Viper Energy Partners LP (NASDAQ:VNOM) (“Viper” or the “Company”),
a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG)
(“Diamondback”), today announced financial and operating results
for the second quarter ended June 30, 2020.
SECOND QUARTER HIGHLIGHTS
- Q2 2020 consolidated net loss (including non-controlling
interest) of $(33.1) million; adjusted net loss (as defined and
reconciled below) of $(4.2) million
- Consolidated Adjusted EBITDA (as defined and reconciled below)
of $26.6 million and cash available for distribution to Viper’s
common limited partner units (as reconciled below) of $8.1
million
- Q2 2020 average production of 14,453 bo/d (24,508 boe/d), an
increase of 9% from Q2 2019 average daily oil production
- Q2 2020 cash distribution of $0.03 per common unit
- Due to the current uncertainty in the commodity markets, Viper
has temporarily reduced its distribution to approximately 25% of
cash available for distribution with the retained cash flow
expected to be used to strengthen the balance sheet; the Board of
Directors of Viper’s General Partner reviews the distribution
policy quarterly
- 134 total gross (2.4 net 100% royalty interest) horizontal
wells turned to production on Viper’s acreage during Q2 2020 with
an average lateral length of 8,648 feet
- Initiating average production guidance for Q3 2020 and Q4 2020
of 14,750 to 16,000 bo/d (24,500 to 26,500 boe/d), the midpoint of
which is up 6% from Q2 2020 average daily oil production
- Narrowing full year 2020 average production guidance to 15,250
to 16,000 bo/d (25,250 to 26,250 boe/d)
- As of July 14, 2020, there were approximately 485 gross
horizontal wells currently in the process of active development on
Viper’s acreage, in which Viper expects to own an average 1.7% net
royalty interest (8.1 net 100% royalty interest wells)
- Approximately 440 gross (8.8 net 100% royalty interest)
line-of-sight wells that are not currently in the process of active
development, but for which we have visibility to the potential of
future development in coming quarters, based on Diamondback’s
current completion schedule and third party operators’ permits
- Q1 2020 and Q2 2020 distributions reasonably estimated to not
constitute dividends for U.S. federal income tax purposes; instead
should generally constitute non-taxable reductions to the tax
basis
“Viper’s production in the second quarter was
supported by 14 of Diamondback’s 15 completions in the quarter
having more than an 8% average royalty interest net to Viper, as
third party activity was minimal and some operators curtailed
existing production. Looking ahead to the second half of
2020, we expect Viper’s production to grow sequentially through the
end of the year supported by Diamondback’s completion schedule
which is focused on areas where Viper has significant mineral
ownership, primarily in the Midland Basin. This activity
should lead to strong fourth quarter 2020 exit rate production and
demonstrates the differentiated relationship between Diamondback
and Viper versus other mineral and royalty peers,” stated Travis
Stice, Chief Executive Officer of Viper’s general partner.
FINANCIAL UPDATE
Viper’s second quarter 2020 average realized
prices were $21.00 per barrel of oil, $0.46 per Mcf of natural gas
and $7.69 per barrel of natural gas liquids, resulting in a total
equivalent realized price of $14.55/boe.
During the second quarter of 2020, the Company
recorded total operating income of $32.7 million and consolidated
net loss (including non-controlling interest) of $(33.1)
million.
As of June 30, 2020, the Company had a cash
balance of $9.7 million and $426.5 million available under its
revolving credit facility. During the second quarter, the
Company repurchased $14.1 million of the outstanding principal of
its 5.375% Senior Notes due 2027 (the “Notes) at a 1.5% to 2.5%
discount to par value. Subsequent to the end of the second
quarter, Viper has repurchased an additional $6.0 million of the
outstanding notes at a 1.5% discount to par value. The
aggregate repurchases brought the total outstanding principal
amount of Notes down to $479.9 million as of July 23, 2020.
SECOND QUARTER 2020 CASH
DISTRIBUTION
The Board of Directors of Viper’s General
Partner (the “Board”) declared a cash distribution for the three
months ended June 30, 2020 of $0.03 per common unit. The
distribution is payable on August 20, 2020 to eligible common
unitholders of record at the close of business on August 13,
2020. This distribution represents approximately 25% of total
cash available for distribution with the remaining available cash
flow from the second quarter of 2020 expected to be used to
strengthen the Company’s balance sheet. The Board reviews
Viper’s distribution policy quarterly.
