PRESS RELEASES
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Viper Energy Partners LP, a Subsidiary of Diamondback Energy, Inc., Reports Third Quarter 2018 Financial and Operating Results
HIGHLIGHTS
- Q3 2018 cash distribution of
$0.58 per common unit , up 72% year over year; implies a 6.4% annualized yield based on theOctober 26, 2018 unit closing price of$36.29 - Q3 2018 consolidated net income (including non-controlling interest) of
$50.8 million , consolidated adjusted EBITDA (as defined and reconciled below) of$72.4 million and cash available for distribution to Limited Partner units (as defined below) of$29.9 million - Q3 2018 production of 18,384 boe/d (69% oil), up 13% over Q2 2018 and 46% year over year
- Initiating average production guidance for Q4 2018/Q1 2019 of 18,500 to 20,000 boe/d, the midpoint of which is up 5% from Q3 2018 production
- Raising full year 2018 production guidance to 16,750 to 17,250 boe/d (69% - 73% oil), up 1% from previous full year 2018 guidance, which implies 54% annualized growth over full year 2017 production
- Closed 15 acquisitions for an aggregate purchase price of approximately
$260 million in Q3 2018, including a completed drop down from Diamondback; increases Viper's mineral assets by 2,457 net royalty acres to 13,908 total net royalty acres, up 52% year over year - As of
October 22, 2018 , there were 24 active rigs on Viper's mineral acreage and approximately 523 active drilling permits filed in the past six months
“During the third quarter, Viper surpassed
Mr. Stice continued, “As a direct result of Viper's accretive acquisitions, as well as continued organic growth on our legacy assets, Viper once again achieved significant quarter over quarter production growth. We have raised our full year production guidance so that the midpoint now represents 54% year over year growth. Looking ahead to 2019, we are excited about our organic growth profile as well as the continued execution of our acquisition strategy, including further drop downs from Diamondback.”
FINANCIAL UPDATE
Viper's third quarter 2018 average realized prices were
During the third quarter of 2018, the Company recorded total operating income of
As of September 30, 2018, the Company had a cash balance of
THIRD QUARTER 2018 CASH DISTRIBUTION
The Board of Directors of Viper's general partner declared a cash distribution for the three months ended
ACQUISITION UPDATE
During the third quarter of 2018, Viper acquired 760 net royalty acres for an aggregate purchase price of
GUIDANCE UPDATE
Below is Viper's updated guidance for the full year 2018, as well as average production guidance for Q4 2018 and Q1 2019.
Viper Energy Partners | |
Q4 2018 / Q1 2019 Net Production – MBoe/d | 18.50 - 20.00 |
Total 2018 Net Production – MBoe/d | 16.75 - 17.25 |
Oil Production - % of Net Production | 69% - 73% |
Unit costs ($/boe) | |
Gathering & Transportation | $0.20 - $0.40 |
Depletion | $8.00 - $11.00 |
G&A | |
Cash G&A | $0.75 - $1.25 |
Non-Cash Unit-Based Compensation | $0.50 - $0.75 |
Production and Ad Valorem Taxes (% of Revenue) (a) | 7% |
Capital Budget ($ - 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 third 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 September 30, | Nine Months Ended September 30, | ||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||
(In thousands) | |||||||||||||
Operating income: | |||||||||||||
Royalty income | $ | 74,386 | $ | 42,211 | $ | 211,199 | $ | 110,194 | |||||
Lease bonus income | 4,205 | 322 | 5,133 | 2,613 | |||||||||
Other operating income | 12 | — | 120 | — | |||||||||
Total operating income | 78,603 | 42,533 | 216,452 | 112,807 | |||||||||
Costs and expenses: | |||||||||||||
Production and ad valorem taxes | 5,027 | 2,825 | 14,133 | 7,668 | |||||||||
Gathering and transportation | 889 | 205 | 1,297 | 492 | |||||||||
Depletion | 16,532 | 11,068 | 41,317 | 28,587 | |||||||||
General and administrative expenses | 1,309 | 1,368 | 6,230 | 5,064 | |||||||||
Total costs and expenses | 23,757 | 15,466 | 62,977 | 41,811 | |||||||||
Income from operations | 54,846 | 27,067 | 153,475 | 70,996 | |||||||||
Other income (expense): | |||||||||||||
Interest expense, net | (3,711 | ) | (859 | ) | (9,061 | ) | (2,114 | ) | |||||
Gain (loss) on revaluation of investment | (199 | ) | — | 5,165 | — | ||||||||
Other income, net | 640 | 399 | 1,479 | 526 | |||||||||
