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Why Is Viper Energy (VNOM) Up 3.4% Since Last Earnings Report?

A month has gone by since the last earnings report for Viper Energy Partners (VNOM). Shares have added about 3.4% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Viper Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Viper Energy Q3 Earnings & Revenues Top Estimates

Viper Energy reported third-quarter 2023 adjusted earnings per unit of $1.10, which beat the Zacks Consensus Estimate of 46 cents. The bottom line also increased from the year-ago quarter’s 98 cents.

The partnership, with mineral interests in North America oil and gas resources, generated an operating income of $293.2 million, which outpaced the Zacks Consensus Estimate of $196 million. The top line increased from the year-ago quarter’s $221.6 million.

Viper Energy’s strong quarterly results were aided by higher oil-equivalent production volumes.

Production

The resources, wherein the partnership has mineral interests, produced 3,721 thousand oil-equivalent barrels (MBoe) in the September-end quarter of 2023, up from 3,173 MBoe a year ago. The reported figure beat our estimate of 3,477 Mboe.

Of the total volume, oil contributed 54.7% at 2,037 thousand barrels of oil (MBbls), up from 1,828 MBbls a year ago. The metric also beat our estimate of 2,011 MBbls.

The production of crude oil, natural gas and natural gas liquids increased from the prior-year quarter’s level.

Realized Prices

The overall average realized price per barrel of oil equivalent was $52.57 compared with $69.31 in third-quarter 2022. The figure was slightly above our estimate of $48.20.

Average realized oil prices in the quarter under review were $82.48 per barrel, down from $91.87 in the year-ago quarter. The price of natural gas was $1.81 per thousand cubic feet, down from $7.01 in the year-ago quarter. The price for natural gas liquids was $21.58 a barrel, down from $35.15 a year ago.

Costs & Expenses

In the third quarter, total expenses were $50.4 million compared with $48.2 million in the prior-year quarter. The figure lagged our estimate of $59 million.

On a per barrel of oil-equivalent (Boe) basis, total operating expenses were $3.71 compared with $5.49 in the year-ago quarter. The figure also lagged our estimate of $5.43.

Cash Flow

Net cash provided by operating activities was $239.7 million, up from $214.2 million in the third quarter of 2022.

Balance Sheet

As of Sep 30, 2023, Viper Energy’s cash and cash equivalents were $146.8 million. The company reported net long-term debt of $675.7 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, Viper Energy has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Viper Energy has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

Viper Energy is part of the Zacks Oil and Gas - Exploration and Production - United States industry. Over the past month, Cheniere Energy (LNG), a stock from the same industry, has gained 0.7%. The company reported its results for the quarter ended September 2023 more than a month ago.

Cheniere Energy reported revenues of $4.16 billion in the last reported quarter, representing a year-over-year change of -53%. EPS of $2.37 for the same period compares with $7.80 a year ago.

For the current quarter, Cheniere Energy is expected to post earnings of $2.70 per share, indicating a change of -82.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -5.1% over the last 30 days.

Cheniere Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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Viper Energy Inc. (VNOM) : Free Stock Analysis Report

Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report

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