Diamondback Energy, Inc. · NASDAQ:FANG
Diamondback Energy — Q1 2023 Earnings Presentation
28 slides from Diamondback Energy's earnings presentation, May 2, 2023
Slide 1: Investor Presentation
Investor Presentation May 2023 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 Best-In-Class Execution Durable Cash Flow Creation through the Cycle 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 Generated ~$646 million of Free Cash Flow (“FCF”) in Q1 2023 ($3.55 / share)(1) Q1 2023 Return of Capital: $485 million ($2.64 / Share) Expect to generate at least $3.0
Slide 5: First Quarter Highlights
First Quarter Highlights Investment Framework and Q1 2023 Results Q1 2023 Execution Maintain Oil Volumes Oil production of 251.4 Mbo/d (425.0 Mboe/d) Oil Production 251.4 252 Oil production per million shares of 1,381 Bo/d, up 11% year Net Mbo/d 248 over year Q1 Guidance Low Q1 Mbo/d Q1 Guidance
Slide 6: Overview of 2023 Guidance
Overview of 2023 Guidance 2023 Activity and Guidance Midpoints vs 2022 2023 Production and Activity Outlook 2023 2022A Q1 2023A Guidance Oil Production 256 - 262 FY 2023 Activity Net Mbo/d 251 259 Mbo/d 224 19.0 16.5 325 - 345 3.5 FireBird Lario (Feb. 23+) Gross operated wells drilled Base Oil Produ
Slide 7: Return of Capital History and Highlights
Return of Capital History and Highlights Declared Base Dividends Since 2018 ($ / Share) $4.0 Billion Authorized Stock Repurchase Program(1) +5.4x Base Dividend Growth Stock Repurchases ($MM) Cumulative Shares Repurchased (MM) 9.7% average quarterly CAGR $1,933 $2,000 15.9 18.00 $3.2000 $3.0000 $1,80
Slide 8: 2023 Free Cash Flow Sensitivity
2023 Free Cash Flow Sensitivity Illustrative 2023E Consolidated Free Cash Flow at Various WTI Oil Prices ($MM)(1) FY 2023 Assumptions 256 - 262 Mbo/d Oil Production $2.5 - $2.7 billion Cash CAPEX(2) >95% % of WTI Realized ($/Bbl) $20/Bbl / $3.00/Mcf Unhedged NGL / Gas Prices $3.20 / Share Annual Bas
Slide 9: Investment Grade Balance Sheet
Investment Grade Balance Sheet Recent Highlights and Balance Sheet Summary: FANG’s Liquidity and Capitalization ($MM) Standalone liquidity of ~$1.5 billion(1) FANG's Consolidated Capitalization 3/31/2023 PF 4/28/2023 Consolidated net debt of ~$6.6 billion(1)(2) Cash and cash equivalents $46 $46
Slide 10: Peer Leading ESG Profile
Peer Leading ESG Profile Diamondback is committed to successful execution on its environmental strategy and targets discussed in the 2022 Corporate Responsibility Report and highlighted below As part of this commitment, in March 2023, Diamondback joined the Oil & Gas Methane Partnership 2.0 (“OG
Slide 11: 2023 Guidance Detail
2023 Guidance Detail Full year 2023 guidance remains unchanged Diamondback Viper Full year 2023 oil production guidance of 256 – 262 Net Production – Mboe/d 430 – 440 35.25 – 38.75 Mbo/d Oil Production – Mbo/d 256 – 262 20.50 – 22.50 Full year 2023 CAPEX budget of $2.5 – $2.7 billion Unit Cost
Slide 12: Appendix
DIAMONUBACK ENERGY APPENDIX 12 DIAMONOBACK ENERGY
Slide 13: Longstanding Track Record of Capital Efficiency and Growing Per Share Metrics
Longstanding Track Record of Capital Efficiency and Growing Per Share Metrics Diamondback Cash Flow / Free Cash Flow Since IPO ($ / Share)(1) CFPS FCFPS +26.7x Cash Flow / Share growth since 2012 $36.96 $22.02 $14.86 $17.74 $25.98 $9.59 $12.79 $3.54 $6.97 $6.64 $4.63 $13.64 $1.33 $0.78 $1.03 -$1.90
Slide 14: Development Strategy and Performance Update
Development Strategy and Performance Update Development Strategy Update: Midland Basin Well Productivity by Year Diamondback saw improving well productivity in 2022, with normalized oil production per well near 2019 levels Cumulative Mbo/d (Normalized to 10k’) 200 2017 Midland Basin productivity
