Viper Energy, Inc. Class A press release
Viper Energy, Inc., a Subsidiary of Diamondback Energy, Inc., Reports Second Quarter 2024 Financial and Operating Results; Increases Base Dividend
NASDAQ - Nasdaq Stock Market · Oil · Natural Gas · Natural Gas Liquids · United States
MIDLAND, Texas, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Viper Energy, Inc., (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), today announced financial and operating results for the second quarter ended June 30, 2024.
SECOND QUARTER HIGHLIGHTS
Q2 2024 average production of 26,352 bo/d (47,473 boe/d), an increase of 3.7% from Q1 2024 Q2 2024 consolidated net income (including non-controlling interest) of $122.2 million; net income attributable to Viper Energy, Inc. of $56.9 million, or $0.62 per common share Q2 2024 cash available for distribution to Viper’s common shares (as defined and reconciled below) of $78.4 million, or $0.86 per Class A common share Increasing annual base dividend 11% to $1.20 per share; declared Q2 2024 base cash dividend of $0.30 per Class A common share; implies a 3.0% annualized yield based on the August 2, 2024 share closing price of $40.25 Q2 2024 variable cash dividend of $0.34 per Class A common share; total base-plus-variable dividend of $0.64 per Class A common share implies a 6.4% annualized yield based on the August 2, 2024 share closing price of $40.25 Total Q2 2024 return of capital of $58.8 million, or $0.64 per Class A common share, represents 75% of cash available for distribution On May 1, 2024, closed divestiture of non-Permian assets for cash proceeds of approximately $90.2 million 375 total gross (6.1 net 100% royalty interest) horizontal wells turned to production on Viper’s acreage during Q2 2024 with an average lateral length of 12,037 feet Initiating average daily production guidance for Q3 2024 of 26,500 to 27,000 bo/d (47,500 to 48,500 boe/d), the midpoint of which represents approximately 1.5% growth relative to Q2 2024 Increasing full year 2024 average daily production guidance to 26,000 to 26,750 bo/d (46,750 to 48,250 boe/d)
“The 11% increase in our base dividend announced today highlights our Board’s belief in a sustainable and growing base dividend that can be maintained through the cycle. This belief and commitment to our shareholders is supported by Viper’s strong balance sheet and durable cash flow profile. Relative to a year ago when we last increased our base dividend, Viper has grown oil production per share by 14% while maintaining our cash margins ( 1 ) and conversion of Adjusted EBITDA into cash available for distribution at both around 80%. Importantly, at current production levels the annual fixed amount of the increased base dividend is protected down to below $30 WTI,” stated Travis Stice, Chief Executive Officer of Viper.
Mr. Stice continued, “Viper today also announced an increase to our production guidance range for full year 2024. This increase is due to both outperformance seen during the first half of the year, as well as an increase in expectations for the remainder of 2024. The midpoint of the guidance range we have provided for Q3 2024 implies 1.5% growth relative to Q2, despite losing roughly 150 bo/d of quarterly production contribution from the non-Permian assets we divested during the second quarter. Overall, we continue to see strong activity levels across our acreage position and benefit from Diamondback’s continued large-scale development of Viper’s high concentration royalty acreage.”
FINANCIAL UPDATE
Viper’s second quarter 2024 average unhedged realized prices were $81.04 per barrel of oil, $0.20 per Mcf of natural gas and $20.35 per barrel of natural gas liquids, resulting in a total equivalent realized price of $49.88/boe.
Viper’s second quarter 2024 average hedged realized prices were $80.24 per barrel of oil, $0.64 per Mcf of natural gas and $20.35 per barrel of natural gas liquids, resulting in a total equivalent realized price of $50.00/boe.
During the second quarter of 2024, the Company recorded total operating income of $216.7 million and consolidated net income (including non-controlling interest) of $122.2 million.
As of June 30, 2024, the Company had a cash balance of $35.2 million and total long-term debt outstanding (excluding debt issuance costs, discounts and premiums) of $1.0 billion, resulting in net debt (as defined and reconciled below) of $972.1 million. Viper’s outstanding long-term debt as of June 30, 2024 consisted of $430.4 million in aggregate principal amount of its 5.375% Senior Notes due 2027, $400.0 million in aggregate principal amount of its 7.375% Senior Notes due 2031 and $177.0 million in borrowings on its revolving credit facility, leaving $673.0 million available for future borrowings and $708.2 million of total liquidity.
_ ( 1 ) Cash margin is calculated as average realized price per boe less production and ad valorem taxes, cash general and administrative expense, and interest expense per boe.
SECOND QUARTER 2024 CASH DIVIDEND & CAPITAL RETURN PROGRAM
Viper announced today that the Board of Directors (the “Board”) of Viper Energy, Inc., declared a base dividend of $0.30 per Class A common share for the second quarter of 2024 payable on August 22, 2024 to Class A common shareholders of record at the close of business on August 15, 2024.
