Diamondback's Hedges Cost It $1.41 A Barrel On Third-Quarter Oil, 8-K Shows
The Permian producer expects a $97 million cash loss on derivative settlements, plus an $85 million non-cash loss, for the quarter.
Diamondback Energy's price-protection contracts pulled its third-quarter oil price down from $87.30 a barrel unhedged to $85.89 after hedging, an 8-K filed Thursday shows. The company anticipates a $97 million net loss on cash settlements of its derivatives, which are contracts used to lock in prices.
What the 8-K says
The filing, made under Item 2.02 (results of operations), covers the quarter ended September 30, 2026. It is a partial update on realized prices, derivative activity and share count, not the full earnings report.
Oil averaged $87.30 per barrel before hedging and $85.89 after. Natural gas averaged $1.12 per Mcf (thousand cubic feet) unhedged and $0.90 hedged. Natural gas liquids, the byproducts separated from gas, fetched $20.02 per barrel on both measures, so hedges did not change that price.
The company says hedged prices include gains and losses on cash settlements of matured contracts. They exclude gains or losses from contracts settled early, and Diamondback does not designate these contracts for hedge accounting.
On derivatives, Diamondback anticipates a net loss of $97 million on cash settlements and a net non-cash loss of $85 million. The filing's table puts the net loss on commodity contracts at $182 million, against $97 million in net cash paid on settlements.
What it changes
The filing shows what the hedges cost relative to selling at market: $1.41 per barrel of oil and $0.22 per Mcf of gas, with nothing on NGLs. Those are the filing's own price pairs, and the oil and gas figures are in different units, so they should not be set against each other.
The $85 million non-cash loss is an accounting entry on derivative instruments rather than money paid out in the quarter. The $97 million is the cash side.
The 8-K also gives basic and diluted weighted average shares outstanding for the quarter, both 279,959 thousand. That is the denominator for per-share results when the full report arrives.
At Thursday's close the stock finished at $191.68, up 3.96% for the session, in market data. The filing was accepted at 4:01 p.m. ET, after that session ended, so that move is not a reaction to it.
The filing was signed by Teresa L. Dick, Diamondback's executive vice president of accounting; revenue, profit and production figures are not in it.
Sources
- 8-K Filing — Diamondback Energy, Inc. (FANG) — SEC EDGAR
