Q4 2025 Viper Energy Inc Earnings Call

February 24, 2026

Operator: Good day, and thank you for standing by. Welcome to the Viper Energy Q4 2025 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Chip Seale, Investor Relations Director. Please go ahead.

Speaker #1: Good day, and thank you for standing by. Welcome to the Viper Energy fourth quarter 2025 earnings conference call. At this time, all participants are in the listen-only mode.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone.

Speaker #1: You will then hear an automated message advising your hand is raised. So if you withdraw your question, please press star 1-1 again. Recorded. I would now like to hand the conference over to your first speaker today, Chip Seale, Investor Relations Director.

Speaker #1: Please go ahead.

Speaker #2: Thank you, Brittany. Good morning, and welcome to Viper Energy's fourth quarter 2025 conference call. During our call today, we will reference an updated investor presentation, which can be found on Viper's website.

Chip Seale: Thank you, Brittany. Good morning, welcome to Viper Energy's Q4 2025 Conference Call. During our call today, we will reference an updated investor presentation, which can be found on Viper's website. Representing Viper today are Kaes Van't Hof, CEO, and Austen Gilfillian, President. During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and businesses. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we will make reference to certain non-GAAP measures. The reconciliations with the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon. I will now turn the call over to Kaes.

Speaker #2: Representing Viper today are Case Vanthoff, CEO, and Austin Gilfillon, President. During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and businesses.

Speaker #2: We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC.

Speaker #2: In addition, we will make reference to certain non-GAAP measures. The reconciliations with the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon.

Speaker #2: I will now turn the call over to Case.

Speaker #3: Thank you, Chip. Welcome, everyone, and thank you for listening to Viper's fourth quarter 2025 conference call. The fourth quarter capped the transformational year for Viper.

Kaes Van't Hof: Thank you, Chip. Welcome, everyone, and thank you for listening to Viper's Q4 2025 Conference Call. The Q4 capped a transformational year for Viper, highlighted by more than $8 billion of mineral acquisitions and meaningful growth in both absolute and per share metrics. Year-over-year, we grew our Permian Basin acreage by nearly two and a half times and our oil production per share by 7%. Activity across our Permian acreage remains strong, supported by Diamondback and third-party operators focused on development of long lateral, high-quality inventory. Looking ahead, we've initiated average daily production guidance for the full year 2026 that implies mid-single-digit organic production growth from our Q4 2025 exit rate.

Speaker #3: Highlighted by more than $8 billion of mineral acquisitions, and meaningful growth in both absolute and per-share metrics. Year over year, we grew our Permian Basin acreage by nearly 2 and 1/2 times, and our oil production per share by 7%.

Speaker #3: Activity across our Permian acreage remained strong, supported by Diamondback and third-party operators focused on development of long-lateral high-quality inventory. Looking ahead, we have initiated average daily production guidance for the full year 2026 that implies mid-single-digit organic production growth from our Q4 2025 exit rate.

Speaker #3: The Diamondback relationship continues to be strategic and meaningful to Viper's growth, even after two significant acquisitions in 2025 and greater exposure to other leading operators in the Permian Basin.

Kaes Van't Hof: The Diamondback relationship continues to be strategic and meaningful to Viper's growth, even after two significant acquisitions in 2025 and greater exposure to other leading operators in the Permian Basin. Beyond visible near-term growth, Viper is better positioned today than we ever have been in terms of the scale, longevity, and overall quality of our asset base and future inventory. Another significant achievement was the work we did on our balance sheet. Following our non-Permian divestiture, we fully repaid our $500 million term loan and outstanding revolver balance, resulting in pro forma net debt of roughly $1.6 billion, just over one turn of leverage. Now turning to return of capital. Our board approved a 15% increase to our base dividend and a $1 billion increase to our share repurchase authorization.

Speaker #3: Beyond visible near-term growth, Viper is better positioned today than we ever have been in terms of the scale, longevity, and overall quality of our asset base and future inventory.

Speaker #3: Another significant achievement was the work we did on our balance sheet. Following our non-Permian divestiture, we fully repaid our $500 million term loan and outstanding revolver balance.

Speaker #3: Resulting in pro forma net debt of roughly $1.6 billion. Just over one turn of leverage. Now turning to return of capital. Our board-approved a 15% increase to our base dividend and a $1 billion increase to our share repurchase authorization, reflecting confidence in our long-term cash-generating ability and disciplined capital allocation approach.

Kaes Van't Hof: reflecting confidence in our long-term cash-generating ability and disciplined capital allocation approach. This base dividend represents approximately 50% of estimated 2026 free cash flow at $50 WTI, and is fully covered below $30 WTI. This increased base dividend provides an attractive yield, while also allowing us continued financial flexibility to optimize capital allocation through additional returns via a combination of our variable dividend and opportunistic share repurchases. Given the strength of our balance sheet, we returned 90% of available cash during Q4, and now, following the closing of our non-Permian divestiture, we are well positioned to increase our return of capital to upwards of 100% of cash available for distribution. Importantly, we expect to execute on this comprehensive return of capital strategy, while also continuing to deliver on differentiated growth in per share metrics.

Speaker #3: This base dividend represents approximately 50% of estimated 2026 free cash flow at $50 WTI and is fully covered below $30 WTI. This increased base dividend provides an attractive yield while also allowing us continued financial flexibility to optimize capital allocation through additional returns via a combination of our variable dividend and opportunistic share repurchases.

Speaker #3: Given the strength of our balance sheet, we returned 90% of available cash during the fourth quarter and now, following the closing of our non-Permian divestiture, we are well positioned to increase our return of capital to upwards of 100% of cash available for distribution.

Speaker #3: Importantly, we expect to execute on this comprehensive return of capital strategy while also continuing to deliver on differentiated growth in per-share metrics. I'm pleased with our accomplishments in 2025 and the strong position Viper is in today.

Kaes Van't Hof: I'm pleased with our accomplishments in 2025 and the strong position Viper is in today. There's still much to achieve. Looking ahead, Viper is well positioned to generate strong free cash flow, deliver attractive shareholder returns, and continue to pursue accretive Permian consolidation opportunities as they arise. Operator, please open the line for questions.

Speaker #3: But there's still much to achieve. Looking ahead, Viper's well positioned to generate strong free cash flow to deliver attractive shareholder returns and continue to pursue a creative Permian consolidation opportunities as they arise.

Speaker #3: Operator, please open the line for questions.

Speaker #1: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Operator: Thank you. At this time, we will conduct a question-and-answer session. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Neal Dingmann with William Blair. Your line is now open.

Speaker #1: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Neil Dingman with William Blair.

Speaker #1: Your line is now open.

Neal Dingmann: Morning, guys. Thanks for the time. Okay, my first question for you, Austen, is just on the Barnett specifically. You know, last night and this morning, FANG's Barnett update really seemed to be positive, and certainly I think positive for Viper. I'm just wondering, could you give any color on how Viper's ownership translates across FANG's Barnett position?

