Diamondback Energy, Inc. (FANG) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that Diamondback Energy, Inc. surfaced in its latest filing.

• Impairment of approximately $3.7 billion recorded for the year ended December 31, 2025 due to low prices.December 31, 2025
• In July 2025, the board approved an increase in the common stock repurchase program to acquire up to $8.0 billion.July 2025
• Through December 31, 2025, approximately $5.3 billion has been repurchased through the repurchase program.December 31, 2025
• On January 3, 2025, the Texas Railroad Commission published final amendments to its water protection rules to encourage waste recycling, effective July 1, 2025.January 3, 2025
• In September 2021, the Texas Railroad Commission curtailed produced water injection volumes into wells near Midland and Odessa in the Permian Basin.September 2021
• In 2021, the Texas Legislature directed the Texas Railroad Commission to adopt rules encouraging fluid oil and gas waste recycling.2021
• The company has a term loan agreement and senior notes outstanding, with borrowings under the revolving credit facilities and the Term Loan Agreement bearing interest at a floating rate tied to SOFR.
• A default under the revolving credit facility would result in an event of default under the indentures governing the senior notes.
• Ownership changes for Diamondback Energy, Inc., QEP and Rattler in connection with the acquisition of QEP and the merger with Rattler in 2022 subjected NOLs and carryforwards to annual limitation under Sections 382 and 383.2022
• Ownership change for Sitio in connection with Viper's Sitio Acquisition subjected carryforwards acquired from Sitio to annual limitation under Sections 382 and 383.
• The company has a return of capital commitment to return at least 50% of Adjusted Free Cash Flow to stockholders.
• As of December 31, 2025, the company had NOL carryforward of approximately $436 million, capital loss carryforwards of approximately $26 million and tax credits of $4 million.December 31, 2025
• The company currently hedges a portion of its estimated 2026 and 2027 production.
• Obligations to deliver specified quantities of oil under long-term crude oil agreements can result in deficiency payments or default if production decreases.
• Failure to deliver specified quantities of oil under oil purchase contracts triggers deficiency payments to the counterparty.
• The company does not require collateral from its counterparties.
• 2025 total cash capital expenditures were approximately $3.5 billion.2025
• 2026 cash capital budget is estimated at $3.60 billion to $3.90 billion, a midpoint increase of 6% from 2025.2026
• As of December 31, 2025, approximately 8,854 gross (6,541 net) identified economic potential horizontal drilling locations at $50.00 per Bbl WTI.December 31, 2025
• As of December 31, 2025, approximately 30% of total estimated proved reserves were proved undeveloped reserves.December 31, 2025
• As of December 31, 2025, 6,677 horizontal producing wells were completed on acreage.December 31, 2025
• Approximately 1,901 horizontal drilling locations in intervals with very few or no wells drilled as of December 31, 2025.December 31, 2025
• As of December 31, 2025, all producing properties are located in the Permian Basin of West Texas, with most proved reserves concentrated in the Wolfberry play in the Midland Basin.December 31, 2025