have material write downs in subsequent quarters. It is possible that circumstances requiring additional impairment testing will occur in future interim periods, which could result in potentially material impairment charges being recorded. Assets Held For Sale During the third quarter of 2023, the Company completed the sale of its Water Assets and oil gathering assets which had been classified as assets held for sale in the condensed consolidated balance sheet as of June 30, 2023, with carrying values of $667 million and $75 million, respectively. The sale of these assets resulted in an insignificant loss on disposal of property, plant and equipment for the three and nine months ended September 30, 2023, which is included in the caption “Other operating expenses” in the condensed consolidated statements of operations. See Note 4—Acquisitions and Divestitures for further discussion of the divestiture of the Water Assets. At December 31, 2022, the Water Assets and oil gathering assets were included in the Company’s condensed consolidated balance sheet under the caption “Other property, equipment and land.” All of these assets are included in the midstream operating segment, which is categorized as “All Other” in the Company’s segment disclosures in Note 16—Segment Information.
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ASSET RETIREMENT OBLIGATIONS |
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Asset Retirement Obligation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ASSET RETIREMENT OBLIGATIONS | ASSET RETIREMENT OBLIGATIONS The following table describes the changes to the Company’s asset retirement obligations liability for the following periods:
(1) The current portion of the asset retirement obligation is included in the caption “Other accrued liabilities” in the Company’s condensed consolidated balance sheets.
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DEBT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Long-term debt consisted of the following as of the dates indicated:
(1) Represents the unamortized basis adjustment related to two receive-fixed, pay variable interest rate swap agreements which were previously designated as fair value hedges of the Company’s $1.2 billion 3.500% fixed rate senior notes due 2029. These swaps were dedesignated in the second quarter of 2022 as discussed further in Note 11—Derivatives. References in this section to the Company shall mean Diamondback Energy, Inc. and Diamondback E&P, collectively, unless otherwise specified. Credit Agreement As of September 30, 2023, Diamondback E&P, as borrower, and Diamondback Energy, Inc., as parent guarantor, have a credit agreement, as amended, which provides for a maximum credit amount of $1.6 billion. As of September 30, 2023, the Company had no outstanding borrowings under the credit agreement and $1.6 billion available for future borrowings. During the three and nine months ended September 30, 2023 and 2022, the weighted average interest rate on borrowings under the credit agreement was 6.59%, 6.31%, 3.92% and 3.50%, respectively. During the second quarter of 2023, the Company exercised an election to extend the maturity date of the credit agreement by one year to June 2, 2028 in accordance with the terms of the credit agreement. As of September 30, 2023, the Company was in compliance with all financial maintenance covenants under the credit agreement. Repurchases of Notes In the second quarter of 2023, the Company repurchased principal amounts of $30 million of its 3.250% Senior Notes due 2026 and $100 million of its 3.500% Senior Notes due 2029 for total cash consideration, including accrued interest paid of $124 million. These repurchases resulted in an immaterial loss on extinguishment of debt during the nine months ended September 30, 2023. Viper’s Credit Agreement On September 22, 2023, Viper LLC entered into an eleventh and separately a twelfth amendment to the existing credit agreement, which among other things, (i) extended the maturity date from June 2, 2025 to September 22, 2028, (ii) maintained the maximum credit amount under the Viper LLC credit agreement of $2.0 billion, (iii) increased the borrowing base from $1.0 billion to $1.3 billion upon consummation of the Viper Acquisition (as defined in Note 15—Subsequent Events), (iv) increased the elected commitment amount from $750 million to $850 million, and (v) waived the automatic reduction of the borrowing base that otherwise would have occurred upon the consummation of the issuance of the Viper 2031 Notes (as defined in Note 15—Subsequent Events). As of September 30, 2023, Viper LLC had $250 million of outstanding borrowings and $600 million available for future borrowings. During the three and nine months ended September 30, 2023 and 2022, the weighted average interest rates on borrowings under the Viper credit agreement were 7.58%, 7.37%, 4.75% and 3.53%, respectively. As of September 30, 2023, Viper LLC was in compliance with all financial maintenance covenants under the Viper credit agreement.
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STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE | STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE Stock Repurchase Program The Company’s board of directors has approved a common stock repurchase program to acquire up to $4.0 billion of the Company’s outstanding common stock, excluding excise tax. Purchases under the repurchase program may be made from time to time in open market or privately negotiated transactions, and are subject to market conditions, applicable legal requirements, contractual obligations and other factors. The repurchase program does not require the Company to acquire any specific number of shares. This repurchase program may be suspended from time to time, modified, extended or discontinued by the board of directors at any time. During the three and nine months ended September 30, 2023 and 2022, the Company repurchased, excluding excise tax, approximately $56 million, $709 million, $472 million and $782 million of common stock under this repurchase program, respectively. As of September 30, 2023, approximately $1.8 billion remained available for use to repurchase shares under the Company’s common stock repurchase program, excluding excise tax. Change in Ownership of Consolidated Subsidiaries Non-controlling interests in the accompanying condensed consolidated financial statements represent minority interest ownership in Viper and Rattler through the Effective Date and are presented as a component of equity. When the Company’s relative ownership interests in Viper and Rattler change, adjustments to non-controlling interest and additional paid-in-capital, tax effected, will occur. The following table summarizes changes in the ownership interest in consolidated subsidiaries during the periods presented:
Earnings (Loss) Per Share The Company’s earnings (loss) per share amounts have been computed using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of common stock and participating securities. Basic earnings (loss) per share amounts have been computed based on the weighted-average number of shares of common stock outstanding for the period. Diluted earnings per share include the effect of potentially dilutive non-participating securities outstanding for the period. Additionally, the per share earnings of Viper are included in the consolidated earnings per share computation based on the consolidated group’s holdings of the subsidiaries. A reconciliation of the components of basic and diluted earnings per common share is presented in the table below:
(1) Unvested restricted stock awards and performance stock awards that contain non-forfeitable distribution equivalent rights are considered participating securities and therefore are included in the earnings per share calculation pursuant to the two-class method.
