Participants

Adam Lawlis; Vice President of Investor Relations; Diamondback Energy Inc

Travis Stice; Chairman of the Board, Chief Executive Officer; Diamondback Energy Inc

Kaes Van't Hof; President, Chief Financial Officer; Diamondback Energy Inc

Neal Dingmann; Analyst; Truist Securities, Inc.

Neil Mehta; Analyst; Goldman Sachs Group, Inc.

John Freeman; Analyst; Raymond James & Associates, Inc.

David Deckelbaum; Analyst; TD Cowen

Arun Jayaram; Analyst; JPMorgan Chase & Co

Derrick Whitfield; Analyst; Texas Capital

Kevin MacCurdy; Analyst; Pickering Energy Partners Insights

Paul Cheng; Analyst; Scotiabank Global Banking and Markets

Leo Mariani; Analyst; ROTH Capital Partners

Doug Leggate; Analyst; Wolfe Research

Kalei Akamine; Analyst; BofA Securities

Presentation

Operator

Hello, and welcome to Diamondback Energy fourth quarter 2024 earnings call. (Operator Instructions) I would now like to turn the conference over to Adam Lawlis, Vice President of Investor Relations. You may begin.

Adam Lawlis

Thank you, Tawanda. Good morning, and welcome to Diamondback Energy's fourth quarter 2024 conference call. During our call today, we will reference an updated investor presentation and letter to stockholders, which can be found on Diamondback's website. Representing Diamondback today are Travis Stice, Chairman and CEO; Kaes Van't Hof, President; Danny Wesson, COO; and Jere Thompson, CFO.
During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance and businesses. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors.
Information concerning these factors can be found in the company's filings with the SEC. In addition, we will make reference to certain non-GAAP measures. The reconciliations with the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon. I'll now turn the call over to Travis Stice.

Travis Stice

Thank you, Adam, and welcome, everyone, and I appreciate you joining this morning. I hope you find the shareholder letter a meaningful way to communicate. And also, as Adam pointed out, we've got an updated investor deck out there that we can reference during our questions this morning. Operator, if you'll please open the line for questions.

Question and Answer Session

Operator

(Operator Instructions)
Neal Dingmann, Truist Securities.

Neal Dingmann

Travis, congratulations on it to you, but obviously Kaes and Jere, but especially fantastic career. I look forward to seeing you soon. My first question maybe just around, again, another great quarter. My first question is really around the free cash flow sensitivity that you all show on slide 13. And specifically, when looking at that, I'm just wondering -- you put a comment that I noticed on the bottom of the slide suggesting now around $67 a barrel produced the same free cash flow at $76 last year. I'm just wondering, is this continued to achieve through the larger scale? Is this a lot of the completion driver? I'm just wondering maybe if you could talk and discuss the drivers behind all this.

Kaes Van't Hof

Yes, Neal, it's a new number that we're going to start to look at here. I kind of equate that number to your the same thing as a dividend breakeven. It's basically what oil price gets you the same free cash flow per share as the prior year. And if that number is going down, capital efficiency is improving where you've done an accretive deal. And when we announced the Endeavor deal a little over a year ago, we said we'd have 10% plus free cash flow per share accretion.
And here you are, a year later, showing that free cash flow per share is going down by $9 a barrel to equal the same number as last year. So it's going to be tough to keep moving that number down $9 a barrel every year, but I think through a lower share count, lower cost structure and quality inventory, that's certainly going to be the goal.

Neal Dingmann

No, great direction. I think it just keeps dropping. And then my second question, maybe on your D&C plans, I'm just wondering, can you talk about -- maybe, I don't know, Kaes, do you look at it, completions for SimulFRAC crew or maybe talk I'm just noticing the amount of completed wells and you all talk about sort of four to five of these SimulFRACs. And then secondly, I noticed you all continue to complete several more wells than you drill like you did last year? Maybe just discuss that.

