Diamondback Energy, Inc.

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1 Management Travis Stice, President and CEO Teresa Dick, CFO Jeffrey White, VP Operations Michael Hollis, VP Drilling Randall Holder, VP & Gen Counsel EPG Commentary by Dan Steffens Diamondback Energy, Inc. (Nasdaq: FANG) has been one of the top preforming stocks in our Sweet 16 Growth Portfolio, up more than 20% since being added January 1, The company increased production by more than 70% year-over-year in 2015 and I expect it to increase another 8% to 10% in If oil prices do rebound, it can ramp up production even faster because it has a large inventory of drilled but uncompleted wells ( DUC ). Diamondback s results in 2015 were in line with my forecast and they have consistently provided accurate guidance. Diamondback is heavily weighted to oil and a pure play on the Permian Basin - one of the top three growth areas for crude oil production in the United States. The Permian Basin covers 19 million acres. There are multiple zones now being developed with horizontal wells. Most of FANG s leasehold has stacked pay potential. Ryder Scott, their 3 rd party reservoir engineering firm, is now giving FANG higher Estimated Ultimate Recoveries ( EUR ) for their Spraberry horizontal wells based on several years of production history. FANG owns 88% of Viper Energy Partners LP (VNOM) a publicly traded variable distribution MLP that has direct mineral interest ownership in Midland County in the heart of the Permian Basin. Viper has no direct operating or capital expenditures. The MLP owns the mineral interests on several of Diamondback s producing properties and makes quarterly cash distributions that give FANG additional cash flows. My Fair Value Estimate for FANG is $80.85/share Compared to First Call s Price Target of $81.16 Disclosure: I do not have a position in FANG and I do not intend on buying or selling it in the next 72 hours. I wrote this profile myself, and it expresses my own opinions. I am not receiving compensation for it from the company. I have no business relationship with any company whose stock is mentioned in this article.

2 Diamondback Energy, Inc. Permian Basin: Over 19 million acres and multiple zones are now being developed with horizontal wells Company Overview Diamondback Energy (FANG) is an independent oil and natural gas company headquartered in Midland, TX. Diamondback s growth strategy is focused on the acquisition, development, exploration and exploitation of unconventional, long-life, onshore oil and natural gas reserves in the major oil producing Permian Basin in West Texas. Diamondback's operations are directed primarily at their large acreage areas of the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations, collectively known as the Wolfberry Trend.

3 Diamondback Energy LLC commenced operations in December 2007 with the acquisition of 4,134 net acres in the Permian Basin. Subsequently, the Company acquired approximately 61,764 additional net acres, which brought its total net acreage position in the Permian Basin to 65,938 net acres as of December 31, Additional bolt on acquisitions bring Diamondback s Permian leasehold to approximately 85,000 acres as of the date of this report. As of December 31, 2015, the Company s estimated proved oil and natural gas reserves were MBOE (67% oil, 16% natural gas, 17% natural gas liquids), with a PV-10 value of approximately $1.4 billion. Additions replaced 465% (422% organically) of 2015 production with a drill bit finding cost ("F&D") of $5.51/boe. Diamondback increased their net leasehold in the Permian to ~89,200 acres as of the date of this report. The company sold 4,000,000 shares of common stock in May, Proceeds were used to shore up their balance sheet so they could increase from 3 to 5 horizontal rigs in 2 nd half of The company announced the sale of 3,875,000 shares of common stock in August, Net proceeds of ~$175 million were used to repay a portion of the outstanding borrowings under its revolving credit facility. In January, 2016 the company sold 4,600,000 shares of common stock for net proceeds of $254.4 million. Diamondback Resource Map

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5 Business Strategy Ø Grow Production and Reserves by developing its oil-rich resource base. Diamondback intends to actively drill and develop its acreage base in an effort to maximize its value and resource potential. Through the conversion of its undeveloped reserves to developed reserves, it will seek to increase its production, reserves and cash flow while generating favorable returns on invested capital. Ø Focus on Increasing Hydrocarbon Recovery through horizontal drilling and increased well density. Diamondback believes there are opportunities to target various intervals in the Wolfberry play with horizontal wells. Diamondback s horizontal drilling program is designed to further capture the upside potential that may exist on its properties. They also believe their horizontal drilling program may significantly increase their recoveries per section as compared to drilling vertical wells alone. Ø Leverage Experience Operating in the Permian Basin. Diamondback s executive team, which has an average of approximately 24 years of industry experience per person and significant experience in the Permian Basin, intends to continue to seek ways to maximize hydrocarbon recovery by refining and enhancing their drilling and completion techniques. Magellan Midstream Partners, LP new pipeline has increased netback oil prices for the Permian.

