Viper Energy Partners (VNOM) Declares $0.189 Quarterly Dividend; 4.2% Yield; Updates on Recent M&A Activity

July 25, 2016 5:05 PM EDT

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Viper Energy Partners (NASDAQ: VNOM) declared a quarterly dividend of $0.189 per share, or $0.756 annualized.

The dividend will be payable on August 22, 2016, to stockholders of record on August 15, 2016, with an ex-dividend date of August 11, 2016.

The annual yield on the dividend is 4.2 percent.


Since the Company's last equity offering in September 2014, Viper has acquired or entered into agreements to acquire 1,464 net royalty acres for an aggregate of $177 million. Most recently, Viper entered into separate purchase agreements with unrelated third party sellers to acquire mineral interests in 7,487 gross (601 net royalty) acres in the Midland Basin and 650 gross (142 net royalty) acres in the Delaware Basin, for approximately $111 million, subject to certain adjustments. These transactions include estimated August 2016 aggregate net production of approximately 500 boe/d and will increase Viper's footprint to a total of 5,357 net royalty acres assuming all acreage is acquired in the transactions. The Company consummated the acquisition of mineral interests in the Midland Basin with approximately 300 boe/d of estimated August 2016 net production on July 22, 2016. The acquisition of mineral interests in the Delaware Basin is expected to close in August 2016; however, the Delaware Basin transaction remains subject to completion of due diligence and satisfaction of other closing conditions, and there can be no assurance that it will be completed as planned or at all.

Net proved developed reserves attributable to these two transactions, based on internal estimates as of the effective dates of such acquisitions, were approximately 1.6 MMboe. Viper's estimate of proved developed reserves is based on analysis of production data provided by the sellers, as well as geologic and other data, and may be revised following ownership of these properties and has not been reviewed by its independent petroleum engineers.

Viper believes that development potential within the footprint of the two most recently announced transactions includes 223 gross horizontal locations incorporating 7,500 foot laterals across multiple development horizons. Additional development potential may exist in the Spraberry, Wolfcamp and Bone Spring as well as through additional downspacing. Pioneer Natural Resources and a private operator serve as primary operators on the assets.

Viper financed the recent Midland Basin acquisition with borrowings under its revolving credit facility and intends to finance the pending Delaware Basin acquisition, subject to market conditions and other factors, through a combination of cash on hand, borrowings under its revolving credit agreement and proceeds from one or more capital markets transactions, which may include debt or equity offerings.

“We are excited about the recently announced acquisitions as Viper Energy Partners continues our track record of opportunistic expansion in the most actively developed areas of the Permian Basin. The assets are ideally suited for Viper’s blend of growth and yield, and are expected to be immediately accretive to cash flow," stated Travis Stice, Chief Executive Officer of Viper's general partner.

Mr. Stice continued, "Following the decrease in completion activity through most of the first half of 2016, we continue to expect to exit 2016 in a position of strength as we enter 2017."

For a dividend history and other dividend-related data on Viper Energy Partners (VNOM) click here.

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