Speaker #2: Morning, guys. Thanks for the time. Case, my first question for you or Austin is just on the Barnett specifically. Last night and this morning, saying Barnett update really seemed to be positive and certainly, I think, positive for Venom.

Speaker #2: I'm just wondering, could you give any color on how Venom's ownership translates across things Barnett's position?

Speaker #3: Yeah, Neil. I'll give you some of the high level. I mean, I think that's what we've continued to try to preach at Viper is the benefits of mineral ownership.

Kaes Van't Hof: Neal, I'll give, I'll give you some of the high level. I mean, I think that's, you know, what we've continued to try to preach at Viper is, you know, the benefits of mineral ownership. You know, you own from the surface of the Earth to the center of the Earth, in perpetuity. You know, as operators try new things or try new zones or try new techniques, you know, the benefit of that accrues to the mineral owner without the need to spend capital or, you know, take too much risk. Pretty exciting for Viper. We kind of kicked this off a couple of years ago in terms of leasing, but Austen's gonna give some color on where we are today and what we're seeing.

Speaker #3: And you own from the surface of the earth to the center of the earth in perpetuity. And as operators try new things or try new zones or try new techniques, the benefit of that accrues to the mineral owner without the need to spend capital or take too much risk.

Speaker #3: So pretty exciting for Viper. We kind of kicked this off a couple of years ago in terms of leasing but Austin's going to give some color on where we are today and what we're seeing.

Speaker #2: Yeah, no, we're still in the early stages on the actual leasing program. So Diamondback directly, and also in some of the JVs that they've done, have been very active in taking new leases from Viper to give them the right to develop those deeper zones in the Midland Basin.

Austen Gilfillian: Yeah, no, we're still early stages on the actual leasing program. So Diamondback directly and also in some of the JVs that they've done, have been very active in taking new leases from Viper to give them the right to develop those deeper zones in the Midland Basin. Now, Spanish Trail was a big chunk of that that we leased with Diamondback back in 2023. As we sit here today, I would say we've still only leased about 10% to 15% of the acres that, you know, would potentially be open in the Midland Basin.

Speaker #2: Spanish Trail was a big chunk of that that we leased with Diamondback back in 2023. But as we sit here today, I would say we've still only leased about 10 to 15 percent of the acreage that would potentially be open in the Midland Basin.

Austen Gilfillian: That should be a tailwind to come, both from a lease bonus perspective, but also, you know, new inventory locations that are gonna come into play and kind of support the production profile over the years to come.

Speaker #2: So that should be a tailwind to come both from a lease bonus perspective but also new inventory locations that are going to come into play and kind of support the production profile over the years to come.

Speaker #2: Great point, Austin. Thanks. And then second question, just on return of capital. Specifically, now you've mentioned that you're positioned to return upwards to 100% of cash available from distribution in addition to the share growth.

Neal Dingmann: Great point, Austen. Thanks. Second question, just on return of capital. Specifically, now, you've mentioned that you're positioned to return upwards to 100% of cash available from distribution in addition to the share growth. I'm just wondering, looks like last quarter, about 41% of the cash available for distribution went to base dividend, and then followed by, what was it? 27% buyback, 23% variable, and 9% debt repayment. I mean, how... You know, will this stay in this range? You know, Austen, Kaes, is this just largely share price dependent? You know, I mean, I'm just thinking more on sort of broad terms in rankings. Should we, you know, will we see the base dividend still probably be the highest, or, you know, how should we think about it?

Speaker #2: And I'm just wondering, it looks like last quarter, about 41% of the cash available for distribution went to base dividend and then followed by what was it?

Speaker #2: 27 buyback, 23 variable, and 9% debt repayment. How will this stay in this range? Or Austin or Case, is this just largely share price dependent?

Speaker #2: Or, I mean, I'm just thinking more in sort of broad terms in ranking. Will we still see the base dividend probably be the highest, or how should we think about it?

Speaker #3: Yeah, I mean, listen, the board decided to increase the base dividend by 15%. I think that's a meaningful number. I think it shows that we've done a good amount of a creative deals.

Kaes Van't Hof: Yeah, I mean, listen, as the board decided to increase the base dividend by 15%, I think that's, you know, a meaningful number. I think it shows that we've done a, you know, a good amount of accretive deals. Balance sheet's strong. You know, that's always gonna be the first call on capital. You know, we've also said, Hey, when we get to $1.5 billion or $1.6 billion of net debt, you know, we're gonna ramp the shareholder returns to almost 100%. You know, I think we're there. You know, I think it all depends on the market and the stock price and where things are headed. Obviously, the decision to buy back shares is less obvious today than it was at, you know, $37 a share.

Speaker #3: Balance sheet's strong. That's always going to be the first call on capital. We've also said when we get to a billion five or a billion six of net debt, we're going to ramp the shareholder returns to almost 100%.

Speaker #3: And I think we're there. I think it all depends on the market and the stock price and where things are headed. Obviously, the decision to buy back shares is less obvious today than it was at $37 a share.

Speaker #3: But I think we recognize that we have done a lot of accretive buybacks at Viper. We'll probably be ready, should any of our non-traditional holders, like the private equity owners, want to sell—we'll help them get out like we did in Q4.

Kaes Van't Hof: You know, I think we recognize that, you know, we have done a lot of accretive buybacks at Viper. You know, we'll probably be ready should any of our, you know, non, traditional holders, like the private equity owners, want to sell, we'll help them get out like we did in Q4, we bought back 1 million shares directly from one of the private equity holders. I just think having that flexibility is key. You know, in general, I think, you know, shareholders still want a lot of cash back. At the, at the, at these prices, with, you know, commodity improving and the stock price improving, we probably lean more towards cash return outside of unique situations.

Speaker #3: We bought back a million shares directly from one of the private equity holders. So I just think having that flexibility is key. But in general, I think shareholders still want a lot of cash back.

Speaker #3: And at these prices, with commodity improving and the stock price improving, we probably lean more towards cash return—outside of unique situations.

Neal Dingmann: That makes sense. Thanks, guys.

Speaker #2: That makes sense. Thanks, Case.

Speaker #1: Thank you so much. One moment for our next question. Our next question comes from the line of Betty Zhang. With Barclays, your line is now open.

Operator: Thank you so much. One moment for our next question. Our next question comes from the line of Betty Jiang with Barclays. Your line is now open.

Speaker #4: Thank you. Good morning. The question is on the third-party activity outlook that you were seeing there. Given the recount declines in the Permian, it's notable how resilient Diamondback's or Viper's third-party activity has been holding up fairly well in the last few quarters.

Betty Jiang: Thank you. Good morning. My question is on the third party activity outlook that you're seeing there. I think, given the rig count declines in the Permian, it's notable how resilient Diamondback's or Viper's third party activity has been holding up fairly well in the last few quarters. Where are you seeing today in terms of your activity backlog? Are you seeing any slowdown at all, or could this be another area that perhaps it's enhancing the production growth that you might see this year?

