Introduction
The share price of Viper Energy (VNOM) has taken a very large plunge so far during 2020, as collapsing oil prices darken their outlook and thus distributions. Given their uncommon and rather unique situation, I believe that analyzing the capital expenditure and financial position of their relevant counterparties can provide insights into their future.
Background
Unlike the vast majority of companies in the oil and gas industry, they derive their income from royalties attached to oil and gas production on their acreage. Whilst this brings the benefit of virtually