Viper Energy, Inc., a Subsidiary of Diamondback Energy, Inc., Announces Acquisition
Viper Energy, a subsidiary of Diamondback Energy, announced a significant acquisition of mineral and royalty interests in the Permian Basin. The company is set to acquire assets from Tumbleweed Royalty IV for $461 million in cash and 10.1 million OpCo units, with a potential additional payment of up to $41 million in 2026. Viper also closed two related acquisitions for $189 million.
The combined acquisitions include 3,727 net royalty acres, primarily in the Midland Basin. Current production is around 2,500 Bo/d, expected to increase to 4,500 Bo/d in 2025. The deal is projected to increase Viper's 2025 per-share return of capital by 4-5%. Post-acquisition, Viper's preliminary Q4 2024 production guidance is 29,000 to 30,000 bo/d, with 2025 guidance at 30,000 to 33,000 bo/d.
Viper Energy, una filiale di Diamondback Energy, ha annunciato un'importante acquisizione di interessi minerari e di royalty nel Bacino del Permiano. L'azienda deve acquisire beni da Tumbleweed Royalty IV per 461 milioni di dollari in contante e 10,1 milioni di unità OpCo, con un ulteriore pagamento potenziale di fino a 41 milioni di dollari nel 2026. Viper ha anche completato due acquisizioni correlate per 189 milioni di dollari.
Le acquisizioni combinate includono 3.727 acri netti di royalty, principalmente nel Bacino di Midland. La produzione attuale è di circa 2.500 Bo/d, con un'aspettativa di aumento a 4.500 Bo/d nel 2025. Si prevede che l'affare aumenterà il rendimento per azione del capitale di Viper nel 2025 del 4-5%. Dopo l'acquisizione, la guida preliminare di produzione di Viper per il quarto trimestre del 2024 è di 29.000 a 30.000 bo/d, con una guida per il 2025 di 30.000 a 33.000 bo/d.
Viper Energy, una subsidiaria de Diamondback Energy, anunció una adquisición significativa de intereses minerales y de regalías en la Cuenca Pérmiana. La empresa adquirirá activos de Tumbleweed Royalty IV por 461 millones de dólares en efectivo y 10,1 millones de unidades OpCo, con un pago adicional potencial de hasta 41 millones de dólares en 2026. Viper también cerró dos adquisiciones relacionadas por 189 millones de dólares.
Las adquisiciones combinadas incluyen 3.727 acres netos de regalías, principalmente en la Cuenca de Midland. La producción actual es de alrededor de 2.500 Bo/d, que se espera aumente a 4.500 Bo/d en 2025. Se proyecta que el acuerdo aumentará el rendimiento por acción de capital de Viper en 2025 en un 4-5%. Después de la adquisición, la guía preliminar de producción de Viper para el cuarto trimestre de 2024 es de 29.000 a 30.000 bo/d, con una guía para 2025 de 30.000 a 33.000 bo/d.
바이퍼 에너지(Viper Energy)는 다이아몬드백 에너지(Diamondback Energy)의 자회사로서, 퍼미안 분지에서 광물 및 로열티 자산을 대규모로 인수한다고 발표했습니다. 이 회사는 4억 6100만 달러의 현금과 1010만 OpCo 유닛으로 텀블위드 로열티 IV(Tumbleweed Royalty IV)로부터 자산을 인수할 예정이며, 2026년에 최대 4100만 달러의 추가 지급이 있을 수 있습니다. 바이퍼는 또한 1억 8900만 달러에 두 건의 관련 인수를 마무리했습니다.
결합된 인수에는 주로 미들랜드 분지에 있는 3,727 네트 로열티 에이커가 포함됩니다. 현재 생산량은 약 2,500 Bo/d이며, 2025년에는 4,500 Bo/d로 증가할 것으로 예상됩니다. 이 거래는 2025년 바이퍼의 주당 자본 수익률을 4-5% 증가시킬 것으로 예상됩니다. 인수 후 바이퍼의 2024년 4분기 생산 가이드는 29,000에서 30,000 bo/d이며, 2025년 가이드는 30,000에서 33,000 bo/d입니다.
Viper Energy, une filiale de Diamondback Energy, a annoncé une acquisition significative d'intérêts miniers et de redevances dans le bassin permien. L'entreprise est sur le point d'acquérir des actifs de Tumbleweed Royalty IV pour 461 millions de dollars en espèces et 10,1 millions d'unités OpCo, avec un paiement supplémentaire potentiel pouvant atteindre 41 millions de dollars en 2026. Viper a également finalisé deux acquisitions connexes pour 189 millions de dollars.
Les acquisitions combinées comprennent 3.727 acres nets de redevances, principalement dans le bassin de Midland. La production actuelle est d'environ 2.500 Bo/d, et devrait augmenter à 4.500 Bo/d d'ici 2025. L'accord devrait augmenter le rendement par action du capital de Viper de 4-5 % en 2025. Après l'acquisition, la prévision de production préliminaire de Viper pour le quatrième trimestre 2024 est de 29.000 à 30.000 bo/d, avec des prévisions pour 2025 de 30.000 à 33.000 bo/d.
