Diamondback Energy, Inc. Q4 FY2025 earnings call

• Barnett Position Building: The Barnett position was built organically without external capital. There is a focus on reducing costs in the Barnett to make returns competitive. - Product Mix Focus: Efforts are underway to maximize the oil cut in Barnett wells. - Inventory Replenishment: There is a strong focus on replenishing inventory in the Midland Basin, with a history of building inventory through organic means and returning cash to shareholders. - Data Center Opportunities: Excitement exists regarding data center opportunities on the surface position, with progress on power purchase agreements to enhance natural gas realizations. - Surfactant Tests: 60 - well surfactant tests were conducted in late 2025, with some positive results observed on the production side. - Drilling and Completion Efficiency: Continuous pumping is being worked on in completion, with the aim of reducing cycle times and improving efficiency. - International Opportunities: International opportunities have low strategic priority, with a focus on Permian Basin expertise.

The Barnett segment is a key focus. In 2025, Barnett wells show performance in relation to core development. Oil production and BOE metrics are noted. There are around 900 gross locations in the Barnett. The product mix in the Barnett has a distinct GOR profile compared to the core, with the Barnett having a flatter GOR profile over 12 months, and oil productivity is competitive once costs are reduced. The Midland Basin core has specific cost and productivity figures, with average lateral lengths increased in the previous year.

• 2026 CapEx Guide: Guiding towards the lower end of the quarterly average in the first half, with the potential for CapEx reduction in the second half if Barnett cost reduction and other initiatives go as planned. - Barnett Drilling and Completion: More capital is expected to be allocated to the Barnett plan in the future, with drilling and completion activity increasing, for example, around 30 wells drilled in 2026 and a ramp - up in 2027. - Inventory and DUCs: The model does not show significant DUC build - up in 2026, and the number of wells drilled and completed will continue to be reported quarterly.

• Uncertainty in the macro environment that can impact production and growth. - Cost reduction in the Barnett may not occur as expected. - Surfactant test results may not meet expectations. - Tariff and inflation impacts on casing and other costs. - The working interest in the Barnett may not be easily increased.

Q: Neil Mehta of Goldman Sachs inquired about the Barnett opportunity set, product mix, and well economics compared to the Midland Basin.

A: Kaes and Al discussed the Barnett position building, product mix differences, and cost reduction plans.

Q: Neal Dingmann of William Blair Equity Research asked about Barnett well economics vs Midland Basin and inventory replenishment.

A: Kaes and Danny talked about cost reduction in the Barnett and the focus on inventory replenishment.

Q: Jeoffrey Lambujon of TPH & Company asked about the corporate oil mix outlook and data center opportunities.

A: Kaes and Jere discussed the oil mix and data center progress.

Q: Phillip Jungwirth of BMO asked about Barnett variability and the sustainable growth rate.

A: Albert and Kaes talked about Barnett variability and the growth outlook.

Q: Arun Jayaram of JPMorgan Securities asked about surfactant pilot projects and Barnett EUR.

A: Kaes and Albert discussed surfactant test progress and EUR commentary.

Q: Bob Brackett of Bernstein Research asked about Barnett drilling and completion differences and international opportunities.

A: Kaes talked about Barnett drilling and completion differences and the low international priority.

Q: John Freeman of Raymond James asked about completed feet per day and continuous pumping.

A: Daniel and Kaes discussed completed feet per day and the benefits of continuous pumping.

Q: Derrick Whitfield of Texas Capital asked about surfactant uplift and Barnett working interest.

A: Kaes discussed surfactant uplift and working interest opportunities.

Q: Kalei Akamine of Bank of America asked about the 2026 guide, DUCs, and Barnett working interest.

A: Kaes talked about the 2026 guide, DUCs, and working interest.

Q: Kevin MacCurdy of Pickering Energy Partners asked about OpEx guidance.

A: Kaes discussed OpEx components.

Q: Leo Mariani of ROTH asked about Barnett drilling pace and continuous pumping savings.

A: Albert and Daniel talked about Barnett drilling pace and continuous pumping savings.

Q: Charles Meade of Johnson Rice asked about Barnett play evolution and the stoplight metaphor.

A: Albert and Kaes discussed Barnett play evolution and the stoplight metaphor.

Q: Paul Cheng of Scotiabank asked about well cost reduction and reserve revisions.

A: Daniel and Kaes talked about well cost reduction and reserve revision reasons.