Q4 2024 Review & 2025 Outlook - Q4 2024 cash available for distribution was $086 per share, with a total return of capital to Class A shareholders of $065 per share[9] - Q4 2024 average production reached 29,859 barrels of oil per day (Bo/d) or 56,109 barrels of oil equivalent per day (Boe/d)[9] - Q1 2025 average production is guided to be between 30,000 and 31,000 Bo/d (54,000 – 56,000 Boe/d)[9] - Post Drop Down, the company expects average daily production for the balance of 2025 to be 47,000 – 49,000 Bo/d (85,000 – 88,000 Boe/d)[9] Return of Capital - The base dividend of $030 per share implies a 25% annualized yield, representing approximately 45% of estimated cash available for distribution assuming $50 WTI[9] - A variable dividend for Q4 2024 of $035 per share was declared, bringing the total base-plus-variable dividend to $065 per share, implying a 54% annualized yield[9] - The board authorized a $750 million share repurchase program, with 134 million shares repurchased to date for an aggregate of $316 million at an average of $2349 per share[9] Reserves - Proved reserves at year-end 2024 were 1959 million barrels of oil equivalent (MMBoe), including 936 million barrels of oil (MMBo), representing a 9% increase over year-end 2023 reserves[18] - Net proved reserve additions of 348 MMBoe resulted in a reserve replacement ratio of 191%, with an organic reserve replacement ratio of 121%[18] - Proved developed reserves account for 84% of the total, and the reserves are 48% oil-weighted on a 3-stream basis[18] Financials - Net debt as of December 31, 2024, was $1065 million, with liquidity of $1016 million[14,36] - The company has an elected commitment of $125 billion with $261 million drawn on the revolving credit facility as of December 31, 2024[37]

Financial Data and Key Metrics Changes - The fourth quarter concluded as a landmark year for Viper, with strong organic production growth on legacy assets and successful execution of an acquisition strategy [7] - Average daily production guidance for Q1 2025 is set at 30,000 to 31,000 barrels of oil per day, with an expected run rate of 48,000 barrels per day upon closing of the drop down in Q2 2025 [9][10] - The company anticipates organic growth in 2026, with Diamondback-operated production expected to increase to approximately 31,000 barrels per day from 27,000 barrels per day in 2025 [9] Business Line Data and Key Metrics Changes - Viper expects to own an interest in approximately 75% of Diamondback's expected completions over the next five years, with an average 6% Net Revenue Interest (NRI) [8] - The recent Quinn Ranch acquisition is expected to enhance Viper's production capabilities and align with Diamondback's development plans [7] Market Data and Key Metrics Changes - Viper ranks among the largest U.S. independent energy producers post-drop down, with a durable cash flow profile that is expected to be recognized by the market over time [10][11] - The company is positioned to be a consolidator in a highly fragmented minerals market, particularly in the Permian Basin [10] Company Strategy and Development Direction - Viper's strategy focuses on zero capital and operating costs while maintaining alignment with Diamondback, which has facilitated consistent organic growth [10] - The company aims to leverage its strong balance sheet to pursue further acquisitions and maintain a flexible capital allocation strategy [21][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the transformative drop down transaction with Diamondback, which is expected to drive significant organic growth [7] - The company is optimistic about the potential upside from the Double Eagle acquisition, estimating at least $50 million in cash flow upside at $70 oil in 2026 [15] - Management highlighted the importance of maintaining a flexible business model to adapt to market volatility and capitalize on opportunities [21] Other Important Information - The company is focused on maintaining a high payout ratio while also prioritizing growth through acquisitions, with a current payout range of 75% to 100% of free cash flow [20] - Viper is exploring opportunities in the Reagan County area, which is seen as an emerging part of the basin with potential for significant growth [15][24] Q&A Session Summary Question: Could you discuss the potential timing and upside from the Double Eagle acquisition? - Management expects at least $50 million of upside from a cash flow perspective at $70 oil in 2026, with further updates to come as details are finalized [15] Question: What are your thoughts on the payout ratio and balance sheet strength? - Management indicated a preference for a 75% payout ratio, allowing for growth and flexibility in capital allocation, while emphasizing the importance of maintaining a strong balance sheet [20][21] Question: Are there opportunities for drop downs from the Double Eagle transaction? - Management noted that while the drop down opportunity is small, there are exciting prospects in Reagan County for mineral acquisitions [23][24] Question: What is the company's perspective on surface rights and data center developments? - Management believes that surface rights are better held by operators to facilitate development, and Viper will remain a pure play royalty company [30] Question: How does Viper view the consolidation opportunities in the mineral space? - Management sees significant opportunities for consolidation in the fragmented mineral landscape, with Viper positioned as a leading player [66] Question: What is the outlook for dividend growth post-drop down? - Management aims to achieve $1 per share of distributable cash flow each quarter, with a focus on returning 75% to shareholders [69]

