Viper Energy Inc (VNOM) 2024 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the Viper Energy Second Quarter 2024 earnings call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Adam Lawlis, Vice President of Investor Relations. Please go ahead.

美好的一天，感謝您的支持。歡迎參加 Viper Energy 2024 年第二季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。現在我想將會議交給今天的第一位發言人，投資者關係副總裁 Adam Lawlis。請繼續。

Thank you, Joe. Good morning and welcome to Viper Energy Second Quarter 2024 conference call. During our call today, we will reference an updated investor presentation, which can be found on Viper's website. Representing Viper today are Travis Stice, CEO; Kaes Van't Hof, President; and Austen Gilfillian, Vice President.

謝謝你，喬。早安，歡迎參加 Viper Energy 2024 年第二季電話會議。在今天的電話會議中，我們將參考更新的投資者演示文稿，該演示文稿可以在 Viper 的網站上找到。今天代表 Viper 的是執行長 Travis Stice；凱斯·范特霍夫，總裁；和副總裁奧斯汀·吉爾菲利安。

During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance and businesses. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC.

在本次電話會議期間，與會者可能會就本公司的財務狀況、營運績效、計畫、目標、未來績效和業務做出某些前瞻性陳述。我們提醒您，由於多種因素，實際結果可能與這些前瞻性聲明中所示的結果有重大差異。有關這些因素的資訊可以在該公司向 SEC 提交的文件中找到。

In addition, we will make reference to certain non-GAAP measures. The reconciliations with the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon, I'll now turn the call over to Travis Stice.

此外，我們也將參考某些非公認會計準則措施。與適當的 GAAP 衡量標準的對帳可以在我們昨天下午發布的收益報告中找到，我現在將把電話轉給 Travis Stice。

Thank you, Adam. Welcome, everyone, and thank you for listening to Viper Energy's Second Quarter 2024 conference call. The second quarter was a strong quarter for Viper, with oil production growing roughly 4% quarter over quarter, and our cash available for distribution increasing by almost 9% over the same period.

謝謝你，亞當。歡迎大家，感謝您收聽 Viper Energy 2024 年第二季電話會議。第二季度對 Viper 來說是一個強勁的季度，石油產量環比增長約 4%，我們可用於分配的現金同期增加了近 9%。

As a result of the production outperformance we have seen during the first half of the year, as well as an increase in expectations for the remainder of 2024, we have increased our production guidance for the full year 2024. In addition to updating our full year guidance range, we've also provided guidance for Q3 that implies 1.5% growth relative to Q2, despite losing roughly 150 barrels of oil per day of quarterly production from the non-Permian assets we divested during the second quarter.

由於我們在今年上半年看到了生產表現優異，以及對 2024 年剩餘時間的預期增加，我們提高了 2024 年全年的生產指導。In addition to updating our full year guidance range, we've also provided guidance for Q3 that implies 1.5% growth relative to Q2, despite losing roughly 150 barrels of oil per day of quarterly production from the non-Permian assets we divested during the second四分之一.

Overall, we continue to see strong activity levels across our acreage position and benefit from Diamondback's continued large scale development of Viper's high concentration royalty acreage. In addition to the strong operational and financial results announced yesterday, we also announced that Viper's Board of Directors has approved an 11% increase in our annual base dividend, which highlights the board's belief in a sustainable and growing base dividend can be maintained through the cycle?

總體而言，我們繼續看到整個地區的強勁活動水平，並受益於響尾蛇對 Viper 高集中特許權土地的持續大規模開發。除了昨天宣布的強勁營運和財務業績外，我們還宣布 Viper 董事會已批准將我們的年度基本股息增加 11%，這突顯了董事會相信在整個週期中可以維持可持續且不斷增長的基本股息？

This belief and commitment to our shareholders is supported by Viper's strong balance sheet and durable cash flow profile. Relative to a year ago, when we last increased our base dividend, Viper has grown oil production per share by 14%, while maintaining our cash margins and free cash flow conversion at around 80%. Importantly, at current production levels, the annual fixed amount of the increased based dividend represents roughly 50% of the expected free cash flow at $50 WTI, and is fully protected down to below $30 WTI.

