การแถลงผลประกอบการไตรมาส 3 ปี 2026 ของ Viper Energy (VNOM): ปรับเพิ่มแนวโน้มผลผลิตน้ำมัน

ประเด็นสำคัญ

• การผลิตน้ำมันในไตรมาส 3/2026 สูงเกิน 69,000 บาร์เรลต่อวัน ซึ่งสูงกว่าขอบบนของประมาณการเล็กน้อย และเพิ่มขึ้นมากกว่า 6% เมื่อเทียบกับไตรมาสก่อนหน้า
• ผู้ดำเนินการขุดเจาะเปิดดำเนินการบ่อน้ำมันหลุมแนวนอนรวม (gross horizontal wells) จำนวน 689 บ่อในพื้นที่ของ Viper Energy ซึ่งรวมถึงบ่อที่ดำเนินการโดย Diamondback จำนวน 123 บ่อ โดยมีสัดส่วนรายได้สุทธิ (net revenue interest) เฉลี่ยสูงกว่า 9%
• กระแสเงินสดอิสระแตะระดับ 520 ล้านดอลลาร์ คิดเป็นอัตรากำไรเกือบ 80% โดย Viper ได้ประกาศจ่ายเงินปันผลพื้นฐาน 0.50 ดอลลาร์ต่อหุ้น และซื้อหุ้นคืนเป็นมูลค่า 90 ล้านดอลลาร์
• ฝ่ายบริหารได้ปรับเพิ่มประมาณการการผลิตน้ำมันเต็มปี 2026 ขึ้นเป็นค่ากลางที่ 67,500 บาร์เรลต่อวัน ส่วนประมาณการไตรมาส 4 อยู่ที่ 70,000–71,000 บาร์เรลต่อวัน
• Viper เสร็จสิ้นการเข้าซื้อกิจการ McElroy Ranch มูลค่า 529 ล้านดอลลาร์ และตกลงที่จะเข้าซื้อสินทรัพย์ของ Buckhorn Minerals เป็นเงินสด 280 ล้านดอลลาร์ พร้อมด้วยหุ้นคลาส A จำนวน 1.8 ล้านหุ้น
• ฝ่ายบริหารตั้งใจที่จะเก็บส่วนต่างเงินสดที่เพิ่มขึ้นไว้เพื่อลดหนี้สินที่เกิดจากการเข้าซื้อกิจการอย่างรวดเร็ว ในขณะที่ยังคงพร้อมที่จะซื้อหุ้นคืนในช่วงที่ราคาหุ้นอ่อนตัวลง

ข้อมูลทางการเงินสำคัญ

ผลการดำเนินงานทางธุรกิจและการปฏิบัติงาน

การเติบโตของการผลิตสะท้อนถึงการเข้าซื้อกิจการเมื่อเร็ว ๆ นี้ รวมถึงการพัฒนาอย่างต่อเนื่องโดย Diamondback Energy และผู้ดำเนินการภายนอก ฝ่ายบริหารระบุว่าแรงขับเคลื่อนการเติบโตภายในยังคงชัดเจนแม้จะแยกส่วนที่ได้จากการเข้าซื้อกิจการออกไป โดยคาดว่ากิจกรรมที่กระจุกตัวของ Diamondback จะยังคงเป็นปัจจัยขับเคลื่อนการเติบโตที่สำคัญต่อไป

Viper เสร็จสิ้นการเข้าซื้อกิจการ Riverbend เมื่อวันที่ 1 กรกฎาคม และการโอนสิทธิในแร่ธาตุจาก Diamondback เมื่อวันที่ 1 กันยายน โดย Diamondback รับค่าตอบแทนทั้งหมดเป็นหุ้น ส่งผลให้สัดส่วนการถือหุ้นใน Viper เพิ่มขึ้น

ธุรกรรม McElroy Ranch ได้เพิ่มพื้นที่ค่าภาคหลวงสุทธิประมาณ 7,400 เอเคอร์ในเคาน์ตีอัพตันและเครน ด้วยมูลค่า 529 ล้านดอลลาร์ Viper ประเมินว่ามีความหนาแน่นของสัดส่วนการถือหุ้น NRI อยู่ที่ประมาณ 12% ในพื้นที่รวม 60,000 เอเคอร์ โดยสินทรัพย์นี้ยังไม่ได้รับการพัฒนามากกว่า 95% และมีตำแหน่งหลุมที่พร้อมพัฒนาสุทธิมากกว่า 40 แห่ง อีกทั้งยังเปิดโอกาสรับประโยชน์จากการพัฒนาชั้นหิน Barnett ที่กำลังเติบโตในแอ่งมิดแลนด์ฝั่งตะวันตก