Speaker #4: Where are you seeing today in terms of your activity backlog? Are you seeing any slowdown at all? Or could this be another area that perhaps it's enhancing the production growth that you might see this year?

Speaker #3: Yeah, good question, Betty. We really haven't seen much of a slowdown at all across the third-party activity with some new disclosures in this quarter on pages 14 and 15 of the deck that break down kind of some of the key third-party operators by both the Midland and Delaware Basin.

Austen Gilfillian: Yeah, good question, Betty. We really haven't seen much of a slowdown at all across the third party activity. You know, we put some new disclosures in this quarter on pages 14 and 15 of the deck that break down kind of some of the key third party operators by both the Midland and Delaware Basin. Kind of as you look through that list, right, it's dominated by some of the larger players in the industry. I think that's really helped. You know, I think also it's just kind of supportive of the view that we've had of trying to acquire high quality royalty interest.

Speaker #3: And kind of as you look through that list, right, it's dominated by some of the larger players in the industry. So I think that's really helped I think also it's just kind of supportive of the view that we've had of trying to acquire high-quality royalty interest.

Austen Gilfillian: As you look at the amount of activity that our acreage position has captured over the years, it's really been consistent in capturing pretty much 50% of everything that happens by third parties across the entire basin. You get the kicker of the concentrated development by Diamondback as well. You know, we'll see what happens over the course of the year, right? Right now, the guidance only takes into account what we can see, meaning existing DUCs and permits. If activity holds like it can today, that might help a bit on, you know, the production outlook. You know, overall, I would say that the key takeaway is that third party activity continues to be very strong.

Speaker #3: And as you look at the amount of activity that our acreage position has captured over the years, it's really been consistent in capturing pretty much 50% of everything that happens by third parties across the entire Basin.

Speaker #3: And then you get the kicker of the concentrated development by Diamondback as well. So we'll see what happens over the course of the year.

Speaker #3: Right now, the guidance when we take into account what we can see, meaning existing ducks and permits, so if activity holds like it can today, that might help a bit on the production outlook.

Speaker #3: But overall, I would say the key takeaway is that third-party activity continues to be very strong.

Speaker #2: Yeah, and Betty, we always put our operator hat on when we're buying minerals. So we always buy under well-capitalized operators. From the third-party side, in acreage that we covet.

Kaes Van't Hof: Yeah, Betty, you know, we always put our operator hat on when we're buying minerals. We always buy under, you know, well-capitalized operators from the third party side in acreage that we covet. That usually means, you know, that acreage that we covet gets developed first, which is why, you know, we've had such strong activity levels on the third party side.

Speaker #2: And that usually means that acreage that we covet gets developed first, which is why we've had such strong activity levels on the third-party side.

Speaker #4: Yeah. No, that makes sense. And can really see how resilient the activity broadly is despite the Basin overall levels. A follow-up on the lease bonus.

Betty Jiang: Yeah. No, that makes sense. Can really see how resilient the activity, broadly is despite the basin, overall levels. A follow-up on the lease bonus, and it's related to the Barnett, refer the deeper zones as well. Lease bonus have been coming in, fairly strong in 2025 and got another, decent quarter in Q4. As the basin continue to chase deeper zones, how does that benefit you guys from the lease bonus income perspective?

Speaker #4: And it's related to the Barnett for the deeper zones as well. Lease bonus have been coming in fairly strong in 2025 and got another decent quarter in 4Q.

Speaker #4: As the Basin continues to chase deeper zones, how does that benefit you guys from the lease bonus income perspective?

Speaker #3: Yeah, I mean, any time a lease comes available—whether it be because a vertical well doesn't hold down to these new emerging deep rights, or an operator fails to fulfill some of the requirements in the lease, meaning drilling a well by a certain date or producing a certain amount of production—that lease would terminate.

Austen Gilfillian: Yeah, I mean, it's any time a lease comes available, whether it be because of, you know, a vertical well doesn't hold down to these new emerging deep rights, or an operator fails to fulfill some of the requirements in the lease, meaning drilling a well by a certain day or producing a certain amount of production. That lease would terminate, and those rights revert back to us as the mineral owner. Then we can go take a new lease and get that lease bonus and kind of set the clock again on the development requirement.

Speaker #3: And those rights revert back to us as the mineral owner. And then we can go take a new lease and get that lease bonus and kind of set the clock again on the development requirements.

Speaker #3: So, we've spent a lot of time and effort building teams and systems and processes here to manage all of those tens of thousands of leases and the production data associated with that.

Austen Gilfillian: You know, we've spent a lot of time and effort building teams and systems and processes here to manage all of those tens of thousands of leases and the production data associated with that, so we can really proactively manage that and have an active leasing program. I think you're seeing that benefit play out with the lease bonus that we achieved last year and really over the last couple of years. You know, I think that's going to be a continuing theme, both from a deep rights perspective as well as just operators needing to meet continuous drilling requirements and overall, the rig count being lower, so that being harder for certain operators to fill.

Speaker #3: So we can really proactively manage that and have an active leasing program. I think you're seeing that benefit play out with the lease bonus that we achieved last year and really over the last couple of years.

Speaker #3: And I think that's going to be a continuing theme, both from a deep rights perspective as well as just operators needing to meet continuous drilling requirements, and overall the rig count being lower, so that being harder for certain operators to fulfill.

Speaker #4: Got it. No, that makes sense. Thank you.

Betty Jiang: Got it. No, that makes sense. Thank you.

Speaker #1: Thank you so much. One moment for our next question. Our next question comes from the line of Neil Mehta with Goldman Sachs and Company.

Operator: Thank you so much. One moment for our next question. Our next question comes from the line of Neil Mehta with Goldman Sachs and Company. Your line is now open.

Speaker #1: Your line is now open.

Speaker #5: Thanks, Case. What's the environment out there right now in terms of the bid-ask for other royalty assets? Is there another CTO waiting out there, or is a lot of the big prizes already been taken?

Neil Mehta: Thanks. Okay, what's the environment out there right now in terms of the bid ask for other royalty assets? Is there another Sitio waiting out there, or has a lot of the big prizes already been taken?

Speaker #3: Yeah, I mean, it's a good question. Minerals are interesting. When commodity prices are lower, there's not really a need to sell unless there's some other use of proceeds the seller has.

Kaes Van't Hof: Yeah, I mean, it's a good question. You know, minerals are interesting. You know, when commodity prices are lower, there's not really a need to sell, unless there's some, you know, some other use of proceeds that the seller has. There hasn't been a ton of large deals for us to look at, you know, over the last six months or so. I think, you know, I think generally investors wanted a little bit of a break from deals at Viper, big deals in particular, and prove that we could integrate, you know, Sitio and the drop down, and we've done that. I'd say we're, you know, we're ready to look at larger deals. They're just kind of hard to get done at these prices.

