MIDLAND, Texas, July 25, 2016 (GLOBE NEWSWIRE) -- 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, 2016 and provided an update on acquisitions.
HIGHLIGHTS
- The Board of Directors of Viper's general partner has declared a cash distribution for the three months ended June 30, 2016
of $0.189 per common unit, payable on August 22, 2016, to unitholders of record at the close of business on August 15,
2016.
- Viper recently 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, with
estimated August 2016 aggregate net production of 500 boe/d, for approximately $111 million, subject to certain adjustments.
- During the second quarter of 2016, the operators of Viper’s Spanish Trail mineral interests brought online eight gross
horizontal wells, consisting of six Lower Spraberry and two Wolfcamp A completions. The operators of Viper's Spanish Trail
acreage have built an inventory of 35 drilled but uncompleted wells ("DUCs") as a result of low commodity prices during the first
half of 2016.
ACQUISITION UPDATE
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."
PRODUCTION UPDATE
As previously announced, production attributable to Viper’s mineral interests was 5,380 boe/d for the second
quarter of 2016, up 11% from 4,832 boe/d for the second quarter of 2015.
FINANCIAL UPDATE
During the second quarter of 2016, the Company recorded total operating income of $17.0 million and a net loss
of $14.0 million, primarily attributable to an impairment charge of $21.5 million as a result of depressed commodity prices.
As of June 30, 2016, Viper had $51.5 million outstanding under its $175 million revolving credit facility.
As of July 22, 2016, Viper had $132.5 million outstanding under this facility as a result of additional borrowings used to fund the
acquisitions it completed in July 2016.
SECOND QUARTER 2016 CASH
DISTRIBUTION
The Board of Directors of Viper's general partner has declared a cash distribution for the three months ended
June 30, 2016 of $0.189 per common unit. The distribution is payable on August 22, 2016 to unitholders of record at the close
of business on August 15, 2016.
This release serves as qualified notice to nominees as provided for under Treasury Regulation Section
1.1446-4(b)(4) and (d). Please note that 100 percent of Viper’s distributions to foreign investors are attributable to income that
is effectively connected with a United States trade or business. Accordingly, all of Viper’s distributions to foreign investors are
subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable.
Nominees, and not Viper, are treated as withholding agents responsible for withholding distributions received by them on behalf of
foreign investors.
FULL YEAR 2016 GUIDANCE
Below is Viper's full year 2016 guidance, which has been updated for decreased depreciation, depletion and amortization expense
("DD&A"). The Company forecasts 2016 DD&A of $12.00 to $14.00 per boe, down from the prior range of $14.00 to $16.00 per
boe.
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Viper Energy
Partners |
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Total Net Production – MBoe/d |
6.0 – 6.5 |
|
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Unit costs
($/boe) |
|
Lease Operating Expenses |
n/a |
Gathering & Transportation |
$0.25-$0.50 |
DD&A |
$12.00-$14.00 |
G&A |
|
Cash G&A |
$0.50-$1.50 |
Non-Cash Unit-Based Compensation |
$2.00-$3.00 |
|
|
Production and Ad Valorem Taxes (% of Revenue) (a) |
|
8 |
% |
|
|
Capital Budget ($
- Million) |
|
2016 Capital Spend |
n/a |
(a) Includes production taxes of 4.6% for crude oil and 7.5% for natural gas and NGLs and ad valorem taxes.
CONFERENCE CALL
Diamondback and Viper will host a joint conference call and webcast for investors and analysts to discuss their
results for the second quarter of 2016 on Wednesday, August 3, 2016 at 9:30 a.m. CT. Participants should call (877) 440-7573
(United States/Canada) or (253) 237-1144 (International) and use the confirmation code 54571403. A telephonic replay will be
available from 12:30 p.m. CT on Wednesday, August 3, 2016 through Wednesday, August 10, 2016 at 10:59 p.m. CT. To access the
replay, call (855) 859-2056 (United States/Canada) or (404) 537-3406 (International) and enter confirmation code
54571403. A live broadcast of the earnings conference call will also be available via the internet at www.diamondbackenergy.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 the Permian Basin.
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. Diamondback's activities are primarily focused on the horizontal exploitation of multiple intervals within the
Wolfcamp, Spraberry, Clearfork and Cline formations.
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. 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 |
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Selected Operating Data |
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(unaudited) |
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Three Months Ended
June 30, |
|
Six Months Ended June
30, |
|
2016 |
2015 |
|
2016 |
2015 |
Production Data: |
|
|
|
|
|
Oil (Bbls) |
371,730 |
|
342,869 |
|
|
805,271 |
|
694,236 |
|
Natural gas (Mcf) |
345,432 |
|
239,470 |
|
|
693,715 |
|
459,122 |
|
Natural gas liquids (Bbls) |
60,258 |
|
56,956 |
|
|
129,361 |
|
104,956 |
|
Combined volumes(1)(2) (BOE) |
489,560 |
|
439,737 |
|
|
1,050,251 |
|
875,712 |
|
Daily combined volumes (BOE/d) |
5,380 |
|
4,832 |
|
|
5,771 |
|
4,838 |
|
% Oil |
76 |
% |
78 |
% |
|
77 |
% |
79 |
% |
|
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|
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Average sales prices: |
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|
|
|
|
Oil, realized ($/Bbl) |
$ |
41.73 |
|
$ |
53.40 |
|
|
$ |
35.31 |
|
$ |
48.75 |
|
Natural gas realized ($/Mcf) |
1.56 |
|
2.15 |
|
|
1.66 |
|
2.36 |
|
Natural gas liquids ($/Bbl) |
13.03 |
|
13.99 |
|
|
10.30 |
|
11.81 |
|
Average price realized ($/BOE) |
34.39 |
|
44.62 |
|
|
29.44 |
|
41.30 |
|
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Investor Contact: Adam Lawlis +1 432.221.7467 alawlis@viperenergy.com