ข้อเสนอซื้อกิจการ Buckhorn ครอบคลุมพื้นที่ค่าภาคหลวงสุทธิเกือบ 1,600 เอเคอร์ในแอ่งมิดแลนด์ โดยประมาณ 80% ซ้อนทับกับพื้นที่เดิมของ Viper ขณะที่สินทรัพย์นี้ยังไม่ได้รับการพัฒนาประมาณ 60% ฝ่ายบริหารประเมินว่าเกือบครึ่งหนึ่งของคลังตำแหน่งหลุมสุทธิถูกจัดอยู่ในกลุ่มควอร์ไทล์สูงสุดของคลังตำแหน่งหลุมที่เหลืออยู่ในแอ่งมิดแลนด์ และ 70% จัดอยู่ในกลุ่มครึ่งบนสุด

เมื่อรวมกันแล้ว McElroy Ranch และ Buckhorn ช่วยเพิ่มตำแหน่งหลุมสุทธิเกือบ 60 แห่งในสินทรัพย์สองแห่งที่ส่วนใหญ่ยังไม่ได้รับการพัฒนา Viper จัดหาเงินทุนสำหรับธุรกรรมเหล่านี้ด้วยเงินสดเป็นหลัก ซึ่งสอดคล้องกับกรอบการจัดสรรเงินทุนที่ปรับปรุงใหม่

ประมาณการโดยฝ่ายบริหาร

ช่วงประมาณการของไตรมาส 4 สูงกว่าการผลิตในไตรมาส 3 เกือบ 1,500 บาร์เรลต่อวัน และรวมส่วนแบ่งการผลิตบางส่วนของไตรมาสจาก Buckhorn แล้ว ฝ่ายบริหารคาดว่าแรงขับเคลื่อนการเติบโตภายในและส่วนสนับสนุนจากการเข้าซื้อกิจการจะช่วยสนับสนุนการผลิต แต่ระบุว่าทัศนวิสัยเกี่ยวกับแผนปี 2027 ของผู้ดำเนินการภายนอกยังคงมีจำกัด

ความเสี่ยงและประเด็นที่ต้องติดตาม

• ฝ่ายบริหารมีทัศนวิสัยจำกัดเกี่ยวกับแผนการพัฒนาในอนาคตของผู้ดำเนินการภายนอก และคาดว่าจะมีความชัดเจนมากขึ้นเมื่อการเปลี่ยนผ่านใบอนุญาตและแผนของผู้ดำเนินการมีความคืบหน้า
• Viper ไม่มีทัศนวิสัยที่เฉพาะเจาะจงเกี่ยวกับกำหนดการพัฒนาของ Chevron ในพื้นที่ McElroy Ranch โดยการเข้าซื้อกิจการนี้ได้รับการประเมินความเสี่ยงบนพื้นฐานการพัฒนาในทศวรรษหน้ามากกว่ากิจกรรมการดำเนินงานในทันที
• การเก็บเงินสดไว้เพื่อลดหนี้สินอาจส่งผลกระทบต่อการจัดสรรสัดส่วนในระยะสั้นระหว่างการชำระคืนหนี้และการซื้อหุ้นคืน แม้ว่าฝ่ายบริหารจะระบุว่าอาจเพิ่มการซื้อหุ้นคืนหากราคาหุ้นอ่อนตัวลง
• การเข้าซื้อกิจการช่วยเพิ่มสัดส่วนพื้นที่ที่ยังไม่ได้รับการพัฒนา ซึ่งทำให้กรอบเวลาและจังหวะความเร็วของการพัฒนาโดยผู้ดำเนินการมีความสำคัญต่อการเติบโตของการผลิตในอนาคต