Speaker #3: So there hasn't been a ton of large deals for us to look at over the last six months or so. And I think generally, investors wanted a little bit of a break from deals at Viper.

Speaker #3: Big deals in particular and prove that we could integrate CTO and the dropdown. And we've done that. But I'd say we're ready to look at larger deals.

Speaker #3: They're just kind of hard to get done at these prices. And Neil, that kind of ties to the thesis around the Viper balance sheet and return of capital.

Kaes Van't Hof: You know, Neal, that kind of ties to the thesis around the Viper balance sheet and return of capital. You know, we've kind of said, Hey, listen, you know, debt to EBITDA at Viper is very close to debt to free cash flow, and at $1.5 billion of debt, you know, we're well protected at $50 oil. Also at $50 oil, you know, we don't need a ton of cash for deals because it's harder to get them done. You know, that's kind of why we set that debt target. You know, as you think about, you know, going above that, as prices recover, I think, you know, the psyche for sellers changes, and we might be able to get some deals done.

Speaker #3: We've kind of said, "Hey, listen, debt to EBITDA at Viper is very close to debt to free cash flow." And a billion-five of debt we're well protected at $50 oil.

Speaker #3: But also at $50 oil, we don't need a ton of cash for deals because it's harder to get them done. So that's kind of why we set that debt target and as you think about going above that, as prices recover, I think the psyche for sellers changes.

Speaker #3: And we might be able to get some deals done. But from a size perspective, it's been hard to get really big deals done over the last few quarters.

Kaes Van't Hof: From a size perspective, it's been hard to get really big deals done in the last, you know, few quarters. We've done a couple small things that add up over time, that's kind of how I see the market. Austen, you want to add anything?

Speaker #3: We've done a couple of small things that add up over time. But that's kind of how I see the market. Austin, do you want to add anything?

Speaker #2: No, I agree. The ground game, as we call it, is tough out here. But we have a team dedicated to that. And I think we have the relationships in the Basin to get some good value adds that help on the margin.

Austen Gilfillian: No, I agree. You know, the ground game, as we call it, is, it's tough out here, but we have a team dedicated to that. You know, I think we have the relationships in the basin to get some good value adds that, you know, help on the margin. I think there, to Casey's point, there are bigger strategic deals to be done when the time is right. You know, we just haven't seen those over the last couple of quarters, more so because of the commodity price environment.

Speaker #2: I think to Case's point, there are bigger strategic deals to be done. When the time is right, we just haven't seen those over the last couple of quarters more so because of the commodity price environment.

Neil Mehta: Yeah, that's great, guys. The follow-up is just geography. I mean, it seems like the position is certainly more concentrated on the Midland side, and that's where you have the asset overlap. With the parent, how does Delaware fit into the portfolio? Where specifically could you see yourselves leaning in from an activity perspective? I think I know the answer to this, but this is a Permian pure play story, right? We, we would be surprised if you tried to diversify outside of that.

Speaker #5: Yeah, that's great, guys. And then the follow-up is just geography. I mean, it seems like the position is certainly more concentrated on the Midland side.

Speaker #5: And that's where you have the asset overlap with the parent. How does Delaware fit into the portfolio? Where specifically could you see yourselves leaning in from an activity perspective?

Speaker #5: And then I think I know the answer to this, but this is a Permian Pure Play story, right? We would be surprised if you tried to diversify outside of that.

Speaker #3: Yeah, it's definitely a Permian Pure Play story. I think the unique attributes of the Permian with the stacked pay and the emerging zones and kind of also some of the modern lease clauses, really benefits you more as a mineral owner, even more so than some of the obvious things that you would appreciate from the operator's perspective.

Austen Gilfillian: Yeah, it's definitely a Permian pure play story. I think the unique attributes of the Permian with the stack pay and the emerging zones, and kind of also some of the modern lease clauses, really benefits you more as a mineral owner, more so than some of the obvious things that you would appreciate from the operated perspective. You know, it's who we know, it's what we know, and I think most of the sizable deals here exist in the Permian, given the still very highly fragmented royalty ownership across, you know, Texas and New Mexico. For us, on the royalty side, you know, I think we still see a lot of value in the Delaware Basin.

Speaker #3: It's who we know. It's what we know. And I think most of the sizable deals here, it exists in the Permian given the still very highly fragmented royalty ownership across Texas and New Mexico.

Speaker #3: For us on the royalty side, I think we still see a lot of value in the Delaware Basin. It's a little bit of a different story, given that you're not going to be able to rely on the Diamondback drill bit to drive that visible growth.

Austen Gilfillian: It's a little bit of a different story, given that you're not going to be able to rely on the Diamondback drill bit to drive that visible growth. As we dig in, you know, there's still some really high-quality, undeveloped locations there and that exists under well-capitalized operators, and that's kind of how we view it, right? It's just like, what is the likelihood of that next inventory location getting developed? For us, you know, we get that confidence either via knowing Diamondback's development plan or by just looking at what the operator economics are. I think a lot of that exists today, and especially in the Northern Delaware. We'll focus there where we can.

Speaker #3: But as we dig in, there's still some really high-quality undeveloped locations there. And that exists under well-capitalized operators. And that's kind of how we view it, right?

Speaker #3: It's just like, what is the likelihood of that next inventory location getting developed? And for us, we get that confidence either via knowing Diamondback's development plan or by just looking at what the operator economics are, and I think a lot of that exists today, especially in the Northern Delaware.

Speaker #3: So we'll focus there where we can. But for us, Rock is Rock and value is value. So it'll just kind of be depending on the assets that are available.

Austen Gilfillian: For us, rock is rock and value is value, so it'll just kind of be depending on the assets that are available.

Speaker #5: Yep. Very clear, guys. Thank you.

Neil Mehta: Yep. Very clear, guys. Thank you.

Speaker #3: Thanks, Neil.

Austen Gilfillian: Thanks, Neil.

Speaker #1: Thank you so much. Our next question comes from the line of Kaleh Akamai with Bank of America. Your line is now open.

Operator: Thank you so much. Our next question comes from the line of Kaleinoheaokealaula Akamine with Bank of America. Your line is now open.

Speaker #6: Hey, good morning, guys. My first question is on the 2026 oil guide. It's quite wide. Wondering what that reflects. Is it visibility that you have on the activity or is it performance-related as players in the Basin are trying out new stuff?

Kaleinoheaokealaula Akamine: Hey, good morning, guys. My first question is on the 2026 oil guide. It's quite wide. Wondering what that reflects. Is it visibility that you have on the activity, or is it performance related as players in the basin are trying out new stuff? If it's visibility related, is it fair to say that visibility is better near term and less so in the second half of the year?

Kaleo Akamine: Hey, good morning, guys. My first question is on the 2026 oil guide. It's quite wide. Wondering what that reflects. Is it visibility that you have on the activity, or is it performance related as players in the basin are trying out new stuff? If it's visibility related, is it fair to say that visibility is better near term and less so in the second half of the year?

