Energy Prospectus

On May 10, 2018 Viper Energy Partners LP filed the necessary paperwork with the Feds to become a C-Corp for income tax purposes. All distributions to unit holders after that date will be treated as regular dividends, making VNOM more appropriate for IRAs.

Based on my forecast, Viper will be increasing their quarterly distributions by quite a bit quarter-after-quarter.

If you are investing for High Yield + Growth of principle, then take a hard look at this one.

I just posted our profile on Viper and my forecast/valuation model for the company to the EPG website. My valuation today is $46.00/unit, but the valuation has a lot of upside from here.

NONE of Viper's production is hedged. It is heavily weighted to oil and increasing oil prices flow right to the bottom line net of taxes, so quarterly distributions are going up. Take a hard look at the chart on page 7.

Dan
The May press release also has language stating that the minerals business will be taxed as a partnership. Since you are familiar with this company, can you clarify the C corp transition with this language of partnership taxation.

Here is the press release. I agree it is a bit confusing.

Viper Energy Partners LP, A Subsidiary Of Diamondback Energy, Inc., Announces Effective Date Of Tax Status Change From Pass-Through Partnership To A Taxable Entity

MIDLAND, Texas, May 09, 2018 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (NASDAQ:VNOM) (“Viper”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), today announced that Viper’s federal income tax status changed from that of a pass-through partnership to that of a taxable entity via a “check the box” election will be effective as of tomorrow, May 10, 2018.

After the effectiveness of the tax status election and the completion of related transactions, the minerals business will continue to be conducted through Viper's wholly-owned subsidiary, which will be taxed as a partnership for federal and state income tax purposes.
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The actual business is run by a 100% owned subsidiary that will continue to be a partnership for tax purposes. It's taxable income will "flow through" to the public company, Viper Energy Partners LP (VNOM), which is still an LLC that on May 10th "checked the box" to be taxes as a C-Corp.

Go to the Viper website at this link: https://www.viperenergy.com/about/overview
On the right side of the screen you will find their current corporate PowerPoint presentation, click on it.
On the 3rd slide, look what it says under "Corporate Tax Status Conversion"
Come back and tell us what it says.

Thanks, actually I contacted IR for clarification of the press release and all purchases of VNOM get a 1099