ไฮไลต์การถาม-ตอบกับนักวิเคราะห์

ศักยภาพและกลยุทธ์การควบรวมและซื้อกิจการ (M&A): ฝ่ายบริหารระบุว่า Viper สามารถเลือกพิจารณาและให้ความสำคัญกับสินทรัพย์ที่มอบทั้งการเติบโตเพิ่มขึ้นในระยะสั้นและคลังพื้นที่ยังไม่ได้รับการพัฒนาที่มีระยะยาว โดยอัตราการแปลงเป็นกระแสเงินสดอิสระที่สูงและศักยภาพงบการเงินทำให้บริษัทมีความยืดหยุ่นในการใช้เงินสด หุ้น หรือหน่วยลงทุนที่ชะลอการเสียภาษีขึ้นอยู่กับแต่ละธุรกรรม

การเติบโตจากภายใน: โครงการพัฒนาของ Diamondback ยังคงเป็นปัจจัยขับเคลื่อนการเติบโตหลักที่เห็นได้ชัด ฝ่ายบริหารคาดว่าจะได้รับประโยชน์ด้านการผลิตอย่างต่อเนื่องจากกิจกรรมที่กระจุกตัวทั่วพื้นที่ของ Viper แม้ว่าการเติบโตในเชิงเปอร์เซ็นต์อาจชะลอตัวลงเมื่อฐานการผลิตขยายตัวขึ้น

การจัดสรรเงินทุน: Viper วางแผนที่จะยึดมั่นในการจ่ายเงินปันผลพื้นฐานที่ยั่งยืนควบคู่ไปกับการลดหนี้สิน การเข้าซื้อกิจการ และการซื้อหุ้นคืนโดยพิจารณาตามระดับราคา ฝ่ายบริหารคาดว่าอัตราส่วนหนี้สินจะยังคงต่ำกว่า 1 เท่า ณ สิ้นปี แม้จะดำเนินธุรกรรมที่ใช้เงินสดมากกว่า 1 พันล้านดอลลาร์ในระหว่างปี 2026

โอกาสในชั้นหิน Barnett: ฝ่ายบริหารไม่คาดว่ากิจกรรมในชั้นหิน Barnett จะเปลี่ยนแปลงตัวชี้วัดการพัฒนาที่สำคัญของ Viper อย่างมีนัยสำคัญในช่วงไม่กี่ปีข้างหน้า อย่างไรก็ตาม ชั้นหินนี้อาจสร้างโอกาสในการเข้าซื้อกิจการที่ตรงเป้าหมายขณะที่ Diamondback และผู้ดำเนินการรายอื่นขยายการพัฒนา

สินทรัพย์บนพื้นดิน: ฝ่ายบริหารมีมุมมองเชิงบวกมากขึ้นต่อพื้นที่บนพื้นดินที่เลือกสรร ซึ่งสามารถรองรับโครงสร้างพื้นฐานบ่อน้ำมัน ศูนย์ข้อมูล หรือการผลิตไฟฟ้า โดยบริษัทกำลังประเมินทางเลือกต่าง ๆ แต่ยังไม่ได้ประกาศธุรกรรมหรือการเปลี่ยนแปลงทางองค์กรที่เฉพาะเจาะจงใด ๆ

บันทึกการประชุมแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Good day, and thank you for standing by. Welcome to the Viper Energy Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Be advised that today's conference is being recorded.

I will now hand the conference over to your first speaker today, Chip Seale, Investor Relations Director. Please go ahead.

Chip Seale

Thank you, Sarah. Good morning, and welcome to Viper Energy's Third Quarter 2026 Conference Call. During our call today, we may 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.

Kaes Van't Hof

Thank you, Chip. Welcome, everyone, and thank you for listening to Viper Energy's Third Quarter 2026 Conference Call. Q3 was another strong quarter for Viper. Oil production averaged just above the high end of our guidance range at over 69,000 barrels per day, up more than 6% quarter-over-quarter, driven by recent acquisitions and continued development from both Diamondback and our third-party operators. During the quarter, operators turned 689 gross horizontal wells to production on our acreage, including 123 Diamondback-operated wells at an average NRI of over 9%.

On the acquisition front, we closed 2 previously announced transactions, the Riverbend acquisition on July 1 and the Drop Down from Diamondback on September 1. Diamondback took its consideration entirely in equity for the Drop Down, further increasing its stake in Viper and reinforcing our alignment with our parent company.

In September, we also closed the McElroy Ranch acquisition for an aggregate purchase price of $529 million. This adds about 7,400 net royalty acres in Upton and Crane Counties. This ranch gives us a concentrated ownership of roughly 12% NRI across 60,000 gross acres in what we expect to be the core fairway of emerging Barnett development in the Western Midland Basin. It is more than 95% undeveloped with over 40 net inventory locations, and we expect its development to support our production profile and continued growth outlook over the next decade.