Kaes Van't Hof

Yeah. So on the DUC drawdown, we're drilling less wells and we're completing a combination of things we were ahead of plan last year. So we drilled more wells than we expected. And then we also acquired a lot of DUCs with the Endeavor deal and a smaller amount with the TRP deal that closed earlier this year. So there's a pretty significant DUC drawdown planned in the CapEx budget. I would just say if we're ahead of schedule and CapEx is looking good for the year, we'll probably reduce that drawdown and drill a few more wells, particularly right now given that putting pipe in the ground on the drilling side is almost as cheap as it's been in the last five or six years.
So I think we have flexibility in the plan, but really seeing the efficiencies come through here, right, with drilling over 400 wells with 15 or 16 rigs this year versus last year. Going into the year, we thought we were going to drill 280 wells Diamondback stand-alone with 15 or 16 rigs.
And then on the frac side, basically, the SimulFRAC fleets are digging about 100 wells per fleet per year. That's kind of up from 80 a year ago, just continued efficiencies in the field, and that's partly due to the higher comp rate that we've implemented from some of the learnings from Endeavor. And I think we're still looking at ways to push that even higher. We're trying some things that might get us closer to 110, 120 wells per year. Not in the plan today, but that's some upside that we could accrue to our shareholders.

Neal Dingmann

Perfect. Thanks. Look forward to seeing you all.

Operator

Operator
Neil Mehta, Goldman Sachs.

Neil Mehta

Congratulations, Travis, and congratulations to Kaes. I think 1 of the takeaways it seems from the deck is -- and post the Double Eagle acquisition is that there might be a pause as it relates to M&A, given that it feels like you've consolidated a lot of the quality positions in the Permian. So Kaes, Travis, just love your perspective on that? And if that's the case, how do you think about leaning into the share repurchase program at these valuation levels?

Travis Stice

Neil, thank you for your comments as well, too. We tried to articulate during the announcement of the Double Eagle trade that this was really the last opportunity in the core of the Midland Basin. And if it, in fact, is the last opportunity, then there's really not much left on a go-forward basis. So -- that's our strategy is to -- we took advantage of probably what was among the last meaningful assets in the Midland Basin.

Kaes Van't Hof

Yeah, Neil, not saying we're never going to do another deal again, but certainly you need to digest here the quality of the inventory that we have. Puts us in a really good position to move more towards the other side of the capital allocation discussion, which is the share repurchases and reducing the enterprise value. And I think at these levels, it's very obvious that share repurchases is a great use of capital.
At $70 oil, this business generates $20 a share of free cash flow in 2025. At our current prices, that's essentially a 12.5%, 13% yield. So for us, that's cheap. And our goal is to continue to make our stock look cheap by improving per share metrics. And I think that's what we've laid out here with the 2025 plan.

Neil Mehta

Yeah. Kaes, on that buyback program, you have a very concentrated shareholder coming out of the Endeavor transaction. So how do you think about maintaining the dry powder for potential sell-downs there? And how should the market be thinking about your largest shareholder in general?

Kaes Van't Hof

Yeah. I mean I think the market should realize that we have a long-term patient shareholder -- and the Stephens family that has known this basin for 45 years and is very, very comfortable with the decision they made in merging with Diamondback. This isn't a private equity investment that has to monetize for fund life. There's a lot of patients from their side, and we have conversations with them just like all of our other shareholders. And they, like our other shareholders, you could see on page 1 of our roster are encouraging us to lean into our buyback right now because the stock is cheap and the best use of capital is to buy back our shares.
So lastly, I'd probably say that I think the market's got a little ahead of this lockup expirations over the coming months. And -- in my mind, there's a lot of other ways to reduce ownership that aren't well telegraphed marketed deals, and that's stuff that we're thinking about. I think we have the balance sheet capacity and the free cash flow generation, most importantly, to get creative on that front. We'll still buying back shares in the open market.

