Viper Energy Partners (VNOM) Q3 2024 earnings summary

Executive summary

• Q3 2024 featured strong organic production growth, major acquisitions including Tumbleweed and TWR IV, and the closing of Q & M Acquisitions, expanding mineral and royalty interests by over 3,700 net royalty acres in the Permian Basin.

• The merger between Diamondback and Endeavor enhanced operational alignment and increased operated acreage, strengthening the growth outlook.

• Q3 2024 average production reached 26,978 Bo/d (49,370 Boe/d), up 2.4% from Q2 2024, with Q4 guidance raised to 29,250–29,750 Bo/d.

• Addition to the S&P MidCap 400 and Russell 1000 indices in 2024 marked milestones in market presence and trading liquidity.

• Focused on increasing per share value through organic growth, accretive acquisitions, and share repurchases, with production per share up 9% year-over-year.

Financial highlights

• Q3 2024 cash available for distribution was $75.4 million ($0.73/share), with a total return of capital of $62.4 million ($0.61/share), reflecting an 83% payout ratio and a 4.7% annualized yield.

• Q3 2024 net income attributable to Viper Energy, Inc. was $48.9 million ($0.52/share); consolidated net income was $109.0 million.

• Pro forma net debt as of October 1, 2024, was $1.1 billion, with $583 million in liquidity and a $1.25 billion borrowing base.

• Board authorized a $750 million share repurchase program; $434 million remains available as of September 30, 2024.

• Q3 2024 base dividend declared at $0.30/share and variable dividend at $0.31/share; annual base dividend increased to $1.20/share.

Outlook and guidance

• Q4 2024 production guidance is 29,250–29,750 Bo/d (52,500–53,000 Boe/d); full-year 2024 guidance increased to 27,000–27,250 Bo/d (48,750–49,250 Boe/d).

• At $70 WTI and midpoint Q4 2024 production, expected distributable cash flow is $3.10/share (~6% annualized yield).

• Depletion cost guidance: $11.50–$12.00/BOE; cash G&A: $0.80–$1.00/BOE; interest expense: $4.00–$4.25/BOE.

• Production and ad valorem taxes expected at ~7% of revenue; Q4 2024 cash taxes projected at $13–$18 million.

• Significant growth is anticipated in 2026 and beyond, driven by high-graded development plans post-Endeavor merger and Tumbleweed acquisition.