On May 21, 2020, Viper made a cash distribution
to its unitholders and subsequently has reasonably estimated that
such distribution, as well as the distribution payable on August
20, 2020, should not constitute dividends for U.S. federal income
tax purposes. Rather, these distributions should generally
constitute non-taxable reductions to the tax basis of each
distribution recipient’s ownership interest in Viper. The
Form 8937 containing additional information may be found on
www.viperenergy.com under the “Investor Relations” section of
the site.
OPERATIONS AND ACQUISITIONS UPDATE
During the second quarter 2020, there was
limited completion activity on our mineral and royalty acreage as
our operators reacted quickly to oil price volatility by cutting
capital expenditures and mostly ceasing completion activity.
As a result, during the second quarter, Viper estimates that 134
gross (2.4 net 100% royalty interest) horizontal wells with an
average royalty interest of 1.8% were turned to production on its
existing acreage position with an average lateral length of 8,648
feet. Of these 134 gross wells, Diamondback is the operator of 14
with an average royalty interest of 8.4%, and the remaining 120
gross wells, with an average royalty interest of 1.1%, are operated
by third parties.
During the second quarter of 2020, Viper did not
complete any acquisitions, leaving its footprint of mineral and
royalty interests at a total of 24,714 net royalty acres.
The following table summarizes Viper’s gross
well information as of July 14, 2020:
|
As of July 14, 2020 |
|
Diamondback Operated |
|
Third Party Operated |
|
Total |
Horizontal wells
turned to production: |
|
|
|
|
|
Gross wells |
14 |
|
120 |
|
134 |
Net 100% royalty interest wells |
1.2 |
|
1.3 |
|
2.4 |
Average percent net royalty interest |
8.4% |
|
1.1% |
|
1.8% |
|
|
|
|
|
|
Horizontal producing
well count: |
|
|
|
|
|
Gross wells |
1,079 |
|
3,401 |
|
4,480 |
Net 100% royalty interest wells |
84.4 |
|
51.8 |
|
136.2 |
Average percent net royalty interest |
7.8% |
|
1.5% |
|
3.0% |
|
|
|
|
|
|
Horizontal active
development well count: |
|
|
|
|
|
Gross wells |
66 |
|
419 |
|
485 |
Net 100% royalty interest wells |
5.2 |
|
2.9 |
|
8.1 |
Average percent net royalty interest |
7.9% |
|
0.7% |
|
1.7% |
|
|
|
|
|
|
Line of sight
wells: |
|
|
|
|
|
Gross wells |
74 |
|
366 |
|
440 |
Net 100% royalty interest wells |
4.3 |
|
4.5 |
|
8.8 |
Average percent net royalty interest |
5.8% |
|
1.2% |
|
2.0% |
Despite the continued depressed commodity price
environment, there continues to be active development across
Viper’s asset base, however, near-term activity is expected to be
driven primarily by Diamondback operations. The 485 gross wells
currently in the process of active development are those wells that
have been spud and are expected to be turned to production within
approximately the next six to eight months. The 440 line-of-sight
wells are those that are not currently in the process of active
development, but for which Viper has reason to believe that they
will be turned to production within approximately the next 15 to 18
months. The expected timing of these line-of-sight wells is based
primarily on permitting by third party operators or Diamondback’s
current expected completion schedule. Existing permits or active
development of our royalty acreage does not ensure that those wells
will be turned to production given the current depressed oil
prices.