Additionally, today, we also announced an agreement to acquire nearly 1,600 net royalty acres in the Midland Basin from Buckhorn Minerals for $280 million in cash and 1.8 million Class A shares. Approximately 80% of the Buckhorn acreage overlaps with Viper's existing footprint and the asset is roughly 60% undeveloped, including exposure to the highly undeveloped Driver Unit.

We think this is one of the highest quality sizable mineral assets left in the Midland Basin. By our estimates, nearly half of its inventory -- half of its net inventory ranks in the top quartile of remaining inventory in the Midland Basin and 70% of the inventory ranks in the top half. Together, the McElroy Ranch and Buckhorn acquisitions add nearly 60 net locations across 2 largely undeveloped assets. Notably, we're funding these deals primarily with cash, delivering on the commitment we made when we revised our return of capital framework last quarter to pursue accretive M&A with less reliance on equity.

Reflecting the strength of our base business and these acquisitions, we are again raising our full year 2026 oil production guidance with a new midpoint of 67,500 barrels of oil per day. We're also initiating fourth quarter oil production guidance of 70,000 to 71,000 barrels of oil per day, up nearly 1,500 barrels per day from our third quarter actuals and inclusive of a partial quarter contribution from Buckhorn.

Turning to our financial results for the quarter, we generated $520 million of free cash flow, which represents a free cash flow margin of almost 80%. With the cash generated during the quarter, we declared a base dividend of $0.50 a share in addition to $90 million of repurchases during the quarter. As part of our revised capital allocation framework announced last quarter, we will also retain a significant amount of incremental cash to pay down debt from our previously disclosed -- discussed acquisitions very quickly.

In conclusion, every part of the Viper model showed up this quarter. Organic growth, high-quality acquisitions funded primarily with cash and a durable growing base dividend paired with opportunistic share repurchases. With a capital-light royalty model and an unmatched acreage position in the Permian Basin, we continue to believe Viper is uniquely positioned to deliver durable per share growth and attractive long-term stockholder returns.

With that, operator, now please open the line for questions.

Operator

[Operator Instructions] Our first question is Betty Jiang from Barclays.

ช่วงถาม-ตอบ

Wei Jiang

I first just want to ask about the M&A. It's really good to see the momentum you're seeing there while being able to fund that with cash on hand and the borrowing base. Maybe just the overall M&A landscape, why do you see these deals coming together now? Where do you see more opportunities going forward? And do you think you have the balance sheet capacity to do more of these things going forward?

Kaes Van't Hof

Yes, Betty, I'll give the high level and Austen can tell you what he's seeing in the market. I mean, I think, high-level, 2 of these deals, Buckhorn and Riverbend kind of packages that have been put together over the last few years that were kind of ripe for a sale. We obviously were able to get Riverbend done about 6 months ago and then Buckhorn through the process of the summer, ended up getting it done. I think both are very high-quality assets, a lot of undeveloped inventory. And we think about these things as multi-decade assets that we're going to own forever.

Obviously, we still have to be focused on the accretion near term, which both of these are. But I think that's kind of the sweet spot for Viper in our acquisition strategy. I'd say on the McElroy Ranch, that's kind of one of those -- we call them the unicorns in this basin, right? This is a ranch that was owned by a family for, I think, 80 years or 80-plus years, one of the first ranches bought as the Permian started developing vertical wells way back in the day.

And that's a hard ranch to -- for a lot of people to buy because they needed all cash, but we were able to move quickly and be a good counterparty. And I think the notoriety and the size and the scale of this business is what started to allow these deals to naturally accrue to us. And I kind of mentioned in past quarter's calls that the opportunity set ahead of Viper looks a lot like what it did in front of Diamondback 6 or 7 years ago with just a lot less well-funded, large competitive peers in the peer group. And so I think that should be a win for Viper shareholders.

But I think the lesson learned is that it's not all going to be equity funded. I think we have the balance sheet, the cash flow, the free cash, the free cash conversion to be able to use cash, do accretive deals for the shareholders and be prepared to do more by paying down debt very quickly.

So Austen, what do you see in the forward outlook here?

