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-eps-surprise-chart | Viper Energy Partners LP Quote
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%.
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.
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.
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.
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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