Viper 強勁的資產負債表和持久的現金流狀況支持了這一信念和對股東的承諾。與一年前我們上次增加基本股息時相比，Viper 每股石油產量增加了 14%，同時將我們的現金利潤率和自由現金流轉換保持在 80% 左右。重要的是，在目前的產量水準下，增加的股息的年度固定金額約佔 WTI 50 美元預期自由現金流的 50%，並且在 WTI 低於 30 美元時受到充分保護。

Bigger picture, the second quarter was also an important quarter strategically for Viper. Following our conversion to a Delaware corporation late last year, we were added to several notable indices during the second quarter, including the Russell 1,000. In addition to the increased governance rights that this conversion provided for our shareholders, it has so far also delivered on our expectations of providing an expanded investor base and improved trading liquidity.

從更大的角度來看，第二季對 Viper 來說也是一個重要的戰略季度。去年年底我們轉為特拉華州公司後，我們在第二季被納入了多個著名指數，包括羅素 1,000 指數。此次轉換除了為我們的股東提供了更多的治理權利外，迄今為止還實現了我們提供擴大的投資者基礎和改善交易流動性的期望。

Fundamentally, we believe this conversion is just one step in the process of fully highlighting the advantaged nature of mineral ownership and the unique value proposition that Viper presents within space as well as in the energy complex more broadly. Operator, please open the line for questions.

從根本上說，我們相信這一轉變只是充分凸顯礦產所有權的優勢性質以及 Viper 在太空以及更廣泛的能源綜合體中呈現的獨特價值主張的過程中的一步。接線員，請開通提問線。

Thank you. At this time, we will conduct a question and answer session. (Operator Instructions) The first question comes from Neal Dingmann with Truist. Go ahead, your line is open.

謝謝。這時候，我們將進行問答環節。（操作員說明）第一個問題來自 Truist 的 Neal Dingmann。繼續吧，您的線路已開通。

Good morning. Fantastic results. Travis, my first question is on your 2024 guided production bump. Specifically, you all seem to be expecting some really notable upside, especially when you capture that at -- some of the asset sales. So I'm just wondering, are you assuming much yield, kind of on a go forward or would this forecast, are you assuming much change in rig count? or can we assume the majority of this upside is coming from the operational efficiencies like we've seen over in FANG.

早安.非常棒的結果。Travis，我的第一個問題是關於 2024 年指導生產的高峰。具體來說，你們似乎都在期待一些真正顯著的上漲，尤其是當你們在某些資產銷售中捕捉到這一點時。所以我只是想知道，您是否假設產量很大，或者是在這個預測中，您是否假設鑽機數量發生很大變化？或者我們是否可以假設這種優勢的大部分來自營運效率，就像我們在 FANG 中看到的那樣。

Good question, Neal. You know, I think the high level, as you think about when we start the year, we don't have as much visibility on nonpaying operated properties, and as the year goes on that visibility increases. I mean, I think part of it is the efficiency piece. I think we always kind of expected a pretty big ramp in the back half of the year with some significant paying wells or paying pads coming on, and that gives us a lot of confidence in the third quarter. And then we're starting to see more near-term activity visibility into fourth quarter, showing that we're going to keep growing this business organically in the second half of the year versus the first half. Austen, you want to add anything to that?

好問題，尼爾。你知道，我認為高層，正如你在年初時所想到的那樣，我們對非付費經營的財產沒有那麼多的可見性，而隨著時間的推移，可見性會增加。我的意思是，我認為其中一部分是效率部分。我認為我們總是預計下半年會有相當大的成長，一些重要的付費井或付費墊即將出現，這給了我們對第三季很大的信心。然後我們開始看到第四季度更多的近期活動可見性，這表明我們將在今年下半年（與上半年相比）繼續以自然方式成長這項業務。奧斯汀，你想補充什麼嗎？

Yes. On the divestiture, as a reminder, that was doing about 450 barrels of oil per day and that divestiture closed May 1. So we've got one month of contribution in the second quarter, but have updated the full year guidance to reflect the loss of that production contribution. And to Kaes's point, you know, we only guide to what we can see on. So we have pretty good visibility to the back half of the year on the non-op side.

