Viper Energy, Inc.
For the period ended Mar 31, 2026. Filed May 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
VNOM$40.62+2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0002074176-25-000053
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCapital ResourcesCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0002074176-26-000030
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCapital ResourcesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 124 previous paragraphs and 102 current paragraphs.
35 unchanged; 47 reworded; 18 added; 41 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 11 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
On May 1, 2026, we and Viper Energy Partners LP entered into a definitive purchase and sale agreement to acquire all of the equity interests of Riverbend Oil & Gas IX, L.L.C., from Riverbend for consideration consisting of (i) approximately $337 million in cash, and (ii) 3,689,865 shares of our Class A Common Stock, in each case, subject to customary closing adjustments. The mineral and royalty interests to be acquired in the Pending Riverbend Acquisition represent approximately 3,064 net royalty acres in the Permian Basin. The Pending Riverbend Acquisition is expected to close during the third quarter of 2026, subject to customary closing conditions. See Note 13—Subsequent Events of the notes to the condensed consolidated financial statements for additional information on the Pending Riverbend Acquisition.
Current report
Secondary Offering
Current report
On March 4, 2026, we completed the 2026 Secondary Offering, which authorized the Selling Stockholders to sell an aggregate of (i) 17,391,304 shares of Class A Common Stock, and (ii) up to an additional 2,608,696 shares of Class A Common Stock at the public offering price of $45.90. On March 19, 2026, the Underwriters exercised a portion of the Underwriter Option and purchased an additional 954,809 shares of Class A Common Stock. We did not receive any proceeds from the 2026 Secondary Offering or the Shoe Exercise.
Current report
Increase in Repurchase Program Authorization
Current report
On February 18, 2026, our board of directors approved an increase in authorization under our existing repurchase program from $750 million to $1.75 billion, excluding excise tax. As of May 1, 2026, approximately $1.14 billion remained available for future repurchases under our repurchase program, excluding excise tax.
Current report
Divestiture Update
Current report
On February 9, 2026, we completed the Non-Permian Divestiture for net cash proceeds of approximately $610 million, including transaction costs and customary post-closing adjustments. The divested properties consisted of approximately 9,400 net royalty acres in the Denver-Julesburg, Eagle Ford and Williston basins with then-current production of approximately 4,750 BO/d. Proceeds from the Non-Permian Divestiture were used to (i) repay the $500 million Term Loan in full, (ii) fully repay $90 million of then-outstanding borrowings under our Revolving Credit Facility, and (iii) for general corporate purposes.
Current report
As of March 31, 2026, there were 88 gross rigs operating on our mineral and royalty acreage, 13 of which are operated by Diamondback. We delivered a strong start to 2026, with first quarter production exceeding expectations and an increased growth outlook for the remainder of 2026. With the Pending Riverbend Acquisition, we continue our strategy to consolidate the highly fragmented minerals and royalty sector. Currently, excluding the Pending Riverbend Acquisition, we estimate full year production levels in 2026 may range between approximately 126 MBOE/d to 130 MBOE/d.
Current report
Royalty income increased by $74 million during the first quarter of 2026 compared to the fourth quarter of 2025. This net increase consisted of an additional $91 million in royalty income attributable to higher average commodity prices received primarily for our oil production in the first quarter of 2026 compared to the fourth quarter of 2025, partially offset by a reduction of $17 million due to a 5% decrease in our production.
Current report
Of the 5% decrease in production, approximately 3% was attributable to the Non-Permian Divestiture, with the remaining change largely due to having two fewer days in the first quarter of 2026 compared to the fourth quarter of 2025. See
Current report
Interest Expense, Net. Interest expense, net decreased by approximately $9 million in the first quarter of 2026 compared to the fourth quarter of 2025, primarily due to the repayment of the Term Loan in February 2026 and the early termination of the Notes in the fourth quarter of 2025.
Current report
Net cash used in financing activities during the three months ended March 31, 2026, was primarily attributable to (i) $500 million paid for the retirement of the Term Loan, (ii) $213 million of dividends paid to holders of our OpCo Units and our Class A Common Stock, (iii) $96 million of securities repurchases under our repurchase program, and (iv) net repayments of $85 million on our Revolving Credit Facility.
Current report
We expect to continue paying quarterly cash dividends in respect of our Class A Common Stock and OpCo Units. Future base and variable dividends are not required and are at the discretion of the board of directors, who may change the dividend policy at any time. See Note 7—Stockholders’ Equity of the notes to the condensed consolidated financial statements for further discussion of the repurchase program and dividends.
Current report
The Guaranteed Senior Notes are fully and unconditionally guaranteed by each of Former Viper and New Viper. Following the Reorganization, Viper Energy Partners LP became the issuer of the Guaranteed Senior Notes.
Current report
The Guaranteed Senior Notes and the guarantees are obligations of the issuer and the guarantors that (i) are senior unsecured obligations and rank equally in right of payment with all of their respective existing and future senior indebtedness, including obligations under the Revolving Credit Facility, (ii) rank senior in right of payment to any of their respective future indebtedness that is expressly subordinated in right of payment to the Guaranteed Senior Notes or the guarantees, as applicable, (iii) are effectively subordinated to any of their respective existing and future secured indebtedness to the extent of the value of the collateral securing such indebtedness, and (iv) are structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) of subsidiaries that are not obligors under the Guaranteed Senior Notes.
