Exhibit 99.3
Viper Energy Partners LP
Unaudited Pro Forma Condensed Combined Financial Statements
On November 1, 2023, (the “Closing Date”) Viper Energy Partners LP (“Viper” or the “Partnership”) and its subsidiary Viper Energy Partners LLC (“Viper OpCo”) acquired certain mineral and royalty interests (the “Assets”) from Royalty Asset Holdings, LP, Royalty Asset Holdings II, LP and Saxum Asset Holdings, LP (collectively, “the Sellers,” and affiliates of Warwick Capital Partners and GRP Energy Capital) pursuant to a definitive purchase and sale agreement for approximately 9.02 million common units (the “Common Unit Consideration”) and $750.0 million in cash (the “Cash Consideration”), subject to customary post-closing adjustments (the “Acquisition”). The mineral and royalty interests acquired in the Acquisition represent approximately 4,600 net royalty acres in the Permian Basin, plus approximately 2,700 additional net royalty acres in other major basins. The cash consideration for the Acquisition was funded through a combination of cash on hand and held in escrow, borrowings under Viper OpCo’s revolving credit facility, proceeds from the offering of $400.0 million in aggregate principal amount of 7.375% Senior Notes maturing on November 1, 2031 (the “2031 Notes”) and proceeds from a $200.0 million common unit issuance to Diamondback Energy, Inc and its subsidiary, Diamondback E&P LLC (collectively, “Diamondback”) on October 31, 2023.
The Acquisition was accounted for as an asset acquisition in accordance with Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”). The fair value of the consideration paid by the Partnership and the allocation of that amount to the underlying assets acquired is recorded on a relative fair value basis. Additionally, transaction costs directly related to the Acquisition are capitalized as a component of the purchase price.
The following unaudited pro forma condensed combined financial statements (the “pro forma financial statements”) are based on the Partnership’s historical consolidated financial statements, adjusted to give effect to transaction adjustments for (i) the Acquisition of the Assets by the Partnership from the Sellers, and (ii) the funding of the purchase price for the Acquisition.
The following pro forma financial statements present (i) our unaudited pro forma balance sheet as of September 30, 2023, (ii) our unaudited pro forma statement of operations for the nine months ended September 30, 2023 and (iii) our unaudited pro forma statement of operations for the year ended December 31, 2022. The pro forma balance sheet assumes that the Acquisition as well as the debt and equity transactions executed to finance the Acquisition all occurred on September 30, 2023. The pro forma statements of operations for the nine months ended September 30, 2023 and the year ended December 31, 2022 give pro forma effect to the Acquisition and related financing transactions as if they had occurred on January 1, 2022, the beginning of the earliest period presented.
The pro forma adjustments related to the Acquisition and related financing for the transaction are based on available information and certain assumptions that management believes are factually supportable, as further described below in Note 3—Pro Forma Adjustments and Assumptions. In the opinion of management, all adjustments necessary to present fairly the pro forma financial statements have been made.
These pro forma financial statements are for information purposes only and do not purport to represent what the Partnership’s financial position and results of operations would have been had the Acquisition occurred on the dates indicated. These pro forma financial statements should not be used to project the Partnership’s financial performance for any future period. A number of factors may affect the results.
The pro forma financial statements have been developed from and should be read in conjunction with:
a.the accompanying notes to the pro forma financial statements;
b.the historical combined financial statements of the Sellers and related notes for the year ended December 31, 2022 and for the nine months ended September 30, 2023; and
c.the separate historical consolidated financial statements and related notes thereto in the Partnership’s filings with the Securities and Exchange Commission.