是的。提醒一下，關於剝離，該公司每天生產約 450 桶石油，剝離於 5 月 1 日結束。因此，我們在第二季有一個月的貢獻，但更新了全年指導，以反映生產貢獻的損失。就凱斯的觀點而言，我們只指導我們所能看到的內容。因此，我們對今年下半年的非操作方面有很好的了解。

On the Diamondback operated side, you know, halfway through the year, we only had about 40% to 45% of the net Diamondback locations turned to production. So we'll see a pretty significant ramp in activity and production there as we kind of progress through the next few quarters.

在響尾蛇營運方面，你知道，今年中期，我們只有大約 40% 到 45% 的響尾蛇淨地點投入生產。因此，隨著我們在接下來的幾個季度取得進展，我們將看到那裡的活動和生產顯著增加。

You know, Neal. Since you listened to the Diamondback call, you heard the commentary around improved efficiencies, and that's obviously a direct read through for operators that are developing Viper's minerals, but also your Diamondback talk about these additional zones that we didn't formally think were Tier 1 zones at the Diamondback level, but now we're confident in the Upper Spraberry and the Wolfcamp D, that those zones are going to start contributing as well too. All of those are positive read-throughs for Viper. And again, I emphasize that in my prepared remarks, with Viper having a below $30 WTI breakeven price, that's a pretty that's a pretty stunning statistics.

你知道，尼爾。自從您聽取了 Diamondback 電話會議以來，您聽到了有關提高效率的評論，這顯然是開發 Viper 礦物的運營商的直接閱讀，而且您的 Diamondback 談論了我們正式認為不屬於 1 級的這些額外區域Diamondback 級別的區域，但現在我們對Upper Spraberry 和Wolfcamp D 充滿信心，這些區域也將開始做出貢獻。所有這些對 Viper 來說都是積極的。我再次強調，在我準備好的發言中，Viper 的 WTI 盈虧平衡價格低於 30 美元，這是一個相當驚人的統計數據。

Great. Great addition there, Travis. And then my second question is just on capital allocation. Specifically, do you view VNOM's payout, maybe for Kaes's options, as opportunistic as paying or given the minimal structure, are you more inclined to stick with the base and variable dividends?

偉大的。很棒的補充，特拉維斯。我的第二個問題是關於資本配置。具體來說，您是否認為 VNOM 的派息（也許是 Kaes 的選擇權）與支付一樣是機會主義的，或者考慮到最小的結構，您是否更傾向於堅持基本股息和可變股息？

Yes, I think the feedback from investors and our board has been to lean more towards the cash distribution model, but also continuing to grow that base dividend. I think we moved this base plus variable model two years ago now. And it's been a positive development.

是的，我認為投資人和董事會的回饋是更傾向現金分配模式，但也持續增加基本股利。我想我們兩年前就移動了這個基礎加變數模型。這是一個積極的發展。

I think buybacks aren't out of the question at Viper, but they're probably third behind based dividend, variable dividend and then buybacks, kind of the opposite at Diamondback, but there will be times of stress in this very cyclical industry where buybacks make a ton of sense, like when we started buying back shares at the end of 2020 and into 2021.

我認為Viper 的回購並不是不可能的，但它們可能排在基於股息、可變股息和回購之後的第三位，這與Diamondback 的情況相反，但在這個週期性很強的行業中，回購會遇到壓力。

But right now, we're very comfortable with the high distribution model.

但現在，我們對高分銷模式感到非常滿意。

Thanks, Kaes.

謝謝，凱斯。

One moment for our next question. The next question comes from Betty Jiang with Barclays. Go ahead, your line is open.

請稍等一下我們的下一個問題。下一個問題來自巴克萊銀行的 Betty Jiang。繼續吧，您的線路已開通。

Good morning. Actually, I have a follow up. I would love to get more color on that visibility on the activity trends that you are seeing. We did note that the rig count on the mineral portfolio is down quarter over quarter but the well backlog is still flattish. So clearly, we're hearing from the not the backhaul that there are some uptick in efficiency gains, but are you seeing more activity conversion from less equipment, basically not just from the Diamondback operated assets, but also a non-op maybe asked another way like Jeff, can you maintain this levels of activity at a portfolio level even at a lower rig count?

