Viper Energy Partners LP, a Subsidiary of Diamondback Energy, Inc., Announces Authorization of a Common Unit Repurchase Prog...
November 09 2020 - 4:01PM
Viper Energy Partners LP (NASDAQ: VNOM) (“Viper” or the “Company”)
today announced that the Board of Directors of Viper’s General
Partner (the “Board”) authorized the initiation of a repurchase
program of up to $100 million of the Company’s common units.
The repurchase program is authorized to extend through December
31, 2021 and the Company intends to purchase common units under the
repurchase program opportunistically with cash on hand, free cash
flow from operations and proceeds from potential liquidity events
such as the sale of assets. This repurchase program may be
suspended from time to time, modified, extended or discontinued by
the Board at any time. Purchases under the repurchase program may
be made from time to time in open market or privately negotiated
transactions in compliance with Rule 10b-18 under the Securities
Exchange Act of 1934, as amended, and will be subject to market
conditions, applicable legal requirements, contractual obligations
and other factors. Any common units purchased as part of this
program will be retired.
“Because of our confidence in the expected free cash flow to be
generated in our forward outlook, which is currently being heavily
discounted by the market, the Board has decided to use a portion of
free cash to repurchase common units, beyond our current
distribution. Viper is currently selling non-operated minerals with
no current cash flow and limited visibility into development by
third-party operators for a significantly higher value than our
implied current public valuation, which includes an implied free
cash flow yield of greater than 15%. We will use a portion of these
one-time proceeds, as well as a percentage of free cash flow from
operations like we have in the past three quarters, to continue to
reduce net debt. However, given the current market dislocation, we
believe that repurchasing our common units at these prices
represents the best return for our unitholders,” stated Travis
Stice, Chief Executive Officer of Viper’s General Partner.
Mr. Stice continued, “To be clear, this is not a buy-in of Viper
by Diamondback, nor a departure from our strategy at the time of
IPO to expand our high quality acreage, particularly acreage
operated by Diamondback. Instead, this common unit repurchase
program is simply a recognition of a market dislocation and an
opportunity to effectively acquire acreage through repurchasing our
common units in the public market. Based on current strip prices,
we believe we can continue to pay a distribution with an expected
yield in excess of the broader market as well as reduce net debt,
while also repurchasing a significant percent of the public float
of our common units.”
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 acquisitions or
dispositions, 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.
Investor Contacts:Adam Lawlis+1
432.221.7467alawlis@viperenergy.com
Austen Gilfillian +1 432.221.7420agilfillian@viperenergy.com
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