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Diamondback Energy, Inc. (FANG)

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47.14+2.65 (+5.96%)
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47.32 +0.18 (0.38%)
After hours: 6:48PM EST

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Previous Close44.49
Open46.53
Bid47.16 x 1100
Ask47.46 x 1000
Day's Range45.00 - 47.25
52 Week Range14.55 - 96.92
Volume5,306,922
Avg. Volume3,402,121
Market Cap7.447B
Beta (5Y Monthly)2.29
PE Ratio (TTM)N/A
EPS (TTM)N/A
Earnings DateN/A
Forward Dividend & Yield1.50 (3.77%)
Ex-Dividend DateNov. 10, 2020
1y Target EstN/A
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  • ACCESSWIRE

    Diamondback Energy, Inc. to Host Earnings Call

    NEW YORK, NY / ACCESSWIRE / November 3, 2020 / Diamondback Energy, Inc.

  • Diamondback Energy, Inc. Announces Third Quarter 2020 Financial and Operating Results
    GlobeNewswire

    Diamondback Energy, Inc. Announces Third Quarter 2020 Financial and Operating Results

    MIDLAND, Texas, Nov. 02, 2020 (GLOBE NEWSWIRE) -- Diamondback Energy, Inc. (NASDAQ: FANG) (“Diamondback” or the “Company”) today announced financial and operating results for the third quarter ended September 30, 2020. THIRD QUARTER 2020 HIGHLIGHTS * Generated third quarter cash flow from operating activities of $542 million. Operating Cash Flow Before Working Capital Changes (as defined and reconciled below) was $434 million * Generated third quarter Free Cash Flow (as defined and reconciled below) of $153 million * Q3 2020 cash operating costs of $7.61 per BOE; including cash general and administrative ("G&A") expenses of $0.42 per BOE and lease operating expenses ("LOE") of $3.86 per BOE * Declared Q3 2020 cash dividend of $0.375 per share payable on November 19, 2020; implies a 5.8% annualized yield based on the October 30, 2020 share closing price of $25.96 * Ended the third quarter with a net cash position of $68 million and had no borrowings outstanding on Diamondback's credit facility. Standalone liquidity of $2,068 million as of September 30, 2020 * Repurchased all $10 million in principal amount of the outstanding 2027 Energen Resources Corporation 7.35% Medium Term Notes * Lowering LOE and G&A unit guidance by a combined $0.40 per BOE at the midpoint of each full year 2020 guidance range, implying estimate of total cash cost savings of over $43 million for the full year 2020 * Current drilling and completion costs in the Midland Basin are ~$450 per lateral foot, with an estimated additional $60 to $80 of equip cost per lateral foot * Current drilling and completion costs in the Delaware Basin are between $600 and $700 per lateral foot, with an estimated additional $100 to $150 of equip costs per lateral foot * Completed an average of over 3,300 lateral feet per day per completion crew in the Midland Basin using Simul-Frac technology during the quarter * Flared 0.5% of net production in the third quarter, down 74% year over year. For the first nine months of 2020, flared 0.9% of net production, down 54% year over year * Recycled 25.1% of water used for completion operations in the third quarter, up 24% year over year. For the first nine months of 2020, recycled 21.4% of water used for completion operations, up 53% year over yearPREVIOUSLY ANNOUNCED THIRD QUARTER 2020 HIGHLIGHTS * Q3 2020 average production of 170.0 MBO/d (287.3 MBOE/d) * Q3 2020 cash capital expenditures of $281 million; Q3 2020 activity-based capital expenditures incurred of approximately $206 million * Q3 2020 average realized hedged prices of $38.17 per barrel of oil, $12.09 per barrel of natural gas liquids and $0.95 per Mcf of natural gas, resulting in a total equivalent price of $26.22 per BOE * Q3 2020 average unhedged realized prices of $38.75 per barrel of oil, $12.09 per barrel of natural gas liquids and $1.11 per Mcf of natural gas, resulting in a total equivalent price of $26.75 per BOE * Drilled 32 gross operated horizontal wells and turned 41 wells to production in the third quarter“Diamondback continued our trend of cost reductions in the third quarter, with LOE and G&A remaining near all-time lows and capital costs per lateral foot continuing to decline to new records. Our drilling and completion operations continue to become more efficient, and we are beginning to see the benefits from high-grading our development program after the downturn began earlier this year. We are on track to meet our fourth quarter average production target of between 170,000 and 175,000 barrels of oil per day and expect this to be the baseline for our development plan in 2021. We expect to execute on this maintenance capital plan with 25% - 35% less capital than 2020 which implies a reinvestment ratio of approximately 70% at $40 WTI,” stated Travis Stice, Chief Executive Officer of Diamondback.Mr. Stice continued, “We still firmly believe that the concept of production growth should not be considered until commodity prices recover and global inventories return to normalized levels, and any form of material production growth will only magnify the issues our industry is fighting today. Therefore, Diamondback's investment framework and capital allocation philosophy at current oil prices remain very simple and have not changed: protect our base dividend, spend maintenance capital to hold oil production flat, and use excess Free Cash Flow to pay down debt. We operate in a cyclical business, and while this downturn has been as severe as any in industry history, Diamondback has the size, scale, balance sheet, asset quality and cost structure to weather a prolonged downturn and thrive in the inevitable upcycle.”Mr. Stice continued, "Diamondback is committed to environmental stewardship and delivering best-in-class performance in reducing our carbon footprint. While owning and operating assets that are positioned on the low end of the global oil cost of supply curve is most important to our stockholders, we recognize it is also important to own and operate assets that are also positioned on the low end of the greenhouse gas emissions cost of supply curve. Diamondback supports public policies that eliminate routine flaring as long as those policies protect the safety of our operations and consider flaring contributions from all segments of the oil and gas industry. Upstream and midstream operators must continue to work together to address the flaring issue for our industry. Flaring was responsible for over 50% of Diamondback's Scope 1 emissions in 2019. With flaring per net BOE produced down 54% year to date, our Scope 1 emissions have materially declined this year, demonstrating our commitment to environmental responsibility."OPERATIONS UPDATEThe tables below provide a summary of operational activity for the third quarter 2020.Total Activity (Gross Operated):    AreaNumber of Wells Drilled Number of Wells Completed Midland Basin22  25  Delaware Basin10  16  Total 32  41  Total Activity (Net Operated):    AreaNumber of Wells Drilled Number of Wells Completed Midland Basin 20  25  Delaware Basin 10  16  Total 30  41  During the third quarter of 2020, Diamondback drilled 22 gross horizontal wells in the Midland Basin and ten gross horizontal wells in the Delaware Basin. The Company turned 25 operated horizontal wells to production in the Midland Basin and 16 operated horizontal wells to production in the Delaware Basin. The average lateral length for the wells completed during the third quarter was 9,881 feet. Operated completions during the third quarter consisted of 16 Wolfcamp A wells, nine Middle Spraberry wells, six Lower Spraberry wells, five Wolfcamp B wells and five Second Bone