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Why Is Viper Energy (VNOM) Up 8.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for Viper Energy Partners (VNOM - Free Report) . Shares have added about 8.6% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Viper Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Viper Energy Q4 Earnings Beat on Higher Production

Viper Energy reported fourth-quarter 2021 adjusted earnings per unit of 36 cents, comfortably beating the Zacks Consensus Estimate of 19 cents. The bottom line increased from the year-ago quarter’s earnings of 12 cents per share.

The partnership, with mineral interests in North America oil and gas resources, generated an operating income of $165.8 million, beating the Zacks Consensus Estimate of $131 million. The top line also increased from the year-ago quarter’s $76 million.

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

Distribution

The partnership was authorized by the board of directors of its general partner to make a cash distribution of 47 cents per common unit, payable Mar 11, 2022, to shareholders of record as of Mar 4, 2022. The metric increased almost 24% from the prior-quarter figure of 38 cents per common unit.

Production

The resources, wherein the partnership has mineral interests, produced 2,885 thousand oil-equivalent barrels (MBoe) for the December-end quarter of 2021, up from 2,549 MBoe in the year-ago quarter. Of the total volumes, oil contributed 58.6% 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 $56.82 compared with $29.48 in fourth-quarter 2020. Average realized oil prices for the quarter under review were recorded at $74 per barrel, up from $40.36 a year ago. The price of natural gas was $4.82 per thousand cubic feet, up from $1.36 in the year-ago quarter. The same for natural gas liquids was recorded at $36.65 a barrel, up from the year-ago quarter’s $14.71.

Costs & Expenses

Total expenses for fourth-quarter 2021 amounted to $39.6 million versus $105 million in the prior-year quarter. On a per barrel of oil equivalent (Boe) basis, total operating expenses were recorded at $3.65 versus $2.83 in the year-ago quarter.

Cash Flow

Net cash from operating activities was recorded at $107.4 million, up from $53.4 million in the fourth quarter of 2020.

Balance Sheet

As of Dec 31, 2021, Viper Energy’s cash and cash equivalents were $39.4 million. It reported net long-term debt of $776.7 million, representing a debt to capitalization of 25.8%.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

Currently, Viper Energy has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Viper Energy has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.


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