Latest news with #KaesVan'tHof
Yahoo
4 days ago
- Business
- Yahoo
Viper Energy to Buy Sitio Royalties Corp in $4.1B Deal
This article was first published on Rigzone here Viper Energy Inc and Sitio Royalties Corp announced in a joint statement 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 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 joint statement noted. The statement highlighted that the deal was unanimously approved by the board of directors of each company and pointed out that it has been approved by the written consent of Diamondback as Viper's majority stockholder. Stockholders holding an aggregate of approximately 48 percent of Sitio's outstanding voting power, including Kimmeridge, its largest stockholder, have agreed to vote in favor of the transaction, the statement noted. The transaction is subject to customary regulatory approvals and is expected to close in the third quarter of 2025, the statement said. In a section highlighting the 'strategic rationale' for the deal, the joint statement outlined that it 'adds substantial scale and inventory depth that will support pro forma Viper's durable production profile and free cash flow growth over the next decade'. The statement also outlined that it offers 'meaningful financial accretion and higher cash returns', 'significant synergies', and 'lowers pro forma Viper's base dividend breakeven by approximately $2 per barrel'. Kaes Van't Hof, Chief Executive Officer of Viper, said in the joint statement, 'the combination of Viper and Sitio signifies an important moment for mineral and royalty interests'. 'This combination creates a leader in size, scale, float, liquidity and access to investment grade capital in the highly fragmented minerals industry. Pro forma Viper is now clearly a must-own public mineral and royalty company in North America, with attractive size and scale in the Permian Basin,' Van't Hof added. 'This transaction positions Viper to compete for capital with mid and large cap North American E&Ps except with higher margins, minimal operating costs, and the lowest dividend breakeven in the space,' Van't Hof continued. 'While this transaction will reduce Diamondback's ownership in pro forma Viper to 41 percent, it does not reduce the significance of the relationship between Diamondback and Viper,' Van't Hof said in the statement. 'The Diamondback drillbit remains Viper's biggest competitive advantage and the most visible source of long-term production growth at Viper. Mineral interests offer the highest form of security and upside in the oil field, and any and all benefits an operator manages to unlock accrues directly to the mineral holder without any capital risk, forever,' Van't Hof went on to note. Sitio CEO Chris Conoscenti said in the statement, 'we are excited to announce the combination of two leading minerals companies with a shared strategic vision of integrating the highest quality assets to create a truly differentiated investment opportunity for shareholders'. 'This transaction provides Sitio's shareholders with exposure to an entity with significantly greater size, future development visibility, and all of the benefits of the economies of scale unique to the minerals business - higher margins, lower cost of capital, strong positioning for future M&A opportunities, and the ability to return more capital to shareholders,' he added. 'I want to thank all of the Sitio team members, whose innovation and relentless pursuit of continuous improvement made building Sitio such an amazing and rewarding experience,' he continued. Noam Lockshin, Chairman of the Sitio Board of Directors, said in the statement, 'this transaction is the next logical step in Sitio's evolution'. Take control of your THOUSANDS of Oil & Gas jobs on Search Now >> 'By adding Sitio's coverage of the Delaware Basin to Viper's position in the Midland Basin, the combined company will be well positioned in the Permian for years to come,' Lockshin added. Analyst Take While corporate mergers are a staple of oil and gas operators, they have been rare in the more sedate minerals space, Andrew Dittmar, principal analyst at Enverus Intelligence Research (EIR), said in a statement sent to Rigzone commenting on the Viper-Sitio deal. 'Now, for just the second time Enverus has tracked, two publicly traded minerals companies are combing with Viper Energy Partners buying Sitio Royalties for $4.1 billion inclusive of net debt,' Dittmar highlighted in the statement. 'The only other significant mineral public company merger tracked by Enverus also involved Sitio when it acquired Brigham Minerals for $1.9 billion in 2022. Deal activity, while active in the space, is usually confined to smaller bolt-on transactions and consolidation of individual interests,' he added. 'Viper, which is affiliated with upstream operator Diamondback Energy, has turned to an unusually active spree of deals to create a public mineral company with differentiated scale compared to peers,' he continued. 'Inclusive of the Sitio merger and a major dropdown from Diamondback, Viper has now spent over $8 billion on acquisitions in 2025 or more than the cumulative value of all disclosed mineral M&A in 2023 and 2024,' Dittmar noted. 