Austen Gilfillian

Yes. I think there's still a lot to do. But I think the good thing about how we're positioned today is that we get to be opportunistic. And frankly, we get to be picky about the assets that we choose and the assets that we like. So if you look at everything we've done this year, Riverbend, Buckhorn, McElroy Ranch and also the Drop Down, you can include that in there as well. They're all kind of distinct in that they have a weighting to undeveloped acreage.

So we generally can, I think, deliver differential returns by having a unique view on asset quality and operator development. So that's all I'll say, while I think there's still plenty to do. We'll look for not only the near-term accretion, but for a unique perspective to gain on the inventory and how that might create differential value for our shareholders.

Wei Jiang

That's great color. And for my follow-up, it just seems there's a lot of tailwind to the Viper business right now. You have higher oil prices, higher activity and you have these new assets coming in where you have this visibility on development cadence going forward. Maybe can you just speak to your current view of organic growth that you could generate from the asset base today into '27? Or however much visibility that you can provide to the market would be great.

Kaes Van't Hof

Yes. We don't have a ton of visibility on the third party yet, right? I think as we get closer to the next year, we start to look at permit conversion and kind of work the third-party plan. I think the Diamondback plan continues to chug along. These are big numbers, right? 123 wells with an average 9% interest is -- that's a huge amount of production coming from the Diamondback drill bit to continue.

I mean, I think in general, right, I think you're right. There's tailwinds. There's -- we've generally bought assets that have outperformed the basin growth. And I think maybe that's been misunderstood, right? The amount of growth relative to the basin is a testament to Austen and the team picking assets that should outperform the basin. And I expect that trend to continue.

Obviously, a lot of exciting things going on with new zones, the Barnett-Woodford development, McElroy Ranch development, some of the mega themes we talked about in the Diamondback call. All those things generally accrue to the benefit of Viper shareholders and should build value over time.

Austen, do you want to say anything about activity levels?

Austen Gilfillian

No, that's right. I mean we had quite a bit of organic growth embedded in the Q3 results. And even once you strip out the contribution from the acquisitions, you're still getting some of that momentum carrying into the fourth quarter. So I think we start to have a much bigger base, so the percentages maybe come down, but Diamondback is still driving a lot of growth through their concentrated activity on our position, and we see that happening for the foreseeable future.

Operator

Our next call and question is from Neal Dingmann with William Blair.

Neal Dingmann

My first question is just on asset drop downs. Could you talk about further drop downs for minerals and surface?

Kaes Van't Hof

Yes. I mean we have dropped down all of the minerals that we know about today that sit at the Diamondback level. There's always kind of little cleanups here and there from trades that we do if NRIs are above 75%. I think generally, we're aware of where surface revenues are trading -- surface cash flow is trading in the market. I think we have a unique surface position at Diamondback. We're evaluating the value of that within Diamondback and where it could or should sit.

I think generally, our progress on power deals and infrastructure development in the basin is allowing us to think about different options for the various assets we have across the portfolio, but nothing to announce today, but we're very conscious of the market and where multiples are. And I think generally, as I mentioned in the Diamondback call, we feel like we can dominate in this basin and kind of all facets of infrastructure, surface, minerals, midstream, upstream. So more to come there, Neal, but I think we're at the center of this next wave of Permian growth and Viper and Diamondback will play an important part of it.

Neal Dingmann

Perfect. And then just my second question, really just some you talked about last time on the increased flexibility that you talked about in that, I guess, you called it your previous revised return on capital framework. Specifically, how do you believe this ultimately will continue to improve investor returns and overall value?

Kaes Van't Hof

Yes. I mean, here's how I would frame it. It's -- we're in a kind of a grow or die business, right? And if you have all of your free cash flow going out the door every quarter, that limits your opportunities to grow. And so I think we recognize that there were a lot of opportunities ahead of us. Obviously, we knew we had McElroy Ranch in the works. We knew we had Buckhorn in the works.

And we just said, let's pay a very high base dividend that's competitive with the top dividend payers across our space, the majors combined with even a utility, but let's beat that with growth on top. And that's allowed us to do over $1 billion of deals with cash this year, and we'll still exit the year at sub 1x leverage. So that should accrete value to the equity holders long term. It should allow us to grow our base dividend long term and not be a flash in the pan because we want to be the dominant mineral position in this basin for a long time.

Operator

Our next question is from the line of Derrick Whitfield with Texas Capital.

