Investor Presentation February 2025 1 Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements Operating cash flow before working capital changes, which is a non-GAAP financial measure representing net cash provided by operating activities as determined under GAAP without regard to changes in operating assets and liabilities. The Company believes operating cash flow before working capital changes is a useful measure of an oil and gas company's ability to generate cash used to fu ...

Core Insights - Diamondback Energy reported $3.71 billion in revenue for Q4 2024, a 66.6% year-over-year increase, with an EPS of $3.64 compared to $4.74 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $3.4 billion by 9.18%, and the EPS surpassed the consensus estimate of $3.26 by 11.66% [1] Financial Performance - Average daily production was 883,424 BOE/D, exceeding the eight-analyst average estimate of 848,018.4 BOE/D [4] - Total production volume was 81,275 MBOE, above the five-analyst average estimate of 77,953.35 MBOE [4] - Revenue from oil, natural gas, and natural gas liquids was $3.47 billion, compared to the $3.37 billion average estimate, reflecting a 60.3% year-over-year change [4] Price Metrics - Average price for natural gas liquids, hedged, was $19.27 per barrel, slightly below the $19.37 per barrel estimate [4] - Average price for oil, hedged, was $68.72 per barrel, compared to the $69.35 per barrel average estimate [4] - Average price for natural gas, hedged, was $0.82 per thousand cubic feet, lower than the $0.88 estimate [4] Stock Performance - Diamondback shares returned -9.9% over the past month, while the Zacks S&P 500 composite changed by -0.5% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Insights - Diamondback Energy reported quarterly earnings of $3.64 per share, exceeding the Zacks Consensus Estimate of $3.26 per share, but down from $4.74 per share a year ago, indicating an earnings surprise of 11.66% [1] - The company generated revenues of $3.71 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 9.18% and significantly up from $2.23 billion year-over-year [2] - Diamondback has outperformed consensus EPS estimates three times in the last four quarters and has topped consensus revenue estimates four times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.91 on revenues of $3.56 billion, while for the current fiscal year, the estimate is $15.67 on revenues of $14.99 billion [7] - The estimate revisions trend for Diamondback is mixed, leading to a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Oil and Gas - Exploration and Production - United States industry is currently in the top 20% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Production and Reserves - Average production for Q4 2024 was 475.9 MBO/d (883.4 MBOE/d) with full year 2024 average production of 337.0 MBO/d (598.3 MBOE/d) [4] - Proved reserves as of December 31, 2024 were 3,557 MMBOE, a 63% increase year over year, with proved developed producing reserves up 59% to 2,385 MMBOE [23] - Daily oil production increased to 475,924 BO/d in Q4 2024, up from 273,087 BO/d in Q4 2023, representing a growth of 74.3% [44] - The company expects net production for 2025 to be between 883 and 909 MBOE/d, with oil production projected at 485 to 498 MBO/d [30] - The company expects to drill between 446 - 471 gross wells and complete between 557 - 592 gross wells in 2025 [9] Financial Performance - Net cash provided by operating activities for Q4 2024 was $2.3 billion, totaling $6.4 billion for the full year 2024 [12] - Consolidated Adjusted EBITDA for Q4 2024 was $2.6 billion, with full year 2024 Adjusted EBITDA totaling $7.7 billion [14] - Total revenues for Q4 2024 reached $3,711 million, a 66.7% increase from $2,228 million in Q4 2023 [40] - Net income attributable to Diamondback Energy, Inc. for Q4 2024 was $1,074 million, compared to $960 million in Q4 2023, reflecting an increase of 11.9% [40] - Adjusted EBITDA for the year ended December 31, 2024, was $7,282 million, up from $6,099 million in 2023, reflecting a 19.43% growth [48] - Free Cash Flow for the year ended December 31, 2024, reached $3,642 million, compared to $2,923 million in 2023, indicating a 24.59% increase [57] Dividends and Shareholder Returns - The company increased its annual base dividend by 11% to $4.00 per share, declaring a Q4 2024 cash dividend of $1.00 per share [4] - The company repurchased 2,326,247 shares of common stock in Q4 2024 for $402 million, and a total of 5,525,276 shares for $959 million in 2024 [4] Costs and Expenses - Cash operating costs for Q4 2024 were $10.30 per BOE, including lease operating expenses of $5.67 per BOE [17] - Total costs and expenses for Q4 2024 were $2,299 million, a significant rise from $1,023 million in Q4 2023, marking an increase of 124.4% [40] - The average cost per BOE for lease operating expenses was $5.67 in Q4 2024, down from $5.97 in Q4 2023, reflecting a decrease of 5.0% [44] - The company incurred merger and integration expenses of $30 million in Q4 2024, compared to no such expenses in Q4 2023 [40] Capital Expenditures and Investments - Diamondback's total capital expenditures for 2025 are projected to be between $3,800 million and $4,200 million, with Q1 2025 capital expenditures estimated at $900 million to $1,000 million [30] - The total acquisition costs for proved properties in 2024 were $21,275 million, a significant increase from $1,314 million in 2023 [28] - The company's total cash capital expenditures for the year ended December 31, 2024, were $2,867 million, up from $2,701 million in 2023, reflecting a 6.15% increase [57] Debt and Cash Position - The company reported a net debt of $3,500 million as of December 31, 2024, down from $4,000 million in 2023, showing a reduction of 12.50% [58] - Diamondback Energy's total debt as of December 31, 2024, was $13,160 million, an increase of 46 million from the previous quarter [60] - The company's net debt stood at $12,999 million, up from $12,744 million in the prior quarter [60] - The company reported cash and cash equivalents of $(161) million as of December 31, 2024, a decrease from $(370) million in the previous quarter [60] Future Outlook - The pending acquisition of Double Eagle is expected to close on April 1, 2025, which will contribute to the company's future production and financial performance [29] - The estimated cash taxes for Q1 2025 are projected to be between $280 million and $340 million [30] - The average lateral length for wells in 2025 is expected to be approximately 11,500 feet, with Midland Basin well costs per lateral foot estimated at $555 to $605 [30] Derivative Instruments and Hedging - For Q1 2025, Diamondback has long puts on Crude Brent Oil at a volume of 52,000 Bbls/day with a long put price of $60.00/Bbl [62] - The company has long puts on WTI (Cushing) at a volume of 142,000 Bbls/day with a long put price of $56.58/Bbl for Q1 2025 [62] - Costless collars for natural gas at Henry Hub are set at 750,000 Mmbtu/day with a long put price of $2.52/Mmbtu for Q1 2025 [62] - The ceiling price for natural gas in the costless collars is $5.26/Mmbtu for Q1 2025 [62] - The deferred premium for long puts on Crude Brent Oil is projected to be $-1.48/Bbl for Q1 2025 [62] - The company has a natural gas basis swap at Waha Hub with a volume of 670,000 Mmbtu/day and a price of $-0.82 for Q1 2025 [62]