Operator

John Freeman, Raymond James.

John Freeman

You have a remarkable career, Travis. And congratulations, Kaes, on the well-deserved promotion. I just want to start on looking at the midstream but roughly $415 million on midstream infrastructure budget. Is there anything that's sort of, I don't know, onetime in nature related to either kind of Double Eagle or Endeavor transactions where you kind of either had to put in some infrastructure, facility upgrades or anything like that that we should be aware of?

Kaes Van't Hof

Yeah, John, I think one thing we highlighted is that there is $60 million of of midstream CapEx in there, traditional midstream CapEx from the Endeavor Water business, EDS. If that business were to monetize likely into our Deep Blue JV, that would reduce our CapEx burden depending on the timing of that deal.
And I think second to that, we have some kind of accelerated environmental CapEx this year and probably a little bit next, but that's to the tune of $60 million or $70 million of onetime this year. So a couple of things going away in the future. I'd say in general, we -- we'd like to get that midstream -- or sorry, that infrastructure and other budget down to kind of 5% to 7% of total capital from where it is today. And the team -- we've put it in Travis' letter. The teams have already worked on best-in-class combined facility design that we expect will save us $1.5 million or 10% or so per facility, and that will add up over the years as we develop the asset base.

John Freeman

That's great. And then just a follow-up on Neil's earlier question on the DUCs. Can you just remind us just rough numbers, where you all sort of stood on DUCs kind of pro forma for the Double Eagle transaction?

Travis Stice

Yeah. We were carrying around just a little over 200 DUCs, total 200, 250 DUCs total, pro forma the Double Eagle transaction. The Double Eagle's coming over with about 50 with that -- what you would add to that number that we call it work in place wells that we don't expect that will be dug. They'll be brought online kind of sometime between now and close.

Operator

David Deckelbaum, TD Cowen.

David Deckelbaum

Just echo everyone's congrats to you Travis, Kaes and Jere. I was hoping just to step back a second, just to revisit, I mean, obviously, Kaes, you made some comments about the attractiveness of the valuation of shares right now in the context of Stephens family as well. You guys have this $1.5 billion commitment on asset sales, and I think you bridge that with free cash down to almost $10 billion of net debt by the end of the year. I guess, how do you think about the flexibility of getting above that 50% return of capital this year when you appreciate -- where your shares are now relative to how you see valuation? Or should we be looking for that net debt trigger before kind of getting away from the 50% -- at least 50% commitment?

Kaes Van't Hof

Yeah. I mean, I think that at least 50% commitment is going to remain regardless of the situation. Now the execution of that, whether it's above 50% or not, I think will depend on market conditions. And I think we -- in Q4, for instance, we leaned in a little bit. I think free cash flow beat even our internal expectations, but we were fully prepared to go over 50% of free cash return in Q4 given the volatility we saw in December. I probably mean against going to [75 or 100] in these market conditions. I don't think we're there. I think we got to get these noncore asset sales done and debt down. But we have a lot of levers to pull and I think we saw more volatility than we're seeing right now, we'd be leaning in.

David Deckelbaum

I appreciate that. And then just a follow-up on the infrastructure spend. Obviously, a trajectory coming down with some of the synergies of facility design. You talked about the potential with the sale to Deep Blue. But just also wanted to bring up like the slide around surface acreage and power generation. How do you feel -- or how do you think about sort of financing your own internal power needs?
How sort of imminent are these needs in terms of spend to expand what you would need just to service your own wells? And when do you think we would expect to hear some announcements around some of those solutions, whether it includes third-party commercial opportunities or just incremental spend to build out for your own operations?

