stockrowWhat it does
Viper Energy owns and acquires mineral and royalty interests in oil and natural gas properties, primarily in the Permian Basin of West Texas. Rather than operating most wells itself, it receives a share of the production revenue from properties where other companies drill and produce. Its interests cover oil, natural gas and natural gas liquids.
Substantially all of Viper’s properties are leased to working-interest owners, which bear the costs of operating and developing them. Viper’s share of production depends on lease terms that vary by property. Most of its interests are perpetual, although some overriding royalty interests may expire.
At December 31, 2025, the company had interests underlying approximately 96,003 net royalty acres and 43,355 gross productive wells. Diamondback Energy operated approximately 35% of Viper’s net royalty acreage at that date. Diamondback is also a major owner of Viper and provides its management and administrative services.
Viper operates in one reportable segment. Kaes Van’t Hof is its chief executive officer. The company seeks to grow both through development of its existing acreage by operators and by acquiring additional mineral and royalty interests.
How it makes money
Viper earns royalty income when oil, natural gas and natural gas liquids are produced and sold from properties in which it owns interests. Income depends on the volumes sold and the average prices received. The royalty terms differ by property, and Viper’s interests give it a share of production rather than ownership of the entire output of a well.
For the year ended December 31, 2025, royalty income was $1.3 billion. Oil income was $1.1 billion, representing 84.0% of revenue in FY2025. Viper also earned income from natural gas liquids and natural gas.
Producing wells can generate continuing royalty receipts, but those receipts change with production and commodity prices. Viper expects production from its mineral interests to increase as Diamondback and other operators drill and complete wells on its acreage. It does not have to fund those drilling and completion costs.
Prices are primarily determined by market conditions rather than set by Viper. Economic activity, trade policies, regional conflicts and weather can affect those conditions. Viper uses commodity derivatives to manage exposure to price changes; hedged prices reflect cash settlements on matured contracts.
In 2025, royalty income increased $492 million from 2024. Higher production added income, while lower average prices for oil and natural gas liquids partly offset that increase. Acquisitions and new wells contributed to production growth.
| Product or service | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| Oil income | $1.1 billion | 84.0% | 50.8% |
| Natural gas liquids income | $159.0 million | 11.8% | 78.7% |
| Natural gas income | $56.0 million | 4.16% | 273.3% |
Customers and how it sells
Viper’s revenue is concentrated among companies associated with production from its interests. Diamondback Energy was a customer, and ExxonMobil Corporation accounted for 14.0% of revenue in FY2025. Diamondback is also an operator on Viper acreage, a shareholder and a provider of services to Viper.
The company’s properties are primarily in the Midland and Delaware basins of the Permian Basin in Texas. At December 31, 2025, its assets included approximately 4,462,119 gross royalty acres and 96,003 net royalty acres. Gross acreage describes the full acreage underlying interests Viper owns; net royalty acreage reflects its share after lease royalties and other burdens.
Viper owned interests outside the Permian at year-end, including acreage acquired with Sitio Royalties. On February 9, 2026, it divested all of its non-Permian assets, including properties in the Denver-Julesburg, Eagle Ford and Williston basins. The sale generated approximately $617 million in net cash proceeds, subject to post-closing adjustments.
Viper receives income through its interests in properties operated by others. Its share of production varies with the royalty terms on each property.
Suppliers and costs
Viper does not manufacture a product or generally fund the operation of the wells underlying its royalty interests. Working-interest owners bear operating and development costs, and Viper’s interests do not require it to fund drilling, completion or lease operating expenses.
Diamondback supplies management, operating and administrative services under a services and secondment agreement, including the services of executive officers and other employees. Neither Viper nor its operating company has employees. Diamondback and other operators make development decisions and carry out work on the underlying acreage.
Acquiring mineral and royalty interests is a use of cash for Viper. Its other uses include debt repayments, dividends, distributions and repurchases. The company has funded its activities with operating cash flow, equity and debt offerings, borrowings and proceeds from sales of non-core assets.
The operators’ costs and access to equipment, supplies and personnel can affect development. Seasonal conditions can increase competition for these resources, causing shortages, higher costs or operational delays.
- Revenue$1.4B
- Selling, general and administrative−$129.0M
- Other operating costs−$1.4B
- Operating income−$140.0M
Competitive position
Viper competes to acquire mineral, royalty and related interests in oil and natural gas properties. Other companies may have greater financial or human resources and may be able to pay more for properties or evaluate and bid for more opportunities. Viper does not name individual competitors.