Current report
In the event of bankruptcy, liquidation, reorganization or other winding up of the issuer or a guarantor or upon a default in payment with respect to, or the acceleration of, any senior secured indebtedness of the issuer or a guarantor, the assets that secure such senior secured indebtedness will be available to pay obligations on the Guaranteed Senior Notes and the guarantees only after all obligations under such senior secured indebtedness have been repaid in full from such assets. There may not be sufficient assets remaining to pay amounts due on any or all of the Guaranteed Senior Notes then outstanding and the guarantees.
Current report
The obligations of the guarantors under the guarantees are limited in a manner designed to prevent the guarantees from constituting a fraudulent conveyance or fraudulent transfer under applicable law, although no assurance can be given that a court would give the holder the benefit of such provision. If a guarantee were rendered voidable, it could be subordinated by a court to all other indebtedness (including contingent liabilities) of such guarantor, and, depending on the amount of such indebtedness, the guarantor’s liability on such guarantee could be reduced to zero.
Removed paragraphs (41)
Previous report
On October 30, 2025, we entered into an equity interest purchase agreement to divest all its non-Permian assets, including those acquired from Sitio, for a purchase price of approximately $670 million, subject to customary purchase price adjustments. The properties to be divested consist of approximately 9,400 net royalty acres in the Denver-Julesburg, Eagle Ford and Williston basins with current production of approximately 4,750 BO/d. The Pending Non-Permian Divestiture is subject to customary closing conditions and is expected to close in the first quarter of 2026.
Previous report
Acquisitions Update
Previous report
Sitio Acquisition
Previous report
On August 19, 2025, we completed the Sitio Acquisition in an all-equity transaction valued at approximately $4.0 billion, subject to further adjustments for transaction costs and certain customary post-closing adjustments, including the retirement of Sitio’s net debt of approximately $1.2 billion. The mineral and royalty interests acquired in the Sitio Acquisition represent approximately 25,300 net royalty acres in the Permian Basin and approximately 9,000 net royalty acres in the Denver-Julesburg, Eagle Ford and Williston basins, for total acreage of approximately 34,300 net royalty acres.
Previous report
During the nine months ended September 30, 2025, we acquired, in individually insignificant transactions from unrelated third-party sellers, mineral and royalty interests representing 270 net royalty acres in the Permian Basin for an aggregate purchase price of approximately $72 million, subject to customary post-closing adjustments.
Previous report
Debt Transactions
Previous report
Notes Offering and Redemption of Notes
Previous report
On July 23, 2025, the Operating Company issued the Guaranteed Senior Notes for an aggregate principal amount of $1.6 billion. We used a portion of the net proceeds from the issuance of the Guaranteed Senior Notes to redeem or satisfy and discharge, as applicable, approximately $780 million in aggregate principal amount of our previously outstanding Notes, including accrued interest paid and redemption premiums. The 2027 Notes were subsequently redeemed in full on November 1, 2025. We used the remaining net proceeds (i) to retire Sitio’s 7.875% senior notes due 2028, (ii) to repay borrowings under Sitio’s revolving credit facility, (iii) to pay fees, costs and expenses related to the redemption or repayment of such debt, and (iv) for general corporate purposes.
Previous report
Term Loan
Previous report
In connection with the closing of the Sitio Acquisition, we entered into the $500 million Term Loan, which was fully drawn in a single borrowing to partially fund the retirement of Sitio’s debt.
Previous report
2025 Equity Offering
Previous report
On February 3, 2025, we completed an underwritten public offering of 28,336,000 shares of our Class A Common Stock, which included 3,696,000 shares issued pursuant to an option to purchase additional shares of Class A Common Stock granted to the underwriters, at a price to the public of $44.50 per share, for total net proceeds of approximately $1.2 billion, after the underwriters’ discount and transaction costs. We used the net proceeds from the 2025 Equity Offering to fund (i) the cash consideration for the Morita Ranches Acquisition, (ii) a portion of the cash consideration for the 2025 Drop Down, and (iii) for general corporate purposes.
Previous report
For additional information around risks related to commodity prices, see Part II. Item 3. Quantitative and Qualitative Disclosures About Market Risk—Commodity Price Risk.
Previous report
Guidance
Previous report
The following table presents our current estimates of certain financial and operating results for the full year 2025, as well as production and cash tax guidance for the fourth quarter of 2025.
Previous report
(1) Attributable to Viper.
Previous report
As of September 30, 2025, there are 104 gross rigs operating on our mineral and royalty acreage, nine of which are operated by Diamondback. During the third quarter of 2025, we continued to execute on our growth strategy, bolstered by the closing of the Sitio Acquisition and continued organic growth. Looking ahead to 2026, we anticipate mid-single digit organic oil production growth from the fourth quarter of 2025 estimated production on our Permian assets.
Previous report
(1) Includes the horizontal wells turned to production by Sitio from July 1, 2025 through August 18, 2025.
Previous report
Royalty income increased by $106 million during the third quarter of 2025 compared to the second quarter of 2025 due to a 39% increase in production. The average realized price for our combined production did not change significantly between quarters due largely to the increase in our average realized oil price being offset by the decrease in our average realized natural gas liquids price for the third quarter of 2025 compared to the second quarter of 2025.
