FANG · 10-Q · 2026Q2 · Full report

Oil and Gas Price Sensitivity

Diamondback Energy, Inc. · 2026-08-05 · Importance 46 · Surprise 42

The $1.4 billion non-cash ceiling test impairment for the six months ended June 30, 2026 primarily resulted from declining SEC commodity prices over the preceding twelve months. Future impairment testing will depend on commodity prices, production rates, proved reserves, development costs, unevaluated-property transfers and income-tax assumptions. Management stated that it does not currently expect additional impairment in the third quarter of 2026, but warned that lower trailing twelve-month commodity prices could cause material subsequent write-downs.

Key facts

• During the three and six months ended June 30, 2026, natural gas price realizations were adversely affected by widening basis differentials between Waha Hub and Henry Hub, driven by regional natural gas takeaway constraints in the Permian Basin and resulting in periods of negative pricing at Waha Hub. source