Kaes Van't Hof

Yesah. I'd say internally, we've spent probably on average, $70 million to $100 million a year on power for the last five or six years. So I think there's $70 million or $75 million in the budget this year for our power needs that's just poles and wires in the field. I kind of separate that from our power JV we're looking at. And I think there's been a lot of -- a lot of discussions around power in the basin. We obviously were short power in the basin. I think what we're trying to pull together with a large IPP is can we build a large behind the meter, gas plant -- power plant, the basin using Diamondback gas, but also having Diamondback receive some of that power back with hyperscaler data center operator taking on the lion's share of that power.
So that's in the works. We're still confidentially discussing it with the hyperscalers, giving feedback. And I think what separates Diamondback from others in this space is our flexibility and how nimble we are and how quickly we can move to get something done, let alone how much gas we have that needs a better market. So two separate things, but we'll continue to build out power in the field because it increases uptime as well as reduces LOE.

David Deckelbaum

Appreciate the color, guys.

Operator

Arun Jayaram, JPMorgan Securities.

Arun Jayaram

My first question, Travis and Kaes, I was wondering if you could talk about the asset sale divestiture program, do you anticipate to execute on in terms of the Double Eagle transaction? Are these going to represent primarily midstream assets, but give us a sense of what your plans are in terms of monetizations?

Kaes Van't Hof

Yeah, I think what we've been done in the market is that we think we can get these non-core asset sales done without selling operated acreage. And I think the lion's share of the value would come from a couple of our equity method investments that we list in our deck that have kind of been built out or near monetization. And on top of that, our midstream business that we acquired from Endeavor, the EDS Water business, like we had some synergies to merge into our Deep Blue JV, which is doing very, very well and winning a lot of third-party business in the basin.
I think most of that, that gets you most of the way there. We've started to cover a lot of assets from Endeavor that we acquired that are all over the country. But the biggest one is probably a sizable non-op position in the Delaware Basin, and that's likely your last kind of monetization candidate to get to that $1.5 billion.

Arun Jayaram

Great. And maybe the follow-up. Your overall -- you've topped down capital efficiency screens quite well relative to our model in the Street's expectation in terms of the CapEx or unit of oil output, that metric you mentioned in the shareholder letter. One kind of question is that the CapEx number is accompanied by more kind of gross [TILs]? Did field a few questions around what are some of the implications for well productivity as we think about the '25 program versus last year.

Kaes Van't Hof

Yeah. I think overall, productivity is going to be as good as any year this year. We've had pretty -- a couple of pretty banner years the last few years. I think TIL number, while a lot of other peers don't even give that number, we put it out there for transparency purposes, but there's a lot of things that can move around in the TIL number, right? If 1 20 well pad is completed on December 30 of last year, the account for last year or this year. So there's some noise in that number.
I think a true run rate -- we kind of got into the Street to 500 wells a year ish before Double Eagle. And Double Eagle adds about 30 wells a year of development. So I think somewhere in that 525 to 540 wells per year, assuming flat capital efficiency is kind of an apples-to-apples number.
And I think your other question on capital efficiency, we have posted this dollars of CapEx per VO produced. And I think that's a number that we want to hold ourselves to in the future. It's going to be tough to replicate the efficiency of 2025 given the DUC drawdown, but that's the mission to the team. I think there's a lot of ancillary CapEx that's going to come down to replace that. And capital efficiency is going to remain strong as particularly on a relative basis to where the market is today.

Operator

Derek Whitfield, Texas Capital.

Derrick Whitfield

I'll echo everyone's congrats as well.

Travis Stice

Thank you, Derek.

Derrick Whitfield

With regard to the Double Eagle transaction, how should we think about the capital and production impacts from your agreement with Double Eagle to accelerate noncore Southern Midland Basin development? And when would that start to -- or could that start to meaningfully impact your financials?

