Company Overview - Viper Energy, Inc. is a subsidiary of Diamondback Energy, Inc. focused on owning, acquiring, and exploiting oil and natural gas properties in North America, particularly in the Permian Basin in West Texas [3] - Diamondback Energy, Inc. is an independent oil and natural gas company headquartered in Midland, Texas, specializing in the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin [4] Upcoming Financial Results - Viper Energy plans to release its second quarter 2025 financial results on August 4, 2025, after the market closes [1] - A conference call and webcast will be held on August 5, 2025, at 10:00 a.m. CT to discuss the second quarter results [2]

MIDLAND, Texas, June 26, 2025 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback”), today announced that it plans to release second quarter 2025 financial results on August 4, 2025 after the market closes. In connection with the earnings release, Diamondback will host a conference call and webcast for investors and analysts to discuss its results for the second quarter of 2025 on Tuesday, August 5, 2025 at 8:00 a.m. CT. Access to the live webcast, and replay which will be available fo ...

Company Overview - Diamondback Energy (FANG) shares increased by 3.7% to close at $154.91, with a notable trading volume compared to normal sessions, and a total gain of 5.2% over the past four weeks [1][2] Recent Developments - The company amended its credit agreement with Wells Fargo Bank, extending the maturity to 2030 and reducing interest rates, which enhanced investor confidence in its financial stability [2] - Escalating tensions between Israel and Iran have driven oil prices up, benefiting U.S. shale producers like Diamondback Energy due to concerns over the security of the Strait of Hormuz, a key oil supply route [2] Earnings Expectations - Diamondback is expected to report quarterly earnings of $2.72 per share, reflecting a year-over-year decline of 39.8%, while revenues are projected to be $3.41 billion, an increase of 37.2% from the previous year [3] - The consensus EPS estimate has been revised 6.4% lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Context - Diamondback Energy is part of the Zacks Oil and Gas - Exploration and Production - United States industry, which includes other companies like Comstock Resources (CRK) [5] - Comstock's EPS estimate for the upcoming report remains unchanged at $0.16, representing a year-over-year increase of 180% [6]

Company Overview - Diamondback Energy is an independent oil and gas company focused on exploration and production of unconventional reserves in the Permian Basin, positioning itself as a leader in this sector with extensive production capabilities and strong fundamentals [1]. Investment Focus - The analysis emphasizes a strategy of identifying undervalued and disliked companies or industries with strong fundamentals and good cash flows, particularly in sectors like Oil & Gas and consumer goods [1]. Market Sentiment - Energy Transfer is highlighted as a company that was previously overlooked by investors but has shown potential for substantial returns, indicating a shift in market sentiment towards certain energy companies [1]. Investment Philosophy - The focus is on long-term value investing, while also exploring potential deal arbitrage opportunities in various sectors, showcasing a diverse investment approach [1].

Company Overview - Diamondback Energy (FANG) shares have increased by approximately 7.8% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Estimates for Diamondback Energy have trended downward, with a consensus estimate shift of -12.4% in the past month [2] - The overall direction and magnitude of estimate revisions indicate a downward shift, leading to a Zacks Rank of 3 (Hold) [4] VGM Scores - Diamondback Energy has an average Growth Score of C, a Momentum Score of F, and a Value Score of B, resulting in an aggregate VGM Score of C [3] Industry Comparison - Diamondback operates within the Zacks Oil and Gas - Exploration and Production - United States industry, where Range Resources (RRC) has gained 11.5% over the past month [5] - Range Resources reported revenues of $854.02 million for the last quarter, reflecting a year-over-year increase of +18.9% and an EPS of $0.96 compared to $0.69 a year ago [6] - Range Resources is expected to post earnings of $0.68 per share for the current quarter, indicating a year-over-year change of +47.8% [6] - Range Resources also holds a Zacks Rank of 3 (Hold) and has a VGM Score of A [7]

