Viper Energy, Inc. Class A press release

Viper Energy, Inc., a Subsidiary of Diamondback Energy, Inc., Reports Second Quarter 2025 Financial and Operating Results

2025-08-04

NASDAQ - Nasdaq Stock Market · Oil · Natural Gas · Natural Gas Liquids · United States

MIDLAND, Texas, Aug. 04, 2025 (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, 2025.

SECOND QUARTER HIGHLIGHTS

Q2 2025 average production of 41,615 bo/d (79,286 boe/d) Q2 2025 consolidated net income (including non-controlling interest) of $84 million; net income attributable to Viper of $37 million, or $0.28 per Class A common share Q2 2025 cash available for distribution to Viper’s Class A common shares (as defined and reconciled below) of $97 million, or $0.74 per Class A common share Declared Q2 2025 base cash dividend of $0.33 per Class A common share; implies a 3.6% annualized yield based on the August 1, 2025 Class A common share closing price of $36.60 Declared Q2 2025 variable cash dividend of $0.20 per Class A common share; total base-plus-variable dividend of $0.53 per Class A common share implies a 5.8% annualized yield based on the August 1, 2025 Class A common share closing price of $36.60 During the second quarter of 2025, repurchased 255,843 shares of the Company’s Class A common stock for an aggregate purchase price of approximately $10 million, excluding excise tax (average price of $37.99 per Class A common share) Total Q2 2025 return of capital to Class A shareholders of $73 million, or $0.56 per Class A common share, represents 75% of cash available for distribution 302 total gross (6.5 net 100% royalty interest) horizontal wells turned to production on Viper’s acreage during Q2 2025 with an average lateral length of 12,846 feet As previously announced, on May 1, 2025, closed the drop down transaction, whereby Viper Energy Partners LLC (the “OpCo”), the Company’s operating subsidiary, acquired all of the equity interests of certain mineral and royalty subsidiaries of Diamondback for consideration of $1.0 billion of cash and 69.6 million limited liability company units of OpCo and an equivalent number of shares of the Company’s Class B common stock (the “Drop Down”)

RECENT EVENTS AND FORWARD OUTLOOK

As previously announced, on June 3, 2025, entered into a definitive agreement whereby Viper will acquire Sitio Royalties Corp. (“Sitio”) in an all-equity transaction valued at approximately $4.1 billion (the “Sitio Acquisition”), which acquisition is subject to approval by Sitio’s shareholders and the satisfaction or waiver of other customary closing conditions As previously announced, on July 23, 2025, closed an offering of $500 million in aggregate principal amount of 4.900% senior notes that will mature on August 1, 2030 (“2030 Notes”) and $1.1 billion in aggregate principal amount of 5.700% senior notes that will mature on August 1, 2035 (“2035 Notes”) Initiating average daily production guidance for Q3 2025 of 46,000 to 49,000 bo/d (86,000 to 92,000 boe/d) Maintaining average daily production for the balance of 2025, after giving pro forma effect to the expected closing of the Sitio Acquisition, of 64,000 to 68,000 bo/d (122,000 to 130,000 boe/d); expect full year 2026 average production to increase by a mid-single digit percentage from these levels

“First, regarding our previously announced merger with Sitio: Sitio will be hosting their shareholder meeting to vote on a proposal to approve the merger on August 18, 2025. If approved by Sitio’s shareholders, we expect to close the merger shortly following the meeting,” stated Kaes Van’t Hof, Chief Executive Officer of Viper.

Mr. Van’t Hof continued, “Despite oil price volatility in the second quarter, Viper delivered strong oil production growth, both on an absolute and per share basis. We remain highly confident our organic growth trajectory will continue into 2026 at current prices, led by over 15% expected year over year growth in our Diamondback-operated net oil production. Our symbiotic relationship with Diamondback provides unmatched growth visibility, and accretive acquisitions, such as the Sitio Acquisition, only accelerate per share growth and increase longevity and durability.”

Mr. Van’t Hof further continued, “As announced with the Sitio Acquisition, our pro forma net and long-term debt target is $1.5 billion, which represents approximately 1.0x leverage at $50 WTI based on expected pro forma production levels. We are committed to maintaining a fortress balance sheet, but see $1.5 billion as the right amount of permanent leverage for Viper as a royalty business with limited costs and no capex. Therefore, in coming quarters, should net debt be at or below $1.5 billion, stockholders should expect us to return all excess cash up to 100% of cash available for distribution generated in a quarter.”

FINANCIAL UPDATE

Viper’s second quarter 2025 average unhedged realized prices were $63.64 per barrel of oil, $0.99 per Mcf of natural gas and $20.70 per barrel of natural gas liquids, resulting in a total equivalent realized price of $39.78/boe.