6 Ø Enhance Returns Through a Low Cost Development Strategy of resource conversion, capital allocation and continued improvements in operational and cost efficiencies. In the current commodity price environment, Diamondback s oil and liquids rich asset base provides attractive returns. Ø Pursue Strategic Acquisitions with Exceptional Resource Potential. Diamondback has a proven history of acquiring leasehold positions in the Permian Basin that they believe has substantial oil-weighted resource potential and can achieve attractive returns on invested capital. Its executive team, with its extensive experience in the Permian Basin, has what they believe is a competitive advantage in identifying acquisition targets and a proven ability to evaluate resource potential. They intend to continue to pursue acquisitions that meet their strategic and financial targets. Ø Maintain Financial Flexibility. Diamondback seeks to maintain a conservative financial position.

7 2015 Fourth Quarter & Year End Highlights The Company has completed its first three-well pad in Glasscock County targeting the Lower Spraberry, Wolfcamp A and Wolfcamp B with an average lateral length of 7,400 feet. The wells are in various stages of flowback and artificial lift but produced an average in excess of 3,600 boe/d (81% oil) on a combined basis over seven days. Proved reserves as of December 31, 2015 increased 39% year over year to MMboe (67% oil, 16% natural gas, 17% natural gas liquids), with a PV-10 value of approximately $1.4 billion calculated with a $50.28/bbl valuation in accordance with the SEC. Costs to drill, complete and equip new horizontal wells are currently trending between $5.0 and $5.5 million for a 7,500 foot lateral and between $6.5 and $7.0 million for a 10,000 foot lateral. Lease operating expenses ("LOE") declined 12% from $7.79/boe in 2014 to $6.84/boe in LOE was below the $7.00 to $8.00/boe guidance range. The Company anticipates LOE of $6.00 to $7.00/boe in Diamondback's Q production was 37.6 Mboe/d (76% oil), up 10% from 34.1 Mboe/d (73% oil) in Q Due to ongoing commodity price volatility, the Company has widened its 2016 production guidance to a range of 32.0 to 38.0 Mboe/d. Diamondback anticipates completing between 30 and 70 gross horizontal wells during 2016, and capital expenditures for 2016 are expected to be between $250 million to $375 million. Diamondback will delay completions on 4 to 5 wells per month until oil prices rebound. Travis Stice, CEO: "2016 began with oil prices testing recent lows. We believe Diamondback is well-positioned in this environment and continues to demonstrate that it is a low cost operator with superior execution abilities. After our equity raise last month, Diamondback had over $250 million in cash at the end of January 2016 and an undrawn revolver. We continue to emphasize our strategy of capital discipline, especially in light of current low oil prices and their impact on stockholder returns. We have widened our 2016 production and capital guidance ranges to allow for capital flexibility in our operations as rig counts and completions may fluctuate throughout the year. In a 'lower for longer' $35 per barrel WTI price scenario that assumes service costs remain stable, we believe we can maintain leverage under 2.0x through the end of the decade without accessing additional debt, equity or drawing on our revolver. Under this scenario, we can also maintain our current leasehold."

8 "We have a deep inventory of high return projects, a strong balance sheet with significant liquidity and the ability to deploy capital quickly to pull value forward in a higher price environment. Additionally, we are extremely encouraged by early results from our three-well pad in Glasscock County which produced an average of over 3,600 boe/d on a combined basis over seven days. While 2016 appears to be a very challenging year for our industry, Diamondback anticipates opportunities for accretive growth during the year."

9 Year End Reserves Update Ryder Scott Company, L.P. prepared estimates of Diamondback's proved reserves as of December 31, Reference prices of $50.28 per barrel of oil, $2.58 per MMcf of natural gas and $19.90 per barrel of natural gas liquids were used in accordance with applicable rules of the Securities and Exchange Commission. Realized prices with applicable differentials were $45.07 per barrel of oil, $1.83 per MMcf of natural gas and $12.56 per barrel of natural gas liquids. Proved reserves at year-end 2015 of MMboe represent a 39% increase over year-end 2014 reserves. Proved developed reserves increased by 39% to 92.1 MMboe (59% of total proved reserves) as of December 31, 2015 reflecting the continued development of the Company's horizontal well inventory. Horizontal wells now represent 72% of Diamondback's proved developed reserves and 99.7% of Diamondback's proved undeveloped reserves. Diamondback's remaining vertical PUD locations are three drilled but uncompleted wells. Crude oil represents 67% of Diamondback's total proved reserves. Net proved reserve additions of 56.1MMboe resulted in a reserve replacement ratio of 465%.The organic reserve replacement ratio was 422%.

