Viper Energy Inc. VNOM reported third-quarter 2024 adjusted earnings per share of 49 cents, which beat the Zacks Consensus Estimate of 43 cents. The bottom line declined from the year-ago level of $1.10.

The company, with mineral interests in North America’s oil and gas resources, generated an operating income of $209.6 million, which missed the Zacks Consensus Estimate of $213 million. The top line also declined from the year-ago quarter’s figure of $293.2 million.

Better-than-expected quarterly earnings can be attributed to higher oil equivalent production volumes, partially offset by lower realized commodity prices and higher costs and expenses.

Production

The resources, wherein the company has mineral interests, produced 4,542 thousand oil-equivalent barrels (MBoe) in the September-end quarter of 2024, up from 3,721 MBoe a year ago. The reported figure surpassed our estimate of 4,376 Mboe.

Oil contributed 54.6% to the total production volume. Oil production increased to 2,482 thousand barrels (MBbls) from 2,037 MBbls a year ago. The metric beat our estimate of 2,443 MBbls.

The production of crude oil, natural gas and natural gas liquids witnessed an increase from the prior-year levels.

Realized Prices

The overall average realized price per barrel of oil equivalent was $45.83 compared with $52.57 in the third quarter of 2023. Our estimate for the same was pinned at $49.11 per barrel.

Average realized oil price in the quarter under review was $75.24 per barrel, down from $82.48 in the year-ago quarter. The figure missed our estimate of $77.99.

The price of natural gas was 13 cents per thousand cubic feet, down from $1.81 in the year-ago quarter. The figure also missed our estimate of 80 cents.

The price for natural gas liquids was $19.89 a barrel, lower than $21.58 recorded a year ago. Our estimate for the same was pinned at $19.88 per barrel.

Costs & Expenses

In the third quarter, total expenses were $74 million, higher than $50.4 million recorded in the prior-year quarter. The figure also surpassed our estimate of $69.6 million.

On a per barrel of oil-equivalent (Boe) basis, total operating expenses were $4.16 compared with $3.71 in the year-ago quarter. The figure lagged our estimate of $4.98.

Cash Flow

Net cash provided by operating activities was $203 million, down from $239.7 million in the third quarter of 2023.

Balance Sheet

As of Sept. 30, 2024, Viper Energy’s cash and cash equivalents were $168.6 million. The company reported a net long-term debt of $821.5 million.

Guidance

The company updated its total production guidance for 2024 to 48.75-49.25 Mboe/d, the midpoint of which indicates an increase from 39.2 Mboe/d reported in the year-ago quarter. The company expects fourth-quarter net production to be in the 52.50-53.00 Mboe/d range.

VNOM’s Zacks Rank and Key Picks

Currently, VNOM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the energy sector are Archrock Inc. AROC, The Williams Companies, Inc. WMB and FuelCell Energy FCEL. Archrock presently sports a Zacks Rank #1 (Strong Buy), while The Williams Companies and FuelCell Energy carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States, with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

The Williams Companies, Inc. is a premier energy infrastructure provider in North America. The company’s core operations include finding, producing, gathering, processing, and transporting natural gas and natural gas liquids. Boasting a widespread pipeline system of more than 33,000 miles, Williams is one of the largest domestic transporters of natural gas by volume.

FuelCell Energy is a clean energy company offering low-carbon energy solutions. It produces power using flexible fuel sources such as biogas, natural gas and hydrogen. The company designs fuel cells that generate electricity through an electrochemical process that combines fuel with air, reducing carbon emissions and minimizing the environmental impact of power generation. As such, FCEL is anticipated to play a crucial role in the energy transition by enabling industries and communities to shift from traditional fossil fuels to low-carbon alternatives.

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