Core Points - Diamondback Energy, Inc. reported strong financial and operational results for Q4 and full year 2024, highlighting significant increases in production and cash flow [1][2][3] Financial Highlights - Q4 2024 net income was $1.1 billion, or $3.67 per diluted share, with adjusted net income also at $1.1 billion, or $3.64 per diluted share [11] - For the full year 2024, net income reached $3.3 billion, or $15.53 per diluted share, with adjusted net income at $3.6 billion, or $16.57 per diluted share [11] - Q4 2024 net cash provided by operating activities was $2.3 billion, while for the full year it was $6.4 billion [12] - Free Cash Flow for Q4 2024 was $1.3 billion, with adjusted Free Cash Flow at $1.4 billion; for the full year, Free Cash Flow was $3.6 billion, and adjusted Free Cash Flow was $4.0 billion [15] Operational Highlights - Average production in Q4 2024 was 475.9 MBO/d (883.4 MBOE/d) [6] - For the full year 2024, average production was 337.0 MBO/d (598.3 MBOE/d) [6] - The company drilled 131 gross wells in the Midland Basin and 6 in the Delaware Basin during Q4 2024, with a total of 342 gross wells drilled in 2024 [10][9] Dividend and Share Repurchase - The company increased its annual base dividend by 11% to $4.00 per share, declaring a Q4 2024 cash dividend of $1.00 per share [6][19] - In Q4 2024, Diamondback repurchased approximately 2.3 million shares for $402 million, and to date has repurchased about 25.8 million shares for a total cost of approximately $3.5 billion [20] Reserves and Guidance - Proved reserves as of December 31, 2024, were 3,557 MMBOE, a 63% increase year-over-year, with proved developed producing reserves up 59% [22] - The company provided 2025 oil production guidance of 485 - 498 MBO/d (883 - 909 MBOE/d) and cash capital expenditures guidance of $3.8 - $4.2 billion [28][30]

Group 1 - Diamondback Energy announced the resignation of CEO Travis Stice, who will remain as Chairman of the Board, with President Kaes Van't Hof taking over the CEO role [2] - The leadership change overshadows an acquisition announcement, indicating potential strategic shifts within the company [2] - The oil and gas industry is characterized as a boom-bust, cyclical sector, requiring patience and experience for successful navigation [2] Group 2 - The analysis of oil and gas companies focuses on identifying undervalued entities, examining balance sheets, competitive positions, and development prospects [1]

Travis D. Stice to step down as Chief Executive Officer, effective as of the Company's 2025 Annual Meeting of Stockholders; will remain as Executive Chairman through the Company's 2026 Annual Meeting of StockholdersKaes Van't Hof, current President, will assume Chief Executive Officer role and will join the Board of Directors effective as of the Company's 2025 Annual Meeting of StockholdersJere W. Thompson III, current Executive Vice President of Strategy and Corporate Development, has been promoted to Exec ...

