GUARANTOR FINANCIAL STATEMENTS (Tables)

12 Months Ended

Dec. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Condensed consolidated balance sheet

Condensed Consolidated Balance Sheet
December 31, 2019
(In millions)
						Non–
			Guarantor			Guarantor
	Parent		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	93	$	—		$	30		$	—		$	123
Restricted cash	5		—			—			—			5
Accounts receivable, net	—		248			367			—			615
Intercompany receivable	5,331		—			572			(5,903		)	—
Inventories	—		1			36			—			37
Derivative instruments	—		46			—			—			46
Prepaid expenses and other	2		1			21			19			43
Total current assets	5,431		296			1,026			(5,884		)	869
Property and equipment:
Oil and natural gas properties, full cost method of accounting	—		13,276			12,707			(201		)	25,782
Midstream assets	—		—			931			—			931
Other property, equipment and land	—		—			125			—			125
Accumulated depletion, depreciation, amortization and impairment	—		(3,167		)	(1,831		)	(5		)	(5,003		)
Net property and equipment	—		10,109			11,932			(206		)	21,835
Equity method investments	—		—			479			—			479
Derivative instruments	—		7			—			—			7
Investment in subsidiaries	10,414		—			—			(10,414		)	—
Investment in real estate, net	—		—			109			—			109
Deferred tax asset	—		—			142			—			142
Other assets	—		10			310			(230		)	90
Total assets	$	15,845	$	10,422		$	13,998		$	(16,734	)	$	23,531
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable-trade	$	—	$	—		$	179		$	—		$	179
Intercompany payable	—		5,930			(27		)	(5,903		)	—
Accrued capital expenditures	—		—			475			—			475
Other accrued liabilities	17		132			155			—			304
Revenues and royalties payable	—		—			278			—			278
Derivative instruments	—		18			8			1			27
Total current liabilities	17		6,080			1,068			(5,902		)	1,263
Long-term debt	3,769		13			1,589			—			5,371
Asset retirement obligations	—		34			60			—			94
Deferred income taxes	470		—			1,416			—			1,886
Other long-term liabilities	—		—			11			—			11
Total liabilities	4,256		6,127			4,144			(5,902		)	8,625
Commitments and contingencies
Stockholders’ equity	11,589		4,295			7,908			(10,543		)	13,249
Non-controlling interest	—		—			1,946			(289		)	1,657
Total equity	11,589		4,295			9,854			(10,832		)	14,906
Total liabilities and equity	$	15,845	$	10,422		$	13,998		$	(16,734	)	$	23,531

Condensed Consolidated Balance Sheet
December 31, 2018
(In millions)
						Non–
			Guarantor			Guarantor
	Parent		Subsidiaries			Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	84	$	2		$	129		$	—		$	215
Accounts receivable, net	—		143			249			—			392
Accounts receivable - related party	—		—			4			(4		)	—
Intercompany receivable	4,469		—			201			(4,670		)	—
Inventories	—		2			35			—			37
Derivative instruments	—		197			34			—			231
Prepaid expenses and other	2		—			48			—			50
Total current assets	4,555		344			700			(4,674		)	925
Property and equipment:
Oil and natural gas properties, full cost method of accounting	—		11,170			11,132			(3		)	22,299
Midstream assets	—		21			679			—			700
Other property, equipment and land	—		1			146			—			147
Accumulated depletion, depreciation, amortization and impairment	—		(2,432		)	(330		)	(12		)	(2,774		)
Net property and equipment	—		8,760			11,627			(15		)	20,372
Equity method investments	—		—			1			—			1
Investment in subsidiaries	12,689		—			112			(12,801		)	—
Deferred tax asset	—		—			97			—			97
Investment in real estate, net	—		—			116			—			116
Other assets	—		10			75			—			85
Total assets	$	17,244	$	9,114		$	12,728		$	(17,490	)	$	21,596
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable-trade	$	—	$	—		$	128		$	—		$	128
Intercompany payable	—		3,939			734			(4,673		)	—
Accrued capital expenditures	—		—			495			—			495
Other accrued liabilities	14		23			216			—			253
Revenues and royalties payable	—		—			143			—			143
Total current liabilities	14		3,962			1,716			(4,673		)	1,019
Long-term debt	2,036		1,490			938			—			4,464
Derivative instruments	—		11			4			—			15
Asset retirement obligations	—		30			106			—			136
Deferred income taxes	382		—			1,403			—			1,785
Other long-term liabilities	—		—			10			—			10
Total liabilities	2,432		5,493			4,177			(4,673		)	7,429
Commitments and contingencies
Stockholders’ equity	14,812		3,621			7,856			(12,589		)	13,700
Non-controlling interest	—		—			695			(228		)	467
Total equity	14,812		3,621			8,551			(12,817		)	14,167
Total liabilities and equity	$	17,244	$	9,114		$	12,728		$	(17,490	)	$	21,596

