VNOM Q2 Earnings Beat Estimates on Higher Output & Realized Prices

The strong quarterly earnings are driven by higher production and improved realized oil prices. Average daily production reached 134,363 barrels of oil equivalent per day (Boe/d), up 69.5% from the prior-year quarter.

VNOM's Q2 Production Surges

Total production was 12.23 million barrels of oil equivalent (MMBoe), up 69.5% from 7.22 MMBoe a year ago. Oil production increased 56.4% to 5.92 million barrels (MMBbl) from 3.79 MMBbl in the prior-year quarter.

Natural gas output rose 87% to 18.95 billion cubic feet (Bcf) from 10.13 Bcf reported a year earlier. Natural gas liquids production increased 81% to 3.15 MMBbl from 1.74 MMBbl recorded in the prior-year quarter.

Average daily oil volumes increased to 65,077 barrels per day (Bbl/d) from 41,615 Bbl/d.

Development activity remained strong across the asset base. During the quarter, 691 gross horizontal wells, normalized to 10,000-foot laterals, were turned to production on Viper's Permian Basin acreage. These represented 19.8 net wells on a 100% royalty-interest basis.

Viper's Realized Prices Strengthen

The average unhedged realized price was $53.82 per barrel of oil equivalent, 35.3% above the year-ago level of $39.78. The average realized oil price increased 54.4% to $98.28 per barrel from $63.62 recorded a year earlier.

Natural gas liquids realized price was $23.83 per barrel, up 15.1% from the year-ago figure of $20.70 per barrel. The average natural gas price declined to 5 cents per thousand cubic feet from 99 cents per thousand cubic feet. The combined realized price including hedges was $55.12 per barrel of oil equivalent, higher than the $41.03 per barrel of oil equivalent recorded in the prior-year quarter.

Hedged oil prices averaged $96.42 per barrel, while hedged natural gas prices were $1.48 per thousand cubic feet. The hedging benefit in natural gas more than offset the lower hedged oil realization compared with unhedged prices.

VNOM's Costs Rise With Expanded Scale

Total costs and expenses were $249 million, up 53.7% from $162 million a year ago. Depreciation, depletion and amortization increased to $195 million from $124 million, while production and ad valorem taxes rose to $43 million from $21 million.

Cash operating costs were $4.17 per barrel of oil equivalent compared with $3.60 a year ago. The increase reflected production and ad valorem taxes of $3.52 per barrel, partly offset by a lower cash general and administrative cost of 65 cents per barrel.

Consolidated net income was $331 million, up from $84 million a year earlier. Net income attributable to Viper totaled $142 million compared with $37 million in the prior-year quarter.

Viper Maintains Cash Flow

Net cash provided by operating activities was $487 million, up 183.1% from $172 million in the prior-year quarter. Consolidated adjusted earnings before income, taxes, depreciation and amortization (EBITDA) totaled $642 million, while cash available for distribution to Class A common stockholders was $262 million, or $1.37 per share.

VNOM’s Balance Sheet

As of June 30, 2026, Viper’s cash was $77 million and total debt was $1.7 billion. Net debt totaled $1.6 billion. The company had roughly $2 billion of total liquidity, including about $1.9 billion available under its revolving credit facility.

The debt balance included $500 million of senior notes due 2030, $1.1 billion of senior notes due 2035 and $95 million borrowed under the revolving credit facility.

Viper Boosts Its Base Dividend

Viper declared a second-quarter base dividend of 38 cents per Class A share and a variable dividend of 29 cents. The combined payout of 67 cents per share is payable on Aug. 20, 2026, to stockholders of record on Aug. 13.

The board approved a 32% increase in the annualized base dividend to $2 per Class A share, effective in the third quarter. Management expects the higher base payout to be protected down to roughly $30 per barrel WTI.

During the second quarter, VNOM repurchased about 3 million Class A shares for roughly $132 million at an average price of $44.34 per share. Total second-quarter capital returns were $197 million, representing 75% of cash available for distribution.

VNOM Raises Q3 & 2026 Production View

The company expects third-quarter 2026 production guidance to be between 133,500 Boe/d and 135,500 Boe/d. Oil production is expected in the range of 67,500-68,500 Bbl/d.

For 2026, Viper raised its production outlook to 132,500-135,000 Boe/d, including oil volumes in the range of 66,000-67,250 Bbl/d. The guidance incorporates the Riverbend acquisition, which closed July 1, 2026.

After giving effect to the acquisition, Viper had about 90,212 net royalty acres and 1,798 gross horizontal wells in active development as of July 1. The company identified 1,589 gross line-of-sight wells that may support future production growth.

VNOM’s Zacks Rank & Key Picks

Viper currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the energy sector are PBF Energy Inc. PBF, HF Sinclair Corporation DINO and Cactus, Inc. WHD. PBF sports a Zacks Rank #1 (Strong Buy), while DINO and WHD carry a Zacks Rank #2 (Buy) each, at present. You can see the complete list of today’s Zacks Rank #1 stocks here.

PBF reported second-quarter 2026 adjusted earnings of $6.22 per share, surpassing the Zacks Consensus Estimate of $4.05 per share.

As of June 30, 2026, PBF had total debt of $1.75 billion, and cash and cash equivalents of $894.1 million.

HF Sinclair reported second-quarter 2026 adjusted earnings of $5.31 per share, topping the Zacks Consensus Estimate of $4.39 per share.

As of June 30, 2026, DINO had total debt of $2.77 billion, and cash and cash equivalents of $2.26 billion.

Cactus reported second-quarter 2026 adjusted earnings of 93 cents per share, surpassing the Zacks Consensus Estimate of 71 cents per share.

As of June 30, 2026, WHD had cash and cash equivalents of $365 million.

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