Viper Energy, eine Tochtergesellschaft von Diamondback Energy, hat eine bedeutende Übernahme von mineralischen und royalties Interessen im Permian-Becken angekündigt. Das Unternehmen wird Vermögenswerte von Tumbleweed Royalty IV für 461 Millionen Dollar in bar und 10,1 Millionen OpCo-Einheiten erwerben, mit einer potenziellen zusätzlichen Zahlung von bis zu 41 Millionen Dollar im Jahr 2026. Viper hat außerdem zwei verwandte Übernahmen für 189 Millionen Dollar abgeschlossen.
Die kombinierten Übernahmen umfassen 3.727 Netto-Royalty-Acres, hauptsächlich im Midland-Becken. Die aktuelle Produktion liegt bei etwa 2.500 Bo/d, die voraussichtlich bis 2025 auf 4.500 Bo/d ansteigen wird. Es wird prognostiziert, dass der Deal die rendite pro Aktie des Kapitals von Viper im Jahr 2025 um 4-5% erhöhen wird. Nach der Übernahme liegt die vorläufige Produktionsprognose von Viper für das 4. Quartal 2024 zwischen 29.000 und 30.000 bo/d, mit einer Prognose für 2025 von 30.000 bis 33.000 bo/d.
- Acquisition of 3,727 net royalty acres in the Permian Basin, enhancing Viper's asset portfolio
- Expected increase in production from 2,500 Bo/d to 4,500 Bo/d by 2025
- Projected 4-5% increase in 2025 per-share return of capital to Class A shareholders
- Significant undeveloped inventory supporting long-term production growth
- 18% increase in expected 2025 average daily oil production compared to Q3 2024
- Large cash outlay of $650 million for acquisitions, potentially increasing debt
- Issuance of 10.1 million OpCo units, which may lead to dilution for existing shareholders
- Contingent payments of up to $50 million in 2026, dependent on oil prices
Insights
This acquisition marks a significant expansion for Viper Energy, strengthening its position in the lucrative Permian Basin. The
Financially, this move is projected to be accretive, with a 4-5% increase in pro forma 2025 per share return of capital to Class A shareholders. The transaction's structure, combining cash, credit facility usage and potential capital market transactions, demonstrates financial flexibility. However, investors should monitor the impact on Viper's debt levels and future capital requirements.
The contingent payments tied to WTI prices add an element of risk and potential reward, aligning the deal's value with market conditions. Overall, this acquisition significantly expands Viper's asset base and production capacity, potentially driving long-term value for shareholders.
This acquisition is strategically significant for Viper Energy, substantially expanding its footprint in the Permian Basin, particularly in the core Midland Basin. The assets' highly undeveloped nature, with ~50% of Midland Basin acreage in potential long-lateral units without existing wells or permits, presents significant upside potential.
The deal leverages Viper's relationship with Diamondback Energy, providing visibility into future development plans. This synergy is crucial, as Diamondback-operated production is expected to triple from 1,000 Bo/d in 2025 to 3,000 Bo/d in 2026. The acquisition also diversifies Viper's operator base, with major players like ExxonMobil heavily involved.
The projected increase in rig count to 61 active rigs with an average
This acquisition positions Viper Energy favorably in the competitive mineral and royalty interest market. The deal's structure, combining immediate production with substantial undeveloped acreage, balances near-term cash flow with long-term growth potential. The focus on the Permian Basin, particularly the Midland Basin, aligns with industry trends favoring this prolific oil-producing region.
The transaction increases Viper's scale, potentially enhancing its attractiveness to investors seeking exposure to the oil sector without direct operational risks. The projected production growth from 29,000-30,000 bo/d in Q4 2024 to 30,000-33,000 bo/d in 2025 represents a significant
However, market reception will depend on how effectively Viper integrates these assets and delivers on production forecasts. The deal's success also hinges on broader market factors, including oil price trends and the pace of energy transition efforts, which could impact long-term demand for oil assets.
