On its Q2 2026 earnings call today, Permian operator Diamondback Energy reported oil production of 525 Mbbl/d, at the top end of guidance, while total production of 1,018 Mboe/d carried the company above 1 MMboe/d for the first time in its history. Full-year 2026 oil guidance rose again to 522+ Mbbl/d (from 520+) and total production to 1,000+ Mboe/d (from 972+), with capex held flat at ~$3.9 billion. CEO Kaes Van't Hof said Diamondback answered the Hormuz-driven price signal by drawing on its drilled-but-uncompleted (DUC) inventory and adding a completion crew, leaving output ~4% above where it started the year, and said the low-inventory backdrop "does skew us towards the decision to grow production versus hold production flat."
Diamondback's Barnett formation wells in the Permian basin, where most of its rig additions in Q1 occurred, have now reported production data for their first 12 months online. The company holds nearly 200,000 net acres in the Midland Basin Barnett core with 878 gross (561 net) locations, and its 2025 Barnett wells are outperforming both its Midland core and peer Barnett wells: 24.9 Mbbl/1,000 lateral ft of cumulative oil at 12 months (black line in chart below) versus 16.5 for Diamondback's Midland core (red line) and 16.6 for peer Barnett wells (grey line). Van't Hof said drilling costs for the Barnett wells are "getting closer to $400 a foot," and the first four-well Spanish Trail pad will be completed within a couple of months. Barnett total well costs including drilling and completion, which currently run ~$1,000/lateral ft., need to be reduced to ~$800/lateral ft. to match Midland core returns.
Source: Diamondback Energy
Q2 gas realizations were -$2.15/Mcf pre-hedge, with spring pipeline maintenance driving Waha gas prices to record lows. That has since reversed: Waha was positive for all of July as new capacity came online, which Van't Hof tied to Energy Transfer and WhiteWater projects moving forward. Rather than shut in oil, as it did at 2-3 Mbbl/d in Q1, Diamondback leaned on a gas offload strategy that cut flaring ~24% sequentially and protected an estimated 15.6 Mbbl/d of oil that would otherwise have been choked back. Committed capacity should more than double the company's long-haul takeaway by year-end. Van't Hof called gas a "mega theme" that is "not core to Diamondback's value proposition, but it can be additive to the amount of oil we produce."
