GlobeNewswire Inc | Nov 2, 2020 04:01PM EST

November 02, 2020

MIDLAND, Texas, Nov. 02, 2020 (GLOBE NEWSWIRE) -- Viper Energy Partners LP (NASDAQ:VNOM) (Viper or the Company), a subsidiary of Diamondback Energy, Inc. (NASDAQ:FANG) (Diamondback), today announced financial and operating results for the third quarter ended September30, 2020.

THIRD QUARTER HIGHLIGHTS

-- Q3 2020 consolidated net income (including non-controlling interest) of $16.2 million; adjusted net income (as defined and reconciled below) of $7.1 million -- Consolidated Adjusted EBITDA (as defined and reconciled below) of $40.4 million and cash available for distribution to Vipers common limited partner units (as reconciled below) of $13.9 million -- Previously announced Q3 2020 average production of 15,829 bo/d (26,409 boe/d), an increase of 10% from Q2 2020 average daily oil production and 16% year over year -- Q3 2020 cash distribution of $0.10 per common unit, representing approximately 50% of cash available for distribution; $0.21 per unit of cash available for distribution implies a 12.0% annualized distributable cash flow yield based on the October 30, 2020 unit closing price of $7.01 -- Ended the third quarter with net debt of $599.1 million; total debt down $67.1 million since March 31, 2020, or a 10% reduction over the past six months -- 108 total gross (4.7 net 100% royalty interest) horizontal wells turned to production on Vipers acreage during Q3 2020 with an average lateral length of 10,022 feet -- Initiating average daily production guidance for Q4 2020 and Q1 2021 of 15,250 to 16,250 bo/d (25,500 to 27,000 boe/d) -- Narrowing full year 2020 average production guidance to 15,750 to 16,000 bo/d (26,000 to 26,500 boe/d) -- As of October 14, 2020, there were approximately 486 gross horizontal wells in the process of active development on Vipers acreage, in which Viper expects to own an average 1.4% net royalty interest (6.6 net 100% royalty interest wells) -- Approximately 431 gross (11.2 net 100% royalty interest) line-of-sight wells that are not currently in the process of active development, but for which Viper has visibility to the potential of future development in coming quarters, based on Diamondbacks current completion schedule and third party operators permits -- Q2 2020 and Q3 2020 distributions reasonably estimated to not constitute dividends for U.S. federal income tax purposes; instead should generally constitute non-taxable reductions to the tax basis

Vipers 10% increase in oil production during the third quarter of 2020 was driven primarily by 38 of Diamondbacks 41 completions in the quarter having a roughly 10% average royalty interest net to Viper, as third-party activity remained minimal, again showcasing the differentiated relationship between Diamondback and Viper. With production already within the high end of our previously guided range, we are confident we will exit 2020 with a strong production rate, positioning Viper well to deliver robust free cash flow in 2021, stated Travis Stice, Chief Executive Officer of Vipers General Partner.

Mr. Stice continued, The advantaged nature of the royalty business model with no required capital expenditures and only minimal operating expenditures, further enhanced by Vipers best-in-class cost structure, has been highlighted during this severe industry downturn as Viper has been able to reduce total debt by 10% in just the past six months. As a direct result of this, and because of our confidence in the expected free cash flow to be generated in our forward outlook, the Board has elected to increase our distribution for the third quarter to 50% of our total cash available for distribution, up from 25% previously. With a currently anticipated forward free cash flow yield of greater than 15%, due primarily to Diamondbacks expected development plan and benefiting from punitive hedges rolling off in 2021, we look forward to continuing to increase our return of capital to unitholders over the coming quarters.

FINANCIAL UPDATE

Vipers third quarter 2020 average unhedged realized prices were $36.80 per barrel of oil, $1.07 per Mcf of natural gas and $12.44 per barrel of natural gas liquids, resulting in a total equivalent realized price of $25.76/boe.

During the third quarter of 2020, the Company recorded total operating income of $62.9 million and consolidated net income (including non-controlling interest) of $16.2 million.