早安.事實上，我還有後續行動。我希望能夠更多地了解您所看到的活動趨勢的可見性。我們確實注意到，礦產組合的鑽機數量逐季下降，但油井積壓仍持平。很明顯，我們不是從回程聽到效率增益有所上升，而是您是否看到更少的設備帶來更多的活動轉換，基本上不僅來自響尾蛇運營的資產，而且還可能問另一個非運營商就像傑夫一樣，即使在鑽機數量較少的情況下，您能否在投資組合水平上維持這種活動水平？

Yes. That's a good question, Betty. I mean we, obviously, track the rig count but much more important for us is the work in progress and line of site wells. And then when you look at what percentage of those are converted and then also kind of the cycle times to be converted. So the rig count will fluctuate day-by-day, week-by-week but we haven't really seen any change in the conversion rates at the cycle times. So with those work in progress and line of sight wells kind of staying at all-time highs, we still feel really confident that that's going to lead to some production growth in the back half of the year and into the beginning of part of next year.

是的。這是個好問題，貝蒂。我的意思是，顯然，我們跟踪鑽機數量，但對我們來說更重要的是正在進行的工作和現場井線。然後，當您查看其中的轉換百分比以及要轉換的周期時間時。因此，鑽機數量會每天、每週波動，但我們並沒有真正看到週期時間內的轉換率有任何變化。因此，隨著這些工作的進展和視線井保持在歷史最高水平，我們仍然非常有信心這將導致今年下半年和明年初的產量成長。

Yes. I think the other thing to think about, Betty, is also net rigs, right? I mean we really look at -- you could have a lot of grocery exposure at 0.5% interest across 100 wells. But if you think about the exposure we have to the Diamondback development plan, that's where your net rigs and your net work in progress wells that we have a differential line of sight to really give us an advantage.

是的。貝蒂，我認為另一個要考慮的事情也是漁網，對吧？我的意思是，我們確實在考慮——您可以在 100 口井中以 0.5% 的利率擁有大量雜貨敞口。但如果你考慮我們對響尾蛇開發計劃的了解，那就是你的網路鑽孔機和正在進行的網路運作良好的地方，我們擁有不同的視線，真正為我們帶來了優勢。

No, that makes a lot of sense. And then just a follow-up on the Diamondback portion of the percentage of total activity, 2Q is a bit light on the Diamondback side. So going forward, the backlog Diamondback accounts for roughly 50% of the backlog. So, should that -- should we expect that to revert higher back to that 50% level?

不，這很有意義。然後只是對響尾蛇部分佔總活動百分比的跟踪，第二季度響尾蛇方面有點輕。因此，展望未來，Diamondback 積壓訂單約佔積壓訂單的 50%。那麼，我們是否應該預期會恢復到 50% 的水平？

Yes, that's right. I kind of mentioned it on the previous question, but when we look at the Diamondback net completions expected for the year, only about 40% to 45% of those were in the first half and the remainder will be in the second half. And really you kind of get a little bit of that lumpiness with the large pad sizes. So, it's not always ratable, but we do see the big increase coming in the back half of the year and it will kind of revert being more Diamondback growth driven here now versus the first half having a lot of upside from the third-party piece.

是的，沒錯。我在上一個問題中提到過這一點，但是當我們查看響尾蛇今年預計的淨完工量時，只有大約 40% 到 45% 是在上半年完成的，其餘的將在下半年完成。事實上，大尺寸的焊盤會帶來一點塊狀的感覺。因此，它並不總是可評級的，但我們確實看到今年下半年會大幅成長，並且現在會恢復更多由響尾蛇驅動的成長，而上半年則有很多來自第三方的上行空間。

Great.

偉大的。

Thank you for the color.

謝謝你的顏色。

One moment for our next question. The next question comes from Paul Diamond with Citi. Go ahead, your line is open.

請稍等一下我們的下一個問題。下一個問題來自花旗銀行的保羅·戴蒙德（Paul Diamond）。繼續吧，您的線路已開通。

Thank you. Good morning. Out there.

謝謝。早安.在那裡。

Thank you. Good morning. Thanks for taking my question. Just a quick one for you is kind of think about portfolio optimization in coming quarters. I guess where do you all see the kind of the right mix going forward at current and kind of looking to the next year as far as the breakdown between opportunities across whether it's from within FANG or elsewhere private in the third-party market?

