Viper Energy, Inc., A Subsidiary of Diamondback Energy, Inc., Announces Drop Down Transaction and Operations Update
Viper Energy (NASDAQ:VNOM) announced two major acquisitions and Q4 2024 results. The company reported Q4 average daily production of 29,859 bo/d and total operating income of $228.7 million, declaring a $0.65 combined dividend per Class A share.
The company entered into two significant transactions: a $1.0 billion Drop Down agreement with Diamondback Energy to acquire mineral and royalty-interest subsidiaries, involving cash and approximately 69.6 million OpCo units, and the Quinn Ranch Acquisition worth $211 million plus 2.4 million OpCo units.
The combined acquisitions will add approximately 23,100 net royalty acres in the Midland Basin, with Diamondback operating >70% of these acres. The transactions are expected to be >10% accretive to cash distribution per Class A share, with pro forma production expected to increase by 61% compared to Q4 2024 levels.
Viper Energy (NASDAQ:VNOM) ha annunciato due importanti acquisizioni e i risultati del quarto trimestre 2024. L'azienda ha registrato una produzione media giornaliera nel quarto trimestre di 29.859 bo/d e un reddito operativo totale di $228,7 milioni, dichiarando un dividendo combinato di $0,65 per azione di Classe A.
L'azienda ha concluso due transazioni significative: un accordo di $1,0 miliardo Drop Down con Diamondback Energy per acquisire sussidiarie di mineral e royalty-interest, coinvolgendo denaro contante e circa 69,6 milioni di unità OpCo, e l'Acquisizione di Quinn Ranch del valore di $211 milioni più 2,4 milioni di unità OpCo.
Le acquisizioni combinate aggiungeranno circa 23.100 acri netti di royalty nel bacino di Midland, con Diamondback che gestisce oltre il 70% di questi acri. Si prevede che le transazioni saranno >10% accretive alle distribuzioni di cassa per azione di Classe A, con la produzione pro forma che dovrebbe aumentare del 61% rispetto ai livelli del quarto trimestre 2024.
Viper Energy (NASDAQ:VNOM) anunció dos adquisiciones importantes y los resultados del cuarto trimestre de 2024. La compañía reportó una producción diaria promedio de 29.859 bo/d en el cuarto trimestre y un ingreso operativo total de $228,7 millones, declarando un dividendo combinado de $0,65 por acción de Clase A.
La compañía llevó a cabo dos transacciones significativas: un acuerdo de $1,0 mil millones Drop Down con Diamondback Energy para adquirir subsidiarias de interés mineral y regalías, que involucran efectivo y aproximadamente 69,6 millones de unidades OpCo, y la Adquisición de Quinn Ranch valorada en $211 millones más 2,4 millones de unidades OpCo.
Las adquisiciones combinadas agregarán aproximadamente 23.100 acres netos de regalías en la Cuenca de Midland, con Diamondback operando más del 70% de estos acres. Se espera que las transacciones sean >10% accretivas a la distribución de efectivo por acción de Clase A, con una producción pro forma que se espera aumente en un 61% en comparación con los niveles del cuarto trimestre de 2024.
Viper Energy (NASDAQ:VNOM)는 두 건의 주요 인수와 2024년 4분기 실적을 발표했습니다. 회사는 4분기 평균 일일 생산량이 29,859 bo/d이며 총 운영 수익이 2억 2,870만 달러에 달한다고 보고했으며, 클래스 A 주식당 0.65달러의 합산 배당금을 선언했습니다.
회사는 두 건의 중요한 거래를 체결했습니다: 10억 달러 규모의 드롭다운 계약을 통해 다이아몬드백 에너지와 함께 광물 및 로열티 관여 자회사를 인수했으며, 현금과 약 6960만 개의 OpCo 유닛을 포함하고 있습니다. 또 하나는 퀸 랜치 인수로 2억 1,100만 달러 및 240만 개의 OpCo 유닛이 포함되어 있습니다.
합산된 인수는 미들랜드 분지에서 약 23,100 에이커의 순 로열티를 추가할 것이며, 다이아몬드백이 이들 중 70% 이상을 운영할 것입니다. 거래는 클래스 A 주식당 현금 배당금이 >10% 증가할 것으로 예상되며, 프로 포르마 생산량은 2024년 4분기 수준에 비해 61% 증가할 것으로 보입니다.
Viper Energy (NASDAQ:VNOM) a annoncé deux acquisitions majeures et les résultats du quatrième trimestre 2024. La société a rapporté une production quotidienne moyenne de 29 859 bo/d pour le quatrième trimestre et un revenu opérationnel total de 228,7 millions de dollars, déclarant un dividende combiné de 0,65 dollar par action de classe A.
