Financial Data and Key Metrics Changes - In Q4 2025, Viper Energy achieved over $8 billion in mineral acquisitions and significant growth in both absolute and per share metrics, with a nearly 2.5 times increase in Permian Basin acreage and a 7% increase in oil production per share year-over-year [4][5] - The company reported a pro forma net debt of approximately $1.6 billion, representing just over 1 turn of leverage after fully repaying a $500 million term loan and outstanding revolver balance [5][6] - The board approved a 15% increase in the base dividend, which now represents about 50% of estimated 2026 free cash flow at $50 WTI, and is fully covered below $30 WTI [6][7] Business Line Data and Key Metrics Changes - Viper Energy's relationship with Diamondback Energy remains strategic, supporting development across their Permian acreage, which is characterized by strong activity levels [4][5] - The company has initiated average daily production guidance for 2026, implying mid-single digit organic production growth from the Q4 2025 exit rate [4] Market Data and Key Metrics Changes - The company has not observed a slowdown in third-party activity, capturing about 50% of all third-party operations across the entire basin, supported by major players in the industry [19][20] - The guidance for production growth is based on existing DUCs and permits, with expectations for strong third-party activity to continue [20] Company Strategy and Development Direction - Viper Energy is focused on generating strong free cash flow, delivering attractive shareholder returns, and pursuing accretive Permian consolidation opportunities [8] - The company emphasizes the importance of mineral ownership, which allows it to benefit from operators' innovations without incurring capital risk [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to return upwards of 100% of cash available for distribution while maintaining differentiated growth in per share metrics [7][8] - The outlook for the Permian Basin remains positive, with expectations for production growth and continued activity from major operators [78][79] Other Important Information - The company is enhancing its operational efficiency through automation and AI to manage a large number of leases and production data effectively [68] - Viper Energy is positioned to explore new development areas as gas takeaway improves, which could enhance lease bonus income [66] Q&A Session Summary Question: Insights on Barnett and Viper's ownership - Management highlighted the benefits of mineral ownership and the ongoing leasing program, with about 10%-15% of potential acreage leased in the Midland Basin [10][11] Question: Return of capital strategy - The board's decision to increase the base dividend reflects confidence in the company's cash-generating ability, with a focus on maintaining flexibility in capital allocation [14][15] Question: Third-party activity outlook - Management confirmed strong third-party activity, with no significant slowdown observed, and emphasized the importance of acquiring high-quality royalty interests [19][20] Question: M&A environment and royalty assets - Management noted a lack of large deals recently, with a focus on integrating previous acquisitions and being ready for future opportunities as market conditions improve [27][28] Question: 2026 oil guidance and visibility - The wide guidance range reflects limited visibility on future activity, with confidence in the first half of the year but uncertainty in the second half [38][40] Question: Lease bonus income outlook - Management indicated that lease bonus income could remain similar in 2026, driven by proactive management and the larger asset base [66][68] Question: Oil cut trends - The decrease in oil cut from mid-50s to low 50s is attributed to various factors, including improved gas system efficiency and the overall performance of the basin [69] Question: Share repurchase strategy - Management discussed the flexibility in capital allocation, balancing between distributions and share repurchases, particularly in light of market conditions [75][76]

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]