GUIDANCE UPDATE
Below is Viper’s revised guidance for the full
year 2020, as well as average production guidance for Q3 2020 and
Q4 2020.
|
|
|
Viper Energy Partners |
|
|
Q3 2020 / Q4 2020 Net
Production - MBo/d |
14.75 - 16.00 |
Q3 2020 / Q4 2020 Net
Production - MBoe/d |
24.50 - 26.50 |
Full Year 2020 Net Production
- MBo/d |
15.25 - 16.00 |
Full Year 2020 Net Production
- MBoe/d |
25.25 - 26.25 |
|
|
Unit costs ($/boe) |
|
Depletion |
$9.50 - $11.50 |
Cash G&A |
$0.60 - $0.80 |
Non-Cash Unit-Based
Compensation |
$0.10 - $0.25 |
Interest Expense (a) |
$3.25 - $3.75 |
|
|
Production and Ad Valorem
Taxes (% of Revenue) (b) |
7% - 8% |
(a) Assumes 1H2020 actual interest expense plus interest expense
for the remainder of 2020 assuming $480mm in principal of Sr. Notes
and $155mm drawn on the revolver.(b) 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 its results for the second
quarter of 2020 on Tuesday, August 4, 2020 at 10:00 a.m. CT.
Participants should call (844) 400-1537 (United States/Canada) or
(703) 326-5198 (International) and use the confirmation code
6714088. A telephonic replay will be available from 1:00 p.m. CT on
Tuesday, August 4, 2020 through Tuesday, August 11, 2020 at 1:00
p.m. CT. To access the replay, call (855) 859-2056 (United
States/Canada) or (404) 537-3406 (International) and enter
confirmation code 6714088. A live broadcast of the earnings
conference call will also be available via the internet at
www.viperenergy.com under the “Investor Relations” section of
the site. A replay will also be available on the website
following the call.
About Viper Energy Partners LP
Viper is a limited partnership formed by
Diamondback to own, acquire and exploit oil and natural gas
properties in North America, with a focus on owning and acquiring
mineral and royalty interests in oil-weighted basins, primarily the
Permian Basin and the Eagle Ford Shale. For more information,
please visit www.viperenergy.com.
About Diamondback Energy, Inc.
Diamondback is an independent oil and natural
gas company headquartered in Midland, Texas focused on the
acquisition, development, exploration and exploitation of
unconventional, onshore oil and natural gas reserves in the Permian
Basin in West Texas. For more information, please visit
www.diamondbackenergy.com.
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 the current adverse industry and macroeconomic
conditions, depressed commodity prices, production levels on
properties in which Viper has mineral and royalty interests, any
potential regulatory action that may impose production limits on
Viper’s royalty acreage, the recent acquisitions, Diamondback’s
plans for the acreage discussed above, development activity by
other operators, Viper’s cash distribution policy and the impact of
the ongoing COVID-19 pandemic. 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 Securities and
Exchange Commission, including its Forms 10-K, 10-Q and 8-K, which
can be obtained free of charge on the Securities and Exchange
Commission’s web site at http://www.sec.gov. Viper undertakes no
obligation to update or revise any forward-looking statement.
Viper Energy Partners LP |
Consolidated Balance Sheets |
(unaudited, in thousands, except unit
amounts) |
|
|
|
|
|
June 30, |
|
December 31, |
|
2020 |
|
2019 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
9,663 |
|
|
$ |
3,602 |
|
Royalty income receivable (net of allowance for credit losses) |
32,118 |
|
|
58,089 |
|
Royalty income receivable—related party |
917 |
|
|
10,576 |
|
Other current assets |
482 |
|
|
397 |
|
Total current assets |
43,180 |
|
|
72,664 |
|
Property: |
|
|
|
