VNOM - Viper Energy Partners LP a Subsidiary of Diamondback Energy Inc. Announces Acquisition | Benzinga
MIDLAND, Texas, Sept. 05, 2023 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (NASDAQ:VNOM) ("Viper" or the "Company"), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) ("Diamondback"), today announced it has entered into a definitive purchase and sale agreement to acquire certain mineral and royalty interests from affiliates of Warwick Capital Partners and GRP Energy Capital (collectively, the "Seller") in exchange for approximately 9.02 million Viper common units and $750 million of cash, subject to customary adjustments. The cash portion of this transaction is expected to be funded through a combination of cash on hand, borrowings under the Company's credit facility, and up to $200 million of committed equity from Diamondback, as well as proceeds from one or more capital markets transactions, including a potential bond offering, subject to market conditions and other factors.
ACQUISITION HIGHLIGHTS
- Approximately 4,600 net royalty acres in the Permian Basin, plus an additional ~2,700 net royalty acres in other major basins; total acreage of roughly 7,300 net royalty acres
- Permian Basin assets represent over 90% of current production and total deal value
- Valuation implies a greater than 15% 2024 unlevered free cash flow yield at current strip prices giving credit to only existing PDP, DUCs and permits
- High confidence visibility to near-term production growth results in meaningful and immediate accretion to all relevant financial metrics; accretion expected to grow in subsequent years due to the highly undeveloped nature of the asset
- Current production of approximately 4,000 bo/d (~7,000 boe/d); expected to increase to ~4,750 bo/d (~8,500 boe/d) for full year 2024 based on existing production and timing assumptions on current work-in-progress locations that are more conservative than Viper's typical base assumptions
- Increases expected pro forma 2024 per unit return of capital to unitholders by an estimated 7-8%
- Viper will issue approximately 9.02 million common units to the Seller at closing, subject to certain closing adjustments
- Diamondback has granted Viper the right to cause Diamondback to purchase up to 7.22 million common units for up to an aggregate of $200 million to partially finance the transaction; this right is exercisable by Viper until the closing date of the acquisition
- Viper intends to finance the remaining cash portion of the purchase price through a combination of cash on hand, existing borrowing capacity under its revolving credit facility, and/or proceeds from one or more capital markets transactions, including a potential bond offering, subject to market conditions and other factors
- Effective date of October 1, 2023, with closing anticipated by the middle ...