Condensed consolidated statement of operations

Condensed Consolidated Statement of Operations
Year Ended December 31, 2019
(In millions)
							Non–
				Guarantor			Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Oil sales	$	—		$	1,972		$	1,318		$	264		$	3,554
Natural gas sales	—			27			31			8			66
Natural gas liquid sales	—			132			114			21			267
Royalty income	—			—			293			(293		)	—
Lease bonus	—			—			4			—			4
Midstream services	—			—			434			(370		)	64
Other operating income	—			—			14			(5		)	9
Total revenues	—			2,131			2,208			(375		)	3,964
Costs and expenses:
Lease operating expenses	—			390			243			(143		)	490
Production and ad valorem taxes	—			130			118			—			248
Gathering and transportation	—			75			34			(21		)	88
Midstream services	—			—			170			(79		)	91
Depreciation, depletion and amortization	—			735			720			(8		)	1,447
Impairment of oil and natural gas properties	—			—			790			—			790
General and administrative expenses	48			1			67			(12		)	104
Asset retirement obligation accretion	—			2			5			—			7
Other operating expense	—			—			4			—			4
Total costs and expenses	48			1,333			2,151			(263		)	3,269
Income (loss) from operations	(48		)	798			57			(112		)	695
Other income (expense):
Interest expense, net	(47		)	(74		)	(51		)	—			(172		)
Other income (expense), net	3			—			2			(7		)	(2		)
Gain on derivative instruments, net	—			(56		)	(52		)	—			(108		)
Gain on revaluation of investment	—			—			5			—			5
Loss on extinguishment of debt	(56		)	—			—			—			(56		)
Income from subsidiaries	764			—			—			(764		)	—
Total other income (expense), net	664			(130		)	(96		)	(771		)	(333		)
Income (loss) before income taxes	616			668			(39		)	(883		)	362
Provision for (benefit from) income taxes	81			—			(33		)	(1		)	47
Net income (loss)	535			668			(6		)	(882		)	315
Net income (loss) attributable to non-controlling interest	—			—			266			(191		)	75
Net income (loss) attributable to Diamondback Energy, Inc.	$	535		$	668		$	(272	)	$	(691	)	$	240

Condensed Consolidated Statement of Operations
Year Ended December 31, 2018
(In millions)
							Non–
				Guarantor			Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Oil sales	$	—		$	1,545		$	87		$	247		$	1,879
Natural gas sales	—			43			5			13			61
Natural gas liquid sales	—			158			9			23			190
Royalty income	—			—			283			(283		)	—
Lease bonus	—			—			6			(3		)	3
Midstream services	—			—			172			(138		)	34
Other operating income	—			—			9			—			9
Total revenues	—			1,746			571			(141		)	2,176
Costs and expenses:
Lease operating expenses	—			230			17			(42		)	205
Production and ad valorem taxes	—			106			27			—			133
Gathering and transportation	—			41			1			(16		)	26
Midstream services	—			—			72			—			72
Depreciation, depletion and amortization	—			472			134			17			623
General and administrative expenses	28			1			38			(2		)	65
Merger and integration expense	18			—			18			—			36
Asset retirement obligation accretion	—			1			1			—			2
Other operating expenses	—			—			3			—			3
Total costs and expenses	46			851			311			(43		)	1,165
Income (loss) from operations	(46		)	895			260			(98		)	1,011
Other income (expense):
Interest expense, net	(43		)	(20		)	(24		)	—			(87		)
Other income (expense), net	1			—			90			(2		)	89
Loss on derivative instruments, net	—			169			(68		)	—			101
Gain on revaluation of investment	—			—			(1		)	—			(1		)
Income from subsidiaries	1,113			—			—			(1,113		)	—
Total other expense, net	1,071			149			(3		)	(1,115		)	102
Income (loss) before income taxes	1,025			1,044			257			(1,213		)	1,113
Provision for (benefit from) income taxes	241			—			(73		)	—			168
Net income (loss)	784			1,044			330			(1,213		)	945
Net income attributable to non-controlling interest	—			—			119			(20		)	99
Net income (loss) attributable to Diamondback Energy, Inc.	$	784		$	1,044		$	211		$	(1,193	)	$	846

