Viper(US:VNOM)2024-11-07 21:03Acquisitions - The company completed the TWR Acquisition on October 1, 2024, for approximately $458.9 million in cash and 10.09 million Operating Company units, adding about 3,067 net royalty acres in the Permian Basin [111]. - The company completed the Q Acquisition on September 3, 2024, for $113.6 million, and the M Acquisition for $75.8 million, expanding its mineral and royalty interests [113][114]. - Approximately 15% of the overall increase in production is attributable to the GRP Acquisition, with an additional 11% from the Q&M Acquisitions [9]. Financial Performance - Total operating income for Q3 2024 was $209.588 million, a decrease from $216.708 million in Q2 2024 [126]. - Net income attributable to Viper Energy, Inc. for Q3 2024 was $48.917 million, down from $56.901 million in Q2 2024 [126]. - Total operating income for the nine months ended September 30, 2024, was $631.7 million, compared to $623.0 million for the same period in 2023, indicating a slight increase [139]. - Net income for the nine months ended September 30, 2024, was $330.8 million, a decrease of 11.9% compared to $375.4 million in the same period of 2023 [139]. - Oil income rose to $558.2 million in the nine months ended September 30, 2024, compared to $443.9 million in the same period of 2023, reflecting increased production [139]. Production Metrics - The company increased its full-year 2024 net production guidance to 27.00 - 27.25 MBO/d and 48.75 - 49.25 MBOE/d, reflecting the impact of recent acquisitions [121]. - Oil production increased to 2,482 MBbls for the three months ended September 30, 2024, up from 2,398 MBbls for the three months ended June 30, 2024, representing a growth of approximately 3.5% [128]. - Natural gas production rose to 6,150 MMcf for the three months ended September 30, 2024, compared to 5,631 MMcf for the previous quarter, marking an increase of about 9.2% [128]. - The average daily combined volumes increased to 49,370 BOE/d in Q3 2024, up from 47,473 BOE/d in Q2 2024, reflecting a growth of approximately 4% [128]. - Production volumes for oil reached 7,192 MBbls, a 24.6% increase from 5,771 MBbls in the same period of 2023 [141]. - Average daily oil volumes increased to 26,248 BO/d, up from 21,139 BO/d in the same period of 2023 [141]. Revenue and Income - Royalty income decreased by $7.3 million in Q3 2024 compared to Q2 2024, primarily due to a $15.3 million reduction in average prices, partially offset by an $8.0 million increase from a 5% growth in production volumes [130]. - Royalty income for the nine months ended September 30, 2024, increased by $113.8 million compared to the same period in 2023, driven by a 27% growth in production [143]. - The average sales price for oil was $75.24 per Bbl in Q3 2024, down from $81.04 per Bbl in Q2 2024, a decrease of approximately 7.5% [128]. Expenses - Depletion expense increased by $6.2 million in Q3 2024, primarily due to a higher depletion rate of $12.01 per BOE, up from $11.19 per BOE in Q2 2024 [135]. - General and administrative expenses rose by $7.5 million for the nine months ended September 30, 2024, totaling $14.1 million compared to $6.7 million in 2023 [150]. - Depletion expense increased by $48.5 million for the nine months ended September 30, 2024, primarily due to a $27.2 million increase from production volume growth and a $21.3 million increase in the depletion rate to $11.47 per BOE [148]. Cash Flow and Liquidity - Net cash provided by operating activities decreased to $461.7 million for the nine months ended September 30, 2024, down from $492.4 million in 2023 [159]. - Net cash used in investing activities was $(183.4) million for the nine months ended September 30, 2024, compared to $(176.7) million in 2023 [161]. - Net cash used in financing activities totaled $(135.5) million for the nine months ended September 30, 2024, primarily due to $348.4 million in dividends paid [162]. - As of September 30, 2024, the company had approximately $1.0 billion in liquidity, consisting of $168.6 million in cash and $850.0 million available under the revolving credit facility [155]. Dividends - The company raised its annual base dividend to $1.20 per share starting from the second quarter of 2024, with a combined cash dividend of $0.61 per share declared for Q4 2024 [116][118]. - The company declared a cash dividend of $0.61 per share of Class A Common Stock for the third quarter of 2024, payable on November 21, 2024 [168]. - A cash dividend of $0.61 per share of Class A Common Stock will be paid on November 21, 2024, consisting of a base dividend of $0.30 and a variable dividend of $0.31 [168]. Risk Management - The company has entered into commodity derivative contracts to mitigate volatility in oil and natural gas prices [157]. - The company expects adequate funding sources to meet both short-term and long-term liquidity requirements despite potential market volatility [158].