Financial Data and Key Metrics Changes - Viper Energy reported over $8 billion in mineral acquisitions during 2025, leading to significant growth in both absolute and per share metrics [3] - The company grew its Permian Basin acreage by nearly 2.5 times year-over-year and increased oil production per share by 7% [3] - Pro forma net debt was approximately $1.6 billion, representing just over 1 turn of leverage after repaying a $500 million term loan and outstanding revolver balance [4] Business Line Data and Key Metrics Changes - The company initiated average daily production guidance for 2026, implying mid-single digit organic production growth from the Q4 2025 exit rate [3] - Viper Energy returned 90% of available cash during Q4 2025 and is positioned to increase returns to upwards of 100% of cash available for distribution [5] Market Data and Key Metrics Changes - The company has not observed a slowdown in third-party activity, capturing about 50% of all activity across the entire basin [20] - The guidance for production growth is based on existing DUCs and permits, with visibility expected to improve as new wells are permitted [38] Company Strategy and Development Direction - Viper Energy is focused on generating strong free cash flow and delivering attractive shareholder returns while pursuing accretive Permian consolidation opportunities [6] - The company has approved a 15% increase in its base dividend and a $1 billion increase in share repurchase authorization, reflecting confidence in long-term cash generation [4] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strength of the Permian Basin, indicating that larger operators continue to grow and that concerns about reductions in activity have quieted [75] - The company is well-positioned to benefit from the ongoing development of deeper zones and the resilience of third-party operators [20][21] Other Important Information - The company is leveraging technology and automation to manage a large number of leases and production data effectively, which is expected to enhance shareholder value [65] - The relationship with Diamondback Energy remains strategic, with ongoing leasing activities and development plans that align with Viper's interests [10][50] Q&A Session Summary Question: How does Viper Energy's ownership translate across FANG's Barnett position? - Management highlighted the benefits of mineral ownership, stating that operators' new techniques and zones accrue benefits to mineral owners without additional capital risk [9] Question: Will the return of capital strategy remain consistent? - Management indicated that the base dividend will remain a priority, with flexibility to adjust based on market conditions and stock price [12][14] Question: What is the outlook for third-party activity? - Management confirmed that third-party activity remains strong, with no significant slowdown observed [20] Question: How does the company view the current market for royalty assets? - Management noted that while there haven't been many large deals recently, they are ready to pursue larger opportunities when market conditions improve [26][28] Question: What is the outlook for lease bonus income in 2026? - Management suggested that lease bonus income could remain similar to 2025 levels, driven by proactive management and the larger asset base [64] Question: How does the company view its oil cut trend? - Management attributed the trend towards lower oil cut to various factors, including improved efficiency in gas systems and the overall performance of the basin [66]

Core Viewpoint - Freehold Royalties Ltd. is set to release its third quarter results on November 13, 2025, after market close, indicating a significant upcoming event for investors and analysts [1]. Group 1 - The conference call and webcast for the third quarter results will take place on November 14, 2025, at 9:30 am MT (11:30 am ET) [1]. - Research analysts are required to register in advance to participate in the call [1]. - A live audio webcast will be available for all investors and stakeholders to listen in or submit written questions [2].

Financial Data and Key Metrics Changes - For Q3 2025, the company reported consolidated total revenue of $203 million, with an adjusted EBITDA of $174 million, resulting in an adjusted EBITDA margin of 85% [16][17] - Free cash flow increased by 15% year-over-year to $123 million [17] Business Line Data and Key Metrics Changes - Oil and gas royalty production reached a record of approximately 36,300 barrels of oil equivalent per day, marking a 9% sequential increase and a 28% year-over-year increase [4][17] - Water sales revenue hit a record of $45 million, representing a 74% sequential growth and a 23% year-over-year growth [4] - Produced water royalty revenues amounted to $32 million, reflecting a 5% sequential growth and a 16% year-over-year increase [4] Market Data and Key Metrics Changes - The company noted that despite weak benchmark oil and gas prices, production volumes benefited from robust activity in specific subregions [5] - The average lateral lengths for wells year-to-date in 2025 are approximately 7% longer than last year and 23% longer compared to 2019 [5] Company Strategy and Development Direction - The company is focused on consolidating high-quality Permian assets, taking advantage of the current low commodity price environment to acquire additional royalties and surface acreage [9][14] - Investments in water infrastructure have established the company as a competitive player in the Permian, allowing it to maintain and grow market share [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term demand for oil, despite current low prices, citing structural declines in other shale basins [10][12] - The company believes it is well-positioned to capitalize on future price increases due to its strong cash flow margins and a robust balance sheet [13][16] Other Important Information - The company announced a three-for-one stock split of its common stock, expected to be completed in December 2025 [19] - The company closed on a $500 million credit facility, enhancing liquidity and providing flexibility for growth opportunities [12][20] Q&A Session Summary Question: What is a good run rate for the business, and how much of your water sales are recycled barrels versus water from source? - Management indicated that they are working to minimize volatility in water sales and are focused on maximizing recycled water usage [25][26] Question: Can you provide details on the royalty acquisition announced? - Management stated that the acquisition is expected to provide a strong growth outlook and is operated by well-capitalized operators [22][24] Question: How does the company view its position in the power and data center market? - Management expressed confidence in their position, noting that they have significant available land and are in discussions for potential opportunities [22][24] Question: What is the outlook for the water resources business? - Management acknowledged recent volatility but emphasized efforts to stabilize and maximize recycled water production [25][26] Question: How does the company characterize the competitive landscape in the Permian? - Management noted ongoing opportunities in the pipeline and expressed optimism about future acquisitions across various regions [30][31]