Oil and natural gas interests, full cost method of accounting
($1,480,346 and $1,551,767 excluded from depletion at June 30,
2020 and December 31, 2019, respectively) |
2,933,731 |
|
|
2,868,459 |
|
Land |
5,688 |
|
|
5,688 |
|
Accumulated depletion and impairment |
(373,898 |
) |
|
(326,474 |
) |
Property, net |
2,565,521 |
|
|
2,547,673 |
|
Deferred tax asset (net of
allowance) |
— |
|
|
142,466 |
|
Other assets |
15,572 |
|
|
22,823 |
|
Total assets |
$ |
2,624,273 |
|
|
$ |
2,785,626 |
|
Liabilities and Unitholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
11 |
|
|
$ |
— |
|
Accounts payable—related party |
— |
|
|
150 |
|
Accrued liabilities |
12,439 |
|
|
13,282 |
|
Derivative instruments |
33,956 |
|
|
— |
|
Total current liabilities |
46,406 |
|
|
13,432 |
|
Long-term debt, net |
630,507 |
|
|
586,774 |
|
Derivative instruments |
5,875 |
|
|
— |
|
Total liabilities |
682,788 |
|
|
600,206 |
|
Commitments and
contingencies |
|
|
|
Unitholders’ equity: |
|
|
|
General partner |
849 |
|
|
889 |
|
Common units (67,831,342 units issued and outstanding as of
June 30, 2020 and 67,805,707 units issued and outstanding as
of December 31, 2019) |
728,149 |
|
|
929,116 |
|
Class B units (90,709,946 units issued and outstanding
June 30, 2020 and December 31, 2019) |
1,080 |
|
|
1,130 |
|
Total Viper Energy Partners LP unitholders’ equity |
730,078 |
|
|
931,135 |
|
Non-controlling interest |
1,211,407 |
|
|
1,254,285 |
|
Total equity |
1,941,485 |
|
|
2,185,420 |
|
Total liabilities and unitholders’ equity |
$ |
2,624,273 |
|
|
$ |
2,785,626 |
|
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, |
|
2020 |
2019 |
|
2020 |
2019 |
Operating
income: |
|
|
|
|
|
Royalty income |
$ |
32,444 |
|
$ |
70,442 |
|
|
$ |
109,273 |
|
$ |
130,870 |
|
Lease bonus income |
23 |
|
1,749 |
|
|
1,645 |
|
2,909 |
|
Other operating income |
202 |
|
3 |
|
|
443 |
|
5 |
|
Total operating income |
32,669 |
|
72,194 |
|
|
111,361 |
|
133,784 |
|
Costs and
expenses: |
|
|
|
|
|
Production and ad valorem taxes |
3,110 |
|
4,389 |
|
|
9,257 |
|
8,081 |
|
Depletion |
22,782 |
|
16,512 |
|
|
47,424 |
|
32,711 |
|
General and administrative expenses |
1,683 |
|
1,723 |
|
|
4,349 |
|
3,418 |
|
Total costs and expenses |
27,575 |
|
22,624 |
|
|
61,030 |
|
44,210 |
|
Income from
operations |
5,094 |
|
49,570 |
|
|
50,331 |
|
89,574 |
|
Other income
(expense): |
|
|
|
|
|
Interest expense, net |
(7,669 |
) |
(2,713 |
) |
|
(16,632 |
) |
(7,262 |
) |
Loss on derivative instruments, net |
(34,443 |
) |
— |
|
|
(42,385 |
) |
— |
|
Gain (loss) on revaluation of investment |
3,443 |
|
50 |
|
|
(6,677 |
) |
3,642 |
|
Other income, net |
519 |
|
547 |
|
|
923 |
|
1,203 |
|
Total other expense, net |
(38,150 |
) |
(2,116 |
) |
|
(64,771 |
) |
(2,417 |
) |
(Loss) income before
income taxes |
(33,056 |
) |
47,454 |
|
|
(14,440 |
) |
87,157 |
|
Provision for (benefit from)
income taxes |
— |
|
180 |
|
|
142,466 |
|
(34,428 |
) |
Net (loss)
income |
(33,056 |
) |
47,274 |
|
|
(156,906 |
) |
121,585 |
|
Net (loss) income attributable
to non-controlling interest |
(11,304 |
) |
45,009 |
|
|
7,015 |
|
85,541 |
|
Net (loss) income
attributable to Viper Energy Partners LP |
$ |
(21,752 |
) |
$ |
2,265 |
|
|
$ |
(163,921 |
) |
$ |
36,044 |
|
|
|
|
|
|
|
Net (loss) income
attributable to common limited partner units: |
|
|
|
|
|
Basic |
$ |
(0.32 |
) |
$ |
0.04 |
|
|
$ |
(2.42 |
) |
$ |
0.61 |
|
Diluted |
$ |
(0.32 |
) |
$ |
0.04 |
|
|
$ |
(2.42 |
) |
$ |
0.61 |
|
Weighted average
number of common limited partner units outstanding: |
|
|
|
|
|
Basic |
67,831 |
|
62,628 |
|
|
67,827 |
|
59,058 |
|
Diluted |
67,831 |
|
62,664 |
|
|
67,827 |
|
59,094 |
|