Core Viewpoint - Viper Energy, Inc. has announced a definitive agreement to acquire Sitio Royalties Corp. in an all-equity transaction valued at approximately $4.1 billion, which includes Sitio's net debt of about $1.1 billion as of March 31, 2025 [1] Transaction Details - The acquisition will involve the exchange of 0.4855 shares of Class A common stock of a new holding company for each share of Sitio Class A common stock, and 0.4855 units of Viper's operating subsidiary for each unit of Sitio's operating subsidiary, implying a value of $19.41 per Sitio share based on Viper's stock price on June 2, 2025 [1] - The transaction has received unanimous approval from the Boards of Directors of both companies and has the consent of Diamondback Energy, Viper's majority stockholder [1] - Approximately 48% of Sitio's voting power has agreed to support the transaction [1] - The deal is subject to customary regulatory approvals and is expected to close in Q3 2025 [1] Financial Highlights - Viper has approved a 10% increase in its base dividend to $1.32 per share annually, which represents approximately 45% of cash available for distribution at $50 WTI [2][6] - The acquisition is expected to be approximately 8-10% accretive to cash available for distribution per Class A share immediately upon closing [6] - The pro forma Viper's base dividend breakeven is expected to decrease by approximately $2 per barrel to below $20 WTI [6] - Estimated annual synergies from the merger are projected to exceed $50 million, primarily from administrative and capital cost savings [6] Strategic Rationale - The merger is expected to create a leader in the minerals industry with enhanced size, scale, liquidity, and access to investment-grade capital [7] - The combined company will have approximately 34,300 net royalty acres in the Permian Basin and an additional ~9,000 net royalty acres in other major basins [6][7] - The merger will position the combined entity to compete effectively for capital with mid and large-cap North American exploration and production companies, benefiting from higher margins and lower operating costs [7] Production and Operational Highlights - The average production for Q1 2025 was reported at 18.9 mbo/d (42.1 mboe/d), with Permian production at 14.5 mbo/d (31.9 mboe/d) [6] - The pro forma Viper is expected to have an average production of 64-68 mbo/d (122-130 mboe/d) by Q4 2025, with a mid-single-digit percentage increase expected for the full year 2026 [6]

Core Viewpoint - Major U.S. companies' earnings and tariff uncertainties are affecting investor sentiment, leading to a focus on attractive dividend stocks for consistent returns [1][2] Group 1: Home Depot (HD) - Home Depot reported mixed Q1 FY2025 results but reaffirmed its full-year guidance, maintaining prices despite tariffs [3][4] - The company declared a dividend of $2.30 per share for Q1 2025, resulting in an annualized dividend of $9.20 per share and a yield of 2.5% [3] - Analyst Greg Melich from Evercore reiterated a buy rating with a price target of $400, highlighting stabilizing traffic and improved online sales growth [4][5] - Melich believes Home Depot could become a significant breakout stock once the macro environment improves, similar to Costco and Walmart [6] Group 2: Diamondback Energy (FANG) - Diamondback Energy delivered better-than-expected Q1 results but reduced its full-year activity to maximize free cash flow due to commodity price volatility [8] - The company returned $864 million to shareholders in Q1 2025 through stock repurchases and a base dividend of $1.00 per share, resulting in a yield of nearly 3.9% [9] - Analyst Scott Hanold from RBC Capital reaffirmed a buy rating with a price target of $180, noting a 10% reduction in the capital budget but only a 1% cut in production outlook [10][11] - Hanold expects Diamondback to exceed its 50% minimum shareholder return target and plans to use remaining free cash flow to pay down a $1.5 billion term loan [12][13] Group 3: ConocoPhillips (COP) - ConocoPhillips reported market-beating Q1 2025 earnings but reduced its full-year capital and adjusted operating cost guidance while maintaining production outlook [14] - The company distributed $2.5 billion to shareholders in Q1 2025, including $1.5 billion in share repurchases and $1.0 billion in ordinary dividends, resulting in a yield of about 3.7% [15] - Analyst Neil Mehta from Goldman Sachs reiterated a buy rating with a price target of $119, highlighting uncertainty in oil prices but optimism about long-term gas prices [16][18] - Mehta expects COP's breakeven to decrease, projecting it to head towards the low $30s as LNG spending decreases and production from the Willow project begins in 2029 [17]

