Viper Energy, Inc.

Good day, and thank you for standing by. Welcome to the VIPER Energy Third Quarter 2025 Earnings Conference 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 that you're advising 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, Chip Seale, Investor Relations Director. Please go ahead.

Thank you, Amber. Good morning and welcome to Viper Energy's third quarter 2025 conference call. During our call today, we will reference an updated investor presentation, which can be found on Viper's website. Representing BIPER today are Case Vantoff, CEO, and Austin Gilfillan, 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 Case.

Thank you, Chip. Welcome, everyone, and thank you for listening to Viper Energy's third quarter 2025 conference call. During the third quarter, Viper continued to execute on our growth strategy bolstered by the closing of the CTO acquisition and continued organic growth. Our fourth quarter 2025 oil production guidance implies a roughly 20% increase in oil production per share compared to the same quarter last year. Looking ahead to next year, 2026, we continue to anticipate mid-single-digit organic oil production growth from fourth quarter 2025 estimated production. This implies double-digit year-over-year growth in oil production per share relative to 2025. VIPER also showcased our differentiated return of capital profile in the third quarter. Because of our high operating and free cash flow margins, strong balance sheet, and recent signing of our non-Permian asset sale, we felt it appropriate to lean into our return of capital commitment and return 85% of cash available for distribution in the third quarter to stockholders. As a result, VIPER is delivering on multiple strategic capital allocation fronts this quarter. Our combined base plus variable dividend represents a greater than 6% annualized yield and an increase of almost 10% relative to our dividend from last quarter. This dividend increase is combined with over $90 million of share repurchases completed during the quarter and an incremental $60 million being retained to go to the balance sheet. In total, third quarter return of capital per Class A share represents a 48% increase versus the second quarter. Looking ahead, as we move to close our non-permian asset sale, and as a result move closer to our long-term net debt target of $1.5 billion, we will have line of sight to return nearly 100% of cash available for distribution to stockholders. We expect to continue to allocate the majority of our cash for distribution to our base plus variable dividend, but feel compelled to buy back shares in today's market given the current market dislocation and unique opportunity to invest countercyclically by increasing our ownership in our existing high quality mineral and royalty assets. Importantly, the share we purchased as done today will further enhance our growth in per share metrics and allow us to distribute more through our base plus variable dividend over the long term. On the operational front, we continue to see strong activity levels across our asset base, and as a result, continue to expect mid-single-digit organic growth in 2026, despite the commodity price volatility we have seen over the past several quarters. Following the closing of the CITIO acquisition, Viper is positioned to benefit from a best-of-both-world situation. Viper continues to own concentrated interests under Diamondback's core Midland Basin development, which is expected to drive meaningful long-term oil production growth. In addition, Viper now has broad exposure to leading third-party operators across both the Midland and Delaware basins, and our current acreage position has consistently captured almost half of all third-party activity in the Permian. Beyond this, the 25,000 existing horizontal wells in the Permian Basin in which VIPER owns an interest provides an invaluable information advantage. In conclusion, we continue to believe that VIPER presents a differentiated investment opportunity within the broader energy space. VIPER's unmatched ability to deliver sustained per share growth with zero capital and limited operating costs should result in a differential ability to return increasing amounts of capital to stockholders over the long term. Additionally, given our extremely low break-even, our business model should provide a more consistent cash flow returns profile during times of overall market volatility. Operator, please open the line for questions.