Spring wells.During the nine months ended September 30, 2020, the Company drilled 183 gross horizontal wells and turned 136 operated horizontal wells to production. The average lateral length for wells completed during the first nine months of 2020 was 9,955 feet, and consisted of 67 Wolfcamp A wells, 17 Lower Spraberry wells, 17 Middle Spraberry wells, 16 Wolfcamp B wells, 11 Second Bone Spring wells, five Third Bone Spring wells and three Jo Mill wells.FINANCIAL UPDATEDiamondback's third quarter 2020 net loss was $1,113 million, or $7.05 per diluted share. Adjusted net income (a non-GAAP financial measure as defined and reconciled below) was $98 million, or $0.62 per diluted share. Third quarter 2020 net loss includes a non-cash impairment charge of $1,451 million as a result of the lower SEC Pricing because of the sharp decline in commodity prices.Third quarter 2020 Consolidated Adjusted EBITDA (as defined and reconciled below) was $496 million. Adjusted EBITDA net of non-controlling interest was $477 million.Third quarter 2020 average unhedged realized prices were $38.75 per barrel of oil, $1.11 per Mcf of natural gas and $12.09 per barrel of natural gas liquids, resulting in a total equivalent unhedged price of $26.75/BOE.Diamondback's cash operating costs for the third quarter of 2020 were $7.61 per BOE, including LOE of $3.86 per BOE, cash G&A expenses of $0.42 per BOE and production and ad valorem taxes and gathering and transportation expenses of $3.33 per BOE.As of September 30, 2020, Diamondback had $68 million in standalone cash and no borrowings outstanding under its revolving credit facility, with approximately $2 billion available for future borrowing under the facility and $2,068 million of total liquidity.During the third quarter of 2020, Diamondback spent $219 million on drilling and completion, $39 million on midstream, $16 million on infrastructure and $7 million on non-operated properties, for total capital expenditures of $281 million. For the nine months ended September 30, 2020, the Company spent $1,347 million on drilling and completion, $133 million on midstream, $96 million on infrastructure and $57 million on non-operated properties, for total capital expenditures of $1,633 million.DIVIDEND DECLARATIONDiamondback announced today that the Company's Board of Directors declared a cash dividend of $0.375 per common share for the third quarter of 2020 payable on November 19, 2020, to stockholders of record at the close of business on November 12, 2020. Future dividends remain subject to review and approval at the discretion of the Company's Board of Directors.FULL YEAR 2020 GUIDANCEBelow is Diamondback's guidance for the full year 2020. Diamondback lowered its full year 2020 guidance for LOE to between $4.00 to $4.20 per BOE and cash G&A expense to between $0.45 to $0.55 per BOE. Diamondback also lowered its full year 2020 guidance for Depreciation, Depletion & Amortization ("D,D&A") to between $11.00 to $13.00 per BOE. 2020 Guidance2020 Guidance  Diamondback Energy, Inc.Viper Energy Partners LP     Total net production – MBOE/d290.0 - 305.026.00 - 26.50 Oil production – MBO/d178.0 - 182.015.75 - 16.00     Unit costs ($/BOE)   Lease operating expenses, including workovers$4.00 - $4.20  G&A   Cash G&A$0.45 - $0.55$0.60 - $0.80 Non-cash equity-based compensation$0.30 - $0.40$0.10 - $0.25 D,D&A$11.00 - $13.00$9.50 - $11.00 Interest expense (net of interest income)$1.75 - $1.95$3.25 - $3.50 Gathering and Transportation$1.25 - $1.35      Production and ad valorem taxes (% of revenue)(a)7% - 8%7% - 8% Corporate tax rate (% of pre-tax income)23%      Gross horizontal wells completed (net)170 - 200 (153 - 180)  Average lateral length (Ft.)~10,000'  Midland Basin net lateral feet (%)~60%  Delaware Basin net lateral feet (%)~40%      Capital Budget ($ - million)   Horizontal drilling and completion$1,565 - $1,630  Midstream (ex. long-haul pipeline investments)$125 - $150  Infrastructure $110 - $120  2020 Capital Spend$1,800 - $1,900  (a) Includes production taxes of 4.6% for crude oil and 7.5% for natural gas and NGLs and ad valorem taxes.CONFERENCE CALLDiamondback will host a conference call and webcast for investors and analysts to discuss its results for the third quarter of 2020 on Tuesday, November 3, 2020 at 8:00 a.m. CT. Participants should call (877) 440-7573 (United States/Canada) or (253) 237-1144 (International) and use the confirmation code 2493666. A telephonic replay will be available from 11:00 a.m. CT on Tuesday, November 3, 2020 through Tuesday, November 10, 2020 at 11:00 a.m. CT. To access the replay, call (855) 859-2056 (United States/Canada) or (404) 537-3406 (International) and enter confirmation code 2493666. A live broadcast of the earnings conference call will also be available via the internet at www.diamondbackenergy.com under the “Investor Relations” section of the site. A replay will also be available on the website following the call.About Diamondback Energy, Inc.Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.Forward-Looking StatementsThis news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than historical facts, that address activities that Diamondback assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events, including the current adverse industry and macroeconomic conditions, depressed commodity prices, production levels, any potential regulatory actions that impose production limits in the Permian Basin, the impact and duration of the ongoing COVID-19 pandemic, acquisitions and sales of assets, future dividends, production, drilling and capital expenditure plans, impact of impairment charges and effects of hedging arrangements. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Diamondback. Information concerning these risks and other factors can be found in Diamondback’s filings with the Securities and Exchange Commission ("SEC"), including its reports on Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the SEC’s web site at http://www.sec.gov. Diamondback undertakes no obligation to update or revise any forward-looking statement. Diamondback Energy, Inc. Condensed Consolidated Balance Sheets (unaudited, in millions, except share amounts)      September 30,December 31,  20202019 Assets   Current assets:   Cash and cash equivalents$92  $123   Restricted cash7  5   Accounts receivable:   Joint interest and other, net67  186   Oil and natural gas sales, net224  429   Inventories33  37   Derivative instruments15  46   Income tax receivable100  19   Prepaid expenses and other current assets20  24   Total current assets558  869   Property and equipment:   Oil and natural gas properties, full cost method of accounting ($7,879 million and $9,207 million excluded from amortization at September 30, 2020 and December 31, 2019, respectively)27,305  25,782   Midstream assets1,026  931   Other property, equipment and land135  125   Accumulated depletion, depreciation, amortization and impairment(11,031) (5,003)  Property and equipment, net17,435  21,835   Equity method investments532  479   Derivative instruments—  7   Deferred tax assets, net75  142   Investment in real estate, net104  109   Other assets56  90   Total assets$18,760  $23,531   Liabilities and Stockholders’ Equity   Current liabilities:   Accounts payable - trade$95  $179   Accrued capital expenditures309  475   Current maturities of long-term debt191  —   Other accrued liabilities329  304   Revenues and royalties payable219  278   Derivative instruments86  27   Total current liabilities1,229  1,263   Long-term debt5,656  5,371   Derivative instruments108  —   Asset retirement obligations112  94   Deferred income taxes978  1,886   Other long-term