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EQUITY-BASED COMPENSATION |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY-BASED COMPENSATION | EQUITY-BASED COMPENSATION Under the Equity Plan approved by the Board of Directors, the Company is authorized to issue up to 11.8 million shares of incentive and non-statutory stock options, restricted stock awards and restricted stock units, performance awards and stock appreciation rights to eligible employees. The Company currently has outstanding restricted stock units and performance-based restricted stock units under the Equity Plan. The Company also has immaterial amounts of restricted share awards and stock appreciation rights outstanding which were issued under plans assumed in connection with previously completed mergers. At September 30, 2023, approximately 5.1 million shares of common stock remain available for future grants under the Equity Plan. The Company classifies its restricted stock units and performance-based restricted stock units as equity-based awards and estimates the fair values of restricted stock awards and units as the closing price of the Company’s common stock on the grant date of the award, which is expensed over the applicable vesting period. In addition to the Equity Plan, Viper maintains its own long-term incentive plan, which is not significant to the Company. The following table presents the financial statement impacts of equity compensation plans and related costs on the Company’s financial statements:
Restricted Stock Units The following table presents the Company’s restricted stock unit activity during the nine months ended September 30, 2023 under the Equity Plan:
The aggregate grant date fair value of restricted stock units that vested during the nine months ended September 30, 2023 was $20 million. As of September 30, 2023, the Company’s unrecognized compensation cost related to unvested restricted stock units was $78 million, which is expected to be recognized over a weighted-average period of 1.6 years. Performance Based Restricted Stock Units The following table presents the Company’s performance restricted stock units activity under the Equity Plan for the nine months ended September 30, 2023:
(1)A maximum of 1,034,136 units could be awarded based upon the Company’s final TSR ranking. As of September 30, 2023, the Company’s unrecognized compensation cost related to unvested performance based restricted stock awards and units was $42 million, which is expected to be recognized over a weighted-average period of 1.5 years. In March 2023, eligible employees received performance restricted stock unit awards totaling 126,347 units from which a minimum of 0% and a maximum of 200% of the units could be awarded based upon the measurement of total stockholder return of the Company’s common stock as compared to a designated peer group during the 3-year performance period of January 1, 2023 to December 31, 2025 and cliff vest at December 31, 2025 subject to continued employment. The initial payout of the March 2023 awards will be further adjusted by a TSR modifier that may reduce the payout or increase the payout up to a maximum of 250%. Additionally, in July 2023 the Company granted 1,858 units under substantially the same terms as the March 2023 performance restricted stock unit awards. The fair value of each performance restricted stock unit issuance is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of units to be earned during the performance period. The following table presents a summary of the grant-date fair values of performance restricted stock units granted and the related assumptions for the awards granted during the periods presented:
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The following table provides the Company’s provision for (benefit from) income taxes and the effective income tax rate for the periods indicated:
Total income tax expense from continuing operations for the three and nine months ended September 30, 2023 and 2022 differed from amounts computed by applying the United States federal statutory tax rate to pre-tax income primarily due to (i) state income taxes, net of federal benefit, and (ii) the impact of permanent differences between book and taxable income, partially offset by (iii) a tax benefit resulting from a reduction in the valuation allowance on Viper’s deferred tax assets for the three and nine months ended September 30, 2022. As of September 30, 2023, Viper maintained a partial valuation allowance against its deferred tax assets, based on its assessment of all available evidence, both positive and negative, supporting realizability of Viper’s deferred tax assets. For the three and nine months ended September 30, 2023, the Company’s items of discrete income tax expense or benefit were not material. For the three and nine months ended September 30, 2022, the Company recognized discrete income tax benefit of $50 million related to a partial release of Viper’s beginning-of-the-year valuation allowance, based on a change in judgment about the realizability of Viper’s deferred tax assets in future years. The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022, which created a 15% corporate alternative minimum tax (“CAMT”) on the “adjusted financial statement income” of certain large corporations (generally, corporations reporting at least $1 billion of average adjusted pre-tax net income on their consolidated financial statements) as well as an excise tax of 1% on the fair market value of certain public company stock/unit repurchases for tax years beginning after December 31, 2022. Based on application of currently available guidance, the Company’s income tax expense for the three and nine months ended September 30, 2023 were not impacted by the CAMT. The Company’s excise tax during the three and nine months ended September 30, 2023 was immaterial and was recognized as part of the cost basis of the units repurchased.
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DERIVATIVES |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVES | DERIVATIVES At September 30, 2023, the Company has commodity derivative contracts and interest rate swaps outstanding. All derivative financial instruments are recorded at fair value. Commodity Contracts The Company has entered into multiple crude oil and natural gas derivatives, indexed to the respective indices as noted in the table below, to reduce price volatility associated with certain of its oil and natural gas sales. The Company has not designated its commodity derivative instruments as hedges for accounting purposes and, as a result, marks its commodity derivative instruments to fair value and recognizes the cash and non-cash changes in fair value in the condensed consolidated statements of operations under the caption “Gain (loss) on derivative instruments, net.” By using derivative instruments to economically hedge exposure to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company has entered into commodity derivative instruments only with counterparties that are also lenders under its credit facility and have been deemed an acceptable credit risk. As such, collateral is not required from either the counterparties or the Company on its outstanding commodity derivative contracts. As of September 30, 2023, the Company had the following outstanding commodity derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed.
