Diamondback Energy is the Midland Basin operator that has built a one million barrel a day production base, and the inflection this quarter is what that scale does to the balance sheet once the commodity spike arrives.
The engine of the move is crude price, and the cash cost stack held in a narrow band even as the barrel price climbed. The prior-year quarter produced a much lower realized price, and that gap is what turned a full production base into a full cash flow quarter. The single number that matters is the $96.82 average realized oil price for the period, which sits far above where the commodity was a year earlier.
Net income attributable to the company came in at $1.88 billion for the quarter, and free cash flow reached $2.3 billion. The question the next six to twelve months resolve is whether that cash flow converts into sustained debt paydown and buybacks, or simply funds the next acquisition.