Viper Energy, Inc., a Subsidiary of Diamondback Energy, Inc., Reports First Quarter 2024 Financial and Operating Results
MIDLAND, Texas, April 30, 2024 (GLOBE NEWSWIRE) -- Viper Energy, Inc., $(VNOM)$ ("Viper" or the "Company"), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) ("Diamondback"), today announced financial and operating results for the first quarter ended March 31, 2024.
FIRST QUARTER HIGHLIGHTS
-- Q1 2024 average production of 25,407 bo/d (46,132 boe/d)
-- Q1 2024 consolidated net income (including non-controlling interest) of
$99.6 million; net income attributable to Viper Energy, Inc. of $43.4
million, or $0.49 per common share
-- Q1 2024 cash available for distribution to Viper's common shares (as
defined and reconciled below) of $72.1 million, or $0.79 per Class A
common share
-- Declared Q1 2024 base cash dividend of $0.27 per Class A common share;
implies a 2.7% annualized yield based on the April 26, 2024 share closing
price of $39.71
-- Q1 2024 variable cash dividend of $0.32 per Class A common share; total
base-plus-variable dividend of $0.59 per Class A common share implies a
5.9% annualized yield based on the April 26, 2024 share closing price of
$39.71
-- Total Q1 2024 return of capital of $54.1 million, or $0.59 per Class A
common share, represents 75% of cash available for distribution
-- 375 total gross (7.0 net 100% royalty interest) horizontal wells turned
to production on Viper's acreage during Q1 2024 with an average lateral
length of 10,872 feet
-- On April 23, 2024, signed definitive agreement to sell 100% of Viper's
non-Permian assets for cash consideration of approximately $90.3 million;
expected to close May 1, 2024 with current production of approximately
450 bo/d
-- Initiating average daily production guidance for Q2 2024 of 26,000 to
26,500 bo/d (46,500 to 47,250 boe/d), the midpoint of which represents
approximately 3.3% growth relative to Q1 2024
-- Narrowing full year 2024 average daily production guidance to 25,750 to
26,750 bo/d (46,000 to 48,000 boe/d); the reduction of 250 bo/d at the
midpoint reflects the loss of approximately 450 bo/d of production
contribution from the non-Permian assets for the remaining seven months
of 2024 following an expected May 1, 2024 close
"The first quarter was a strong start to the year for Viper and a period which uniquely highlighted the benefits of Viper's business model and high quality assets. Despite commodity prices declining during the quarter, Viper's continued production growth, along with our best-in-class cost structure, allowed for us to increase to our cash available for distribution per share quarter over quarter," stated Travis Stice, Chief Executive Officer of Viper.
Mr. Stice continued, "Looking ahead, we have initiated production guidance for Q2 and revised our guidance for the full year 2024 that reflects continued strong operational performance as well as the pending divestiture of the non-Permian assets we acquired in the GRP acquisition last year. Based on the midpoint of the guidance range for Q2, oil production is expected to grow over three percent relative to Q1 2024, despite losing almost 300 bo/d of quarterly production contribution from the non-Permian assets. We continue to see strong activity levels across our acreage position and expect that production growth will continue beyond the second quarter, as is reflected in our full year guidance."
FINANCIAL UPDATE
Viper's first quarter 2024 average unhedged realized prices were $76.61 per barrel of oil, $1.22 per Mcf of natural gas and $22.17 per barrel of natural gas liquids, resulting in a total equivalent realized price of $48.85/boe.
Viper's first quarter 2024 average hedged realized prices were $75.64 per barrel of oil, $1.12 per Mcf of natural gas and $22.17 per barrel of natural gas liquids, resulting in a total equivalent realized price of $48.19/boe.
During the first quarter of 2024, the Company recorded total operating income of $205.4 million and consolidated net income (including non-controlling interest) of $99.6 million.
As of March 31, 2024, the Company had a cash balance of $20.0 million and total long-term debt outstanding (excluding debt issuance, discounts and premiums) of $1.1 billion, resulting in net debt (as defined and reconciled below) of $1.1 billion. Viper's outstanding long-term debt as of March 31, 2024 consisted of $430.4 million in aggregate principal amount of its 5.375% Senior Notes due 2027, $400.0 million in aggregate principal amount of its 7.375% Senior Notes due 2031 and $273.0 million in borrowings on its revolving credit facility, leaving $577.0 million available for future borrowings and $597.0 million of total liquidity.