Total other income (expense), net | (3,270 | ) | (460 | ) | (2,417 | ) | (1,588 | ) | |||||
Income before income taxes | 51,576 | 26,607 | 151,058 | 69,408 | |||||||||
Provision for (benefit from) income taxes | 764 | — | (71,114 | ) | — | ||||||||
Net income | 50,812 | 26,607 | 222,172 | 69,408 | |||||||||
Net income attributable to non-controlling interest | 48,466 | — | 77,526 | — | |||||||||
Net income attributable to Viper Energy Partners LP | $ | 2,346 | $ | 26,607 | $ | 144,646 | $ | 69,408 | |||||
Net income attributable to common limited partners per unit: | |||||||||||||
Basic | $ | 0.05 | $ | 0.24 | $ | 1.85 | $ | 0.69 | |||||
Diluted | $ | 0.05 | $ | 0.24 | $ | 1.85 | $ | 0.69 | |||||
Weighted average number of common limited partner units outstanding: | |||||||||||||
Basic | 48,234 | 110,377 | 78,250 | 101,095 | |||||||||
Diluted | 48,304 | 110,424 | 78,319 | 101,143 |
Viper Energy Partners LP | |||||||||||||||||
Selected Operating Data | |||||||||||||||||
(unaudited) | |||||||||||||||||
Three Months Ended September 30, 2018 |
Three Months Ended June 30, 2018 |
Three Months Ended September 30, 2017 |
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Production Data: | |||||||||||||||||
Oil (MBbls) | 1,167 | 1,052 | 794 | ||||||||||||||
Natural gas (MMcf) | 1,624 | 1,280 | 1,236 | ||||||||||||||
Natural gas liquids (MBbls) | 254 | 221 | 160 | ||||||||||||||
Combined volumes (MBOE)(1) | 1,691 | 1,485 | 1,160 | ||||||||||||||
Daily combined volumes (BOE/d) | 18,384 | 16,323 | 12,611 | ||||||||||||||
% Oil | 69 | % | 71 | % | 68 | % | |||||||||||
Average sales prices: | |||||||||||||||||
Oil (per Bbl) | $ | 54.51 | $ | 62.66 | $ | 45.33 | |||||||||||
Natural gas (per Mcf) | 2.42 | 2.07 | 2.55 | ||||||||||||||
Natural gas liquids (per Bbl) | 27.05 | 26.68 | 19.10 | ||||||||||||||
Combined (per BOE) | 43.98 | 50.10 | 36.38 | ||||||||||||||
Average Costs (per BOE) | |||||||||||||||||
Production and ad valorem taxes | $ | 2.97 | $ | 3.28 | $ | 2.43 | |||||||||||
Gathering and transportation expense | 0.53 | 0.10 | 0.18 | ||||||||||||||
General and administrative - cash component | 0.52 | 1.18 | 0.75 | ||||||||||||||
Total operating expense - cash | $ | 4.02 | $ | 4.56 | $ | 3.36 | |||||||||||
General and administrative - non-cash component | $ | 0.25 | $ | 0.31 | $ | 0.43 | |||||||||||
Interest expense | 2.19 | 2.19 | 0.74 | ||||||||||||||
Depletion | 9.77 | 8.93 | 9.54 |
- 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, loss (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, fixed charges and reserves for future operating or capital needs that the board of directors of Viper’s general partner may deem appropriate, dividend equivalent rights and preferred distributions. 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 September 30, 2018 |
Three Months Ended June 30, 2018 |
Three Months Ended September 30, 2017 |
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Net income | $ | 50,812 | $ | 128,464 | $ | 26,607 | ||||||||||||||||||||||
Interest expense, net | 3,711 | 3,252 | 859 | |||||||||||||||||||||||||
Non-cash unit-based compensation expense | 426 | 452 | 503 | |||||||||||||||||||||||||
Depletion | 16,532 | 13,260 | 11,068 | |||||||||||||||||||||||||
Loss (gain) on revaluation of investment | 199 | (4,465 | ) | — | ||||||||||||||||||||||||
Provision for (benefit from) income taxes | 764 | (71,878 | ) | — | ||||||||||||||||||||||||
Consolidated Adjusted EBITDA | 72,444 | 69,085 | 39,037 | |||||||||||||||||||||||||
EBITDA attributable to non-controlling interest | (42,256 | ) | (43,642 | ) | — | |||||||||||||||||||||||
Adjusted EBITDA attributable to Viper Energy Partners LP | $ | 30,188 | $ | 25,443 | $ | 39,037 | ||||||||||||||||||||||
Adjustments to reconcile Adjusted EBITDA to cash available for distribution: | ||||||||||||||||||||||||||||
Debt service, contractual obligations, fixed charges and reserves | (184 | ) | (437 | ) | (708 | ) | ||||||||||||||||||||||
Units - dividend equivalent rights | (48 | ) | (25 | ) | — | |||||||||||||||||||||||
Preferred distributions | (40 | ) | (23 | ) | — | |||||||||||||||||||||||
Cash available for distribution | $ | 29,916 | $ | 24,958 | $ | 38,329 | ||||||||||||||||||||||
Limited Partner units outstanding | 51,654 | 41,471 | 113,882 | |||||||||||||||||||||||||
Cash available for distribution per common limited partner unit | $ | 0.58 | $ | 0.60 | $ | 0.34 |
Investor Contact:
+1 432.221.7467
alawlis@viperenergy.com