Viper Energy, Inc.

What they do

Viper owns mineral and royalty interests in oil and natural gas properties, primarily in the Permian Basin. It generates revenue from royalty payments and lease bonus income without bearing development costs. The company's production and development activities depend on operators, including its parent Diamondback, which drill wells on its acreage.

Revenue drivers

• Royalty production — Primary revenue source from oil, natural gas, and NGLs. Q2 2026 average production was 65,077 bo/d (134,363 boe/d).
• Lease bonus income — One-time payments from leasing additional acreage. Q2 2026 lease bonus income was $15 million.
• Acquisitions — Growth via bolt-on purchases of mineral and royalty interests, such as the Riverbend Acquisition and a definitive agreement to acquire ~933 net royalty acres from Diamondback.

Recent performance

For Q2 2026, consolidated net income was $331 million, with net income attributable to Viper of $142 million, or $0.73 per Class A share. Adjusted net income was $345 million, or $1.78 per share. Cash available for distribution was $262 million, or $1.37 per Class A share. For fiscal 2025, annual revenue was $1.35 billion, but net income was -$206 million. The company declared base and variable dividends totaling $0.67 per share for Q2 2026.

Strategy

Management is prioritizing steady dividend growth, increasing the base dividend by 32% to $2.00 annually. The company is removing its quarterly commitment to return at least 75% of cash available for distribution to allow flexibility for share repurchases and accretive M&A. It continues to pursue acquisitions of mineral and royalty interests, including deals with Diamondback and Riverbend. The company also focuses on opportunistic share repurchases.

Risks

• Operator dependence — Viper relies on a small number of operators, particularly Diamondback, for drilling on its acreage; operator decisions significantly affect production and revenue.
• Commodity price volatility — Oil and natural gas prices directly impact royalty income and cash available for distribution; low prices can make development uneconomic, reducing future production.
• PUD development uncertainty — Approximately 22% of proved reserves are undeveloped; delays or higher drilling costs could reduce value and force reclassification to unproved.
• Dividend variability — Quarterly dividends may vary significantly or be zero, and cash available is limited for reinvestment or acquisitions.

Outlook

For Q3 2026, the company guides average production of 67,500–68,500 bo/d (133,500–135,500 boe/d). Full-year 2026 guidance was raised to 66,000–67,250 bo/d (132,500–135,000 boe/d). The increased base dividend is expected to be fully protected down to ~$30 WTI and represent ~50% of cash available at $70 WTI.