Viper Energy, Inc. Q1 FY2026 earnings call

First quarter marked strong start with production exceeding expectations and momentum carrying into increased growth outlook. Increased full-year oil production guidance midpoint by roughly 2.5% driven by Diamondback's acceleration and VIPER's royalty interest. Announced River Bend acquisition of over 3,000 net royalty acres and ~2,000 bbls oil production per day for $337M in cash and 3.7M Class A shares. First quarter return of capital $0.94 representing 90% of cash available for distribution, composed of $0.68 per share dividend and $0.28 per share stock repurchases. Committed to returning at least 75% of cash available for distribution with capital allocation framework disciplined and flexible.

No detailed product segment financial performance with absolute terms and revenue contribution % provided in the transcript

Increased midpoint of full-year oil production guidance by roughly 2.5%. Expect growth driven by Diamondback's acceleration and VIPER's royalty interest, over 5% organic growth relative to pro forma 2025 exit rate. Announced River Bend acquisition.

No specific discussion of risks and operational failures detailed in the transcript

Q: Speak to number of and scale of remaining Permian pure plate packages available and consolidation strategy.

A: It's both, Riverbend deal is first in size range, opportunity set for medium and larger deals is massive, cautiously optimistic and positioned as buyer of choice.

Q: Detail on quality and geological differences of non-overlapping 25% of Riverbend asset base.

A: Midland Basin overlap, Delaware similar, New Mexico assets different with exposure to Conoco, Oxy, EOG.

Q: Capital allocation process decision making for Viper.

A: Primarily distribution vehicle, distribute at least 75% of free cash, this quarter 90% due to strong balance sheet, flexibility to return 75%-90% in future based on cash flow.

Q: Production guide besides Diamondback, other upside and third-party activity.

A: Likely third-party activity to accelerate but not fully baked into guide yet, watching and monitoring as things evolve.

Q: M&A outlook after prior sale, non-core assets.

A: Cleaned up non-Permian assets, primed for private equity-backed Mineral companies' deals.

Q: Impact of recent volatility on bid-asks of deals, cash taxes.

A: Riverbend deal underwrote with moderate oil price scenario, cash taxes at 27-30% of pre-tax income expected to be steady.

Q: Flexibility in development plan at Diamondback for Viper's high NRIs.

A: Look at consolidated inventory, Barnett area likely accelerated, two-well and four-well tests coming.

Q: Variable dividend vs buyback at higher mid-cycle oil price.

A: Lean more towards cash returns, base dividend to grow, variable dividend above repurchases, decision tree easier as distribution vehicle.

Q: Inventory and production growth potential of Riverbend deal acreage.

A: Most value from core undeveloped zones, including Midland and New Mexico, 2027 production likely higher than NTM number.

Q: Participation in unnatural holders' sales and M&A outlook.

A: Depends on size and nature of deal, flexible, supply of deals expected, stay disciplined in underwriting.