PRESS RELEASES
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Viper Energy Partners LP, a Subsidiary of Diamondback Energy, Inc., Reports Second Quarter 2018 Financial and Operating Results
HIGHLIGHTS
- Previously announced cash distribution of
$0.600 per common unit declared for Q2 2018, up 25% quarter over quarter and 81% year over year; implies a 6.4% annualized yield based onAugust 6, 2018 unit closing price of$37.37 - Q2 2018 net income of
$99.4 million , consolidated adjusted EBITDA (as defined and reconciled below) of$69.1 million and cash available for distribution to Limited Partner units (as defined below) of$25.0 million - Q2 2018 production of 16,323 boe/d (71% oil), up 16% over Q1 2018 and 56% year over year
- Initiating average production guidance for Q3 2018/Q4 2018 of 17,500 to 19,000 boe/d, the midpoint of which is up 12% from Q2 2018 production
- Raising full year 2018 production guidance to 16,500 to 17,000 boe/d (70% - 73% oil), up 5% from previous full year 2018 guidance and implies 52% annualized growth over full year 2017 production
- Closed 29 acquisitions for an aggregate purchase price of approximately
$103 million in Q2 2018, increasing Viper's mineral assets by 924 net royalty acres - From the end of Q2 2018 through
July 23, 2018 , Viper had acquired or entered into definitive purchase agreements with unrelated third parties for 557 net royalty acres for an aggregate purchase price of approximately$61 million - Agreed to a drop down transaction ("drop down") from Diamondback for 1,696 net royalty acres for a purchase price of
$175 million , subject to post-closing adjustments; expected to close inAugust 2018 and will increase Viper's pro forma mineral assets to 13,705 net royalty acres - As of
August 7, 2018 , there were 32 active rigs on Viper's mineral acreage and approximately 367 active permits which had been filed in the past six months
“2018 has been an exceptional year so far for Viper as we have continued to grow production at industry-leading rates due to robust growth on our legacy assets as well as outperformance on our recent acquisitions. Our acquisition machine continues to consolidate Tier 1 properties throughout the
Mr. Stice continued, “Viper’s focus on accretive acquisitions combined with our best-in-class cost structure has directly led to seven consecutive Company record distributions. Looking forward, we now have the conviction to raise the midpoint of our full year production guidance by 5%, which will represent annualized production growth of over 50% for the full year 2018.”
FINANCIAL UPDATE
Viper's previously announced second quarter 2018 average realized prices were
During the second quarter of 2018, the Company recorded total operating income of
As of June 30, 2018, the Company had a cash balance of
SECOND QUARTER 2018 CASH DISTRIBUTION
As previously announced, the Board of Directors of Viper's general partner declared a cash distribution for the three months ended
ACQUISITION UPDATE
During the second quarter of 2018, Viper acquired 924 net royalty acres for an aggregate purchase price of
GUIDANCE UPDATE
Below is Viper's updated guidance for the full year 2018, as well as average production guidance for Q3 2018 and Q4 2018.
Viper Energy Partners | ||
Q3/Q4 2018 Net Production – MBoe/d | 17.5 - 19.0 | |
Total 2018 Net Production – MBoe/d | 16.5 - 17.0 | |
Oil Production - % of Net Production | 70% - 73% | |
Unit costs ($/boe) | ||
Gathering & Transportation | $0.10 - $0.20 | |
Depletion | $8.00 - $11.00 | |
G&A | ||
Cash G&A | $0.75 - $1.25 | |
Non-Cash Unit-Based Compensation | $0.75 - $1.25 | |
Production and Ad Valorem Taxes (% of Revenue) (a) | 7% | |
Capital Budget ($ - Million) | ||
2018 Capital Spend | n/a |
- Includes production taxes of 4.6% for crude oil and 7.5% for natural gas and NGLs and ad valorem taxes.
