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The call conveys a constructive and proactive tone: Diamondback is pivoting to measured growth (adding rigs and a fifth frac crew) in response to a supportive macro environment while demonstrating operational execution (Q1 production beat, completion uplifts, and drilling cost improvements). The company is prioritizing capital efficiency and balance sheet repair—net debt targets brought forward, dividend increased, and a disciplined buyback posture—while acknowledging near-term risks from negative Waha differentials, market volatility, and potential service capacity constraints. Overall, the positives around production, cost improvement, cash generation, and balance-sheet optionality materially outweigh the operational and macro headwinds.
During the call Diamondback reiterated a baseline oil production target of roughly 520,000+ bbl/d (Q1 was ~520k), said it will add 2–3 rigs (≈1.5 net rigs) and a fifth completion crew (five frac fleets running consistently), expects each crew to complete ~100 wells/year, and plans to draw DUCs from a Q1 peak just over ~200 then rebuild to a carry of a couple hundred DUCs; full‑year average lateral length is expected to be ~12.9k ft (Q1 ~11.5k ft) with ~6.2 million ft of lateral drilling implied (back‑half ~1.5–1.6M ft/quarter), drilling cost targets improved to ~$300/ft (from ~$360/ft) with Barnett drilling under ~$400/ft, the reinvestment rate fell from 44% to ~34% at current strip, pro forma net debt is ~$12.7B with a $10B net‑debt target sooner than the prior 12–18 month outlook, buybacks to date totaled 42M shares for ~$6B (~$148/share), and the company bumped the base dividend while keeping a fixed return framework and prioritizing debt paydown and capital efficiency.
Added 2–3 rigs and reinstated a fifth completion crew to accelerate production; net to Diamondback ~1.5 net rigs. Acceleration focused on Barnett development to capture high-return inventory and drive near-term oil growth.
Reported a production beat in Q1 with oil around ~520,000 bbl/d and guidance of 520k+ bbl/d as the new baseline. Outperformance attributed to improved completion designs, lower downtime, automation/AI, and production workovers.
Surfactant tests (≈50 wells) averaged ≈100 bbl/d uplift on average, with several wells seeing 400–500 bbl/d gains, indicating material upside from completion optimization and ongoing deployment.
Wolfcamp D drilling goal reduced from $360/ft to $300/ft (a $60/ft, ~16.7% improvement) and Barnett wells drilled under $400/ft against an $800/well cost target. Team setting records on multi-mile laterals and driving above-ground and subsurface efficiency gains.
Reinvestment rate fell from 44% to 34% at the current strip (10 percentage point decrease; ≈22.7% relative reduction), increasing free cash flow per share and financial optionality.
Pro forma net debt down to $12.7B with a goal to reach $10B earlier than prior 12–18 month target (potentially within months). Plan to build cash into Q4, call $750M 2026 notes, and consider further liability management for maturities before 2030.
Maintained fixed return-of-capital framework, modestly bumped the dividend, and signaled potential moderation of buybacks while preserving flexibility. Historical buybacks: 42M shares for $6B (~$148/share) demonstrating strong buyback execution.
Strong crude takeaway/marketing: ~300k bbl/d to Corpus Christi (EPIC/Gray Oak) and ~100k bbl/d via Wink to Webster, with some dated Brent exposure—helping realize stronger realized crude pricing in Q1.
Good day, and thank you for standing by. Welcome to the Diamondback Energy, Inc. first quarter 2026 conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press 11 again.
Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam T. Lawlis, VP of Investor Relations. Please go ahead.
Thank you, Corey. Good morning, and welcome to Diamondback Energy, Inc.’s first quarter 2026 conference call. During our call today, we will reference an updated investor presentation and letter to stockholders that can be found on Diamondback Energy, Inc.’s website. Representing Diamondback Energy, Inc. today are Kaes Van’t Hof, Daniel N. Wesson, Jere W. Thompson, and Albert Barkmann. During this conference call, the participants may make certain forward-looking statements relating to the company’s financial condition, results of operations, plans, objectives, future performance, and businesses.
We caution you that actual results could differ materially from those that are indicated in forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company’s filings with the SEC. In addition, we will make reference to certain non-GAAP measures. Reconciliations with the appropriate ...