Core Insights - Viper Energy Inc. (VNOM) reported Q3 2025 adjusted EPS of 40 cents, exceeding the Zacks Consensus Estimate of 38 cents, but down from 49 cents a year ago [1][9] - The company generated operating income of $418 million, surpassing the Zacks Consensus Estimate of $403 million and significantly up from $211 million in the same quarter last year [1][2] Production and Revenue - VNOM's oil-equivalent production reached 10,015 thousand barrels (MBoe), a substantial increase from 4,542 MBoe a year ago, and exceeded the estimate of 9,709 MBoe [3][9] - Oil accounted for approximately 51.5% of total production, with oil production rising to 5,160 MBbls from 2,482 MBbls year-over-year, surpassing the estimate of 5,054 MBbls [3][5] - Natural gas production increased to 14,655 million cubic feet (MMcf) from 6,150 MMcf in the same quarter of 2024 [4] Pricing - The average realized price per barrel of oil equivalent was $39.24, down from $45.83 in Q3 2024, while the average realized oil price was $64.34 per barrel, down from $75.24 year-over-year but above the estimate of $60.50 [5][6] - The price of natural gas was $1.02 per thousand cubic feet, significantly up from $0.13 in the year-ago quarter, while natural gas liquids were priced at $19.07 per barrel, slightly lower than $19.89 a year ago [6] Costs and Expenses - Total expenses for the quarter were $594 million, a sharp increase from $75 million in the prior-year quarter and above the estimate of $245.8 million [7][9] - On a per barrel of oil-equivalent (Boe) basis, total operating expenses were $3.50, down from $4.16 in the year-ago quarter, and below the estimate of $4.05 [7] Cash Flow and Balance Sheet - Net cash provided by operating activities was $281 million, up from $203 million in Q3 2024 [10] - As of September 30, 2025, VNOM had cash and cash equivalents of $53 million and net long-term debt of $2,241 million [11] Guidance - The company projects Q4 2025 production to be in the range of 124-128 Mboe/d, with full-year 2025 net production expected to be between 92.75-93.50 Mboe/d [12]

Group 1 - The analyst has over 10 years of experience researching more than 1000 companies across various sectors including commodities and technology [1] - The focus has shifted from writing a blog to creating a value investing-focused YouTube channel, covering hundreds of companies [1] - The analyst expresses a preference for metals and mining stocks but is also knowledgeable in consumer discretionary, staples, REITs, and utilities [1]

