Viper Energy (NASDAQ:VNOM) Partners LP, a subsidiary of Diamondback (NASDAQ:FANG) Energy Inc., has reported growth in its Q3 2023 financial results, with production increasing by approximately 5%, and a consolidated net income of $207.2 million. The company has also announced its conversion to a Delaware corporation, Viper Energy, Inc., effective November 13, 2023. This transition is a crucial part of Viper's growth strategy, promising increased governance rights for limited partners and the potential for expanding trading liquidity.
The company's average unhedged realized prices for Q3 were $82.48 per barrel of oil, $1.81 per Mcf of natural gas, and $21.58 per barrel of natural gas liquids. These prices led to a total equivalent realized price of $52.57/boe. Viper recorded a total operating income of $293.2 million and ended the quarter with a cash balance of $146.8 million.
In addition to its financial growth, Viper declared base and variable cash distributions for Q3 2023 payable on November 24, 2023. It also repurchased 0.4 million common units for an aggregate purchase price of $9.6 million in Q3, bringing the total repurchases to 12.4 million common units at an aggregate cost of $287.1 million since the initiation of the common unit repurchase program.
On November 1, 2023, Viper acquired mineral and royalty interests from Warwick Capital Partners and GRP Energy Capital affiliates for about 9.02 million common units and $750.0 million in cash. These interests represent approximately 4,600 net royalty acres in the Permian Basin and an additional 2,700 net royalty acres in other major basins.
Viper also completed the offering of $400.0 million in aggregate principal amount of 7.375% Senior Notes due 2031 to pay a portion of the cash consideration for the GRP Acquisition. After the conversion, Diamondback will beneficially own 56% of Viper Energy, Inc.'s outstanding shares.
The conversion effective time will see the outstanding common units and Class B units of Viper convert into Class A Common Stock and Class B Common Stock, respectively. Following this conversion, Nasdaq will cease trading of the common units and commence trading of the Class A Common Stock under the existing ticker symbol “VNOM”.
Viper has set Q4 2023 production guidance at 24,250 to 24,750 bo/d and full year 2023 guidance at approximately 22,000 bo/d. The company expects further growth after the GRP Acquisition, providing preliminary full year 2024 production guidance and anticipating Q4 production to be around 24.5 mbo/d or roughly 26.0 if the GRP assets were owned for the entire quarter.
InvestingPro Insights
According to InvestingPro, Viper Energy Partners LP (VNOM) has shown consistent growth in earnings per share and operates with a high return on assets, a promising sign for potential investors. The company's stock generally trades with low price volatility, providing a stable investment opportunity.
InvestingPro's real-time data reveals VNOM's market cap stands at $4550M USD, with a P/E Ratio of 12.51. The company's revenue for the last twelve months as of Q2 2023 was $717.05M USD, showing a growth of 1.88%. The company also offers an attractive dividend yield of 3.81%.
InvestingPro offers numerous additional tips and data points for VNOM and other companies, providing a comprehensive view for investors looking to make informed decisions.
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