Why Is Viper Energy (VNOM) Up 4.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Viper Energy Partners (VNOM). Shares have added about 4.3% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Viper Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Viper Energy Q4 Earnings Top Estimates
Viper Energy Partners LP reported fourth-quarter 2023 adjusted earnings per unit of 67 cents, which beat the Zacks Consensus Estimate of 47 cents. The bottom line also increased from the year-ago quarter’s 28 cents.
The partnership, with mineral interests in North America oil and gas resources, generated an operating income of $204.7 million, which missed the Zacks Consensus Estimate of $207 million. The top line increased from the year-ago quarter’s $203.6 million.
Viper Energy’s strong quarterly earnings were aided by higher oil-equivalent production volumes.
Production
The resources, wherein the partnership has mineral interests, produced 4,028 thousand oil-equivalent barrels (MBoe) in the December-end quarter of 2023, up from 3,214 MBoe a year ago. The reported figure is in line with our estimate.
Of the total volume, oil contributed 56% to 2,257 thousand barrels of oil (MBbls), up from 1,838 MBbls a year ago. The metric also beat our estimate of 2,240 MBbls.
The production of crude oil, natural gas and natural gas liquids increased from the prior-year quarter’s level.
Realized Prices
The overall average realized price per barrel of oil equivalent was $50.20 compared with $57.92 in fourth-quarter 2022. The figure was slightly above our estimate of $49.42.
Average realized oil prices in the quarter under review were $77.65 per barrel, down from $83.30 in the year-ago quarter. The price of natural gas was $1.50 per thousand cubic feet, down from $3.74 in the year-ago quarter. The price for natural gas liquids was $21.47 a barrel, down from $25.65 a year ago.
Costs & Expenses
In the fourth quarter, total expenses were $61.7 million compared with $44.6 million in the prior-year quarter. The figure is below our estimate of $66.5 million.
On a per barrel of oil-equivalent (Boe) basis, total operating expenses were $4.03 compared with $4.07 in the year-ago quarter. The figure also lagged our estimate of $5.84.
Cash Flow
Net cash provided by operating activities was $145.8 million, down from $186.6 million in the fourth quarter of 2022.
Balance Sheet
As of Dec 31, 2023, Viper Energy’s cash and cash equivalents were $25.9 million. The company reported a net long-term debt of $1.1 billion.
Guidance
For 2024, the partnership expects a total production of 45.5-49 MBoe/d, indicating an increase from the 43.8 MBoe/d reported in 2023. For the first quarter, it anticipates production of 44.75-45.50 MBoe/d.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -6.56% due to these changes.
VGM Scores
Currently, Viper Energy has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Viper Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Viper Energy Inc. (VNOM) : Free Stock Analysis Report
