Viper Energy

Viper owns perpetual mineral and royalty interests. Operators like Diamondback Energy, ExxonMobil, and ConocoPhillips drill and complete wells on Viper's acreage at their own cost, and Viper receives a fixed percentage of the gross revenue from produced hydrocarbons. Because Viper does not pay drilling or operating costs, its revenue translates directly to cash flow with very high margins.

Diamondback Energy controls Viper and uses it as the vehicle to hold and acquire mineral and royalty assets. Diamondback contributes assets in exchange for Viper equity, and Viper benefits from Diamondback's subsurface intelligence when purchasing additional royalty acreage. Travis Stice serves as CEO of both entities, and Kaes Van't Hof is President of both.

Royalty companies offer commodity-price exposure without the capital-expenditure risk of drilling operations. Viper receives a share of production revenue but never writes a check for leasehold drilling costs, completion services, or operating expenses. This creates a lower-decline, high-margin cash-flow profile that produces significant free cash flow even during periods of lower oil prices.

Viper's 32,700 net royalty acres are concentrated in the Permian Basin of West Texas, split between the Midland Basin and the Delaware Basin. The Midland Basin represents the bulk of the company's acreage, located in the core of the play underneath operators running some of the highest-productivity wells in the United States.

Viper maintains a variable-plus-fixed dividend policy. The base dividend is set at a sustainable level, and the variable component rises with free cash flow, meaning payouts increase during periods of strong commodity prices or high production. The structure is designed to return the majority of cash flow to shareholders while retaining modest capital for accretive acreage acquisitions.