1
Viper Energy Partners LP
Unaudited Pro Forma Condensed Combined Balance Sheet
As of September 30, 2023 | ||||||||||||||||||||
Viper (Historical) | Transaction Accounting Adjustments | Viper Pro Forma Combined | ||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 146,814 | $ | (95,836) | (e) | $ | 50,978 | |||||||||||||
Royalty income receivable (net of allowance for credit losses) | 103,804 | — | 103,804 | |||||||||||||||||
Royalty income receivable—related party | 7,431 | — | 7,431 | |||||||||||||||||
Other current assets | 4,081 | — | 4,081 | |||||||||||||||||
Total current assets | 262,130 | (95,836) | 166,294 | |||||||||||||||||
Property: | ||||||||||||||||||||
Oil and natural gas interests, full cost method of accounting | 3,592,768 | 1,013,427 | (a) | 4,606,195 | ||||||||||||||||
Land | 5,688 | — | 5,688 | |||||||||||||||||
Accumulated depletion and impairment | (821,565) | — | (821,565) | |||||||||||||||||
Property, net | 2,776,891 | 1,013,427 | 3,790,318 | |||||||||||||||||
Funds held in escrow | 50,000 | (50,000) | (f) | — | ||||||||||||||||
Deferred income taxes (net of allowances) | 48,768 | — | 48,768 | |||||||||||||||||
Other assets | 5,577 | — | 5,577 | |||||||||||||||||
Total assets | $ | 3,143,366 | $ | 867,591 | $ | 4,010,957 | ||||||||||||||
Liabilities and Unitholders’ Equity | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 197 | $ | — | $ | 197 | ||||||||||||||
Accrued liabilities | 24,688 | — | 24,688 | |||||||||||||||||
Derivative instruments | 9,284 | — | 9,284 | |||||||||||||||||
Income taxes payable | 13,322 | — | 13,322 | |||||||||||||||||
Total current liabilities | 47,491 | — | 47,491 | |||||||||||||||||
Long-term debt, net | 675,681 | 412,991 | (b) | 1,088,672 | ||||||||||||||||
Derivative instruments | 1,619 | — | 1,619 | |||||||||||||||||
Total liabilities | 724,791 | 412,991 | 1,137,782 | |||||||||||||||||
Commitments and contingencies | ||||||||||||||||||||
Unitholders’ equity: | ||||||||||||||||||||
General Partner | 589 | — | 589 | |||||||||||||||||
Common units | 712,728 | 254,600 | (c) | 1,014,976 | ||||||||||||||||
200,000 | (d) | |||||||||||||||||||
(152,352) | (g) | |||||||||||||||||||
Class B units | 757 | — | 757 | |||||||||||||||||
Total Viper Energy Partners LP unitholders’ equity | 714,074 | 302,248 | 1,016,322 | |||||||||||||||||
Non-controlling interest | 1,704,501 | 152,352 | (g) | 1,856,853 | ||||||||||||||||
Total equity | 2,418,575 | 454,600 | 2,873,175 | |||||||||||||||||
Total liabilities and unitholders’ equity | $ | 3,143,366 | $ | 867,591 | $ | 4,010,957 |
See accompanying notes to unaudited pro forma condensed consolidated combined financial statements.
2
Viper Energy Partners LP and Subsidiary
Unaudited Pro Forma Condensed Combined Statement of Operations
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||
Viper (Historical) | Sellers (Historical) | Transaction Accounting Adjustments | Viper Pro Forma Combined | |||||||||||||||||||||||
(In thousands, except per unit amounts) | ||||||||||||||||||||||||||
Operating income: | ||||||||||||||||||||||||||
Royalty income | $ | 514,896 | $ | 91,099 | $ | — | $ | 605,995 | ||||||||||||||||||
Lease bonus income—related party | 105,585 | — | — | 105,585 | ||||||||||||||||||||||
Lease bonus income | 1,730 | 1,788 | — | 3,518 | ||||||||||||||||||||||
Other operating income | 774 | — | — | 774 | ||||||||||||||||||||||
Total operating income | 622,985 | 92,887 | — | 715,872 | ||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||
Production and ad valorem taxes | 37,794 | 6,180 | — | 43,974 | ||||||||||||||||||||||
Depletion | 101,331 | 23,989 | (23,291) | (a) | 102,029 | |||||||||||||||||||||
General and administrative expenses | 6,652 | 10,534 | — | 17,186 | ||||||||||||||||||||||
Total costs and expenses | 145,777 | 40,703 | (23,291) | 163,189 | ||||||||||||||||||||||
Income (loss) from operations | 477,208 | 52,184 | 23,291 | 552,683 | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest expense, net | (32,180) | — | (23,151) | (b) | (55,331) | |||||||||||||||||||||
Gain (loss) on derivative instruments, net | (30,685) | — | — | (30,685) | ||||||||||||||||||||||
Other income, net | 802 | 1,819 | — | 2,621 | ||||||||||||||||||||||
Total other expense, net | (62,063) | 1,819 | (23,151) | (83,395) | ||||||||||||||||||||||
Income (loss) before income taxes | 415,145 | 54,003 | 140 | 469,288 | ||||||||||||||||||||||
Provision for (benefit from) income taxes | 39,735 | — | 10,391 | (c) | 50,126 | |||||||||||||||||||||
Net income (loss) | 375,410 | 54,003 | (10,251) | 419,162 | ||||||||||||||||||||||
Net income (loss) attributable to non-controlling interest | 232,294 | — | 6,477 | (d) | 238,771 | |||||||||||||||||||||
Net income (loss) attributable to Viper Energy Partners LP | $ | 143,116 | $ | 54,003 | $ | (16,728) | $ | 180,391 | ||||||||||||||||||
Net income (loss) attributable to common limited partner units: | ||||||||||||||||||||||||||
Basic | $ | 1.99 | $ | 2.05 | ||||||||||||||||||||||
Diluted | $ | 1.99 | $ | 2.05 | ||||||||||||||||||||||
Weighted average number of common limited partner units outstanding: | ||||||||||||||||||||||||||
Basic | 71,803 | 16,234 | (e) | 88,037 | ||||||||||||||||||||||
Diluted | 71,803 | 16,234 | (e) | 88,037 |
See accompanying notes to unaudited pro forma condensed consolidated combined financial statements.