Core Insights - Viper Energy Partners reported revenue of $228.7 million for the quarter ended December 2024, reflecting an 11.7% increase year-over-year and a surprise of +2.47% over the Zacks Consensus Estimate [1] - The company's EPS was $0.42, down from $0.67 in the same quarter last year, with an EPS surprise of +2.44% compared to the consensus estimate of $0.41 [1] Financial Performance Metrics - Average daily combined volumes were 56,109 BOE/D, exceeding the estimated 54,471.87 BOE/D [4] - Average sales prices for natural gas liquids were $22.15, higher than the estimated $20.09, while natural gas prices averaged $0.84, below the estimated $1.17 [4] - Crude oil production was 2,747 MBBL, slightly above the estimated 2,729.34 MBBL, with average sales prices at $69.91, slightly below the estimated $70.48 [4] - Total production reached 5,162 MBOE, surpassing the estimated 4,932.6 MBOE [4] Income Breakdown - Natural gas income was reported at $6.05 million, exceeding the estimate of $4.91 million, but reflecting a -24.2% change year-over-year [4] - Natural gas liquids income was $26.78 million, significantly above the estimated $21.35 million, representing a +41.1% year-over-year change [4] - Oil income was $192.04 million, slightly above the estimated $191.11 million, with a year-over-year increase of +9.6% [4] - Royalty income was $224.87 million, exceeding the estimated $210.91 million, with an +11.2% change compared to the previous year [4]

Acquisitions and Transactions - Viper Energy, Inc. entered into a definitive equity purchase agreement to acquire Endeavor Subsidiaries for $1.0 billion in cash and the issuance of 69,626,640 OpCo Units and Class B Common Stock[2] - Viper completed the TWR Acquisition on October 1, 2024, for a total consideration of approximately $458.9 million in cash, 10,093,670 OpCo Units, and contingent cash consideration of up to $41.0 million[5] - The Q Acquisition involved approximately 406 net royalty acres for $113.6 million in cash and contingent cash consideration of up to $5.4 million[7] - The M Acquisition included approximately 267 net royalty acres for $75.8 million in cash and contingent cash consideration of up to $3.6 million[8] - The GRP Acquisition was completed for a total consideration of $747.6 million in cash and 9,018,760 common units[10] - The Pending Drop Down is subject to approval by a majority of the voting power of the Company's common stock and regulatory clearance under the Hart-Scott-Rodino Antitrust Improvement Act[4] - The Pending Drop Down consideration amounts to $4.32 billion, with $3.32 billion in OpCo Unit consideration and $1 billion in cash consideration[42] - The fair value of contingent consideration for the TWR Acquisition is estimated at $21.3 million[47] - The company issued 11.5 million shares of Class A Common Stock in September 2024 to partially fund the cash consideration for the TWR Acquisition[48] Financial Performance - Total operating income for the nine months ended September 30, 2024, was $1,056,483,000, reflecting a significant increase from the previous period[28] - Net income attributable to Viper Energy, Inc. was $158,299,000, compared to a loss of $82,281,000 in the prior period[28] - Basic earnings per share increased to $1.55, up from $1.64 in the previous period[28] - Total operating income for the year ended December 31, 2023, was $1,008,428,000, reflecting a significant increase from the previous year[34] - Net income attributable to Viper Energy, Inc. for the same period was $241,779,000, compared to $26,330,000 in the prior year, indicating a substantial growth[34] - Basic and diluted earnings per share for the year were both $2.43, up from $2.40 in the previous year[34] - Total costs and expenses amounted to $429,776,000, which includes production and ad valorem taxes of $73,605,000[28] - Total costs and expenses amounted to $306,055,000, which is an increase from $31,155,000 in the previous year[34] - The provision for income taxes was $55,897,000, reflecting the company's tax obligations for the period[28] - The provision for income taxes was $57,577,000, compared to $270,000 in the previous year, reflecting a higher tax burden due to increased income[34] - Interest expense, net, was reported at $(69,844,000), indicating a rise in financing costs[28] - The company incurred interest expense of $94,771,000, which is a significant cost impacting net income[34] Assets and Liabilities - Total assets as of September 30, 2024, amount to $4,976,542,000, reflecting an increase of $490,013,000 from historical values[21] - Current assets total $202,751,000, with cash and cash equivalents at $26,831,000[21] - Oil and natural gas interests using the full cost method of accounting are valued at $5,702,279,000, with a total property net value of $4,691,794,000[21] - Total liabilities stand at $1,172,688,000, including long-term debt of $1,101,505,000[23] - Stockholders' equity for Viper Energy, Inc. is reported at $1,400,958,000, with additional paid-in capital of $1,429,649,000[23] - The company has a non-controlling interest valued at $2,402,896,000, contributing to total equity of $3,803,854,000[23] - Total current liabilities are $45,052,000, with accrued liabilities at $42,227,000[23] Pro Forma Financial Statements - The pro forma financial statements reflect the impacts of the TWR Acquisition, Pending Drop Down, GRP Acquisition, and assumed Equity Offering as if they occurred on January 1, 2023[15] - The pro forma financial statements do not predict future results and should not be used to project the Company's financial performance for any future period[17] - The pro forma adjustments for the TWR Acquisition indicate a significant increase in total assets to $9,294,940,000[22] - The company anticipates further growth in equity with an additional $1,000,000,000 in paid-in capital from the acquisition[22] - The pro forma combined total operating income, including acquisitions, is projected to be $1,454,954,000[34] - The pro forma statements indicate a $15.1 million increase in interest expense for the nine months ended September 30, 2024, due to incremental borrowings[47] - The pro forma adjustments reflect a $378.8 million decrease in contributed capital and retained earnings due to the elimination of TWR's net equity interests[45] - The pro forma financial statements include a $280 million increase in cash and long-term debt to fund part of the cash consideration for the TWR Acquisition[47] Reserves and Future Projections - As of December 31, 2023, net proved oil reserves increased to 95,532 MBbls, up from 82,297 MBbls as of December 31, 2022, representing a growth of approximately 16.1%[55] - Total net proved natural gas reserves as of December 31, 2023, reached 290,553 MMcf, an increase from 224,962 MMcf in the previous year, marking a rise of about 29.1%[55] - The company reported a total of 189,374 MBOE in proved reserves as of December 31, 2023, compared to 154,693 MBOE as of December 31, 2022, indicating an increase of approximately 22.3%[56] - Pro forma total proved developed reserves as of December 31, 2023, were 149,909 MBOE, while proved undeveloped reserves were 39,465 MBOE[56] - Future net cash flows are projected to be $12,564,103, with a breakdown of $7,441,971 from Viper and $5,122,132 from TWR[60] - The standardized measure of discounted future net cash flows at the end of the period is $6,011,256, reflecting a decrease from the beginning of the period's $7,286,482[60] - The company reported a purchase of minerals in place amounting to $547,019, contributing positively to future cash inflows[60] - The company anticipates a 10% discount to reflect the timing of cash flows, amounting to $6,552,847[60] Income Tax and Cash Flow Considerations - The estimated incremental income tax provision associated with pro forma income before taxes for the nine months ended September 30, 2024, is calculated at a blended rate of 21.9%[51] - The company experienced a net change in income taxes amounting to $218,138, which may impact future cash flow projections[60] - Accretion of discount contributed $813,393 to the standardized measure, highlighting the importance of time value in cash flow assessments[60] - Extensions and discoveries added $706,855 to future cash flows, showcasing successful exploration efforts[60] - The company incurred future development costs of $58, which are minimal compared to overall cash flow projections[60] - The future production taxes are estimated at $1,025,515, which will affect net cash flow calculations[60]