(1) The Company has fixed price basis swaps for the spread between the Cushing crude oil price and the Midland WTI crude oil price as well as the spread between the Henry Hub natural gas price and the Waha Hub natural gas price. The weighted average differential represents the amount of reduction to the Cushing, Oklahoma oil price and the Waha Hub natural gas price for the notional volumes covered by the basis swap contracts.
Interest Rate Swaps In the second quarter of 2021, the Company entered into two interest rate swap agreements for notional amounts of $600 million, which were designated as fair value hedges of the Company’s $1.2 billion 3.50% fixed rate senior notes due 2029 (the “2029 Notes”) at inception. The Company receives a fixed 3.50% rate of interest on these swaps. Effective on May 28, 2023, the variable rate of interest the Company pays on these swaps was reset from three month LIBOR to three month SOFR plus 2.1865%. The Company previously adopted the optional expedient in ASU 2020-04, “Reference Rate Reform (Topic 848) - Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” as later extended for these contract term modifications, and as a result, did not recognize any impact of the change in reference rate on its financial position, results of operations or liquidity for the three or nine months ended September 30, 2023. In the second quarter of 2022, the Company elected to fully dedesignate these interest rate swaps and hedge accounting was discontinued. The cumulative fair value basis adjustment recorded on the 2029 Notes at the time of dedesignation totaled $135 million. This basis adjustment is being amortized to interest expense over the remaining term of the 2029 Notes utilizing the effective interest method. The dedesignated interest rate swaps are considered economic hedges of the Company’s fixed-rate debt. As such, changes in the fair value of the interest rate swaps after the date of dedesignation have been recorded in earnings under the caption “Gain (loss) on derivative instruments, net” in the condensed consolidated statements of operations. Balance Sheet Offsetting of Derivative Assets and Liabilities The fair value of derivative instruments is generally determined using established index prices and other sources which are based upon, among other things, futures prices and time to maturity. These fair values are recorded by netting asset and liability positions, including any deferred premiums that are with the same counterparty and are subject to contractual terms which provide for net settlement. See Note 12—Fair Value Measurements for further details. Gains and Losses on Derivative Instruments The following table summarizes the gains and losses on derivative instruments not designated as hedging instruments included in the condensed consolidated statements of operations:
(1)The three and nine months ended September 30, 2022 includes cash paid on commodity contracts terminated prior to their contractual maturity of $3 million and $138 million.
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FAIR VALUE MEASUREMENTS |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Assets and Liabilities Measured at Fair Value on a Recurring Basis As discussed in Note 13—Fair Value Measurements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, certain financial instruments of the Company are reported at fair value on the Company’s condensed consolidated balance sheets. The net amounts of derivative instruments are classified as current or noncurrent based on their anticipated settlement dates. The Company has an immaterial investment that is reported at fair value using observable, quoted stock prices and is included in “Other assets” on the Company’s condensed consolidated balance sheet at September 30, 2023. The following table provides the fair value of financial instruments that are recorded at fair value in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:
Assets and Liabilities Not Recorded at Fair Value The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets:
The fair values of the Company’s credit agreement and the Viper credit agreement approximate their carrying values based on borrowing rates available to the Company for bank loans with similar terms and maturities and is classified as Level 2 in the fair value hierarchy. The fair values of the outstanding notes were determined using the quoted market price at each period end, a Level 1 classification in the fair value hierarchy. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Certain assets and liabilities are measured at fair value on a nonrecurring basis in certain circumstances. These assets and liabilities can include those acquired in a business combination, inventory, proved and unproved oil and gas properties, equity method investments and other long-lived assets that are written down to fair value when they are impaired or held for sale. Refer to Note 4—Acquisitions and Divestitures and Note 5—Property and Equipment for additional discussion of nonrecurring fair value adjustments. Fair Value of Financial Assets The carrying amount of cash and cash equivalents, receivables, funds held in escrow, prepaid expenses and other current assets, payables and other accrued liabilities approximate their fair value because of the short-term nature of the instruments.
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SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS |
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Supplemental Cash Flow Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS | SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIESThe Company is a party to various routine legal proceedings, disputes and claims arising in the ordinary course of its business, including those that arise from interpretation of federal and state laws and regulations affecting the crude oil and natural gas industry, personal injury claims, title disputes, royalty disputes, contract claims, 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 the Company’s current operations. While the ultimate outcome of the pending proceedings, disputes or claims and any resulting impact on the Company, cannot be predicted with certainty, the Company’s management believes that none of these matters, if ultimately decided adversely, will have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company’s assessment is based on information known about the pending matters and its experience in contesting, litigating and settling similar matters. Actual outcomes could differ materially from the Company’s assessment. The Company records reserves for contingencies related to outstanding legal proceedings, disputes or claims when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated. Environmental Matters The United States Department of the Interior, Bureau of Safety and Environmental Enforcement, ordered several oil and gas operators, including a corporate predecessor of Energen Corporation, to perform decommissioning and reclamation activities related to a Louisiana offshore oil and gas production platform and related facilities. In response to the insolvency of the operator of record, the government ordered the former operators and/or alleged former lease record title owners to decommission the platform and related facilities. The Company has agreed to an arrangement with other operators to contribute to a trust to fund the decommissioning costs, however, the Company’s portion of such costs are not expected to be material. Beginning in 2013 and continuing through the third quarter of 2023, several coastal Louisiana parishes and the State of Louisiana have filed 43 lawsuits under Louisiana’s State and Local Coastal Resources Management Act (“SLCRMA”) against numerous oil and gas producers seeking damages for coastal erosion in or near oil fields located within Louisiana’s coastal zone. The Company is a defendant in three of these cases, and Plaintiffs’ claims against the Company relate to the prior operations of entities previously acquired by Energen Corporation. The Company has exercised contractual indemnification rights where applicable. Plaintiffs’ SLCRMA theories are unprecedented, and there remains significant uncertainty about the claims (both as to scope and damages). Although we cannot predict the ultimate outcome of these matters, the Company believes the claims lack merit and intends to continue vigorously defending these lawsuits.