'Since the start of 2023, Viper has accounted for 70 percent of publicly disclosed mineral M&A, taking on the job of consolidating and bringing to public markets at an investible scale the fragmented space,' he went on to state. Despite the attractive yields and low capital requirement of the mineral space, the small size and market capitalization of these somewhat niche companies likely limited their appeal to the broader investment community, Dittmar said in the statement. 'Viper already had a leading scale among pure mineral companies with a market capitalization over $12 billion, but adding Sitio still helps boost the company's public float given the substantial ownership by Diamondback, sitting at 41 percent pro forma for the Sitio acquisition,' he added. 'Viper will have a pro-forma market capitalization of around $15 billion, trailing just Texas Pacific Land, which has a mixed royalty and surface ownership business, and about five times the scale of the next largest company, Blackstone Minerals. Its market capitalization will sit between operators Coterra and Permian Resources,' Dittmar noted. Besides its scale, Viper is differentiated by the quality of its asset base with a concentration in the Permian Basin, Dittmar said in the statement, describing the Permian as 'by a significant margin the largest and most economic U.S. shale play'. 'The company was previously focused on the Midland Basin and particularly on interests operated by Diamondback,' Dittmar highlighted in the statement. 'This deal materially increases its exposure to the Delaware Basin. That does drop Viper's weighting towards Diamondback and the unique insight into development plans that offers but given the quality of Delaware inventory investors are likely to take that in stride,' he added. 'Furthermore, ExxonMobil accounts for almost half of third-party operated production including third-party Midland volumes, per Viper, giving investors further confidence in these assets,' he continued. Besides the increased Permian exposure, Sitio brings to the table royalty interests in the DJ, Eagle Ford, and Williston Basin, Dittmar noted. 'That is something Viper could look to sell once the deal closes to return to its status as a Permian pure play,' Dittmar highlighted in the statement. 'That should be straight forward to accomplish as there is a ready and active market for minerals including significant interest from private capital,' he added. To contact the author, email More From The Leading Energy Platform: USA Crude Oil Inventories Drop 4.3 Million Barrels Week on Week Bilfinger Picked by Cadent to Upgrade UK Gas Distribution Network BP Enters Into Series of Azerbaijan Deals Equinor, Centrica Sign $27 Billion Gas Sales Deal >> Find the latest oil and gas jobs on << Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Viper Energy to acquire Sitio Royalties for $4.1bn
Diamondback Energy's subsidiary Viper Energy has agreed to acquire Sitio Royalties in an all-equity transaction valued at around $4.1bn. The deal includes Sitio's net debt of approximately $1.1bn as of 31 March 2025. Sitio is a pure-play mineral and royalty company engaged in the acquisition of high quality oil and gas mineral and royalty interests in productive US basins. As of 31 March 2025, Sitio has accumulated around 34,300 net royalty acres via the consummation of more than 200 acquisitions. Viper owns, acquires and exploits oil and natural gas properties in North America, with a focus on owning and acquiring mineral and royalty interests in oil-weighted basins, primarily the Permian Basin. The boards of both companies have unanimously approved the transaction, and Diamondback, as Viper's majority stockholder, has also given written consent. Post-acquisition, Diamondback is expected to own around 41% of pro forma Viper's outstanding common stock and will continue to drive meaningful long-term oil production growth from the company's acreage. The transaction is anticipated to close in the third quarter of 2025 (Q3 2025), subject to customary regulatory approvals. Viper chief executive officer Kaes Van't Hof said: 'The combination of Viper and Sitio signifies an important moment for mineral and royalty interests. This combination creates a leader in size, scale, float, liquidity and access to investment grade capital in the highly fragmented minerals industry. Pro forma Viper is now clearly a must-own public mineral and royalty company in North America, with attractive size and scale in the Permian Basin. 'This transaction positions Viper to compete for capital with mid and large cap North American E&Ps [exploration and production companies]; except with higher margins, minimal operating costs and the lowest dividend breakeven in the space.' In conjunction with the acquisition news, Viper announced a 10% increase to its base dividend, which now stands at $1.32 per share annually, or $0.33 per share quarterly. "Viper Energy to acquire Sitio Royalties for $4.1bn" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Yahoo
6 days ago
- Business
- Yahoo
Diamondback's Viper Energy buys Sitio Royalties for $4.1 billion in merger of the top two minerals players