La société a conclu deux transactions significatives : un accord de 1,0 milliard de dollars Drop Down avec Diamondback Energy pour acquérir des filiales d'intérêts miniers et de redevances, impliquant des liquidités et environ 69,6 millions d'unités OpCo, ainsi que l'Acquisition de Quinn Ranch d'une valeur de 211 millions de dollars plus 2,4 millions d'unités OpCo.
Les acquisitions combinées ajouteront environ 23 100 acres de redevances nettes dans le bassin de Midland, avec Diamondback exploitant plus de 70 % de ces acres. Les transactions devraient être >10 % accréditives à la distribution de liquidités par action de classe A, avec une production pro forma qui devrait augmenter de 61 % par rapport aux niveaux du quatrième trimestre 2024.
Viper Energy (NASDAQ:VNOM) hat zwei wichtige Übernahmen sowie die Ergebnisse des vierten Quartals 2024 bekannt gegeben. Das Unternehmen berichtete von einer durchschnittlichen täglichen Produktion im vierten Quartal von 29.859 bo/d und einem Gesamtbetriebsgewinn von 228,7 Millionen US-Dollar und erklärte eine kombinierte Dividende von 0,65 US-Dollar pro Aktie der Klasse A.
Das Unternehmen hat zwei bedeutende Transaktionen abgeschlossen: eine 1,0 Milliarden Dollar Drop Down-Vereinbarung mit Diamondback Energy zur Übernahme von Tochtergesellschaften für Mineralien und Royalty-Interessen, die Bargeld und etwa 69,6 Millionen OpCo-Einheiten umfasst, sowie die Quinn Ranch Übernahme, die 211 Millionen Dollar plus 2,4 Millionen OpCo-Einheiten beträgt.
Die kombinierten Übernahmen werden voraussichtlich etwa 23.100 Netto-Royalty-Acres im Midland-Becken hinzufügen, wobei Diamondback über 70% dieser Acres betreibt. Es wird erwartet, dass die Transaktionen eine >10%ige Steigerung der Barverteilung pro Klasse A-Aktie bringen, mit einer pro forma Produktionssteigerung von 61% im Vergleich zu den Werten des vierten Quartals 2024.
- Q4 2024 operating income of $228.7 million
- Expected >10% accretion to cash distribution per share post-acquisitions
- 61% increase in pro forma production expected post-acquisitions
- Conservative leverage ratio <1.0x expected at year-end 2025
- Acquisition adds 23,100 net royalty acres with >70% operated by Diamondback
- None.
Insights
These transformative acquisitions mark a pivotal moment for Viper Energy, substantially expanding its royalty portfolio while maintaining financial discipline. The
Key financial metrics underscore the deal's strength:
- Immediate >10% accretion to cash available for distribution per Class A share
- Conservative leverage profile maintained at <1.0x by year-end 2025
- Retained commitment to distribute >75% of available cash
The production economics are particularly compelling. The acquired assets feature a 5.0% average net revenue interest across high-quality Midland Basin acreage, with Diamondback operating over 70% of the assets. This strategic alignment ensures operational efficiency and development predictability. The expected increase in Diamondback-operated production from 11,000 bo/d in 2025 to 14,000 bo/d in 2026 demonstrates strong organic growth potential.
The transaction structure, particularly the drop-down component, includes significant equity consideration (69.6 million OpCo units), aligning interests between Viper and Diamondback while preserving balance sheet flexibility. The timing of these acquisitions, coupled with Q4's solid performance (
The strategic value of these acquisitions extends beyond mere acreage expansion. The deals provide Viper with premium positioning in the Permian Basin's core, increasing its total Permian Basin net royalty acres to 60,200, with 36,300 operated by Diamondback - representing impressive growth of 70% and 90% respectively.
The asset quality is exceptional, evidenced by:
- High-quality inventory of 334 net locations with >10% IRR at
$50 WTI - Exposure to 300-325 gross locations planned for 2026 development
- Strategic third-party operator diversity, with ExxonMobil controlling 35% of non-Diamondback operated acreage
The development timeline is well-structured, with 11.0-12.0 net 100% royalty interest wells planned by Diamondback, complemented by 6.7 net existing DUCs and permits from third-party operators. This balanced approach to development, combined with Viper's interest in 75% of Diamondback's planned five-year drilling inventory, ensures sustainable long-term production growth and cash flow generation.
MIDLAND, Texas, Jan. 30, 2025 (GLOBE NEWSWIRE) -- Viper Energy, Inc. (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), today provided an update on Q4 2024 financial and operating results.