liabilities8  11   Total liabilities8,091  8,625   Commitments and contingencies   Stockholders’ equity:   Common stock, $0.01 par value; 200,000,000 shares authorized; 157,849,848 and 159,002,338 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively2  2   Additional paid-in capital12,615  12,357   Retained earnings (accumulated deficit)(3,065) 890   Total Diamondback Energy, Inc. stockholders’ equity9,552  13,249   Non-controlling interest1,117  1,657   Total equity10,669  14,906   Total liabilities and equity$18,760  $23,531   Diamondback Energy, Inc. Condensed Consolidated Statements of Operations (unaudited, $ in millions except per share data, shares in thousands)           Three Months Ended September 30, Nine Months Ended September 30,  2020 2019 2020 2019 Revenues:        Oil, natural gas and natural gas liquid sales$707   $956   $2,002   $2,798   Lease bonus—   1   —   4   Midstream services12   16   37   51   Other operating income1   2   5   7   Total revenues720   975   2,044   2,860   Costs and expenses:        Lease operating expenses102   128   332   364   Production and ad valorem taxes55   61   148   180   Gathering and transportation33   25   105   54   Midstream services26   26   81   60   Depreciation, depletion and amortization286   365   1,036   1,046   Impairment of oil and natural gas properties1,451   —   4,999   —   General and administrative expenses20   19   64   68   Asset retirement obligation accretion2   1   5   6   Other operating expense1   1   4   3   Total costs and expenses1,976   626   6,774   1,781   Income (loss) from operations(1,256)  349   (4,730)  1,079   Other income (expense):        Interest expense, net(53)  (38)  (147)  (133)  Other income, net—   2   1   5   Gain (loss) on derivative instruments, net(99)  177   82   3   Gain (loss) on revaluation of investment(2)  —   (9)  4   Loss on extinguishment of debt(2)  —   (5)  —   Income (loss) from equity investments3   —   (10)  —   Total other income (expense), net(153)  141   (88)  (121)  Income (loss) before income taxes(1,409)  490   (4,818)  958   Provision for (benefit from) income taxes(304)  102   (902)  171   Net income (loss)(1,105)  388   (3,916)  787   Net income (loss) attributable to non-controlling interest8   20   (138)  60   Net income (loss) attributable to Diamondback Energy, Inc $(1,113)  $368   $(3,778)  $727            Earnings (loss) per common share:        Basic$(7.05)  $2.27   $(23.91)  $4.44   Diluted$(7.05)  $2.26   $(23.91)  $4.42   Weighted average common shares outstanding:        Basic 157,833    162,543    157,984    164,070   Diluted 157,833    162,780    157,984    164,466   Dividends declared per share $0.375   $0.1875   $1.125   $0.5625   Diamondback Energy, Inc. Condensed Consolidated Statements of Cash Flows (unaudited, in millions)           Three Months Ended September 30, Nine Months Ended S eptember 30,  2020 2019 2020 2019          Cash flows from operating activities:        Net income (loss)$(1,105)  $388   $(3,916)  $787   Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:        Provision for (benefit from) deferred income taxes(304)  102   (902)  171   Impairment of oil and natural gas properties1,451   —   4,999   —   Depreciation, depletion and amortization286   365   1,036   1,046   (Gain) loss on derivative instruments, net99   (177)  (82)  (3)  Cash received on settlement of derivative instruments(9)  11   288   33   Other16   7   68   34   Changes in operating assets and liabilities:        Accounts receivable36   (22)  265   (116)  Accounts payable and accrued liabilities32   30   (18)  (136)  Accrued interest50   1   34   (29)  Revenues and royalties payable(9)  68   (59)  64   Other(1)  36   2   1   Net cash provided by (used in) operating activities542   809   1,715   1,852   Cash flows from investing activities:        Drilling, completions and non-operated additions to oil and natural gas properties(226)  (728)  (1,404)  (1,883)  Infrastructure additions to oil and natural gas properties(16)  (21)  (96)  (104)  Additions to midstream assets(39)  (75)  (133)  (186)  Acquisitions of leasehold interests(25)  (184)  (89)  (311)  Acquisitions of mineral interests—   (195)  (65)  (320)  Proceeds from sale of assets2   301   2   301   Contributions to equity method investments(24)  (39)  (90)  (225)  Distributions from equity method investments9    —   27   —   Other(1)  (31)  (7)  (16)  Net cash provided by (used in) investing activities(320)  (972)  (1,855)  (2,744)  Cash flows from financing activities:        Proceeds from borrowings under credit facility265   484   917   1,409   Repayments under credit facility(848)  (195)  (1,238)  (1,168)  Proceeds from senior notes500   —   997   —   Repayment of senior notes(17)  —   (239)  —   Proceeds from joint venture4   (1)  47   42   Public offering costs—   1   —   (40)  Proceeds from public offerings—   —   —   1,106   Repurchased shares as part of share buyback—   (296)  (98)  (400)  Dividends to stockholders(59)  (31)  (177)  (82)  Distributions to non-controlling interest(15)  (29)  (77)  (79)  Other(12)  4   (21)  (11)  Net cash provided by (used in) financing activities(182)  (63)  111   777   Net increase (decrease) in cash and cash equivalents40   (226)  (29)  (115)  Cash, cash equivalents and restricted cash at beginning of period59   326   128   215   Cash, cash equivalents and restricted cash at end of period$99   $100   $99   $100   Supplemental disclosure of cash flow information:        Interest paid, net of capitalized interest$11   $39   $100   $115   Diamondback Energy, Inc. Selected Operating Data (unaudited)         Three Months Ended September 30, 2020 Three Months Ended June 30, 2020 Three Months Ended September 30, 2019 Production Data:      Oil (MBbls)15,639  16,045  17,064  Natural gas (MMcf)32,505  31,857  26,271  Natural gas liquids (MBbls)5,377  5,411  4,974  Combined volumes (MBOE)(1) 26,433  26,765  26,417         Daily oil volumes (BO/d)(2)169,989  176,323  185,478  Daily combined volumes (BOE/d)(2) 287,315  294,126  287,138         Average Prices:      Oil ($ per Bbl)$38.75  $21.99  $51.71  Natural gas ($ per Mcf)$1.11  $0.63  $0.62  Natural gas liquids ($ per Bbl)$12.09  $7.17  $11.61  Combined ($ per BOE)$26.75  $15.39  $36.20         Oil, hedged ($ per Bbl)(3) $38.17  $35.21  $51.84  Natural gas, hedged ($ per Mcf)(3)$0.95  $0.33  $0.69  Natural gas liquids, hedged ($ per Bbl)(3)$12.09  $7.17  $12.83  Average price, hedged ($ per BOE)(3) $26.22  $22.95  $36.59         Average Costs per BOE:      Lease operating expense$3.86  $3.85  $4.85  Production and ad valorem taxes2.08  0.83  2.31  Gathering and transportation expense1.25  1.35  0.95  General and administrative - cash component0.42  0.41  0.59  Total operating expense - cash$7.61  $6.44  $8.70         General and administrative - non-cash component$0.34  $0.33  $0.16  Depreciation, depletion and amortization$10.82  $12.82  $13.82  Interest expense, net$2.01  $1.72  $1.44  1. Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl. 2. The volumes presented are based on actual results and are not calculated using the rounded numbers in the table above. 