Viper(VNOM) - 2024 Q4 - Annual Results

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]