Derrick Whitfield

I wanted to focus on the acquisition, the McElroy Ranch with my first question. So regarding that acquisition, how would you guys characterize your visibility into the development of the Barnett? Clearly, Diamondback can drive activity, but how do you project it across the other operators?

Austen Gilfillian

Yes, Derrick, good question. So we disclosed that in the Barnett specifically, Chevron is the largest operator, and we have the map on Slide 11 of the investor presentation. So that's kind of the big chunk of the contiguous acreage on the Southwest corner. While we don't have specific visibility into what Chevron is going to do, we do know them. We do know kind of operator trends within the basin. But really where we see value in acquisitions generally and also to this deal specifically is ranking the unbuilt inventory in what we think is an operator's overall inventory position.

So when you look at what Chevron is doing in the Permian and when we look at what we think is their remaining runway, we think this is going to be some of the highest return inventory that they have, both from an NPV certainly and then also from an IRR perspective. So we didn't underwrite happen today or tomorrow, but over the next decade, as these inventory locations start to get developed, I think that's going to create a lot of value for our shareholders.

Derrick Whitfield

Great. And for my follow-up, I wanted to pivot back to your long-term outlook for the business and what's collectively owned across the Diamondback family of companies today. Well, I realize Viper is oil and gas royalties focused. How do you view the longer-term opportunity for surface in Midland, particularly as you think about the mega themes that you outlined in the Diamondback shareholder letter?

Kaes Van't Hof

Yes. I would say, generally, Derrick, I have grown or we have grown more bullish on surface and kind of understand the long-term option value of it. Now just like not all acreage is created equal on the upstream side and not all mineral acreage is created equal on the mineral side, not all surface is created equal either, right? So it's about targeted acquisitions of surface that could have real use cases for oilfield development or data center development or power gen development. And there's some very specific things we're looking for when trying to pursue that. But I would say just generally, our kind of attitude on pursuing the right surface acquisitions has probably grown with knowledge gained through what we hope to be one of the first real projects completed in the basin on the power side.

Derrick Whitfield

Kaes, if I could go one further, maybe just as a follow-up to that. If you guys are looking at that as an opportunity, would that also necessitate standing up a separate team that could really focus on non-oil and gas applications? Or do you think that could all be done within the current management in place?

Kaes Van't Hof

Maybe not management, but we certainly have a lot of -- we have a lot of talented people throughout this organization. And I think those talents can be leveraged to many different things. I think it goes back to the institutional knowledge about the basin and how to get things done here that should drive that talent to succeed. So I know you're baiting me a little bit, Derrick, but I think there's some things in the works over here. And I think we have some catalysts as a group to think about and who's going to sit where it is kind of a secondary discussion.

Operator

Our next question is from the line of Jack Cavanagh with Goldman Sachs.

John Cavanagh

You mentioned earlier that it's a grow or die business. So I'm just kind of curious how that informs how you're thinking about the buyback for VNOM at current levels relative to incremental equity issuance to help fund some of the inorganic growth opportunities you're seeing in the market?

Kaes Van't Hof

Yes, Jack, you kind of think about them a little differently. I see the buyback as something that can grow per share metrics and look at like how many reserves per share we've grown, how much oil production per share we've grown, but we've got to do that at the right time. So I think about the buyback as selective on price. And then on deals, I wish we could control timing of deals, right? I'd love to buy every deal at $40 oil, but in the minerals, you're not being forced to sell, whereas upstream, sometimes the CapEx requirements force people into less economic decisions.

So I think being able to pounce on the upstream is more of a positioning that we focus on, whereas on the mineral side, I think balance sheet capacity being able to divide between cash and stock and even some of the unique aspects of Viper where we can offer tax deferred units to large enough deals positions Viper to be ready to do deals when the counterparty is ready versus be more front foot and aggressive, I would say.

Austen, do you want to add anything to that?

Austen Gilfillian

Yes. I think the beauty of the business model is that it's -- we can do all of the above. I mean when you think about a business with 80% free cash flow margins for us -- it's not a decision of dividend or buyback or acquisitions or debt reduction. It's a little bit of everything. And it might change quarter-to-quarter on the margin. But I think we can grow the business from an absolute standpoint with good deals with continued organic growth. And then if we can reduce the share count opportunistically where we see value, that just means incremental value creation on a per share basis.