Previous report
Transaction Expenses. The $15 million in transaction expenses recorded in the third quarter of 2025 primarily consisted of employee severance costs related to the Sitio Acquisition. The $10 million in transaction expenses recorded in the second quarter of 2025 are costs related to the 2025 Drop Down, which was accounted for as a common control transaction, including $5 million of deal advisory fees and other individually insignificant costs for accounting, legal and filing fees.
Previous report
Interest Expense, Net. The increase in net interest expense of $17 million for the third quarter of 2025 compared to the second quarter of 2025 consisted primarily of (i) $16 million in additional expense incurred for our Guaranteed Senior Notes, which were issued July 23, 2025, (ii) $3 million in additional expense incurred on the Term Loan, (iii) $2 million in additional amortization of debt issuance costs related to costs incurred on the Guaranteed Senior Notes and the Term Loan, and (iv) other individually insignificant changes. These increases in net interest expense were partially offset by interest cost savings of $6 million due to the early termination of the Notes.
Previous report
Comparison of the Nine Months Ended September 30, 2025, and 2024
Previous report
Impairment. See discussion in “—Results of Operations—Comparison of the Three Months Ended September 30, 2025, and June 30, 2025” above.
Previous report
Transaction expenses. The $25 million in transaction expenses recorded in the nine months ended September 30, 2025, are (i) $15 million in employee severance costs related to the Sitio Acquisition, and (ii) costs related to the 2025 Drop Down, which was accounted for as a common control transaction, including $5 million of deal advisory fees and other individually insignificant costs for accounting, legal and filing fees.
Previous report
Gain (loss) on Early Extinguishment of Debt. See discussion in “—Results of Operations—Comparison of the Three Months Ended September 30, 2025, and June 30, 2025” above.
Previous report
At September 30, 2025, we had approximately $1.4 billion of liquidity consisting of $53 million in cash and cash equivalents and $1.3 billion in available borrowings under the 2025 Revolving Credit Facility. At September 30, 2025, our $380 million 2027 Notes were recorded as a current liability in the condensed consolidated balance sheet and were subsequently redeemed on November 1, 2025, with funds held in restricted cash as discussed in Note 6—Debt of the notes to the condensed consolidated financial statements. See “—Capital Resources” below for additional discussions of changes in our sources of cash.
Previous report
Net cash provided by financing activities during the nine months ended September 30, 2025, was primarily attributable to (i) net proceeds from the issuance of the Guaranteed Senior Notes of $1.6 billion, (ii) proceeds of $1.2 billion from the 2025 Equity Offering, and (iii) net proceeds from the Term Loan of $500 million. These cash inflows were partially offset by (i) net repayments of $101 million on the 2025 Revolving Credit Facility, (ii) a payment of $427 million for the retirement of the outstanding 2031 Notes principal and redemption premium and $50 million paid for the redemption of a portion of principal outstanding on the 2027 prior to their satisfaction and discharge, (iii) $512 million of dividends paid to holders of the OpCo Units and our Class A Common Stock, and (iv) $100 million of repurchases as part of the share repurchase programs.
Previous report
The 2025 Revolving Credit Facility and Other Debt Instruments
Previous report
We receive debt ratings from the major ratings agencies in the U.S., which impact the interest rates we receive on our variable rate debt and interest rate swaps. In determining our debt ratings, the agencies consider a number of qualitative and quantitative items including, but not limited to, commodity pricing levels, our liquidity, asset quality, reserve mix, debt levels, cost structure, planned asset sales and production growth opportunities. In May 2025, Fitch Investor Services upgraded our credit rating to investment grade, the second such investment grade credit rating for us. This upgrade granted us access to a broader investor base, lower interest rates and reduced collateral requirements; therefore, enhancing our liquidity. Currently, our credit ratings from the three main credit rating agencies are as follows:
Previous report
•Standard and Poor’s Global Ratings Services (BBB-);
Previous report
Any rating downgrades may result in additional letters of credit or cash collateral being posted under certain contractual arrangements.
Previous report
On July 23, 2025, we redeemed all of our 2031 Notes and subsequently redeemed our 2027 Notes on November 1, 2025, for an aggregate cash purchase price of approximately $780 million. On August 19, 2025, we used the remaining proceeds from the issuance of the Guaranteed Senior Notes and borrowings under the Term Loan to retire approximately $1.2 billion of Sitio’s outstanding debt.
Previous report
During the second quarter of 2025, we opportunistically repurchased principal amounts of $50 million of our 2027 Notes in open market transactions for total cash consideration of $50 million, at an average of 99.7% of par value. We may continue from time to time to opportunistically repurchase some of the outstanding Notes in open market purchases or in privately negotiated transactions.
Previous report
In 2025 we do not expect to incur any cash interest costs on the Guaranteed Senior Notes. We expect to incur future cash interest costs on the Guaranteed Senior Notes of approximately $174 million cumulatively in the years from 2026 through 2027, $174 million cumulatively in the years from 2028 through 2029 and $402 million between 2030 and 2035.
Previous report
As we move to close the Pending Non-Permian Divestiture, and as a result move closer to our net debt target of $1.5 billion, we will have line of sight to return nearly 100% of cash available for distribution to stockholders. We expect to continue to allocate the majority of our cash available for distribution to our base plus variable dividend but feel compelled to repurchase of shares of our Class A Common Stock in today’s market given the current market dislocation. See Note 7—Stockholders’ Equity of the notes to the condensed consolidated financial statements for further discussion of the repurchase program and dividends.