Kaes Van't Hof

Yeah, Derek. On the capital side, there's 0 capital. We're getting a carry. So no impact to us. Further rationale for that part of the deal is we were going to have to move a few rigs down south to secure some leasehold that had lower working interest and needed some horizontal wells to maintain the leasehold. And we obviously have a good relationship with the Double Eagle guys. And they needed a place for their couple of rigs to go, and so they're going to accelerate some development down there.
I think the color we've given the market is that it's about $100 million of free cash flow on a consolidated basis in 2026. And I'd probably say that 50% of that is for Viper. We'll talk about it on the Viper call, but the Raymond Towny piece was the second largest from an acreage perspective piece of the drop-down. And so this is kind of an unmodeled upside for the dropdown that in turn benefits Diamondback through Viper's outperformance.

Derrick Whitfield

That's great. And then regarding your commentary on unmodeled synergies, where do you see the greatest remaining opportunities now that your organizations are fully integrated?

Travis Stice

I think we've really talked a lot about synergies around the drill bit and completions and the capital synergies. I think there's some longer-dated synergies in the field in the production world as we get teams integrated and continue to share learnings and best practices from the operating teams in the field and on the production and PDP side, where can we see improvements, shared resources. Those things take a little longer than just converting a drilling rig or a completion crew over to a program. So we're still in the middle of all that.
And the integration of the field organization really is going to be hot and heavy this year, and we're excited to -- it will be smaller things that are harder to measure, but be a lot of things that will accrue, hopefully, to our LOE and OpEx budgets in future years.

Operator

Kevin MacCurdy, Pickering Energy Partners.

Kevin MacCurdy

Do you have a breakdown of the 2025 CapEx plan for the legacy assets versus the CapEx for Double Eagle? Just trying to get a feel for how much lower the new legacy guide is compared to the prior commentary.

Kaes Van't Hof

Yeah. Kevin, we gave out Double Eagle $200 million of CapEx for Q2 to Q4 for 27,000 barrels a day of oil. Their assets a little earlier. So something like 40, something like that, 1,000 BOEs a day. So if you look at our [3.8% to 4.2%], you take [200] off down on each side, you're at [3.64%]. It kind of ties $3.6 billion -- $3.6 billion to $4 billion for the full year. And it kind of ties to where we guided Q1 of 2025, which is $900 million to $1 billion for [$4.70] oil to [$4.75] oil, which ironically looks a lot like Q4 of 2024.
So we're kind of moving towards -- given the volatility we've seen over the last quarter last year and certainly some more headlines and volatility this year to kick things off, we figured cutting capital and growing less or growing 0 prior to the Double Eagle deal made a lot of sense. And so Q1 is a pretty good look at what we were planning to do prior to DE. And we certainly had to change our plans pretty quickly as that deal moved quickly. But I think in general, we're seeing a more capital-efficient plan than expectations.

Kevin MacCurdy

Great. I appreciate that detail. And as a follow-up, is there any CapEx associated with the assets that you might sell this year, both on the JV and the non-op?

Kaes Van't Hof

The only thing we highlighted this midstream CapEx number, which is $60 million or so. There's certainly some CapEx associated with the non-op in the Delaware, but it's not a meaningful overall number.

Operator

Paul Cheng, Scotiabank.

Paul Cheng

And first, congratulations to Travis and Kaes and Jere. Maybe that's -- Kaes. Can you tell us that with the [drawdown]. How much you estimate is the saving in CapEx on those $120, $130?

Kaes Van't Hof

Yeah, Paul. Basically, on a gross basis, drilling right now is about $220 a foot. So on a net basis, our average working interest is about $200 a foot. So you're basically at $2.2 million to $2.4 million a well. So I'd say, overall, it's probably about a $200 million savings this year. And I think as I mentioned earlier in the call, the Gulf of the team is going to be how can we offset that in 2026, but reduce CapEx elsewhere.

Paul Cheng

Okay. And just curious that the cadence of the program, I mean, if we put Double Eagle aside, so we assume that it's roughly about prorate each quarter, the same number of where they're coming on stream. Because when we're looking at the number of wells that you expect to bring, one would think, given your strong productivity, that production will be somewhat higher than what you guide. So just curious that, is there anything we should be aware in terms of the timing of the wells or anything?

