Diamondback takes another $100 million out of 2025’s capex plan

The Permian titan is “waiting for that spring to coil” on price, Kaes Van’t Hof said, and relying on efficiency gains to help fight tariff-induced inflation.
Aug. 5, 2025
3 min read

Executives at Diamondback Energy Inc., Midland, have cut the company's 2025 capital spending plans by about $100 million, building on a $400 million cut three months ago as they prioritize keeping oil volumes flat in an environment that continues to be volatile.

Newly named chief executive officer Kaes Van’t Hof and his team are now forecasting that Diamondback will spend between $3.4 billion and $3.6 billion this year. The lower end of that range is the same as in May but the higher bound is $200 million lower, which has trimmed the midpoint of the range to $3.5 billion from $3.6 billion (and $4.0 billion early this year).

“It’s certainly hard for me to get extremely bullish today,” Van’t Hof told analysts and investors about crude oil prices on an Aug. 5 conference call discussing the company’s second-quarter results. “That’s why I think 2025 for us is a year of debt reduction and share count reduction—waiting for that spring to coil when commodity prices do rally.”

Diamondback produced 495,700 b/d of oil (and 919,900 boe/d in total) in the second quarter from its operations in the Midland and Delaware basins. Its teams completed 116 gross wells (109 net) during the quarter, down about 5% from its Q1 pace, as they reduced their rig count to 13 from 17. Thanks to higher production and capture of NGLs, executives have lifted the company's full-year total production forecast by about 2% to between 890,000 and 910,000 boe/d.

Despite the further retrenching on capex, Van’t Hof said there’s less uncertainty in the market today than in early May and added that “it seems that the double whammy of a demand shock and a supply shock has dissipated for now.”

He also said Diamondback’s drilling and completion work is, like many of its peers, becoming increasingly efficient: The company is now on track to drill about 30 more gross wells this year and complete about 10 fewer than previously forecast while spending less capital. That, he noted, will let Diamondback keep on hand more drilled-but-uncompleted wells for when prices do climb.

Such efficiency is especially prized today with pricing pressures growing: In a letter to investors, Van’t Hof wrote that steel tariffs imposed by the Trump administration will push casing costs up nearly 25% this year versus 2024. Diamondback, he said on the conference call, has seen its casing prices climb about 15% since President Trump’s early-April announcement of a range of tariffs and expects more increases through year’s end.

In the 3 months that ended June 30, Diamondback posted net profits of $739 million on total revenues of nearly $3.7 billion. In the same period of a year ago, those figures were $894 million and $2.5 billion, respectively. The company’s average realized price for a barrel of oil fell to $63.23 during the quarter versus nearly $80 last year and its combined average price for oil, natural gas, and NGLs fell below $40 from $50.33 in the prior-year quarter.

Shares of Diamondback (Ticker: FANG) were down nearly 4% to about $142 in midday trading after the earnings report. Over the past 6 months, the stock has lost nearly 15% of its value, which has cut the company’s market capitalization to about $41 billion.

About the Author

Geert De Lombaerde

Senior Editor

A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.

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