Viper Energy Partners (VNOM) Q2 2024 earnings summary

Executive summary

• Q2 2024 average production reached 26,352 bo/d (47,473 boe/d), up 3.7% from Q1 2024, with net income of $56.9 million and cash available for distribution of $78.4 million, or $0.86 per share.

• The annual base dividend was increased by 11% to $1.20 per share, with a Q2 2024 dividend of $0.64 per share.

• The divestiture of non-Permian assets was completed for $90.2–$90.3 million, focusing the portfolio on the Permian Basin.

• Board authorized a $750 million share repurchase program, with $316 million repurchased to date.

• Conversion to a Delaware corporation led to inclusion in major indices and improved trading liquidity.

Financial highlights

• Q2 2024 operating income was $216.7 million, with adjusted EBITDA of $199.4 million and net income of $56.9 million.

• Q2 2024 return of capital was $58.8 million, or $0.64 per share, representing a 6.4% annualized yield and 75% payout ratio.

• Net debt as of June 30, 2024, was $972.1 million, with $708 million in liquidity.

• Market cap as of August 2, 2024, was $7.1 billion; enterprise value $8.1 billion.

• Proved reserves at year-end 2023 were 179.3 MMBoe.

Outlook and guidance

• Full-year 2024 production guidance increased to 26,000–26,750 bo/d (46,750–48,250 boe/d), with Q3 2024 guidance at 26,500–27,000 bo/d.

• Q3 2024 cash tax guidance is $13.0–$18.0 million; depletion cost guidance is $11.00–$11.50/boe.

• Continued strong activity and production growth expected in the Permian Basin, supported by Diamondback-operated assets.

• Q3 production expected to grow 1.5% sequentially, with significant ramp-up in the second half of the year.

• High work-in-progress and line-of-sight wells support confidence in future growth.