Diamondback Energy FANG · USD

SEGMENT INFORMATIONThe Company is managed on a consolidated basis as one operating segment and one reportable segment: the upstream segment, which is engaged in the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. This singular operating and reportable segment is comprised of (i) the Company and its wholly-owned subsidiaries, and (ii) Viper and its consolidated subsidiaries, which have been aggregated due to the similarity in their economic characteristics, products and services, processes, type of customers, method of distribution for their products and the regulatory environment in which they operate. The upstream segment derives its revenue from customers through the sale of oil and natural gas products as well as other immaterial service contracts. See Note 3—Revenue from Contracts with Customers for further discussion of the Company’s sources of revenue.The Company’s Chief Operating Decision Maker (“CODM”) is a senior executive committee that is comprised of the Chief Operating Officer, Chief Financial Officer, and Chief Executive Officer. The CODM uses the Company’s consolidated financial results to make key operating decisions, assess performance and to allocate resources. The measures of segment profit or loss and total assets utilized by the CODM are net income and total assets as reported on the consolidated statements of operations and the consolidated balance sheets, respectively. The significant expense categories, their amounts and other segment items that are regularly provided to the CODM are those that are reported in the Company’s consolidated statements of operations as well as interest income and interest expense in Note 8—Debt.The CODM uses consolidated net income as a measure of profitability to evaluate segment performance and to make capital allocation decisions such as reinvestment in the business or return of capital through the payment of base and variable dividends or repurchases under the share repurchase program.

REVENUE FROM CONTRACTS WITH CUSTOMERSRevenue from Contracts with CustomersThe following tables present the Company’s revenue from contracts with customers:Year Ended December 31,202520242023(In millions)Oil sales$11,621 $9,067 $7,279 Natural gas sales400 89 262 Natural gas liquid sales1,432 944 687 Total oil, natural gas and natural gas liquid revenues13,453 10,100 8,228 Sales of purchased oil1,476 923 111 Other service revenues65 29 62 Total revenue from contracts with customers$14,994 $11,052 $8,401 The following tables present the Company’s revenue from oil, natural gas and natural gas liquids disaggregated by basin:Year Ended December 31, 2025Midland BasinDelaware BasinOtherTotal(In millions)Oil sales$10,729 $850 $42 $11,621 Natural gas sales349 45 6 400 Natural gas liquid sales1,321 111 — 1,432 Total$12,399 $1,006 $48 $13,453 Year Ended December 31, 2024Midland BasinDelaware BasinOtherTotal(In millions)Oil sales$7,711 $1,347 $9 $9,067 Natural gas sales65 23 1 89 Natural gas liquid sales779 165 — 944 Total$8,555 $1,535 $10 $10,100 Year Ended December 31, 2023Midland BasinDelaware BasinOtherTotal(In millions)Oil sales$5,746 $1,527 $6 $7,279 Natural gas sales176 85 1 262 Natural gas liquid sales500 187 — 687 Total$6,422 $1,799 $7 $8,228 CustomersThe Company is subject to risk resulting from the concentration of its crude oil and natural gas sales and receivables with several significant purchasers. For the year ended December 31, 2025, four purchasers each accounted for more than 10% of our revenue: Medallion Midstream (16%), Shell Trading (USA) Company (“Shell”) (13%), Enterprise Crude Oil LLC (“Enterprise”) (12%) and Vitol Inc. (“Vitol”) (11%). For the year ended December 31, 2024, four purchasers each accounted for more than 10% of the Company’s revenue: Vitol (17%), Enterprise (15%), Shell (13%) and DK Trading & Supply LLC (“DK”) (11%). For the year ended December 31, 2023, four purchasers each accounted for more than 10% of the Company’s revenue: Vitol (22%), DK (18%), Shell (14%) and Enterprise (13%). The Company does not require collateral and does not believe the loss of any single purchaser would materially impact its operating results, as crude oil and natural gas are fungible products with well-established markets and numerous purchasers.

COMMITMENTS AND CONTINGENCIESThe Company is a party to various routine legal proceedings, disputes and claims arising in the ordinary course of its business, including those that arise from interpretation of federal and state laws and regulations affecting the crude oil and natural gas industry, personal injury claims, title disputes, royalty disputes, contract claims, employment claims, claims alleging violations of antitrust laws, contamination claims relating to oil and natural gas exploration and development and environmental claims, including claims involving assets previously sold to third parties and no longer part of the Company’s current operations. While the ultimate outcome of the pending proceedings, disputes or claims and any resulting impact on the Company, cannot be predicted with certainty, the Company’s management believes that none of these matters, if ultimately decided adversely, will have a material adverse effect on the Company’s financial condition, results of operations or cash flows. The Company’s assessment is based on information known about the pending matters and its experience in contesting, litigating and settling similar matters. Actual outcomes could differ materially from the Company’s assessment. The Company records accrued liabilities for contingencies related to outstanding legal proceedings, disputes or claims when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated.CommitmentsThe following is a schedule of minimum future payments with commitments that have initial or remaining noncancellable terms in excess of one year as of December 31, 2025:Year Ending December 31,Transportation Commitments(1)(2)Electrical Power Agreements(3)Other Operating Agreements(4)Electrical Fracturing Fleet(5)(In millions)2026$275 $125 $114 $50 2027316 128 43 50 2028313 98 14 24 2029312 95 6 — 2030312 21 6 — Thereafter1,485 28 24 — Total$3,013 $495 $207 $124 (1)Total costs incurred under take-or-pay and throughput obligations were approximately $449 million, $337 million and $266 million in 2025, 2024 and 2023, respectively.(2)The Company has committed to transport gross quantities of crude oil and natural gas on various pipelines under a variety of contracts including throughput and take-or-pay agreements.

