Diamondback Energy (FANG) Q1 2025 earnings summary

Executive summary

• Announced a $400 million capital budget reduction, cutting three drilling rigs and one frac spread to maximize capital efficiency amid a challenging oil macro environment.

• Q1 2025 net income reached $1.4 billion, driven by major acquisitions including Endeavor and Double Eagle, with average production of 850.7 MBOE/d and 475.9 MBO/d oil.

• Generated $1.6 billion of Adjusted Free Cash Flow in Q1 2025, returning $864 million (~55% of Adjusted FCF) to shareholders via dividends and buybacks.

• Repurchased 3.66 million shares in Q1 2025 for $575 million, with continued buybacks in Q2.

• Management transition underway, with CEO retirement and new leadership in place.

Financial highlights

• Q1 2025 oil production was 475,944 BO/d (850,656 BOE/d), up 7% per share year-over-year, with total revenues of $4.05 billion and Adjusted EBITDA of $2.8 billion.

• Unhedged realized cash margin reached 77%; total operating cash expenses were $10.48 per BOE.

• Net cash received on settlements was $85 million; total gain on derivatives was $226 million.

• Cash and cash equivalents at quarter-end were $1.82 billion; net debt/annualized Q1 Adjusted EBITDA was 1.04x.

• Lease operating expenses were $408 million ($5.33/BOE); depreciation, depletion, amortization, and accretion totaled $1.10 billion.

Outlook and guidance

• 2025 oil production guidance: 480–495 MBO/d; total production: 857–900 MBOE/d; CAPEX budget: $3.4–$3.8 billion.

• Q2 2025 oil production expected at 485–500 MBO/d; cash CAPEX: $800–$900 million.

• Plans to drill 385–435 gross (349–395 net) wells and complete 475–550 gross (444–514 net) wells in 2025.

• Flexibility to adjust activity and capital allocation based on oil prices and macro conditions.

• Lease operating expenses expected at $5.65–$6.05/BOE; cash tax rate guidance increased to 19–22% of pre-tax income.