Core Insights - Viper Energy (VNOM) reported solid Q3 2025 results, with oil production meeting expectations and total production exceeding guidance by a couple of percent [1] Group 1: Company Performance - Viper Energy's total production was a couple percent higher than its guidance midpoint [1] - The company announced a sale, although specific details about the sale were not provided in the text [1] Group 2: Analyst Background - Aaron Chow, also known as Elephant Analytics, has over 15 years of analytical experience and is a top-rated analyst on TipRanks [1] - Chow co-founded a mobile gaming company that was acquired by PENN Entertainment and has designed in-game economic models for mobile apps with over 30 million combined installs [1] - He is the author of the investing group Distressed Value Investing, focusing on value opportunities and distressed plays, particularly in the energy sector [1]

Core Viewpoint - Viper Energy's stock has experienced a decline, with significant selling activity from major investors indicating potential concerns about the company's performance and investor sentiment in the energy sector [1][2][6]. Company Overview - Viper Energy focuses on acquiring and managing mineral rights in key U.S. oil and gas basins, allowing participation in upstream production economics while minimizing capital expenditures and operational risks [5][8]. - The company operates as a subsidiary of Diamondback Energy and generates revenue primarily from royalties on hydrocarbon production [8]. Financial Performance - For the trailing twelve months (TTM), Viper Energy reported revenue of $1.19 billion and a net income of $243.66 million [4]. - The company has a dividend yield of 5.5%, with shares priced at $38.48 as of the latest report [4]. - In the third quarter, Viper produced over 108,000 barrels of oil equivalent per day and generated $165 million in pro forma cash available for distribution, returning 85% of that cash to shareholders through dividends and buybacks [6][9]. Market Performance - Viper Energy's shares have decreased by 20% over the past year, significantly underperforming the S&P 500, which has increased by approximately 15.5% during the same period [3]. - The Nemes Rush Group sold its entire position of 319,503 shares, valued at approximately $12.18 million, indicating a strategic move after a sharp drawdown [2][10].

Core Insights - Guardian Wealth Management, Inc. has acquired over 133,000 shares of Viper Energy, valued at approximately $5.12 million as of September 30, 2025, marking a new position for the fund [1][2][7] Company Overview - Viper Energy reported a total revenue of $1.15 billion and a net income of $311.51 million for the trailing twelve months (TTM) [4] - The company offers a dividend yield of 5.79% and its stock price was $40.65 as of December 5, 2025 [4][3] Business Model - Viper Energy operates a royalty-based model, generating income from oil and gas production without incurring direct drilling or operating costs [9][10] - The company holds mineral and royalty interests primarily in the Permian Basin and Eagle Ford Shale, which provides a stable revenue stream linked to oil and gas production volumes and prices [6][10] Performance Metrics - Over the past decade, Viper Energy's stock has increased by 298%, reflecting a compound annual growth rate (CAGR) of 17.4%, outperforming both energy sector ETFs and the S&P 500 [11] - The stock's total return is significantly supported by dividends, appealing to income-oriented investors with a current dividend yield of 5.8% [13][14] Recent Developments - The new position in Viper Energy accounts for 3.02% of Guardian Wealth Management's 13F reportable assets under management, which total $169.26 million across 61 positions [2][3]

Core Argument - The article discusses concerns regarding the sustainability of the "circular economy" surrounding artificial intelligence investments, particularly focusing on OpenAI's financial practices and potential risks of a market collapse similar to past financial crises [2][4]. Group 1: AI Investment Risks - OpenAI is raising significant capital to fund hardware and services but lacks sufficient revenue to cover these expenses, creating a precarious financial situation [2][3]. - The interdependent relationships among major tech companies and startups could lead to a collapse if funding dries up, resulting in a market crash [4][2]. - Companies are depreciating NVIDIA GPU chipsets over six years, despite rapid technological advancements that could render them obsolete sooner [3]. Group 2: Hedging Strategies - Porter & Co. recommends hedging against potential market downturns, specifically suggesting buying put options on the Nasdaq 100 to protect investments [5][6]. - The cost of put options can be substantial, with a potential 1,000% return if the market declines significantly [6][28]. - The article outlines various options trading strategies, including selling call options for income and buying put options for protection against declines [11][14]. Group 3: Investment Opportunities - After establishing protective measures, investors may consider opportunities arising from increased tech capital expenditures, including a specific recommendation for Viper Energy, which has strong profit margins and a solid dividend yield [43][44]. - Viper Energy focuses on mineral and royalty interests in the Permian Basin, with plans for growth through acquisitions and increased production [44][46]. - The company is primarily oil-focused, with a significant portion of its revenue derived from oil production rather than natural gas, which may limit its appeal as a direct play on AI-related energy demands [48][49].