Slide 15: Inventory and Asset Overview
Inventory and Asset Overview Midland Basin Gross (Net) Locations Economic at $50 / Bbl(1) Diamondback Acreage Map(3) 5,000'+ 7,500'+ 10,000'+ Total Avg. Lateral MS / JM 63 (28) 265 (205) 668 (568) 996 (801) 9,700' LS 105 (52) 219 (159) 821 (690) 1,145 (901) 9,900' WCA 100 (41) 121 (90) 477 (391) 698
Slide 16: Year-end Reserves Summary
Year-end Reserves Summary YE22 proved reserves increased 14% y/y to 2,033 Total Proved Reserve Growth (MMBoe) MMBoe (1,070 MMBo, 69% PDP) FANG Standalone VNOM 1P BOE / Share PDP reserves of 1,404 MMBoe; PDP oil reserves of 700 MMBo 2,033 15 1,789 2000.0 Oil comprised 53% of total proved reserves
Slide 17: Environmental Performance Scorecard
Environmental Performance Scorecard Flaring (% of Gross Gas Production)(1) GHG Intensity (mt / mboe Produced)(1) Methane Intensity (mt / mboe Produced)(1) FANG Operated Goal: Reduce 2019 intensity by 50% by 2024 Goal: Reduce 2019 intensity by 70% by 2024 3rd Party Planned Maintenance 3rd Party Unpla
Slide 18: Scope 1 Emissions Breakdown and Strategic Reduction Initiatives
Scope 1 Emissions Breakdown and Strategic Reduction Initiatives Diamondback 2021 Scope 1 Emissions Detail and Current Strategic Initiatives: Atmospheric Storage Tanks: ~55K mt, or 4% of 2021 CO2e emissions Atmospheric (43K mt, or 4% of 2020 CO2e emissions) Storage Combustion Equipment: ~724K mt, or
Slide 19: Methane Emissions and Strategic Reduction Initiatives
Methane Emissions and Strategic Reduction Initiatives Diamondback 2021 Methane Emissions Detail and Current Strategic Initiatives: Gas Pneumatic Devices: ~2.8K mt, or 59% of 2021 CH4 emissions Flare Stacks: (2.9K mt, or 57% of 2020 CH4 emissions) ~1.2K mt, or 24% of 2021 CH4 emissions (1.3K mt, or 2
Slide 20: Governance Summary
Governance Summary Board Independence & Diversity: Board Independence and Diversity 8 of 9, or 89%, of our director nominees are independent 100% of Committee Members are independent 5 of 9, or 56%, of our director nominees are diverse (gender or ethnic minority) Board Leadership: 56% of Direc
Slide 21: Current Hedge Summary: Oil
Current Hedge Summary: Oil Consolidated Crude Oil Hedges (Bbl/day, $/Bbl) Crude Oil Hedges Q2 2023 Q3 2023 Q4 2023 Q1 2024 12,000 12,000 8,000 – Long Puts - WTI $55.00 / -$1.82 $55.00 / -$1.80 $55.00 / -$1.89 – 36,000 28,000 20,000 – Long Puts - MEH $54.17 / -$1.71 $55.00 / -$1.65 $55.00 / -$1.63 –
Slide 22: Current Hedge Summary: Natural Gas
Current Hedge Summary: Natural Gas Consolidated Natural Gas Hedges (Mmbtu/day, $/Mmbtu) Natural Gas Hedges Q2 2023 Q3 2023 Q4 2023 1H 2024 2H 2024 Costless Collars - Henry Hub 330,000 310,000 310,000 200,000 200,000 Floor / Ceiling $3.17 / $9.13 $3.18 / $9.22 $3.18 / $9.22 $3.00 / $8.42 $3.00 / $8.4
Slide 23: Viper Summary
Viper Summary Viper Energy Partners: 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 2
Slide 24: Overview of Equity Method Joint Ventures
Overview of Equity Method Joint Ventures Gray Oak EPIC Crude Wink to Webster OMOG WTG BANGL Long-Haul Crude Oil Long-Haul Crude Oil Long-Haul Crude Oil In-Basin Crude Oil Gas Gathering and Long-Haul Y Grade Project Type Pipeline Pipeline Pipeline Gathering Processing NGL Pipeline Operator Other Inve
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 representing net cash provided by operating activities as determined un
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 less cash and cash equivalents. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Management uses
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