VNOM - Viper Energy Partners: Potential For A $1 Per Unit Distribution In 2021 At Mid-$40s Oil
- Viper has high-quality royalty acreage that is mostly in the Permian Basin, with Diamondback Energy being the main operator.
- It may be able to generate $1.45 per unit in discretionary cash flow in 2021 at around $45 WTI oil.
- Hedges partially reduce the company's ability for its margins to benefit from higher oil prices, as around 62% of its 2021 oil production is hedged with a ceiling of $43.05.
- Higher oil prices would result in production growth on Viper's acreage that it would benefit from though.
- A $1 per unit distribution in 2021 would allow the company to pay down some of its debt and potentially repurchase units.
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Viper Energy Partners: Potential For A $1 Per Unit Distribution In 2021 At Mid-$40s Oil