Showing the first 40 of 41 passages. Open the source sections for the rest.
Reworded paragraphs (47)
Previous wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto presented in this report as well as our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. See Part II. Item 1A. Risk Factors and Cautionary Statement Regarding Forward-Looking Statements.
Current wording
The following discussion and analysis should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto presented in this report as well as our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. See Part II. Item 1A. Risk Factors, Part I. Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025 and Cautionary Statement Regarding Forward-Looking Statements.
Previous wording
Pending Divestiture of Non-Permian Assets
Current wording
Divestiture of Non-Permian Assets
Previous wording
At September 30, 2025, our footprint of mineral and royalty interests totaled approximately 95,846 net royalty acres, approximately 39% of which are operated by Diamondback.
Current wording
At March 31, 2026, our footprint of mineral and royalty interests totaled approximately 86,639 net royalty acres, approximately 38% of which are operated by Diamondback. See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional information on our acquisitions and divestitures.
Previous wording
Prices for oil, natural gas and natural gas liquids are determined primarily by prevailing market conditions. Regional and worldwide economic activity, changes in trade or other government policies or regulations, including with respect to tariffs or other trade barriers and any resulting trade tensions, extreme weather conditions and other substantially variable factors influence market conditions for these products. These factors are beyond our control and are difficult to predict. OPEC and its non-OPEC allies, known collectively as OPEC+, continue to meet regularly to evaluate the state of global oil supply, demand and inventory levels and can heavily influence volatility in oil prices. During the nine months ended September 30, 2025, and 2024, WTI prices averaged $66.65 and $77.61 per Bbl, respectively, and Henry Hub prices averaged $3.48 and $2.22 per MMBtu, respectively.
Current wording
Prices for oil, natural gas and natural gas liquids are determined primarily by prevailing market conditions. Geopolitical global conflicts, tariffs or other trade barriers and any resulting trade tensions, regional and worldwide economic activity, changes in trade or other government policies or regulations, including with respect to U.S. energy and monetary policies, extreme weather conditions and other substantially variable factors influence market conditions for these products. For example, in the last quarter the global crude oil market shifted from a supply-demand surplus to a deficit, materially reducing crude oil and refined products from the markets, and increasing benchmark crude oil prices. These factors are beyond our control and are difficult to predict. OPEC+ continues to meet regularly to evaluate the state of global oil supply, demand and inventory levels and can heavily influence volatility in oil prices. During the three months ended March 31, 2026, and 2025, WTI prices averaged $72.67 and $71.42 per Bbl, respectively, and Henry Hub prices averaged $3.47 and $3.87 per MMBtu, respectively.
Previous wording
The following table summarizes our gross well information for the third quarter ended September 30, 2025:
Current wording
The following table summarizes our gross well information for the first quarter ended March 31, 2026:
Previous wording
(2) Average lateral length of 10,947.
Current wording
(1)Average lateral length of 11,583 feet.
Previous wording
(3) The total 1,947 gross wells currently in the process of active development are those wells that have been spud and are expected to be turned to production within approximately the next six to eight months.
Current wording
(2)The total 1,370 gross wells currently in the process of active development are those wells that have been spud and are expected to be turned to production within approximately the next six to eight months.
Previous wording
(4) The total 1,664 gross line-of-sight wells are those that are not currently in the process of active development, but for which we have reason to believe will be turned to production within approximately the next 15 to 18 months. The expected timing of these line-of-sight wells is based primarily on permitting by third-party operators or Diamondback’s current expected completion schedule. Existing permits or active development of our royalty acreage does not ensure that those wells will be turned to production given the volatility in oil prices.
Current wording
(3)The total 1,351 gross line-of-sight wells are those that are not currently in the process of active development, but for which we have reason to believe will be turned to production within approximately the next 15 to 18 months. The expected timing of these line-of-sight wells is based primarily on permitting by third-party operators or Diamondback’s current expected completion schedule. Existing permits or active development of our royalty acreage does not ensure that those wells will be turned to production given the volatility in oil prices.
Previous wording
(1) Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
Current wording
(1)Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
Previous wording
(2) Realized price net of all deducts for gathering, transportation and processing.
Current wording
(2)Realized price net of all deducts for gathering, transportation and processing.
Previous wording
(3) Hedged prices reflect the impact of cash settlements of our matured commodity derivative transactions on our average sales prices.
Current wording
(3)Hedged prices reflect the impact of cash settlements of our matured commodity derivative transactions on our average sales prices.
Previous wording
Significant changes in our revenues and expenses between the third quarter of 2025 and the second quarter of 2025 are discussed further below.
Current wording
Significant changes in our revenues and expenses between the first quarter of 2026 and the fourth quarter of 2025 are discussed further below.
Previous wording
Of the overall 39% increase in production, approximately 58% is attributable to the Sitio Acquisition, 33% is attributable to recording a full quarter of production from the 2025 Drop Down, and 9% is attributable to adjustments recorded in the third quarter of 2025 to estimated volumes accrued in the second quarter of 2025. See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional discussion of our acquisitions.
Current wording
Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional discussion of our acquisitions.
