Diamondback Energy, Inc.

Supply chain and procurement · Geographic concentration of suppliers

Our producing properties are located in the Permian Basin of West Texas, making us vulnerable to risks (including weather-related risks) associated with operating in a single geographic area. Our producing properties are currently geographically concentrated in the Permian Basin of West Texas.

Human capital and workforce · Key personnel dependence and succession

In addition, many key responsibilities within our business have been assigned to a small number of employees. The loss of their services could adversely affect our business. In particular, the loss of the services of one or more members of our executive team could disrupt our operations.

Supply chain and procurement · Supplier operation and dependance

If transportation or other facilities, certain of which we do not control, or rigs, equipment, raw materials, supplies, oilfield services or personnel become unavailable or too costly, our operations could be interrupted and our revenues reduced. The unavailability, high cost or shortages of rigs, equipment, raw materials (particularly sand and other proppants), supplies and personnel may restrict our operations.

Supply chain and procurement · Raw material availability and cost volatility

Restrictions on our ability to obtain water and dispose of produced water, and additional monitoring and reporting requirements related to existing and new produced water disposal wells in the Permian Basin could adversely impact our business, results of operations and financial condition.

Project and contract management · Project execution and delivery risks

Our identified potential drilling locations are susceptible to uncertainties that could materially alter the occurrence or timing of their drilling. Drilling for oil and natural gas often involves unprofitable efforts, not only from dry wells but also from wells that are productive but do not produce sufficient oil or natural gas to return a profit at then realized prices after deducting drilling, operating and other costs.

Technology infrastructure · Technology systems and infrastructure failure

Our operations depend heavily on electrical power, internet and telecommunication infrastructure and information and computer systems. If any of these systems are compromised or unavailable, our business could be adversely affected.

Digital transformation and innovation · Artificial intelligence and automation

Additionally, the development, deployment and use of artificial intelligence ('AI') and machine learning in our operations and those of our service providers and partners could introduce new risks, including increased exposure to cybersecurity threats and social engineering, inadvertent disclosure or misuse of confidential, proprietary or personal information.

Digital transformation and innovation · Technology obsolescence and evolution

We may not be able to keep pace with technological developments in our industry. The oil and natural gas industry is characterized by rapid and significant technological advancements and introductions of new products and services using new technologies.

Industry regulation · Regulatory compliance and changes

Our operations are subject to various governmental laws and regulations which require compliance that can be burdensome and expensive. Our oil and natural gas operations are subject to various federal, state and local governmental regulations that may be changed from time to time in response to economic and political conditions.

Industry regulation · Safety and environmental regulations

The production, handling, storage, transportation, remediation, emission and disposal of oil and natural gas, by-products thereof and other substances and materials produced or used in connection with oil and natural gas operations are subject to regulation under federal, state and local laws and regulations primarily relating to protection of human health and the environment.

Data and privacy · Data protection and privacy laws

A variety of U.S. federal, state and international laws and regulations govern the collection, use, retention, sharing and security of personal data. All 50 states have enacted legislation on data breach notification requirements and many states continue to enact laws on matters of privacy, data protection and cybersecurity.

Customer and revenue · Customer concentration and key customer dependence

The loss of one or more of our customers or their inability to meet their obligations may adversely affect our financial results. We are also subject to credit risk due to the concentration of our oil and natural gas receivables with several significant customers.

Market and investment · Asset valuation and impairment

Our method of accounting for investments in oil and natural gas properties may result in impairment of asset value. An impairment on proved oil and natural gas properties of approximately $3.7 billion was recorded for the year ended December 31, 2025.

Capital structure and performance · Debt management and refinancing

Our substantial level of indebtedness could adversely affect our results of operations, business flexibility and our ability to service our debt. We have incurred a substantial amount of debt to finance our recent acquisitions and for other corporate purposes.

Credit and liquidity · Access to capital and financing

We may be unable to obtain needed capital or financing on satisfactory terms or at all to fund our acquisitions, exploration or development activities. Our development and exploration operations and our ability to complete acquisitions require substantial capital and we may be unable to obtain needed capital or financing on satisfactory terms or at all, which could lead to a loss of properties and a decline in our oil and natural gas reserves.

Market and investment · Trading and market making activities

Our commodity price derivatives could result in financial losses, may fail to protect us from declines in commodity prices, prevent us from fully benefiting from commodity price increases and may expose us to other risks, including counterparty credit risk.

Market and investment · Market volatility and economic cycles

Geopolitics and market conditions for oil and natural gas, and particularly volatility in prices for oil and natural gas, have in the past adversely affected, and may in the future adversely affect, our revenue, cash flows, profitability, growth, production and the present value of our estimated reserves.

Geopolitical and trade · Trade policies tariffs and sanctions

Changes in U.S. trade policy and the impact of tariffs may have a material adverse effect on our business and results of operations. Our business and results of operations may be adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments.

Social and demographic · Public perception and reputation

Changing political and social perspectives on climate change and other environmental, social and governance factors may create risks and uncertainties impacting our business. Any such future actions may result in significant management distraction and potentially significant expense.

Reputation and brand · Esg environmental social governance performance

Our targets related to sustainability and emissions reduction initiatives, including our public statements and disclosures regarding them, may expose us to numerous risks. Statements in this and other reports we file with the SEC and other public statements related to these initiatives reflect our current plans and expectations and are not a guarantee the targets will be achieved or achieved on the currently anticipated timeline.