Diamondback Energy, Inc.
Diamondback Energy, Inc., an independent oil and natural gas company, acquires, develops, explores, and exploits unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas, the United States. The company primarily focuses on the development of the Spraberry and Wolfcamp formations of the Midland Basin; and the Wolfcamp and Bone Spring formations of the Delaware Basin, both of which are part of the Permian Basin in West Texas and New Mexico. Diamondback Energy, Inc. was founded in 2007 and is headquartered in Midland, Texas.
What does it do?
Diamondback Energy drills for oil and natural gas in the Permian Basin, a massive underground oil field stretching across West Texas and New Mexico. Think of the Permian Basin as one of the most oil-rich patches of land on Earth — Diamondback has secured rights to drill in some of its most productive sections. They pull crude oil and natural gas out of the ground, sell it to refiners and pipelines, and collect the revenue. They do not own gas stations or refineries — they are purely a 'find it and sell it raw' business.
The Permian Basin is the single most important oil-producing region in the United States, and Diamondback is one of its largest and most efficient operators — meaning it produces oil at a lower cost than most competitors. After its 2024 acquisition of Endeavor Energy for roughly $26 billion, Diamondback became a genuine heavyweight in U.S. energy, with enough scale to influence supply decisions and attract serious institutional investors. In a world where energy security is a political priority and oil demand remains stubbornly high, owning a low-cost Permian producer matters a lot.
How does it make money?
Diamondback makes almost all of its money by selling crude oil, natural gas, and natural gas liquids (think propane and butane) that it pumps out of the ground. In its latest annual results, it brought in $15 billion in revenue, up sharply from $11.1 billion the prior year — largely because the Endeavor acquisition added a huge volume of new production. The company's profit margins depend heavily on the gap between what oil sells for on the market and what it costs Diamondback to get it out of the ground, a figure it keeps notably low at around $11–13 per barrel of oil equivalent. Net income came in at $1.7 billion, though that headline number is weighed down by merger-related costs and depreciation charges common in this industry.
Why do investors care?
The core investment argument for Diamondback is simple: it is one of the cheapest oil producers in America, which means it stays profitable even when oil prices fall. Investors are also drawn to its aggressive shareholder returns — the company pays a base dividend plus variable dividends tied to how much cash it generates, meaning shareholders get a direct cut of oil profits. The growth story hinges on successfully integrating the Endeavor acquisition and unlocking additional drilling locations that Endeavor brought along. If oil prices hold above $60–70 per barrel and integration goes smoothly, the combined company could generate enormous free cash flow (cash left over after all spending) to return to investors.
Deep Dive
MemberA full investor briefing on Diamondback Energy, Inc. — history, leadership, risks, and outlook.