Speaker #6: And if it's visibility-related, is it fair to say that visibility is better near-term and less so in the second half of the year?

Austen Gilfillian: That's right, Clay. Mainly on the second point. On the third-party operated side, we have the same visibility that you do really, being that it's limited to the existing DUCs and permits. If you look at conversion rates and also conversion timelines on wells that have been drilled currently, that those typically get converted to production within about five to six months. We feel very good about the first half of the year and what that growth outlook looks like. As you move to the second half of the year, it becomes a little bit more tricky calculus and having conversion rates and timelines on permits.

Speaker #3: That's right, Kaleh. Mainly on the second point. So on the third-party operator side, we had the same visibility that you do, really, being that it's limited to existing ducts and permits.

Chip Seale: That's right, Clay. Mainly on the second point. On the third-party operated side, we have the same visibility that you do really, being that it's limited to the existing DUCs and permits. If you look at conversion rates and also conversion timelines on wells that have been drilled currently, that those typically get converted to production within about five to six months. We feel very good about the first half of the year and what that growth outlook looks like. As you move to the second half of the year, it becomes a little bit more tricky calculus and having conversion rates and timelines on permits.

Speaker #3: If you look at conversion rates and also conversion timelines, on wells that have been drilled currently, those typically get converted to production within about five to six months.

Speaker #3: So we feel very good about the first half of the year and what that growth outlook looks like. As we move to the second half of the year, it becomes a little bit more tricky calculus timelines on permits.

Austen Gilfillian: We've modeled the permits that we can see today, but as we progress through the year and potentially activity gets brought forward or new wells get permitted that aren't already included in the guide, that could, you know, help move you up to the higher end of the range. Really, the wide guide right now is just reflected that we can only guide to what we see today, and a lot will happen that we don't know about today in the back half of the year.

Speaker #3: So we've modeled the permits that we can see today. But as we progress through the year and potentially activity gets brought forward or new wells get permitted, that already included in the guide, that could help move you up to the higher end of the range.

Chip Seale: We've modeled the permits that we can see today, but as we progress through the year and potentially activity gets brought forward or new wells get permitted that aren't already included in the guide, that could, you know, help move you up to the higher end of the range. Really, the wide guide right now is just reflected that we can only guide to what we see today, and a lot will happen that we don't know about today in the back half of the year.

Speaker #3: And really, the wide guide right now is just reflected to that we can only guide to what we see today and a lot will happen that we don't know about today.

Speaker #3: In the back half of the year.

Speaker #5: Thank you, Jim. My second question is on the gas contracts that were announced at Diamondback that are starting up later this year. To the extent that Secure has hired gas realizations, wondering if that also benefits Viper on the revenue side?

Kaleinoheaokealaula Akamine: Thank you, Chip. My second question is on the gas contracts that were announced at Diamondback that are starting up later this year. To the extent that secures higher gas realizations, wondering if that also benefits Viper on the revenue side?

Kaleo Akamine: Thank you, Chip. My second question is on the gas contracts that were announced at Diamondback that are starting up later this year. To the extent that secures higher gas realizations, wondering if that also benefits Viper on the revenue side?

Speaker #3: Yeah, we do everything essentially heads-up between Viper and Diamondback. So any marketing contract benefit rolls through. It won't be for all of Viper's production, but for a good majority of the gas realization thesis, it works pretty well for Viper too.

Kaes Van't Hof: Yeah, we, you know, we do everything essentially heads up between Viper and Diamondback. Any marketing contract benefit, you know, rolls through, you know, it won't be for all of Viper's production, but, you know, for a good majority, you know, the gas realization thesis works pretty well for Viper, too. You know, particularly now, you know, on the third-party side, you know, if you bottleneck Permian, you know, given the Viper Delaware exposure, you know, could be a good positive rate of change story as well.

Speaker #3: Particularly now on the third-party side, devolving that Permian given the Viper-Delaware exposure could be a good positive way to change the story as well.

Speaker #5: I hope you guys don't mind me trying the third question, but I imagine that there's a portfolio of lower-zoned rights at Viper, maybe not all that is viewed as being competitive today given where the activity on the Midland side of the Basin has been.

Kaleinoheaokealaula Akamine: I hope you guys don't mind me trying a third question?

Kaleo Akamine: I hope you guys don't mind me trying a third question?

Kaes Van't Hof: Go for it.

Kaleinoheaokealaula Akamine: I imagine that there's a portfolio of lower zoned rights at Viper. Maybe not all that is viewed as being competitive today, given where the activity on the Midland side of the basin has been. The proportion that is competitive, should we assume that's already been transferred to Diamondback?

Kaleo Akamine: I imagine that there's a portfolio of lower zoned rights at Viper. Maybe not all that is viewed as being competitive today, given where the activity on the Midland side of the basin has been. The proportion that is competitive, should we assume that's already been transferred to Diamondback?

Speaker #5: But the proportion that is competitive, should we assume that's already been transferred to Diamondback?

Speaker #3: Yeah, not all of it has been leased yet. There's still a lot of unleased deep rights that at Viper. And as we get closer to development, at Diamondback, it's logical that Viper will be a first call.

Kaes Van't Hof: Not all of it has been leased yet. There's still a lot of unleased deep rights at Viper. You know, as we get closer to development, you know, at Diamondback, you know, it's logical that Viper will be a first call. You know, we got to do things on a market basis and a heads-up basis. You know, this relationship between parent and sub, mineral owner and operator, I think is going to pay some long-term dividends with, you know, with deeper zone development. Now, you know, I think the great example was, you know, we leased Spanish Trail, which is 100% of the minerals are owned by Viper, and that started this business, you know, 15 or 11 years ago, going public.

Speaker #3: We got to do things on a market basis in a heads-up basis. But this relationship between parent and sub, mineral owner and operator, I think, is going to pay some long-term dividends with deeper zone development.

Speaker #3: I think the great example was we leased Spanish Trail, which is 100% of the minerals are owned by Viper. That's what started this business 15 or 11 years ago.

Speaker #3: Going public, and a 10,000-acre block at 100% NRI is as good as it gets in the Permian Basin.

Kaes Van't Hof: You know, a 10,000 acre block at 100% NRI is as good as it gets in the Permian Basin.

Speaker #5: I appreciate that, guys. Thank you.

Tim Rezvan: I appreciate that, guys. Thank you.

Kaleo Akamine: I appreciate that, guys. Thank you.

Speaker #1: Thank you so much. One moment for our next question. Our next question comes from the line of Derek Whitfield with Texas Capital. Your line is now open.

Operator: Thank you so much. One moment before our next question. Our next question comes from the line of Derrick Whitfield with Texas Capital. Your line is now open.

Speaker #6: Thanks, guys. Good morning.

Derrick Whitfield: Thanks, guys. Good morning.