CONFERENCE CALL
Viper will host a conference call and webcast for investors and analysts to discuss their results for the second quarter of 2018 on
About
Viper is a limited partnership formed by Diamondback to own, acquire and exploit oil and natural gas properties in
About
Diamondback is an independent oil and natural gas company headquartered in
Forward-Looking Statements
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
Viper Energy Partners LP | |||||||||||||
Consolidated Statements of Operations | |||||||||||||
(unaudited, in thousands, except per unit data) | |||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
(In thousands) | |||||||||||||
Operating income: | |||||||||||||
Royalty income | $ | 74,420 | $ | 35,933 | $ | 136,813 | $ | 67,983 | |||||
Lease bonus income | 928 | 689 | 928 | 2,291 | |||||||||
Other operating income | 58 | — | 108 | — | |||||||||
Total operating income | 75,406 | 36,622 | 137,849 | 70,274 | |||||||||
Costs and expenses: | |||||||||||||
Production and ad valorem taxes | 4,867 | 2,773 | 9,106 | 4,843 | |||||||||
Gathering and transportation | 143 | 144 | 408 | 287 | |||||||||
Depletion | 13,260 | 9,672 | 24,785 | 17,519 | |||||||||
General and administrative expenses | 2,210 | 1,554 | 4,921 | 3,696 | |||||||||
Total costs and expenses | 20,480 | 14,143 | 39,220 | 26,345 | |||||||||
Income from operations | 54,926 | 22,479 | 98,629 | 43,929 | |||||||||
Other income (expense): | |||||||||||||
Interest expense, net | (3,252 | ) | (643 | ) | (5,350 | ) | (1,255 | ) | |||||
Gain on revaluation of investment | 4,465 | — | 5,364 | — | |||||||||
Other income, net | 447 | 313 | 839 | 127 | |||||||||
Total other income (expense), net | 1,660 | (330 | ) | 853 | (1,128 | ) | |||||||
Income before income taxes | 56,586 | 22,149 | 99,482 | 42,801 | |||||||||
Benefit from income taxes | (71,878 | ) | — | (71,878 | ) | — | |||||||
Net income | 128,464 | 22,149 | 171,360 | 42,801 | |||||||||
Net income attributable to non-controlling interest | 29,060 | — | 29,060 | — | |||||||||
Net income attributable to Viper Energy Partners LP | $ | 99,404 | $ | 22,149 | $ | 142,300 | $ | 42,801 | |||||
Net income attributable to common limited partners per unit: | |||||||||||||
Basic | $ | 1.36 | $ | 0.23 | $ | 1.52 | $ | 0.44 | |||||
Diluted | $ | 1.35 | $ | 0.23 | $ | 1.52 | $ | 0.44 | |||||
Weighted average number of limited partner units outstanding: | |||||||||||||
Basic | 73,336 | 97,677 | 93,506 | 96,377 | |||||||||
Diluted | 73,427 | 97,677 | 93,612 | 96,382 | |||||||||
Viper Energy Partners LP | |||||||||||||||||
Selected Operating Data | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three Months Ended June 30, 2018 |
Three Months Ended March 31, 2018 |
Three Months Ended June 30, 2017 |
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Production Data: | |||||||||||||||||
Oil (MBbls) | 1,052 | 906 | 699 | ||||||||||||||
Natural gas (MMcf) | 1,280 | 1,162 | 735 | ||||||||||||||
Natural gas liquids (MBbls) | 221 | 171 | 133 | ||||||||||||||
Combined volumes (MBOE)(1) | 1,485 | 1,271 | 955 | ||||||||||||||
Daily combined volumes (BOE/d) | 16,323 | 14,122 | 10,491 | ||||||||||||||
% Oil | 71 | % | 71 | % | 73 | % | |||||||||||
Average sales prices: | |||||||||||||||||
Oil (per Bbl) | $ | 62.66 | $ | 61.43 | $ | 45.43 | |||||||||||
Natural gas (per Mcf) | 2.07 | 2.22 | 2.66 | ||||||||||||||
Natural gas liquids (per Bbl) | 26.68 | 24.17 | 16.63 | ||||||||||||||
Combined (per BOE) | 50.10 | 49.09 | 37.64 | ||||||||||||||
Average Costs (per BOE) | |||||||||||||||||
