The Endeavor Acquisition added approximately 500,849 gross (361,927 net) acres primarily in the Permian Basin, significantly expanding Diamondback's resource base. A pending Double Eagle Acquisition will add approximately 67,700 gross (40,000 net) acres in the Midland Basin.

Diamondback emphasizes capital discipline and efficiency, planning capital expenditures between $3.80 billion and $4.20 billion in 2025 after giving effect to the pending Double Eagle Acquisition. The company is focused on capital efficiency over volume growth.

The company is allocating more free cash flow to debt reduction, targeting $10 billion in near-term and $6-8 billion long-term net debt. This is supported by plans to sell at least $1.5 billion in non-core assets.

Management notes that the successful execution of the Endeavor Acquisition has further strengthened our existing operating experience and has begun to deliver operational synergies ahead of schedule.

The company is focused on low-cost development strategy and continuous improvement in operational, capital allocation and cost efficiencies. The acreage position is generally in contiguous blocks which allows us to develop this acreage efficiently with a “manufacturing strategy.

The company is committed to the safe and responsible development of our resources in the Permian Basin. Our approach to ESG is evidenced through our commitment to people, safety, environmental responsibility, community and sound governance practices.

Market conditions and particularly volatility in prices for oil and natural gas may adversely affect our revenue, cash flows, profitability, growth, production and the present value of our estimated reserves.

The IRA and other risks relating to climate change could accelerate the transition to a low carbon economy and could impose new costs on our operations that may have a material and adverse effect on us.

Our operations are substantially dependent on the availability of water. Restrictions on our ability to obtain water may have an adverse effect on our financial condition, results of operations and cash flows.

We have identified a multi-year inventory of potential drilling locations for our oil-weighted reserves that we believe provides attractive growth and return opportunities.

We are the operator of approximately 92% of our Permian Basin acreage. This operating control allows us to better execute on our strategies of enhancing returns through operational and cost efficiencies.

Our executive team has a proven track record of executing on multi-rig development drilling programs and extensive experience in the Permian Basin.

Our acreage position is generally in contiguous blocks which allows us to develop this acreage efficiently with a “manufacturing” strategy that takes advantage of economies of scale and uses centralized production and fluid handling facilities.

Our average 80% working interest in our acreage allows us to realize the majority of the benefits of these activities and cost efficiencies.

We expect to be in a position to continue to deliver on our enhanced capital return program, through which we intend to return at least 50% of our quarterly free cash flow to our stockholders.

Our executive team, which has significant experience in the Permian Basin, intends to continue to seek ways to maximize hydrocarbon recovery by optimizing and enhancing our drilling and completion techniques.

Our completion techniques are continually evolving as we evaluate and implement hydraulic fracturing practices that have and are expected to continue to increase recovery and reduce completion costs.

We retain the ability to increase or decrease our capital expenditure program based on commodity price outlooks. This operating control also enables us to obtain data needed for efficient exploration of horizontal prospects.

Beginning in the first quarter of 2024, our board of directors approved a reduction to our return of capital commitment to at least 50% (down from 75%) of our quarterly free cash flow to our stockholders.

Because we added debt to fund the cash portion of the Endeavor Acquisition and expect to add additional debt upon completion of the pending Double Eagle Acquisition, we are allocating more free cash flow to pay down our debt.

We also remain focused on our long-term priority to return cash to our stockholders.

We are committed to the safe and responsible development of our resources in the Permian Basin. Our approach to ESG is evidenced through our commitment to people, safety, environmental responsibility, community and sound governance practices.

We have committed to reduce injuries and fatalities in our business and are focused on safety culture improvements, safety leadership actions and human performance principles.

We support employees in pursuing training opportunities to expand their professional skills. Our internal course offerings in 2024 included a wide array of topics in addition to extensive safety and other compliance training sessions.

We have focused our drilling and development operations in the Permian Basin, one of the longest operating hydrocarbon basins in the United States, with a long and well-established production history and developed infrastructure.

We believe that the geological and regulatory environment of the Permian Basin is stable and predictable and that we are faced with less operational risks in the Permian Basin when compared to other emerging hydrocarbon basins.

We are the operator of approximately 92% of our Permian Basin acreage. This operating control allows us to better execute on our strategies of enhancing returns through operational and cost efficiencies.