About Diamondback Energy

Diamondback Energy, Inc. (Diamondback) operates as an independent oil and natural gas company. The company focuses on the acquisition, development, exploration, and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. The company reports operations in one reportable segment, the upstream segment. The company’s activities are primarily focused on horizontal development of the Spraberry and Wolfcamp formations of the Midland Basin and the Wolfcamp and Bone Spring formations of the Delaware Basin, both of which are part of the larger Permian Basin in West Texas and New Mexico. These formations are characterized by a high concentration of oil and liquids rich natural gas, multiple vertical and horizontal target horizons, extensive production history, long-lived reserves and high drilling success rates. As of December 31, 2023, the company’s total acreage position in the Permian Basin was approximately 607,877 gross (493,769 net) acres, which consisted primarily of 428,324 gross (349,707 net) acres in the Midland Basin and 174,828 gross (143,742 net) acres in the Delaware Basin. In addition, the company’s publicly traded subsidiary Viper Energy, Inc., which the company refers to as Viper, owns mineral interests primarily in the Permian Basin. The company owns approximately 56% of Viper’s outstanding shares of common stock. Acquisitions and Divestitures GRP Acquisition On November 1, 2023, Viper acquired certain mineral and royalty interests from Royalty Asset Holdings, LP, Royalty Asset Holdings II, LP and Saxum Asset Holdings, LP and affiliates of Warwick Capital Partners and GRP Energy Capital (collectively, ‘GRP’). The mineral and royalty interests acquired included 4,600 net royalty acres in the Permian Basin, plus an additional 2,700 net royalty acres in other major basins. Deep Blue Formation and Divestiture of Deep Blue 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 saltwater disposal assets (the ‘Deep Blue Water Assets’). Lario Acquisition On January 31, 2023, the company closed on the 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’), which included approximately 25,000 gross (16,000 net) acres in the Midland Basin and certain related oil and gas assets (the ‘Lario Acquisition’). Business Strategy The company’s business strategies are to leverage its experience operating in the Permian Basin; pursue strategic acquisitions with substantial resource potential; and deliver on the company’s commitment to environmental, social and governance (‘ESG’) performance. Properties Location and Land The Permian Basin area covers a significant portion of western Texas and eastern New Mexico and is considered one of the major producing basins in the United States. As of December 31, 2023, the company’s total acreage position in the Permian Basin was approximately 607,877 gross (493,769 net) acres, which consisted primarily of 428,324 gross (349,707 net) acres in the Midland Basin and 174,828 gross (143,742 net) acres in the Delaware Basin. In addition, the company’s publicly traded subsidiary Viper owns mineral interests underlying approximately 1,197,638 gross acres (34,217 net) royalty acres in the Permian Basin. Approximately 49% of these net royalty acres are operated by the company. Equity Method Investments As of December 31, 2023, the company owned interests in the following significant equity method investments: A 10% equity interest in EPIC Crude Holdings LP, which owns and operates a long-haul crude oil pipeline from the Permian Basin and the Eagle Ford Shale to Corpus Christi, Texas that is capable of transporting approximately 600,000 Bbl/d. A 4% equity interest in Wink to Webster Pipeline LLC, which owns and operates a crude oil pipeline that is capable of transporting approximately 1,000,000 Bbl/d from origin points at Wink and Midland in the Permian Basin for delivery to multiple Houston area locations. A 25% equity interest in Remuda Midstream Holdings LLC, which the company refers to as the WTG joint venture, which owns and operates an interconnected gas gathering system and seven major gas processing plants servicing the Midland Basin with 1,300 MMcf/d of total processing capacity with additional gas gathering and processing expansions planned. A 10% equity interest in BANGL LLC, which the company refers to as the BANGL joint venture. The BANGL pipeline, which began full commercial service in the fourth quarter of 2021, provides NGL takeaway capacity from the MPLX and WTG gas processing plants in the Permian Basin to the NGL fractionation hub in Sweeny, Texas and has expansion capacity of up to 300,000 Bbl/d. A 30% equity interest in Deep Blue, which owns and operates an integrated midstream water infrastructure network with over 800 miles of gathering and redelivery pipelines for gathering, transport, disposal and reuse throughout the Midland Basin. Deep Blue has approximately 2,000,000 Bbl/d of produced water capacity and approximately 66,000,000 Bbl/d of water storage capacity. The company’s proved reserves are located in the Permian Basin of West Texas, in particular in the Clearfork, Spraberry, Bone Spring, Wolfcamp, Strawn, Atoka, Barnett and Woodford formations. Marketing and Customers The company typically sells production to a relatively small number of customers, as is customary in the exploration, development and production business. Regulation The company is subject to the requirements of the federal Occupational Safety and Health Act, or OSHA, and comparable state statutes, whose purpose is to protect the health and safety of workers. Moreover, the OSHA hazard communication standard, the EPA community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act and comparable state statutes require that information be maintained concerning hazardous materials used or produced in the company’s operations and that this information be provided to employees, state and local government authorities and citizens. In the company’s midstream operations, the company is subject to regulation by the U.S. Department of Transportation, or DOT, under the Hazardous Liquids Pipeline Safety Act of 1979, or HLPSA, and comparable state statutes with respect to design, installation, testing, construction, operation, replacement and management of pipeline facilities. FERC regulates interstate oil pipeline transportation rates under the Interstate Commerce Act, and the company has a tariff on file with FERC to perform oil gathering service in interstate commerce. The company is also subject to the Pipeline Safety Improvement Act of 2002. History Diamondback Energy, Inc. was founded in 2007. The company was incorporated in Delaware in 2011.