Viper Energy Partners LP |
Consolidated Statements of Cash Flows |
(unaudited, in thousands) |
|
|
|
|
|
Six Months Ended June 30, |
|
2020 |
|
2019 |
Cash flows from
operating activities: |
|
|
|
Net (loss) income |
$ |
(156,906 |
) |
|
$ |
121,585 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
Provision for (benefit from) income taxes |
142,466 |
|
|
(34,536 |
) |
Depletion |
47,424 |
|
|
32,711 |
|
Loss on derivative instruments, net |
42,385 |
|
|
— |
|
Net cash payments on derivatives |
(2,554 |
) |
|
— |
|
Gain on extinguishment of debt |
(14 |
) |
|
— |
|
Loss (gain) on revaluation of investment |
6,677 |
|
|
(3,642 |
) |
Amortization of debt issuance costs |
1,152 |
|
|
441 |
|
Non-cash unit-based compensation |
670 |
|
|
877 |
|
Changes in operating assets and liabilities: |
|
|
|
Royalty income receivable, net |
25,971 |
|
|
(7,996 |
) |
Royalty income receivable—related party |
9,659 |
|
|
(5,549 |
) |
Accounts payable and accrued liabilities |
(832 |
) |
|
(2,238 |
) |
Accounts payable—related party |
(150 |
) |
|
— |
|
Income tax payable |
— |
|
|
108 |
|
Other current assets |
(85 |
) |
|
(41 |
) |
Net cash provided
by operating activities |
115,863 |
|
|
101,720 |
|
Cash flows from
investing activities: |
|
|
|
Acquisitions of oil and natural gas interests |
(65,272 |
) |
|
(125,231 |
) |
Funds held in escrow |
— |
|
|
(13,215 |
) |
Net cash used in
investing activities |
(65,272 |
) |
|
(138,446 |
) |
Cash flows from
financing activities: |
|
|
|
Proceeds from borrowings under credit facility |
92,000 |
|
|
171,000 |
|
Repayment on credit facility |
(35,000 |
) |
|
(369,500 |
) |
Debt issuance costs |
(44 |
) |
|
(258 |
) |
Repayment of senior notes |
(13,787 |
) |
|
— |
|
Proceeds from public offerings |
— |
|
|
340,860 |
|
Public offering costs |
— |
|
|
(221 |
) |
Units purchased for tax withholding |
(383 |
) |
|
(353 |
) |
Distributions to General Partner |
(40 |
) |
|
(40 |
) |
Distributions to public |
(36,928 |
) |
|
(49,491 |
) |
Distributions to Diamondback |
(50,348 |
) |
|
(65,143 |
) |
Net cash (used in)
provided by financing activities |
(44,530 |
) |
|
26,854 |
|
Net increase
(decrease) in cash |
6,061 |
|
|
(9,872 |
) |
Cash and cash
equivalents at beginning of period |
3,602 |
|
|
22,676 |
|
Cash and cash
equivalents at end of period |
$ |
9,663 |
|
|
$ |
12,804 |
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
Interest paid |
$ |
17,918 |
|
|
$ |
2,382 |
|
Viper Energy Partners LP |
Selected Operating Data |
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2020 |
|
Three Months Ended March 31, 2020 |
|
Three Months Ended June 30, 2019 |
Production
Data: |
|
|
|
|
|
Oil (MBbls) |
1,315 |
|
|
1,587 |
|
|
1,202 |
|
Natural gas (MMcf) |
2,685 |
|
|
2,658 |
|
|
1,640 |
|
Natural gas liquids (MBbls) |
467 |
|
|
479 |
|
|
308 |
|
Combined volumes (MBOE)(1) |
2,230 |
|
|
2,509 |
|
|
1,783 |
|
|
|
|
|
|
|
Average daily oil volumes (BO/d) |
14,453 |
|
|
17,441 |
|
|
13,205 |
|
Average daily combined volumes (BOE/d) |
24,508 |
|
|
27,575 |
|
|
19,597 |
|
|
|
|
|
|
|
Average sales
prices: |
|
|
|
|
|
Oil ($/Bbl) |
$ |
21.00 |
|
|
$ |
45.49 |
|
|
$ |
54.81 |
|
Natural gas ($/Mcf) |
$ |
0.46 |
|
|
$ |
0.13 |
|
|
$ |
(0.65 |
) |
Natural gas liquids ($/Bbl) |
$ |
7.69 |
|
|
$ |
8.94 |
|
|
$ |
18.33 |
|
Combined ($/BOE)(2) |
$ |
14.55 |
|
|
$ |
30.62 |
|
|
$ |
39.50 |
|
|
|
|
|
|
|
Oil, hedged ($/Bbl)(3) |
$ |
22.39 |
|
|
$ |
45.49 |
|
|
$ |
54.81 |
|
Natural gas, hedged ($/Mcf)(3) |
$ |
(1.01 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.65 |
) |
Natural gas liquids ($/Bbl)(3) |
$ |
7.69 |
|
|
$ |
8.94 |
|
|
$ |
18.33 |
|
Combined price, hedged ($/BOE)(3) |
$ |
13.60 |