謝謝。早安.感謝您提出我的問題。對您來說，快速思考未來幾季的投資組合優化。我想你們都認為當前的正確組合在哪裡，以及對明年的展望，無論是來自 FANG 內部還是來自第三方市場的其他私人市場的機會之間的細分？

Yes.

是的。

Yeah. I mean I think we're trying to position ourselves to be the consolidator of choice in the Permian. I think you saw how we treated the non-core or non-Permian assets associated with the GRP deal. We kind of monetize those very quickly for a quick gain. But really, I think generally the significant opportunities under Diamondback that would move the needle for Viper production are fewer and further between. Obviously, the potential drop-down from the Endeavor merger is the biggest and most visible.

是的。我的意思是，我認為我們正在努力將自己定位為二疊紀地區的首選整合者。我想您已經看到我們如何處理與 GRP 交易相關的非核心或非二疊紀資產。我們很快就將這些貨幣化以獲取快速收益。但實際上，我認為總體而言，響尾蛇領導下能夠推動毒蛇生產的重大機會越來越少。顯然，奮進合併帶來的潛在下降是最大、最明顯的。

But on a Diamondback stand-alone basis, there's not a lot of Spanish Trail sitting out there. But that's why we've kind of moved to this portfolio effect of looking at really good rock that we covered at the Diamondback level or the Viper level with deals like GRP and that's a deal that's -- it was a $1 billion deal that's tough to get done in the mineral space today. So I think we're positioning ourselves to be the buyer of choice for those large packages with a lot of visibility, a lot of upside in the basin that we know the best.

但就響尾蛇獨立而言，西班牙小徑並不多。但這就是為什麼我們已經轉向這種投資組合效應，著眼於我們在 Diamondback 級別或 Viper 級別上透過 GRP 等交易覆蓋的真正優質岩石，這是一筆 10 億美元的交易，很難達成。空間完成任務。因此，我認為我們將自己定位為那些具有很高知名度、我們最了解的盆地裡有很多上行空間的大型包裝的首選買家。

Understood. Makes perfect sense. And just a quick follow-up. Talking about your visibility into work in progress wells and cycle time evolution. How do you all see the cycle time have obviously been trending positively? How, I guess, how linear should we expect that to be in coming quarters and years in your view?

明白了。很有道理。只是快速跟進。談論您對正在進行的油井和周期時間演變的了解。你們如何看待週期時間明顯呈現正向趨勢？我想，在您看來，我們應該預期未來幾季和幾年的線性度如何？

We don't really model an improvement from here. So we're constantly watching operators kind of by county or even more precise geographic region than that and then also looking at pad size as well to kind of think about what those permits will look like in terms of being converted to production and driving production growth. So I wouldn't say that we've baked in an improvement in cycle times into our modeling. We've kind of kept the historical average. So I would say as long as we have a steady state of work in progress or line of sight wells and cycle time has improved that might just be a little bit of upside to the guidance as we currently have a model.

我們並沒有真正從這裡開始建立改進模型。因此，我們不斷地按縣或更精確的地理區域來觀察運營商，然後也會關注焊盤尺寸，以思考這些許可證在轉化為生產和推動產量增長方面會是什麼樣子。所以我不會說我們已經將週期時間的改進融入我們的建模中。我們保持了歷史平均。因此，我想說，只要我們的工作處於穩定狀態，或者視線井和周期時間有所改善，這可能對指導有一點好處，因為我們目前有一個模型。

Understood. Appreciate the clarity. Thanks for your time.

明白了。欣賞清晰度。感謝您抽出時間。

Standby for our next question.

等待我們的下一個問題。

The next question comes from Leo Mariani with ROTH. Go ahead, your line is open.

下一個問題來自利奧·馬裡亞尼和羅斯。繼續吧，您的線路已開通。

I just wanted to follow up on some of your comments here just around M&A. You talked about, obviously, the Endeavor drop-down being a big focus. Just wanted to kind of get a sense. I know the deal hasn't closed yet, but -- have you all been able to kind of do some prep work ahead of time to maybe try to get that deal to fruition a little sooner. I know there's kind of a lot of land work that needs to kind of get done in the background? Or do you really have to kind of wait for the deal to close to get on that? And then I guess, just -- is there any kind of high-level expectation on when that might happen? Do you guys anticipate that, that big deal could happen kind of by middle of next year.