Speaker #3: Hey, Derek.

Kaes Van't Hof: Hey, Derrick.

Speaker #6: Wanted to start on the Barnett regarding the interval and the 200,000 net acres you referenced for Diamondback earlier today. How much coverage do you specifically have with Viper?

Derrick Whitfield: Wanted to start on the Barnett. Regarding the interval and the 200,000 net acres you referenced for Diamondback earlier today, how much coverage do you specifically have with Viper? Does Diamondback have any activity planned at Spanish Trail, the area you were just mentioning, which you guys have a very high NRI for?

Speaker #6: And does Diamondback have any activity plan at Spanish Trail, the area you were just mentioning, which you guys have a very high NRI for?

Speaker #3: Yeah, so without getting into the specifics, I would say a lot of the work that Diamondback has done has kind of been with third parties.

Austen Gilfillian: Yeah. You know, without getting into the specifics, I would say a lot of the work that Diamondback has done has kind of been with third parties. You know, we had the big chunk, kind of in that 10 to 15,000 acres block in Spanish Trail, which is going to provide the great alignment between Diamondback and Viper. You know, I think Diamondback had a little bit more flexibility to handle the leases with Viper as they come up and think more term on the development plan. Whereas a lot of what they've done has kind of been more bigger strategic options. I think you'll see the alignment continue to improve as we progress through the year.

Speaker #3: We had the big chunk kind of in that 10 to 15 thousand acre block in Spanish Trail, which is going to provide the great alignment between Diamondback and Viper.

Speaker #3: I think Diamondback had a little bit more flexibility to handle the leases with Viper as they come up, and a bit more term on the development plan.

Speaker #3: Whereas a lot of what they've done has kind of been more big, strategic options. So I think you'll see the alignment continue to improve as we progress through the year.

Speaker #3: And then, on Spanish Trail, I think if you listen to the Diamondback call, there have been some references to some offset tests. But the first two wells that are going to be tested on Spanish Trail proper—those wells have been permitted.

Austen Gilfillian: On Spanish Trail, I think if you listen to the Diamondback call, there's been some references to some offset tests. The first two wells that are going to be tested on Spanish Trail proper, those wells have been permitted and should have production kind of in the mid part of this year. Very excited to see those results and see what that might mean for, you know, Diamondback to apply more of a full-scale development approach where Viper owns 100% of the minerals.

Speaker #3: And should have production kind of in the mid-part of this year, so very excited to see those results and see what that might mean for Diamondback to apply more of a full-scale development approach where Viper owns 100% of the minerals.

Speaker #6: Yeah, no question. Great development for Viper. And maybe just going back to some of your M&A comments earlier on the ground game—with the inclusion of the CDO guys, who had really focused on the ground game—I guess, how would you characterize the growth you're seeing in organic additions throughout 2025?

Derrick Whitfield: Yeah, no question. Great development for Viper. Maybe, just going back to some of your M&A comments earlier on the ground game. With the inclusion of the Sitio guys, who had really focused on the ground game, I guess, how would you characterize the growth you're seeing in organic additions throughout 2025, and kind of what you see ahead for you in 2026?

Speaker #6: And kind of what you see ahead for you in 2026?

Speaker #3: Yeah. I mean, listen, we're continuing to look at every deal that crosses our desk, right? We're in the flow. We know everybody. They're bringing us deals.

Kaes Van't Hof: Yeah, I mean, listen, we're, you know, we're continuing to look at every deal that, you know, crosses our desk, right? We're in the flow. We know everybody. They're bringing us deals. You know, I just say it's not that we're not getting anything done, it's just that from a materiality perspective, it takes a lot more effort on the ground game to, you know, equal something of the scale that we did last year. You know, don't count out the ground game. I think that's still gonna be an important part of the story. It's just gonna have to add up over time, and then you have the big deals, you know, really moving the needle from a size, scale, and, you know, flow and liquidity perspective.

Speaker #3: I just say it's not that we're not getting anything done. It's just that from a materiality perspective, it takes a lot more effort on the ground game to equal something of the scale that we did last year.

Speaker #3: So don't count out the ground game. I think that's still going to be an important part of the story. It's just going to have to add up over time.

Speaker #3: And then you have the big deals really moving the needle from a size scale and flow and liquidity perspective.

Speaker #6: Got it. Great. Very helpful. Thanks for your time.

Derrick Whitfield: Got it. Great, very helpful. Thanks for your time.

Speaker #3: Thanks, Derek.

Kaes Van't Hof: Thanks, Derrick.

Speaker #1: Thank you so much. Our next question comes from the line of Paul Diamond with City. Your line is now open.

Operator: Thank you so much. Our next question comes from the line of Paul Diamond with Citi. Your line is now open.

Paul Diamond: Thank you. Good morning, all. Thanks for taking the call. Quick one, sticking on M&A. You guys have been kind of progressing towards that, you know, $1.5 billion net debt number, you know, 1 turn leverage. I guess, in the presence of a potential or potentially larger deal, I guess with increased scale, how much are you willing to flex that out?

Speaker #7: Thank you. Good morning, all. Thanks for taking the call. So quick one sticking on M&A. You guys have been kind of progressing towards that billion and a half net debt number, one-turn leverage.

Speaker #7: I guess, in the presence of a potential or potentially larger deal, how much are you, with the increased scale, how much are you willing to flex that out?

Speaker #3: Yeah, I mean, I think we probably feel like a little bit of a turn and a half, a little bit above that, as a stretch.

Kaes Van't Hof: Yeah, I mean, you know, I think we probably feel like, you know, a little bit of a turn and a half, a little bit above that, as a stretch, and then you pay it down, you know, wouldn't hurt. You know, I think we're very cognizant of maintaining and improving our ratings profile. Getting to investment grade was a big deal for us last year. Pretty unique access to capital at Viper versus peers in the space. I wouldn't want to stress the balance sheet, and I think, you know, I think our currency offers a very unique opportunity for sellers as well.

Speaker #3: And then you pay it down. It wouldn't hurt. I think we're very cognizant of maintaining and improving our ratings profile. Getting to investment grade was a big deal for us last year.

Speaker #3: Pretty unique access to capital at Viper versus peers in the space. So I wouldn't want to stretch the balance sheet. And I think our currency offers a very unique opportunity for sellers as well.

Kaes Van't Hof: You know, we've done a few of these deals with OpCo units, where taxes can be deferred and, you know, a lot of large mineral owners, mineral owners have very little basis in their in their minerals and, you know, like that tax-deferred status. You know, we stretch a little bit. I think, you know, half a turn of leverage is a big number now, which is a good thing. You know, any deal that we do is gonna come with significant cash flow. That's how I'd frame it.

Speaker #3: We've done a few of these deals with Opco units where taxes can be deferred. And a lot of large mineral owners have very little basis in their minerals.

Speaker #3: And like that tax-deferred status. So we stretch a little bit. I think half a turn of leverage is a big number now, which is a good thing.

