Thank you, Adam, and welcome to Diamondback’s fourth quarter earnings call.
Before I start with my remarks, I want to pause and recognize an individual who passed away last week, Clayton Williams, who was truly a larger than life West Texan and a man that paved the way for so many in our industry who came after him. He was a wildcatter, a patriarch, a philanthropist, and a Texas Aggie.
Later today, we will lay him to rest and celebrate a life well lived, but I couldn't start without reflecting on what Claty has meant to so many people. Mr. Williams and family, our thoughts and prayers are with you today. Godspeed Clayton Williams! You will be missed.
Turning to the fourth quarter, Diamondback ended 2019 in a position of strength, achieving 5% oil production growth quarter-over-quarter, along with our highest oil realizations of the year. This, combined with our industry leading cost structure resulted in 18% quarter-over-quarter EBITDA growth and 31% quarter-over-quarter adjusted EPS growth.
We repurchased 2.4 million shares in the quarter for approximately $199 million, utilizing free cash flow and a $43 million gain from an interest rate swap that was unwound as part of our first investment grade bond offering in November to repurchase shares at a depressed valuation.
Further, Diamondback did not slow operations in the second half of 2019 and maintained continuous operations with eight completion crews running consistently through the end of the year, setting us up for continued growth and operational momentum in 2020.
Taking a step back to review the full year, 2019 was a busy year for Diamondback. We successfully integrated our merger with Energen, doubling the size of our company, while achieving greater cost synergies in a shorter period of time than originally promised at time of deal announcement.
We grew pro forma oil production 26% year-over-year from a $2.9 billion capital budget, increased our dividend by 50% and repurchased 6.4 million shares or about 10% of the shares issued to complete the Energen merger.
On the corporate development front, we sold non-core assets, dropped down mineral interests to Viper and took our midstream business public. In November, we executed of the final piece of our synergy scorecard and refinanced $3.0 billion of the company's long-term debt, following our upgrade to investment grade at an attractive interest rate.
Well, I'm proud of what we accomplished in 2019. We don't spend any time looking backward at our tracks in the sand, but rather looking ahead and concentrating on the future. 2020 has already brought its own industry challenges and we are focused on navigating these challenges by staying disciplined, improving our industry leading cost structure, growing production, increasing environmental transparency and returning more cash to stockholders.
Our dividend remains our primary method of returning capital to stockholders and as evidenced through our announcement today, we are strongly committed to continuing to grow this dividend, which sits at a 2% yield at today's stock price.
We will continue to be opportunistic with our share repurchase program and outright debt reduction to maintain balance sheet strength, but our dividend is considered first dollar out when it comes to capital allocation at Diamondback.
Looking to the year ahead of us, Diamondback expects to grow oil production in the first quarter of 2020 on the back of our strong fourth quarter production in route to our 10% to 15% year-over-year expected oil production growth in 2020.
We expect to execute this plan within the same capital budget framework as 2019, while completing 7% more lateral footage with the same amount of capital.
Our oil realizations are expected to improve to nearly 100% of WTI in the first quarter of 2020, which will be a nice tailwind for per share metrics. Full service start-up of the EPIC and Gray Oak pipelines in the second quarter will increase our exposure to the export and Gulf Coast markets, as well as increased cash flow through our 10% ownership of each pipeline at Rattler.
We will also continue to work to drive down cash operating costs through the year, with LOE expected to decline relative to 2019 numbers.
We believe this capital and operating plan reflects the optimal capital efficiency for achieving a peer leading combination of grow and free cash flow in 2020, should commodity prices decline further from current levels, we will be prepared to act responsibly and cut capital further, just like we've done multiple times in the past. If commodity prices rally, we plan to use excess free cash flow to accelerate our capital return program and reduce debt.
With these comments now complete, operator, please open the line for questions.