John Cavanagh

Great. That makes a ton of sense. And then for my follow-up, Kaes, when you think about value capture across the FANG, VNOM complex, has the stock performance this year for VNOM influenced how you're thinking about the relationship between the 2 companies? And looking forward, is there any change to how you see FANG supporting VNOM's growth and value creation given the number of levers you can pull with the FANG enterprise?

Kaes Van't Hof

Yes. I mean that's a good question. Obviously, very reflective this year on stock price performance relative to peers. And I guess we could debate who we should define as VNOM peers. I think there's probably a couple of things I reflect on through the year. I think we sold where my Diamondback hat, we sold some shares in VNOM in March when oil prices, kind of, spiked. And I think in retrospect, that probably sent the wrong message to The Street, and I'm not afraid to admit some mistakes. But I think selling VNOM didn't make sense then. I think we've tried to reframe our commitment to VNOM ownership by increasing ownership through the Drop Down.

I think -- and I think over the long term, the FANG, VNOM relationship remains very strong. I think as an overall capital allocator, keeping all of our options open at both companies is going to be a good thing for both shareholder bases. And at Diamondback, that means grow my dividend, pay down debt, do deals or repurchase shares. But also at Diamondback, it means you can repurchase VNOM shares if you think they're a great deal and you're not blacked out from the market to do so.

And the same goes for VNOM, right? VNOM, we can do deals. We can buy back shares. We can hoard cash or like we did last quarter, we use cash in deals to be able to do that quickly and get our balance sheet back in shape. So long-winded answer, I think the relationship is strong and probably getting stronger, particularly as the 3 mega themes that we talked about on the last call start to come to fruition and grow within our combined complex.

Operator

Our last question will be from the line of Leo Mariani with ROTH.

Leo Mariani

Just wanted to follow up on an earlier comment that you made. It sounds like you're very kind of committed to paying down some of the incremental debt that you guys took on with the acquisitions. Do you see perhaps the share buyback getting a little bit less capital to execute in the next handful of quarters to try to get that debt down? Just trying to get a better understanding of that.

Kaes Van't Hof

Yes. I'll go back to it depends, Leo. I mean if the stock goes back to where it was at the beginning of the third quarter, we're going to lean in and buy back. That's the beauty of how much free cash benefit this business is generating. And I know people like to focus on debt to EBITDA. But at the end of the day, the debt to free cash flow of Viper is second to none. So if we see weakness in the stock price, we're going to lean in and buy back shares.

Leo Mariani

Okay. Appreciate that. And I guess just, obviously, FANG has had success in the Barnett. There's been a little bit more shift in activity towards that zone. It sounds like you guys are signaling you plan to kind of continue to do more in the coming years as kind of percentage of activity. Does that sort of benefit VNOM a bit more on the margin? Do they have higher kind of NRIs in the Barnett perhaps versus some of the other more traditional zones?

Kaes Van't Hof

Yes, Leo, in the near term or really the medium term, I don't think it has a huge impact to Viper. Really, the way that you have to think about it is total Diamondback completions and then what percentage of those wells Viper will own an interest in and then what NRI we have within those. We'll get the benefit of having some really high NRI in some really good areas, thinking about Spanish Trail specifically.

But I think for the next couple of years, even with the Barnett being added in, in a more significant way to the Diamondback development plan, those key metrics look similar. So that's good. I think really what gets exciting is the acquisition opportunity set that we can tailor around the Barnett. Diamondback can be selective on where they're developing it as they start to HBP leases, that creates a lot of synergy opportunities or even leverage for us to be smart in targeted acquisitions. So I think that's going to be a big part of the story over the next couple of years as the Barnett becomes more relevant to both complexes development.

Leo Mariani

Okay. And it sounds like the McElroy Ranch deal is really kind of a prime example of that. And it sounds like that's really kind of a medium- to longer-term bet just on a lot more industry development in the Barnett.

Kaes Van't Hof

Yes. I think we highlighted the Barnett there because we think it's probably the best zone, but there actually was a good amount of development from Firebird that is now Continental. Diamondback has got a little of it. It's not a zone territory, but there are some zones that have been tested further east that have been productive and added to production there.

Operator

This concludes the question-and-answer session. I would now like to turn it back to Kaes Van't Hof for closing remarks.

Kaes Van't Hof

Thanks, everyone, for participating in today's call. If you have any questions, please reach out. We're available at your convenience.

Operator

Thank you for your participation today. This concludes the program. You may now disconnect.