3. Hedged prices reflect the effect of our commodity derivative transactions on our average sales prices. Our calculation of such effects includes realized gains and losses on cash settlements for matured commodity derivatives, which we do not designate for hedge accounting.NON-GAAP FINANCIAL MEASURESAdjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted EBITDA as net income (loss) plus non-cash (gain) loss on derivative instruments, net, interest expense, net, depreciation, depletion, amortization and accretion, depreciation and interest expense related to equity method investments, impairment and abandonments related to equity method investments, (gain) loss on revaluation of investment, loss on extinguishment of debt, impairment of oil and natural gas properties, non-cash equity-based compensation expense, other non-cash transactions and provision for (benefit from) income taxes. Adjusted EBITDA is not a measure of net income as determined by United States’ generally accepted accounting principles ("GAAP"). Management believes Adjusted EBITDA is useful because the measure allows it to more effectively evaluate the Company’s operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. The Company adds the items listed above to net (loss) income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within its industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP or as an indicator of the Company’s operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets. The Company’s computation of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.The following tables present a reconciliation of the non-GAAP financial measure of Adjusted EBITDA to the GAAP financial measure of net income.Diamondback Energy, Inc. Reconciliation of Adjusted EBITDA to Net Income (Loss) (unaudited, in millions)         Three Months Ended September 30, 2020 Three Months Ended June 30, 2020 Three Months Ended September 30, 2019 Net income (loss)$(1,105)  $(2,411)  $388   Non-cash (gain) loss on derivative instruments, net90   571   (166)  Interest expense, net53   46   38   Depreciation, depletion, amortization and accretion288   344   366   Depreciation and interest expense related to equity method investments9   7   —   Impairment and abandonments related to equity method investments1   16   —   (Gain) loss on revaluation of investment2   (3)  —   Loss on extinguishment of debt2   3   —   Impairment of oil and natural gas properties1,451   2,539   —   Non-cash equity-based compensation expense9   9   4   Other non-cash transactions—   1   —   Provision for (benefit from) income taxes(304)  (681)  102   Consolidated Adjusted EBITDA496   441   732   Less: Adjustment for non-controlling interest19   27   33   Adjusted EBITDA attributable to Diamondback Energy, Inc $477   $414   $699          Adjusted EBITDA per common share:      Basic$3.02   $2.62   $4.30   Diluted$3.02   $2.62   $4.29   Weighted average common shares outstanding:      Basic157,833   157,829   162,543   Diluted157,833   157,958   162,780   Adjusted net income is a non-GAAP financial measure equal to net loss adjusted for non-cash loss on derivative instruments, impairment and abandonments related to equity method investments, gain on revaluation of investments, loss on extinguishment of debt, impairment of oil and natural gas properties, other income and related income tax adjustments. The Company’s computation of adjusted net income may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.The following table presents a reconciliation of adjusted net income to net loss:Diamondback Energy, Inc. Adjusted Net Income (unaudited, in millions, except per share data)     Three Months Ended September 30, 2020  Pre-Tax Amounts Amounts Per Diluted Share Net loss(1,105)  $(7.00)  Non-cash loss on derivative instruments90   0.57   Abandonments related to equity method investments1   0.01   Gain on revaluation of investments2   0.01   Loss on extinguishment of debt2   0.01   Impairment of oil and natural gas properties1,451   9.19   Adjusted net income excluding above items441   2.79   Income tax adjustment for above items(334)  (2.12)  Adjusted net income(1)107   0.68   Less: Adjusted net income attributable to non-controlling interest(1) 9   0.06   Adjusted net income attributable to Diamondback Energy, Inc.(1)$98   $0.62   (1) Calculated using diluted shares (non-GAAP)Operating cash flow before working capital changes, which is a non-GAAP financial measure representing net cash provided by operating activities as determined under GAAP without regard to changes in operating assets and liabilities. The Company believes operating cash flow before working capital changes is an accepted measure of an oil and natural gas company’s ability to generate cash used to fund exploration, development and acquisition activities and service debt or pay dividends. The Company also uses this measure because adjusted operating cash flow relates to the timing of cash receipts and disbursements that the Company may not control and may not relate to the period in which the operating activities occurred. This allows the Company to compare its operating performance with that of other companies without regard to financing methods and capital structure.Additionally, the Company provides Free Cash Flow, which is a non-GAAP financial measure. Free Cash Flow is cash flow from operating activities before changes in working capital in excess of cash capital expenditures. The Company believes that Free Cash Flow is useful to investors as it provides a measure to compare both cash flow from operating activities and additions to oil and natural gas properties across periods on a consistent basis. These measures should not be considered as an alternative to, or more meaningful than, net cash provided by operating activities as an indicator of operating performance. The Company's computation of operating cash flow before working capital changes and Free Cash Flow may not be comparable to other similarly titled measures of other companies.The following tables present a reconciliation of net cash provided by operating activities to operating cash flow before working capital changes and to Free Cash Flow:Diamondback Energy, Inc. Operating Cash Flow (unaudited, in millions)  Three Months Ended September 30, Nine Months Ended September 30,  2020 2019 2020 2019 Net cash provided by operating activities$542   $809   $1,715   $1,852   Less: Changes in cash due to changes in operating assets and liabilities:        Accounts receivable36   (22)  265   (116)  Accounts payable and accrued liabilities32   30   (18)  (136)  Accrued interest50   1   34   (29)  Revenues and royalties payable(9)  68   (59)  64   Other(1)  36   2   1   Total working capital changes108   113   224   (216)  Operating cash flow before working capital changes$434   $696   $1,491   $2,068   Diamondback Energy, Inc. Free Cash Flow (unaudited, in millions)  Three Months Ended September 30, Nine Months Ended September 30,  2020 2019 2020 2019 Operating cash flow before working capital changes$434   $696   $1,491   $2,068            Drilling, completions and non-operated additions to oil and natural gas properties(226)  (728)  (1,404)  (1,883)  Infrastructure additions to oil and natural gas properties(16)  (21)  (96)  (104)  Additions to midstream assets(39)  (75)  (133)  (186)  Total Cash CAPEX(281)  (824)  (1,633)  (2,173)  Free Cash Flow$153   $(128)  $(142)  $(105)  RECONCILIATION OF TOTAL DEBT TO NET DEBTThe Company defines net debt as total debt less cash and cash equivalents. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Management uses net debt to determine the Company's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. The Company believes this metric is useful to analysts and investors in determining the Company's leverage position because the Company has the ability to, and may decide to, use a portion of its cash and cash equivalents to reduce debt. September 30, 2020 Net Q3 Borrowings/(Repayments) June 30, 2020 December 31, 2019 September 30, 2019  (in millions) Diamondback Energy, Inc.