The Board also declared a variable cash dividend of $0.34 per Class A common share for the second quarter of 2024 payable on August 22, 2024 to Class A common shareholders of record at the close of business on August 15, 2024.
OPERATIONS UPDATE
During the second quarter of 2024, Viper estimates that 375 gross (6.1 net 100% royalty interest) horizontal wells with an average royalty interest of 1.6% were turned to production on its acreage position with an average lateral length of 12,037 feet. Of these 375 gross wells, Diamondback is the operator of 48 gross wells, with an average royalty interest of 5.4%, and the remaining 327 gross wells, with an average royalty interest of 1.1%, are operated by third parties.
Viper’s footprint of mineral and royalty interests was 31,762 net royalty acres as of June 30, 2024.
Our gross well information as of June 30, 2024 is as follows, unless otherwise specified:
| | Diamondback Operated | | Third Party Operated | | Total | | | | | | | | Horizontal wells turned to production ( 1) : | | | | | | | | | | | | | Gross wells | | 48 | | | | 327 | | | | 375 | | | Net 100% royalty interest wells | | 2.6 | | | | 3.5 | | | | 6.1 | | | Average percent net royalty interest | | 5.4 | % | | | 1.1 | % | | | 1.6 | % | | | | | | | | | | | | | | | Horizontal producing well count: | | | | | | | | | | | | | Gross wells | | 1,964 | | | | 7,488 | | | | 9,452 | | | Net 100% royalty interest wells | | 134.7 | | | | 96.8 | | | | 231.5 | | | Average percent net royalty interest | | 6.9 | % | | | 1.3 | % | | | 2.4 | % | | | | | | | | | | | | | | | Horizontal active development well count: | | | | | | | | | | | | | Gross wells | | 132 | | | | 604 | | | | 736 | | | Net 100% royalty interest wells | | 7.6 | | | | 6.6 | | | | 14.2 | | | Average percent net royalty interest | | 5.8 | % | | | 1.1 | % | | | 1.9 | % | | | | | | | | | | | | | | | Line of sight wells: | | | | | | | | | | | | | Gross wells | | 124 | | | | 608 | | | | 732 | | | Net 100% royalty interest wells | | 8.9 | | | | 8.4 | | | | 17.3 | | | Average percent net royalty interest | | 7.2 | % | | | 1.4 | % | | | 2.4 | % |
(1) Average lateral length of 12,037 feet.
The 736 gross wells currently in the process of active development are those wells that have been spud and are expected to be turned to production within approximately the next six to eight months. Further in regard to the active development on Viper’s asset base, there are currently 49 gross rigs operating on Viper’s acreage, nine of which are operated by Diamondback. The 732 line-of-sight wells are those that are not currently in the process of active development, but for which Viper has reason to believe that they will be turned to production within approximately the next 15 to 18 months. The expected timing of these line-of-sight wells is based primarily on permitting by third party operators or Diamondback’s current expected completion schedule. Existing permits or active development of Viper’s royalty acreage does not ensure that those wells will be turned to production.
GUIDANCE UPDATE
Below is Viper’s updated guidance for the full year 2024, as well as production guidance for Q3 2024.
| | | | | Viper Energy, Inc. | | | | | Q3 2024 Net Production - MBo/d | 26.50 - 27.00 | | Q3 2024 Net Production - MBoe/d | 47.50 - 48.50 | | Full Year 2024 Net Production - MBo/d | 26.00 - 26.75 | | Full Year 2024 Net Production - MBoe/d | 46.75 - 48.25 | | | | | Share costs ($/boe) | | | Depletion | $11.00 - $11.50 | | Cash G&A | $1.00 - $1.20 | | Non-Cash Share-Based Compensation | $0.10 - $0.20 | | Interest Expense | $4.00 - $4.25 | | | | | Production and Ad Valorem Taxes (% of Revenue) | ~7% | | Cash Tax Rate (% of Pre-Tax Income Attributable to Viper Energy, Inc.) ( 1) | 20% - 22% | | Q3 2024 Cash Taxes ($ - million) ( 2) | $13.0 - $18.0 |
(1) Pre-tax income attributable to Viper Energy, Inc. is reconciled below. (2) Attributable to Viper Energy, Inc.
CONFERENCE CALL
Viper will host a conference call and webcast for investors and analysts to discuss its results for the second quarter of 2024 on Tuesday, August 6, 2024 at 10:00 a.m. CT. Access to the live audio-only webcast, and replay which will be available following the call, may be found here . The live webcast of the earnings conference call will also be available via Viper’s website at www.viperenergy.com under the “Investor Relations” section of the site.
