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Viper Energy Partners LP (NASDAQ:VNOM) Q4 2023 Earnings Call Transcript February 21, 2024
Viper Energy Partners LP isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Leo Mariani - ROTH: Tim Rezvan - KeyBanc Capital Markets
Operator: Good day, and thank you for standing by. Welcome to the Viper Energy Fourth Quarter 2023 Earnings Call. [Operator Instructions] 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 Lawlis, Vice President of Investor Relations. Please go ahead.
Adam Lawlis: Thank you, Victor. Good morning, and welcome to Viper Energy's Fourth Quarter 2023 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 Stice, CEO; Kaes Van’t Hof, President; and Austen Gilfillian, 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'll 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 Stice.
Travis Stice: Thank you, Adam. Welcome, everyone, and thank you for listening to Viper Energy's fourth quarter 2023 conference call. The fourth quarter wrapped up a milestone year for Viper. For the full year, average oil production increased 13% compared to the previous year, while our average share count was reduced by 1% over the same period. As a result of continued strong organic production growth, creative acquisitions and an opportunistic share repurchase program, the fourth quarter represented the eighth consecutive quarter of increased production per share for Viper. For our return of capital for the fourth quarter, we've declared a $0.29 variable dividend to Class A shareholders to go along with our $0.27 based dividend.
Importantly, this variable dividend is the same that we would have paid with a 75% payout ratio, assuming we did not repurchase any shares during the quarter. However, inclusive of the $28.7 million in shares that we repurchased during the quarter, our effective payout ratio for Q4 is 97%. Our rationale for excluding the share repurchases done during the quarter and calculated our variable dividend is that we view this buyback, which was done during the secondary offering related to our GRP acquisition as an extension of the financing of the deal. Additionally, we've already received $10 million in post-effective cash flow that is applied as a reduction to the purchase price and does not show up in our reported financials for the quarter. Looking back on the year as a whole, there were several strategic initiatives completed during 2023 that marked important steps in the growth and evolution of Viper.