Viper(US:VNOM)2024-02-21 20:18Financial Data and Key Metrics Changes - In Q4 2023, average oil production increased by 13% compared to the previous year, while the average share count was reduced by 1% [6] - The fourth quarter represented the eighth consecutive quarter of increased production per share for the company [6] - A variable dividend of $0.29 was declared for Class A shareholders, alongside a $0.27 based dividend, resulting in an effective payout ratio of 97% for Q4 [7][8] Business Line Data and Key Metrics Changes - The GRP acquisition, which closed in Q4, is expected to enhance the company's growth profile and provide significant scale [9][10] - The company has initiated production guidance for both Q1 and the full year of 2024, with Q4 2024 production expected to be at or above the high end of the guidance range [12] Market Data and Key Metrics Changes - The company is experiencing strong activity levels across its acreage position, indicating potential for significant growth throughout 2024 [12] Company Strategy and Development Direction - The company completed its conversion into a Delaware corporation, which is believed to enhance governance rights for shareholders and support business growth [11] - The management emphasized the importance of being a large mineral owner in Texas, positioning the company favorably for future opportunities [21] Management's Comments on Operating Environment and Future Outlook - Management believes the market is beginning to recognize the company's growth potential and the broader mineral story [14] - The company is open to pursuing additional acquisitions, particularly if they present significant undeveloped value [35] Other Important Information - The company has already received $10 million in post-effective cash flow that will reduce the purchase price of the GRP acquisition, which is not reflected in the reported financials for the quarter [9] Q&A Session Summary Question: Market Valuation of VNOM - Management believes the market is starting to appreciate VNOM's growth story and the mineral sector overall [14] Question: Capital Allocation and Buybacks - The company plans to continue paying out over 90% of cash available for distribution, with a focus on base plus variable dividends [16][18] Question: Development Focus in Spanish Trail Area - The development is broadly integrated across the portfolio, with significant opportunities in the Spanish Trail area [20] Question: Run Rate Cadence and Guidance - Guidance is conservative, primarily due to timing and lower well counts in Q1, but there may be upside potential later in the year [24][26] Question: M&A Opportunities Post-GRP - The company remains open to transactions with third-party minerals this year, particularly if they resemble the GRP deal [35] Question: G&A Costs Post-Corporate Conversion - Increased G&A costs are attributed to the conversion to a C corporation, with no significant increase in personnel [33]