Viper Energy, Inc.

Good day and thank you for standing by. Welcome to the VIPER Energy second quarter 2024 earnings call. At this time, all participants are in a 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 that 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, Adam Lawless, Vice President of Investor Relations. Please go ahead.

Thank you, Jill. Good morning, and welcome to Viper Energy's second quarter 2024 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 Travis Tsai, CEO, Case Vantoff, President, and Austin Gilfillan, Vice 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'll now turn the call over to Travis Stutz.

Thank you, Adam. Welcome, everyone, and thank you for listening to Viper Energy's second quarter 2024 conference call. The second quarter was a strong quarter for Viper with oil production growing roughly 4% quarter over quarter and our cash available for distribution increasing by almost 9% over the same period. As a result of the production outperformance we have seen during the first half of the year, as well as an increase in expectations for the remainder of 2024, we have increased our production guidance for the full year 2024. In addition to updating our full year guidance range, we've also provided guidance for Q3 that implies 1.5% growth relative to Q2, despite losing roughly 150 barrels of wool per day of quarterly production from the non-permeant assets we divested during the second quarter. Overall, we continue to see strong activity levels across our acreage position and benefit from Diamondback's continued large-scale development of Vipers high concentration royalty acreage. In addition to the strong operational and financial results announced yesterday, we also announced that Vipers Board of Directors has approved an 11 percent increase in our annual base dividend, which highlights the Board's belief in a sustainable and growing base dividend can be maintained through the cycle. This belief and commitment to our shareholders is supported by Viper's strong balance sheet and durable cash flow profile. Relative to a year ago, when we last increased our base dividend, Viper has grown oil production per share by 14%, while maintaining our cash margins and free cash flow conversion at around 80%. Importantly, at current production levels, the annual fixed amount of the increased base dividend represents roughly 50% of the expected free cash flow at $50 WTI and is fully protected down to below $30 WTI. Bigger picture, the second quarter was also an important quarter strategically for Vipa. Following our conversion to a Delaware corporation late last year, we were added to several notable indices during the second quarter, including the Russell 1000. In addition to the increased governance rights that this conversion provided for our shareholders, it has so far also delivered on our expectations of providing an expanded investor base and improved trading liquidity. Fundamentally, we believe this conversion is just one step in the process of fully highlighting the advantaged nature of mineral ownership, and the unique value proposition that VIPER presents within the space, as well as in the energy complex more broadly. Operator, please open the line for questions.