Group 1: Oil Market Overview - Oil prices have been volatile, influenced by geopolitical tensions and bearish crude data from the U.S. West Texas Intermediate (WTI) crude is down 0.7% at $61.62, contributing to a 14.3% year-to-date deficit [1] - The market is reacting to reports of Israel preparing to strike Iran, which has added to the volatility [1] Group 2: Company Performance - EQT Corp (NYSE:EQT) reached an 11-year high of $57.37, currently down 0.3% at $55.96, with a year-over-year increase of 35.7% and a year-to-date increase of 21.5% [2] - TotalEnergies SE (NYSE:TTE) is down 0.3% at $59.21, facing resistance at the $60 level and its 160-day moving average, but is still up 8.7% year-to-date [3] - Diamondback Energy Inc (NASDAQ:FANG) hit a two-year low of $114.00, currently down 0.8% at $137.22, and has decreased 16.2% year-to-date [4]

Core Insights - Diamondback Energy reported first-quarter 2025 adjusted earnings per share of $4.54, exceeding the Zacks Consensus Estimate of $4.09 and the previous year's earnings of $4.50, driven by strong production and lower costs despite a decline in oil realization [1] - Revenues reached $4 billion, an 82% increase from the same quarter last year, and surpassed the Zacks Consensus Estimate by 8.1% [1] Production & Realized Prices - Average production was 850,656 barrels of oil equivalent per day (BOE/d), up 84.5% year-over-year, although slightly below the estimate of 850,688.7 BOE/d [3] - Crude oil output increased by 72% and natural gas output by 99% year-over-year, with natural gas liquids volumes rising by 96% [3] - The average realized oil price was $70.95 per barrel, down 5.5% from $75.06 a year ago, while the average realized natural gas price surged to $2.11 per thousand cubic feet (Mcf) from 99 cents [4] Costs & Financial Position - Cash operating costs decreased to $10.48 per BOE from $11.52 in the prior-year quarter, reflecting lower lease operating expenses and a 21.2% reduction in gathering, processing, and transportation expenses [5] - Capital expenditure totaled $942 million, with $864 million allocated to drilling and completion, and adjusted free cash flow reached $1.6 billion [6] - As of March 31, the company had approximately $1.8 billion in cash and cash equivalents and $13 billion in long-term debt, resulting in a debt-to-capitalization ratio of 23.7% [6] Guidance - The company expects to produce between 857,000 and 900,000 BOE/d in 2025, a slight reduction from previous projections, with oil volumes anticipated to be between 480,000 and 495,000 barrels per day [7] - Capital spending is forecasted to be between $3.4 billion and $3.8 billion, down from earlier estimates of $3.8 billion to $4.2 billion [7]