Condensed Consolidated Statement of Operations
Year Ended December 31, 2017
(In millions)
							Non–
				Guarantor			Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Revenues:
Oil sales	$	—		$	904		$	—		$	140		$	1,044
Natural gas sales	—			43			—			9			52
Natural gas liquid sales	—			79			—			11			90
Royalty income	—			—			160			(160		)	—
Lease bonus income	—			—			12			—			12
Midstream services	—			—			39			(32		)	7
Total revenues	—			1,026			211			(32		)	1,205
Costs and expenses:
Lease operating expenses	—			143			—			(16		)	127
Production and ad valorem taxes	—			63			11			—			74
Gathering and transportation	—			21			—			(8		)	13
Midstream services	—			—			11			(1		)	10
Depreciation, depletion and amortization	—			277			46			4			327
General and administrative expenses	27			—			23			(2		)	48
Asset retirement obligation accretion expense	—			1			—			—			1
Total costs and expenses	27			505			91			(23		)	600
Income (loss) from operations	(27		)	521			120			(9		)	605
Other income (expense):
Interest expense, net	(30		)	(6		)	(5		)	—			(41		)
Other income (expense), net	1			—			12			(2		)	11
Loss on derivative instruments, net	—			(77		)	(1		)	—			(78		)
Income from subsidiaries	446			—			—			(446		)	—
Total other expense, net	417			(83		)	6			(448		)	(108		)
Income (loss) before income taxes	390			438			126			(457		)	497
Provision for income taxes	(20		)	—			—			—			(20		)
Net income (loss)	410			438			126			(457		)	517
Net income attributable to non-controlling interest	—			—			—			35			35
Net income (loss) attributable to Diamondback Energy, Inc.	$	410		$	438		$	126		$	(492	)	$	482

Condensed consolidated statement of cash flows

Condensed Consolidated Statement of Cash Flows
Year Ended December 31, 2019
(In millions)
							Non–
				Guarantor			Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash (used in) provided by operating activities	$	(956	)	$	1,433		$	2,257		$	—		$	2,734
Cash flows from investing activities:
Additions to oil and natural gas properties	—			(2,038		)	(639		)	—			(2,677		)
Additions to midstream assets	—			(38		)	(206		)	—			(244		)
Purchase of other property, equipment and land	—			—			(5		)	—			(5		)
Acquisition of leasehold interests	—			(360		)	(83		)	—			(443		)
Acquisition of mineral interests	—			—			(523		)	190			(333		)
Proceeds from sale of assets	—			118			372			(190		)	300
Investment in real estate	—			—			(1		)	—			(1		)
Equity investments	—			—			(485		)	—			(485		)
Intercompany transfers	(860		)	—			860			—			—
Net cash used in investing activities	(860		)	(2,318		)	(710		)	—			(3,888		)
Cash flows from financing activities:
Proceeds from borrowing under credit facility	—			1,292			1,058			—			2,350
Repayment under credit facility	—			(2,769		)	(949		)	—			(3,718		)
Proceeds from senior notes	2,968			—			501			—			3,469
Repayment of senior notes	(1,250		)	—			—			—			(1,250		)
Premium on extinguishment of debt	(44		)	—			—			—			(44		)
Proceeds from joint venture	—			—			39			—			39
Debt issuance costs	—			—			(18		)	—			(18		)
Public offering costs	—			—			(41		)	—			(41		)
Proceeds from public offerings	—			—			1,106			—			1,106
Distributions from subsidiary	860			—			—			(860		)	—
Proceeds from exercise of stock options	9			—			—			—			9
Repurchased for tax withholdings	(13		)	—			—			—			(13		)
Repurchased as part of share buyback	(593		)	—			—			—			(593		)
Dividends to stockholders	(112		)	—			—			—			(112		)
Distributions to non-controlling interest	—			—			(982		)	860			(122		)
Intercompany transfers	—			2,360			(2,360		)	—			—
Net cash (used in) provided by financing activities	1,825			883			(1,646		)	—			1,062
Net increase (decrease) in cash and cash equivalents	9			(2		)	(99		)	—			(92		)
Cash and cash equivalents at beginning of period	84			2			129			—			215
Cash and cash equivalents at end of period	$	93		$	—		$	30		$	—		$	123

