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Viper Energy Partners LP, a subsidiary of Diamondback energy reported fourth quarter earnings after the market close Tuesday. Last quarter $VNOM surpassed $1 billion in aquistions since it's IPO four years ago.Q4 saw higher production, offset by lower average sales prices..

Viper Mineral Assets

Viper Energy Partners (NASDAQ: $VNOM) Report Earnings After Close Tuesday

$0.51 Cash Distribution on $73.70 million Income

Earnings

Viper Energy (VNOM) reported fourth quarter total operating income of $73.7 million and consolidated net income (including non-controlling interest) of $40.7 million. Operating income increased 24% year over year.

Q4 2018 cash distribution of $0.51 per common unit , up 11% year over year; implies a 6.4% annualized yield based on the February 4, 2019 unit closing price of $31.95 

Viper Energy NYSE: $VNOM 

 

Highlights

  • Q4 2018 cash distribution of $0.51 per common unit , up 11% year over year; implies a 6.4% annualized yield based on the February 4, 2019 unit closing price of $31.95
  • 2018 full year distribution of $2.17, up 52% from full year 2017; implies a 6.8% yield based on the February 4, 2019 unit closing price of $31.95
  • Q4 2018 consolidated net income (including non-controlling interest) of $40.7 million, consolidated adjusted EBITDA (as defined and reconciled below) of $68.1 million and cash available for distribution to Limited Partner units (as defined below) of $26.5 million Q4 2018 production of 20,191 boe/d (69% oil), up 10% over Q3 2018 and 63% year over year
  • Proved reserves as of December 31, 2018 of 63.1 MMboe (72% PDP, 66% oil), up 65% year over year
  • Full year 2019 production guidance of 20,000 to 23,000 boe/d (67% - 71% oil), up ~24% at the midpoint from full year 2018 production
  • Average production guidance for 1H 2019 of 20,500 to 22,000 boe/d, the midpoint of which is up 5% from Q4 2018 production
  • Acquired 5,281 net royalty acres across 88 transactions for an aggregate purchase price of approximately $615 million during the full year 2018
  • Closed 23 acquisitions for an aggregate purchase price of approximately $104 million in Q4 2018, increasing Viper's mineral interests to a total of 14,841 net royalty acres, up 55% year over year
  • As of January 23, 2019, there were 40 active rigs on Viper's mineral acreage and approximately 619 active drilling permits filed in the past six months Q2 2018 and Q3 2018 distributions, which were the initial distributions after Viper's election to be treated as a taxable entity for federal income tax purposes, determined to not constitute dividends for U.S. federal income tax purposes; instead should generally constitute non-taxable reductions to the tax basis

“2018 was a transformational year for Viper as we successfully effected our election to be treated as a taxable entity which enabled us to present our differentiated investment opportunity to a significantly expanded investor universe, while also showcasing a unique tax strategy. We continued to execute on our strategy of delivering unmatched return on and return of capital, as we increased our annual distribution by over 50% and generated a full year return on capital employed in excess of 15%. Our acquisition machine continued to consolidate Tier 1 properties as represented by Viper closing 88 deals for an aggregate purchase price of approximately $615 million and correspondingly growing our asset base by over 5,000 net royalty acres throughout the year,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.

Mr. Stice continued, “Moving to 2019, we continue to see healthy activity levels across our acreage represented by the 40 active rigs currently operating on our properties. As a result, we are providing full year 2019 production guidance that at the midpoint implies roughly 25% annual organic growth. Viper does not need to spend one dollar of capital to achieve this robust organic growth, and we simultaneously provide a significant, high single digit free cash flow yield, showcasing a business model that is without peer in our industry. In addition to our strong anticipated organic growth, we remain excited about the continued execution of our acquisition strategy, including both the consolidation of the private minerals market as well as significant expected drop down opportunities from our parent company.”

Viper Energy Partners Q3 Earnings Recap

$0.05 Missed $0.41 EPS But $78.60 Beat $77.28 million Forecast Revenue 

Earnings

Viper Energy (VNOM) reported third quarter earnings on Monday of $0.05 per share, missing the consensus estimate of $0.41 per share. This compares to earnings of $0.24 per share a year ago. These figures are adjusted for non-recurring items. Revenues of $78.60 million beat the expected $77.28 million in revenue. Last quarter $VNOM reported $1.35 earnings per share beating the consensus estimate of $0.38.earnings.  

Viper Energy NYSE: $VNOM 

Market Reaction After hours 32.40 −2.49 (-7.14%)

“During the third quarter, Viper surpassed $1 billion of closed acquisitions since its IPO four years ago, with over $500 million of these deals having been completed through the first three quarters of 2018. Viper continues to use its size, scale and expertise in the Permian Basin to consolidate the fragmented private minerals market, and we believe there remain significant opportunities ahead for us to continue this consolidation,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.

Highlights

  • Q3 2018 cash distribution of $0.58 per common unit , up 72% year over year; implies a 6.4% annualized yield based on the October 26, 2018 unit closing price of $36.29
  • Q3 2018 consolidated net income (including non-controlling interest) of $50.8 million, consolidated adjusted EBITDA (as defined and reconciled below) of $72.4 million and cash available for distribution to Limited Partner units (as defined below) of $29.9 million
  • Q3 2018 production of 18,384 boe/d (69% oil), up 13% over Q2 2018 and 46% year over year
  • Closed 15 acquisitions for an aggregate purchase price of approximately $260 million in Q3 2018, including a completed drop down from Diamondback; increases Viper's mineral assets by 2,457 net royalty acres to 13,908 total net royalty acres, up 52% year over year
  • As of October 22, 2018, there were 24 active rigs on Viper's mineral acreage and approximately 523 active drilling permits filed in the past six months

Outlook

  • Raising full year 2018 production guidance to 16,750 to 17,250 boe/d (69% - 73% oil), up 1% from previous full year 2018 guidance, which implies 54% annualized growth over full year 2017 production 

 About Viper Energy Partners LP

Viper is a limited partnership formed by Diamondback to own, acquire and exploit oil and natural gas properties in North America, with a focus on oil-weighted basins, primarily the Permian Basin in West Texas. For more information, please visit www.viperenergy.com.

About Diamondback

Diamondback Energy is an independent oil and natural gas company headquartered in Midland, TX. Diamondback’s growth strategy is focused on the acquisition, development, exploration and exploitation of unconventional, long-life, onshore oil and natural gas reserves in the major oil producing Permian Basin in West Texas. The Company’s operations are directed primarily at the large acreage areas of the Clearfork, Spraberry, Wolfcamp, Cline, Strawn and Atoka formations, collectively known as the Wolfberry Trend.

Source Diamondback Energy, Viper Energy

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