Speaker #3: And any deal that we do is going to come with significant cash flow. So that's how I frame it.

Speaker #7: You got it. Understood. And then just a housekeeping question on hedge plan. 2026 looks pretty well locked in. Is there any volatility level that would really move you off these marks?

Paul Diamond: Got it. Understood. Then, just a housekeeping question on the hedge plan. 2026 looks pretty well locked in. Is there any volatility level that would really move you off these marks, or are you guys comfortable with the current levels?

Speaker #7: Or are you guys comfortable with the current levels?

Austen Gilfillian: We're comfortable with it. We've had this approach for a while now, where we just try to protect against the extreme downside through deferred premium puts. We've been able to take advantage of some of volatility over the last couple of quarters and have a good position built through Q3, which especially given where the debt level is, don't feel like we need to do much more there. As we continue to progress through time, and if you see debt levels stay low like they are now, you probably just need less protection, meaning either a lower percentage of our volumes heads or potentially a lower strike price on the puts meet, and you can get them for a little bit cheaper.

Speaker #3: We're comfortable with it. We've had this approach for a while now, where we just try to protect against the extreme downside through deferred premium puts.

Speaker #3: So we've been able to take advantage of some of all its volatility over the last couple of quarters, and have a good position built through Q3, which, especially given where the debt level is, we don't feel like we need to do much more there.

Speaker #3: As we continue to progress through time. And if you see debt levels stay low like they are now, you probably just need less protection.

Speaker #3: Meaning either a lower percentage of our volumes heads or potentially a lower strike price on the puts and you can get them for a little bit cheaper.

Speaker #3: But in general, we just want to protect against the extreme downside. Ensure that we can continue to pay out a lot of our capital.

Austen Gilfillian: In general, you know, we just want to protect against the extreme downside, ensure that we can continue to pay out a lot of our capital, and, you know, not have to panic if things go south quickly again, and try to start burning cash. I think it's just a prudent approach that we've had that's worked well for us the last couple of years.

Speaker #3: And not have to panic if things go south quickly again. And try to start pouring cash. So I think it's just a prudent approach that we've had that's worked well for us the last couple of years.

Speaker #7: Understood. Appreciate the clarity. I'll leave it there.

Paul Diamond: Understood. Appreciate the clarity. I'll leave it there.

Speaker #1: Thank you so much. One moment for our next question. Our next question comes from the line of Leo Mariani with Roth. Your line is now open.

Operator: ... Thank you so much. One moment for our next question. Our next question comes from the line of Leo Mariani with Roth. Your line is now open.

Speaker #3: Hey, guys. One of the follow-ups on lease bonus income. Obviously, that popped a bit in 2025. I know it's difficult to kind of have any precision guide.

Leo Mariani: Hey, guys. Wanted to follow up on lease bonus income. Obviously, that popped a bit in 2025. I know it's difficult to kind of, you know, have any precision guide, but, you know, would it be fair to assume that maybe 2026 is not dramatically different in terms of lease bonus income? Are we kind of in a bit of an upcycle versus kind of a handful of years ago? Obviously, there's some new zones that are coming to bear, as you guys have described on both this and the FANG call.

Speaker #3: But would it be fair to assume that maybe '26 is not dramatically different in terms of lease bonus income? Or are we kind of in a bit of an upcycle versus kind of a handful of years ago?

Speaker #3: Obviously, there are some new zones that are coming to bear, as you guys have described on both this and the phone call.

Austen Gilfillian: We'll see. I mean, it's a little bit out of our control, given it's, you know, dependent on operators typically failing to meet certain lease provisions or lease requirements, or alternatively having deep rights being open. I think we are seeing the deep rights story play out on both Midland and Delaware side for Viper in terms of the ground leasing that's happening. I think something also that's going to be interesting to happen, especially post Sitio, is as you move into 2027 and gas takeaway gets better, you know, we'll be able to explore what new development areas might look a little bit better with higher gas realizations, and that could help as well. You know, I maybe it's being optimistic, but I think we can have 2026 look similar to 2025.

Speaker #8: We'll see. I mean, it's a little bit out of our control given it's dependent on operators typically filling to meet certain lease provisions or lease requirements.

Speaker #8: Or alternatively having depriced being open. I mean, I think we are seeing the depriced story play out on both the Midland and Delaware side.

Speaker #8: For Viper, in terms of the ground root leasing, that's happening. I think something also that's going to be interesting to happen, especially post-CDO, is as you move into 2027 and gas takeaway gets better, we'll be able to explore what new development areas might look a little bit better with higher gas utilizations.

Speaker #8: And that could help as well. So maybe it's being optimistic. But I think we can have 2026 look similar to 2025. And really, it's just going to be the benefit of having a much larger asset base today.

Austen Gilfillian: Really, it's just going to be the benefit of having a much larger asset base today and a team fully dedicated to proactively managing the position.

Speaker #8: And a team fully dedicated to proactively managing the position.

Speaker #3: Yeah. I mean, that's the key. We're getting a lot better at proactively managing our position despite its size. And that's where some of the CTO team members that are focused on automation, reviewing title, reviewing leases, this is where I think I think AI is going to be important for Viper.

Kaes Van't Hof: Yeah, I mean, that's the key. We're getting a lot better at proactively managing our position despite its size. That's where, you know, some of the Sitio team members that are, you know, focused on automation, reviewing title, reviewing leases. You know, this is where I think, you know, I think AI is going to be important for Viper. You know, we don't have a ton of manpower to study, you know, 50,000 wellbores and 40,000 leases, but a machine can do it, and I think that's gonna make, you know, our shareholders more money.

Speaker #3: We don't have a ton of manpower to study 50,000 wellbores and 40,000 leases. But a machine can do it. And I think that's going to make our shareholders more money.

Speaker #7: All right. That's good color there. And just wanted to ask on kind of oil cut. Your oil cut here was kind of mid-50, several quarters ago.

Leo Mariani: All right. That's good color there. Just wanted to ask on kind of oil cut. Your oil cut here was kind of mid-50s several quarters ago. It's kind of trending a little bit more towards low 50s. What do you attribute this to? Is this just more secondary zone development and of course, just, you know, wells get older, GOR sort of increases?

Speaker #7: It's kind of trending a little bit more towards the low 50s. What do you attribute this to? Is this just more secondary zone development? And of course, as wells get older, GOR sort of increases.

Speaker #3: Yeah. I mean, I think if you think about Viper as a bond for the Permian Basin, it actually kind of gives you a good look into where GORs are headed throughout the last year, we added a lot of Delaware exposure through CTO.

Kaes Van't Hof: Yeah, I mean, I think, I think if you think about Viper as a bond for the Permian Basin, it actually kind of gives you a good look into where GORs are headed throughout the basin. You know, last year, we added a lot of Delaware exposure through Sitio, so that's part of the, part of the equation. I think, you know, outside of that, you've seen these gas systems and gas plants operate a lot more efficiently in both basins. You've seen just the gas and the NGL beats be pretty dramatic across the board. You know, I think, I think, you know, I think that's telling you something about the basin. It's not necessarily just secondary zones. I think it's, I think it's all the above.