10 Purchases of reserves came from the acquisition of acreage primarily in Howard and Martin Counties. The acquired reserves were proved developed producing reserves from 139 gross vertical wells and four gross horizontal wells in which Diamondback has a working interest and 21 vertical wells in which Diamondback has only a mineral interest through Viper. Significant extensions occurred from continued successful horizontal development of the Lower Spraberry and Wolfcamp B horizons and initial development of the Wolfcamp A and Middle Spraberry intervals on its acreage. Approximately 63% of the extensions are classified as proved undeveloped. Revisions are primarily the result of reclassifying 14.6 MMboe of reserves attributable to 80 vertical wells and 22 horizontal wells in which Diamondback has a working interest and 22 vertical wells in which Diamondback has only a mineral interest through Viper as a result of lower product prices. Vertical well reclassifications accounted for 8.6 MMboe of the 14.6 MMboe total. It is unlikely that these locations will be developed within the five year SEC reserve rule, even with a price recovery, since Diamondback's focus is on horizontal development. Diamondback's exploration and development costs in 2015 were $361.9 million. F&D costs were $5.51/boe, with F&D costs defined as exploration and development costs divided by the sum of extensions, discoveries and revisions (with revisions excluding 14.6 MMboe of vertical and horizontal PUD reclassifications due to lower product prices). Including the effect of all revisions, the F&D costs were $7.09/boe.

11 Fourth Quarter Financial Update In January FANG sold 4.6 million shares of commons stock for approximately $254.4 million (gross proceeds before underwriter discounts and commission) implying an approximate prices of $66.5 per share. Proceeds were used to pay off and to provide funding for their drilling program. During the fourth quarter of 2015, the Company incurred an impairment charge of $218 million as a result of depressed commodity prices. Diamondback recorded a net loss of $187 million for the quarter. The Company's fourth quarter 2015 adjusted net income after taxes and net income attributable to a non-controlling interest was $39 million, or $0.58 per share, up from $26 million in Q Fourth quarter 2015 Adjusted EBITDA was $121 million and fourth quarter 2015 revenues were $114 million, as compared to $110 million and $112 million, respectively, in the third quarter of 2015.

12 As of December 31, 2015, the Company had $11 million drawn on its credit facility. Diamondback subsequently paid off this balance with a portion of the net proceeds from its January 2016 equity offering. Diamondback's credit facility with an elected commitment of $500 million is currently undrawn, and the Company had $257 million in cash as of January 31, During the fourth quarter of 2015, capital spent for drilling and completion was $70 million, capital spent for infrastructure was $5 million and capital spent for non-operated properties was $20 million. The Company spent an additional $24 million on acquisitions during the fourth quarter of In February 2016, Standard & Poor's reaffirmed its B+ corporate credit rating on Diamondback Guidance Diamondback forecasts 2016 production of 32.0 to 38.0 Mboe/d, including 6.0 to 6.5 Mboe/d attributable to its subsidiary Viper Energy Partners LP. This range represents 6% growth at the midpoint when compared with 2015 production of 33.1 Mboe/d for Diamondback and 15% growth at the midpoint as compared to 2015 production of 5.4 Mboe/d for Viper. Diamondback expects a 2016 total capital spend of $250 million to $375 million, consisting of $210 million to $315 million for horizontal drilling and completions, $25 million to $35 million for infrastructure and $15 million to $25 million for non-operated activity and other expenditures. Diamondback now expects to complete 30 to 70 gross horizontal wells in The Company anticipates costs for a 7,500 foot lateral horizontal well to range from $5.0 to $5.5 million LOE is expected to be in the range of $6.00 to $7.00 per boe with gathering and transportation in the range of $0.50 to $1.00 per boe. Depreciation, depletion and amortization expense ("DD&A") is expected to range from $13.00 to $15.00 per boe. The Company projects cash general and administrative expense ("G&A") to be between $1.00 and $2.00 per boe and non-cash equity-based compensation to be between $1.50 and $2.50 per boe. Production and ad valorem taxes as a percent of revenue are expected to be 8%. Diamondback does not anticipate the need to sell additional equity as they believe cash on hand plus cash flow from operations will fund their growth plans through Risk: None of Diamondback s production is hedged after December 31, If oil prices do remain at current level, they are expected to cut back on their drilling program.

13 Horizontal Drilling Update Diamondback has drilled its first three-well pad in Howard County targeting the Lower Spraberry, Wolfcamp A and Wolfcamp B. One of the wells on this pad has a 9,600 foot lateral that was drilled in less than 12 days from spud to total depth. The Company is currently drilling its second three-well pad in Howard County. Diamondback intends to complete these wells in mid operated horizontal wells were completed in the fourth quarter of 2015, bringing the full year 2015 total to 65 wells. Wells completed during the fourth quarter of 2015 consisted of 11 Lower Spraberry wells and three Wolfcamp B wells. In total during 2015, Diamondback competed 37 Lower Spraberry, 25 Wolfcamp B, two Wolfcamp A and one Middle Spraberry well. The Company also participated in seven gross (three net) non-operated completions in 2015.

