Diamondback Energy, Inc. (FANG)

The company deliberately works in a single basin, which confers a cost advantage: drilling crews, infrastructure, logistics and geological knowledge are concentrated in a compact area. Its cost per barrel is among the lowest in US shale.

Growth came through buying neighbouring acreage — that is how shale consolidation works: small independent operators sell to larger ones because scale lowers cost per well. Each such deal changes both output and leverage.

A shale well peaks in its first year and depletes quickly, so drilling is required merely to hold production flat. The company pays a base dividend plus a variable distribution tied to the oil price.