Core Insights - Viper Energy, Inc. reported strong financial and operational results for Q4 and full year 2024, highlighting significant production growth and a successful acquisition strategy [1][6][18] Fourth Quarter Highlights - Average production for Q4 2024 was 29,859 barrels of oil per day (bo/d) or 56,109 barrels of oil equivalent per day (boe/d) [5] - Consolidated net income for Q4 2024 was $272.8 million, with net income attributable to Viper of $210.1 million, translating to $2.04 per Class A common share [5][36] - A one-time tax benefit of $155.9 million was recorded due to the reversal of the valuation allowance against deferred tax assets [5][8] - Cash available for distribution to Class A common shares was $89.0 million, or $0.86 per share [5] - Declared a total cash dividend of $0.65 per Class A common share for Q4 2024, which includes a base dividend of $0.30 and a variable dividend of $0.35 [10][11] Full Year 2024 Highlights - Full year average production was 27,156 bo/d (49,784 boe/d) [5] - Consolidated net income for the full year was $603.6 million, with net income attributable to Viper of $359.2 million, or $3.82 per share [5][36] - Total dividends declared during 2024 amounted to $2.49 per Class A common share [5] - Proved reserves as of December 31, 2024, were 195,873 thousand barrels of oil equivalent (Mboe), reflecting a 9% increase year-over-year [5][18] 2025 Outlook - The company initiated average daily production guidance for Q1 2025 of 30,000 to 31,000 bo/d (54,000 to 56,000 boe/d) [5][24] - Following the anticipated closing of a significant acquisition (Drop Down) in Q2 2025, average daily production for the remainder of 2025 is expected to be in the range of 47,000 to 49,000 bo/d (85,000 to 88,000 boe/d) [5][6] Financial Update - Average unhedged realized prices for Q4 2024 were $69.91 per barrel of oil, $0.84 per Mcf of natural gas, and $22.15 per barrel of natural gas liquids, resulting in a total equivalent realized price of $43.56 per boe [7] - The company had a cash balance of $26.9 million and total long-term debt of $1.1 billion as of December 31, 2024 [9] Operations Update - A total of 381 gross horizontal wells were turned to production in Q4 2024, with an average lateral length of 10,818 feet [5][12] - As of December 31, 2024, there were approximately 867 gross horizontal wells in active development on Viper's acreage [5][16]