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SUBSEQUENT EVENTS |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Viper 2031 Notes Offering On October 19, 2023, Viper completed an offering (the “Viper 2031 Notes Offering”) of $400 million in aggregate principal amount of its 7.375% Senior Notes maturing on November 1, 2031 (the “Viper 2031 Notes”). Viper received net proceeds of approximately $394 million, after deducting the initial purchasers’ discount and expected transaction costs, from the Viper 2031 Notes Offering. Viper loaned the gross proceeds to Viper LLC, which used the proceeds to partially fund the cash portion of the Viper Acquisition as defined and discussed further below. The Viper 2031 Notes are senior unsecured obligations of Viper, initially guaranteed on a senior unsecured basis by Viper LLC, and will pay interest semi-annually. Neither the Company nor Viper’s General Partner will guarantee the Viper 2031 Notes. In the future, each of Viper’s restricted subsidiaries that either (i) guarantees any of its or a guarantor’s indebtedness, or (ii) is a domestic restricted subsidiary and is an obligor with respect to any indebtedness under any credit facility will be required to guarantee the Viper 2031 Notes. Viper Issuance of Common Units to Diamondback On October 31, 2023, pursuant to a common unit purchase and sale agreement entered into on September 4, 2023, Viper issued approximately 7.22 million of its common units to the Company at a price of $27.72 per unit for total net proceeds to Viper of approximately $200 million. Viper used the net proceeds of this common unit issuance to fund a portion of the cash consideration for the Viper Acquisition, as defined and discussed further below. Viper Acquisition On November 1, 2023, Viper and Viper LLC acquired certain mineral and royalty interests from Royalty Asset Holdings, LP, Royalty Asset Holdings II, LP and Saxum Asset Holdings, LP (collectively, “the Sellers,” and affiliates of Warwick Capital Partners and GRP Energy Capital) pursuant to a definitive purchase and sale agreement for approximately 9.02 million Viper common units and $750 million in cash, subject to customary post-closing adjustments (the “Viper Acquisition”). The mineral and royalty interests acquired in the Viper Acquisition represent 4,600 net royalty acres in the Permian Basin, plus an additional 2,700 net royalty acres in other major basins. The cash consideration for the Viper Acquisition was funded through a combination of cash on hand and held in escrow, borrowings under Viper LLC’s credit agreement, proceeds from the Viper 2031 Notes Offering and proceeds from the $200 million common unit issuance to the Company. Following the completion of the Viper Acquisition and the related issuance of Viper common units to the Company under the common unit purchase and sale agreement, the Company beneficially owned approximately 56% of Viper’s total units outstanding. Third Quarter 2023 Dividend DeclarationOn November 2, 2023, the board of directors of the Company declared a cash dividend for the third quarter of 2023 of $3.37 per share of common stock, payable on November 24, 2023 to its stockholders of record at the close of business on November 16, 2023. The dividend consists of a base quarterly dividend of $0.84 per share of common stock and a variable quarterly dividend of $2.53 per share of common stock. Future base and variable dividends are at the discretion of the board of directors of the Company.
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SEGMENT INFORMATION |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION As of September 30, 2023, the Company has one reportable segment, the upstream segment, which is engaged in the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. Other operations are included in the “All Other” category in the table below. The following tables summarize the results of the Company’s operating segments during the periods presented:
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Pay vs Performance Disclosure - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income (loss) attributable to Diamondback Energy, Inc. | $ 915 | $ 1,184 | $ 2,183 | $ 3,379 |
Insider Trading Arrangements |
3 Months Ended | 9 Months Ended |
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Sep. 30, 2023
shares
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Sep. 30, 2023
shares
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Trading Arrangements, by Individual | ||
Non-Rule 10b5-1 Arrangement Adopted | false | |
Rule 10b5-1 Arrangement Terminated | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Travis D. Stice [Member] | ||
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | On August 21, 2023, Travis D. Stice, the Company's Chief Executive Officer and Chairman of the board of directors of the Company, adopted a trading plan intended to satisfy Rule 10b5-1(c), as amended. The plan relates to the sale of up to 90,000 shares of common stock between November 22, 2023 and November 22, 2024. The shares covered by this plan include shares of common stock which will be acquired upon (i) the exercise of any employee stock options, and (ii) vesting of restricted stock units, including the net settlement of such restricted stock units to satisfy tax withholding obligations. | |
Name | Travis D. Stice | |
Title | Company's Chief Executive Officer and Chairman | |
Rule 10b5-1 Arrangement Adopted | true | |
Adoption Date | August 21, 2023 | |
Arrangement Duration | 366 days | |
Aggregate Available | 90,000 | 90,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries after all significant intercompany balances and transactions have been eliminated upon consolidation. The Company has one reportable segment, the upstream segment. Diamondback’s publicly traded subsidiary Viper Energy Partners LP (“Viper”) is consolidated in the Company’s financial statements. As of September 30, 2023, the Company owned approximately 57% of Viper’s total units outstanding. The Company’s wholly owned subsidiary, Viper Energy Partners GP LLC, is the general partner of Viper. The results of operations attributable to the non-controlling interest in Viper are presented within equity and net income and are shown separately from the equity and net income attributable to the Company. These condensed consolidated financial statements have been prepared by the Company without audit, pursuant to the rules and regulations of the SEC. They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to SEC rules and regulations, although the Company believes the disclosures are adequate to make the information presented not misleading. This Quarterly Report on Form 10–Q should be read in conjunction with the Company’s most recent Annual Report on Form 10–K for the fiscal year ended December 31, 2022, which contains a summary of the Company’s significant accounting policies and other disclosures.
