Viper Energy Earns $300 Million, Raises 2026 Oil Output Guidance And Lines Up A $280 Million Buckhorn Deal
The Diamondback subsidiary reported a $596 million adjusted EBITDA quarter and still has the Buckhorn purchase pending.
Viper Energy, the Diamondback subsidiary that owns oil and gas mineral and royalty interests, earned $300 million in the third quarter, against a $197 million loss a year earlier that included a $360 million impairment. It also raised its 2026 oil production guidance and agreed to buy Buckhorn Minerals interests for $280 million cash plus about 1.8 million Class A shares, a deal still pending.
Quarter's numbers
Total operating income was $661 million, according to the 8-K and its attached release. Adjusted EBITDA, a profit measure before interest, taxes and depreciation, was $596 million, a 90% margin. Operating cash flow was $447 million and free cash flow $520 million.
Average daily oil production was 69,076 barrels, up from 65,077 in the second quarter. Oil sold for an average $87.65 a barrel unhedged, down from $98.28 in the second quarter.
Viper, which collects royalties from operators who drill on its Permian Basin land, had total debt of $2.4 billion at September 30 and about $1.2 billion of liquidity.
Guidance and the Buckhorn deal
Full-year 2026 oil production guidance rose to 67,250 to 67,750 barrels a day. Fourth-quarter guidance is 70,000 to 71,000 barrels a day, a range that includes Buckhorn.
Viper signed the Buckhorn agreement on September 14. It covers 1,552 net royalty acres, substantially all in the Midland Basin, with about 80% overlapping Viper's existing acreage. The cash part will come from cash on hand and revolver borrowings, and closing is expected in the fourth quarter of 2026.
In September Viper completed the McElroy Ranch Acquisition, about $529 million for 7,359 net royalty acres in Upton and Crane Counties. The asset is 96% undeveloped, and Chevron operates about 27% of its net inventory.
Dividend, buybacks and equity pledge
Viper declared a $0.50 base dividend per Class A share, payable November 19 to holders of record November 12. It bought back about 2.1 million shares for about $90 million in the quarter, at an average $43.01.
CEO Kaes Van't Hof said the company funded, or expects to fund, the acquisitions primarily with cash, delivering on a commitment to pursue deals "with minimal reliance on equity."
On Viper's acreage, 104 horizontal rigs were running at September 30, about 40% of the Permian Basin total, the company said.
Viper hosts its earnings call Tuesday at 10:00 a.m. CT.
Sources
- 8-K Filing — Viper Energy, Inc. (VNOM) — SEC EDGAR
- Exhibit viperex991-11x2x26.htm — Viper Energy, Inc. 8-K exhibit — SEC EDGAR
- Viper Energy, Inc., a Subsidiary of Diamondback Energy, — globenewswire.com
