Viper Energy's $4.1B all-stock Sitio deal highlights the resilience of the Permian Basin, even as oil prices slide in 2025.

VNOM's latest acquisition of Sitio Royalties is expected to be closed in the third quarter of 2025. The company has also announced a 10% increase in its base dividend.

Viper Energy (VNOM) reported earnings 30 days ago. What's next for the stock?

Oil and gas firm Diamondback Energy's unit Viper Energy will acquire Sitio Royalties in an all-equity transaction valued at about $4.1 billion including debt, the companies said on Tuesday.

MIDLAND, Texas, June 03, 2025 (GLOBE NEWSWIRE) -- Viper Energy, Inc. (NASDAQ:VNOM) (“Viper” or the “Company”), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (“Diamondback”), and Sitio Royalties Corp. (NYSE:STR) (“Sitio”) today announced that they have entered into a definitive agreement under which Viper will acquire Sitio in an all-equity transaction valued at approximately $4.1 billion, including Sitio's net debt of approximately $1.1 billion as of March 31, 2025. The consideration will consist of 0.4855 shares of Class A common stock of a new holding company (“pro forma Viper”) for each share of Sitio Class A common stock, and 0.4855 units of Viper's operating subsidiary, Viper Energy Partners LLC, for each unit of Sitio's operating subsidiary (along with a corresponding amount of Class B common stock of pro forma Viper for each share of Sitio Class C common stock), representing an implied value to each Sitio stockholder of $19.41 per share based on the closing price of Viper common stock on June 2, 2025. The transaction was unanimously approved by the Board of Directors of each company and has been approved by the written consent of Diamondback as Viper's majority stockholder. Stockholders holding an aggregate of approximately 48% of Sitio's outstanding voting power, including Kimmeridge, its largest stockholder, have agreed to vote in favor of the transaction. The transaction is subject to customary regulatory approvals and is expected to close in the third quarter of 2025.

Viper closed on the dropdown transaction with Diamondback and expects 48,000 barrels per day in oil production going forward. This is over 60% higher than its Q4 2024 oil production. Viper's share count went up by a bit over 50% since late 2024 as it essentially paid for the deals with shares (directly and through an equity offering).

Viper Energy, Inc. (NASDAQ:VNOM ) Q1 2025 Earnings Conference Call May 6, 2025 11:00 AM ET Company Participants Chip Seale - Director of Investor Relations Kaes Van't Hof - Chief Executive Officer Austen Gilfillian - President Conference Call Participants Greta Drefke - Goldman Sachs Paul Diamond - Citi Derrick Whitfield - Texas Capital Leo Mariani - ROTH Tim Rezvan - KeyBanc Capital Markets Operator Good day, and thank you for standing by. Welcome to the Viper Energy First Quarter 2025 Earnings Conference Call.

Although the revenue and EPS for Viper Energy (VNOM) give a sense of how its business performed in the quarter ended March 2025, it might be worth considering how some key metrics compare with Wall Street estimates and the year-ago numbers.

Viper Energy focuses on maximizing shareholder value through strategic acquisitions. Current stock prices offer an attractive entry point, with insider investments indicating confidence in Viper's future performance and growth strategy. Despite macroeconomic challenges, Viper's consistent production growth and management's commitment to distribute 75% of cash flows to shareholders present a solid long-term investment.

Viper Energy's strategy involves acquiring high-quality acreage with lower development costs and investment grade operators. Viper Energy remains a strong investment consideration with a historically high yield. Viper Energy's selective acquisition approach and steady production growth protect downside risks.