Viper Energy, Inc., a subsidiary of Diamondback Energy, Inc., announces acquisition Page 1

MIDLAND, Texas, Sept. 11, 2024 (GLOBE NEWSWIRE) — Viper Energy, Inc. (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), today announced that it and its operating subsidiary Viper Energy Partners LLC (“OpCo”) have entered into a definitive purchase and sale agreement to acquire certain mineral and royalty interest subsidiaries of Tumbleweed Royalty IV, LLC in exchange for $461.0 million of cash and approximately 10.1 million OpCo units, subject to customary adjustments. The cash portion of this transaction is expected to be funded through a combination of cash on hand, borrowings under the Company’s credit facility and proceeds from one or more capital markets transactions, subject to market conditions and other factors. The issuance of OpCo units will be accompanied by the grant of an option to purchase an equal number of shares of the Company’s Class B common stock. The purchase agreement also includes a potential additional payment in Q1 2026 of contingent cash consideration of up to $41.0 million, based on the 2025 average West Texas Intermediate (“WTI”) price. This transaction is expected to close in early Q4 2024, subject to customary closing conditions.

The Company also announced today that it previously completed two related acquisitions. On September 3, 2024, OpCo completed the acquisition of certain mineral and royalty interest entities from Tumbleweed-Q Royalty Partners, LLC and MC Tumbleweed Royalty, LLC for combined cash consideration of $189.0 million, plus potential additional payments in Q1 2026 of contingent cash consideration of up to $9.0 million, based on the 2025 average WTI price. These transactions were financed with a combination of cash on hand and borrowings under the Company’s credit facility.

HIGHLIGHTS OF COMBINED ACQUISITIONS

Approximately 3,727 net royalty acres (“NRAs”) in the Permian Basin
Very undeveloped asset with a focus on the core of the Midland Basin
A high degree of certainty about near-term production growth results in a meaningful increase in all relevant financial metrics; the increase is expected to accelerate in the coming years due to the highly undeveloped nature of the assets.
Current production of approximately 2,500 Boe/d (4,000 Boe/d); expected to increase to approximately 4,500 Boe/d for full year 2025 based only on currently producing wells (“PDP”), drilled but uncompleted wells (“DUCs”), permits and Diamondback’s anticipated development plan.
Viper currently expects Diamondback to complete approximately 120-140 gross locations, in addition to existing DUCs and permits on the acquired properties through the end of 2026, with an estimated average net revenue interest of ~3.0% (“NRI”) (3.5 – 4.0 net 100% royalty interest wells); this is expected to increase Diamondback’s operated production from an average of approximately 1,000 Bo/d in 2025 to approximately 3,000 Bo/d in 2026.
Increases expected pro forma 2025 returns per share on capital for Class A shareholders by an estimated 4-5%, assuming the Company funds a portion of the remaining cash consideration from the transaction through the successful issuance of approximately 8.0 million Class A shares of Viper’s common stock