FOURTH QUARTER HIGHLIGHTS
- Q4 2024 average daily production of 29,859 bo/d (56,109 boe/d)
- Q4 2024 average unhedged realized prices of
$69.91 per barrel of oil,$0.84 per Mcf of natural gas, and$22.15 per barrel of natural gas liquids - During the fourth quarter of 2024, the Company recorded total operating income of
$228.7 million - Declared Q4 2024 combined base-plus-variable dividend of
$0.65 per Class A common share; payable on March 13, 2025 to Class A shareholders of record at the close of business on March 6, 2025
Additionally, the Company announced today it and its operating subsidiary Viper Energy Partners LLC (“OpCo”) have entered into a definitive purchase and sale agreement to acquire all of the equity interests of certain mineral and royalty-interest owning subsidiaries of Diamondback in exchange for
The Company today also announced it and OpCo have entered into a separate definitive purchase and sale agreement to acquire certain mineral and royalty interests from Morita Ranches Minerals LLC in exchange for approximately
PENDING ACQUISITIONS COMBINED HIGHLIGHTS
- Approximately 23,100 net royalty acres (“NRAs”) in the Midland Basin; additional acreage in the Delaware and Williston Basins (approximately 1,700 NRAs combined)
- Diamondback operates >
70% of the Midland Basin NRAs with an approximately5.0% average net revenue interest (“NRI”) across high-quality and largely undeveloped acreage - Expected average daily oil production for full year 2025 of approximately 18,000 bo/d (32,000 boe/d); includes contribution from Diamondback’s expected development plan (11.0-12.0 net
100% royalty interest wells) and 6.7 net existing DUCs and permits operated by third party operators - Viper currently expects Diamondback to complete roughly 300-325 gross locations on the acquired properties in 2026 with an estimated average ~
6.0% NRI; expected to drive an increase in Diamondback-operated production from an average of approximately of 11,000 bo/d in 2025 to approximately 14,000 bo/d in 2026 - Third party operated acreage located primarily in Martin, Midland, and Reagan counties; ExxonMobil (~
35% of third party operated acreage) is the largest operator with diversified exposure to other leading well-capitalized operators in the Midland Basin - Substantial near and long-term financial accretion; expected to be >
10% accretive to cash available for distribution per Class A share immediately upon closing - Each of the Pending Acquisitions has an effective date of January 1, 2025
PRO FORMA VIPER HIGHLIGHTS
- Giving effect to only the assumed closing of the Quinn Ranch Acquisition during Q1 2025, initiating average daily production guidance for Q1 2025 of 30,000 to 31,000 bo/d (54,000 to 56,000 boe/d)
- Upon the assumed closing of the Drop Down during Q2 2025, expect average daily production for the balance of 2025 in the range of 47,000 to 49,000 bo/d (85,000 to 88,000 boe/d); the midpoint is approximately
61% higher than standalone Viper’s Q4 2024 average daily oil production - Based on Diamondback’s expected development plans, Viper expects its Diamondback-operated production to increase to approximately 31,000 bo/d in 2026, up from approximately 27,000 bo/d on a pro forma basis in 2025
- Viper expects to own an interest in approximately
75% of the total amount of gross wells that Diamondback would plan to develop over the next five years at today’s activity levels; expect to own an estimated ~6.0% NRI in these wells - Total inventory of Diamondback-operated locations with a greater than
10% IRR at$50 WTI of approximately 334 net locations - Approximately 60,200 NRAs in the Permian Basin, approximately 36,300 of which are operated by Diamondback; represents increases of approximately
70% and90% , respectively - Maintaining return of capital commitment of at least
75% of cash available for distribution - Conservative leverage of <1.0x expected at year-end 2025 based on current commodity prices
“We are excited to announce today the highly anticipated, transformative Drop Down transaction between Viper and Diamondback. This transaction, combined with the Quinn Ranch Acquisition, furthers Viper’s alignment with Diamondback’s expected development plan and positions Viper to continue to deliver organic growth driven by the Diamondback drillbit for multiple years ahead. The pro forma size and scale provided to Viper, and the continued support of our parent company, meaningfully enhances the unmatched advantage Viper has in the minerals and royalty market,” stated Travis Stice, Chief Executive Officer of Viper.
Mr. Stice continued, “In addition to being immediately accretive to all relevant financial metrics, this conservatively financed transaction also reduces Viper’s pro forma leverage to below 1.0x. Looking ahead, Viper’s leading scale and fortress balance sheet will enable the Company to continue to opportunistically consolidate the highly fragmented minerals market through a disciplined and focused approach.”
Advisors
Evercore is serving as financial advisor to the Audit Committee of Viper’s Board of Directors and Hunton Andrews Kurth LLP is serving as the Audit Committee’s legal advisor for the Drop Down.
RBC Capital Markets is serving as financial advisor to Diamondback and Kirkland & Ellis LLP is serving as its legal advisor for the Drop Down.
For the Quinn Ranch Acquisition, Akin Gump Strauss Hauer & Feld LLP is serving as Viper’s legal advisor and Vinson & Elkins LLP is serving as legal advisor for Morita Ranches Minerals LLC.