|
|
$ |
30.44 |
|
|
$ |
39.50 |
|
|
|
|
|
|
|
Average Costs
($/BOE): |
|
|
|
|
|
Production and ad valorem taxes |
$ |
1.39 |
|
|
$ |
2.45 |
|
|
$ |
2.46 |
|
General and administrative - cash component |
0.63 |
|
|
0.91 |
|
|
0.70 |
|
Total operating expense - cash |
$ |
2.02 |
|
|
$ |
3.36 |
|
|
$ |
3.16 |
|
|
|
|
|
|
|
General and administrative - non-cash component |
$ |
0.13 |
|
|
$ |
0.15 |
|
|
$ |
0.26 |
|
Interest expense, net |
$ |
3.44 |
|
|
$ |
3.57 |
|
|
$ |
1.52 |
|
Depletion |
$ |
10.21 |
|
|
$ |
9.82 |
|
|
$ |
9.26 |
|
(1) Bbl equivalents are calculated using a conversion rate of
six Mcf per one Bbl.(2) Realized price net of all deducts for
gathering, transportation and processing.(3) Hedged prices reflect
the effect of our matured commodity derivative transactions on our
average sales prices. Our calculation of such effects includes
realized gains and losses on cash settlements for commodity
derivatives, which we do not designate for hedge accounting. We did
not have any derivative contracts prior to February of 2020.
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 (loss) plus interest expense, net, non-cash unit-based
compensation expense, depletion, loss (gain) on revaluation of
investments, non-cash loss (gain) on derivative instruments, gain
on extinguishment of debt and provision for (benefit from) income
taxes. Adjusted EBITDA is not a measure of net income as determined
by United States’ generally accepted accounting principles
(“GAAP”). Management believes Adjusted EBITDA is useful
because it allows them 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, royalty
income, cash flow from operating activities or any other measure of
financial performance or liquidity presented as determined in
accordance with GAAP. 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 income taxes payable, debt
service, 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, common units
repurchased for tax withholding, 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
loss.
Viper Energy Partners LP |
(unaudited, in thousands, except per unit
data) |
|
|
|
|
|
Three Months Ended June 30, 2020 |
Net loss |
$ |
(33,056 |
) |
Interest expense, net |
7,669 |
|
Non-cash unit-based compensation expense |
283 |
|
Depletion |
22,782 |
|
Gain on revaluation of investment |
(3,443 |
) |
Non-cash loss on derivative instruments, net |
32,342 |
|
Gain on extinguishment of debt |
(14 |
) |
Consolidated Adjusted
EBITDA |
26,563 |
|
Less: Adjusted EBITDA
attributable to non-controlling interest |
15,198 |
|
Adjusted EBITDA
attributable to Viper Energy Partners LP |
$ |
11,365 |
|
|
|
Adjustments to
reconcile Adjusted EBITDA to cash available for
distribution: |
|
Debt service, contractual
obligations, fixed charges and reserves |
$ |
(3,261 |
) |
Units - dividend equivalent
rights |
(4 |
) |
Preferred distributions |
(45 |
) |
Cash available for
distribution to Viper Energy Partners LP unitholders |
$ |
8,055 |
|
|
|
Common limited partner units
outstanding |
67,831 |
|
|
|
Cash available for
distribution per limited partner unit |
$ |
0.12 |
|
Cash per unit approved for
distribution |
$ |
0.03 |
|
Adjusted net (loss) income is a non-GAAP
financial measure equal to net income attributable to Viper
adjusted for non-cash loss (gain) on derivative instruments, (gain)
loss on revaluation of investments, gain on extinguishment of debt,
valuation for deferred tax asset and related income tax
adjustments. The Company’s computation of adjusted net income may
not be comparable to other similarly titled measures of other
companies or to such measure in our credit facility or any of our
other contracts.