3
Viper Energy Partners LP and Subsidiary
Unaudited Pro Forma Condensed Combined Statement of Operations
Year Ended December 31, 2022 | ||||||||||||||||||||||||||
Viper (Historical) | Sellers (Historical) | Acquisition Transaction Adjustments | Viper Pro Forma Combined | |||||||||||||||||||||||
(In thousands, except per unit amounts) | ||||||||||||||||||||||||||
Operating income: | ||||||||||||||||||||||||||
Royalty income | $ | 837,976 | $ | 156,931 | $ | — | $ | 994,907 | ||||||||||||||||||
Lease bonus income—related party | 4,424 | — | 203 | (f) | 4,627 | |||||||||||||||||||||
Lease bonus income | 23,367 | 3,615 | (203) | (f) | 26,779 | |||||||||||||||||||||
Other operating income | 700 | — | — | 700 | ||||||||||||||||||||||
Total operating income | 866,467 | 160,546 | — | 1,027,013 | ||||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||
Production and ad valorem taxes | 56,372 | 10,060 | — | 66,432 | ||||||||||||||||||||||
Depletion | 121,071 | 30,126 | (30,441) | (a) | 120,756 | |||||||||||||||||||||
General and administrative expenses | 8,542 | 12,948 | — | 21,490 | ||||||||||||||||||||||
Total costs and expenses | 185,985 | 53,134 | (30,441) | 208,678 | ||||||||||||||||||||||
Income (loss) from operations | 680,482 | 107,412 | 30,441 | 818,335 | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest expense, net | (40,409) | — | (30,284) | (b) | (70,693) | |||||||||||||||||||||
Gain (loss) on derivative instruments, net | (18,138) | — | — | (18,138) | ||||||||||||||||||||||
Other income, net | 416 | 646 | — | 1,062 | ||||||||||||||||||||||
Total other expense, net | (58,131) | 646 | (30,284) | (87,769) | ||||||||||||||||||||||
Income (loss) before income taxes | 622,351 | 108,058 | 157 | 730,566 | ||||||||||||||||||||||
Provision for (benefit from) income taxes | (32,653) | — | 14,505 | (c) | (18,148) | |||||||||||||||||||||
Net income (loss) | 655,004 | 108,058 | (14,348) | 748,714 | ||||||||||||||||||||||
Net income (loss) attributable to non-controlling interest | 503,331 | — | 41,678 | (d) | 545,009 | |||||||||||||||||||||
Net income (loss) attributable to Viper Energy Partners LP | $ | 151,673 | $ | 108,058 | $ | (56,026) | $ | 203,705 | ||||||||||||||||||
Net income (loss) attributable to common limited partner units: | ||||||||||||||||||||||||||
Basic | $ | 2.00 | $ | 2.21 | ||||||||||||||||||||||
Diluted | $ | 2.00 | $ | 2.21 | ||||||||||||||||||||||
Weighted average number of common limited partner units outstanding: | ||||||||||||||||||||||||||
Basic | 75,612 | 16,234 | (e) | 91,846 | ||||||||||||||||||||||
Diluted | 75,679 | 16,234 | (e) | 91,913 |
See accompanying notes to unaudited pro forma condensed combined financial statements.