DEBTThe Company’s debt consisted of the following as of the dates indicated:December 31,20252024(In millions)3.250% Senior Notes due 2026$749 $750 5.625% Senior Notes due 2026(1)14 14 5.200% Senior Notes due 2027850 850 7.125% Medium-term Notes, Series B, due 202873 73 3.500% Senior Notes due 2029915 915 5.150% Senior Notes due 2030850 850 3.125% Senior Notes due 2031740 767 6.250% Senior Notes due 20331,100 1,100 5.400% Senior Notes due 20341,300 1,300 5.550% Senior Notes due 20351,200 — 4.400% Senior Notes due 2051386 650 4.250% Senior Notes due 2052605 750 6.250% Senior Notes due 2053650 650 5.750% Senior Notes due 20541,480 1,500 5.900% Senior Notes due 20641,000 1,000 Tranche A Loans— 900 2025 Term Loan550 — Unamortized debt issuance costs(99)(91)Unamortized discount costs(22)(25)Unamortized premium costs2 3 Unamortized basis adjustment of dedesignated interest rate swap agreements(2)(59)(72)Viper revolving credit facility105 261 Viper 5.375% Senior Notes due 2027 (discharged)— 430 Viper 4.900% Senior Notes due 2030500 — Viper 7.375% Senior Notes due 2031— 400 Viper 5.700% Senior Notes due 20351,100 — Viper 2025 Term Loan500 — Total debt, net14,489 12,975 Less: current maturities of debt763 900 Total long-term debt$13,726 $12,075 (1)QEP remained the issuer of these senior notes subsequent to becoming a wholly owned subsidiary of the Company.(2)Represents the unamortized basis adjustment related to two receive-fixed, pay variable interest rate swap agreements which were previously designated as fair value hedges of the Company’s 3.500% fixed rate senior notes due 2029 (the “2029 Notes”). This basis adjustment is being amortized to interest expense over the remaining term of the 2029 Notes utilizing the effective interest method. See Note 12—Derivatives for further discussion on the interest rate swaps.Debt maturities as of December 31, 2025, excluding debt issuance costs, premiums and discounts and the unamortized basis adjustment of dedesignated interest rate swap agreements are as follows:Year Ending December 31,(In millions)2026$763 20271,900 202873 2029915 20301,455 Thereafter9,561 Total$14,667 References in this section to the Company shall mean Diamondback Energy, Inc. and Diamondback E&P, collectively, unless otherwise specified.Credit AgreementOn June 12, 2025, Diamondback E&P, as borrower, and Diamondback Energy, Inc.

INCOME TAXESDeferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company is subject to corporate income taxes and the Texas margin tax. The Company and its subsidiaries, other than Viper, Viper LLC and certain other subsidiaries classified as partnerships for U.S. federal income tax purposes, file a U.S. federal corporate income tax return on a consolidated basis. Viper’s provision for income taxes is included in the Company’s consolidated income tax provision and, to the extent applicable, in net income attributable to the non-controlling interest.The Company’s effective income tax rates were 17.4%, 17.8% and 21.5% for the years ended December 31, 2025, 2024 and 2023, respectively. Total income tax expense for the year ended December 31, 2025 differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income primarily due to (i) state income taxes, net of federal benefit, (ii) the effect of research and development tax credits, and (iii) other permanent differences between book and taxable income. Total income tax expense for the year ended December 31, 2024 differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income primarily due to (i) the impact of removing the valuation allowance against Viper’s deferred tax assets, (ii) state income taxes, net of federal benefit, and (iii) other permanent differences between book and taxable income. Total income tax expense for the year ended December 31, 2023 differed from amounts computed by applying the U.S. federal statutory tax rate to pre-tax income for the period primarily due to state income taxes, net of federal benefit, partially offset by the impact of permanent differences between book and taxable income and tax benefit resulting from a reduction in the valuation allowance on Viper’s deferred tax assets.Based on application of the Inflation Reduction Act of 2022 and related administrative guidance, the Company’s income tax expense for the years ended December 31, 2025, 2024 and 2023, was not impacted by the corporate alternative minimum tax.On July 4, 2025, the One Big Beautiful Bill Act (the “OBBB”), was enacted. The OBBB included multiple provisions applicable to U.S.