(a)(b)$4,697   $(125)  $4,822   $4,391   $4,261   Viper Energy Partners LP(b)607   (33)  640   597   410   Rattler Midstream LP(b)585   62   523   424   103   Total debt5,889   $(96)  5,985   5,412   4,774   Cash and cash equivalents(92)    (51)  (123)  (100)  Net debt$5,797     $5,934   $5,289   $4,674   (a) Includes $191 million of debt which matures on September 1, 2021. (b) Excludes debt issuance costs, discounts, and premiums.DERIVATIVESThe Company now has a total of 162.2 thousand barrels of crude oil per day protected in the fourth quarter of 2020, with 95% of those hedges having unlimited downside protection as a swap, put or collar. The Company has an average of 88.9 thousand barrels of crude oil per day of hedge protection in 2021 through a combination of collars and swaps. These hedge positions are consolidated to include hedges in place at Viper Energy Partners LP (“Viper”).As of October 30, 2020, the Company had the following outstanding consolidated derivative contracts, including derivative contracts at Viper. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing and Crude Oil Brent pricing and with natural gas derivative settlements based on the New York Mercantile Exchange Henry Hub pricing. When aggregating multiple contracts, the weighted average contract price is disclosed. Crude Oil (Bbls/day, $/Bbl)      Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2022 Swaps - WTI (Cushing)11,000   —  —  —  —  —  $43.47   $—  $—  $—  $—  $—  Swaps - WTI (Magellan East Houston) 4,000   5,000  5,000  5,000  5,000  —  $61.95   $37.78  $37.78  $37.78  $37.78  $—  Swaps - Crude Brent Oil(1)24,200   5,000  5,000  5,000  5,000  —  $47.62   $41.62  $41.62  $41.62  $41.62  $—  Long Puts - WTI (Cushing) 4,700   —  —  —  —  —  $46.51   $—  $—  $—  $—  $—  Short Puts - Crude Brent Oil—   —  —  —  —  5,000  $—   $—  $—  $—  $—  $35.00  Calls - WTI (Cushing)(2) 8,000   —  —  —  —  —  $45.00   $—  $—  $—  $—  $—  Costless Collars - WTI (Cushing)45,779   13,000  11,000  10,000  10,000  —  Long Put Price ($/Bbl)$35.92   $31.62  $30.64  $30.00  $30.00  $—  Ceiling Price ($/Bbl)$42.29   $43.31  $43.41  $43.05  $43.05  $—  Costless Collars - WTI (Magellan East Houston)4,000   —  —  —  —  —  Long Put Price ($/Bbl)$39.00   $—  $—  $—  $—  $—  Ceiling Price ($/Bbl)$49.00   $—  $—  $—  $—  $—  Costless Collars - Crude Brent Oil64,710   76,000  76,000  60,000  60,000  —  Long Put Price ($/Bbl)$37.59   $38.96  $38.96  $39.43  $39.43  $—  Ceiling Price ($/Bbl)$45.63   $48.33  $48.33  $48.12  $48.12  $—  Costless Put Spreads - WTI (Magellan East Houston)3,800   —  —  —  —  —  Short Put Price ($/Bbl)$25.00   $—  $—  $—  $—  $—  Long Put Price ($/Bbl)$50.00   $—  $—  $—  $—  $—  Basis Swaps - WTI (Midland)45,087   —  —  —  —  —  $(1.33)  $—  $—  $—  $—  $—  Argus WTL - NYMEX WTI Basis Differential 8,000   —  —  —  —  —  $(1.31)  $—  $—  $—  $—  $—  Roll Swaps - WTI120,000   —  —  —  —  —  $(1.05)  $—  $—  $—  $—  $—  (1) Includes of 5,000 BO/d of swaps in the first half of 2021 whereby the counterparty has the right to extend the hedge into the second half of 2021 at an average price of $51/Bbl (2) Includes a deferred premium at a weighted-average price of $1.89/Bbl Natural Gas (Mmbtu/day, $/Mmbtu)  Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2022 Natural Gas Swaps - Henry Hub60,000   200,000   200,000   200,000   200,000   —   $2.48   $2.65   $2.65   $2.65   $2.65   $—   Natural Gas Swaps - Waha Hub90,000   —   —   —   —   —   $1.58   $—   $—   $—   $—   $—   Natural Gas Basis Swaps - Waha Hub145,000   230,000   230,000   230,000   230,000   100,000   $(1.57)  $(0.69)  $(0.69)  $(0.69)  $(0.69)  $(0.42)   Natural Gas Liquids (Bbls/day, $/Bbl)  Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY 2022 Natural Gas Liquids Swaps - Mont Belvieu Ethane7,000  —  —  —  —  —  $8.43  $—  $—  $—  $—  $—  Natural Gas Liquids Swaps - Mont Belvieu Propane5,000  —  —  —  —  —  $21.76  $—  $—  $—  $—  $—  Investor Contact: Adam Lawlis +1 432.221.7467 alawlis@diamondbackenergy.com

  • Viper Energy Partners LP, a Subsidiary of Diamondback Energy, Inc., Reports Third Quarter 2020 Financial and Operating Results
    GlobeNewswire

    Viper Energy Partners LP, a Subsidiary of Diamondback Energy, Inc., Reports Third Quarter 2020 Financial and Operating Results

    MIDLAND, Texas, Nov. 02, 2020 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), today announced financial and operating results for the third quarter ended September 30, 2020. THIRD QUARTER HIGHLIGHTS * Q3 2020 consolidated net income (including non-controlling interest) of $16.2 million; adjusted net income (as defined and reconciled below) of $7.1 million * Consolidated Adjusted EBITDA (as defined and reconciled below) of $40.4 million and cash available for distribution to Viper’s common limited partner units (as reconciled below) of $13.9 million * Previously announced Q3 2020 average production of 15,829 bo/d (26,409 boe/d), an increase of 10% from Q2 2020 average daily oil production and 16% year over year * Q3 2020 cash distribution of $0.10 per common unit, representing approximately 50% of cash available for distribution; $0.21 per unit of cash available for distribution implies a 12.0% annualized distributable cash flow yield based on the October 30, 2020 unit closing price of $7.01 * Ended the third quarter with net debt of $599.1 million; total debt down $67.1 million since March 31, 2020, or a 10% reduction over the past six months * 108 total gross (4.7 net 100% royalty interest) horizontal wells turned to production on Viper’s acreage during Q3 2020 with an average lateral length of 10,022 feet * Initiating average daily production guidance for Q4 2020 and Q1 2021 of 15,250 to 16,250 bo/d (25,500 to 27,000 boe/d) * Narrowing full year 2020 average production guidance to 15,750 to 16,000 bo/d (26,000 to 26,500 boe/d) * As of October 14, 2020, there were approximately 486 gross horizontal wells in the process of active development on Viper’s acreage, in which Viper expects to own an average 1.4% net royalty interest (6.6 net 100% royalty interest wells) * Approximately 431 gross (11.2 net 100% royalty interest) line-of-sight wells that are not currently in the process of active development, but for which Viper has visibility to the potential of future development in coming quarters, based on Diamondback’s current completion schedule and third party operators’ permits * Q2 2020 and Q3 2020 distributions reasonably estimated to not constitute dividends for U.S. federal income tax purposes; instead should generally constitute non-taxable reductions to the tax basis“Viper’s 10% increase in oil production during the third quarter of 2020 was driven primarily by 38 of Diamondback’s 41 completions in the quarter having a roughly 10% average royalty interest net to Viper, as third-party activity remained minimal, again showcasing the differentiated relationship between Diamondback and Viper.  With production already within the high end of our previously guided range, we are confident we will exit 2020 with a strong production rate, positioning Viper well to deliver robust free cash flow in 2021,” stated Travis Stice, Chief Executive Officer of Viper’s General Partner.Mr. Stice continued, “The advantaged nature of the royalty business model with no required capital expenditures and only minimal operating expenditures, further enhanced by Viper’s best-in-class cost structure, has been highlighted during this severe industry downturn as Viper has been able to reduce total debt by 10% in just the past six months.  As a direct result of this, and because of our confidence in the expected free cash flow to be generated in our forward outlook, the Board has elected to increase our distribution for the third quarter to 50% of our total cash available for distribution, up from 25% previously.  