Diamondback Energy, Inc. · NASDAQ:FANG
Diamondback Energy — Q4 2023 Earnings Presentation
28 slides from Diamondback Energy's earnings presentation, Feb 21, 2024
Slide 1: Investor Presentation
Investor Presentation February 2024 1
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statemen
Slide 3: Disciplined Capital Allocator with Differentiated Returns
Disciplined Capital Allocator with Differentiated Returns Durable Cash Flow Creation through the Cycle Best-In-Class Execution Long Life, Pure Play Permian Basin Inventory Base Investment Grade Balance Sheet Peer Leading ESG Profile 3
Slide 4: Disciplined Capital Allocator with Differentiated Returns
Disciplined Capital Allocator with Differentiated Returns Continued Free Cash Flow Generation: FANG Return of Capital Framework $910 million of Free Cash Flow (“FCF”) in Q4 2023 ($5.09 / share)(1) Q4 2023 Return of Capital: $683 million ($3.80 / Share) Generated over $2.9 billion of FCF in 2023
Slide 5: Full Year Highlights and Fourth Quarter Execution
Full Year Highlights and Fourth Quarter Execution Investment Framework and Full Year 2023 Results Q4 2023 Execution Q3 2023 Q4 2023 Grow per Share Oil Volumes Oil Production per Oil production of 263.5 Mbo/d (447.7 Mboe/d) Oil production per million shares of 1,464 Bo/d, up 16% year over Million
Slide 6: Year-end Reserves Summary
Year-end Reserves Summary Year-end 2023 proved reserves increased 7% y/y to Total Proved Reserve Growth (MMBoe) 2,178 MMBoe (1,144 MMBo, 69% PDP) FANG Standalone VNOM 1P BOE / Share PDP reserves of 1,497 MMBoe; PDP oil reserves of 2,178 744 MMBo 2,033 15 1,789 2000.0 Oil comprised 53% of total p
Slide 7: Overview of 2024 Guidance
Overview of 2024 Guidance 2024 Activity and Guidance Midpoints vs 2023 2024 Production and Activity Outlook 2024 2023A Guidance 270 – 275 FY 2023 2024 Activity Mbo/d Oil Production 270 265 335 –- 350 285 Net Mbo/d 263 273 220 Gross operated wells drilled 170 263.1 266.1 273.1 120 251.4 330 300 – 345
Slide 8: Return of Capital Framework
Return of Capital Framework Diamondback’s return of capital strategy is underpinned by a sustainable and growing base dividend, as well as additional return of capital from a combination of share repurchases and/or variable dividends Our strategy gives us the flexibility to pivot to share repurc
Slide 9: Return of Capital History and Highlights
Return of Capital History and Highlights Declared Base Dividends Since 2018 ($ / Share) $4.0 Billion Authorized Stock Repurchase Program(1) +6.2x Base Dividend Growth Stock Repurchases ($MM) Cumulative Shares Repurchased (MM) ~9% average quarterly CAGR $2,500 $2,408 25.00 $3.6000 19.3 $3.3800 $3.000
Slide 10: 2024 Free Cash Flow Sensitivity
2024 Free Cash Flow Sensitivity Illustrative 2024E Consolidated Free Cash Flow at Various WTI Oil Prices ($MM)(1) FY 2024 Assumptions(2) 270 - 275 Mbo/d Oil Production $2.3 - $2.55 billion Cash CAPEX >95% % of WTI Realized ($/Bbl) $20/Bbl / $3.00/Mcf Unhedged NGL / Gas Prices $3.60 / Share Annual Ba
Slide 11: Differentiated Large-Scale, Multi-Zone Development Strategy
Differentiated Large-Scale, Multi-Zone Development Strategy Development Strategy Summary: Midland Basin Well Productivity by Year Midland Basin average per well productivity (normalized for 200 2019 2020 2021 2022 2023 lateral length) has continued to improve in 2023 Cumulative Mbo/d (Normalized t
Slide 12: Investment Grade Balance Sheet
Investment Grade Balance Sheet Recent Highlights and Balance Sheet Summary: FANG’s Liquidity and Capitalization ($MM) Standalone liquidity of ~$2.2 billion(1) FANG's Consolidated Capitalization 12/31/2023 Consolidated net debt of ~$6.2 billion(2) Cash and cash equivalents $582 In January, repu
Slide 13: Peer Leading ESG Profile
Peer Leading ESG Profile Diamondback is committed to successful execution on its environmental strategy and targets discussed in the 2023 Corporate Responsibility Report and highlighted below As part of this commitment, in 2023, Diamondback joined the Oil & Gas Methane Partnership 2.0 (“OGMP 2.0
Slide 14: 2024 Guidance Detail
2024 Guidance Detail Full year 2024 oil production guidance of 270 – 275 Diamondback Viper Mbo/d Net production – Mboe/d 458 – 466 45.50 – 49.00 Full year 2024 CAPEX budget of $2.30 – $2.55 billion Oil production – Mbo/d 270 – 275 25.50 – 27.50 Expect to complete between 300 and 320 gross well