Kaes Van't Hof

No, I think we kind of said that 20 wells were brought into this year from last year. Who really knows what's going to happen at the end of this year. But I think this kind of low 500s before Double Eagle wells per year run rate is a pretty good number with 30 added wells from Double Eagle. But the program of 500 wells a year, wells moving forward and backward across the calendar line is not something we actively think about.

Paul Cheng

I see.

Operator

Leo Mariano, Roth.

Leo Mariani

I was hoping you could say a little bit more into the Double Eagle deal here and the synergies? You guys obviously spoke about it a little bit on the call and kind of alluded to some of this in the press release, but clearly, FANG is a low-cost operator in terms of being able to drill and complete wells nicely under $600 per foot in the Midland. Do you kind of have a number for those guys in terms of what their kind of run rate was? Just trying to get a sense of well cost savings over time here. And I'm also going to probably assume that maybe your LOE is also a bit lower than theirs. So I was hoping you could kind of quantify kind of the D&C and LOE numbers there to give us a sense of maybe some potential savings over time?

Kaes Van't Hof

Yeah. For group known for their land prowess, those guys are actually pretty good operators over there at Double Eagle. They're doing a pretty good job. They were probably in the [$625, $650] range. But on a private deal, we're going to model it with our cost structure, and we put that new kind of well cost out last year when we announced the trade. So that's probably the biggest number we've put out.
I think second to that, because of the adjacencies, we're not going to have to build as much infrastructure to service those assets. And yes, I mean, I think from a timing perspective, those guys have been running 5 or 6 rigs and they ran them on in the southern portion of their asset, and we're about to move 4 or 5 rigs up to the north and choose through that inventory very, very quickly.
And so we decided to move on the deal because so often in this business, you've seen companies buy deals that have high decline curves and have to chase that decline curve with too much capital and too many rigs. And the outcome of that is inventory duration being shortened rather than lengthened. So we timed it well, where we didn't acquire too much production and instead acquired a lot of upside that fits in well with our plan over the next 10 years.

Leo Mariani

Okay. That's helpful. I just wanted to take on the capital side here. So I certainly noted that your capitalized interest has kind of been going up the last few quarters. I'm sure a lot of that is related to the Endeavor deal. But just wanted to kind of check in on that. Is the capitalized interest included when you lay out the budget for 2025 here on the capital side?

Kaes Van't Hof

Yeah. No. So capitalized interest seems to be the hot topic. I don't know if we've gone down to capitalized interest is something that's interesting in this business. But at the end of the day, we don't make the accounting rules. When you do a deal with a lot of undeveloped acreage, if you raise debt dollars to pay for it, those go in the capitalized section.
For us, that runs through addition to oil and gas properties, which is not in our CapEx budget, we've got to put our CapEx budget as what it takes to run the business. But our shareholder commitments and return commitments and all the math we do on our side does include that. But from a free cash flow definition perspective, we excluded. And I think over the coming couple of years as we pay down a significant amount of that debt, that issue will be put to rest.

Operator

(Operator Instructions)
Doug Leggate, Wolfe Research.

Doug Leggate

Hey, gentlemen. Good morning. This is actually Carlos in for Doug. And he most definitely experienced congratulations to you, Travis, Jere and Kaes. Look, guys, what we're trying to figure out is we talk about a decade of inventory at the current pace and that's presumably associated to your highest return on screen. What would that look like if we applied the current strip to screen returns? Would that number change? And how much so?

Kaes Van't Hof

Yeah. I think the gold standard in the industry right now is sub [40] breakeven, and that's what we've been focused on and saying, the decade reference. Obviously, inventory expands significantly as commodity prices go up. I think for us, that number is put in our deck on slide 12, we show kind of the $50 breakeven though, that's a 10% rate of return at $50 a barrel, right? We're not going to be wanting to drill that many wells in that situation. Instead, we'd like to have the balance sheet strength to be buying back shares in that situation.
But I think from an overall strategy perspective, the inventory is there. It's just about at what time do you have to prosecute that inventory, and we've tried to position ourselves to be the last person to have to drill the lower returning inventory but also have the lowest cost structure to be able to do it.