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Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had an immaterial effect on the previously reported total assets, total liabilities, stockholders’ equity, results of operations or cash flows.
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Use of Estimates | Use of Estimates Certain amounts included in or affecting the Company’s condensed consolidated financial statements and related disclosures must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the condensed consolidated financial statements are prepared. These estimates and assumptions affect the amounts the Company reports for assets and liabilities and the Company’s disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements. Actual results could differ from those estimates. Making accurate estimates and assumptions is particularly difficult in the oil and natural gas industry given the challenges resulting from volatility in oil and natural gas prices. For instance, the war in Ukraine and Israel-Hamas war, rising interest rates, global supply chain disruptions, concerns about a potential economic downturn or recession, recent measures to combat persistent inflation and instability in the financial sector have contributed to recent economic and pricing volatility. The financial results of companies in the oil and natural gas industry have been impacted materially as a result of these events and changing market conditions. Such circumstances generally increase uncertainty in the Company’s accounting estimates, particularly those involving financial forecasts. The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in the particular circumstances. Nevertheless, actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas properties, fair value estimates of derivative instruments, the fair value determination of acquired assets and liabilities assumed and estimates of income taxes, including deferred tax valuation allowances.
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Net Sales of Purchased Oil | Net Sales of Purchased OilThe Company enters into pipeline capacity commitments in order to secure available transportation capacity from the Company's areas of production for its commodities. Beginning in the third quarter of 2023, the Company has also entered into purchase transactions with third parties and separate sale transactions with third parties to satisfy certain of its unused oil pipeline capacity commitments. Revenues and expenses from these transactions are generally presented on a gross basis in the captions “Sales of purchased oil” and “Purchased oil expense” in the accompanying condensed consolidated statements of operations as the Company acts as a principal in the transaction by assuming both the risks and rewards of ownership, including credit risk, of the oil volumes purchased and the responsibility to deliver the oil volumes sold. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Pronouncements In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This update required the acquirer in a business combination to record contract assets and liabilities following Topic 606 – “Revenue from Contracts with Customers” at acquisition as if it had originated the contract, rather than at fair value. The Company adopted this update effective January 1, 2023. The adoption of this update did not have a material impact on its financial position, results of operations or liquidity. Accounting Pronouncements Not Yet Adopted The Company considers the applicability and impact of all ASUs. ASUs not discussed above were assessed and determined to be either not applicable, the effects of adoption are not expected to be material or are clarifications of ASUs previously disclosed.
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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following tables present the Company’s revenue from contracts with customers:
The following tables present the Company’s revenue from oil, natural gas, and natural gas liquids disaggregated by basin:
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ACQUISITIONS AND DIVESTITURES (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisition Pro Forma | The pro forma financial data does not include the results of operations for any other acquisitions made during the periods presented, as they were primarily acreage acquisitions, and their results were not deemed material.
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Lario Acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Asset Acquisition | The following table presents the acquisition consideration paid in the Lario Acquisition (in millions, except per share data, shares in thousands):
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Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table sets forth the Company’s preliminary purchase price allocation (in millions):
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Firebird Acquisition | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Asset Acquisition | The following table presents the acquisition consideration paid in the FireBird Acquisition (in millions, except per share data, shares in thousands):
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Schedule of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table sets forth the Company’s preliminary purchase price allocation (in millions):
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PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment includes the following as of the dates indicated:
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ASSET RETIREMENT OBLIGATIONS (Tables) |
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Asset Retirement Obligation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Asset Retirement Obligations | The following table describes the changes to the Company’s asset retirement obligations liability for the following periods:
(1) The current portion of the asset retirement obligation is included in the caption “Other accrued liabilities” in the Company’s condensed consolidated balance sheets.
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DEBT (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt | Long-term debt consisted of the following as of the dates indicated:
(1) Represents the unamortized basis adjustment related to two receive-fixed, pay variable interest rate swap agreements which were previously designated as fair value hedges of the Company’s $1.2 billion 3.500% fixed rate senior notes due 2029. These swaps were dedesignated in the second quarter of 2022 as discussed further in Note 11—Derivatives.
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STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Change in Ownership Interest | The following table summarizes changes in the ownership interest in consolidated subsidiaries during the periods presented:
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Schedule of Reconciliation of Basic and Diluted Net Income Per Share | A reconciliation of the components of basic and diluted earnings per common share is presented in the table below:
(1) Unvested restricted stock awards and performance stock awards that contain non-forfeitable distribution equivalent rights are considered participating securities and therefore are included in the earnings per share calculation pursuant to the two-class method.
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EQUITY-BASED COMPENSATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effects of Stock-Based Compensation Plans and Related Costs | The following table presents the financial statement impacts of equity compensation plans and related costs on the Company’s financial statements:
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Schedule of Restricted Stock Units | The following table presents the Company’s restricted stock unit activity during the nine months ended September 30, 2023 under the Equity Plan:
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Schedule of Performance Restricted Stock Units Activity | The following table presents the Company’s performance restricted stock units activity under the Equity Plan for the nine months ended September 30, 2023:
(1)A maximum of 1,034,136 units could be awarded based upon the Company’s final TSR ranking.
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Schedule of Grant-Date Fair Values of Performance Restricted Stock Units Granted and Related Assumptions | The following table presents a summary of the grant-date fair values of performance restricted stock units granted and the related assumptions for the awards granted during the periods presented:
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INCOME TAXES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The following table provides the Company’s provision for (benefit from) income taxes and the effective income tax rate for the periods indicated:
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DERIVATIVES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | As of September 30, 2023, the Company had the following outstanding commodity derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed.
