Number of additional wells

[Table of Contents](#i31241139a24240ee889881d54ce4b5f1_7)Diamondback Energy, Inc. and Subsidiaries Condensed Notes to Consolidated Financial Statements - (Continued)(Unaudited)2021 Activity  
Guidon Operating LLC  
On February 26, 2021, the Company completed its acquisition of all leasehold interests and related assets of Guidon Operating LLC (the “Guidon Acquisition”) which include approximately 32,500 net acres in the Northern Midland Basin in exchange for 10.68 million shares of the Company’s common stock and $375 million of cash. The cash portion of this transaction was funded through a combination of cash on hand and borrowings under the Company’s credit facility. As a result of the Guidon Acquisition, the Company added approximately 210 gross producing wells. The following table presents the acquisition consideration paid in the Guidon Acquisition (in millions, except per share data, shares in thousands):  


|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| Consideration: |  |
| Shares of Diamondback common stock issued at closing | 10,676 |
| Closing price per share of Diamondback common stock on the closing date | $ | 69.28  |  |
| Fair value of Diamondback common stock issued | $ | 740  |  |
| Cash consideration | 375  |  |
| Total consideration (including fair value of Diamondback common stock issued) | $ | 1,115  |  |

  
Purchase Price Allocation  
The Guidon Acquisition has been accounted for as a business combination using the acquisition method. The following table represents the allocation of the total purchase price paid in the Guidon Acquisition to the identifiable assets acquired based on the fair values at the acquisition date. The purchase price allocation was complete as of the first quarter of 2022. The following table sets forth the Company’s purchase price allocation (in millions):  


|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
|  |  |
| Total consideration | $ | 1,115  |  |
|  |  |
| Fair value of liabilities assumed: |  |
| Asset retirement obligations | 9  |  |
|  |  |
| Fair value of assets acquired: |  |
| Oil and gas properties | 1,110  |  |
| Midstream assets | 14  |  |
| Amount attributable to assets acquired | 1,124  |  |
| Net assets acquired and liabilities assumed | $ | 1,115  |  |

  
Oil and natural gas properties were valued using an income approach utilizing the discounted cash flow method, which takes into account production forecasts, projected commodity prices and pricing differentials, and estimates of future capital and operating costs which were then discounted utilizing an estimated weighted-average cost of capital for industry market participants. The fair value of acquired midstream assets was based on the cost approach, which utilized asset listings and cost records with consideration for the reported age, condition, utilization and economic support of the assets. The majority of the measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and are therefore considered Level 3 inputs.   
With the completion of the Guidon Acquisition, the Company acquired proved properties of $537 million and unproved properties of $573 million. The results of operations attributable to the Guidon Acquisition since the acquisition date have been included in the condensed consolidated statements of operations and include $103 million and $133 million of total revenue and $49 million and $65 million of net income for the three and six months ended June 30, 2021, respectively.  
10