Financial Data and Key Metrics Changes - Viper Energy's fourth quarter 2025 oil production guidance indicates a roughly 20% increase in oil production per share compared to the same quarter last year [4] - The combined base plus variable dividend represents a greater than 6% annualized yield, with an increase of almost 10% relative to the previous quarter's dividend [5] - The return of capital per Class A share in the third quarter represents a 48% increase versus the second quarter [5] Business Line Data and Key Metrics Changes - The company anticipates mid-single-digit organic oil production growth from fourth quarter 2025 estimated production, implying double-digit year-over-year growth in oil production per share relative to 2025 [4] - Viper's asset base has captured almost half of all third-party activity in the Permian Basin, indicating strong operational performance [7][16] Market Data and Key Metrics Changes - The company has seen strong activity levels across its asset base, expecting mid-single-digit organic growth in 2026 despite commodity price volatility [7] - The non-Permian asset sale is expected to enhance the company's balance sheet and return of capital strategy [6][11] Company Strategy and Development Direction - Viper Energy is focused on returning nearly 100% of cash available for distribution to stockholders, with a commitment to buy back shares in the current market environment [6][11] - The company aims to leverage its differentiated return of capital profile and maintain a strong balance sheet while pursuing growth opportunities [5][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustained per share growth with zero capital and limited operating costs, even during market volatility [8] - The relationship with Diamondback is expected to drive growth for at least the next couple of years, with a projected interest of 5% to 7% in all of Diamondback's wells [34] Other Important Information - The company is integrating AI and automation to enhance operational efficiency and data management, which is expected to provide a competitive advantage [22][40] - The net proceeds from the recent asset sale are projected to be about $610 million, which will be used to pay down debt and enhance financial flexibility [26] Q&A Session Summary Question: Near-term and 2026 capital allocation following the asset sale - Management indicated that they plan to return nearly 100% of free cash to shareholders and will be aggressive with buybacks due to market dislocation [11][12] Question: Activity trends outside of Diamondback - Management confirmed strong activity levels across the asset base, with Viper capturing almost half of all activity in the Permian Basin [15][16] Question: Contribution of CTO to third-party activity - Management stated that the increase in third-party activity is evenly mixed between the CTO contribution and legacy assets outperforming expectations [21] Question: Impact of AI on operations and M&A - Management highlighted the potential for AI to improve operational efficiency and data utilization, with a focus on automation [22][40] Question: Considerations regarding cash inflows from asset sales - Management noted a slight tax hit on proceeds, but overall, the cash will be used to strengthen the balance sheet and return capital to shareholders [26] Question: A&D market outlook - Management indicated that while larger strategic acquisitions may be challenging in the current environment, smaller acquisitions are still possible [28] Question: Guidance for 2026 and price sensitivity - Management clarified that the guidance reflects a maintenance level of activity and is insulated from gross reductions in Diamondback's activity [39] Question: Clarification on growth guidance and asset sale impact - Management explained that the growth guidance for 2026 is based on retained assets post-asset sale, with a couple thousand barrels of growth expected [45] Question: Future of variable dividend growth - Management stated that the growth of the variable dividend will depend on market conditions, but they aim to balance buybacks and cash distributions [48]

Financial Data and Key Metrics Changes - Viper Energy reported a 20% increase in oil production per share for Q4 2025 compared to the same quarter last year [3] - The combined base plus variable dividend represents a greater than 6% annualized yield, with a nearly 10% increase relative to the previous quarter [4] - Return of capital per Class A share increased by 48% compared to Q2 [4] Business Line Data and Key Metrics Changes - The company anticipates mid-single-digit organic oil production growth in 2026, implying double-digit year-over-year growth in oil production per share relative to 2025 [3] - Viper's asset base captured almost half of all third-party activity in the Permian Basin over the past three years [29] Market Data and Key Metrics Changes - The company has seen strong activity levels across its asset base despite commodity price volatility [6] - The non-Permian asset sale is expected to provide approximately $610 million in net proceeds, which will be used to pay down debt and enhance the balance sheet [21] Company Strategy and Development Direction - Viper Energy is focused on returning nearly 100% of cash available for distribution to stockholders, with a commitment to buy back shares in the current market environment [5][11] - The company aims to leverage its strong balance sheet and high operating margins to enhance shareholder returns through dividends and share repurchases [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustained per share growth with limited operating costs, even during market volatility [8] - The relationship with Diamondback is expected to drive growth for at least the next few years, with a projected interest of 5% to 7% in all of Diamondback's wells [30] Other Important Information - The integration of AI and automation is expected to enhance operational efficiency and data utilization within the company [18][36] - The company is positioned to capitalize on potential acquisition opportunities in the future, despite current market conditions [24] Q&A Session Summary Question: Near-term and 2026 capital allocation following the asset sale - Management indicated that they plan to return nearly 100% of free cash to shareholders and will be aggressive with buybacks due to market dislocation [11] Question: Activity outside of Diamondback - Management confirmed strong activity levels outside of Diamondback, with Viper capturing almost half of all activity in the Permian Basin [13] Question: Contribution of CTO to backlog increase - Management stated that the increase in backlog is evenly mixed between CTO contributions and legacy Viper's performance [17] Question: Tax considerations on asset sale proceeds - Management highlighted a tax hit, estimating net proceeds from the asset sale to be about $610 million, which will be used to pay down debt [21] Question: A&D market outlook - Management noted that while larger strategic acquisitions may be challenging, smaller ground game acquisitions are still viable [24] Question: Growth sustainability in the Permian - Management believes the relationship with Diamondback will support growth for the next few years, despite overall market conditions [30] Question: Valuation of Viper and potential share purchases - Management is open to using free cash to purchase more interest in Viper shares, emphasizing the importance of reducing share count [31] Question: Guidance for 2026 and price sensitivity - Management indicated that guidance for 2026 is based on maintaining current activity levels, with flexibility to adjust based on market conditions [35] Question: Synergies from CTO team and AI integration - Management discussed the benefits of cost savings and automation from the CTO integration, which will enhance operational efficiency [36] Question: Future of variable dividend growth - Management stated that the growth of the variable dividend will depend on market conditions, but they aim to balance buybacks and cash distributions [44]

