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How Diamondback Energy's Permian Edge Powers Its Growth Story
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Key Takeaways
Diamondback Energy's vast Permian footprint fuels growth with low-cost output and scale.
FANG operates 97% of nearly 869k Permian acres, boosting control, efficiency and drilling output.
The Double Eagle deal and stacked geology extend inventory, and support multi-year drilling and cash flow.
Diamondback Energy, Inc.’s (FANG - Free Report) deep-rooted presence in the Permian Basin continues to define its long-term growth trajectory. As one of the most prolific oil-producing regions in North America, the Permian offers low-cost production, extensive infrastructure and multi-layered resource potential.
Diamondback Energy’s concentrated footprint across the Midland and Delaware sub-basins enables operational efficiencies that few peers can match. As of Dec. 31, 2025, the company held about 869,036 net acres in the Permian Basin and operates roughly 97% of this acreage, enabling tighter control over costs, improved drilling and enhanced hydrocarbon recovery. By focusing on contiguous acreage, Diamondback Energy reduces logistical complexities and enhances drilling productivity. Its use of advanced horizontal drilling and high-intensity completion techniques further boosts output while maintaining cost discipline, supporting strong margins.
A key growth catalyst has been the acquisition of Double Eagle in 2025, which expanded Diamondback Energy’s position in the Midland Basin and strengthened its inventory depth, allowing for sustained multi-year drilling programs without the need for aggressive land acquisitions.
Importantly, the Permian’s stacked geology — featuring formations like Wolfcamp and Spraberry — provides multiple development opportunities from a single location. This enhances capital efficiency and supports consistent production growth. Additionally, proximity to Gulf Coast export hubs ensures reliable demand and favorable pricing dynamics.
Diamondback Energy’s Permian dominance not only drives near-term cash flow but also underpins its long-term strategy. With a focus on operational excellence, technological innovation and disciplined capital allocation, the company is well-positioned to translate its basin leadership into sustained shareholder value and resilient growth.
Other Energy Firms Holding Solid Permian Footprint
Like Diamondback Energy, the following companies also produce significant volumes of oil and natural gas from the Permian.
Chevron Corporation (CVX - Free Report) is intensifying its focus on the Permian Basin, boosting production through efficiency, digital technologies and disciplined development. Chevron has a strong footprint in the Permian with about 2 million net acres of land and has been operating in the basin for more than 100 years. The company is integrating automation, water recycling and methane reduction to balance growth with environmental goals. In the fourth quarter of 2025, the Permian significantly supported Chevron’s upstream performance, driving a 25% year-over-year rise in U.S. output, reinforcing the Permian as a key driver for Chevron’s long-term growth and returns.
ExxonMobil (XOM - Free Report) continues to break records in the Permian — the most prolific shale play in the United States. Along with fourth-quarter 2025 earnings, ExxonMobil announced that it produced around 1.8 million BOE/d, marking its highest output ever from this area, highlighting the fact that Permian has already become central to its growth story. ExxonMobil projects a ramping up of production from the unconventional play to 2.5 million BOE/d by 2030. Thus, XOM is showcasing a solid production outlook for the years to come.
The Zacks Rundown on Diamonback Energy
Shares of Diamondback Energy have gained 46.1% in a year compared with the Oil/Energy sector’s rally of 50.6%.
Image Source: Zacks Investment Research
From a valuation perspective — in terms of Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA) ratio — Diamondback Energy is trading at a discount compared with the industry average, making it attractive for investors as more upside is still left in the stock.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate implies about 15% year-over-year growth in Diamondback Energy’s 2026 earnings per share. This anticipated growth aligns with the optimism embedded in the stock’s current price. In other words, investors are paying up for FANG at a point when the fundamentals of the company are expected to accelerate.
View the Zacks #1 Rank List
Image: Shutterstock
How Diamondback Energy's Permian Edge Powers Its Growth Story
Key Takeaways
Diamondback Energy, Inc.’s (FANG - Free Report) deep-rooted presence in the Permian Basin continues to define its long-term growth trajectory. As one of the most prolific oil-producing regions in North America, the Permian offers low-cost production, extensive infrastructure and multi-layered resource potential.
Diamondback Energy’s concentrated footprint across the Midland and Delaware sub-basins enables operational efficiencies that few peers can match. As of Dec. 31, 2025, the company held about 869,036 net acres in the Permian Basin and operates roughly 97% of this acreage, enabling tighter control over costs, improved drilling and enhanced hydrocarbon recovery. By focusing on contiguous acreage, Diamondback Energy reduces logistical complexities and enhances drilling productivity. Its use of advanced horizontal drilling and high-intensity completion techniques further boosts output while maintaining cost discipline, supporting strong margins.
A key growth catalyst has been the acquisition of Double Eagle in 2025, which expanded Diamondback Energy’s position in the Midland Basin and strengthened its inventory depth, allowing for sustained multi-year drilling programs without the need for aggressive land acquisitions.
Importantly, the Permian’s stacked geology — featuring formations like Wolfcamp and Spraberry — provides multiple development opportunities from a single location. This enhances capital efficiency and supports consistent production growth. Additionally, proximity to Gulf Coast export hubs ensures reliable demand and favorable pricing dynamics.
Diamondback Energy’s Permian dominance not only drives near-term cash flow but also underpins its long-term strategy. With a focus on operational excellence, technological innovation and disciplined capital allocation, the company is well-positioned to translate its basin leadership into sustained shareholder value and resilient growth.
Other Energy Firms Holding Solid Permian Footprint
Like Diamondback Energy, the following companies also produce significant volumes of oil and natural gas from the Permian.
Chevron Corporation (CVX - Free Report) is intensifying its focus on the Permian Basin, boosting production through efficiency, digital technologies and disciplined development. Chevron has a strong footprint in the Permian with about 2 million net acres of land and has been operating in the basin for more than 100 years. The company is integrating automation, water recycling and methane reduction to balance growth with environmental goals. In the fourth quarter of 2025, the Permian significantly supported Chevron’s upstream performance, driving a 25% year-over-year rise in U.S. output, reinforcing the Permian as a key driver for Chevron’s long-term growth and returns.
ExxonMobil (XOM - Free Report) continues to break records in the Permian — the most prolific shale play in the United States. Along with fourth-quarter 2025 earnings, ExxonMobil announced that it produced around 1.8 million BOE/d, marking its highest output ever from this area, highlighting the fact that Permian has already become central to its growth story. ExxonMobil projects a ramping up of production from the unconventional play to 2.5 million BOE/d by 2030. Thus, XOM is showcasing a solid production outlook for the years to come.
The Zacks Rundown on Diamonback Energy
Shares of Diamondback Energy have gained 46.1% in a year compared with the Oil/Energy sector’s rally of 50.6%.
Image Source: Zacks Investment Research
From a valuation perspective — in terms of Enterprise Value to Earnings Before Interest, Taxes, Depreciation and Amortization (EV/EBITDA) ratio — Diamondback Energy is trading at a discount compared with the industry average, making it attractive for investors as more upside is still left in the stock.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate implies about 15% year-over-year growth in Diamondback Energy’s 2026 earnings per share. This anticipated growth aligns with the optimism embedded in the stock’s current price. In other words, investors are paying up for FANG at a point when the fundamentals of the company are expected to accelerate.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.