我只是想跟進您關於併購的一些評論。顯然，您談到 Endeavour 下拉選單是一個重點。只是想了解一下。我知道交易還沒完成，但是——你們都能夠提前做一些準備工作，以便嘗試讓交易提早實現。我知道有很多土地工作需要在後台完成？或者你真的必須等待交易完成才能進行嗎？然後我想，對於何時發生這種情況，是否有任何高層期望？你們是否預計到，這筆大交易可能會在明年年中發生？

Yeah, Leo. This has been a pretty restrictive process with the FTC second request at Diamondback. So we haven't been able to do much if anything at all. We look forward to getting through that very quickly here and then hitting the ground running. I think history is any guide. We are -- we don't move very slow -- well at Viper or Diamondback. And so we'll get to work on it right away. And I think nothing has changed from our perspective on the sizing and potential opportunity set that we put in the merger deck at the Diamondback level.

是的，利奧。這是聯邦貿易委員會在響尾蛇提出的第二次要求的一個相當嚴格的過程。所以我們根本沒能做太多事。我們期待在這裡快速解決這個問題，然後開始行動。我認為歷史是有指導意義的。我們在 Viper 或 Diamondback 方面進展得併不慢。所以我們會立即著手解決這個問題。我認為，從我們對響尾蛇級別合併平台的規模和潛在機會集的角度來看，沒有任何改變。

Okay. No, that's helpful. And is it fair to say just based on your kind of prepared comments that you walked through on some of the M&A stuff that the smaller deals, just kind of the little stuff has kind of been a little more competitive and it's really these really big deals that you might see out there that are third party and then in kind of the drop-down here from endeavor, that's the type of things we should expect VNOM to focus on.

好的。不，這很有幫助。公平地說，根據您對一些併購事項所準備的評論，較小的交易，只是一些小交易更具競爭力，而且這些交易確實是大交易您可能會看到第三方，然後從努力的下拉列表中看到，這就是我們應該期望VNOM 關注的事情類型。

Yes. I think certainly, from an external perspective, that's what we're focused on. We still try to get the little deals here and there, but I think you'd be shocked to see how many kind of $20 million to $50 million mineral funds there are that you never see on the outside. So those competitors are very aggressive on smaller deals. They probably take a little more risk on undeveloped acreage and timing, and we kind of see our spot in the food chain as being the aggregator of those aggregators and being able to come to an opportunity with real amount of cash, real amount of market access, real amount of liquidity. And so that's why we've been really trying to improve our liquidity and trading volume position over the last 12 months, and it's paid dividends for our unitholders.

是的。我認為，從外在角度來看，這當然是我們關注的重點。我們仍然嘗試到處達成小額交易，但我想如果你看到有多少 2000 萬至 5000 萬美元的礦產基金是你在外面從未見過的，你會感到震驚。因此，這些競爭對手在較小規模的交易上非常積極。他們可能會在未開發的土地和時機上承擔更多的風險，我們認為我們在食物鏈中的地位是這些聚合者的聚合者，並且能夠獲得擁有大量現金、真實市場准入的機會，實際流動資金量。這就是為什麼我們在過去 12 個月裡一直在努力改善我們的流動性和交易量頭寸，並且它為我們的單位持有人帶來了紅利。

Okay. Thanks, Kaes.

好的。謝謝，凱斯。

Thanks, Leo.

謝謝，利奧。

This concludes the question-and-answer session. I would now like to turn it back to Travis Stice, CEO, for closing remarks.

問答環節到此結束。現在我想請執行長 Travis Stice 發表結束語。

Thank you. This call this morning is concluded, and thank you for attending. If you've got any questions, please reach out. Thank you again, and have a great day.

謝謝。今天早上的電話會議到此結束，感謝您的出席。如果您有任何疑問，請與我們聯絡。再次感謝您，祝您有美好的一天。

This does conclude the program. You may now disconnect.

這確實結束了該程式。您現在可以斷開連線。