14 In March, the Company intends to release one of its three horizontal rigs that are currently operating. Diamondback will continue to monitor the commodity price environment and retains the capital flexibility to adjust its drilling and completion plans in response to market conditions. Diamondback has the option to release an additional rig in the second quarter of Highlights of Viper Subsidiary Viper previously announced that the Board of Directors of its general partner has declared a cash distribution for the three months ended December 31, 2015 of $0.228 per common unit (a 14% increase from $0.20 per common unit for the three months ended September 30, 2015), payable on February 26, 2016, to unitholders of record at the close of business on February 19, This distribution represents an approximate 6% yield when annualized based on the closing price for Viper's common units on February 12, Proved reserves as of December 31, 2015 increased 42% year over year to 26.3 MMboe (70% oil, 15% natural gas liquids, 15% natural gas), with a PV-10 of approximately $398.0 million Additions replaced 495% (486% organically) of 2015 production.

15 Viper announced its full year 2016 production guidance range of 6,000 to 6,500 boe/d, representing a 15% increase at the midpoint of the range from 2015 production of 5,431 boe/d. Fourth quarter 2015 production was 6,313 boe/d (81% oil), up 10% from 5,715 boe/d (75% oil) in the third quarter of Net income was $4.9 million and Adjusted EBITDA (as defined and reconciled below) was $18.6 million, for the three months ended December 31, During the fourth quarter of 2015, the operators of Viper's Spanish Trail mineral interests brought online 10 gross horizontal wells. In total, the operators of Viper's acreage completed 51 gross horizontal wells during 2015, including 2 Middle Spraberry, 27 Lower Spraberry, 6 Wolfcamp A and 16 Wolfcamp B. Viper had $34.5 million outstanding under its credit agreement with a borrowing base of $200 million as of December 31, 2015.

16 Viper Reserves & Production Update Production attributable to Viper's mineral interests was 6,313 boe/d for the fourth quarter of 2015, up 10% from 5,715 boe/d, for the third quarter of The production mix was comprised of 81% oil, 9% natural gas liquids and 10% natural gas in the fourth quarter of During 2015, production attributable to Viper's mineral interests was 5,431 boe/d, up 79% from 3,038 boe/d during Ryder Scott Company, L.P. prepared an estimate of Viper's proved reserves as of December 31, Reference prices of $50.28 per barrel of oil, $2.58 per MMcf of natural gas and$19.90 per barrel of natural gas liquids were used in accordance with applicable rules of the Securities and Exchange Commission. Realized prices with applicable differentials were$45.03 per barrel of oil, $1.64 per MMcf of natural gas and $11.41 per barrel of natural gas liquids. Proved reserves at year-end 2015 of 26.3 MMboe represent a 42% increase over year-end 2014 reserves. These proved reserves have a PV-10 value of approximately $398.0 million. As the owner of mineral interests, Viper incurred no exploration and development costs during the year ended December 31, The Company incurred $43.9 million in acquisition costs during Proved developed reserves increased by 40% to 14.2 MMboe as of December 31, 2015 reflecting continued horizontal development by the operators of Viper's acreage. Horizontal wells now represent 78% of Viper's proved developed reserves and 100% of Viper's proved undeveloped reserves. Crude oil represents 70% of Viper's total proved reserves. Net proved reserve additions of 9.8 MMboe resulted in a reserve replacement ratio of 495%.The organic reserve replacement ratio was 486%. Extensions and discoveries of 12.0 MMboe are primarily attributable to Lower Spraberry development as well as continued Wolfcamp B development and initial development of the Wolfcamp A and Middle Spraberry on Viper's acreage. As a result of lower commodity prices, 2.1 MMboe of reserves associated with 48 vertical locations (1.4 MMboe) and nine short lateral horizontal locations (0.7 MMboe) were moved out of the proved undeveloped category. Although these revisions are price related, it is unlikely that these vertical locations will be developed by the operators of Viper's acreage within the five year SEC reserve rule, even with a price recovery, since their focus has shifted to horizontal development. Oil (Bbls) Liquids (Bbls) Gas (Mcf) BOE Proved reserves as of December 31, ,830,294 2,513,708 18,994,160 18,509,695 Purchase of reserves in place 107,072 3, , ,501 Extensions and discoveries 8,449,586 2,012,599 9,476,316 12,041,571 Revisions of previous estimates (1,454,037 ) (375,275 ) (3,464,719 ) (2,406,765 ) Production (1,555,493 ) (238,716 ) (1,128,605 ) (1,982,310 ) Proved reserves as of December 31, ,377,422 3,915,956 24,307,885 26,344,692

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