FIRST QUARTER 2024 CASH DIVIDEND & CAPITAL RETURN PROGRAM
Viper announced today that the Board of Directors (the "Board") of Viper Energy, Inc., declared a base dividend of $0.27 per Class A common share for the first quarter of 2024 payable on May 22, 2024 to Class A common shareholders of record at the close of business on May 15, 2024.
The Board also declared a variable cash dividend of $0.32 per Class A common share for the first quarter of 2024 payable on May 22, 2024 to Class A common shareholders of record at the close of business on May 15, 2024.
OPERATIONS UPDATE
During the first quarter of 2024, Viper estimates that 375 gross (7.0 net 100% royalty interest) horizontal wells with an average royalty interest of 1.9% were turned to production on its acreage position with an average lateral length of 10,872 feet. Of these 375 gross wells, Diamondback is the operator of 68 gross wells, with an average royalty interest of 5.4%, and the remaining 307 gross wells, with an average royalty interest of 1.1%, are operated by third parties.
Viper's footprint of mineral and royalty interests was 34,346 net royalty acres as of March 31, 2024, of which 2,726 net royalty acres are subject to the pending sale of the Company's non-Permian assets.
Our gross well information as of March 31, 2024 is as follows, unless otherwise specified:
Diamondback Operated Third Party Operated Total
Horizontal wells
turned to
production(1) :
Gross wells 68 307 375
Net 100% royalty
interest wells 3.7 3.3 7.0
Average percent
net royalty
interest 5.4% 1.1% 1.9%
Horizontal producing
well count:
Gross wells 1,913 9,673 11,586
Net 100% royalty
interest wells 131.6 110.3 241.9
Average percent
net royalty
interest 6.9% 1.1% 2.1%
Horizontal active
development well
count:
Gross wells 112 648 760
Net 100% royalty
interest wells 5.7 8.1 13.8
Average percent
net royalty
interest 5.1% 1.2% 1.8%
Line of sight wells:
Gross wells 172 578 750
Net 100% royalty
interest wells 11.3 7.4 18.7
Average percent
net royalty
interest 6.6% 1.3% 2.5%
(1) Average lateral length of 10,872 feet.
The 760 gross wells currently in the process of active development are those wells that have been spud and are expected to be turned to production within approximately the next six to eight months. Further in regard to the active development on Viper's asset base, there are currently 68 gross rigs operating on Viper's acreage, 10 of which are operated by Diamondback. The 750 line-of-sight wells are those that are not currently in the process of active development, but for which Viper has reason to believe that they will be turned to production within approximately the next 15 to 18 months. The expected timing of these line-of-sight wells is based primarily on permitting by third party operators or Diamondback's current expected completion schedule. Existing permits or active development of Viper's royalty acreage does not ensure that those wells will be turned to production.
GUIDANCE UPDATE
Below is Viper's updated guidance for the full year 2024, as well as production guidance for Q2 2024.
Viper Energy, Inc.
--------------------------------------------------- ------------------
Q2 2024 Net Production - MBo/d 26.00 - 26.50
Q2 2024 Net Production - MBoe/d 46.50 - 47.25
Full Year 2024 Net Production - MBo/d 25.75 - 26.75
Full Year 2024 Net Production - MBoe/d 46.00 - 48.00
Share costs ($/boe)
---------------------------------------------------
Depletion $11.00 - $11.50
Cash G&A $1.00 - $1.20
Non-Cash Share-Based Compensation $0.10 - $0.15
Interest Expense $4.25 - $4.50
Production and Ad Valorem Taxes (% of Revenue) 7%
Cash Tax Rate (% of Pre-Tax Income Attributable to
Viper Energy, Inc.)(1) 20% - 22%
Q2 2024 Cash Taxes ($ - million)(2) $13.0 - $18.0
(1) Pre-tax income attributable to Viper Energy, Inc. is reconciled below.
(2) Attributable to Viper Energy, Inc.
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