Viper’s second quarter 2025 average hedged realized prices were $62.85 per barrel of oil, $1.58 per Mcf of natural gas and $20.70 per barrel of natural gas liquids, resulting in a total equivalent realized price of $41.03/boe.

During the second quarter of 2025, the Company recorded total operating income of $297 million and consolidated net income (including non-controlling interest) of $84 million.

As of June 30, 2025, the Company had a cash balance of $28 million and total long-term debt outstanding (excluding debt issuance costs, discounts and premiums) of $1.1 billion, resulting in net debt (as defined and reconciled below) of $1.1 billion. Viper’s outstanding long-term debt as of June 30, 2025 consisted of $380 million in aggregate principal amount of its 5.375% Senior Notes due 2027 (“2027 Notes”), $400 million in aggregate principal amount of its 7.375% Senior Notes due 2031 (“2031 Notes”) and $325 million borrowings on its revolving credit facility, leaving approximately $1.2 billion available for future borrowings and approximately $1.2 billion of total liquidity.

During the second quarter of 2025, Viper repurchased approximately $50 million in aggregate principal amount of the Company’s 2027 Notes.

On July 23, 2025, OpCo completed its previously announced underwritten public offering (the “Notes Offering”) of $500 million in aggregate principal amount of the 2030 Notes and $1.1 billion in aggregate principal amount of the 2035 Notes. The price to the public was 99.902% of the principal amount for the 2030 Notes and 99.636% of the principal amount for the 2035 Notes. The net proceeds from the Notes Offering were approximately $1.58 billion. Concurrently, the Company and OpCo used a portion of the proceeds to redeem or satisfy and discharge, as applicable, $780 million in aggregate principal amount of the outstanding 2027 Notes and 2031 Notes, including accrued interest paid and redemption premiums. The Company and OpCo intend to use the remaining net proceeds (i) if the Sitio Acquisition is consummated, to redeem Sitio’s 7.875% senior notes due 2028, repay borrowings under Sitio’s revolving credit facility and pay any fees, costs and expenses related to the redemption or repayment of such debt, and (ii) for general corporate purposes.

SECOND QUARTER 2025 CASH DIVIDEND & CAPITAL RETURN PROGRAM

Viper announced today that the Company’s Board of Directors (the “Board”) declared a base cash dividend of $0.33 per Class A common share for the second quarter of 2025, payable on August 21, 2025 to Class A common shareholders of record at the close of business on August 14, 2025.

The Board also declared a variable cash dividend of $0.20 per Class A common share for the second quarter of 2025, payable on August 21, 2025 to Class A common shareholders of record at the close of business on August 14, 2025.

During the second quarter of 2025, Viper repurchased 255,843 shares of Class A common stock for an aggregate purchase price of approximately $10 million, excluding excise tax (average price of $37.99 per Class A common share). In total, since the initiation of Viper’s common stock repurchase program on November 9, 2020 through August 1, 2025, the Company has repurchased 13,700,426 shares of Class A common stock for an aggregate purchase price of approximately $326 million, excluding excise tax (average price of $23.76 per Class A common share). Future base and variable cash dividends and stock repurchases are at the discretion of the Board and are subject to a number of factors discussed in Viper’s reports filed with the U.S. Securities and Exchange Commission (“SEC”).

OPERATIONS UPDATE

During the second quarter of 2025, Viper estimates that 302 gross (6.5 net 100% royalty interest) horizontal wells with an average royalty interest of 2.2% were turned to production on its acreage position with an average lateral length of 12,846 feet. Of these 302 gross wells, Diamondback is the operator of 76 gross wells, with an average royalty interest of 5.5%, and the remaining 226 gross wells, with an average royalty interest of 1.0%, are operated by third parties.

As of June 30, 2025, Viper’s footprint of mineral and royalty interests was approximately 61,275 net royalty acres.

Our gross well information as of June 30, 2025 is as follows, unless otherwise specified:

| | Diamondback Operated | | Third-Party Operated | | Total | | Q2 2025 Horizontal wells turned to production (1) : | | | | | | | Gross wells | 76 | | 226 | | 302 | | Net 100% royalty interest wells | 4.2 | | 2.3 | | 6.5 | | Average percent net royalty interest | 5.5% | | 1.0% | | 2.2% | | | | | | | | | Horizontal producing well count: | | | | | | | Gross wells | 3,795 | | 11,100 | | 14,895 | | Net 100% royalty interest wells | 238.2 | | 164.6 | | 402.8 | | Average percent net royalty interest | 6.3% | | 1.5% | | 2.7% | | | | | | | | | Horizontal active development well count: | | | | | | | Gross wells | 284 | | 817 | | 1,101 | | Net 100% royalty interest wells | 15.5 | | 14.1 | | 29.6 | | Average percent net royalty interest | 5.5% | | 1.7% | | 2.7% | | | | | | | | | Line of sight wells: | | | | | | | Gross wells | 295 | | 589 | | 884 | | Net 100% royalty interest wells | 22.8 | | 10.2 | | 33.0 | | Average percent net royalty interest | 7.7% | | 1.7% | | 3.7% |

(1) Average lateral length of 12,846 feet.

