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Viper Energy (VNOM) Up 0.3% Since Last Earnings Report: Can It Continue?

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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 0.3% 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 drivers.

Viper Energy Q2 Earnings in Line With Estimates

Viper Energy Partners LP reported second-quarter 2022 adjusted earnings per unit of 43 cents, in line with the Zacks Consensus Estimate. The bottom line significantly improved from the year-ago quarter’s profit of 9 cents per share.

The partnership, with mineral interests in North America oil and gas resources, generated an operating income of $239.3 million, beating the Zacks Consensus Estimate of $220 million. The top line increased from the year-ago quarter’s $114.2 million.

Viper Energy’s quarterly results were aided by higher oil-equivalent production and prices.

Increase in Buyback Program

As a measure of enhancing its capital return plan, Viper Energy hiked its unit buyback authorization from $250 million to $750 million.

Production

The resources, wherein the partnership has mineral interests, produced 3,054 thousand oil-equivalent barrels (MBoe) for the June quarter of 2022, up from 2,489 MBoe in the year-ago quarter. Of the total volume, oil contributed 58.9%. The production of crude oil, natural gas and natural gas liquids increased from the prior-year quarter.

Realized Prices

Overall average realized price per barrel of oil equivalent was recorded at $78.20 compared with $45.58 in second-quarter 2021. Average realized oil prices in the second quarter were $106.34 per barrel, up from $62.51 a year ago. The price of natural gas was $6.10 per thousand cubic feet, up from $2.96 in the year-ago quarter. The same for natural gas liquids was $39.28 a barrel, up from $22.21.

Costs & Expenses

In second-quarter 2022, total expenses amounted to $49.9 million versus $34.3 million in the prior-year quarter. On a per barrel of oil equivalent (Boe) basis, total operating expenses were recorded at $5.76 versus $4.01 in the year-ago quarter.

Cash Flow

Net cash from operating activities was recorded at $163.2 million, up from $75 million in the second quarter of 2021.

Balance Sheet

As of Jun 30, 2022, Viper Energy’s cash and cash equivalents were $4.3 million. It reported net long-term debt of $674.4 million.

Guidance

For the third and fourth quarters, Viper Energy initiates its production in the range of 32,750 to 34,500 Boe/d. For 2022, the partnership is increasing its guidance for production to the band of 32,500 to 33,750 Boe/d from the prior range of 30,500 to 32,750 Boe/d.

How Have Estimates Been Moving Since Then?

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

The consensus estimate has shifted 68.97% due to these changes.

VGM Scores

Currently, Viper Energy has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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 #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Viper Energy belongs to the Zacks Oil and Gas - Exploration and Production - United States industry. Another stock from the same industry, EQT Corporation (EQT - Free Report) , has gained 11.9% over the past month. More than a month has passed since the company reported results for the quarter ended June 2022.

EQT Corporation reported revenues of $1.61 billion in the last reported quarter, representing a year-over-year change of +61.7%. EPS of $0.83 for the same period compares with $0.07 a year ago.

EQT Corporation is expected to post earnings of $0.96 per share for the current quarter, representing a year-over-year change of +700%. Over the last 30 days, the Zacks Consensus Estimate has changed +4.6%.

EQT Corporation has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.


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