4
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF PRESENTATION
The Partnership’s historical financial information has been derived from its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 and its Annual Report on Form 10-K for the year ended December 31, 2022. Pro forma adjustments have been made to reflect the Acquisition and certain transaction accounting adjustments, as discussed further in Notes 2 and 3. The pro forma balance sheet gives effect to the Acquisition as if it had been completed on September 30, 2023. The pro forma statements of operations for the nine months ended September 30, 2023 and the year ended December 31, 2022 give pro forma effect to the Acquisition as if it had occurred on January 1, 2022, the beginning of the earliest period presented.
The Acquisition was accounted for as an acquisition of assets under ASC 805-50. The Partnership therefore recognized the assets acquired in the transaction based on their cost to the Partnership, which includes the total consideration paid as well as capitalization of all transaction costs incurred relating to the Acquisition.
In the opinion of management, all material adjustments have been made that are necessary to present fairly, in accordance with Article 11 of Regulation S-X, the pro forma financial statements. The pro forma financial statements are provided for illustrative purposes only and do not purport to be indicative of what the Partnership’s actual results of operations and financial position would have been on a consolidated basis if the Acquisition had occurred on the dates indicated, nor are they indicative of the future results of operations or financial position.
The pro forma basic and diluted earnings per share amounts presented in the unaudited pro forma statements of operations are based on the weighted average number of the Partnership’s common units outstanding, assuming the Acquisition occurred at the beginning of the earliest period presented.
2. CONSIDERATION AND PURCHASE PRICE ALLOCATION
The Partnership has performed a preliminary analysis of the total consideration paid for the assets acquired. The total consideration for the Acquisition, including all associated transaction costs, has been allocated to the assets acquired. Due to the fact that the pro forma financial statements have been prepared based on these preliminary estimates, the final purchase price allocation and the resulting effect on the Partnership’s financial position and results of operations may differ significantly from the pro forma amounts included herein.
The following table summarizes the preliminary purchase price as of the Closing Date and the allocation of the total accumulated transaction costs to the assets acquired (in thousands except common units and per unit amount):
Consideration: | |||||
Partnership common units issued at closing | 9,018,760 | ||||
Closing price per common unit of the Partnership | $ | 28.23 | |||
Common unit consideration | $ | 254,600 | |||
Cash consideration | 750,000 | ||||
Transaction costs | 8,827 | ||||
Total consideration (including fair value of Viper common stock issued) | $ | 1,013,427 | |||
Purchase price allocation: | |||||
Oil and natural gas interests | $ | 1,013,427 | |||
Net assets acquired | $ | 1,013,427 |
The total consideration has been used to prepare the transaction accounting adjustments in the pro forma balance sheet and statements of operations. The total value of consideration, including transaction costs, is subject to change due to customary purchase price adjustments including post-close adjustments and actual transaction costs incurred. The final amount and allocation of the total consideration is expected to be completed when the Partnership files its report on Form 10-K for the year ended December 31, 2023 and could differ materially from the preliminary allocation used in the transaction accounting adjustment.
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED
3. PRO FORMA ADJUSTMENTS AND ASSUMPTIONS
The pro forma financial statements have been prepared to illustrate the effect of the Acquisition and have been prepared for informational purposes only.
Balance Sheet
The adjustments included in the pro forma balance sheet as of September 30, 2023 are as follows:
(a) Reflects the total purchase price allocated to the oil and natural gas properties acquired, which consists of $296.3 million allocated to proved properties, $708.3 million allocated to unproved properties and $8.8 million in transaction costs. See Note 2—Consideration and Purchase Price Allocation.
(b) Represents the total increase in long-term debt borrowed by Viper to fund the Acquisition, consisting of:
•net proceeds of approximately $394.4 million, including estimated transactions costs, from the issuance of the 2031 Notes; and
•an increase of $18.6 million in borrowings under Viper OpCo’s revolving credit facility.
(c) Represents the 9.02 million common units issued to the Sellers as part of the total consideration for the Acquisition. See Note 2—Consideration and Estimated Cost Allocation.
(d) Represents proceeds of approximately $200.0 million from Viper’s issuance of approximately 7.22 million common units to Diamondback at a price of $27.72 per unit on October 31, 2023, which were used to fund a portion of the Cash Consideration for the Acquisition.