The 1,101 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 69 gross rigs operating on Viper’s acreage, 11 of which are operated by Diamondback. The 884 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 guidance for the full year 2025, as well as average production guidance for Q3 2025. This guidance does not take into account the pending Sitio Acquisition.

| | | | | Viper Energy, Inc. | | | | | Q3 2025 Net Production - Mbo/d | 46.0 - 49.0 | | Q3 2025 Net Production - Mboe/d | 86.0 - 92.0 | | Full Year 2025 Net Production - Mbo/d | 41.0 - 43.5 | | Full Year 2025 Net Production - Mboe/d | 76.5 - 81.5 | | | | | Unit costs ($/boe) | | | Depletion | $16.50 - $17.50 | | Cash G&A | $0.80 - $1.00 | | Non-Cash Share-Based Compensation | $0.10 - $0.20 | | Net Interest Expense | $2.00 - $2.50 | | | | | Production and Ad Valorem Taxes (% of Revenue) | ~7% | | Cash Tax Rate (% of Pre-Tax Income Attributable to the Company) (1) | 21% - 23% | | Q3 2025 Cash Taxes ($ - million) (2) | $13 - $18 |

(1) Pre-tax income attributable to the Company is reconciled below. (2) Attributable to the Company.

CONFERENCE CALL

Viper will host a conference call and webcast for investors and analysts to discuss its results for the second quarter of 2025 on Tuesday, August 5, 2025 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 in West Texas. 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 of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve risks, uncertainties, and assumptions that could cause the results to differ materially from such statements. 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; the anticipated benefits from the Sitio Acquisition or other strategic transactions (including the Drop Down or any other 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: the risk associated with Sitio’s ability to obtain the approvals of its stockholders required to consummate the Sitio Acquisition; risks related to the timing of the closing of the Sitio Acquisition, including the risk that the conditions to the Sitio Acquisition are not satisfied on a timely basis or at all or the failure of the Sitio Acquisition to close for any other reason or to close on the anticipated terms, including the anticipated tax treatment; the post-combination company’s ability to successfully integrate Viper’s and Sitio’s businesses and technologies; the risk that the expected benefits and synergies of the Sitio Acquisition may not be fully achieved in a timely manner, or at all; unanticipated difficulties or expenditures relating to the Sitio Acquisition, the response of business partners and retention as a result of the announcement and pendency of the Sitio Acquisition; uncertainty as to the long-term value of the post-combination company’s common stock; the diversion of Viper’s and Sitio’s management’s time on transaction-related matters; 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; changes in U.S. energy, environmental, monetary and trade policies, including with respect to tariffs or other trade barriers, and any resulting trade tensions; 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 conflicts in the Middle East or other regions 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 periodic filings with the SEC, including its Forms 10-K, 10-Q and 8-K, and other filings Viper makes with the SEC, which can be obtained free of charge on the SEC’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, 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.

Additional Information and Where to Find It

In connection with the Sitio Acquisition, New Cobra Pubco, Inc. (“New Viper”) has filed with the SEC a registration statement on Form S-4, which includes a proxy statement of Sitio, an information statement of Viper and a prospectus of New Viper. Viper, Sitio and New Viper may also file other documents with the SEC regarding the Sitio Acquisition. The registration statement has been declared effective by the SEC. A definitive joint information statement/proxy statement/prospectus has been mailed to the stockholders of Viper and Sitio. This communication is not a substitute for the registration statement and joint information statement/proxy statement/prospectus or any other documents that Viper, Sitio or New Viper may file with the SEC or send to stockholders of Viper or Sitio in connection with the Sitio Acquisition. INVESTORS AND STOCKHOLDERS OF SITIO AND VIPER ARE URGED TO READ THE REGISTRATION STATEMENT AND JOINT INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS AND ALL OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE SITIO ACQUISITION AND RELATED MATTERS. Investors and stockholders may obtain free copies of the registration statement and the joint information statement/proxy statement/prospectus and all other documents filed or that will be filed with the SEC by Viper, Sitio or New Viper, through the website maintained by the SEC at http://www.sec.gov.