MIDLAND, Texas, Sept. 11, 2024 (GLOBE NEWSWIRE) -- Viper Energy, Inc. (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), today announced it and its operating subsidiary Viper Energy Partners LLC (“OpCo”) have entered into a definitive purchase and sale agreement to acquire certain mineral and royalty interest- owning subsidiaries of Tumbleweed Royalty IV, LLC in exchange for
The Company also announced today that it previously closed two related acquisitions. On September 3, 2024, OpCo completed the acquisition of certain mineral and royalty interest-owning entities from Tumbleweed-Q Royalty Partners, LLC and MC Tumbleweed Royalty, LLC for a combined
COMBINED ACQUISITION HIGHLIGHTS
- Approximately 3,727 net royalty acres ("NRAs") in the Permian Basin
- Highly undeveloped asset with a focus in the core of the Midland Basin
- High confidence visibility to near-term production growth results in meaningful accretion to all relevant financial metrics; accretion expected to grow in subsequent years due to the highly undeveloped nature of the asset
- Current production of approximately 2,500 Bo/d (4,000 Boe/d); expected to increase to approximately 4,500 Bo/d for full year 2025 based on only current producing wells ("PDP"), drilled but uncompleted wells ("DUCs"), permits, and Diamondback's expected development plan
- Viper currently expects Diamondback to complete roughly 120-140 gross locations beyond existing DUCs and permits on the acquired properties through year-end 2026 with an estimated average ~
3.0% net revenue interest ("NRI") (3.5 - 4.0 net100% royalty interest wells); expected to drive an increase in Diamondback-operated production from an average of approximately 1,000 Bo/d in 2025 to approximately 3,000 Bo/d in 2026 - Increases expected pro forma 2025 per share return of capital to Class A shareholders by an estimated 4
-5% , assuming the Company funds a portion of the remaining cash consideration of the transaction through the successful issuance of approximately 8.0 million Class A shares of Viper's common stock
ASSET DETAILS
- Approximately 3,237 NRAs in the Midland Basin and 490 NRAs in the Delaware Basin with an average
1.0% NRI - Combined 16 gross (0.3 net) rigs currently operating on acreage position, led by ExxonMobil (8) and Diamondback (3)
- Midland Basin:
- Approximately
75% of acreage operated by Diamondback (~950 NRAs) and ExxonMobil (~1,410 NRAs) - >
70% of acreage in Midland and Martin counties - Largely undeveloped acreage that provides an average ~
1.4% NRI across an estimated 96 completely undeveloped horizontal units normalized to 1,280 gross acres; represents ~1,640 NRAs and an expected ~23.7 net locations - 5.7 net DUCs and permits; expected to be turned to production over the next 12-15 months
- Approximately
- Delaware Basin:
- Approximately
80% of acreage in Lea and Eddy counties - Largest exposure to ConocoPhillips and Mewbourne as primary operators; other notable operators include Devon, Coterra, Chevron, and EOG
- 0.8 net DUCs and permits; expected to be turned to production over the next 12-15 months
- Approximately
PRO FORMA VIPER HIGHLIGHTS
- Preliminary average daily production guidance for Q4 2024 of 29,000 to 30,000 bo/d (51,500 to 53,000 boe/d)
- Preliminary full year 2025 average daily production guidance of 30,000 to 33,000 bo/d (53,000 to 58,000 boe/d), the midpoint of which is approximately
18% higher than standalone Viper’s expected Q3 2024 average daily oil production - Approximately 35,500 NRAs in the Permian Basin
- 61 active rigs currently operating on combined acreage position in the Permian Basin, with an average
1.8% NRI expected in those wells
“The set of acquisitions announced today is a continuation of Viper’s strategy to consolidate high quality mineral and royalty assets that not only provide meaningful and immediate financial accretion, but also provide significant undeveloped inventory that supports our long-term production profile. With roughly
Mr. Stice continued, “Viper was able to uniquely execute on this differentiated acquisition opportunity given its overall size and scale, but also due to the visibility we have into Diamondback’s expected multi-year development plan. With this visibility, we expect Diamondback-operated production to increase from an average of roughly 1,000 Bo/d in 2025 to approximately 3,000 Bo/d in 2026. This production growth, along with the remaining core inventory primarily operated by ExxonMobil, provide a high level of confidence to the implied valuation metrics and expected accretion beyond just the next twelve months of visibility typically associated with non-operated mineral and royalty interests.”
Grant Wright, President of Tumbleweed Royalty, stated, “The Tumbleweed team has built an impressive mineral and royalty position over the last four years with the support of our dedicated team and long-term partners. The assets are a natural fit for Viper, and we look forward to closing the transaction.”
Advisors
Intrepid Partners, LLC is serving as financial advisor to Viper. Akin Gump Strauss Hauer & Feld LLP and Wachtell, Lipton, Rosen & Katz are serving as its legal advisors.
Vinson & Elkins LLP and Kirkland & Ellis LLP are serving as the sellers’ legal advisors.
About Viper Energy, Inc.
Viper is a corporation formed by Diamondback to own, acquire and exploit oil and natural gas properties in North America, with a focus on owning and acquiring mineral and royalty interests in oil-weighted basins, primarily the Permian Basin. For more information, please visit www.viperenergy.com.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves primarily in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that Viper assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events, including specifically the statements regarding the pending acquisition and any potential capital markets transactions and other funding sources for the pending acquisition. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Viper. Information concerning these risks and other factors can be found in Viper’s filings with the Securities and Exchange Commission, including its Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the Securities and Exchange Commission’s web site at http://www.sec.gov. Viper undertakes no obligation to update or revise any forward-looking statement.
Investor Contacts:
Adam Lawlis
+1 432.221.7467
alawlis@diamondbackenergy.com
Austen Gilfillian
+1 432.221.7420
agilfillian@diamondbackenergy.com
Source: Viper Energy, Inc.; Diamondback Energy, Inc.
FAQ
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