Production and ad valorem taxes | $ | 3.28 | $ | 3.34 | $ | 2.90 | |||||||||||
Gathering and transportation expense | 0.10 | 0.21 | 0.15 | ||||||||||||||
General and administrative - cash component | 1.18 | 1.12 | 0.88 | ||||||||||||||
Total operating expense - cash | $ | 4.56 | $ | 4.67 | $ | 3.93 | |||||||||||
General and administrative - non-cash component | $ | 0.31 | $ | 1.01 | $ | 0.75 | |||||||||||
Interest expense | 2.19 | 1.65 | 0.67 | ||||||||||||||
Depletion | 8.93 | 9.07 | 10.13 |
- Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Viper defines Adjusted EBITDA as net income plus interest expense, net, non-cash unit-based compensation expense, depletion, gain on revaluation of investments and benefit from income taxes. Adjusted EBITDA is not a measure of net income as determined by United States’ generally accepted accounting principles, or GAAP. Management believes Adjusted EBITDA is useful because it allows it to more effectively evaluate Viper’s operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of Viper’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Viper defines cash available for distribution generally as an amount equal to its Adjusted EBITDA for the applicable quarter less cash needed for debt service and other contractual obligations and fixed charges and reserves for future operating or capital needs that the board of directors of Viper’s general partner may deem appropriate. Viper’s computations of Adjusted EBITDA and cash available for distribution may not be comparable to other similarly titled measures of other companies or to such measure in its credit facility or any of its other contracts.
The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA and cash available for distribution to the GAAP financial measure of net income.
Viper Energy Partners LP | ||||||||||||||||||||||||||||
(unaudited, in thousands, except per unit data) | ||||||||||||||||||||||||||||
Three Months Ended June 30, 2018 |
Three Months Ended March 31, 2018 |
Three Months Ended June 30, 2017 |
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Net income | $ | 128,464 | $ | 42,896 | $ | 22,149 | ||||||||||||||||||||||
Interest expense, net | 3,252 | 2,098 | 643 | |||||||||||||||||||||||||
Non-cash unit-based compensation expense | 452 | 1,288 | 718 | |||||||||||||||||||||||||
Depletion | 13,260 | 11,525 | 9,672 | |||||||||||||||||||||||||
Gain on revaluation of investment | (4,465 | ) | (899 | ) | — | |||||||||||||||||||||||
Benefit from income taxes | (71,878 | ) | — | — | ||||||||||||||||||||||||
Consolidated Adjusted EBITDA | 69,085 | 56,908 | 33,182 | |||||||||||||||||||||||||
EBITDA attributable to noncontrolling interest | (43,642 | ) | — | — | ||||||||||||||||||||||||
Adjusted EBITDA attributable to Viper Energy Partners LP | $ | 25,443 | $ | 56,908 | $ | 33,182 | ||||||||||||||||||||||
Adjustments to reconcile Adjusted EBITDA to cash available for distribution: | ||||||||||||||||||||||||||||
Debt service, contractual obligations, fixed charges and reserves | (437 | ) | (1,952 | ) | (685 | ) | ||||||||||||||||||||||
Units - dividend equivalent rights | (25 | ) | — | — | ||||||||||||||||||||||||
Preferred distributions | (23 | ) | — | — | ||||||||||||||||||||||||
Cash available for distribution | $ | 24,958 | $ | 54,956 | $ | 32,497 | ||||||||||||||||||||||
Limited Partner units outstanding | 41,471 | 113,882 | 97,764 | |||||||||||||||||||||||||
Cash available for distribution per limited partner unit | $ | 0.60 | $ | 0.48 | $ | 0.332 | ||||||||||||||||||||||
Investor Contact:
+1 432.221.7467
alawlis@viperenergy.com