Previous wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices, and ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Production taxes and ad valorem taxes as a percentage of royalty income for the third quarter of 2025 were relatively consistent with the second quarter of 2025.
Current wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices. Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Production taxes and ad valorem taxes as a percentage of royalty income for the first quarter of 2026 were relatively consistent with the fourth quarter of 2025.
Previous wording
Depletion. The increase in depletion expense of $58 million for the third quarter of 2025 compared to the second quarter of 2025 consisted primarily of (i) $48 million from growth in production volumes, and (ii) $10 million due to an increase in the depletion rate to $18.17 per BOE for the third quarter of 2025, resulting primarily from the addition of leasehold costs and reserves from the Sitio Acquisition compared to $17.19 per BOE for the second quarter of 2025.
Current wording
Depletion. The decrease in depletion expense of $28 million for the first quarter of 2026 compared to the fourth quarter of 2025 consisted primarily of (i) $17 million due to a reduction in the depletion rate to $17.51 per BOE for the first quarter of 2026 compared to $18.98 per BOE for the fourth quarter of 2025, and (ii) $11 million from the decline in production volumes. The rate decrease largely resulted from reductions in the depletable base related to the Non-Permian Divestiture and the ceiling test impairment recorded in the fourth quarter of 2025 as discussed below.
Previous wording
Impairment. In the third quarter of 2025, we recorded a non-cash ceiling test impairment charge of $360 million due to the carrying value of our proved reserves exceeding their estimated future net cash flows utilizing the SEC’s methodology and pricing at September 30, 2025. The excess value resulted primarily from recording properties acquired in the 2025 Drop Down at Diamondback’s historical carrying value, which exceeded the value calculated in the ceiling test using the SEC Prices at September 30, 2025. No impairment expense was recorded for the second quarter of 2025.
Current wording
Impairment. No impairment expense was recorded in the first quarter of 2026. In the fourth quarter of 2025, we recorded a non-cash ceiling test impairment charge of $408 million due to the carrying value of our proved reserves exceeding their estimated future net cash flows utilizing the SEC’s methodology and pricing at December 31, 2025. The excess value resulted primarily from recording properties acquired in the 2025 Drop Down at the seller’s historical carrying value, which exceeded the value calculated in the ceiling test due primarily to declining SEC Prices.
Previous wording
Impairment charges affect our results of operations but do not reduce our cash flow. In addition to commodity prices, our production rates, levels of proved reserves, future development costs, transfers of unevaluated properties, income tax rate assumptions and other factors will determine our actual ceiling test calculation and impairment analysis in future periods. Given the overall decline in SEC Prices through the first three quarters of 2025 and into the fourth quarter of 2025, as compared to 2024, we believe an additional material non-cash impairment of our assets is reasonably likely to occur in the fourth quarter of 2025; however, based on the number of factors that may impact our future estimate of proved reserves, we are currently unable to determine an estimate of the amount or range of amounts of any potential impairment charge in the fourth quarter of 2025.
Current wording
Impairment charges affect our results of operations but do not reduce our cash flow. In addition to commodity prices, our production rates, levels of proved reserves, transfers of unevaluated properties, income tax rate assumptions and other factors will determine our actual ceiling test calculation and impairment analysis in future periods. Given the overall increase in SEC Prices through the first quarter of 2026 and into the second quarter of 2026, we currently do not anticipate recording a material non-cash impairment of our assets in the second quarter of 2026; however, based on the number of factors that may impact our future estimate of proved reserves, we could have material write-downs in subsequent quarters.
Previous wording
The $47 million change to a gain on derivative instruments, net in the third quarter of 2025 compared to a loss in the second quarter of 2025 consists of (i) a $38 million increase in the value of our open natural gas contracts due primarily to a $43 million increase in the value of our basis swaps from changes in the differential between prices for Waha Hub and Henry Hub, (ii) a $7 million decrease in the estimated fair value of our 2026 WTI Contingent Liability based on fluctuations in the projected WTI 2025 Average price, (iii) a $5 million increase in cash receipts on settled natural gas basis swaps, and (iv) a $3 million cash receipt on our treasury locks, which were terminated upon issuance of the Guaranteed Senior Notes. These increases were offset by a $5 million decrease in the value of our open oil contracts and other insignificant changes.
Current wording
The $5 million decrease in the gain on derivative instruments, net in the first quarter of 2026 compared to the fourth quarter of 2025 consisted primarily of (i) a reduction of approximately $9 million in the value of our open oil contracts, (ii) a gain of approximately $7 million on our 2026 WTI Contingent Liability recorded in the fourth quarter of 2025, and (iii) a reduction of approximately $3 million in the value of our open natural gas contracts primarily due to changes in the differential between prices for Waha Hub and Henry Hub. These decreases in the gain on derivative instruments were partially offset by an increase of approximately $12 million in cash receipts on settled natural gas basis swaps, and other insignificant changes.
Previous wording
Provision for (Benefit from) Income Taxes. The $33 million change from income tax expense to benefit from income taxes for the third quarter of 2025 compared to the second quarter of 2025 primarily resulted from a net loss attributable to Viper driven by the $360 million non-cash impairment recorded in the third quarter of 2025. See Note 9—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of income tax expense.
Current wording
Provision for (Benefit from) Income Taxes. The $49 million change to income tax expense in the first quarter of 2026 from income tax benefit in the fourth quarter of 2025 was primarily driven by the $408 million non-cash impairment recorded in the fourth quarter of 2025. See Note 9—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of income tax expense.