Condensed Consolidated Statement of Cash Flows
Year Ended December 31, 2018
(In millions)
							Non–
				Guarantor			Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities	$	(58	)	$	1,224		$	399		$	—		$	1,565
Cash flows from investing activities:
Additions to oil and natural gas properties	—			(1,461		)	—			—			(1,461		)
Additions to midstream assets	—			(21		)	(183		)	—			(204		)
Purchase of other property, equipment and land	—			(7		)	—			—			(7		)
Acquisition of leasehold interests	—			(1,371		)	—			—			(1,371		)
Acquisition of mineral interests	—			—			(440		)	—			(440		)
Proceeds from sale of assets	—			79			1			—			80
Investment in real estate	—			—			(111		)	—			(111		)
Funds held in escrow	—			27			(16		)	—			11
Intercompany transfers	(367		)	989			(622		)	—			—
Net cash used in investing activities	(367		)	(1,765		)	(1,371		)	—			(3,503		)
Cash flows from financing activities:
Proceeds from borrowing under credit facility	—			1,960			692			—			2,652
Repayment under credit facility	—			(867		)	(375		)	—			(1,242		)
Repayment on Energen's credit facility	—			—			(559		)	—			(559		)
Proceeds from senior notes	1,062			—			—			—			1,062
Debt issuance costs	(14		)	—			(11		)	—			(25		)
Public offering costs	—			—			(3		)	—			(3		)
Proceeds from public offerings	—			—			305			—			305
Contributions to subsidiaries	(1		)	—			(1		)	2			—
Distribution to parent	155			—			—			(155		)	—
Distributions from subsidiary	(696		)	—			696			—			—
Repurchased for tax withholdings	(14		)	—			—			—			(14		)
Dividends to stockholders	(37		)	—			—			—			(37		)
Distributions to non-controlling interest	—			—			(253		)	155			(98		)
Intercompany transfers	—			(550		)	552			(2		)	—
Net cash provided by financing activities	455			543			1,043			—			2,041
Net increase (decrease) in cash and cash equivalents	30			2			71			—			103
Cash and cash equivalents at beginning of period	54			—			58			—			112
Cash and cash equivalents at end of period	$	84		$	2		$	129		$	—		$	215

Condensed Consolidated Statement of Cash Flows
Year Ended December 31, 2017
(In millions)
							Non–
				Guarantor			Guarantor
	Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	(29	)	$	768		$	150		$	—		$	889
Cash flows from investing activities:
Additions to oil and natural gas properties	—			(790		)	(3		)	—			(793		)
Additions to midstream assets	—			—			(68		)	—			(68		)
Purchase of other property, equipment and land	—			(22		)	(1		)	—			(23		)
Acquisition of leasehold interests	—			(1,961		)	—			—			(1,961		)
Acquisition of mineral interests	—			(63		)	(344		)	—			(407		)
Acquisition of midstream assets	—			—			(50		)	—			(50		)
Proceeds from sale of assets	—			66			—			—			66
Funds held in escrow	—			(27		)	131			—			104
Intercompany transfers	(1,631		)	1,631			—			—			—
Net cash used in investing activities	(1,631		)	(1,166		)	(335		)	—			(3,132		)
Cash flows from financing activities:
Proceeds from borrowing under credit facility	—			475			279			—			754
Repayment under credit facility	—			(78		)	(306		)	—			(384		)
Purchase of subsidiary units by parent	(10		)	—			—			10			—
Debt issuance costs	(8		)	1			(2		)	—			(9		)
Public offering costs	—			—			(1		)	—			(1		)
Proceeds from public offerings	—			—			380			(10		)	370
Distribution from subsidiary	90			—			(1		)	(89		)	—
Distribution to non-controlling interest	—			—			(130		)	89			(41		)
Net cash provided by financing activities	72			398			219			—			689
Net increase (decrease) in cash and cash equivalents	(1,588		)	—			34			—			(1,554		)
Cash and cash equivalents at beginning of period	1,642			—			24			—			1,666
Cash and cash equivalents at end of period	$	54		$	—		$	58		$	—		$	112