As of September30, 2020, the Company had a cash balance of $7.4 million and $453.5 million available under its revolving credit facility. During the third quarter of 2020, the Company repurchased $6.0 million of the outstanding principal of its 5.375% Senior Notes due 2027 (the Notes) at a 1.5% discount to par value. Additionally, during the third quarter, Viper repaid $27.0 million in outstanding borrowings under its revolving credit facility, resulting in total debt reduction of $33.0 million. Since the end of the first quarter of 2020, Viper has now reduced total debt by $67.1 million, or a 10% reduction over this time period.

In connection with its Fall redetermination, expected to close in November 2020, Vipers lead bank has recommended maintaining the borrowing base at $580.0 million. As a result, Viper is expected to maintain its elected commitment at $580.0 million.

THIRD QUARTER 2020 CASH DISTRIBUTION

The Board of Directors of Vipers General Partner declared a cash distribution for the three months ended September 30, 2020 of $0.10 per common unit. The distribution is payable on November 19, 2020 to eligible common unitholders of record at the close of business on November 12, 2020. This distribution represents approximately 50% of total cash available for distribution.

On August 20, 2020, Viper made a cash distribution to its unitholders and subsequently has reasonably estimated that such distribution, as well as the distribution payable on November 19, 2020, should not constitute dividends for U.S. federal income tax purposes. Rather, these distributions should generally constitute non-taxable reductions to the tax basis of each distribution recipients ownership interest in Viper. The Form 8937 containing additional information may be found on www.viperenergy.com under the Investor Relations section of the site.

OPERATIONS AND ACQUISITIONS UPDATE

During the third quarter 2020, there was a resumption of completion activity on our mineral and royalty acreage as commodity prices improved from historic lows witnessed during the second quarter of 2020. As a result, during the third quarter, Viper estimates that 108 gross (4.7 net 100% royalty interest) horizontal wells with an average royalty interest of 4.3% were turned to production on its existing acreage position with an average lateral length of 10,022 feet. Of these 108 gross wells, Diamondback is the operator of 38 with an average royalty interest of 9.9%, and the remaining 70 gross wells, with an average royalty interest of 1.3%, are operated by third parties.

During the third quarter of 2020, Viper did not complete any acquisitions. However, during the third quarter, the Company sold 18 net royalty acres in the Permian Basin for an aggregate of approximately $2.1 million, subject to post-closing adjustments. As a result of the divestitures, Vipers footprint of mineral and royalty interests as of September 30, 2020 was 24,696 net royalty acres.

The following table summarizes Vipers gross well information as of October 14, 2020:

As of October 14, 2020 Diamondback Third Operated Party Total OperatedHorizontal wells turned to production: Gross wells 38 70 108Net 100% royalty interest wells 3.8 0.9 4.7Average percent net royalty interest 9.9% 1.3% 4.3% Horizontal producing well count: Gross wells 1,121 3,427 4,548Net 100% royalty interest wells 88.2 52.6 140.8Average percent net royalty interest 7.9% 1.5% 3.1% Horizontal active development well count: Gross wells 71 415 486Net 100% royalty interest wells 3.5 3.1 6.6Average percent net royalty interest 5.0% 0.7% 1.4% Line of sight wells: Gross wells 110 321 431Net 100% royalty interest wells 7.4 3.9 11.2Average percent net royalty interest 6.7% 1.2% 2.6%

Despite the continued depressed commodity price environment, there continues to be active development across Vipers asset base, however, near-term activity is expected to be driven primarily by Diamondback operations. The 486 gross wells currently in the process of active development are those wells that have been spud and are expected to be turned to production within approximately the next six to eight months. The 431 line-of-sight wells are those that are not currently in the process of active development, but for which Viper has reason to believe that they will be turned to production within approximately the next 15 to 18 months. The expected timing of these line-of-sight wells is based primarily on permitting by third party operators or Diamondbacks current expected completion schedule. Existing permits or active development of our royalty acreage does not ensure that those wells will be turned to production given the current depressed oil prices.

