FIRST QUARTER HIGHLIGHTS
Q1 2023 average production of 20,111 bo/d (34,967 boe/d), an increase of 1% from Q4 2022 and 11% year over year; highest in Company history
Received $7.5 million in lease bonus income
Q1 2023 consolidated net income (including non-controlling interest) of $88.3 million; net income attributable to Viper Energy Partners LP of $34.0 million, or $0.47 per common unit
Q1 2023 cash available for distribution to Viper’s common units (as defined and reconciled below) of $50.8 million, or $0.70 per common unit
Q1 2023 base cash distribution of $0.25 per common unit; implies a 3.4% annualized yield based on the April 28, 2023 unit closing price of $29.44
Q1 2023 variable cash distribution of $0.08 per common unit; total base-plus-variable distribution of $0.33 per common unit implies a 4.5% annualized yield based on the April 28, 2023 unit closing price of $29.44
Repurchased 1.1 million common units in Q1 2023 for $32.7 million, excluding excise tax (average price of $29.33 per unit)
Total Q1 2023 return of capital to LP unitholders of $38.1 million, or $0.53 per common unit, represents 75% of cash available for distribution from unit repurchases and the declared base-plus-variable distribution
Acquired 819 net royalty acres (696 of which are operated by Diamondback) for an aggregate purchase price of $115.8 million, including a $75.1 million drop down transaction from Diamondback
241 total gross (6.0 net 100% royalty interest) horizontal wells turned to production on Viper’s acreage during Q1 2023 with an average lateral length of 10,384 feet
Initiating average daily production guidance for Q2 2023 and Q3 2023 of 21,000 to 22,500 bo/d (36,250 to 38,750 boe/d), the midpoint of which implies 8.2% growth relative to Q1 2023
Increasing full year 2023 average daily production to 20,500 to 22,500 bo/d (35,250 to 38,750 boe/d), an increase of 2.4% at the midpoint
“The first quarter was a strong start to the year for Viper as oil production set a Company record for a fourth consecutive quarter. The advantaged nature of the royalty business model was highlighted during the quarter as we maintained our strong free cash flow conversion despite the volatility in commodity prices. We took advantage of this volatility through our flexible return of capital program by opportunistically repurchasing over one million common units while still being set to pay a distribution that provides an annualized yield of over four percent,” stated Travis Stice, Chief Executive Officer of Viper’s General Partner.
Mr. Stice continued, “Viper today also announced it completed a drop down transaction of certain royalty interests from Diamondback on operated properties located in Ward County. This transaction provides high NRI exposure to Diamondback’s expected development plan in the Southern Delaware Basin over the next several years and will enhance Viper’s growth profile over that same period. As a result of this acquisition, as well as continued outperformance from our legacy asset base, we have increased production guidance for 2023 by over two percent at the midpoint.”
DROP DOWN TRANSACTION
On March 8, 2023, Viper completed the acquisition of certain royalty interests from subsidiaries of Diamondback for approximately $75.1 million in cash, subject to customary post-closing adjustments. The acquisition was funded through a combination of cash on hand and borrowings under the Company’s revolving credit facility.
DROP DOWN HIGHLIGHTS
660 net royalty acres, 100% of which are operated by Diamondback, in Ward County
Acreage provides a 6.9% average NRI across ten Diamondback operated units
Q1 2023 average daily production of approximately 300 bo/d (72% oil); contributed approximately 80 bo/d of production to Q1 2023 financials given March 8, 2023 closing date
Full year 2023 estimated average daily production of 525 bo/d
Full year 2024 estimated average daily production of 550 bo/d