Financial Highlights - Viper reported a pro forma cash available for distribution of $0.97 per share in Q3 2025, with a total return of capital to Class A stockholders of $0.83 per share, representing an 85% payout ratio[7] - The company repurchased 2.4 million shares in Q3 2025 for $90 million at an average price of $38.42 per share[7] - As of October 31, 2025, Viper had repurchased 16.9 million shares for an aggregate of $448 million, with $302 million remaining in the $750 million share repurchase program[7] - The base dividend for Q3 2025 was $0.33 per share, implying a 3.5% annualized yield, representing approximately 40% of estimated cash available for distribution assuming $50 realized oil pricing[7] - The total base-plus-variable dividend for Q3 2025 was $0.58 per share, implying a 6.2% annualized yield[7] Operational Performance - Average production in Q3 2025 was 56,087 barrels of oil per day (bo/d) or 108,859 barrels of oil equivalent per day (boe/d)[7] - Viper's Q4 2025 average production guidance is 65,000 - 67,000 bo/d (124,000 - 128,000 boe/d)[7] - There were 739 total gross (15.2 net 100% royalty interest) horizontal wells turned to production during Q3 2025, with an average lateral length of 10,947 feet[7] Strategic Initiatives - Viper closed the acquisition of Sitio Royalties Corp on August 19, 2025, in an all-equity transaction[7] - The company refinanced senior notes and all legacy Sitio debt, lowering the weighted average interest rate by approximately 150 basis points and extending the weighted average maturity by about 3 years[7] - Viper entered into a definitive agreement to sell its non-Permian Basin assets (2026E production of approximately 5,000 bo/d) for roughly $670 million, with the deal expected to close in Q1 2026[7] - Pro forma for the non-Permian asset sale, Viper expects mid-single digit percentage organic production growth in 2026 relative to Q4 2025, driven by Diamondback development[7]

Core Viewpoint - Viper Energy, Inc. (NASDAQ:VNOM) is recognized as one of the best high-yield energy stocks to consider for investment, despite some concerns regarding valuation and oil price risks [1][2][3]. Company Overview - Viper Energy, Inc. is a publicly traded corporation based in Delaware, focusing on owning and acquiring mineral and royalty interests, primarily in the Permian Basin [2]. Analyst Coverage - Jefferies analyst John Edelman initiated coverage of Viper Energy with a price target of $38 and a 'Hold' rating, citing high valuation and oil price risks as factors for caution [3]. Recent Acquisitions - The company completed the acquisition of Sitio Royalties in August, which is expected to be approximately 15% accretive to cash flow per share and 13% accretive to earnings per share [4]. Dividend Information - Viper Energy increased its quarterly dividend by 10% to $0.33 per share in August and announced a variable cash dividend of $0.20 per share, resulting in a dividend yield of 6.28% [5].