(e) Reflects the use of $95.8 million in cash held as of September 30, 2023 which was obtained from lease bonus proceeds and effectively used to partially fund the Cash Consideration for the Acquisition.
(f) Reflects the application of the $50.0 million of funds held in escrow as of September 30, 2023 towards the Cash Consideration for the Acquisition.
(g) Reflects the change in ownership interest attributable to Viper’s noncontrolling interest which resulted from the issuance of 7.22 million common units to Diamondback and 9.02 million common units issued to the Sellers as part of the total consideration for the Acquisition.
Statements of Operations
The adjustments included in the pro forma statements of operations for the nine months ended September 30, 2023 and for the year ended December 31, 2022 are as follows:
(a) Reflects the change in depletion expense computed on a unit of production basis under the full cost method of accounting following the preliminary purchase price allocation to oil and natural gas properties, as if the Acquisition was consummated on January 1, 2022. Of the $1.0 billion of oil and natural gas properties acquired, $296.3 million was subject to depletion in the periods presented.
(b) Reflects the estimated interest expense that would have been recorded in the periods presented with respect to the incremental borrowings used to finance the cash consideration for the Acquisition.
•The $400 million in new debt bears interest at 7.375%, resulting in pro forma interest expense of $22.1 million and $29.5 million for the nine months ended September 30, 2023 and for the year ended December 31, 2022, respectively.
•The pro forma statements of operations for the nine months ended September 30, 2023 and for the year ended December 31, 2022 used the weighted average interest rates prevailing during the periods of 7.37% and 4.22% respectively on the pro forma incremental outstanding borrowings on Viper’s revolving credit facility of $18.6 million, resulting in pro forma interest expense of $1.0 million and $0.8 million, respectively.
(c) Reflects the estimated incremental income tax provision associated with the incremental pro forma income before taxes attributable to Viper Energy Partners LP, using a blended federal plus state statutory tax rate, net of federal benefit, of 21.8%.
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED
(d) Reflects the non-controlling interest portion of incremental pro forma earnings as well as the estimated incremental impact on Viper’s historical net income attributable to the non-controlling interests as a result of the Partnership’s sale of common units to Diamondback and the issuance of common units as part of the purchase consideration for the Acquisition, as if the additional common units had been outstanding since the beginning of the periods presented.
(e) Reflects the issuance of approximately 9.02 million common units to the Sellers and 7.22 million common units to Diamondback to partially finance the Acquisition. The additional common units were assumed to have been outstanding since the beginning of the periods presented. The following table reconciles historical and pro forma basic and diluted earnings per share utilizing the two-class method for the periods indicated:
Nine Months Ended September 30, 2023 | Year Ended December 31, 2022 | ||||||||||||||||||||||
Historical | Pro Forma | Historical | Pro Forma | ||||||||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||||||||||
Net income (loss) attributable to the period | $ | 143,116 | $ | 180,391 | $ | 151,673 | $ | 203,705 | |||||||||||||||
Less: distributed and undistributed earnings allocated to participating securities | 263 | 296 | 365 | 391 | |||||||||||||||||||
Net income (loss) attributable to common unitholders | $ | 142,853 | $ | 180,095 | $ | 151,308 | $ | 203,314 | |||||||||||||||
Weighted average common units outstanding: | |||||||||||||||||||||||
Basic weighted average common units outstanding | 71,803 | 88,037 | 75,612 | 91,846 | |||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Potential common units issuable | — | — | 67 | 67 | |||||||||||||||||||
Diluted weighted average common units outstanding | 71,803 | 88,037 | 75,679 | 91,913 | |||||||||||||||||||
Net income (loss) per common unit, basic | $ | 1.99 | $ | 2.05 | $ | 2.00 | $ | 2.21 | |||||||||||||||
Net income (loss) per common unit, diluted | $ | 1.99 | $ | 2.05 | $ | 2.00 | $ | 2.21 |
(f) Reflects the reclassification of lease bonus income of the Sellers during the year ended December 31, 2022 which was paid by Diamondback to Sellers.
