Viper Energy Posts $520 Million Q3 Free Cash Flow as Acquisitions Expand Output

Viper Energy Inc. reported $520 million of free cash flow for the third quarter of 2026 as production reached 141,152 barrels of oil equivalent per day, while the Permian Basin royalty owner continued an acquisition program that has added acreage and undeveloped inventory but increased pro forma debt.

The company generated $596 million of adjusted EBITDA, representing a 90% adjusted EBITDA margin. Free cash flow, a non-GAAP measure defined as operating cash flow before working-capital changes less capital expenditures, carried a 79% margin. Average oil production was 69,076 barrels per day, and oil production per million shares increased 13% from the third quarter of 2025.

Viper declared a quarterly cash dividend of $0.50 per Class A share, consistent with its new $2.00 annual base dividend. The company also repurchased approximately 2.1 million Class A shares during the quarter for about $90 million, at an average price of $43.01 per share.

Acquisitions expand inventory

Viper has closed or signed 29 transactions in 2026 with an aggregate purchase price of approximately $1.7 billion. The deals added about 13,400 net royalty acres and an estimated 107 net undeveloped locations normalized to 10,000-foot laterals. Approximately 79% of the capital was directed to proprietary or off-market transactions, and the company estimates that 77% of the acquired value is undeveloped.

The Riverbend acquisition closed in July, while a Diamondback drop-down and the McElroy Ranch transactions closed in September. The pending Buckhorn acquisition is expected to close in the fourth quarter, subject to customary conditions.

Riverbend, the drop-down and Buckhorn represent a combined purchase price of $1.03 billion and are expected to add about 4,325 barrels of oil per day, based on production in each transaction’s effective month. Together, they add 5,328 net royalty acres and 60 net undeveloped locations. Viper said the assets were acquired at a combined implied cash-flow multiple of approximately 7.3 times.

The $529 million McElroy Ranch acquisition added roughly 7,359 net royalty acres in the western Midland Basin. Viper estimates the assets are 96% undeveloped and contain 40.9 net undeveloped locations. Existing vertical wells produce about 400 barrels of oil per day, while the company forecasts peak oil production from the ranch of 5,000 barrels per day over the next decade. Diamondback operates an estimated 15% of McElroy Ranch’s net undeveloped inventory, with the remainder operated by several third parties.

Production outlook reflects recent deals

Viper expects fourth-quarter oil production of 70,000 to 71,000 barrels per day and total production of 141,500 to 143,500 boe per day. Full-year 2026 guidance calls for oil production of 67,250 to 67,750 barrels per day and total production of 137,000 to 138,000 boe per day. The guidance includes the September drop-down and McElroy Ranch acquisition as well as the pending Buckhorn transaction.

The company reported 689 gross horizontal wells, equal to 19 net normalized wells, turned to production during the third quarter. At September 30, Viper had 38.9 net normalized wells in active development and another 36.4 net line-of-sight wells that it believes could be turned to production over a longer period. The portfolio had 104 active gross rigs, including 11 operated by Diamondback.

Diamondback owns about 40% of Viper’s equity and operates approximately 38% of its 98,098 net royalty acres. Viper said this relationship provides visibility into development on a significant part of its acreage, while its third-party-operated assets broaden its exposure to Permian drilling activity. The company does not bear lease operating expenses or drilling and completion capital expenditures on its royalty interests.

Dividend coverage and balance sheet

Viper said its $2.00 annual base dividend is designed to remain covered at roughly $30 per barrel WTI, based on its unhedged 2027 estimates. Cash retained above the base dividend may be used for share repurchases, debt reduction or acquisitions.

The company also presented commodity-price scenarios based on annualized fourth-quarter production. At $80 per barrel WTI and production at the midpoint of fourth-quarter guidance, Viper estimates annualized free cash flow of approximately $1.85 billion, or about $4.55 per Class A share. At $100 WTI, the estimate rises to approximately $2.31 billion, or $5.60 per share. These are forward-looking non-GAAP estimates and depend on assumptions including production, realized prices, taxes, interest expense and existing hedges.

Net debt stood at $2.4 billion on September 30, equal to 1.0 times most-recent-quarter annualized adjusted EBITDA, while liquidity totaled $1.2 billion. After giving effect to Buckhorn, Viper estimates net debt of approximately $2.66 billion, leverage of 1.1 times and liquidity of about $938 million. The company’s hedging strategy uses oil puts and natural-gas basis hedges to protect against severe downside while retaining exposure to higher commodity prices.

Results and the outlook remain sensitive to oil, natural-gas and natural-gas-liquids prices, as well as the pace of development by Diamondback and other operators. Other disclosed risks include Viper’s concentration in the Permian Basin, substantial indebtedness, acquisition execution and integration, infrastructure constraints, regulatory changes, water-use restrictions and potential disruptions affecting operators. The timing of permitted or actively developed wells is also uncertain and does not ensure that they will enter production as anticipated.