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Viper Energy (VNOM) Sees Q1 Output Rise, Production Fall

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Viper Energy Partners LP VNOM recently announced first-quarter 2021 production and realized price of commodities. This preliminary data will give an insight into the partnership’s first-quarter earnings, scheduled to release on May 3. Moreover, the partnership bought back $13 million worth of common units in the quarter.

First-Quarter Production

Overall production averaged 26,066 barrels of oil equivalent per day (Boe/d). The figure was lower than the year-ago period’s 27,575 Boe/d. Oil production for the quarter was recorded at 15,500 barrels per day (bpd), lower than 17,441 bpd a year ago. The partnership faced adverse weather conditions due to the winter Storm Uri, which might have affected production.

In the first quarter, 134 horizontal wells were turned to production at an average lateral length of 10,584 feet. Of the gross number of wells, 50 were operated by the parent company, Diamondback Energy, Inc. FANG.

Realized Prices

Hedged realized price of oil was $45.45 per barrel for the first quarter. The same for natural gas liquids (NGLs) and natural gas was recorded at $22.42 per barrel and $2.77 per thousand cubic feet (Mcf), respectively. Overall hedged realized oil equivalent price was $34.77 per barrel, higher than the year-ago quarter’s $30.44.

During the first quarter, unhedged realized price of oil was $56.16 per barrel. The same for NGLs and natural gas was recorded at $22.42 per barrel and $2.77 cents per Mcf, respectively. Overall hedged realized oil equivalent price was $41.14 per barrel, reflecting a huge jump from the year-ago figure of $30.62.

What to Expect

Higher commodity prices might have boosted first-quarter earnings and partially offset the negative impacts of lower production. As such, the Zacks Consensus Estimate for Viper Energy’s first-quarter earnings is 4 cents per share. Earnings of 21 cents per share were recorded in the year-ago period. In the past 60 days, the partnership has witnessed three upward and downward estimate revisions each.

Looking Ahead

For the rest of the year, production is expected to remain strong. Parent company Diamondback resumed completion activities following the winter Storm Uri. In the second half of the year, it is expected to complete more wells, which will boost production metrics.

Price Performance

Units of the partnership have popped 34.2% in the year-to-date period.

Zacks Rank & Other Stocks to Consider

The partnership currently has a Zacks Rank #2 (Buy). Other top-ranked players in the energy space include CrossAmericaPartners LP CAPL and Equinor ASA EQNR, each having a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CrossAmerica’s bottom line for first-quarter 2021 is expected to surge 166.7% year over year.

Equinor’s bottom line for first-quarter 2021 is expected to rise 111.8% year over year.

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