Previous wording
Net Income (Loss) Attributable to Non-controlling Interest. The $167 million decrease in net income attributable to non-controlling interest for the third quarter of 2025 compared to the second quarter of 2025 is primarily due to a net loss resulting from the $360 million non-cash impairment expense recorded in the third quarter of 2025 and changes in the non-controlling interest in the Operating Company resulting from the issuance of OpCo Units to fund the Sitio Acquisition in the third quarter of 2025.
Current wording
Net Income (Loss) Attributable to Non-Controlling Interest. The change to $118 million in net income attributable to non-controlling interest for the first quarter of 2026 from a net loss attributable to non-controlling interest of $143 million in the fourth quarter of 2025 was primarily due to (i) the $408 million non-cash impairment recorded in the fourth quarter of 2025, and (ii) a dilution of the non-controlling interest following the 2026 Secondary Offering.
Previous wording
(1) Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
Current wording
(1)Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.
Previous wording
(2) Realized price net of all deducts for gathering, transportation and processing.
Current wording
(2)Realized price net of all deducts for gathering, transportation and processing.
Previous wording
(3) Hedged prices reflect the impact of cash settlements of our matured commodity derivative transactions on our average sales prices.
Current wording
(3)Hedged prices reflect the impact of cash settlements of our matured commodity derivative transactions on our average sales prices.
Previous wording
Significant changes in our revenues and expenses for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, are discussed further below.
Current wording
Significant changes in our revenues and expenses for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, are discussed further below.
Previous wording
Royalty income increased $295 million during the nine months ended September 30, 2025, compared to the same period in 2024. This net increase consisted of an additional $410 million in royalty income from the 71% growth in production, partially offset by a decrease of $115 million due primarily to lower average prices received for our oil production during 2025 compared to the same period in 2024.
Current wording
Royalty income increased $252 million during the three months ended March 31, 2026, compared to the same period in 2025. This net increase was primarily due to an additional $282 million in royalty income from the 128% growth in production, partially offset by a net decrease of $30 million from lower average natural gas and natural gas liquids prices received for our production during the first quarter of 2026 compared to the same period in 2025.
Previous wording
Of the 71% growth in production, approximately 52% is attributable to the 2025 Drop Down, 17% is attributable to the Sitio Acquisition, 9% is attributable to the Tumbleweed Acquisitions, and 2% is attributable to the Morita Ranches Acquisition. The remainder of the growth is primarily from new wells added between periods. See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional discussion of our acquisitions.
Current wording
Of the 128% growth in production, approximately 54% was attributable to the Sitio Acquisition and 45% was attributable to the 2025 Drop Down. The remainder of the growth is primarily from new wells added between periods. See Note
Previous wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices. Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Production taxes and ad valorem taxes as a percentage of royalty income for the nine months ended September 30, 2025, were relatively consistent with the same period in 2024.
Current wording
In general, production taxes are directly related to production revenues and are based upon current year commodity prices. Ad valorem taxes are based, among other factors, on property values driven by prior year commodity prices. Production taxes and ad valorem taxes as a percentage of royalty income for the three months ended March 31, 2026, were relatively consistent with the same period in 2025.
Previous wording
Depletion. The increase in depletion expense of $223 million for the nine months ended September 30, 2025, compared to the same period in 2024 consisted primarily of (i) $116 million due to an increase in the depletion rate to $16.66 per BOE for the nine months ended September 30, 2025, resulting primarily from the addition of leasehold costs and reserves from the TWR Acquisition, the Morita Ranches Acquisition, the 2025 Drop Down and the Sitio Acquisition compared to $11.47 per BOE for the same period in 2024, and (ii) $107 million from growth in production volumes.
Current wording
Depletion. The increase in depletion expense of $139 million for the three months ended March 31, 2026, compared to the same period in 2025 consisted primarily of (i) $86 million from growth in production volumes, and (ii) $53 million due to an increase in the depletion rate to $17.51 per BOE for the three months ended March 31, 2026, resulting primarily from the addition of leasehold costs and reserves from the 2025 Drop Down and the Sitio Acquisition compared to $12.97 per BOE for the same period in 2025.
Previous wording
Interest Expense, Net. The increase in net interest expense of $6 million for the nine months ended September 30, 2025, compared to the same period in 2024 consisted primarily of (i) approximately $16 million in additional expense incurred for our Guaranteed Senior Notes, which were issued July 23, 2025, (ii) approximately $3 million in additional interest expense incurred on the Term Loan, and (iii) other individually insignificant changes. These increases in net interest expense were partially offset by (i) the receipt of approximately $7 million in additional interest income, and (ii) interest cost savings of approximately $7 million due to the early termination of the Notes.
Current wording
Interest Expense, Net. The increase in interest expense, net of $14 million for the three months ended March 31, 2026, compared to the same period in 2025 consisted primarily of (i) approximately $22 million in additional expense incurred for our Guaranteed Senior Notes, (ii) approximately $3 million in additional interest expense incurred on the Term Loan prior to its termination, and (iii) a reduction of approximately $3 million in interest income. These increases in interest expense, net were partially offset by interest cost savings of approximately $13 million due to the early termination of the Notes.
