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Viper Energy's Q3 Crude Oil Production Increases Sequentially

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Viper Energy Partners LP (VNOM - Free Report) has provided a glimpse of its third-quarter operational update.

The limited partnership said that it produced 26,409 barrels of oil equivalent per day (BoE/D) on an average through the September quarter of 2020. This reflects an improvement of 7.8% from 24,508 BoE/D of average daily combined volumes in the June quarter of 2020.

The partnership’s third-quarter average oil production was 15,829 barrels per day, suggesting a sequential improvement of almost 10%. The outperformance was owing to the upstream energy companies returning previously curtailed production in the prolific resources, where the partnership has mineral interest. The resumption of completion activities by Diamondback Energy, Inc. (FANG), the parent company of Viper Energy, in those resources also supported the sequential volume growth.

Viper Energy added that the unhedged realized price of crude oil in the September quarter was $36.80 per barrel, reflecting an increase from the prior quarter’s $21 per barrel. The realized price of natural gas was $1.07 per Mcf, up from 46 cents per Mcf in the June quarter.

Overall, with easing lockdown measures to combat the coronavirus pandemic, fuel demand is gradually improving, which reflects higher commodity price realizations and production volumes from the resources where the partnership has mineral interest. Importantly, Viper Energy expects that as compared to the first half of 2020, the partnership will be in a better position to generate cashflows for unitholders in the second half. This is because the partnership’s outlook for production and commodity prices is promising. Viper Energy added that from the peak level, its net debt load is declining, thanks to higher cashflow generations.

Based in Midland, TX, Viper Energy currently carries a Zacks Rank #3 (Hold). Meanwhile, better-ranked players in the energy space include Cabot Oil Gas Corporation (COG - Free Report) , Apache Corporation (APA - Free Report) and EOG Resources, Inc. (EOG - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cabot Oil Gas Corporation has seen upward earnings estimate revisions for 2020 in the past 30 days.

Apache has seen upward estimate revisions for its bottom-line for 2020 in the past 30 days.

EOG Resources has seen upward estimate revisions for its bottom-line for 2020 in the past 60 days.

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