FANG · 10-Q · 2026Q3 · Full report

Derivative Commodity Hedging

Diamondback Energy, Inc. · 2026-11-04 · Importance 25 · Surprise 6

Derivative instruments produced a net loss of $182 million in the third quarter of 2026, and cash settlements resulted in $97 million of net payments.

Key facts

• For October–December, Diamondback had crude oil basis swaps for 85,000 barrels per day indexed to Argus WTI Midland at a weighted-average differential of $1.09 and roll swaps for 150,000 barrels per day indexed to WTI Cushing at $2.89. source
• For October–December, Diamondback had Henry Hub natural gas two-way collars for 840,000 MMBtu per day with a $2.87 floor and $6.35 ceiling. source
• For October–December, Diamondback had Waha Hub natural gas basis swaps for 650,000 MMBtu per day at a weighted-average differential of negative $1.75. source
• Diamondback's net loss on derivative instruments changed between Q2 and Q3 2026 primarily reflecting a $129 million decline in oil contract value and a $102 million decrease in natural gas contract value. source
• Diamondback's nine-month derivative results included a $179 million increase in oil contract losses, comprising $111 million more cash paid on settlements and $68 million more loss on unsettled contracts. source
• The $129 million decline in Diamondback's oil contract value included a $180 million decrease in unsettled contract value, partly offset by a $51 million decrease in cash paid to settle oil contracts. source
• Diamondback had commodity derivative contracts outstanding at September 30, 2026, to reduce price volatility on certain oil and natural gas sales, and had not designated them as accounting hedges. source
• Diamondback's nine-month derivative results included a $37 million increase in natural gas contract gains: $105 million more cash received on settlements, partly offset by $68 million more loss on unsettled contracts. source