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Viper (VNOM) Tops Q2 Earnings Estimates, Cuts Distribution

Zacks Equity Research
·4-min read

Viper Energy Partners LP VNOM reported second-quarter 2020 loss per unit of 4 cents, narrower than the Zacks Consensus Estimate of a loss of 14 cents. Notably, the partnership reported a profit of 4 cents in the year-ago quarter.

The partnership, with mineral interests in North American oil and gas resources, generated operating income of $33 million, which marginally beat the Zacks Consensus Estimate of $32 million. However, the top line decreased from the year-ago level of $72 million.

The better-than-expected quarterly results can be attributed to a rise in oil equivalent production volumes. This was offset partially by lower commodity price realizations, led by coronavirus-dented energy demand.

Viper Energy Partners LP Price, Consensus and EPS Surprise

 

Viper Energy Partners LP Price, Consensus and EPS Surprise
Viper Energy Partners LP Price, Consensus and EPS Surprise

Viper Energy Partners LP price-consensus-eps-surprise-chart | Viper Energy Partners LP Quote

Distribution Cut

The partnership was authorized by the board of directors of its general partner to make cash distribution of 3 cents per common unit for the June quarter of 2020. The new distribution reflects a sequential decline of roughly 70%.

Production

The resources, wherein the partnership has mineral interests, produced 2,230 thousand oil equivalent barrels (MBoe) in the June quarter of 2020, up from 1,783 MBoe a year ago. Of the total volumes, oil accounted for almost 59%. Production of crude oil, natural gas and natural gas liquids rose from the year-ago levels in the quarter under review.

Overall Realized Prices

Overall average realized price per barrel of oil equivalent was recorded at $14.55 compared with $39.50 in second-quarter 2019. Notably, average realized oil prices during the quarter were recorded at $21 per barrel, down from $54.81 a year ago. The price of natural gas liquids was $7.69 a barrel, down from the year-ago quarter’s $18.33.

Cost & Expenses

Total expenses in the quarter under review amounted to $27.6 million versus $22.6 million in the prior-year quarter. On a per barrel of oil equivalent (BOE) basis, total operating expenses were recorded at $2.02 versus $3.16 in the year-ago quarter.

Balance Sheet

As of Jun 30, 2020, the partnership’s cash and cash equivalents were recorded at $9.7 million. It reported net long-term debt of $630.5 million, representing a debt-to-capitalization ratio of 0.24.

Guidance

The partnership has issued its daily average oil equivalent production guidance at 24.5-26.5 thousand barrels of oil equivalent per day (MBoE/D) for the third and fourth quarter of 2020. For 2020, the partnership has narrowed the average production guidance to 25.3-26.3 MBoE/D.

Zacks Rank & Stocks to Consider

The partnership currently has a Zacks Rank #3 (Hold). Meanwhile, a few better-ranked players in the energy space include Concho Resources Inc. CXO, Cimarex Energy Co XEC and EOG Resources, Inc. EOG, each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Concho is likely to see earnings growth of 21.6% in 2020.

Cimarex Energy’ 2020 bottom-line estimates have moved up over the past 30 days.

EOG Resources’ 2020 bottom-line estimates have risen more than 200% over the past 30 days.

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EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
Concho Resources Inc. (CXO) : Free Stock Analysis Report
 
Cimarex Energy Co (XEC) : Free Stock Analysis Report
 
Viper Energy Partners LP (VNOM) : Free Stock Analysis Report
 
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Zacks Investment Research