The company seeks acquisitions from Diamondback and unaffiliated third parties. Viper believes its access to Diamondback’s management talent and industry relationships helps it pursue third-party opportunities. Diamondback is not obligated to offer properties or acquisition opportunities to Viper and may pursue transactions on its own.
Our reading: The royalty structure is a cost advantage because Viper can receive production income without funding drilling, completion or lease operating expenses; it does not eliminate competition to acquire the underlying interests.
Our reading: Diamondback’s relationships and operating activity provide a potential sourcing advantage, but its freedom to withhold opportunities limits how exclusive that advantage is.
Viper also competes indirectly with other energy sources because demand for oil and natural gas can change with their prices and availability. Alternatives include electricity, coal, fuel oils and nuclear energy.
Growth opportunities
Viper expects growth from operators drilling and completing wells on its existing acreage. It also intends to acquire mineral and other interests from Diamondback and unaffiliated sellers, and to sell non-core interests and redeploy the proceeds into its areas of focus.
In August 2025, Viper acquired Sitio Royalties in an all-equity transaction valued at approximately $4.0 billion, including customary transaction costs, post-closing adjustments and the partial retirement of Sitio’s net debt. The acquired interests included approximately 25,300 net royalty acres in the Permian Basin. Viper subsequently sold its non-Permian assets in February 2026.
In May 2025, Viper acquired interests representing approximately 24,446 net royalty acres in the Permian Basin from a Diamondback subsidiary. Viper attributed part of its 2025 production growth to that transaction and the Sitio acquisition, with the remainder primarily from new wells and other acquisitions.
The company estimates 2026 production of approximately 120 MBOE/d to 132 MBOE/d. The timing of future wells depends partly on third-party permitting and Diamondback’s completion schedule; permits or active development do not ensure that wells will begin producing. Viper also intends to manage debt and use derivatives to help manage commodity-price exposure.
- $504.9MFY2021
- $866.5MFY2022
- $828.0MFY2023
- $861.0MFY2024
- $1.4BFY2025
Structural risks
- Commodity prices: Volatility in oil and natural gas prices has adversely affected Viper and may affect its revenue, cash flow, profitability, growth and production. Lower prices can also lead to impairments of proved interests and reduce proved reserves.
- Operator dependence: Production growth depends on Diamondback and other operators developing Viper’s acreage. Drilling schedules can be affected by prices, permits, seasonal conditions and access to equipment and personnel.
- Diamondback relationship: Diamondback controls Viper, and their interests may conflict. Diamondback can acquire properties or retain interests without offering Viper an opportunity to participate.
- Acquisitions and estimates: Acquisitions can bring integration difficulties, unknown liabilities and inaccurate assumptions about reserves, production, prices or costs. Reserve estimates themselves require judgment about underground accumulations and future conditions.
- Debt and capital: Viper’s indebtedness could restrict its business flexibility and ability to service debt. Adverse capital-market conditions could make funding more costly or unavailable.
- Regulation and property rights: Environmental rules, restrictions on water disposal or hydraulic fracturing, and title defects can raise operators’ costs, delay development or adversely affect Viper’s production and cash available for dividends.
Leadership
Diamondback controls Viper and, at December 31, 2025, beneficially owned Class B shares representing approximately 42.1% of Viper’s voting power on a fully diluted basis. Diamondback provides Viper’s executive officers and other personnel under a services and secondment agreement.
| Name | Role | Since | Total pay, FY2025 |
|---|---|---|---|
| Travis D. Stice | Former Chief Executive Officer | — | $68,880.00 |
| Kaes Van’t Hof | Chief Executive Officer | — | $1.8 million |
| Teresa L. Dick Executive | Vice President, Chief Financial Officer and Assistant Secretary | — | $365,133.00 |
| Al Barkmann Executive | Vice President and Chief Engineer | — | $365,133.00 |
| Austen Gilfillian | President | — | $2.5 million |
| Matt Zmigrosky | Former Executive Vice President, General Counsel and Secretary | — | $584,214.00 |
Bottom line
Our reading
Viper is a royalty owner whose income depends on production and commodity prices, without the obligation to fund drilling and completion on its interests. Its relationship with Diamondback supplies personnel, operating activity and potential acquisition opportunities, but also creates dependence on a controlling shareholder whose interests can differ from Viper’s. Future growth rests on operators developing the acreage and on Viper finding and funding acquisitions.