About Viper Energy, Inc.
Viper is a corporation formed by Diamondback to own, acquire and exploit oil and natural gas properties in North America, with a focus on owning and acquiring mineral and royalty interests in oil-weighted basins, primarily the Permian Basin. For more information, please visit www.viperenergy.com.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding Viper’s: future performance; business strategy; future operations; estimates and projections of operating income, losses, costs and expenses, returns, cash flow, and financial position; production levels on properties in which Viper has mineral and royalty interests, developmental activity by other operators; reserve estimates and Viper’s ability to replace or increase reserves; anticipated benefits of strategic transactions (such as acquisitions or divestitures); and plans and objectives (including Diamondback’s plans for developing Viper’s acreage and Viper’s cash dividend policy and common stock repurchase program) are forward-looking statements. When used in this news release, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to Viper are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although Viper believes that the expectations and assumptions reflected in its forward-looking statements are reasonable as and when made, they involve risks and uncertainties that are difficult to predict and, in many cases, beyond its control. Accordingly, forward-looking statements are not guarantees of Viper’s future performance and the actual outcomes could differ materially from what Viper expressed in its forward-looking statements.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: changes in supply and demand levels for oil, natural gas, and natural gas liquids, and the resulting impact on the price for those commodities; the impact of public health crises, including epidemic or pandemic diseases, and any related company or government policies or actions; actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments, including any impact of the ongoing war in Ukraine and the Israel-Hamas war on the global energy markets and geopolitical stability; instability in the financial sector; higher interest rates and their impact on the cost of capital; regional supply and demand factors, including delays, curtailment delays or interruptions of production on Viper’s mineral and royalty acreage, or governmental orders, rules or regulations that impose production limits on such acreage; federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations; physical and transition risks relating to climate change and the risks and other factors disclosed in Viper’s filings with the Securities and Exchange Commission, including its Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the Securities and Exchange Commission's web site at http://www.sec.gov.
In light of these factors, the events anticipated by Viper’s forward-looking statements may not occur at the time anticipated or at all. Moreover, the new risks emerge from time to time. Viper cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements made in this news release. All forward-looking statements speak only as of the date of this news release or, if earlier, as of the date they were made. Viper does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
| Viper Energy, Inc. | | | | | | | | | Condensed Consolidated Balance Sheets | | | | | | | | | (unaudited, in thousands, except share amounts) | | | | | | | | | | | | | | | | | | | June 30, | | December 31, | | | | | | | | 2024 | | | | 2023 | | | Assets | | | | | | | | | Current assets: | | | | | | | | | Cash and cash equivalents | $ | 35,211 | | | $ | 25,869 | | | Royalty income receivable (net of allowance for credit losses) | | 131,724 | | | | 108,681 | | | Royalty income receivable—related party | | 34,981 | | | | 3,329 | | | Income tax receivable | | — | | | | 813 | | | Derivative instruments | | — | | | | 358 | | | Prepaid expenses and other current assets | | 3,468 | | | | 4,467 | | | Total current assets | | 205,384 | | | | 143,517 | | | Property: | | | | | | | | | Oil and natural gas interests, full cost method of accounting ($1,581,227 and $1,769,341 excluded from depletion at June 30, 2024 and December 31, 2023, respectively) | | 4,567,518 | | | | 4,628,983 | | | Land | | 5,688 | | | | 5,688 | | | Accumulated depletion and impairment | | (961,646 | ) | | | (866,352 | ) | | Property, net | | 3,611,560 | | | | 3,768,319 | | | Derivative instruments | | 2,134 | | | | 92 | | | Deferred income taxes (net of allowances) | | 76,393 | | | | 56,656 | | | Other assets | | 4,951 | | | | 5,509 | | | Total assets | $ | 3,900,422 | | | $ | 3,974,093 | | | Liabilities and Stockholders’ Equity | | | | | | | | | Current liabilities: | | | | | | | | | Accounts payable | $ | 19 | | | $ | 19 | | | Accounts payable—related party | | — | | | | 1,330 | | | Accrued liabilities | | 22,106 | | | | 27,021 | | | Derivative instruments | | 4,766 | | | | 2,961 | | | Income taxes payable | | 2,200 | | | | 1,925 | | | Total current liabilities | | 29,091 | | | | 33,256 | | | Long-term debt, net | | 998,021 | | | | 1,083,082 | | | Derivative instruments | | — | | | | 201 | | | Total liabilities | | 1,027,112 | | | | 1,116,539 | | | Stockholders’ equity: | | | | | | | | | Class A Common Stock, $0.000001 par value: 1,000,000,000 shares authorized; 91,423,830 shares issued and outstanding as of June 30, 2024 and 86,144,273 shares issued and outstanding as of December 31, 2023 | | — | | | | — | | | Class B Common Stock, $0.000001 par value: 1,000,000,000 shares authorized; 85,431,453 shares issued and outstanding as of June 30, 2024 and 90,709,946 shares issued and outstanding as of December 31, 2023 | | — | | | | — | | | Additional paid-in capital | | 1,108,739 | | | | 1,031,078 | | | Retained earnings (accumulated deficit) | | (18,939 | ) | | | (16,786 | ) | | Total Viper Energy, Inc. stockholders’ equity | | 1,089,800 | | | | 1,014,292 | | | Non-controlling interest | | 1,783,510 | | | | 1,843,262 | | | Total equity | | 2,873,310 | | | | 2,857,554 | | | Total liabilities and stockholders’ equity | $ | 3,900,422 | | | $ | 3,974,093 | | | | | | | | | | |
| Viper Energy, Inc. | | | | | | | | | | | | | | | | | Condensed Consolidated Statements of Operations | | | | | | | | | | | | | | | | | (unaudited, in thousands, except per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | | | | | | | | | | | | | | 2024 | | | | 2023 | | | | 2024 | | | | 2023 | | | Operating income: | | | | | | | | | | | | | | | | | Oil income | $ | 194,335 | | | $ | 139,300 | | | $ | 371,453 | | | $ | 275,919 | | | Natural gas income | | 1,143 | | | | 5,090 | | | | 7,940 | | | | 14,081 | | | Natural gas liquids income | | 20,008 | | | | 13,807 | | | | 41,160 | | | | 29,282 | | | Royalty income | | 215,486 | | | | 158,197 | | | | 420,553 | | | | 319,282 | | | Lease bonus income—related party | | — | | | | 1,277 | | | | 120 | | | | 8,348 | | | Lease bonus income | | 1,096 | | | | 1,134 | | | | 1,146 | | | | 1,534 | | | Other operating income | | 126 | | | | 179 | | | | 281 | | | | 581 | | | Total operating income | | 216,708 | | | | 160,787 | | | | 422,100 | | | | 329,745 | | | Costs and expenses: | | | | | | | | | | | | | | | | | Production and ad valorem taxes | | 15,201 | | | | 12,621 | | | | 29,607 | | | | 25,508 | | | Depletion | | 48,360 | | | | 34,064 | | | | 95,293 | | | | 65,051 | | | General and administrative expenses—related party | | 2,436 | | | | 924 | | | | 4,822 | | | | 1,848 | | | General and administrative expenses | | 2,019 | | | | 1,084 | | | | 4,666 | | | | 2,924 | | | Other operating expense | | 139 | | | | — | | | | 233 | | | | — | | | Total costs and expenses | | 68,155 | | | | 48,693 | | | | 134,621 | | | | 95,331 | | | Income (loss) from operations | | 148,553 | | | | 112,094 | | | | 287,479 | | | | 234,414 | | | Other income (expense): | | | | | | | | | | | | | | | | | Interest expense, net | | (18,667 | ) | | | (11,120 | ) | | | (37,997 | ) | | | (20,666 | ) | | Gain (loss) on derivative instruments, net | | 5,346 | | | | (12,594 | ) | | | (2,146 | ) | | | (27,697 | ) | | Other income, net | | — | | | | 1 | | | | — | | | | 2 | | | Total other expense, net | | (13,321 | ) | | | (23,713 | ) | | | (40,143 | ) | | | (48,361 | ) | | Income (loss) before income taxes | | 135,232 | | | | 88,381 | | | | 247,336 | | | | 186,053 | | | Provision for (benefit from) income taxes | | 13,006 | | | | 8,450 | | | | 25,535 | | | | 17,856 | | | Net income (loss) | | 122,226 | | | | 79,931 | | | | 221,801 | | | | 168,197 | | | Net income (loss) attributable to non-controlling interest | | 65,325 | | | | 49,381 | | | | 121,540 | | | | 103,680 | | | Net income (loss) attributable to Viper Energy, Inc. | $ | 56,901 | | | $ | 30,550 | | | $ | 100,261 | | | $ | 64,517 | | | | | | | | | | | | | | | | | | | | Net income (loss) attributable to common shares: | | | | | | | | | | | | | | | | | Basic | $ | 0.62 | | | $ | 0.42 | | | $ | 1.12 | | | $ | 0.89 | | | Diluted | $ | 0.62 | | | $ | 0.42 | | | $ | 1.12 | | | $ | 0.89 | | | Weighted average number of common shares outstanding: | | | | | | | | | | | | | | | | | Basic | | 91,424 | | | | 71,771 | | | | 89,480 | | | | 72,249 | | | Diluted | | 91,424 | | | | 71,771 | | | | 89,570 | | | | 72,249 | | | | | | | | | | | | | | | | | | |