The following table presents a reconciliation of adjusted net
loss to net (loss) income:
Viper Energy Partners LP |
Adjusted Net Income (Loss) |
(unaudited, in thousands, except per unit
data) |
|
|
|
Three Months Ended June 30, 2020 |
Net loss |
$ |
(33,056 |
) |
Non-cash loss on derivative
instruments, net |
32,342 |
|
Gain on revaluation of
investments |
(3,443 |
) |
Gain on extinguishment of
debt |
(14 |
) |
Adjusted net
loss |
(4,171 |
) |
Less: Adjusted net loss
attributed to non-controlling interests |
(1,341 |
) |
Adjusted net loss
attributable to Viper Energy Partners LP |
$ |
(2,830 |
) |
|
|
Adjusted net loss attributable
to limited partners per common unit |
$ |
(0.04 |
) |
Derivatives
As of the filing date, the Company had the
following outstanding derivative contracts. The Company’s
derivative contracts are based upon reported settlement prices on
commodity exchanges, with crude oil derivative settlements based on
New York Mercantile Exchange West Texas Intermediate pricing and
Crude Oil Brent and with natural gas derivative settlements based
on the New York Mercantile Exchange Henry Hub pricing. When
aggregating multiple contracts, the weighted average contract price
is disclosed.
|
Crude Oil (Bbls/day, $/Bbl) |
|
Q3 2020 |
|
Q4 2020 |
|
FY 2021 |
Swaps - WTI
(Cushing) |
1,000 |
|
|
1,000 |
|
|
— |
$ |
27.45 |
|
|
$ |
27.45 |
|
|
$ |
— |
Collars - WTI (Cushing) |
14,000 |
|
|
14,000 |
|
|
10,000 |
Floor Price |
$ |
28.86 |
|
|
$ |
28.86 |
|
|
$ |
30.00 |
Ceiling Price |
$ |
32.33 |
|
|
$ |
32.33 |
|
|
$ |
43.05 |
Deferred Premium Call Options - WTI (Cushing) |
— |
|
|
8,000 |
|
|
— |
Premium |
$ |
— |
|
|
$ |
(1.89 |
) |
|
$ |
— |
Strike Price ($/Bbl) |
$ |
— |
|
|
$ |
45.00 |
|
|
$ |
— |
Basis Swaps
- WTI (Midland-Cushing) |
4,000 |
|
|
4,000 |
|
|
— |
$ |
(2.60 |
) |
|
$ |
(2.60 |
) |
|
$ |
— |
|
Natural Gas (Mmbtu/day, $/Mmbtu) |
|
Q3 2020 |
|
Q4 2020 |
|
FY 2021 |
Natural Gas
Basis Swaps - Waha Hub |
25,000 |
|
|
25,000 |
|
|
— |
$ |
(2.07 |
) |
|
$ |
(2.07 |
) |
|
$ |
— |
Investor Contact:Adam Lawlis+1
432.221.7467alawlis@viperenergy.com
Source: Viper Energy Partners LP; Diamondback Energy, Inc.
Diamondback Energy (NASDAQ:FANG)
Historical Stock Chart
From Mar 2024 to Apr 2024
Diamondback Energy (NASDAQ:FANG)
Historical Stock Chart
From Apr 2023 to Apr 2024