Letter to Stockholders Issued by Diamondback Energy, Inc.

MIDLAND, Texas, Feb. 20, 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 fourth quarter of 2023 rounded out a great year for Diamondback Energy and our stockholders. We seamlessly integrated our acquisitions of Lario and FireBird, exceeded production guidance, generated $5.9 billion of Net Cash Provided by Operating Activities, $2.9 billion of Free Cash Flow and returned $2.3 billion of that Free Cash Flow back to our stockholders via our $3.38 per share of base dividends, $838 million of share repurchases and $4.74 per share of variable dividends. We exceeded our non-core asset sale targets set out when we acquired FireBird and Lario, and exited the year with $6.8 billion of total debt and $6.2 billion of consolidated net debt, below 1.0x 2023 EBITDA.

Last Monday, we announced a transformational combination with Endeavor Energy Resources (“Endeavor”). This combination will create a “must-own” North American independent oil company. Combined, the two companies produced 468 MBO/d (816 MBOE/d) in the fourth quarter of 2023 across approximately 838,000 acres in the core of the Permian Basin. The combined business will have an unmatched depth of high-quality inventory, which, when combined with Diamondback’s cost structure, is set to generate significant long-term Free Cash Flow accretion to our stockholders. The combination is subject to stockholder and regulatory approvals, and we look forward to providing more information when permitted.

Production:
Fourth quarter oil and total production, at 273.1 MBO/d and 462.6 MBOE/d respectively, were both above the high end of our fourth quarter guidance ranges. As a result of this outperformance, full year oil production was approximately 263.5 MBO/d, up almost 18% year over year with an average diluted share count that was up only 2% year over year, despite closing two acquisitions. Diamondback is focused on per share growth, and we have now grown oil production per share 14x since our 2012 IPO.