Diamondback says it should be Permian’s ‘consolidator of choice’ as oil outlook dims

Shale driller Diamondback Energy said on Tuesday it should remain the Permian Basin's "consolidator of choice" as shale activity slows and the company focuses on shareholder returns following its $26 billion merger with Endeavor Energy.

"We should naturally be the consolidator of choice as we execute a lower-cost and better overall development strategy," a key company executive said in a post-earnings call.

"Until someone else can prove they can do it better than us, we should be the consolidator of choice."

Diamondback's shares fell 3.6% to $142.67 in morning trade after it posted second-quarter profit below analysts' estimates, hit by a 20% year-on-year drop in Brent crude prices amid weak global growth, OPEC+ supply increases and geopolitical tensions.

The Midland, Texas-based company said it remains focused on reducing debt and share count in 2025, and may lean more into buybacks if market conditions weaken.

The company said it was hard to be bullish on oil, adding that shale producers were increasingly running scenarios based on $50–$60 oil, versus $60–$80 in recent years.

Diamondback dropped four rigs in the second quarter, reducing its activity to 13 rigs and lowered its 2025 capital budget around 3% at midpoint to $3.4–$3.6 billion.