Speaker #3: So that's part of the equation. But I think outside of that, you've seen these gas systems and gas plants operate a lot more basins.

Speaker #3: So you've seen just the gas and the NGL beats be pretty dramatic across the board. And I think that's telling you something about the basin.

Speaker #3: It's not necessarily just secondary zones. I think it's all of the above.

Speaker #7: Got it. Okay. Thanks.

Leo Mariani: Got it. Okay. Thanks.

Speaker #3: Thanks, Leo.

Kaes Van't Hof: Thanks, Leo.

Operator: Much. One moment for our next question. Our next question comes from the line of Tim Rezvan with KeyBanc Capital Markets. Your line is now open.

Speaker #1: March. One moment for our next question. Our next question comes from a line of Tim Resvin with Key Bank Capital Markets. Your line is now.

Speaker #7: Okay, thanks, folks. I appreciate you letting me on here. I wanted to kind of circle back on the repurchase comments. It sounds like, Kate, from your comments, that $1 billion authorization may be as much focused on liquidity for the unnatural holders as it is to open market repurchases today.

Tim Rezvan: Okay, thanks, folks. I appreciate you letting me on here. I want to kind of circle back on the repurchase comments. You know, it sounds like, Casey, from your comments, that that $1 billion authorization may be as much focused on liquidity for the unnatural holders as it is to open market repurchases today. I'm just trying to kind of I know you can't show your cards too much, but, you know, shares are up 17% year to date. You're still well below where shares traded in 2024 and 2025 at a higher oil price. Just trying to kind of get your arms around the attractiveness of open market repurchases today?

Speaker #7: So I'm just trying to kind of—I know you can't show your cards too much. But shares are up 17% year to date. You're still well below where shares traded in '24 and '25 at a higher oil price.

Speaker #7: So just trying to kind of get your arms around the attractiveness of open market repurchases today.

Speaker #3: Yeah, I mean, it's a good question, Tim. I mean, it's a relative question too, right? Obviously, open market repurchases are more obvious in Q4 than they are today.

Kaes Van't Hof: Yeah, it's a good question, Tim. I mean, it's a relative question too, right? Obviously, open market repurchases were more obvious in Q4 than they are today. You know, we're trying to walk this balancing act of how to return capital to shareholders. With the balance sheet where it is, you know, we do have, you know, more cash that can go to shareholders in the form of the distribution or repurchases. I think, you know, you should expect us to continue to be flexible. I don't think we need to spend every dollar we make on repurchases at these levels, but it's still a part of the story. I just think, you know, the bigger slugs could come from, you know, unnatural holders that want to get out.

Speaker #3: And so we're trying to walk this balancing act of how to return capital to shareholders. And with the balance sheet where it is, we do have more cash that can go to shareholders in the form of the distribution or repurchases.

Speaker #3: So I think you should expect us to continue to be flexible. I don't think we need to spend every dollar we make on repurchases at these levels.

Speaker #3: But it's still a part of the story. I just think the bigger slugs could come from unnatural holders that want to get out. And just having that ability to make sure the stock's not heavy and have the repurchase in place is, I think, a good thing for Viper shareholders.

Kaes Van't Hof: Just having that ability to make sure, you know, the stock's not heavy and have the repurchase in place is, you know, I think is a good thing for Viper shareholders. You know, I'm talking down the buyback a little bit relative to Q4, because Q4 was a much different environment than where we are today. Who knows? I mean, you know, we could drop from here, and that's why the authorization is there to lean in.

Speaker #3: So I'm talking down the buyback a little bit relative to Q4 because Q4 was a much different environment than where we are today. But who knows?

Speaker #3: I mean, we could drop from here. And that's why the authorization's there to lean in.

Speaker #7: Okay. That's good context. I appreciate that. And Kate, if I could quickly ask a macro question. We saw pretty strong third-party turn-in lines in the fourth quarter relative to the full-year run rate.

Tim Rezvan: Okay, that's good context. I appreciate that. Then, Casey, if I could quickly ask a macro question. We saw pretty strong 3rd-party turn-in lines in Q4 relative to the full year run rate. I know some of that is probably due to the Sitio acquisitions. But you know, it seems like industry-wide concerns on Permian Oil, you know, rolling over, those concerns seem to be fading. You know, given the lens into aggregate activity that you have through Viper, do you expect Permian Oil to grow this year?

Speaker #7: I know some of that is probably due to the CDO acquisitions. But it seems like industry-wide concerns on Permian oil, rolling over those concerns seem to be fading.

Speaker #7: So given the lens into aggregate activity that you have through Viper, do you expect Permian oil to grow this year?

Speaker #3: Yeah. I mean, we've been very vocal in the Diamondback side about production and US production. I think the Permian's always kind of been an outlier.

Kaes Van't Hof: Yeah, I mean, you know, we've been very vocal on the Diamondback side about production and US production. I think, you know, the Permian's always kind of been an outlier. I would say at these, at these oil prices, you know, I haven't heard about operators dropping a rig since kind of the first week of the year, you know, when we had the Venezuelan noise. I mean, since then, that's gone very quiet. I think overall, Permian probably grows here and, you know, some of the larger operators, the majors are continuing to grow. You know, some of the privates, you know, still have deals to do here and there. In general, I think the Permian looks strong relative to the rest of North America.

Speaker #3: I would say, at these oil prices, I haven't heard about operators dropping a rig since kind of the first week of the year, when we had the Venezuela noise.

Speaker #3: So I mean, since then, that's gone very quiet. I think overall, Permian probably grows here. And some of the larger operators, the majors, are continuing to grow.

Speaker #3: Some of the privates still have deals to do here and there. So, in general, I think the Permian looks strong relative to the rest of North America.

Speaker #3: And the conversations about reductions in activity have gone very quiet.

Kaes Van't Hof: You know, the conversations about reductions in activity have gone very quiet.

Speaker #7: Okay. I appreciate the context. Thank you.

Tim Rezvan: Okay. I appreciate the context. Thank you.

Speaker #3: Thanks, Tim.

Kaes Van't Hof: Thanks, Tim.

Speaker #1: Thank you so much. I'm showing no further questions at this time. I would now like to turn it back to Kate Van Hoff, CEO, for closing remarks.

Operator: Thank you so much. I'm showing no further questions at this time. I would now like to turn it back to Kaes Van't Hof, CEO, for closing remarks.

Speaker #3: Thanks, everybody, for taking the time to listen in today. If you have any questions, please reach out, and we'll talk soon. Thank you.

Kaes Van't Hof: Thanks, everybody, for taking the time to listen in today. If you have any questions, please reach out and we'll talk soon. Thank you.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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