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Viper Energy (VNOM) Gains 2% as Q3 Earnings Beat Estimates

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Viper Energy Partners LP (VNOM - Free Report) has gained almost 2% since it reported the strong third-quarter 2021 results on Nov 1.

The partnership, an affiliate of Diamondback Energy, Inc. (FANG - Free Report) , reported adjusted earnings per unit of 21 cents for the third quarter, beating the Zacks Consensus Estimate for earnings of 9 cents. The bottom line improved from the breakeven earnings in the year-ago quarter.

The partnership — with mineral interests in North America oil and gas resources — generated operating income of $128 million, beating the Zacks Consensus Estimate of $101 million. The top line also increased from the year-ago quarter’s $62.9 million.

The strong quarterly results were aided by an increase in oil-equivalent production volumes and higher commodity price realizations.

Viper Energy Partners LP Price, Consensus and EPS Surprise

 

Distribution

The partnership was authorized by the board of directors of its general partner to make a cash distribution of 38 cents per common unit, payable Nov 18, 2021, to shareholders of record as of Nov 11, 2021. The metric increased 15% from the prior-quarter figure of 33 cents per common unit.

Production

The resources, wherein the partnership has mineral interests, produced 2,541 thousand oil-equivalent barrels (MBoe) for the September-end quarter of 2021, up from 2,430 MBoe in the year-ago quarter. Of the total volumes, oil contributed 58.2% to the total production. The production of crude oil, natural gas and natural gas liquids increased from the prior-year quarter figure.

Realized Prices

Overall average realized price per barrel of oil equivalent was recorded at $50.24 compared with $25.76 in third-quarter 2020. Average realized oil prices for the quarter under review were recorded at $67.67 per barrel, up from $36.80 a year ago. The price of natural gas was $3.61 per thousand cubic feet, up from $1.07 in the year-ago quarter. The same for natural gas liquids was recorded at $30.66 a barrel, up from the year-ago quarter’s $12.44.

Costs & Expenses

Total expenses for third-quarter 2021 amounted to $35.7 million versus $31.6 million in the prior-year quarter. On a per barrel of oil equivalent (Boe) basis, total operating expenses were recorded at $3.98 versus $2.71 in the year-ago quarter.

Cash Flow

Net cash from operating activities was recorded at $70 million, up from $27.3 million in the third quarter of 2020.

Balance Sheet

As of Sep 30, 2021, Viper Energy’s cash and cash equivalents were $41.5 million. It reported net long-term debt of $564.5 million, representing a debt to capitalization of 23.3%.

Guidance

For 2021, the partnership increased its daily average oil equivalent production to 27.3-27.8 thousand barrels of oil equivalent per day (MBoe/d) from 26.3-27 MBoe/d mentioned earlier.

The partnership sets its average daily production guidance for fourth-quarter 2021 and first-quarter 2022 in the range of 28.3-29.5 Mboe/d.

Zacks Rank & Stocks to Consider

The partnership currently has a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space are Chevron Corporation (CVX - Free Report) and Range Resources Corporation (RRC - Free Report) . Both companies currently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chevron is expected to witness earnings growth of 19.1% in 2021.

Range Resources is expected to see a surge in earnings of 73.2% in 2021.