[PART I. FINANCIAL INFORMATION](index=9&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Part I provides the unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter ended March 31, 2025 [Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited Q1 2025 financial statements reflect significant growth driven by the Endeavor acquisition, with increased assets, revenues, and net income [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows total assets of **$70.07 billion**, reflecting growth in cash and equity Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,816 | $161 | | Property and equipment, net | $64,896 | $64,472 | | Total assets | $70,066 | $67,292 | | **Liabilities & Equity** | | | | Total current liabilities | $4,753 | $4,811 | | Long-term debt | $12,996 | $12,075 | | Total liabilities | $28,323 | $27,430 | | Total equity | $41,743 | $39,862 | [Condensed Consolidated Statements of Operations](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 operations show total revenues of **$4.05 billion** and net income of **$1.41 billion**, significantly up year-over-year due to acquisitions Q1 2025 vs. Q1 2024 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $4,048 | $2,227 | | Income from operations | $1,673 | $1,118 | | Gain (loss) on derivative instruments, net | $226 | $(48) | | Net income (loss) attributable to Diamondback | $1,405 | $768 | | Diluted Earnings (loss) per common share | $4.83 | $4.28 | [Condensed Consolidated Statements of Cash Flows](index=16&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 cash flows show strong operating cash generation of **$2.36 billion**, with increased investing and financing activities Q1 2025 vs. Q1 2024 Cash Flows (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,355 | $1,334 | | Net cash used in investing activities | $(1,653) | $(751) | | Net cash provided by (used in) financing activities | $1,175 | $(269) | | Net increase in cash and cash equivalents | $1,877 | $314 | [Notes to the Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant corporate events, including the Endeavor acquisition, subsequent Double Eagle acquisition, and Viper asset drop-down - The company is an independent oil and natural gas company focused on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas[31](index=31&type=chunk) - Diamondback continues to consolidate its subsidiary Viper Energy, Inc., determining it to be a Variable Interest Entity (VIE) of which Diamondback is the primary beneficiary, despite ownership falling below **50%**[34](index=34&type=chunk)[43](index=43&type=chunk) - On September 10, 2024, the Company completed its acquisition of Endeavor for total consideration of **$27.42 billion**, consisting of **$7.31 billion** in cash and **117.27 million** shares of common stock. This acquisition added **$1.4 billion** in revenue and **$477 million** in net income for Q1 2025[69](index=69&type=chunk)[73](index=73&type=chunk)[76](index=76&type=chunk) - Subsequent to quarter end, on April 1, 2025, the company completed the acquisition of Double Eagle for **$3.0 billion** in cash and **~6.84 million** shares[156](index=156&type=chunk) - Subsequent to quarter end, on May 1, 2025, the company divested certain Endeavor royalty assets to its subsidiary Viper in a '2025 Drop Down' transaction for **$1.0 billion** in cash and **69.63 million** Viper LLC units. The cash proceeds were used to repay **$900 million** in Tranche A Loans[153](index=153&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Q1 2025 performance driven by the Endeavor acquisition, strategic post-quarter transactions, and a revised capital budget prioritizing free cash flow [First Quarter 2025 Financial and Operating Highlights](index=45&type=section&id=First%20Quarter%202025%20Financial%20and%20Operating%20Highlights) Q1 2025 highlights include **$1.4 billion** net income, **850.7 MBOE/d** average production, and **$942 million** in capital expenditures Q1 2025 Key Metrics | Metric | Value | | :--- | :--- | | Net Income | $1.4 billion | | Average Production | 850.7 MBOE/d | | Dividends Paid | $290 million | | Stock Repurchased | $575 million | | Cash Operating Costs | $10.48 per BOE | | Cash Capital Expenditures | $942 million | [Results of Operations](index=51&type=section&id=Results%20of%20Operations) Q1 2025 results show a **74%** year-over-year revenue increase driven by production volume growth from acquisitions, with quarter-over-quarter revenue up due to higher prices - **YoY Comparison (Q1 2025 vs Q1 2024):** - Oil, natural gas, and NGL revenues increased by **$1.6 billion (74%)**, driven by an **82%** growth in combined production volumes, with **73%** of the increase from the Endeavor Acquisition[207](index=207&type=chunk)[208](index=208&type=chunk) - Lease operating expenses increased in total due to costs from acquired Endeavor wells, but decreased on a per-BOE basis from **$6.08** to **$5.33**[212](index=212&type=chunk) - DD&A expense increased by **$613 million**, driven by production growth and a higher depletion rate from the addition of higher-value assets[212](index=212&type=chunk) - **QoQ Comparison (Q1 2025 vs Q4 2024):** - Oil, natural gas, and NGL revenues increased by **$186 million**, as a **$306 million** improvement from higher prices was partially offset by a **$120 million** decrease from a **6%** decline in production volumes[188](index=188&type=chunk) - Lease operating expenses decreased by **$53 million**, primarily due to reduced cost estimates for Endeavor properties and a volume discount for water services[191](index=191&type=chunk) Production and Average Prices | Metric | Q1 2025 | Q1 2024 | Q4 2024 | | :--- | :--- | :--- | :--- | | Daily Combined Volumes (BOE/d) | 850,656 | 461,110 | 883,424 | | Oil ($ per Bbl) | $70.95 | $75.06 | $69.48 | | Natural Gas ($ per Mcf) | $2.11 | $0.99 | $0.48 | | Combined ($ per BOE) | $47.77 | $50.07 | $42.71 | [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company maintained strong liquidity of **$3.8 billion** and revised its 2025 capital budget to prioritize free cash flow - At March 31, 2025, the company had approximately **$3.8 billion** of liquidity, consisting of **$1.3 billion** in cash and **$2.5 billion** available under its credit facility[222](index=222&type=chunk) - The company revised its 2025 capital budget to **$3.40 billion** to **$3.80 billion** to prioritize free cash flow generation due to recent weakness in commodity prices[245](index=245&type=chunk) - The company maintains a commitment to return at least **50%** of free cash flow to stockholders through base dividends, variable dividends, and share repurchases[249](index=249&type=chunk) - In Q2 2025, the company repurchased **$220 million** in principal of its senior notes in open market transactions for **$167 million**[248](index=248&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages primary market risks, including commodity price volatility and interest rate exposure, through derivative instruments and swaps - The company's main market risk is the pricing of its oil and natural gas production. It uses derivative instruments to reduce price volatility[261](index=261&type=chunk)[262](index=262&type=chunk) - A sensitivity analysis shows that a **10%** increase in forward commodity prices would decrease the net asset value of its derivatives by **$2 million**, while a **10%** decrease would increase it by **$15 million**[263](index=263&type=chunk) - The company is exposed to interest rate risk on its revolving credit facilities and Tranche A Loans. It also uses interest rate swaps with a notional amount of **$900 million** to manage fair value changes on its fixed-rate debt[266](index=266&type=chunk)[268](index=268&type=chunk) [Controls and Procedures](index=73&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2025, excluding recently acquired Endeavor entities from internal control assessment - Management concluded that disclosure controls and procedures were effective as of March 31, 2025[270](index=270&type=chunk) - The assessment of internal control over financial reporting did not include the internal controls of the entities acquired in the Endeavor Acquisition, as the company is still in the process of integration[271](index=271&type=chunk) [PART II. OTHER INFORMATION](index=74&type=section&id=PART%20II.%20OTHER%20INFORMATION) Part II provides additional information on legal proceedings, risk factors, equity sales, and other disclosures [Legal Proceedings](index=74&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to materially impact its financial condition or operations - The company is party to various routine legal proceedings arising in the ordinary course of business, which are not expected to have a material adverse effect[274](index=274&type=chunk) [Risk Factors](index=74&type=section&id=Item%201A.%20Risk%20Factors) Risk factors remain largely unchanged from the 2024 10-K, with an added emphasis on potential impacts from U.S. trade policy changes - Risk factors are largely unchanged from the Annual Report on Form 10-K for the year ended December 31, 2024[276](index=276&type=chunk) - The report highlights the risk that changes in U.S. trade policy, tariffs, and trade restrictions could cause market volatility, reduce demand for oil and gas, and have a material adverse effect on the business[277](index=277&type=chunk)[278](index=278&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2025, the company repurchased **3.66 million** shares for approximately **$575 million**, with **$2.1 billion** remaining in the buyback program Q1 2025 Share Repurchases | Period | Total Shares Purchased (thousands) | Average Price Paid Per Share | Value Remaining in Plan (millions) | | :--- | :--- | :--- | :--- | | Jan 2025 | 689 | $173.16 | $2,556 | | Feb 2025 | 853 | $158.94 | $2,420 | | Mar 2025 | 2,114 | $151.87 | $2,100 | | **Total** | **3,656** | **$157.30 (approx.)** | **$2,100** | - The board of directors approved an increase in the common stock repurchase program from **$4.0 billion** to **$6.0 billion** on September 18, 2024[284](index=284&type=chunk) [Other Information](index=75&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025[283](index=283&type=chunk) [Exhibits](index=76&type=section&id=Item%206.%20Exhibits) This section indexes exhibits filed with the 10-Q, including merger agreements, corporate governance, and officer certifications