v3.26.3
RELATED PARTY TRANSACTIONS
 9 Months Ended
Sep. 30, 2026
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS RELATED PARTY TRANSACTIONS
Deep Blue

The Company and Five Point Energy LLC have a joint venture, Deep Blue, in which the Company owned a 30% equity ownership interest as of September 30, 2026. The equity ownership interest is included in the caption “Other assets” on the Company’s condensed consolidated balance sheets. Additionally, the Company has other related party transactions with Deep Blue in the ordinary course of business, which result in (i) certain accounts receivable from Deep Blue, (ii) accrued capital expenditures and other accrued payables related to a commitment to fund certain capital expenditures on projects that were in process at the time of the Deep Blue transaction, and (iii) lease operating expenses and capitalized expenses related to fees paid to Deep Blue under a 15-year dedication for its produced water and supply water within a 12-county area of mutual interest in the Midland Basin.

For further discussion on the 2025 transaction with Deep Blue, see Note 4—Acquisitions and Divestitures.
The following table presents related party balances that pertain to Deep Blue which are included in the condensed consolidated balance sheets as of the dates indicated:

September 30,December 31,
20262025
(In millions)
Assets:
Accounts receivable
$1 $1 
Other assets
$243 $197 
Liabilities:
Accounts payable and accrued capital expenditures
$95 $71 
Other accrued liabilities
$51 $82 

The Company incurred costs for water services provided by Deep Blue of approximately $81 million and $23 million during the three months ended September 30, 2026 and 2025, respectively, and $214 million and $95 million during the nine months ended September 30, 2026 and 2025, respectively, which were capitalized and are included in the caption “Proved properties” on the condensed consolidated balance sheets.

The following table presents the significant related party transactions included in the condensed consolidated statements of operations for the periods indicated:

Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
(In millions)
Revenues:
Other operating income$8 $— $8 $— 
Costs and expenses:
Lease operating expenses$81 $39 $240 $111 

Viper

For discussion on related party transactions with Viper, see Note 1—Description of the Business and Basis of Presentation and Note 4—Acquisitions and Divestitures.

SGF Common Stock Repurchases and Secondary Offering

In 2024, the Company completed the acquisition of 100% of the equity interests of Endeavor Parent, LLC (“Endeavor”) (the “Endeavor Acquisition”). As partial consideration for the Endeavor Acquisition, the Company issued 117.27 million shares, or 39.8% of its then-outstanding common stock to the former owners of Endeavor (the “Endeavor equityholders”), the majority of which are currently held by SGF FANG Holdings, LP (“SGF”). Additionally, pursuant to a stockholders agreement executed with the Endeavor equityholders, the Endeavor equityholders have the right to propose for nomination between one and four directors for election to the Company’s board of directors as long as certain established ownership thresholds are maintained. As a result, SGF is considered a related party of the Company under ASC Topic 850 “Related Party Disclosures.”
On September 29, 2026, Diamondback entered into a first amendment of the stockholders agreement with SGF, which, among other things, provides the right to designate (i) two directors to the board of directors if SGF beneficially owns between 10% and 25% of the Company’s outstanding common stock, and (ii) no directors to the board of directors if SGF beneficially owns less than 10% of the Company’s outstanding common stock. In connection with the first amendment, two of the directors previously designated by the Endeavor equityholders resigned from the Company’s board of directors on September 29, 2026 and September 30, 2026.

On November 28, 2025, the Company entered into a letter agreement with SGF, which provides SGF with the right, but not the obligation, to sell up to 3.0 million shares of the Company’s common stock to the Company per quarter through December 31, 2026 at the most recent Nasdaq closing price of such transaction. The Company did not repurchase any shares from SGF during the three months ended September 30, 2026. During the nine months ended September 30, 2026, the Company repurchased 3.0 million shares from SGF for approximately $509 million, excluding excise taxes. Repurchases under the letter agreement are pursuant to the Company’s existing share repurchase program, and have been approved by the audit committee of the Company’s board of directors. For details on the Company’s existing share repurchase program, see Note 9—Stockholders’ Equity and Earnings (Loss) Per Share.

On March 12, 2026, SGF completed a secondary public offering with Evercore Group L.L.C., Citigroup Global Markets Inc., and J.P. Morgan Securities LLC, as representatives of the several underwriters named therein (the “SGF Underwriters”), providing for the sale of 12.65 million shares of the Company’s common stock to the SGF Underwriters at $170.18875 per share.

Giving effect to the repurchases and secondary offering discussed above, as well as SGF’s sales of Company common stock to third parties, as of September 30, 2026, the Endeavor equityholders held approximately 23.5% of the Company’s outstanding common stock.