Core Viewpoint - Diamondback Energy (FANG) is expected to report fourth-quarter 2024 results on February 24, with a consensus estimate of $3.26 earnings per share and $3.4 billion in revenues [1][4]. Financial Performance - In the previous quarter, Diamondback reported adjusted earnings per share of $3.38, missing the consensus estimate of $3.80, while revenues of $2.6 billion exceeded expectations by 6.6% [3]. - The Zacks Consensus Estimate for the fourth-quarter earnings has been revised downward by 0.9% in the past week, indicating a 31.2% year-over-year decline, while revenue estimates suggest a 52.7% increase from the previous year [4]. Production and Operations - Diamondback holds approximately 476,000 net acres in the Delaware and Midland regions, with over 8,000 drilling locations and production exceeding 450,000 barrels of oil equivalent per day [5]. - The company’s wells have low oil price breakeven costs, requiring only $40 per barrel to be profitable [5]. - Following the $26 billion acquisition of Endeavor Energy, Diamondback is expected to benefit from increased production, with an average fourth-quarter volume projected at 845,967.5 barrels of oil equivalent per day, an 82.9% increase from the previous year [6][7]. Earnings Expectations - The company has a positive earnings surprise prediction, supported by an Earnings ESP of +0.02% and a Zacks Rank of 3 (Hold), which enhances the likelihood of an earnings beat [8].

Core Insights - Diamondback Energy, Inc. (FANG) has acquired key Midland Basin assets from Double Eagle IV Midco, LLC in a deal valued at approximately $4 billion, consisting of $3 billion in cash and about 6.9 million shares of common stock [3][4] - The acquisition is expected to enhance Diamondback's core holdings and position the company for long-term free cash flow growth, with an estimated run-rate production of about 27 MBo/d [4][5] - The deal includes an agreement to accelerate development at a non-core southern Midland Basin asset, which will increase the net asset value and free cash flow with minimal capital deployment [2][4] Financial Considerations - The cash portion of the transaction will be financed through a combination of cash on hand, borrowings under a credit facility, and proceeds from term loans and senior notes offerings [3][6] - To maintain financial discipline, Diamondback has committed to selling at least $1.5 billion of its non-core assets, aiming to reduce net debt to $10 billion and maintain long-term leverage between $6 billion and $8 billion [6] Strategic Expansion - The acquisition covers approximately 40,000 net acres in the Midland Basin, with 68% of the undeveloped acreage and 407 new locations in development target, significantly extending Diamondback's high-quality inventory [4][5] - This strategic move solidifies Diamondback's position as a leader in the Permian Basin, enhancing its long-duration high-quality inventory with a low breakeven [5]

Core Viewpoint - Analysts forecast that Diamondback Energy (FANG) will report quarterly earnings of $3.26 per share, reflecting a year-over-year decline of 31.2%, while revenues are expected to reach $3.4 billion, indicating a 52.7% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate for the quarter has been revised 8.9% higher over the last 30 days, indicating a collective reevaluation by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, with empirical studies showing a strong relationship between earnings estimate revisions and short-term stock performance [3]. Revenue Projections - Analysts project 'Revenues- Oil, natural gas and natural gas liquid' to reach $3.36 billion, a year-over-year increase of 55.1% [5]. - 'Revenues- Oil sales' are expected to be $2.98 billion, reflecting a 55.3% year-over-year change [5]. - 'Revenues- Natural gas liquid sales' are estimated at $293.64 million, indicating a 63.1% increase from the previous year [5]. - 'Revenues- Other operating income' is forecasted to be $7.07 million, suggesting a year-over-year decline of 35.7% [6]. Production Metrics - Average daily production is expected to reach 848,160.30 BOE/D, up from 462,565 BOE/D in the same quarter last year [6]. - Total Production Volume (Combined volumes) is projected at 77,974.23 MBOE, compared to 42,556 MBOE in the same quarter of the previous year [7]. - Total Production Volume - Oil is expected to be 43,564.94 MBBL, up from 25,124 MBBL in the same quarter last year [7]. Price Estimates - Average Prices - Oil -hedged are projected at $69.28 per barrel, down from $75.59 per barrel in the same quarter last year [8]. - Average Prices - Natural gas liquids are expected to be $18.42 per barrel, compared to $19.96 per barrel a year ago [9]. - Average Prices - Oil are estimated at $67.78 per barrel, down from $76.42 per barrel in the previous year [9]. - Average Prices - Natural gas liquids, hedged, are projected at $19.40 per barrel, compared to $19.96 per barrel last year [10]. Stock Performance - Over the past month, shares of Diamondback have returned -12.9%, contrasting with the Zacks S&P 500 composite's +4.7% change [10]. - Currently, FANG holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [11].