With a currently anticipated forward free cash flow yield of greater than 15%, due primarily to Diamondback’s expected development plan and benefiting from punitive hedges rolling off in 2021, we look forward to continuing to increase our return of capital to unitholders over the coming quarters.”FINANCIAL UPDATEViper’s third quarter 2020 average unhedged realized prices were $36.80 per barrel of oil, $1.07 per Mcf of natural gas and $12.44 per barrel of natural gas liquids, resulting in a total equivalent realized price of $25.76/boe.During the third quarter of 2020, the Company recorded total operating income of $62.9 million and consolidated net income (including non-controlling interest) of $16.2 million.As of September 30, 2020, the Company had a cash balance of $7.4 million and $453.5 million available under its revolving credit facility. During the third quarter of 2020, the Company repurchased $6.0 million of the outstanding principal of its 5.375% Senior Notes due 2027 (the “Notes) at a 1.5% discount to par value.  Additionally, during the third quarter, Viper repaid $27.0 million in outstanding borrowings under its revolving credit facility, resulting in total debt reduction of $33.0 million.  Since the end of the first quarter of 2020, Viper has now reduced total debt by $67.1 million, or a 10% reduction over this time period.In connection with its Fall redetermination, expected to close in November 2020, Viper’s lead bank has recommended maintaining the borrowing base at $580.0 million.  As a result, Viper is expected to maintain its elected commitment at $580.0 million.THIRD QUARTER 2020 CASH DISTRIBUTION The Board of Directors of Viper’s General Partner declared a cash distribution for the three months ended September 30, 2020 of $0.10 per common unit.  The distribution is payable on November 19, 2020 to eligible common unitholders of record at the close of business on November 12, 2020.  This distribution represents approximately 50% of total cash available for distribution.On August 20, 2020, Viper made a cash distribution to its unitholders and subsequently has reasonably estimated that such distribution, as well as the distribution payable on November 19, 2020, should not constitute dividends for U.S. federal income tax purposes.  Rather, these distributions should generally constitute non-taxable reductions to the tax basis of each distribution recipient’s ownership interest in Viper.  The Form 8937 containing additional information may be found on www.viperenergy.com under the “Investor Relations” section of the site.OPERATIONS AND ACQUISITIONS UPDATEDuring the third quarter 2020, there was a resumption of completion activity on our mineral and royalty acreage as commodity prices improved from historic lows witnessed during the second quarter of 2020.  As a result, during the third quarter, Viper estimates that 108 gross (4.7 net 100% royalty interest) horizontal wells with an average royalty interest of 4.3% were turned to production on its existing acreage position with an average lateral length of 10,022 feet. Of these 108 gross wells, Diamondback is the operator of 38 with an average royalty interest of 9.9%, and the remaining 70 gross wells, with an average royalty interest of 1.3%, are operated by third parties.During the third quarter of 2020, Viper did not complete any acquisitions.  However, during the third quarter, the Company sold 18 net royalty acres in the Permian Basin for an aggregate of approximately $2.1 million, subject to post-closing adjustments.  As a result of the divestitures, Viper’s footprint of mineral and royalty interests as of September 30, 2020 was 24,696 net royalty acres.The following table summarizes Viper’s gross well information as of October 14, 2020: As of October 14, 2020  Diamondback Operated Third Party Operated Total Horizontal wells turned to production:      Gross wells38 70 108 Net 100% royalty interest wells3.8 0.9 4.7 Average percent net royalty interest9.9% 1.3% 4.3%        Horizontal producing well count:      Gross wells1,121 3,427 4,548 Net 100% royalty interest wells88.2 52.6 140.8 Average percent net royalty interest7.9% 1.5% 3.1%        Horizontal active development well count:      Gross wells71 415 486 Net 100% royalty interest wells3.5 3.1 6.6 Average percent net royalty interest5.0% 0.7% 1.4%        Line of sight wells:      Gross wells110 321 431 Net 100% royalty interest wells7.4 3.9 11.2 Average percent net royalty interest6.7% 1.2% 2.6%        Despite the continued depressed commodity price environment, there continues to be active development across Viper’s asset base, however, near-term activity is expected to be driven primarily by Diamondback operations. The 486 gross wells currently in the process of active development are those wells that have been spud and are expected to be turned to production within approximately the next six to eight months. The 431 line-of-sight wells are those that are not currently in the process of active development, but for which Viper has reason to believe that they will be turned to production within approximately the next 15 to 18 months. The expected timing of these line-of-sight wells is based primarily on permitting by third party operators or Diamondback’s current expected completion schedule. Existing permits or active development of our royalty acreage does not ensure that those wells will be turned to production given the current depressed oil prices.GUIDANCE UPDATEBelow is Viper’s revised guidance for the full year 2020, as well as average production guidance for Q4 2020 and Q1 2021.    Viper Energy Partners    Q4 2020 / Q1 2021 Net Production - MBo/d15.25 - 16.25 Q4 2020 / Q1 2021 Net Production - MBoe/d25.50 - 27.00 Full Year 2020 Net Production - MBo/d15.75 - 16.00 Full Year 2020 Net Production - MBoe/d26.00 - 26.50    Unit costs ($/boe)  Depletion$9.50 - $11.00 Cash G&A$0.60 - $0.80 Non-Cash Unit-Based Compensation$0.10 - $0.25 Interest Expense(1)$3.25 - $3.50    Production and Ad Valorem Taxes (% of Revenue)(2)7% - 8% (1) Assumes actual interest expense through Q3 2020 plus expected interest expense for Q4 2020 assuming $480mm in principal of Sr. Notes and $125mm drawn on the revolver. (2) Includes production taxes of 4.6% for crude oil and 7.5% for natural gas and NGLs and ad valorem taxes.CONFERENCE CALLViper will host a conference call and webcast for investors and analysts to discuss its results for the third quarter of 2020 on Tuesday, November 3, 2020 at 10:00 a.m. CT.  Participants should call (844) 400-1537 (United States/Canada) or (703) 326-5198 (International) and use the confirmation code 3361815. A telephonic replay will be available from 1:00 p.m. CT on Tuesday, November 3, 2020 through Tuesday, November 10, 2020 at 1:00 p.m. CT.  To access the replay, call (855) 859-2056 (United States/Canada) or (404) 537-3406 (International) and enter confirmation code 3361815.  A live broadcast of the earnings conference call will also be available via the internet at www.viperenergy.com under the “Investor Relations” section of the site.  A replay will also be available on the website following the call.About Viper Energy Partners LPViper is a limited partnership formed by Diamondback to own, acquire and exploit oil and natural gas properties in North America, with a focus on owning and acquiring mineral and royalty interests in oil-weighted basins, primarily the Permian Basin and the Eagle Ford Shale. For more information, please visit www.viperenergy.com.About Diamondback Energy, Inc.Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.Forward-Looking StatementsThis news release contains forward-looking statements within the meaning of the federal securities laws.  All statements, other than historical facts, that address activities that Viper assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management’s current beliefs, based on currently available information, as to the outcome and timing of future events, including specifically the statements regarding the current adverse industry and macroeconomic conditions, depressed commodity prices, production levels on properties in which Viper has mineral and royalty interests, any potential regulatory action that may impose production limits on Viper’s royalty acreage, the acquisitions or dispositions, Diamondback’s plans for the acreage discussed above, development activity by other operators, Viper’s cash distribution policy and the impact of the ongoing COVID-19 pandemic. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Viper.  Information concerning these risks and other factors can be found in Viper’s filings with the Securities and Exchange Commission, including its Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the Securities and Exchange Commission’s web site at http://www.sec.gov. Viper undertakes no obligation to update or revise any forward-looking statement.  Viper Energy Partners LP Consolidated Balance Sheets (unaudited, in thousands, except unit amounts)       September 30, December 31,  2020 2019 Assets    Current assets:    Cash and cash equivalents$7,374  $3,602  Royalty income receivable (net of allowance for credit losses)32,108  58,089  Royalty income receivable—related party14,911  10,576  Other current assets371  397  Total current assets54,764  72,664  Property:    Oil and natural gas interests, full cost method of accounting ($1,452,248 and $1,551,767 excluded from depletion at September 30, 2020 and December 31, 2019, respectively)2,930,869  2,868,459  Land5,688  5,688  Accumulated depletion and impairment(398,678) (326,474) Property, net2,537,879  2,547,673  Deferred tax asset (net of allowance)—  142,466  Other assets8,057  22,823  Total assets$2,600,700  $2,785,626  Liabilities and Unitholders’ Equity    Current liabilities:    Accounts payable$95  $—  Accounts payable—related party—  150  Accrued liabilities20,831  13,282  Derivative instruments23,263  —  Total current liabilities44,189  13,432  Long-term debt, net597,880  586,774  Derivative instruments5,487  —  Total liabilities647,556  600,206  Commitments and contingencies    Unitholders’ equity:    General partner829  889  Common units (67,850,632 units issued and outstanding as of September 30, 2020 and 67,805,707 units issued and outstanding as of December 31, 2019)725,625  929,116  Class B units (90,709,946 units issued and outstanding September 30, 2020 and December 31, 2019)1,055  1,130  Total Viper Energy Partners LP unitholders’ equity727,509  931,135  Non-controlling interest1,225,635  1,254,285  Total equity1,953,144  2,185,420  Total liabilities and unitholders’ equity$2,600,700  $2,785,626             Viper Energy Partners LP Consolidated Statements of Operations (unaudited, in thousands, except per unit data)         Three Months Ended September 30, Nine Months Ended September 30,  20202019 20202019 Operating income:      Royalty income$62,584  $71,080  $171,857  $201,950  Lease bonus income40  698  1,685  3,607  Other operating income318  10  761  15  Total operating income62,942  71,788  174,303  205,572  Costs and expenses:      Production and ad valorem taxes5,049  4,731  14,306  12,812  Depletion24,780  18,697  72,204  51,408  General and administrative expenses1,811  1,805  6,160  5,223  Total costs and expenses31,640  25,233  92,670  69,443  Income from operations31,302  46,555  81,633  136,129  Other income (expense):      Interest expense, net(8,238) (3,827) (24,870) (11,089) Gain (loss) on derivative instruments, net(5,084) —  (47,469) —  Gain (loss) on revaluation of investment(1,984) 336  (8,661) 3,978  Other income, net188  553  1,111  1,756  Total other expense, net(15,118) (2,938) (79,889) (5,355) Income (loss) before income taxes16,184  43,617  1,744  130,774  Provision for (benefit from) income taxes—  (7,480) 142,466  (41,908) Net income (loss)16,184  51,097  (140,722) 172,682  Net income (loss) attributable to non-controlling interest16,948  43,151  23,963  128,692  Net income (loss) attributable to Viper Energy Partners LP$(764) $7,946  $(164,685) $43,990         Net income (loss) attributable to common limited partner units:      Basic$(0.01) $0.13  $(2.43) $0.73  Diluted$(0.01) $0.13  $(2.43) $0.73  Weighted average number of common limited partner units outstanding:      Basic67,847  62,645  67,832  60,267  Diluted67,847  62,678  67,832  60,296                 Viper Energy Partners LP Consolidated Statements of Cash Flows (unaudited, in thousands)           Three Months Ended September 30, Nine Months Ended September 30,  2020 2019 2020 2019 Cash flows from operating activities:        Net income (loss)$16,184  $51,097  $(140,722) $172,682  Adjustments to reconcile net income (loss) to net cash provided by operating activities:        Provision for (benefit from) income taxes—  (7,541) 142,466  (42,077) Depletion24,780  18,697  72,204  51,408  (Gain) loss on derivative instruments, net5,084  —  47,469  —  Net cash payments on derivatives(16,164) —  (18,718) —  (Gain) loss on extinguishment of debt20  —  6  —  (Gain) loss on revaluation of investment1,984  (336) 8,661  (3,978) Amortization of debt issuance costs578  235  1,730  676  Non-cash unit-based compensation275  449  945  1,326  Changes in operating assets and liabilities:        Royalty income receivable10  3,531  25,981  (4,465) Royalty income receivable—related party(13,994) (4,995) (4,335) (10,544) Accounts payable and accrued liabilities8,476  1,417  7,644  (821) Accounts payable—related party—  —  (150) —  Income tax payable—  61  —  169  Other current assets110  (107) 25  (148) Net cash provided by (used in) operating activities27,343  62,508  143,206  164,228  Cash flows from investing activities:        Acquisitions of oil and natural gas interests764  (194,465) (64,508) (319,696) Funds held in escrow—  5,715  —  (7,500) Proceeds from sale of assets2,098  —  2,098  —  Proceeds from the sale of investments5,262  —  5,262  —  Net cash provided by (used in) investing activities8,124  (188,750) (57,148) (327,196) Cash flows from financing activities:        Proceeds from borrowings under credit facility3,000  197,000  95,000  368,000  Repayment on credit facility(30,000) —  (65,000) (369,500) Debt issuance costs(46) (91) (90) (349) Repayment of senior notes(5,910) —  (19,697) —  Proceeds from public offerings—  —  —  340,860  Public offering costs—  —  —  (221) Units purchased for tax withholding(1) —  (384) (353) Distributions to General Partner(20) (20) (60) (60) Distributions to public(2,015) (29,099) (38,943) (78,590) Distributions to Diamondback(2,764) (34,400) (53,112) (99,543) Net cash provided by (used in) financing activities(37,756) 133,390  (82,286) 160,244  Net increase (decrease) in cash(2,289) 7,148  3,772  (2,724) Cash and cash equivalents at beginning of period9,663  12,804  3,602  22,676  Cash and cash equivalents at end of period$7,374  $19,952  $7,374  $19,952           Supplemental disclosure of cash flow information:        Interest paid$1,278  $8,500  $19,196  $10,882                     Viper Energy Partners LP Selected Operating Data (unaudited)            Three Months Ended September 30, 2020 Three Months Ended June 30, 2020 Three Months Ended September 30, 2019 Production Data:      Oil (MBbls)1,456  1,315   1,258  Natural gas (MMcf)3,111  2,685   1,710  