Viper Energy will acquire Sitio Royalties for $4.1 billion in an all-stock deal combining the two biggest minerals and royalties players in the oil and gas sector. The June 3 industry shakeup further consolidates both the booming, but maturing Permian Basin in West Texas and the niche minerals and royalties space in which companies own the rights to fossil fuels beneath the surface, but do not drill or operate the wells. Viper is the publicly traded minerals subsidiary of Midland, Texas-based Diamondback Energy (ranked 383 in the Fortune 500), which continues to rapidly expand as the largest Permian oil and gas producer focused only on the West Texas region. 'The combination of Viper and Sitio signifies an important moment for mineral and royalty interests,' said Diamondback and Viper CEO Kaes Van't Hof in a prepared statement. 'This combination creates a leader in size, scale, float, liquidity, and access to investment-grade capital in the highly fragmented minerals industry.' The deal allows the expanded Viper the scale to compete for capital even with large-cap exploration and production players that own and operate their own oil and gas wells, Van't Hof added. The deal is the biggest in the minerals sector since Sitio first emerged as a power player in 2022 through its $4.8 billion combination with Brigham Minerals. The $4.1 billion equity deal, including $1.1 billion in debt assumption, represents an almost 15% premium on Sitio's stock value, which rose by 12% in early trading June 3. The deal is expected to close in the third quarter. Viper's stock largely held flat in early trading with a market cap of about $11.5 billion, while Diamondback rose 1% to a value of more than $40 billion. Diamondback's ascent continues after its nearly $4.1 billion acquisition of Double Eagle assets on April 1—a seemingly popular acquisition price for Diamondback—and its much larger $26 billion deal for Endeavor Energy Resources last year. Earlier this year, Sitio CEO Chris Conoscenti told this reporter that he saw 2025 as a growth opportunity through acquisitions. However, in the publicly traded energy space, a company is always for sale when the offer is right. In the booming Permian, which produces roughly 40% of the nation's crude oil and much of the natural gas, propane, butane, and ethane as well, Viper is more strongly positioned in the Permian's eastern Midland Basin, while Sitio is bigger in the western Delaware Basin that extends into southeastern New Mexico. 'This transaction is the next logical step in Sitio's evolution,' said Sitio chairman Noam Lockshin in a statement. 'By adding Sitio's coverage of the Delaware Basin to Viper's position in the Midland Basin, the combined company will be well positioned in the Permian for years to come.' The deal expands Viper's minerals footprint in the Permian by about 25,300 net royalty acres to a total of 85,700 net acres, about 43% of which are operated by the parent Diamondback, according to Viper. The net royalty acreage represents the geographic scale and value of Viper's ownership position of the unrecovered oil and gas still underground. The merger also expanded Viper beyond the Permian a bit with 9,000 net royalty acres in other oil and gas basins in or near South Texas, Colorado, and North Dakota. 'We are still focused on the Permian, and will hold the other basins for now—but eventually might sell them if prices improve,' Van't Hof told Fortune about the non-core assets being acquired. Diamondback is expected to own roughly 41% of Viper's outstanding shares after the deal, down from a majority ownership today. 'While this transaction will reduce Diamondback's ownership in pro forma Viper,' Van't Hof stated, 'it does not reduce the significance of the relationship between Diamondback and Viper. The Diamondback drill bit remains Viper's biggest competitive advantage and the most visible source of long-term production growth at Viper. 'Mineral interests offer the highest form of security and upside in the oil field, and any and all benefits an operator manages to unlock accrues directly to the mineral holder without any capital risk, forever,' he added. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-03-2025
- Business
- Yahoo
SNEAK PEEK: DiamondBack Energy's vision for 2025
MIDLAND, Texas (KMID/KPEJ) – Check out our exclusive sneak peek of ABC Big 2's Chris Talley's one-on-one interview with DiamondBack Energy's President and CFO, Kaes Van't Hof as he talks about the company's future plans of growth in 2025. Catch the full-length interview in an all-new Powering the Permian on March 26. Hear Van't Hof speak about recent mergers and acquisitions of other local West Texas oil and gas companies and DiamondBack's nearly 2 decades of growth. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Reuters
20-02-2025
- Business
- Reuters
Diamondback Energy CEO Stice to step down, insider Van't Hof to take helm
Feb 20 (Reuters) - Diamondback Energy said on Thursday CEO Travis D. Stice intends to step down from his role as of the company's 2025 annual meeting of stockholders. Kaes Van't Hof, current president of the company, will succeed Stice as the head of the company and will join the board of directors, Diamondback said. Effective on Thursday, Jere Thompson, current executive vice president of strategy and corporate development, will assume the role of chief financial officer. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here.
