The following is a summary of the Viper Energy, Inc. (VNOM) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Viper Energy reported oil production growth of approximately 4% quarter-over-quarter and an almost 9% increase in cash available for distribution over the same period.

• Updated production guidance for the full year 2024 to reflect increased expectations, including 1.5% growth for Q3. This is despite the divestiture of non-Permian assets which resulted in a loss of about 150 barrels of oil per day of quarterly production.

• The annual base dividend has been increased by 11%, reflecting a sustainable and growing cash flow which is projected to be about 50% of the expected free cash flow at $50 WTI, secure down to below $30 WTI.

Business Progress:

• Viper's royalty acreage benefits from Diamondback's ongoing large-scale development, enhancing production levels.

• Conversion to a Delaware corporation has improved governance rights for shareholders and was expected to enlarge investor base and improve trading liquidity, affirmed by inclusion in the Russell 1000 index during Q2.

• The company's strategy focuses on being the preferred consolidator in the Permian, evidenced by the efficient handling and quick monetization of non-core assets post-acquisition.

Opportunities:

• The company plans to consolidate its position further by targeting significant acquisition opportunities, particularly in their core area - the Permian Basin.

• Anticipation of a production increase in the second half of the year, highlighting robust activity levels and expected contributions from additional zones like the Upper Spraberry and Wolfcamp D.

Risks:

• Albeit increasing production guidance, there is potential volatility in operational tempo as indicated by the subtle admission that rig counts may fluctuate, which could affect cycle times and conversion rates.

• Exposure to market dynamics and rig activity, especially with their reliance on partnerships and the operational efficiencies of entities like Diamondback.

More details: Viper Energy IR

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