Viper Energy Partners (VNOM) Q4 2024 earnings summary

Executive summary

• Achieved strong organic production growth and executed major acquisitions, including the Quinlan Ranch and Morita Ranches Minerals deals, with a transformative $1B Drop Down acquisition from Diamondback expected to close in Q2 2025.

• Q4 2024 net income attributable to Viper was $210.1 million, or $2.04 per share, including a $155.9 million one-time tax benefit from reversal of deferred tax asset valuation allowance.

• Proved reserves at year-end 2024 were 195,873 Mboe, up 9% year-over-year, with a 191% reserve replacement ratio and PV-10 value of $3.7 billion.

• Focused on high-margin, oil-weighted assets in the Permian Basin, with about 35,700 net royalty acres and 54 rigs operating on its acreage.

• Positioned as a consolidator of choice in the fragmented Permian Basin minerals market.

Financial highlights

• Q4 2024 average production was 29,859 bo/d (56,109 boe/d); full year average was 27,156 bo/d (49,784 boe/d).

• Q4 2024 operating income was $228.7 million; full year operating income was $860.4 million.

• Q4 2024 consolidated adjusted EBITDA was $207.9 million; full year adjusted EBITDA was $782.2 million.

• Expects at least $50 million of upside from the Double Eagle acceleration, assuming $70 oil in 2026.

• Targeting $1 per share of distributable cash flow per quarter post-dropdown, with 75% returned to shareholders.

Outlook and guidance

• Q1 2025 production guidance: 30,000–31,000 bo/d (54,000–56,000 boe/d); post-Drop Down, 2025 average daily production expected at 47,000–49,000 bo/d (85,000–88,000 boe/d).

• Upon dropdown closing in Q2 2025, run-rate daily average oil production expected at 48,000 barrels.

• Upon closing the Drop Down, distributable cash flow per Class A share in 2025 is expected to exceed $3.75/share at $70 WTI, or ~8% yield.

• 867 gross (14.1 net) horizontal wells in active development; 1,191 gross (23.9 net) wells with line-of-sight to future development.

• Q1 2025 unit cost guidance: depletion $12.25–$12.75/boe, cash G&A $0.80–$1.00/boe, interest $2.50–$3.00/boe, production taxes ~7% of revenue.