Previous wording
The $16 million increase in the gain on derivative instruments, net for the nine months ended September 30, 2025, compared to the same period in 2024 consists primarily of (i) a $25 million increase in cash receipts on our settled natural gas basis swaps, (ii) a $3 million decrease in the estimated fair value of our 2026 WTI Contingent Liability based on fluctuations in the projected WTI 2025 Average price, (iii) a $3 million increase in the value of our open oil contracts, (iv) a $3 million cash receipt on our treasury locks, which were terminated upon issuance of the Guaranteed Senior Notes, and (v) other insignificant changes. These increases were primarily offset by a $15 million decrease in the value of our open natural gas contracts primarily due to changes in the differential between prices for Waha Hub and Henry Hub on our basis swaps and other insignificant changes.
Current wording
The $14 million decrease in the gain on derivative instruments, net for the three months ended March 31, 2026, compared to the same period in 2025 consisted primarily of (i) a reduction of approximately $14 million in the value of our open natural gas contracts due primarily to changes in the differential between prices for Waha Hub and Henry Hub, (ii) a reduction of approximately $9 million in the value of our open oil contracts, and (iii) an increase of approximately $2 million in cash paid to settle oil contracts. These decreases in the gain on derivative instruments were partially offset by an increase of approximately $13 million in cash receipts on settled natural gas basis swaps and other insignificant changes.
Previous wording
Provision for (Benefit from) Income Taxes. The $41 million decrease in income tax expense for the nine months ended September 30, 2025, compared to the same period in 2024 primarily resulted from a decrease in pre-tax income attributable to Viper driven by the $360 million non-cash impairment recorded in the third quarter of 2025. See Note 9—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of income tax expense.
Current wording
Provision for (Benefit from) Income Taxes. The $7 million increase in income tax expense for the three months ended March 31, 2026, compared to the same period in 2025 primarily resulted from an increase in pre-tax income attributable to Viper. See Note 9—Income Taxes of the notes to the condensed consolidated financial statements for further discussion of income tax expense.
Previous wording
Net Income (Loss) Attributable to Non-controlling Interest. The $177 million decrease in net income attributable to non-controlling interest for the nine months ended September 30, 2025, compared to the same period in 2024 is primarily due to a decrease in net income and changes in the non-controlling interest in the Operating Company resulting from (i) the Drop Down Equity Issuance, (ii) the issuance of OpCo Units to fund the Sitio Acquisition in the third quarter of 2025, (iii) the issuance of OpCo Units to the Morita Ranches Equity Recipients, and (iv) the issuance of OpCo Units to TWR IV in the fourth quarter of 2024, which were partially offset by a dilution of the non-controlling interest following the 2024 Equity Offering and the 2025 Equity Offering.
Current wording
Net Income (Loss) Attributable to Non-Controlling Interest. The $40 million increase in net income attributable to non-controlling interest for the three months ended March 31, 2026, compared to the same period in 2025 was primarily due to (i) an increase in net income, and (ii) changes in the non-controlling interest in the Operating Company resulting from the Drop Down Equity Issuance and the issuance of OpCo Units to fund the Sitio Acquisition, which were partially offset by a dilution of the non-controlling interest following the 2025 Equity Offering and the 2026 Secondary Offering.
Previous wording
As we pursue our business and financial strategy, we regularly consider which capital resources, including cash flow, equity and debt financings, are available to meet our future financial obligations and liquidity requirements. Our future ability to grow proved reserves will be highly dependent on the capital resources available to us. Our primary sources of liquidity have been cash flows from operations, equity and debt offerings, borrowings underthe 2025 Revolving Credit Facility and proceeds from sales of non-core assets. Our primary uses of cash have been dividends to our stockholders, Operating Company distributions to the holders of OpCo Units, repayments of debt, capital expenditures for the acquisition of our mineral and royalty interests in oil and natural gas properties, including the recently completed Sitio Acquisition, the 2025 Drop Down and the Morita Ranches Acquisition and repurchases of our Class A Common Stock.
Current wording
As we pursue our business and financial strategy, we regularly consider which capital resources, including cash flow and equity and debt financings, are available to meet our future financial obligations and liquidity requirements. Our future ability to grow proved reserves will be highly dependent on the capital resources available to us. Our primary sources of liquidity have been cash flow from operations, equity and debt offerings, borrowings underour Revolving Credit Facility, term loan agreements and proceeds from sales of non-core assets. Our primary uses of cash have been dividends to our stockholders, Operating Company distributions to the holders of OpCo Units, repayments of debt, capital expenditures for the acquisition of our mineral and royalty interests in oil and natural gas properties and repurchases of our Common Stock and OpCo Units. At March 31, 2026, we had $1.51 billion of liquidity consisting of $28 million in cash and cash equivalents and $1.48 billion in available borrowings under our Revolving Credit Facility. See “—Capital Resources” below for additional discussions of changes in our sources of cash.
Previous wording
Our working capital requirements are supported by our cash and cash equivalents andthe 2025 Revolving Credit Facility. We may draw onthe 2025 Revolving Credit Facility to meet short-term cash requirements, or issue debt or equity securities as part of our longer-term liquidity and capital management program. Because of the alternatives available to us as discussed above, we believe our short-term and long-term liquidity are adequate to fund not only our current operations, but also our near-term and long-term funding requirements including future acquisitions of mineral and royalty interests, dividends, debt service obligations, repayment of debt maturities, any repurchases of our Class A Common Stock, Notes or Guaranteed Senior Notes and any amounts that may ultimately be paid in connection with contingencies.
