Viper Energy, Inc. · NASDAQ:VNOM
Viper Energy — Q3 2021 Earnings Presentation
19 slides from Viper Energy's earnings presentation, Nov 4, 2021
Slide 1: Investor Presentation
Investor Presentation November 2021
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains “forward-looking statements” within the meaning of the securities laws. All statements, other than statements of historical fact, included in this presentation that address activities, events or developments that Viper Energy Partners LP (“Viper,
Slide 3: Viper: Investment Highlights
Viper: Investment Highlights 3Q ‘21 cash available for distribution of $0.54/unit; Board approved distribution of $0.38/unit, up 15% quarter over quarter, represents ~70% of cash available for distribution Repurchased 765,512 common units at an average price of $17.95/unit for a total cost of ~$
Slide 4: Viper Energy Partners Overview
Viper Energy Partners Overview Differentiated Investment Opportunity Viper Mineral and Royalty Assets Unique Relationship with Primary Operator VNOM royalty acreage Diamondback relationship and ownership reduces uncertainty around pace of development FANG acreage Free Cash Flow Positive Through th
Slide 5: Free Cash Flow Sensitivity
Free Cash Flow Sensitivity Viper is uniquely positioned to generate free cash flow through commodity price cycles with high leverage to increasing oil prices; further upside to commodity prices in 2022 as hedges roll off At $75 WTI and production held flat relative to our average Q4 2021 / Q1 20
Slide 6: Record Cash Flow per Unit
Record Cash Flow per Unit Viper generated record recurring cash flow per unit during Q3 2021 as commodity prices recovered and production maintained strong levels In addition to its resilient production base and high leverage to increasing oil prices, Viper also continues to reduce its unit coun
Slide 7: Industry Leading Cash Margins
Industry Leading Cash Margins Viper Cash Margins Versus Mineral and E&P Peers(1) % of Realized Price Unhedged Cash Margin ($/Boe) Mineral Peer E&P Peer 90% 84% $45 Cash Margin (% of Realized) 80% 78% 77% 80% 76% 73% $40 72% 71% Cash Margin ($/Boe) 69% 69% 68% 70% 61% $35 59% 59% 60% 52% $30 50% $25
Slide 8: Portfolio Overview
Portfolio Overview 223 gross (3.1 net) horizontal wells turned to production during Q3 2021 Near-term inventory of 9.5 net wells currently in the process of active development and an additional 9.3 net line-of-sight wells not currently being developed 35 gross rigs currently operating on Viper
Slide 9: Diamondback Activity on Viper's Acreage
Diamondback Activity on Viper’s Acreage Higher exposure to Diamondback’s completions with a higher average NRI supports Viper’s production despite lower gross Diamondback activity levels Following the closing of the Swallowtail acquisition, Viper has unprecedented, high confidence visibility int
Slide 10: Near-Term Inventory Summary and Forward Visibility
Near-Term Inventory Summary and Forward Visibility Diamondback expects to focus its completion activity on areas where Viper has significant royalty interests, primarily in the Midland Basin Visibility into third party operators’ anticipated activity levels continue to increase with third quarte
Slide 11: Swallowtail Diamondback Operated Acreage Detail
Swallowtail Diamondback Operated Acreage Detail FANG acreage Swallowtail acreage Producing well Anchor ♦ 237 NNA ♦ 2.1% average NRI Airstrip ♦ 60-80 wells planned for ♦ 87 NNA next five years ♦ 2.3% average NRI ♦ 40-60 wells planned for next five years Mustang Springs ♦ 43 NNA ♦ 3.8% average NRI ♦ 1
Slide 12: Significant Undeveloped, Concentrated Resource (Midland)
Significant Undeveloped, Concentrated Resource Highly Concentrated Acreage in Midland Basin Illustrative Remaining Midland Basin Resource 14,678 VNOM Net Royalty Acres Assumed 1.5 Assumed 25% mile lateral lease royalty (240 NRA) 15.3 Net Drilling Spacing Units (100% NRI) 28 wells per 1.5 mile DSU ~4
Slide 13: Significant Undeveloped, Concentrated Resource (Delaware)
Significant Undeveloped, Concentrated Resource Highly Concentrated Acreage in Delaware Basin Illustrative Remaining Delaware Basin Resource 11,323 VNOM Net Royalty Acres Assumed 1.5 Assumed 25% mile lateral lease royalty (240 NRA) 11.8 Net Drilling Spacing Units (100% NRI) 20 wells per 1.5 mile DSU
Slide 14: High Growth, Oil Weighted Reserves
High Growth, Oil Weighted Reserves ♦ Proved reserves at YE 2020 of 99.4 MMBoe (57.5 Proved Developed Reserves MMBo) represent a 12% increase over YE 2019 (MMBoe) 73 (MBoe per mm units) 69 465 reserves 437 369 ♦ Net proved reserve additions of 20.2 MMBoe resulted 46 in a reserve replacement ratio of
Slide 15: How Viper Defines a "Net Royalty Acre"
How Viper Defines a “Net Royalty Acre” Methodology for deriving “Net Royalty Viper’s Formula for Net Royalty Acreage Acreage” differs widely across the industry Many companies calculate assuming there are eight royalty acres for every one net Net Lease Net Royalty mineral acre (NMA) Mineral Roya
Slide 16: Financial Overview
Financial Overview Financial Strategy Viper Capitalization ($MM) Maintain Financial Flexibility VNOM Capitalization & Leverage 9/30/2021 ♦ Borrowing base of $500 million with only $92 million Cash $42 (1) drawn as of 9/30/2021(1) Rev olv ing Credit Facility 92 Senior Notes 480 ♦ Maintain strong liqu
Slide 17: Hedge Update
Hedge Update Crude Oil (Bbls/day, $/Bbl) Q4 2021 Q1 2022 Q2 2022 Costless Collars - WTI 10,000 2,500 2,000 Floor $30.00 $45.00 $45.00 Ceiling $43.05 $79.55 $80.15 Deferred Premium Put Options - WTI - 9,500 7,500 Strike - $47.51 $47.50 Premium - -$1.57 -$1.55 Natural Gas (Mmbtu/day, $/Mmbtu) FY 2022
Slide 18: Final Thoughts
Final Thoughts Viper Energy Partners offers sustainable free cash flow, substantial remaining inventory and upside to strength in commodity prices Mineral ownership provides surest form of security in the oil industry Relationship with Diamondback provides visibility to production and cash flow dura
Slide 19: Viper Energy Partners LP contact details
Viper Energy Partners LP Adam Lawlis, Vice President, Investor Relations 500 West Texas Ave., Suite 1200 (432) 221-7430 Midland, TX 79701 ir@viperenergy.com www.viperenergy.com Austen Gilfillian (432) 221-7420 agilfillian@viperenergy.com 19