Slide 15: Appendix
DIAMONUBACK ENERGY APPENDIX 15 DIAMONOBACK ENERGY
Slide 16: Longstanding Track Record of Capital Efficiency and Growing Per Share Metrics
Longstanding Track Record of Capital Efficiency and Growing Per Share Metrics Diamondback Cash Flow / Free Cash Flow Since IPO ($ / Share)(1) FCFPS +22.4x Cash Flow / Share growth since 2012 CFPS $36.96 $31.24 $22.02 $14.86 $17.74 $25.98 $9.59 $12.79 $16.24 $3.54 $6.97 $6.64 $4.63 $13.64 $1.33 $1.03
Slide 17: Inventory and Asset Overview
Inventory and Asset Overview Midland Basin Gross (Net) Locations Economic at $50 / Bbl(1) Diamondback Acreage Map(3) <10,000' 10,000'+ 12,500'+ Total Avg. Lateral MS / JM 328 (227) 416 (340) 200 (172) 944 (738) 9,800' LS 252 (167) 430 (351) 217 (191) 899 (709) 10,000' WCA 179 (111) 265 (202) 121 (10
Slide 18: Environmental Performance Scorecard
Environmental Performance Scorecard Flaring (% of Gross Gas Production) GHG Intensity (mt / mboe Produced) Methane Intensity (mt / mboe Produced) Goal: Eliminate Routine Flaring by 2025(1) Goal: Reduce 2019 intensity by 50% by 2024 Goal: Reduce 2019 intensity by 70% by 2024 FANG Operated 3.4% 3rd Pa
Slide 19: Scope 1 Emissions Breakdown and Strategic Reduction Initiatives
Scope 1 Emissions Breakdown and Strategic Reduction Initiatives Diamondback 2022 Scope 1 Emissions Detail and Current Strategic Initiatives: Atmospheric Storage Atmospheric Storage Tanks / Other: ~11K mt, or 1% of 2022 CO2e emissions Tanks / Other 1% Combustion Equipment: (55K mt, or 4% of 2021 CO2e
Slide 20: Methane Emissions and Strategic Reduction Initiatives
Methane Emissions and Strategic Reduction Initiatives Diamondback 2022 Methane Emissions Detail and Current Strategic Initiatives: Gas Pneumatic Devices: Flare Stacks: ~3.8K mt, or 56% of 2022 CH4 emissions ~2.1K mt, or 31% of 2022 CH4 emissions (2.8K mt, or 59% of 2021 CH4 emissions) (1.2K mt, or 2
Slide 21: Governance Summary
Governance Summary Board Independence & Diversity: Board Independence and Diversity 8 of 9, or 89%, of Board are independent 100% of Committee Members are independent 5 of 9, or 56%, of Board are diverse (gender or ethnic minority) Board Leadership: 56% of 89% of Directors are Two female dir
Slide 22: Current Hedge Summary: Oil
Current Hedge Summary: Oil Consolidated Crude Oil Hedges (Bbl/day, $/Bbl) Crude Oil Hedges Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2025 124,000 110,000 78,000 42,000 – Long Puts - Brent $55.40 / -$1.48 $55.45 / -$1.49 $55.13 / -$1.55 $55.00 / -$1.62 – 32,000 30,000 24,000 10,000 – Long Puts - MEH $55.00
Slide 23: Current Hedge Summary: Natural Gas
Current Hedge Summary: Natural Gas Consolidated Natural Gas Hedges (Mmbtu/day, $/Mmbtu) Natural Gas Hedges Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2025 Costless Collars - Henry Hub 290,000 290,000 290,000 290,000 20,000 Floor / Ceiling $2.83 / $7.52 $2.83 / $7.52 $2.83 / $7.52 $2.83 / $7.52 $2.50 / $6.00
Slide 24: Viper Summary
Viper Summary Viper Energy, Inc: Viper Mineral and Royalty Assets Publicly-traded mineral and royalty subsidiary (NASDAQ: VNOM) created by Diamondback ◊ Focused on owning and acquiring minerals and royalty interests in the Permian Basin, with a primary focus on Diamondback-operated acreage ~32,0
Slide 25: Non-GAAP Definitions and Reconciliations
Non-GAAP Definitions and Reconciliations Adjusted EBITDA: Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA a
Slide 26: Non-GAAP Definitions and Reconciliations
Non-GAAP Definitions and Reconciliations Operating Cash Flow before Working Capital Changes, Free Cash Flow and Adjusted Free Cash Flow: Operating cash flow before working capital changes, which is a non-GAAP financial measure, represents net cash provided by operating activities as determined und
Slide 27: Non-GAAP Definitions and Reconciliations
Non-GAAP Definitions and Reconciliations Net Debt: The Company defines the non-GAAP measure of net debt as total debt (excluding debt issuance costs, discounts, premiums and fair value hedges) less cash and cash equivalents. Net debt should not be considered an alternative to, or more meaningful t
Slide 28: Diamondback Energy Corporate Headquarters
Diamondback Energy Corporate Headquarters Adam Lawlis, Vice President, Investor Relations 500 West Texas Ave., Suite 100 (432) 221-7400 Midland, TX 79701 ir@diamondbackenergy.com www.diamondbackenergy.com 28