4. SUPPLEMENTAL PRO FORMA OIL AND NATURAL GAS RESERVES INFORMATION
The following unaudited supplemental pro forma oil and natural gas reserve tables present how the combined oil and natural gas reserves and standardized measure information of the Company and the Acquisition may have appeared had the Acquisition occurred on January 1, 2022. The supplemental pro forma combined oil and natural gas reserves and standardized measure information are for illustrative purposes only. Numerous uncertainties are inherent in estimating quantities and values of proved reserves including future rates of production, exploration and development expenditures, commodity prices, and service costs which may affect the reserve volumes attributable to the Properties and the standardized measure of discounted future net cash flows.
7
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED
The following tables provide a summary of the changes in estimated proved reserves for the year ended December 31, 2022, as well as pro forma proved developed and proved undeveloped reserves as of the beginning and end of the year, giving effect to the Acquisition as if it had occurred on January 1, 2022.
Estimated Pro Forma Combined Quantities of Proved Reserves
Oil (MBbls) | |||||||||||||||||
Viper (Historical) | Sellers (Historical) | Viper Pro Forma Combined | |||||||||||||||
Proved Developed and Undeveloped Reserves: | |||||||||||||||||
As of December 31, 2021 | 69,240 | 13,566 | 82,806 | ||||||||||||||
Purchase of reserves in place | 599 | 263 | 862 | ||||||||||||||
Extensions and discoveries | 15,714 | 56 | 15,770 | ||||||||||||||
Revisions of previous estimates | 1,453 | 52 | 1,505 | ||||||||||||||
Divestitures | (905) | — | (905) | ||||||||||||||
Production | (7,097) | (1,316) | (8,413) | ||||||||||||||
As of December 31, 2022 | 79,004 | 12,621 | 91,625 | ||||||||||||||
Proved Developed Reserves: | |||||||||||||||||
December 31, 2021 | 49,280 | 6,146 | 55,426 | ||||||||||||||
December 31, 2022 | 54,817 | 7,126 | 61,943 | ||||||||||||||
Proved Undeveloped Reserves: | |||||||||||||||||
December 31, 2021 | 19,960 | 7,420 | 27,380 | ||||||||||||||
December 31, 2022 | 24,187 | 5,495 | 29,682 |
Natural Gas (MMcf) | |||||||||||||||||
Viper (Historical) | Sellers (Historical) | Viper Pro Forma Combined | |||||||||||||||
Proved Developed and Undeveloped Reserves: | |||||||||||||||||
As of December 31, 2021 | 183,690 | 59,626 | 243,316 | ||||||||||||||
Purchase of reserves in place | 1,186 | 1,785 | 2,971 | ||||||||||||||
Extensions and discoveries | 29,177 | 273 | 29,450 | ||||||||||||||
Revisions of previous estimates | 15,248 | (776) | 14,472 | ||||||||||||||
Divestitures | (3,469) | — | (3,469) | ||||||||||||||
Production | (15,868) | (3,266) | (19,134) | ||||||||||||||
As of December 31, 2022 | 209,964 | 57,642 | 267,606 | ||||||||||||||
Proved Developed Reserves: | |||||||||||||||||
December 31, 2021 | 134,485 | 32,774 | 167,259 | ||||||||||||||
December 31, 2022 | 161,119 | 35,007 | 196,126 | ||||||||||||||
Proved Undeveloped Reserves: | |||||||||||||||||
December 31, 2021 | 49,205 | 26,852 | 76,057 | ||||||||||||||
December 31, 2022 | 48,845 | 22,635 | 71,480 |
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED
Natural Gas Liquids (MBbls) | |||||||||||||||||
Viper (Historical) | Sellers (Historical) | Viper Pro Forma Combined | |||||||||||||||
Proved Developed and Undeveloped Reserves: | |||||||||||||||||
As of December 31, 2021 | 28,033 | 8,880 | 36,913 | ||||||||||||||
Purchase of reserves in place | 209 | 303 | 512 | ||||||||||||||
Extensions and discoveries | 5,281 | 34 | 5,315 | ||||||||||||||
Revisions of previous estimates | 4,483 | (102) | 4,381 | ||||||||||||||
Divestitures | (564) | — | (564) | ||||||||||||||
Production | (2,540) | (494) | (3,034) | ||||||||||||||
As of December 31, 2022 | 34,902 | 8,621 | 43,523 | ||||||||||||||