Leadership Transition - Viper Energy, Inc. announced a leadership transition plan, with Travis D. Stice stepping down as CEO and Kaes Van't Hof, the current President, taking over the role immediately [1][6] - Austen Gilfillian has been promoted from Vice President to President, effective immediately [1][6] Acknowledgment of Leadership - The Board of Directors expressed gratitude to Travis D. Stice for his ten years of leadership, highlighting the significance of the Viper IPO in 2014 as a pivotal moment for the minerals market [2][3] - Steven E. West, Chairman of the Board, noted the Board's confidence in the new leadership team and their ability to drive future success [3] Future Outlook - Kaes Van't Hof emphasized the company's strong position in the public mineral and royalties space and the importance of maintaining competitive advantages, particularly the relationship with Diamondback [3][4] - The management team is being strengthened to prepare for future growth through consolidation in the fragmented minerals market [4]

Core Viewpoint - Viper Energy Partners (VNOM) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4][6]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for Viper Energy is projected at $2.02 per share for the fiscal year ending December 2024, reflecting a year-over-year decline of 26.8% [9]. - Over the past three months, analysts have increased their earnings estimates for Viper Energy by 1.7% [9]. Zacks Rating System - The Zacks rating system is based on changes in a company's earnings picture, which is crucial for stock price movements [2][3]. - The system classifies stocks into five groups, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [8]. - Viper Energy's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10][11].

Core Viewpoint - Analysts forecast a quarterly earnings per share (EPS) of $0.41 for Viper Energy Partners (VNOM), indicating a year-over-year decline of 38.8%, while revenues are expected to reach $223.18 million, reflecting a 9% increase compared to the previous year [1]. Earnings Estimates - The consensus EPS estimate has been revised downward by 6.9% over the past 30 days, indicating a reassessment by analysts [2]. - Revisions to earnings projections are crucial for predicting investor behavior and are linked to short-term stock price performance [3]. Key Metrics Projections - Natural Gas Income is estimated at $4.91 million, showing a year-over-year decline of 38.5% [5]. - Natural Gas Liquids Income is projected to be $21.35 million, reflecting a 12.5% increase from the previous year [5]. - Oil Income is expected to reach $191.11 million, indicating a 9.1% increase year-over-year [5]. - Royalty Income is forecasted at $210.91 million, suggesting a 4.3% increase compared to last year [6]. Production and Sales Estimates - Average daily combined volumes are projected at 54,471.87 BOE/D, up from 43,783 BOE/D reported in the same quarter last year [6]. - Average sales prices for Natural Gas Liquids are expected to be $20.09, down from $21.47 a year ago [7]. - Crude Oil production is anticipated to reach 2,729.34 MBBL, compared to 2,257 MBBL in the same quarter last year [7]. - Average sales prices for Crude Oil are forecasted at $70.48, down from $77.65 year-over-year [7]. - Total Production is expected to be 4,932.60 MBOE, compared to 4,028 MBOE reported in the same quarter last year [8]. - Production of Natural Gas is projected at 6,646.17 MMcf, up from 5,321 MMcf in the same quarter last year [9]. Market Performance - Viper Energy shares have returned -3.8% over the past month, contrasting with a +4.7% change in the Zacks S&P 500 composite [9].

Group 1 - Viper Energy Inc. (VNOM) is experiencing significant activity in the options market, particularly with the Mar 21, 2025 $33.00 Call showing high implied volatility, indicating potential for a major price movement [1] - Implied volatility reflects market expectations for future stock movement, suggesting that investors anticipate a significant event that could lead to a rally or sell-off [2] - Viper Energy Inc. holds a Zacks Rank 3 (Hold) in the Oil and Gas - Exploration and Production - United States industry, which is in the top 30% of the Zacks Industry Rank [3] Group 2 - Over the past 60 days, one analyst has raised their earnings estimate for the current quarter, while four analysts have lowered theirs, resulting in a flat Zacks Consensus Estimate of 40 cents for the current quarter [3] - The high implied volatility may indicate a developing trading opportunity, as options traders often seek to sell premium on such options to capture decay, hoping the stock does not move as much as expected by expiration [4]

Group 1 - The price of the black commodity has increased from the high-$60 range in the fourth quarter of the previous year to the high-$70 range, marking the highest price level since the summer of 2024 [1]