Diamondback Energy moves to full-field Barnett shale development as drilling costs decline toward $800 per lateral foot target
Drilling costs that started the year around $1,000 per lateral foot have dropped enough that Diamondback Energy is done testing the Barnett shale — it’s ready to go all in. On November 3, CEO Kaes Van’t Hof told analysts on the company’s third-quarter earnings call that Diamondback is moving to full-field development of its Barnett position, with plans for up to five section developments completed by the end of February.
Diamondback announces full-field Barnett development push
Van’t Hof’s announcement marks a clear turning point for a position Diamondback first disclosed publicly in February. Back then, the company revealed a 200,000-acre Barnett holding — a significant footprint that’s since grown by another 24,000 net acres. Moving from exploratory testing to full-field development signals that leadership now sees the play as commercially viable, not just geologically interesting.
“What was once a geologic success is now turning into meaningful value for the company, and we’re moving into kind of full-field development,” Van’t Hof told analysts on the November 3 call.
That number has moved meaningfully toward Van’t Hof’s target of $800 per lateral foot, and he doesn’t see anything blocking further progress.
The near-term plan is concrete. Up to five section developments are targeted for completion by the end of February — a pace that reflects growing confidence in both subsurface results and the company’s demonstrated ability to bring costs down far enough for the Barnett to compete with other capital priorities.
Falling drilling costs drive the decision
The cost story is central to everything happening in the Barnett right now. At the start of 2026, Diamondback was spending roughly $1,000 per lateral foot drilled. That number has moved meaningfully toward Van’t Hof’s target of $800 per lateral foot, and he doesn’t see anything blocking further progress.
“Nothing that scares me or scares the team from continuing to push on,” he said.
That kind of confidence matters in shale development, where economics hinge heavily on drilling and completion costs. When those costs fall, marginal acreage becomes economic and projects that once looked borderline start competing for capital.
There’s an additional factor improving the math. Diamondback’s acquisition of deeper zones appears to be paying off in recovery efficiency — Van’t Hof noted that dynamic should deliver more value as costs keep declining. Lower costs and better recoveries are reinforcing each other at the same time, which changes the calculus considerably.
Drilling program details and near-term priorities
Not every well in the upcoming program is purely a capital-optimization call. Chief engineer Al Barkmann told analysts that some of the drilling will fulfill lease obligations the company holds, with those wells focused on areas near existing Diamondback operations — a practical choice that helps with logistics and keeps execution clean.
Parts of the Barnett acreage are also competing for capital internally. Barkmann noted that Diamondback’s 56% ownership stake in Viper Energy — a mineral- and royalty-focused company — factors into those allocation decisions. Where Viper’s royalty interest is present, the economics shift in ways that affect how different areas rank against each other.
Over the longer term, Diamondback believes its Barnett holdings could support 878 gross locations, or 561 net. That’s a substantial inventory if costs keep falling. Van’t Hof also acknowledged something common to early-stage development programs: the tendency to over-engineer. “Early on in these developments, we kind of gold-plate everything and then start to work our way down,” he said. As operations mature, that cost discipline tends to improve on its own.
Broader company outlook: Rigs, production, and M&A stance
Beyond the Barnett, Diamondback’s broader operational posture looks steady rather than aggressive. The company plans to run 19 to 20 rigs and five frac crews, turning in line 120 to 140 wells per quarter — consistent with the third quarter’s pace of 135 wells. No major production ramp is planned heading into 2027.
Van’t Hof was direct about the reasoning. Preparing for a swing to the downside on oil prices is always smart, he said, even if his base case is that prices stay higher for longer. “We prepare the business to keep our cost structure low and execution in perfect shape,” he added.
On acquisitions, Diamondback has been active but focused. The company has spent $406 million on ground-game deals in the Permian Basin, and Van’t Hof’s letter to investors signaled openness to more within that region. Multi-basin M&A is a different conversation entirely.
Executives have looked at opportunities outside the Permian, Van’t Hof said — but they keep landing at the same conclusion. Investors would rather see that capital go toward improving recoveries within the basin Diamondback knows best. “At the end of the day, I think our investors would rather us spend the extra $100 million on surfactant tests to improve our overall recoveries and duration than go explore outside the basin that we don’t know as well,” he said.
What this means for Diamondback’s Barnett position
The move to full-field Barnett development comes down to two things happening at once: drilling costs falling toward the $800 per lateral foot target, and early wells showing the geology actually works. With up to five section developments planned by February, a 200,000-plus-acre position that’s grown by 24,000 net acres, and an estimated 561 net locations in inventory, the Barnett is shifting from a watch-and-wait experiment to an active part of Diamondback Energy‘s development portfolio. Cost discipline and improving recovery efficiency are the two levers the company is counting on to keep that momentum going.
Kelly is an experienced writer with 15 years of experience exploring the big stories that shape our world, from tech breakthroughs and space exploration to climate, energy, and the fascinating quirks of science. She has a talent for turning complex ideas into sharp, memorable insights that stay with readers long after they’ve finished reading.