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 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 Insights - The AI investment landscape is experiencing a significant influx of capital, with notable investments such as NVIDIA's $100 billion into OpenAI and a broader $500 billion initiative [2][3] - Identifying undervalued AI stocks is challenging in a market where many technology stocks are perceived as overvalued, yet opportunities still exist [3][4] Company Overview: Black Stone Minerals L.P. (BSM) - Black Stone Minerals is positioned to benefit from the increasing energy demand driven by AI data centers, with strong profitability and a favorable valuation compared to other tech stocks [4][5] - The company has a unique business model that allows it to generate revenue through leasing mineral and royalty interests without bearing the operational risks associated with drilling [24][25] Energy Demand and Natural Gas - The demand for energy from data centers is projected to surge, with McKinsey estimating $6.7 trillion in capital expenditures needed by 2030 to meet compute power demands [9] - Natural gas is becoming a preferred energy source for data centers due to its reliability and efficiency, with capacity factors for natural gas combined cycle systems averaging 60% to 80% [10][13] Natural Gas Production and Market Position - Black Stone Minerals holds mineral rights across 20+ million gross acres in the U.S., with significant exposure to major producing basins [19] - The company is expanding its natural gas production capacity through development agreements, aiming to double its drilling obligations over the next five years [21][22] Financial Performance - Black Stone Minerals generated $245 million in Core Earnings in the TTM ended 2Q25, with a consistent growth trajectory in revenue and earnings since 2015 [26] - The company has maintained strong free cash flow, totaling $1.9 billion since 2020, which supports capital returns to shareholders [28][29] Profitability and Shareholder Returns - Black Stone Minerals boasts industry-leading profitability metrics, with a NOPAT margin improvement from 48% in 2019 to 64% in the TTM [27][33] - The company has increased its regular distribution from $0.08/unit in 2Q20 to $0.30/unit in 3Q25, providing a yield of approximately 9.3% [34][35] Market Outlook and Valuation - Despite lower oil prices impacting sales, rising natural gas prices have offset these declines, with projections indicating further increases in natural gas prices [38][39] - The current stock price implies a significant margin deterioration, yet historical growth rates suggest potential for a 50%+ increase in share value [41][42]

Company Overview - Freehold Royalties is an oil and gas royalty company with 6.1 million gross acres in Canada and 1.2 million in the US, with approximately 52% of its revenue derived from oil [1] Analyst Background - The analyst has over 10 years of experience researching companies across various sectors, including commodities like oil, natural gas, gold, and copper, as well as technology and emerging market stocks [1] - The analyst has researched over 1000 companies and has transitioned from writing a blog to a value investing-focused YouTube channel, covering hundreds of different companies [1] Investment Focus - The analyst expresses a preference for covering metals and mining stocks but is also comfortable with other industries such as consumer discretionary/staples, REITs, and utilities [1]

Company Overview - Viper Energy (NASDAQ: VNOM) has recently completed the acquisition of Sitio Royalties, which significantly enhances its production capacity to approximately 126,000 BOEPD [2] Production Growth - Following the acquisition, Viper Energy anticipates mid-single-digit production growth from the new production level by 2026 [2]

Group 1 - Sitio Royalties reported $145.66 million in revenue for Q2 2025, a year-over-year decline of 13.6% [1] - The EPS for the same period was $0.08, down from $0.15 a year ago, but exceeded the consensus estimate of $0.04 by 100% [1] - The reported revenue surpassed the Zacks Consensus Estimate of $136.5 million, resulting in a surprise of +6.71% [1] Group 2 - Sitio Royalties' average daily combined production volume was 41,879.00 BOE/D, slightly above the average estimate of 40,916.75 BOE/D [4] - Average realized prices for natural gas were $1.43, significantly lower than the $2.09 average estimate [4] - Average realized prices for crude oil were $63.03, closely aligning with the estimated $62.98 [4] - Average realized prices for NGLs were $22.57, exceeding the $16.91 average estimate [4] - Revenue from NGLs was $19.98 million, surpassing the two-analyst average estimate of $14.7 million [4] Group 3 - Over the past month, shares of Sitio Royalties returned -4.2%, while the Zacks S&P 500 composite increased by +0.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Group 1 - The core appeal of SBR lies in providing monthly cash flow to investors seeking regular income [1] - SBR owns a diversified portfolio of perpetual royalties from both producing and proved undeveloped oil wells [1]