Core Insights - Oaktree Capital Management's latest 13F filing reveals a focus on deep-value cyclicals, energy companies with strong free cash flow, and special-situation equities with asymmetric payoff potential [1][2] Group 1: Top Holdings - TORM PLC (TRMD) is Oaktree's largest holding with 40,581,120 shares valued at $834.6 million, indicating strong conviction in the tanker cycle and a favorable supply/demand imbalance in the product tanker market [3] - Expand Energy Corp (CHK) holds 5,062,363 shares worth $537.8 million, reflecting Oaktree's long-term confidence in energy, particularly natural gas, despite minimal activity this quarter [4] - Garrett Motion (GTX) has 31,894,816 shares valued at $434.4 million, representing a classic special situation investment as the company continues to reduce leverage and grow cash flow post-restructuring [5] - AngloGold Ashanti (AU) consists of 4,185,261 shares worth $294.3 million, fitting Oaktree's strategy with improving margins and optionality in an inflationary environment [6] - Viper Energy (VNOM) has 6,285,062 shares valued at $240.2 million, showcasing a strong thematic bet on energy with predictable royalty cash flows [7] Group 2: Investment Strategy - Oaktree's portfolio heavily emphasizes deep-value cyclicals, particularly in tankers, energy producers, and commodity-linked businesses, all characterized by significant cash flow yield and depressed valuations [8] - The firm maintains a consistent philosophy of embracing dislocation, favoring investments in situations where pessimism is already priced in, such as restructuring plays and underfollowed foreign cyclicals [9] - Energy remains the highest-conviction theme for Oaktree, with multiple top holdings indicating an underestimation of cash generation durability across the sector [10] - Position changes reflect a blend of patience and opportunism, with Oaktree trimming stocks that rallied while increasing positions in VNOM and selected common stocks, aligning with a strategy of controlled aggression [11]

Core Viewpoint - Viper Energy Partners reported better-than-expected Q3 2025 earnings, but the overall performance shows signs of potential challenges ahead due to declining realized prices and rising expenses [2][4][14]. Financial Performance - Adjusted EPS for Q3 2025 was 40 cents, beating the Zacks Consensus Estimate of 38 cents but down from 49 cents a year ago [2]. - Operating income reached $418 million, exceeding the Zacks Consensus Estimate of $403 million and significantly up from $211 million in the prior year [3]. - Total expenses surged to $594 million, compared to $75 million in the same quarter last year, and above the estimate of $245.8 million [9]. Production Metrics - Total production was 10,015 thousand oil-equivalent barrels (MBoe), up from 4,542 MBoe a year ago, surpassing the estimate of 9,709 MBoe [5]. - Oil production increased to 5,160 thousand barrels (MBbls) from 2,482 MBbls year-over-year, exceeding the estimate of 5,054 MBbls [5]. - Natural gas production rose to 14,655 million cubic feet (MMcf) from 6,150 MMcf in the same period last year [6]. Realized Prices - Average realized price per barrel of oil equivalent was $39.24, down from $45.83 in Q3 2024, and slightly below the estimate of $39.76 [7]. - Average realized oil price was $64.34 per barrel, down from $75.24 a year ago but above the estimate of $60.50 [7]. - Natural gas price was $1.02 per thousand cubic feet, significantly up from $0.13 a year ago, but below the estimate of $1.90 [8]. Cash Flow and Balance Sheet - Net cash provided by operating activities was $281 million, an increase from $203 million in Q3 2024 [11]. - As of September 30, 2025, cash and cash equivalents stood at $53 million, with net long-term debt reported at $2,241 million [12]. Guidance - Production for Q4 2025 is projected to be between 124-128 Mboe/d, with full-year 2025 net production expected in the range of 92.75-93.50 Mboe/d [13]. Market Sentiment - There has been a downward trend in estimates, with the consensus estimate shifting down by 8.12% [14]. - Viper Energy currently holds a Zacks Rank 3 (Hold), indicating expectations for an in-line return in the coming months [16].

Group 1 - The article discusses the analysis of oil and gas companies, focusing on identifying undervalued names in the sector [1] - The author emphasizes the cyclical nature of the oil and gas industry, highlighting the need for patience and experience in investing [2] - The investing group, Oil & Gas Value Research, seeks out under-followed oil companies and midstream companies that present compelling investment opportunities [2] Group 2 - The article mentions that the author has a beneficial long position in the shares of VNOM and FANG, indicating a personal investment interest [3] - It is noted that the article expresses the author's own opinions and is not influenced by compensation from any company mentioned [3] - The article does not provide investment advice and encourages investors to conduct their own research [4]

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]