Natural gas liquids (MBbls)455  467   413  Combined volumes (MBOE)(1)2,430  2,230   1,956         Average daily oil volumes (BO/d)(2)15,829  14,453   13,674  Average daily combined volumes (BOE/d)(2)26,409  24,508   21,266         Average sales prices(2):      Oil ($/Bbl)$36.80  $21.00   $51.53  Natural gas ($/Mcf)$1.07  $0.46   $1.28  Natural gas liquids ($/Bbl)$12.44  $7.69   $9.84  Combined ($/BOE)(3)$25.76  $14.55   $36.33         Oil, hedged ($/Bbl)(4)$27.65  $22.39   $51.53  Natural gas, hedged ($/Mcf)(4)$0.16  $(1.01)  $1.28  Natural gas liquids ($/Bbl)(4)$12.44  $7.69   $9.84  Combined price, hedged ($/BOE)(4)$19.11  $13.60   $36.33         Average Costs ($/BOE):      Production and ad valorem taxes$2.08  $1.39   $2.42  General and administrative - cash component(5)0.63  0.63   0.69  Total operating expense - cash$2.71  $2.02   $3.11         General and administrative - non-cash stock compensation expense$0.11  $0.13   $0.23  Interest expense, net$3.39  $3.44   $1.96  Depletion$10.20  $10.21   $9.56  (1) Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl. (2) Average daily volumes and average sales prices presented are based on actual production volumes and not calculated utilizing the rounded production volumes presented in the table above. (3) Realized price net of all deducts for gathering, transportation and processing. (4) Hedged prices reflect the effect of our matured commodity derivative transactions on our average sales prices. Our calculation of such effects includes realized gains and losses on cash settlements for commodity derivatives, which we do not designate for hedge accounting. We did not have any derivative contracts prior to February of 2020. (5) Excludes non-cash stock compensation for the respective periods presented.NON-GAAP FINANCIAL MEASURESAdjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies.  Viper defines Adjusted EBITDA as net income (loss) plus interest expense, net, non-cash unit-based compensation expense, depletion, (gain) loss on revaluation of investments, non-cash (gain) loss on derivative instruments, (gain) loss on extinguishment of debt and provision for (benefit from) income taxes, if any. Adjusted EBITDA is not a measure of net income as determined by United States’ generally accepted accounting principles (“GAAP”).  Management believes Adjusted EBITDA is useful because it allows them to more effectively evaluate Viper’s operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income, royalty income, cash flow from operating activities or any other measure of financial performance or liquidity presented as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA.  Viper defines cash available for distribution generally as an amount equal to its Adjusted EBITDA for the applicable quarter less cash needed for income taxes payable, debt service, contractual obligations, fixed charges and reserves for future operating or capital needs that the board of directors of Viper’s general partner may deem appropriate, common units repurchased for tax withholding, dividend equivalent rights and preferred distributions. Viper’s computations of Adjusted EBITDA and cash available for distribution may not be comparable to other similarly titled measures of other companies or to such measure in its credit facility or any of its other contracts.The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA and cash available for distribution to the GAAP financial measure of net loss.  Viper Energy Partners LP (unaudited, in thousands, except per unit data)        Three Months Ended September 30, 2020 Net income (loss)$16,184  Interest expense, net8,238  Non-cash unit-based compensation expense275  Depletion24,780  (Gain) loss on revaluation of investment1,984  Non-cash (gain) loss on derivative instruments(11,080) (Gain) loss on extinguishment of debt20  Consolidated Adjusted EBITDA40,401  Less: Adjusted EBITDA attributable to non-controlling interest(1)23,113  Adjusted EBITDA attributable to Viper Energy Partners LP$17,288     Adjustments to reconcile Adjusted EBITDA to cash available for distribution:  Debt service, contractual obligations, fixed charges and reserves$(3,297) Units repurchased for tax withholding(1) Units - dividend equivalent rights(2) Preferred distributions(45) Cash available for distribution to Viper Energy Partners LP unitholders$13,943     Common limited partner units outstanding67,851     Cash available for distribution per limited partner unit$0.21  Cash per unit approved for distribution$0.10  (1) Does not take into account special income allocation consideration.Adjusted net income (loss) is a non-GAAP financial measure equal to net income (loss) attributable to Viper adjusted for non-cash (gain) loss on derivative instruments, (gain) loss on revaluation of investments, (gain) loss on extinguishment of debt, valuation for deferred tax asset and related income tax adjustments, if any. The Company’s computation of adjusted net income may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.  The following table presents a reconciliation of adjusted net income (loss) to net income (loss):Viper Energy Partners LP Adjusted Net Income (Loss) (unaudited, in thousands, except per unit data)     Three Months Ended September 30, 2020 Net income (loss)$16,184  Non-cash (gain) loss on derivative instruments, net(11,080) (Gain) loss on revaluation of investments1,984  (Gain) loss on extinguishment of debt20  Adjusted net income (loss)7,108  Less: Adjusted net income (loss) attributed to non-controlling interests7,317  Adjusted net income (loss) attributable to Viper Energy Partners LP$(209)    Adjusted net income (loss) attributable to limited partners per common unit$(0.003)      RECONCILIATION OF LONG-TERM DEBT TO NET DEBTThe Partnership defines net debt as debt less cash equivalents. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Management uses net debt to determine the Partnership's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. The Partnership believes this metric is useful to analysts and investors in determining the Partnership's leverage position because the Partnership has the ability to, and may decide to, use a portion of its cash and cash equivalents to reduce debt. September 30, 2020 Net Q3 Principal Borrowings/(Repayments) June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019               (in thousands) Total long-term debt(1)$606,438  $(33,000) $639,438  $673,500  $596,500  $409,500  Cash and cash equivalents(7,374)   (9,663) (40,271) (3,602) (19,952) Net debt$599,064    $629,775  $633,229  $592,898  $389,548  (1) Excludes debt issuance, discounts & premiums.DerivativesAs of the filing date, the Company had the following outstanding derivative contracts. The Company’s derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing and Crude Oil Brent and with natural gas derivative settlements based on the New York Mercantile Exchange Henry Hub pricing. When aggregating multiple contracts, the weighted average contract price is disclosed. Crude Oil (Bbls/day, $/Bbl)  Q4 2020 FY 2021 Swaps - WTI (Cushing)1,000  —  $27.45  $—  Collars - WTI (Cushing)14,000  10,000  Floor Price$28.86  $30.00  Ceiling Price$32.33  $43.05  Deferred Premium Call Options - WTI (Cushing)8,000  —  Premium$(1.89) $—  Strike Price ($/Bbl)$45.00  $—  Basis Swaps - WTI (Midland-Cushing) 4,000   —  $(2.60) $—   Natural Gas (Mmbtu/day, $/Mmbtu)  Q4 2020 FY 2021 Natural Gas Basis Swaps - Waha Hub25,000  —  $(2.07) $—           Investor Contacts: Adam Lawlis +1 432.221.7467 alawlis@viperenergy.comAusten Gilfillian +1 432.221.7420 agilfillian@viperenergy.comSource: Viper Energy Partners LP; Diamondback Energy, Inc.