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, which involve certain risks, uncertainties and assumptions that could cause the results to differ materially from those expected by the management of Viper. 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 acquisitions discussed in this news release and any potential capital markets transactions and other funding sources for the pending acquisitions, as well as statements regarding the pro forma results for the pending acquisitions and Viper’s operating and financial expectations following those acquisitions, including existing and future production on the mineral and royalty acreage subject to the pending acquisitions and Diamondback’s plans with respect to such Diamondback-operated acreage.
Factors that could cause the outcomes to differ materially include (but are not limited to) the following: the completion of the pending acquisitions on anticipated terms and timing or at all, including obtaining the requisite regulatory and stockholder approvals for the Pending Drop Down, the satisfaction of other conditions to the pending acquisitions, uncertainties as to whether the pending acquisitions, if consummated, will achieve their anticipated benefits within the expected time periods or at all, and those risks described in Item 1A of Viper’s Annual Report on Form 10-K, filed with the SEC on February 22, 2024, subsequent Forms 10-Q and 8-K and other filings Viper makes with the SEC, which can be obtained free of charge on the SEC’s website at http://www.sec.gov and Viper’s website at www.viperenergy.com/investor-overview, as well as those risks that will be more fully described in the definitive proxy statement on Schedule 14A that is intended to be filed with the SEC in connection with the Pending Drop Down.
In light of these factors, the events anticipated by Viper’s forward-looking statements may not occur at the time anticipated or at all. Moreover, Viper conducts its business in a very competitive and rapidly changing environment and new risks emerge from time to time. Viper cannot predict all risks, nor can it assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements it may make. Accordingly, you should not place undue reliance on any forward-looking statements. All forward-looking statements speak only as of the date of this news release or, if earlier, as of the date they were made. Viper does not intend to, and disclaims any obligation to, update or revise any forward-looking statements unless required by applicable law.
Additional Information about the Pending Drop Down and Where to Find It
In connection with the Pending Drop Down, Viper expects to file relevant materials with the SEC including a proxy statement on Schedule 14A. Promptly after filing its definitive proxy statement with the SEC, Viper will mail the definitive proxy statement to each stockholder entitled to vote at the special meeting relating to the Pending Drop Down. This news release is not a substitute for the proxy statement or for any other document that Viper may file with the SEC and send to its stockholders in connection with the Pending Drop Down. INVESTORS AND STOCKHOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO AND ANY DOCUMENTS INCORPORATED BY REFERENCE THEREIN) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE PENDING DROP DOWN THAT VIPER WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE TRANSACTION. The definitive proxy statement, the preliminary proxy statement, and other relevant materials in connection with the Pending Drop Down (when they become available) and any other documents filed by Viper with the SEC, may be obtained free of charge at the SEC’s website www.sec.gov. Copies of the documents filed with the SEC by Viper will be available free of charge on Viper’s website at www.viperenergy.com/investor-overview.
Participants in the Solicitation
Viper and its directors and executive officers, and Diamondback as its parent and major stockholder, may be deemed, under SEC rules, to be participants in the solicitation of proxies from Viper’s stockholders in connection with the Pending Drop Down. Information about the directors and executive officers of Viper and, as applicable, about Diamondback, is set forth in (i) in Viper’s proxy statement for its 2024 annual meeting, including under the headings “Proposal 1—Election of Directors”, “Executive Officers”, “Compensation Discussion and Analysis”, “Compensation Tables”, “Stock Ownership” and “Certain Relationships and Related Transactions,” which was filed with the SEC on April 25, 2024 and is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/1602065/000119312524113976/d796418ddef14a.htm, (ii) Viper’s Annual Report on Form 10-K for the year ended December 31, 2023, including under the headings “Item 10. Directors, Executive Officers and Corporate Governance”, “Item 11. Executive Compensation”, “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Item 13. Certain Relationships and Related Transactions, and Director Independence”, which was filed with the SEC on February 22, 2024 and is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/1602065/000160206524000010/vnom-20231231.htm and (iii) subsequent statements of changes in beneficial ownership on file with the SEC.
Additional information about Diamondback may be found in Diamondback’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 22, 2024, and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed by Diamondback with the SEC. These documents may be obtained free of charge from the SEC’s website at www.sec.gov and Diamondback’s website at www.diamondbackenergy.com/investors.
Additional information regarding the participants in the proxy solicitation and a description of their direct or indirect interests, by security holdings or otherwise, will be contained in the proxy statement and other relevant materials filed with the SEC when they become available. These documents may be obtained free of charge from the SEC’s website at www.sec.gov and Viper’s website at www.viperenergy.com/investor-overview.
No Offer or Solicitation
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Investor Contact:
Austen Gilfillian
+1 432.221.7420
agilfillian@diamondbackenergy.com
Source: Viper Energy, Inc.; Diamondback Energy, Inc.
FAQ
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