Core Insights - Viper Energy, Inc. reported financial and operational results for Q3 2025, highlighting a continued growth strategy supported by the Sitio Acquisition and organic growth [1][4] - The company anticipates a ~20% increase in oil production per share for Q4 2025 compared to Q4 2024, with mid-single digit organic growth expected in 2026 [4] - Viper returned 85% of pro forma cash available for distribution to stockholders in Q3 2025, with plans to approach nearly 100% following the divestiture of non-Permian assets [5] Financial Update - Q3 2025 average production was 56,087 barrels of oil per day (bo/d) and 108,859 barrels of oil equivalent per day (boe/d) [7] - The consolidated net loss for Q3 2025 was $197 million, with a net loss attributable to Viper of $77 million, or $0.52 per Class A common share [7][9] - Pro forma cash available for distribution was $165 million, or $0.97 per Class A common share [7] - The declared base cash dividend was $0.33 per Class A common share, yielding 3.5% annualized based on the closing price of $37.56 [7][11] - A variable cash dividend of $0.25 per Class A common share was also declared, leading to a total dividend yield of 6.2% [7][12] Recent Events and Forward Outlook - The Sitio Acquisition was completed on August 19, 2025, valued at approximately $4.0 billion [7] - A definitive agreement was made to sell non-Permian assets for $670 million, expected to close in Q1 2026 [7] - Q4 2025 production guidance is set at 65,000 to 67,000 bo/d, with full-year 2025 production guidance of 48.75 to 49.00 million barrels [19] Operational Update - During Q3 2025, 739 horizontal wells were turned to production, with an average lateral length of 10,947 feet [14] - The company had a total of 95,846 net royalty acres as of September 30, 2025 [15] - As of September 30, 2025, Viper's cash balance was $443 million, with total debt outstanding of $2.6 billion [10] Selected Operating Data - Average realized prices for Q3 2025 were $64.34 per barrel of oil, $1.02 per Mcf of natural gas, and $19.07 per barrel of natural gas liquids, leading to a total equivalent realized price of $39.24/boe [8][39] - The company repurchased 2.4 million shares of Class A common stock for approximately $90 million during Q3 2025 [7][13]

Core Insights - The article discusses the analysis of oil and gas companies, focusing on identifying undervalued entities within the sector [1] - It emphasizes the cyclical nature of the oil and gas industry, highlighting the need for patience and experience in navigating this market [2] Company Analysis - The service provided includes a comprehensive breakdown of companies' balance sheets, competitive positions, and development prospects [1] - Members of the Oil & Gas Value Research service receive exclusive analysis on certain companies not available on the free site [1] Industry Perspective - The oil and gas sector is characterized as a boom-bust industry, indicating significant fluctuations in performance over time [2] - The importance of having a long-term perspective and experience in the industry is underscored [2]

Core Insights - Viper Energy, Inc. (NASDAQ:VNOM) is identified as one of the most oversold large-cap stocks in 2025, with a price target adjustment from TD Securities analyst Aaron Bilkoski, lowering it to $54 from $58 while maintaining a Buy rating [1][2] Company Overview - Viper Energy, Inc. is headquartered in Midland, TX, and focuses on acquiring, owning, and exploiting natural gas and oil properties in North America [3] Market Analysis - TD Securities noted that energy equities have demonstrated resilience despite broader commodity weakness, leading to higher valuations [3] - The firm updated its commodity price deck to reflect Q3 trends and introduced financial estimates for 2027, maintaining relatively unchanged oil price assumptions while increasing crack spreads and revising natural gas estimates negatively [2]

Group 1 - Viper Energy (NASDAQ: VNOM) focuses on owning and acquiring mineral and royalty interests in oil and natural gas properties, primarily in the Permian Basin, which includes Midland and Delaware assets [1] - The company has made a recent acquisition that is expected to enhance its asset portfolio significantly [1] Group 2 - The analyst has over 10 years of experience researching various companies across multiple sectors, including commodities and technology [1] - The analyst has transitioned from writing a blog to creating a value investing-focused YouTube channel, where extensive research on numerous companies has been conducted [1]