Diamondback Energy, Inc.

FANG · NASDAQ · USD

Analysis

Last 4 earnings calls · through Q2 FY2026

Diamondback spent 2025 holding output flat and banking cash, then switched on growth in Q1 FY2026 when oil supply tightened. Next year it bets the Barnett and enhanced recovery turn trials into barrels.Will the Barnett lift growth in 2027?

  • Growth is back on, and management says the market made the call.

    The 2025 plan was to hold production flat under a 'yellow light.' After the largest oil supply disruption in history, the board added rigs and lifted oil output about 4%. The spending now rides on a macro call management cannot make.

  • The Barnett is new inventory the company built without buying anything.

    The position went from almost nothing to about 900 locations, built without outside capital or a headline. Wells cost about $1,000 a foot; the target is $800.How many Barnett wells must get cheaper to work?

  • More of what Diamondback sells is gas, and gas pays badly right now.

    Most gas sales price off Waha, where in-basin prices have gone negative, and the Barnett brings more gas with its oil. So barrels already produced earn less.What does gas fetch once the new pipelines flow?

Bullish
  • Low-cost Permian inventory depth
    The bull case is that Diamondback owns the deepest low-cost inventory in the Permian, so additional capital goes into wells that pay back quickly.
  • Rapid response to price signals
    Management restarted growth within weeks of a price signal because the drilling backlog and spare crews were already in place rather than needing to be built.
  • Debt paydown and share count
    Free cash flow is going to debt reduction and buybacks, and as net debt falls the value of each remaining share rises without any new production.
Bearish
  • Growth dependent on oil price
    The bear case is that the growth decision depends on oil prices nobody can forecast, and this plan has already been reversed once in the last year.
  • Barnett cost gap to core
    Barnett wells cost much more per foot than core Midland wells, so the returns depend on cost cuts that have not yet been shown across a full section.
  • Flexible capital returns
    Management removed its fixed commitment to return a set share of free cash, leaving the split between buybacks and debt repayment to its own judgment.
See the full bull & bear case
PoliticiansInstitutionsInsiders
PoliticianTransactionAmountTradedFiled
Donald Trump
Republican · Executive
Sale≥$1KJun 23Aug 22
Donald Trump
Republican · Executive
Sale≥$1KJun 16Aug 22
Donald Trump
Republican · Executive
Purchase≥$1KMar 23May 13
Donald Trump
Republican · Executive
Purchase≥$15KMar 23May 13
Roger Williams
Republican · House · TX-25
Sale≥$1KDec 22Jan 15

Congressional trading data provided by QuiverQuant

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Product segmentsGeography
FY2025 · USD

How Diamondback Energy turned $15.0B of revenue into $1.3B of operating income.

Revenue
Oil Exploration and Production$25.1B▲ 30.82% YoY
Oil Purchased$1.5B▲ 59.91% YoY
Natural Gas Liquids Production$1.4B▲ 51.69% YoY
Natural Gas, Production$400.0M▲ 349.44% YoY
Total revenue$15.0B
Operating income$1.3B8.4%
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