Diamondback Produces 525,000 Barrels a Day, Sticks to Spending Discipline Amid Market Volatility
Key Facts
Diamondback Energy recorded average oil production of 525,000 barrels a day in the third quarter of 2026, matching the second quarter and exceeding the midpoint of its guidance range, according to the company’s letter to shareholders. Average total production was 1.034 million barrels of oil equivalent a day, up 2% quarter over quarter. The company said cash capital spending reached $1.03 billion, within its range of $950 million to $1.05 billion. The figures put the quarter’s results alongside higher annual production and spending guidance, while the company maintains its stated focus on capital efficiency. Diamondback said its priorities amid market volatility remain executing operations with the best capital efficiency and appropriately allocating free cash flow.
The company raised its 2026 oil production guidance to about 524,000 barrels a day, compared with previous guidance of 522,000 or more. It also raised its total production outlook to about 1.015 million barrels of oil equivalent a day, from 1 million or more in its previous estimate. Its cash capital spending guidance for the year rose to $3.95–4.00 billion, from about $3.9 billion. The revisions show a modest increase in production expectations alongside higher spending allocations, rather than a freeze in activity. The initial 2026 plan aimed to keep activity and production at fourth-quarter 2025 levels, with cash capital spending of $3.6 billion to $3.9 billion, given uncertainty over oil prices.
The board described the macroeconomic environment as "highly volatile and impossible to predict" and said the company expects current volatility to continue. The letter added that priorities have not changed despite these conditions, including capital efficiency and free cash flow allocation. The message is consistent with the company’s current outlook for 2027 activity, which includes regularly operating five electric frac fleets simultaneously to boost efficiency. Diamondback said it intends to keep enough drilling rigs ahead of its frac fleets to preserve operational execution margins. The company thus sets out a framework for its expected activity next year without presenting it as a detailed final plan.
On execution, Diamondback said completion crews finished 1.86 million lateral feet in the third quarter, up 10% from the previous quarter. It said cost per lateral foot remained roughly stable compared with the second quarter and the same period a year earlier, despite higher diesel, sand and water costs. By contrast, the blended drilling cost per lateral foot increased as the program shifted to deeper targets in the Barnett and Wolfcamp D formations. Wells targeting those two formations accounted for about one-fifth of the wells the company drilled during the quarter. It said drilling cost per foot in each formation, on a like-for-like basis, remained stable or below its level a year earlier.
The company set fourth-quarter 2026 oil production guidance at 518,000 to 528,000 barrels a day, with capital spending of $1.00 billion to $1.05 billion. It had announced that its third-quarter results call would be held on November 3, 2026, at 8:00 a.m. Central U.S. time. Across the broader market, an October report by the U.S. Energy Information Administration said Brent crude averaged $114 a barrel in September, up $23 from August. The report forecast an average of $105 a barrel in the fourth quarter of 2026, $14 above its previous monthly forecast. It also expected most Middle Eastern production to return to pre-conflict averages by the end of the second quarter of 2027, and forecast Brent averaging $87 in that quarter and $74 in the fourth quarter of the same year.