(1) The Company has fixed price basis swaps for the spread between the Cushing crude oil price and the Midland WTI crude oil price as well as the spread between the Henry Hub natural gas price and the Waha Hub natural gas price. The weighted average differential represents the amount of reduction to the Cushing, Oklahoma oil price and the Waha Hub natural gas price for the notional volumes covered by the basis swap contracts.
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Schedule of Derivative Contract Gains and Losses Included in the Consolidated Statements of Operations | The following table summarizes the gains and losses on derivative instruments not designated as hedging instruments included in the condensed consolidated statements of operations:
(1)The three and nine months ended September 30, 2022 includes cash paid on commodity contracts terminated prior to their contractual maturity of $3 million and $138 million.
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FAIR VALUE MEASUREMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurement Information For Financial Instruments Measured on a Recurring Basis | The following table provides the fair value of financial instruments that are recorded at fair value in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:
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Schedule of Offsetting Assets | The following table provides the fair value of financial instruments that are recorded at fair value in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:
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Schedule of Offsetting Liabilities | The following table provides the fair value of financial instruments that are recorded at fair value in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:
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Schedule of Fair Value Measurement Information For Financial Instruments Measured On A Nonrecurring Basis | The following table provides the fair value of financial instruments that are not recorded at fair value in the condensed consolidated balance sheets:
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SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Disclosures of Cash Flow Information |
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SEGMENT INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Results Of The Company Business Segments | The following tables summarize the results of the Company’s operating segments during the periods presented:
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ACQUISITIONS AND DIVESTITURES - Schedule of Acquisition Consideration Paid (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
Jan. 31, 2023 |
Nov. 30, 2022 |
---|---|---|
Lario Acquisition | ||
Asset Acquisition [Line Items] | ||
Shares of Diamondback common stock issued at closing (shares) | 4,330 | |
Closing price per share of Diamondback common stock on the closing date (in USD per share) | $ 146.12 | |
Fair value of Diamondback common stock issued | $ 633 | |
Cash consideration | 814 | |
Total consideration (including fair value of Diamondback common stock issued) | $ 1,447 | |
Firebird Acquisition | ||
Asset Acquisition [Line Items] | ||
Shares of Diamondback common stock issued at closing (shares) | 5,921,000 | |
Closing price per share of Diamondback common stock on the closing date (in USD per share) | $ 148.02 | |
Fair value of Diamondback common stock issued | $ 876 | |
Cash consideration | 787 | |
Total consideration (including fair value of Diamondback common stock issued) | $ 1,663 |
ACQUISITIONS AND DIVESTITURES - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Millions |
Jan. 31, 2023 |
Nov. 30, 2022 |
---|---|---|
Lario Acquisition | ||
Asset Acquisition [Line Items] | ||
Total consideration | $ 1,447 | |
Fair value of liabilities assumed: | ||
Other long-term liabilities | 37 | |
Fair value of assets acquired: | ||
Oil and natural gas properties | 1,460 | |
Inventories | 2 | |
Other property, equipment and land | 22 | |
Amount attributable to assets acquired | 1,484 | |
Net assets acquired and liabilities assumed | $ 1,447 | |
Firebird Acquisition | ||
Asset Acquisition [Line Items] | ||
Total consideration | $ 1,663 | |
Fair value of liabilities assumed: | ||
Other long-term liabilities | 10 | |
Fair value of assets acquired: | ||
Oil and natural gas properties | 1,598 | |
Inventories | 3 | |
Other property, equipment and land | 72 | |
Amount attributable to assets acquired | 1,673 | |
Net assets acquired and liabilities assumed | $ 1,663 |
ACQUISITIONS AND DIVESTITURES - Business Acquisition, Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Acquisitions And Divestitures [Abstract] | ||||
Revenues | $ 2,340 | $ 2,681 | $ 6,229 | $ 8,308 |
Income (loss) from operations | 1,341 | 1,776 | 3,401 | 5,707 |
Net income (loss) | $ 916 | $ 1,356 | $ 2,214 | $ 3,866 |
Basic earnings (loss) per common share (in USD per share) | $ 5.07 | $ 7.34 | $ 12.18 | $ 20.74 |
Diluted earnings (loss) per common share (in USD per share) | $ 5.07 | $ 7.36 | $ 12.18 | $ 20.79 |
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Oil and natural gas properties: | ||
Not subject to depletion | $ 8,239 | $ 8,355 |
Gross oil and natural gas properties | 40,647 | 37,122 |
Accumulated depreciation, amortization, accretion and impairment | (15,988) | (14,844) |
Other property, equipment and land | 706 | 1,481 |
Property and equipment, net | 25,365 | 23,759 |
Oil and Natural Gas | ||
Oil and natural gas properties: | ||
Subject to depletion | 32,408 | 28,767 |
Not subject to depletion | 8,239 | 8,355 |
Gross oil and natural gas properties | 40,647 | 37,122 |
Accumulated depreciation, amortization, accretion and impairment | (7,884) | (6,671) |
Accumulated impairment | (7,954) | (7,954) |
Oil and natural gas properties, net | 24,809 | 22,497 |
Other Property and Equipment, Net | ||
Oil and natural gas properties: | ||