Current wording
Our working capital requirements are supported by our cash and cash equivalents and our Revolving Credit Facility. We may draw on our Revolving Credit Facility to meet short-term cash requirements, or issue debt or equity securities as part of our longer-term liquidity and capital management program. Because of the alternatives available to us as discussed above, we believe our short-term and long-term liquidity are adequate to fund not only our current operations, but also our near-term and long-term funding requirements including dividends, debt service obligations, repayment of debt maturities, any repurchases of our Common Stock, OpCo Units or Guaranteed Senior Notes and any amounts that may ultimately be paid in connection with contingencies.
Previous wording
In order to mitigate volatility in oil and natural gas prices, we have entered into commodity derivative contracts as discussed further in Part II. Item 3. Quantitative and Qualitative Disclosures About Market Risk—Commodity Price Risk.
Current wording
In order to mitigate volatility in oil and natural gas prices, we have entered into commodity derivative contracts as discussed further in Note 10—Derivatives of the notes to the condensed consolidated financial statements.
Previous wording
Continued prolonged volatility in the capital, financial and/or credit markets due to changing or adverse macroeconomic conditions, including tariffs, higher interest rates, global supply chain disruptions and actions taken by OPEC members and other exporting nations, conflicts in the Middle East and globally may limit our access to, or increase our cost of, capital or make capital unavailable on terms acceptable to us or at all. Although we expect that our sources of funding will be adequate to fund our short-term and long-term liquidity requirements, we cannot assure you that the needed capital will be available on acceptable terms or at all.
Current wording
Continued prolonged volatility in the capital, financial and/or credit markets due to changing or adverse macroeconomic conditions, including geopolitical global conflicts, elevated interest rates, effects of tariffs, actions taken by OPEC members and other exporting nations and global supply chain disruptions may limit our access to, or increase our cost of, capital or make capital unavailable on terms acceptable to us or at all. Although we expect that our sources of funding will be adequate to fund our short-term and long-term liquidity requirements, we cannot assure you that the needed capital will be available on acceptable terms or at all.
Previous wording
Our operating cash flow is sensitive to many variables, the most significant of which are the volatility of prices for oil and natural gas and the volumes of oil and natural gas sold by our producers. The increase in net cash provided by operating activities during the nine months ended September 30, 2025, compared to the same period in 2024 was primarily driven by an increase in royalty and lease bonus income and receiving cash payments on our derivatives in 2025 compared to making cash payments to counterparties in 2024. These increases in cash flow were partially offset by an increase in certain cash costs for transaction expenses and production taxes and other changes in our working capital accounts including the timing of when accounts receivable are collected. See “—Results of Operations” for discussion of significant changes in our revenues and expenses.
Current wording
Our operating cash flow is sensitive to many variables, the most significant of which are the volatility of prices for oil and natural gas and the volumes of oil and natural gas sold by our operators. The increase in net cash provided by operating activities during the three months ended March 31, 2026, compared to the same period in 2025 was primarily driven by an increase in royalty income, which was partially offset by changes in our working capital accounts including the timing of when accounts receivable are collected and when payments are made on accounts payable. See “—Results of Operations” for discussion of significant changes in our income and expenses.
Previous wording
Net cash used in investing activities during the nine months ended September 30, 2024, was primarily related to the Q Acquisition, the M Acquisition and acquisitions of oil and natural gas interests from third parties, partially offset by proceeds from the divestiture of our non-Permian assets.
Current wording
Net cash provided by investing activities during the three months ended March 31, 2026, was primarily related to proceeds received from the Non-Permian Divestiture, partially offset by insignificant acquisitions of oil and natural gas properties. See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional information on these transactions.
Previous wording
Net cash used in investing activities during the nine months ended September 30, 2025, was primarily related to acquisitions of oil and natural gas interests, including the approximately $1.2 billion repayment made for Sitio’s outstanding debt as part of the consideration for the Sitio Acquisition, the 2025 Drop Down, the Morita Ranches Acquisition and from other third parties. See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional information on these acquisitions.
Current wording
Net cash used in investing activities during the three months ended March 31, 2025, was primarily related to acquisitions of oil and natural gas properties and a $223 million escrow deposit made for the 2025 Drop Down.
Previous wording
Net cash used in financing activities during the nine months ended September 30, 2024, was primarily attributable to $349 million of dividends paid to holders of the OpCo Units and our Class A Common Stock and net repayments of $263 million on the Operating Company’s previous revolving credit facility, offset by proceeds of $476 million from the 2024 Equity Offering.
Current wording
Net cash provided by financing activities during the three months ended March 31, 2025, was primarily attributable to proceeds of $1.2 billion from the 2025 Equity Offering, partially offset by net repayments of $261 million on our Revolving Credit Facility and $153 million of dividends paid to holders of our OpCo Units and our Class A Common Stock.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Comparison of the Three Months Ended March 31, 2026, and 2025
Current report — wording carried from elsewhere
4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional discussion of our acquisitions.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
See Note 4—Acquisitions and Divestitures of the notes to the condensed consolidated financial statements for additional information on these acquisitions.