Diamondback Energy announced a 5% increase in its annual base dividend to $4.40 per share and lifted its 2026 production guidance to over 520,000 barrels of oil equivalent per day, citing a historic global supply deficit that has pushed front‑month oil prices up more than 50%.
The company's letter highlighted that global oil production fell by more than 8 million barrels per day in March, a decline of almost 8% of worldwide output, and that the 2‑year oil strip has moved by over 20%. The letter noted that the company remains positioned with ultimate flexibility, having inventory depth and operational capacity to accelerate activity quickly if the market tightens.
To meet the new guidance, Diamondback plans to run five completion crews for the rest of the year and add two or three rigs to preserve a healthy backlog, while maintaining a current capital‑efficiency level. The revised plan is expected to generate more free cash flow per share in 2026, assuming WTI averages above $60 for the remainder of the year.
First‑quarter 2026 production averaged 521 MBO/d, exceeding the high end of the 502–512 MBO/d guidance range, and the company invested $933 million in capital expenditures, below the midpoint of the $900–975 million guidance. Lease operating expenses averaged $6.21 per BOE, and drilling performance was highlighted by 11% of wells reaching total depth in less than five days, with the fastest Barnett well completed in 18 days at a cost under $400 per lateral foot.
Financially, the company generated $1.8 billion in net cash from operating activities, translating into $1.7 billion of free cash flow. A $1.4 billion non‑cash impairment was recorded, expected to be the last related to the price roll‑through. The base dividend increase to $4.40 per share represents a 10% rise this year, and the company has repurchased $777 million of senior notes and $550 million of term loan principal, reducing total debt by roughly $3.7 billion, a 23% cut.
With the supply deficit and price signal in place, Diamondback is positioned to accelerate production, preserve operational flexibility, and continue delivering value to shareholders through a disciplined capital allocation strategy.