Accumulated depreciation, amortization, accretion and impairment | (150) | (219) |
Other property, equipment and land | $ 706 | $ 1,481 |
PROPERTY AND EQUIPMENT - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||||
Impairment of oil and natural gas properties | $ 0 | $ 0 | $ 0 | $ 0 | ||
Long-Lived Assets Held-for-Sale [Line Items] | ||||||
Assets held for sale | $ 0 | $ 0 | $ 158,000,000 | |||
Midstream Water Asset | ||||||
Long-Lived Assets Held-for-Sale [Line Items] | ||||||
Assets held for sale | $ 667,000,000 | |||||
Oil Gathering Assets | ||||||
Long-Lived Assets Held-for-Sale [Line Items] | ||||||
Assets held for sale | $ 75,000,000 |
ASSET RETIREMENT OBLIGATIONS (Details) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||
Asset retirement obligations, beginning of period | $ 347 | $ 171 | |
Additional liabilities incurred | 5 | 31 | |
Liabilities acquired | 7 | 3 | |
Liabilities settled and divested | (83) | (12) | |
Accretion expense | 12 | 10 | |
Revisions in estimated liabilities | (42) | 133 | |
Asset retirement obligations, end of period | 246 | 336 | |
Less current portion | 6 | 11 | |
Asset retirement obligations - long-term | $ 240 | $ 325 | $ 336 |
DEBT - Credit Agreement (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Line of Credit Facility [Line Items] | |||||
Outstanding borrowings | $ 6,230,000,000 | $ 6,230,000,000 | $ 6,248,000,000 | ||
Credit agreement | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | 1,600,000,000 | 1,600,000,000 | |||
Remaining borrowing capacity | $ 1,600,000,000 | $ 1,600,000,000 | |||
Weighted average rate | 6.59% | 3.92% | 6.31% | 3.50% | |
Credit agreement | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Outstanding borrowings | $ 0 | $ 0 | $ 0 |
DEBT - Repurchases of Notes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Jun. 30, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Debt Instrument [Line Items] | |||
Repurchase of debt | $ 134 | $ 1,910 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Repurchase of debt | $ 124 | ||
3.250% Senior Notes due 2026 | Medium-term Notes | |||
Debt Instrument [Line Items] | |||
Redemption, amount | $ 30 | ||
Debt instrument stated interest rate | 3.25% | ||
3.500% Senior Notes due 2029 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Redemption, amount | $ 100 | ||
Debt instrument stated interest rate | 3.50% |
DEBT - Viper’s Credit Agreement (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 22, 2023 |
Sep. 21, 2023 |
Dec. 31, 2022 |
|
Line of Credit Facility [Line Items] | |||||||
Outstanding borrowings | $ 6,230,000,000 | $ 6,230,000,000 | $ 6,248,000,000 | ||||
Viper revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 2,000,000,000 | ||||||
Elected commitment amount | 850,000,000 | $ 750,000,000 | |||||
Viper revolving credit facility | Viper Energy Partners LP | |||||||
Line of Credit Facility [Line Items] | |||||||
Current borrowing capacity | $ 1,300,000,000 | $ 1,000,000,000 | |||||
Outstanding borrowings | 250,000,000 | 250,000,000 | $ 152,000,000 | ||||
Remaining borrowing capacity | $ 600,000,000 | $ 600,000,000 | |||||
Weighted average rate | 7.58% | 4.75% | 7.37% | 3.53% |
STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Equity [Abstract] | ||||
Stock repurchase program authorized amount | $ 4,000,000,000 | $ 4,000,000,000 | ||
Shares repurchased during period | 56,000,000 | $ 472,000,000 | 709,000,000 | $ 782,000,000 |
Stock repurchase remaining authorized amount | $ 1,800,000,000 | $ 1,800,000,000 |
STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE - Change in Ownership of Consolidated Subsidiaries (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Net income (loss) attributable to the Company | $ 915 | $ 1,184 | $ 2,183 | $ 3,379 | ||||
Change in ownership of consolidated subsidiaries | 0 | $ 2 | $ 2 | 5 | $ 3 | $ 3 | ||
Limited Partner | ||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Net income (loss) attributable to the Company | 915 | 1,184 | 2,183 | 3,379 | ||||
Change in ownership of consolidated subsidiaries | (3) | (15) | (27) | (36) | ||||
Change from net income (loss) attributable to the Company's stockholders and transfers to non-controlling interest | $ 912 | $ 1,169 | $ 2,156 | $ 3,343 |
STOCKHOLDERS’ EQUITY AND EARNINGS (LOSS) PER SHARE - Capital Stock (Details) - USD ($) |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
|
Equity [Abstract] | ||||||
Stock repurchase program authorized amount | $ 4,000,000,000 | |||||
Stock repurchase program amount repurchased | 56,000,000 | $ 321,000,000 | $ 332,000,000 | $ 472,000,000 | $ 303,000,000 | $ 7,000,000 |
Stock repurchase remaining authorized amount | $ 1,800,000,000 |
EQUITY-BASED COMPENSATION - (Narratives) (Details) - Equity Plan - shares shares in Millions |
Sep. 30, 2023 |
Dec. 31, 2021 |
---|---|---|
Restricted Stock Awards & Units | ||
Shares authorized for issuance (in shares) | 11.8 | |
Common stock available for future grants (in shares) | 5.1 |
EQUITY-BASED COMPENSATION - Schedule of Stock-Based Compensation Plans and Related Costs (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Equity-based compensation capitalized pursuant to full cost method of accounting for oil and natural gas properties | $ 8 | $ 6 | $ 19 | $ 16 |
General and administrative expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
General and administrative expenses | $ 13 | $ 14 | $ 40 | $ 42 |
EQUITY-BASED COMPENSATION - Restricted Stock Units (Details) - Equity Plan - Restricted Stock Units (RSUs) |
9 Months Ended |
---|---|
Sep. 30, 2023
$ / shares
shares
| |
Restricted Stock Units | |
Unvested, beginning balance (in shares) | shares | 918,902 |
Granted (in shares) | shares | 392,310 |
Vested (in shares) | shares | (161,878) |
Forfeited (in shares) | shares | (64,453) |
Unvested, ending balance (in shares) | shares | 1,084,881 |
Weighted Average Grant-Date Fair Value | |
