Letter to Stockholders Issued by Diamondback Energy, Inc. - Seite 2

Looking ahead to 2024, we have shifted our production philosophy from what we previously described as “low single digit growth with the same amount of activity” to a plan where we are expecting to hold fourth quarter 2023 oil production flat with less capital and activity than last year, emphasizing our commitment to capital efficiency and “value over volumes.” As mentioned in last week’s merger announcement, Diamondback released 2024 production guidance of 270 - 275 MBO/d (458 - 466 MBOE/d). First quarter oil production is expected to be 270 - 274 MBO/d (458 - 464 MBOE/d). The global oil market appears to be well-supplied, and there is currently significant OPEC spare capacity. Therefore, Diamondback is positioned to maintain our production, grow Free Cash Flow and return that Free Cash Flow to our stockholders. Should there be a "call for growth" from the global oil market, Diamondback has the inventory quality and depth to answer that call, but that is not today.

Oil realizations decreased quarter over quarter to 97% of West Texas Intermediate ("WTI") pricing for the quarter, but in line with our average realization for the year of 97% of WTI. We still expect to realize at least 95% of WTI when WTI is at least $65 per barrel, with most quarters above that number. Gas and NGL realizations decreased quarter over quarter as each commodity declined in the fourth quarter.

Capital Expenditures:
Cash capex for the fourth quarter was $649 million; at the high end of our quarterly guidance range, but still down 5% quarter over quarter. We expect cash capex to decline by 5% - 11% in the first quarter to $580 - $620 million as we continue to see the benefits of lower well costs and strong capital efficiency from long-lateral, multi-well pad development.

As mentioned in our announcement last week, Diamondback released full year 2024 capex guidance of $2.30 - $2.55 billion. The midpoint of this range is down 10% year over year due to a combination of lower well costs and lower activity expected to maintain fourth quarter 2023 oil production. We expect to drill approximately 275 wells and turn approximately 310 wells to production, with almost 30% of those wells expected to be turned to production in the first quarter of 2024. Average estimated completed lateral length is expected to be the longest in our Company history at approximately 11,500 feet, highlighting our contiguous and advantaged acreage position.