Proved Developed Reserves: | |||||||||||||||||
December 31, 2021 | 19,476 | 4,559 | 24,035 | ||||||||||||||
December 31, 2022 | 25,621 | 4,961 | 30,582 | ||||||||||||||
Proved Undeveloped Reserves: | |||||||||||||||||
December 31, 2021 | 8,557 | 4,321 | 12,878 | ||||||||||||||
December 31, 2022 | 9,281 | 3,660 | 12,941 |
Total (MBOE) | |||||||||||||||||
Viper (Historical) | Sellers (Historical) | Viper Pro Forma Combined | |||||||||||||||
Proved Developed and Undeveloped Reserves: | |||||||||||||||||
As of December 31, 2021 | 127,888 | 32,383 | 160,271 | ||||||||||||||
Purchase of reserves in place | 1,006 | 864 | 1,870 | ||||||||||||||
Extensions and discoveries | 25,858 | 136 | 25,994 | ||||||||||||||
Revisions of previous estimates | 8,477 | (179) | 8,298 | ||||||||||||||
Divestitures | (2,047) | — | (2,047) | ||||||||||||||
Production | (12,282) | (2,354) | (14,636) | ||||||||||||||
As of December 31, 2022 | 148,900 | 30,850 | 179,750 | ||||||||||||||
Proved Developed Reserves: | |||||||||||||||||
December 31, 2021 | 91,170 | 16,167 | 107,337 | ||||||||||||||
December 31, 2022 | 107,291 | 17,922 | 125,213 | ||||||||||||||
Proved Undeveloped Reserves: | |||||||||||||||||
December 31, 2021 | 36,718 | 16,216 | 52,934 | ||||||||||||||
December 31, 2022 | 41,609 | 12,928 | 54,537 |
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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS - CONTINUED
Pro Forma Combined Standardized Measure of Discounted Future Net Cash Flows
December 31, 2022 | |||||||||||||||||
Viper (Historical) | Sellers (Historical) | Viper Pro Forma Combined | |||||||||||||||
(In thousands) | |||||||||||||||||
Future cash inflows | $ | 10,072,969 | $ | 1,739,907 | $ | 11,812,876 | |||||||||||
Future production taxes | (729,256) | (97,469) | (826,725) | ||||||||||||||
Future income tax expense | (1,465,160) | (7,691) | (1,472,851) | ||||||||||||||
Future net cash flows | 7,878,553 | 1,634,747 | 9,513,300 | ||||||||||||||
10% discount to reflect timing of cash flows | (4,424,457) | (779,108) | (5,203,565) | ||||||||||||||
Standardized measure of discounted future net cash flows | $ | 3,454,096 | $ | 855,639 | $ | 4,309,735 |
Pro Forma Combined Changes in the Standardized Measure of Discounted Future Net Cash Flows
December 31, 2022 | |||||||||||||||||
Viper (Historical) | Sellers (Historical) | Viper Pro Forma Combined | |||||||||||||||
(In thousands) | |||||||||||||||||
Standardized measure of discounted future net cash flows at the beginning of the period | $ | 2,093,117 | $ | 601,739 | $ | 2,694,856 | |||||||||||
Purchase of minerals in place | 30,331 | 20,346 | 50,677 | ||||||||||||||
Divestiture of reserves | (30,076) | — | (30,076) | ||||||||||||||
Sales of oil and natural gas, net of production costs | (781,604) | (146,871) | (928,475) | ||||||||||||||
Extensions and discoveries | 844,010 | 3,573 | 847,583 | ||||||||||||||
Net changes in prices and production costs | 1,131,202 | 336,617 | 1,467,819 | ||||||||||||||
Revisions of previous quantity estimates | 309,338 | (2,882) | 306,456 | ||||||||||||||
Net changes in income taxes | (393,652) | (1,174) | (394,826) | ||||||||||||||
Accretion of discount | 234,717 | 60,462 | 295,179 | ||||||||||||||
Net changes in timing of production and other | 16,713 | (16,171) | 542 | ||||||||||||||
Standardized measure of discounted future net cash flows at the end of the period | $ | 3,454,096 | $ | 855,639 | $ | 4,309,735 |
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
VIPER ENERGY, INC. | |||||||||||
Date: | November 13, 2023 | By: | /s/ Travis D. Stice | ||||||||
Travis D. Stice | |||||||||||
Chief Executive Officer | |||||||||||
Date: | November 13, 2023 | By: | /s/ Teresa L. Dick | ||||||||
Teresa L. Dick | |||||||||||
Chief Financial Officer |
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