LETTER FROM THE CEO
Welcome to Diamondback’s second annual corporate responsibility report, which documents the many ways in which we operate responsibly and sustainably. With each step we take to help create a positive impact in communities where we do business, we also see our company grow stronger and more successful.
Diamondback remains committed to our role as a good corporate citizen. Our industry, perhaps more than any other, faces substantial challenges in defining how we add value to our stockholders, our community, and both the U.S. and global economies. We understand these challenges, and we are committed to being a constructive partner in the economic and social environments in which we operate and live.
The burning of fossil fuels and other related practices directly impact our global environment. At the same time, businesses and homes around the world require affordable energy, including energy derived from oil and gas. We believe domestic production of oil and gas is good for the United States, and we are proud that we operate exclusively in the Permian Basin, one of the oldest and most economically productive oil basins in the world. Oil and gas production in the Permian Basin is heavily monitored and regulated by multiple local, state, and federal agencies, and Diamondback complies with all such agencies’ requirements. From worker safety to product transportation, spill prevention, control, and remediation, we believe there are few other places where hydrocarbon extraction is as safe and minimally impactful to the outside environment.
The success of the Permian Basin and growth in production from the shale revolution in the United States has created a significant number of jobs, generated substantial tax revenues, and improved our trade balance. Domestic production reduces the United States’ reliance on foreign oil, and our industry’s innovation (including Diamondback’s) has directly led to the U.S. regaining its position as the largest producer of oil in the world.
Diamondback is one of the fastest growing and most efficient operators in the Permian Basin. I am proud of how far we have come as a company in a short period of time. At the end of 2018, we surpassed a daily production level of 250,000 net barrels of oil equivalent, compared with approximately 79,224 in 2017. That means in 2018 we produced about one out of every 50 barrels produced in the United States—a significant achievement by our dedicated team of more than 700 employees and our partners. We recognize that this rapid growth contributed to greater challenges in 2018, particularly concerning Diamondback’s environmental impact and on-the-job safety performance. We are investing to continue to lead our industry in efficiency and safety while we embrace new opportunities for our company to help build a brighter future.
We are committed to being a constructive partner in the economic and social environments in which we operate and live.
Our corporate responsibility initiatives in 2018 centered on a dozen key areas where we have a material impact, or that directly impact our business: risk management, energy intensity, global climate change, emissions, waste and spills, water use, business ethics, compliance, diversity and inclusion, health and safety, training and education, and community engagement. The process of assessing and reporting on Diamondback’s performance in each of these areas gives us clearer insights on where and how we can improve.
Here are a few examples of our 2018 accomplishments related to corporate responsibility that exemplify how all of us at Diamondback are embracing the opportunity to be a greater force for positive change:
ENVIRONMENT
Our use of recycled water in Diamondback’s production operations grew 10-fold, to more than 10.7% of total water used in completions.
SAFETY
We launched several new and improved safety technologies, including a cloud-based application that helps field employees identify and immediately report incidents, potential hazards, and near misses using a mobile device.
COMMUNITY
We joined with 19 fellow energy companies to launch the Permian Strategic Partnership, which commits more than $100 million over the next five years toward developing superior educational programs, accessible housing, a supportive healthcare system, safer roads, and a more skilled workforce for communities across West Texas and southeastern New Mexico. Our team members also increased their volunteering activities at Travis Elementary School in Midland.
This report focuses not just on what Diamondback has done in the past year, but also on our present and future commitments to improve in all facets of corporate responsibility. Diamondback’s five core values of leadership, integrity, excellence, people, and teamwork are key to our recent accomplishments and will guide our work going forward.
Our success hinges not only on our ability to execute better and produce at a lower cost than our competition, but also on our ongoing commitment to meet the demand for affordable energy through the safe and responsible development of our resources in the Permian Basin. Our future as a company remains bright, and we look forward to celebrating new milestones in the years to come. Thank you.
Sincerely,