Doug Leggate

Got you. That's very helpful. And not to beat the dead horse here, but in terms of your DUCs and the capital associated with that, how much of that capital benefit or at what rate do you expect that capital to come back throughout 2026? What's the cadence associated with the capital benefit reverting back to normal levels?

Kaes Van't Hof

It's pretty level loaded. We have a very good forward visibility into when we're completing and what we're drilling. I think we also went into this year running 18 or 19 rigs and realize that we were going to have a pretty sizable DUC balance we could draw down. So we're going to be down at kind of 15 rigs here in the next couple of weeks, and we'll probably keep that pace for most of the year.
I think, as mentioned earlier, if things are going well on the year and we're towards the lower half of guidance, we'll probably drill 30 to 50 more wells and keep a relatively high DUC balance. We really like that because it gives us operational flexibility, particularly with the size of these pads and the size of the development. So it's good to have somewhere to go when things go south, and that DUC balance allows us to do that.

Operator

(Operator Instructions)
Kalei Akamine, Bank of America.

Kalei Akamine

On slide 28, you're breaking out surface acres in the Permian for the first time, kind of suggests that you're getting close to securing maybe the Permian's first data center deal. How should we think about how the financial benefits are going to flow back? And I'm thinking in terms of land sale revenues, will there be maybe a fixed price for gas? Could you even be paid in kind or through discounted power prices?

Kaes Van't Hof

Yeah, good questions. I think the land payment in my mind, is the least important of all of the payments given the size of the land needed. It's not a huge piece of property, but about 1,000 acres and you can buy a lot of surface out here in the Permian cheap. And fortunately, we have a lot of it. But I think the benefit to us would be participation from an equity perspective in the plant and on the power side, but also -- and also contributing all of the gas needed for the plant. And the debate is on between us and our partners on how we want to structure that.
You could look at things on a fixed price basis. You could look at a collar, you could look at an index. So I think what we're trying to do is kind of be more flexible than most here because in our situation, we're looking to take back a good amount of power ourselves, which I think will maintain our best-in-class LOE structure, particularly as power gets more scarce in the basin. So a lot of moving parts, but we're very actively working on it today. And I think it could be exciting for the Permian and exciting for Diamondback shareholders.

Kalei Akamine

I appreciate that color. For my next question, I'm thinking about the Endeavor share overhang. Kind of go back to Neil's question, post drop-down, you guys are a lot longer [BENEM] stock. Do you think there's any opportunities to maybe creatively swap BENEM shares for the sellers' shares in FANG?

Kaes Van't Hof

Yeah. Probably, that's something I can comment on. But I think Diamondback from Diamondback's perspective is happy with our ownership in BENEM. I think the stocks had a good run. I think the world is kind of waking up to the value of minerals. And Diamondback has a now $7.5 billion to $8 billion stake in -- [in BENEM] that I think is truly unique. But we structured that deal because we with as much equity as we did because we look at debt on a net debt on a consolidated basis. And in our mind, it didn't make sense to lever up Viper exchange for after-tax debt dollars at the parent.
So we did a highly equitized trade. But I think from the Diamondback side, gets us back over 50% ownership of Viper and leaves Viper under levered to continue to consolidate its market. Because I think that mineral consolidation will be pretty significant over the coming years relative to upstream.

Operator

Ladies and gentlemen, I'm showing no further questions in the queue. I would now like to turn the call back over to CEO, Travis Stice, for closing remarks.

Travis Stice

Thanks, everyone, for listening in this morning. I appreciate your attention. If you've got any follow-up questions, please reach out to the numbers provided. Thanks again. You all have a great day.

Operator

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.