Letter to Stockholders Issued by Diamondback Energy, Inc.

MIDLAND, Texas, April 30, 2024 (GLOBE NEWSWIRE) --

Diamondback Stockholders,

This letter is meant to be a supplement to our earnings release and is being furnished to the Securities and Exchange Commission (SEC) and released to our stockholders simultaneously with our earnings release. Please see the information regarding forward-looking statements and non-GAAP financial information included at the end of this letter.

The first quarter of 2024 was a great start of the year for Diamondback. The Company continues to execute with production and capital expenditures meeting expectations. Additionally, we generated $1.3 billion of net cash provided by operating activities and nearly $800 million in Free Cash Flow with 50% of that Cash Flow returned to our stockholders through a combination of our base dividend, variable dividend and share buybacks.

Last week, our stockholders voted to approve our transformational combination with Endeavor Energy Resources, L.P. (“Endeavor”), creating the “must-own” North American independent oil company. As a reminder, the combined business will have an unmatched depth of high-quality inventory in the core of the Midland Basin, which, when combined with Diamondback’s cost structure, is set to generate significant long-term Free Cash Flow accretion to our stockholders.

On April 29, 2024, we received a second request for information and documents from the Federal Trade Commission. This second request was factored into our previously announced closing timeline. We still expect the Endeavor transaction to close in the fourth quarter of this year and will provide more information when possible.

Production:
First quarter oil production of 273.3 MBO/d was at the high end of our quarterly guidance range of 270 - 274 MBO/d. Looking ahead to the second quarter, we expect our oil production to stay relatively flat, with guidance of 271 – 275 MBO/d. We continue to target a capital program designed to maintain fourth quarter 2023 oil production levels. By focusing on capital efficiency and increasing our Free Cash Flow, we feel we are executing a plan that creates the most value for our stockholders in the current macro environment.

On the pricing side, oil realizations stayed relatively flat quarter over quarter at 98% of West Texas Intermediate ("WTI") pricing. We expect to realize at least 95% of WTI when WTI is at least $65 per barrel, with most quarters (like the first quarter) above that number.