Capex
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FY2025 Q3
Improving
Diamondback Energy, Inc. earnings call
Buzzberg read
Maintenance capex run rate set at ~$925 million per quarter
Diamondback's Q3 2025 call focused on capital discipline and efficiency gains amid a 'yellow light' macro environment. Management highlighted continued cost reductions, a shift away from Waha gas pricing, and confidence in its co-development strategy to deliver superior returns. Diamondback expects Waha gas exposure to drop to just over 40% of gas sales by end of 2026, down from over 70% today.
Buzzberg read Maintenance capex run rate set at ~$925 million per quarter Diamondback's Q3 2025 call focused on capital discipline and efficiency gains amid a 'yellow light' macro environment. Management highlighted continued cost reductions, a shift away from Waha gas pricing, and confidence in its co-development strategy to deliver superior returns. Diamondback expects Waha gas exposure to drop to just over 40% of gas sales by end of 2026, down from over 70% today. Read full analysisCollapse analysis
Diamondback's Q3 2025 call focused on capital discipline and efficiency gains amid a 'yellow light' macro environment. Management highlighted continued cost reductions, a shift away from Waha gas pricing, and confidence in its co-development strategy to deliver superior returns. Diamondback expects Waha gas exposure to drop to just over 40% of gas sales by end of 2026, down from over 70% today.
- Company committed up to $50 million/day of gas to Competitive Power Ventures' new power plant, a creative in-basin egress solution.
- Continuous pumping on frac crews is reducing crew requirements by 0.5 to 1.0 on an annual basis.
- Management sees potential for Barnett and Woodford zones to become Tier 1 development targets, extending core inventory.
Revenue$3.924BReported
EPS$3.08Reported
Gross margin34.63%Reported
Operating margin31.5%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Macro
Yellow light macro stance persists; red light if oil prints low $50s
Gas Realizations
Gas Waha exposure to drop from 70% to 40% by end-2026
Show 3 more callouts
Efficiency
Continuous pumping could reduce frac crew count by half to one
Inventory
Core inventory includes Barnett and Woodford as potential Tier 1 zones
M&A
M&A focus on cashless, value-accretive trades, not large deals
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| Revenue | $3.924B | Reported |
| EPS | $3.08 | Reported |
| Gross margin | 34.63% | Reported |
| Operating margin | 31.5% | Reported |
| Free cash flow | $1.609B | Reported |
| Capex | $0.774B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Capex | FY2026 | $3.5B–$3.9BIn line with consensus | $3.7B | Maintained |
AI, capex & demand read
Management read
Measured
Management expressed confidence in their low-cost position and capital discipline while acknowledging macro uncertainty with a 'yellow light' stance.
Investment and capacity
Management indicated that Q4 2025 capex of around $925 million is a good bogey for maintaining production, with a new baseline of about 505,000 barrels of oil per day in Q1 2026. They expect to hold production flat with capex in the $875-975 million per quarter range, and noted that efficiencies and service costs could help further.
all 3 named companies below
Companiesreturns since call
Partners
Partners
Kate Fantos
Diamondback expects its Waha exposure to fall to just over 40% of gas sales by end of 2026, down from over 70% today, driven by new pipeline capacity and power demand. — This shift away from Waha implies improved gas realizations for FANG and increased demand for alternative egress, benefiting pipeline operators like Energy Transfer.
Evidence
“post-energy transfer buying WTG, which we were an investor in, we've decided to work with them and commit some gas to that Hugh Brinson pipeline going east.”
Investees
Investees
Kate Fantos
Diamondback indicates Viper is taking similar steps to sell non-core assets at favorable valuations, likely improving its balance sheet and aligning with Diamondback's capital discipline strategy.
Evidence
“Viper, as you might know, also executed a non-core or non-permeant asset sale at a good number that we'll talk about in a couple hours.”
Supply chain
Supply chain
Kate Fantos
Continuous pumping on frac crews is estimated to save 0.5 to 1.0 frac crew on an annual basis, indicating a structural improvement in completion efficiency. — Reduced frac crew demand suggests potential pricing pressure for oilfield service providers as operators achieve more output with fewer completions crews.
Evidence
“on the continuous pumping thing, the exciting thing is that you use one less crew, most likely half to one less crew on an annual basis.”
External signals
Supply-chain alpha · 3returns since call
Diamondback expects its Waha exposure to fall to just over 40% of gas sales by end of 2026, down from over 70% today, driven by new pipeline capacity and power demand.
Evidence
“by year end 2026, we expect Waha exposure to be down to just over 40% of gas sales as compared to a little over 70% today.”
Continuous pumping on frac crews is estimated to save 0.5 to 1.0 frac crew on an annual basis, indicating a structural improvement in completion efficiency.
Diamondback is testing deeper zones like the Barnett and Woodford, and believes the Barnett and Woodford could become Tier 1 development zones given recent results.
Evidence
“I think we're really excited about the results of those two zones and have some really promising wealth performance that will be public, you know, coming pretty soon.”
Methodology & coverage
Management-only analysis. All 3 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.