Viper Energy — Financial Results

Production Nearly Doubled Thanks to Two Major Acquisitions

Production grew 91% year-over-year, with 46% of that growth coming from the 2025 Drop Down (24,446 Permian acres acquired from parent company Diamondback for $873 million in cash plus equity) and 32% from the Sitio Acquisition (34,300 acres acquired in an all-equity deal valued at ~$4.0 billion). Royalty income rose $492 million as a result, though lower oil prices partially offset the volume gains.

Falling Oil Prices Triggered a $768 Million Write-Down

Oil prices dropped from an average of $75.76/Bbl in 2024 to $63.27/Bbl in 2025 — a 16% decline. Under accounting rules, when the carrying value (the book value of assets on the balance sheet) of proved reserves exceeds what those reserves are estimated to be worth at current prices, a company must record a non-cash impairment charge. That produced a $768 million write-down in 2025, flipping net income from $604 million in 2024 to a net loss of $206 million. Importantly, this does not affect cash flow — it is a purely accounting-driven loss.

Cash Flow From Operations Grew Strongly Despite the Accounting Loss

Operating cash flow — the actual cash the business generated — rose 70% to $1.05 billion, reflecting the much larger production base. The net loss is explained entirely by the non-cash impairment; the underlying business generated meaningfully more cash than the prior year.

Another Impairment Is Likely in Early 2026

The company explicitly warned that oil prices have continued declining into early 2026, and that a material additional non-cash impairment in the first quarter of 2026 is "reasonably likely." The exact amount cannot yet be determined. Investors should expect another accounting loss in Q1 2026, though again this would not directly reduce cash generation.

Non-Permian Assets Sold; Company Sharpens Permian Focus

In February 2026, Viper completed the sale of roughly 9,400 royalty acres in the Denver-Julesburg, Eagle Ford and Williston basins for approximately $617 million in net proceeds. The proceeds were used to fully repay the $500 million Term Loan and reduce revolving credit borrowings, meaningfully cleaning up the balance sheet. This leaves Viper almost entirely focused on the Permian Basin.

Shareholder Returns Ramped Up Significantly

The board raised the annual base dividend to $1.52 per share and expanded the share repurchase program authorization from $750 million to $1.75 billion, with ~$1.2 billion remaining as of February 2026. The company returned 90% of cash available for distribution (the cash left after operating costs) to shareholders in Q4 2025, and signaled it intends to push that toward 100% going forward. Total dividends paid in 2025 were $745 million, up from $481 million in 2024.