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MIDLAND, Texas, July 31, 2018 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (“Diamondback”), today announced its second quarter 2018 cash distribution, provided an update on second quarter operations and scheduled its second quarter 2018 conference call.
SECOND QUARTER 2018 CASH DISTRIBUTION
The Board of Directors of Viper’s general partner has declared a cash distribution of $0.600 per common unit for the three-month period ended June 30, 2018, payable on August 20, 2018 to common unitholders of record as of the close of business on August 13, 2018.
The second quarter 2018 cash distribution increased 25% to $0.600 per unit from $0.480 per unit in the first quarter of 2018. When annualized, this distribution represents an approximate 7.4% yield based on the closing price for Viper's common units on July 30, 2018.
Viper announced that production for the second quarter of 2018 was 16.3 Mboe/d (11.6 Mbo/d; 71% oil), an increase of approximately 16% from its Q1 2018 average daily production of 14.1 Mboe/d.
Viper's second quarter 2018 average realized prices were $62.66 per barrel of oil, $2.07 per Mcf of natural gas and $26.68 per barrel of natural gas liquids, resulting in a total equivalent price of $50.10/boe, up 33% year over year from $37.64/boe in Q2 2017 and up 2% from the Q1 2018 total equivalent price of $49.09/boe.
ACQUISITION AND DROP DOWN UPDATE
During the second quarter of 2018, Viper acquired 924 net royalty acres for an aggregate purchase price of $103 million. To date in the third quarter of 2018, Viper has acquired or entered into definitive purchase agreements for 2,253 net royalty acres for an aggregate purchase price of $236 million, including $175 million from Diamondback via a drop down transaction (“drop down”) approved by the Board of Directors of the General Partner of Viper and the Board of Directors of Diamondback. This drop down is expected to close in the third quarter of 2018 and includes 1,696 net royalty acres, approximately 80% of which are operated by Diamondback, primarily in Pecos County.
SunTrust Robinson Humphrey (“STRH”) acted as exclusive financial advisor to Viper in connection with the drop down and delivered an opinion to the Board of Directors of the General Partner of Viper (the “Board”) that the purchase price to be paid by Viper’s operating company in the drop down is fair to the operating company from a financial perspective. STRH’s opinion is subject to the assumptions, qualifications and limitation contained in the opinion letter provided to the Board. The Board considered numerous factors in approving the drop down, including STRH’s fairness opinion.
The pending acquisitions are expected to close during the third quarter of 2018. However, these transactions remain subject to completion of due diligence and satisfaction of other closing conditions, and there can be no assurance that they will be completed as planned or at all. If completed as planned, these transactions will increase Viper’s pro forma footprint to a total of 13,705 net royalty acres. Viper financed the recent acquisitions with cash on hand and borrowings under its revolving credit facility. Viper intends to finance the pending acquisitions through a combination of cash on hand, borrowings under its revolving credit agreement and, subject to market conditions and other factors, proceeds from one or more capital markets transactions, which may include debt or equity offerings.
“During the second quarter, Viper achieved significant quarter over quarter production growth due to continually increasing activity levels across our asset base and also recognized our highest average realized price in 14 quarters. Our acquisitions continue to exceed expectations and drive consistent production growth, including the acreage we acquired in the Eagle Ford as well as other acreage operated by third parties. As a result, we set a 7th consecutive Company record distribution and have now increased our distribution for nine consecutive quarters,” stated Travis Stice, Chief Executive Officer of Viper’s general partner.
Mr. Stice continued, “Viper continues to be active in the acquisition market, as we closed 29 acquisitions for over $100 million during a busy second quarter. The recently approved drop down from Diamondback, which will be immediately accretive upon closing, is a transformational event for Viper in that Pecos County is now larger than Spanish Trail in terms of size and Diamondback-operated acreage. This mineral acreage has active development and significant forward visibility with 17 wells expected to be drilled during the remainder of 2018 and over 50 anticipated in 2019.”
Viper also announced today that it plans to release second quarter 2018 financial results on August 8, 2018 after the market closes.
In connection with the earnings release, Viper will host a conference call and webcast for investors and analysts to discuss their results for the second quarter of 2018 on Thursday, August 9, 2018 at 10:30 a.m. CT. Participants should call (844) 400-1537 (United States/Canada) or (703) 326-5198 (International) and use the confirmation code 6898669. A telephonic replay will be available from 1:30 p.m. CT on Thursday, August 9, 2018 through Thursday, August 16, 2018 at 1:30 p.m. CT. To access the replay, call (855) 859-2056 (United States/Canada) or (404) 537-3406 (International) and enter confirmation code 6898669. A live broadcast of the earnings conference call will also be available via the internet at www.viperenergy.com under the “Investor Relations” section of the site. A replay will also be available on the website following the call.
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 Energy, Inc.
Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.
This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that Viper assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current beliefs, based on currently available information, as to the outcome and timing of future events, including specifically the statements regarding any pending, completed or future acquisitions discussed above. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Viper. Information concerning these risks and other factors can be found in Viper's filings with the Securities and Exchange Commission, including its Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the Securities and Exchange Commission's web site at http://www.sec.gov. Viper undertakes no obligation to update or revise any forward-looking statement.