Diamondback Energy cuts 2025 capital budget, boosts share buybacks

Diamondback Energy Inc. (NASDAQ: FANG) reduced its 2025 capital expenditure budget by $100 million to $3.4-$3.6 billion and increased its share repurchase authorization by $2 billion to $8 billion total, according to a letter to stockholders released Monday.

The Midland, Texas-based oil producer cited continued macroeconomic uncertainty and market oversupply concerns for the budget reduction, which represents approximately 3% from the prior midpoint. The company dropped four rigs in the second quarter, reducing activity from 17 to 13 rigs, and expects to operate 13-14 rigs for the remainder of 2025.

Chief Executive Officer Kaes Van't Hof stated the company believes U.S. shale oil production has likely peaked at current oil prices. The U.S. oil-directed rig count declined by approximately 60 rigs this year, with 59 rigs dropping in the second quarter alone.

Second quarter oil production averaged 496 thousand barrels per day, near the top of guidance, while capital expenditures totaled $864 million. The company generated $1.2 billion in free cash flow and returned approximately $691 million to stockholders through dividends and share repurchases.

Diamondback repurchased 3 million shares for $398 million in the second quarter at a weighted average price of $133.15 per share. Through the first half of 2025, the company bought back 6.6 million shares for $973 million.

The company narrowed its annual oil production guidance to 485-492 thousand barrels per day and increased total production guidance by 2% to 890-910 thousand barrels of oil equivalent per day. Consolidated net debt rose by $2.8 billion following the April 1 completion of the Double Eagle acquisition.

Diamondback completed the sale of its 10% interest in the BANGL pipeline for approximately $130 million in July and signed an agreement to divest Delaware Basin properties for $138 million, expected to close in the third quarter.

You May Also Be Interested In

• Exchange Income raises guidance and dividend after record Q2
• Transact Technologies (TACT) Tops Q2 EPS by 1c
• Aardvark Therapeutics (AARD) Tops Q2 EPS by 21c