ACQUISITIONS AND DIVESTITURES2025 ActivityDiamondback Acquisitions and DivestituresEPIC DivestitureOn October 31, 2025, the Company divested its 27.5% equity interest in EPIC Crude Holdings, LP (“EPIC”) pursuant to a definitive purchase and sale agreement with Plains All American Pipeline, L.P. and Plains GP Holdings for approximately $504 million in cash and an additional $96 million in unrecognized contingent consideration (the “EPIC Divestiture”). The EPIC Divestiture resulted in a gain on the sale of equity method investments of approximately $299 million, which is included in the caption “Other income (expense), net” on the consolidated statements of operations for the year ended December 31, 2025. The contingent cash payment is due should the capacity expansion of EPIC be formally sanctioned before year-end 2027.Divestiture of Water Assets to Deep BlueOn October 1, 2025, the Company divested Environmental Disposal Systems, LLC, a subsidiary originally acquired in connection with the Endeavor Acquisition, to Deep Blue Midland Basin LLC (“Deep Blue”), in exchange for upfront net cash proceeds of $694 million, subject to customary post-closing adjustments, and approximately $34 million of additional equity interests issued by Deep Blue as non-cash consideration. The transaction provides for the potential for the Company to earn up to an additional $200 million. If certain completion thresholds are not met, the Company could owe up to $150 million in contingent consideration for the years 2026 through 2028. The Company will recognize any contingent gains when realizable at the end of each annual measurement period, or will accrue a contingent loss if at any time a payable to Deep Blue becomes probable and reasonably estimable. The divestiture resulted in a gain of approximately $168 million, which is included in the caption “Other operating expenses, net” on the consolidated statements of operations for the year ended December 31, 2025. As part of the divestiture, the Company renewed its 15-year dedication to Deep Blue for its produced water and supply water within a 12-county area of mutual interest in the Midland Basin. The Company’s equity ownership interest in Deep Blue remained at 30% following the closing of the transaction. The cash proceeds from the divestiture were used to repay borrowings under the Credit Agreement (as defined and discussed in Note 8—Debt) and for general corporate purposes.

Our cybersecurity governance program is led by the Senior Vice President and Chief Information Officer, with support from the internal information technology department. The Senior Vice President and Chief Information Officer has over 20 years of technological leadership experience in the oil and gas industry, providing oversight of all information technology disciplines, including cybersecurity, networking, infrastructure, applications, and data management and protection. The Senior Vice President and Chief Information Officer and his team, which consists of individuals who hold designations as Certified Information Systems Security Professional (CISSP), Certified Information Systems Auditor (CISA), and CompTIASecurity+, are responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture and processes. In addition, our cybersecurity incident response team is responsible for responding to cybersecurity incidents and are guided by our Computer Security Incident Response Plan. Progress and developments in our cybersecurity governance program are communicated to members of the executive team. Our management team takes steps to remain informed about and monitor efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including third-party consultants engaged by us; alerts and reports produced by security tools deployed in our IT and OT environments; and through reporting by employees and service providers. While our board of directors is ultimately responsible for enterprise-wide risk oversight, the board’s committees assist the board in fulfilling its oversight responsibilities in certain areas of risk. In particular, the board’s audit committee is responsible, among other things, for risk management relating to legal and regulatory requirements, including cybersecurity, which plays an integral role in our risk management strategy and continues to be an area of increasing focus for our board, the audit committee and our management team.

DERIVATIVESAt December 31, 2025, the Company has commodity derivative contracts and interest rate swaps outstanding. All derivative financial instruments are recorded at fair value.Commodity ContractsThe Company has entered into multiple crude oil and natural gas derivatives, indexed to the respective indices as noted in the table below, to reduce price volatility associated with certain of its oil and natural gas sales. The Company has not designated its commodity derivative instruments as hedges for accounting purposes and, as a result, marks its commodity derivative instruments to fair value and recognizes the cash and non-cash changes in fair value in the consolidated statements of operations under the caption “Gain (loss) on derivative instruments, net.”By using derivative instruments to economically hedge exposure to changes in commodity prices, the Company exposes itself to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk. The Company has entered into commodity derivative instruments only with counterparties that are also lenders under its credit facility and have been deemed an acceptable credit risk. As such, collateral is not required from either the counterparties or the Company on its outstanding commodity derivative contracts.As of December 31, 2025, the Company had the following outstanding commodity derivative contracts. When aggregating multiple contracts, the weighted average contract price is disclosed:SwapsCollarsSettlement MonthSettlement YearType of ContractBbls/MMBtu Per DayIndexWeighted Average DifferentialWeighted Average Floor PriceWeighted Average Ceiling PriceOILJan. - Jun.2026Basis Swap(1)35,000Argus WTI Midland$0.94$—$—Jul. - Dec.2026Basis Swap(1)30,000Argus WTI Midland$0.93$—$—NATURAL GASJan. - Dec.2026Costless Collar840,000Henry Hub$—$2.87$6.35Jan. - Dec.2027Costless Collar640,000Henry Hub$—$2.90$6.41Jan. - Dec.2026Basis Swap(1)650,000Waha Hub$(1.69)$—$—Jan. - Dec.2026Basis Swap(1)100,000HSC Hub$(0.35)$—$—Jan. - Dec.2027Basis Swap(1)340,000Waha Hub$(1.28)$—$—Jan. - Dec.2027Basis Swap(1)180,000HSC Hub$(0.