Unvested, beginning balance (in USD per share) | $ / shares | $ 95.74 |
Granted (in USD per share) | $ / shares | 143.69 |
Vested (in USD per share) | $ / shares | 122.77 |
Forfeited (in USD per share) | $ / shares | 104.66 |
Unvested, ending balance (in USD per share) | $ / shares | $ 108.34 |
EQUITY-BASED COMPENSATION - Restricted Stock Units (Narratives) (Details) - Restricted Stock Units (RSUs) - Equity Plan $ / shares in Units, $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
$ / shares
shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Aggregated fair value of restricted stock | $ 20 |
Share based award not recognized | $ 78 |
Share based payment not recognized | 1 year 7 months 6 days |
Granted (in shares) | shares | 392,310 |
Granted (in USD per share) | $ / shares | $ 143.69 |
EQUITY-BASED COMPENSATION - Performance Restricted Stock Activity (Details) - Equity Plan - Performance Shares - $ / shares |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 31, 2023 |
Mar. 31, 2023 |
Sep. 30, 2023 |
|
Performance Restricted Stock Units | |||
Unvested, beginning balance (in shares) | 347,881 | ||
Granted (in shares) | 1,858 | 126,347 | 128,205 |
Forfeited (in shares) | (42,657) | ||
Unvested, ending balance (in shares) | 433,429 | ||
Weighted Average Grant-Date Fair Value | |||
Unvested, beginning balance (in USD per share) | $ 168.48 | ||
Granted (in USD per share) | $ 222.09 | $ 259.52 | 258.98 |
Forfeited (in USD per share) | 144.48 | ||
Unvested, ending balance (in USD per share) | $ 197.61 | ||
Share based compensation arrangement by share based payment maximum award potential (in shares) | 1,034,136 |
EQUITY-BASED COMPENSATION - Performance Based Restricted Stock Units (Narratives) (Details) - Performance Shares - Equity Plan - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 31, 2023 |
Mar. 31, 2023 |
Sep. 30, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based award not recognized | $ 42 | ||
Share based payment not recognized | 1 year 6 months | ||
Granted (in shares) | 1,858 | 126,347 | 128,205 |
Number of shares authorized percent of shares granted | 250.00% | ||
Performance shares, performance period | 3 years | ||
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized percent of shares granted | 0.00% | ||
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized percent of shares granted | 200.00% |
EQUITY-BASED COMPENSATION - Valuation Assumptions (Details) - Equity Plan - Performance Shares - $ / shares |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 31, 2023 |
Mar. 31, 2023 |
Sep. 30, 2023 |
|
Restricted Stock Awards & Units | |||
Granted (in USD per share) | $ 222.09 | $ 259.52 | $ 258.98 |
Risk-free rate | 4.70% | 4.64% | |
Company volatility | 47.20% | 46.90% |
INCOME TAXES - Schedule Tax Provision (Benefit) and Effective Income Tax Rate (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit from) income taxes | $ 276 | $ 290 | $ 648 | $ 913 |
Effective income tax rate | 21.70% | 18.60% | 21.80% | 20.50% |
INCOME TAXES (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2022 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||
Valuation allowance decrease | $ 50 | $ 50 |
DERIVATIVES - Interest Rate Swaps (Details) |
Sep. 30, 2023
derivative
|
Jun. 30, 2022
USD ($)
|
Jun. 30, 2021
USD ($)
instrument
|
---|---|---|---|
Derivative [Line Items] | |||
Number of instruments held | instrument | 2 | ||
Interest rate swaps | |||
Derivative [Line Items] | |||
Number of instruments held | derivative | 2 | ||
Derivative, notional amount | $ 600,000,000 | ||
Interest rate swaps | Designated as Hedging Instrument | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Derivative [Line Items] | |||
Derivative, average variable interest rate | 2.1865% | ||
Interest rate swaps | Senior Notes Due 2029 | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Fair value hedges | $ 1,200,000,000 | ||
Derivative, fixed interest rate | 3.50% | ||
Cumulative basis adjustments on discontinuation of hedge | $ 135,000,000 |
DERIVATIVES - Gains and Losses on Derivative Instruments Included in Statement of Operations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instruments, net: | $ (76) | $ (24) | $ (358) | $ (677) |
Net cash received (paid) on settlements: | (24) | (96) | (62) | (816) |
Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instruments, net: | (36) | 39 | (297) | (615) |
Net cash received (paid) on settlements: | (24) | (96) | (40) | (822) |
Cash paid on contract | 3 | 138 | ||
Interest rate swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instruments, net: | (40) | (63) | (61) | (62) |
Net cash received (paid) on settlements: | $ 0 | $ 0 | $ (22) | $ 6 |
FAIR VALUE MEASUREMENTS - Asset and Liabilities Not Recorded at Fair Value (Details) - USD ($) $ in Millions |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Carrying Value | ||
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Debt | $ 6,230 | $ 6,248 |
Fair Value | Nonrecurring | ||
Fair value of assets and liabilities measured on a recurring and nonrecurring basis | ||
Debt | $ 5,650 | $ 5,754 |
SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Supplemental disclosure of cash flow information: | ||
Cash paid (received) for income taxes | $ 195 | $ 560 |
Supplemental disclosure of non-cash transactions: | ||
Accrued capital expenditures included in accounts payable and accrued expenses | 639 | 431 |
Common stock issued for business combinations | 633 | 595 |
Equity method investment received in exchange for contributed assets | $ 126 | $ 0 |
COMMITMENTS AND CONTINGENCIES (Details) - Environmental Matters |
129 Months Ended |
---|---|
Sep. 30, 2023
lawsuit
| |
Loss Contingencies [Line Items] | |
Number of lawsuits | 43 |
Number of lawsuits company is defendant | 3 |
SEGMENT INFORMATION- Additional Information (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
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