GUIDANCE UPDATE

Below is Vipers revised guidance for the full year 2020, as well as average production guidance for Q4 2020 and Q1 2021.

Viper Energy Partners Q4 2020 / Q1 2021 Net Production - MBo/d 15.25 - 16.25Q4 2020 / Q1 2021 Net Production - MBoe/d 25.50 - 27.00Full Year 2020 Net Production - MBo/d 15.75 - 16.00Full Year 2020 Net Production - MBoe/d 26.00 - 26.50 Unit costs ($/boe) Depletion $9.50 - $11.00Cash G&A $0.60 - $0.80Non-Cash Unit-Based Compensation $0.10 - $0.25Interest Expense^(1) $3.25 - $3.50 Production and Ad Valorem Taxes (% of Revenue)^(2) 7% - 8%

(1) Assumes actual interest expense through Q3 2020 plus expected interest expense for Q4 2020 assuming $480mm in principal of Sr. Notes and $125mm drawn on the revolver.(2) Includes production taxes of 4.6% for crude oil and 7.5% for natural gas and NGLs and ad valorem taxes.

CONFERENCE CALL

Viper will host a conference call and webcast for investors and analysts to discuss its results for the third quarter of 2020 on Tuesday, November 3, 2020 at 10:00 a.m. CT. Participants should call (844) 400-1537 (United States/Canada) or (703) 326-5198 (International) and use the confirmation code 3361815. A telephonic replay will be available from 1:00 p.m. CT on Tuesday, November 3, 2020 through Tuesday, November 10, 2020 at 1:00 p.m. CT. To access the replay, call (855) 859-2056 (United States/Canada) or (404) 537-3406 (International) and enter confirmation code 3361815. A live broadcast of the earnings conference call will also be available via the internet at www.viperenergy.com under the Investor Relations section of the site. A replay will also be available on the website following the call.

About Viper Energy Partners LP

Viper is a limited partnership formed by Diamondback to own, acquire and exploit 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 and the Eagle Ford Shale. For more information, please visit www.viperenergy.com.

About Diamondback Energy, Inc.

Diamondback is an independent oil and natural gas company headquartered in Midland, Texas focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. For more information, please visit www.diamondbackenergy.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the federal securities laws. All statements, other than historical facts, that address activities that Viper assumes, plans, expects, believes, intends or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on managements current beliefs, based on currently available information, as to the outcome and timing of future events, including specifically the statements regarding the current adverse industry and macroeconomic conditions, depressed commodity prices, production levels on properties in which Viper has mineral and royalty interests, any potential regulatory action that may impose production limits on Vipers royalty acreage, the acquisitions or dispositions, Diamondbacks plans for the acreage discussed above, development activity by other operators, Vipers cash distribution policy and the impact of the ongoing COVID-19 pandemic. These forward-looking statements involve certain risks and uncertainties that could cause the results to differ materially from those expected by the management of Viper. Information concerning these risks and other factors can be found in Vipers filings with the Securities and Exchange Commission, including its Forms 10-K, 10-Q and 8-K, which can be obtained free of charge on the Securities and Exchange Commissions web site at http://www.sec.gov. Viper undertakes no obligation to update or revise any forward-looking statement.

Viper Energy Partners LPConsolidated Balance Sheets(unaudited, in thousands, except unit amounts) September 30, December 31, 2020 2019Assets Current assets: Cash and cash equivalents $ 7,374 $ 3,602 Royalty income receivable (net of allowance for 32,108 58,089 credit losses)Royalty income receivable?related party 14,911 10,576 Other current assets 371 397 Total current assets 54,764 72,664 Property: Oil and natural gas interests, full cost methodof accounting ($1,452,248 and $1,551,767 excluded 2,930,869 2,868,459 from depletion at September30, 2020 and December31, 2019, respectively)Land 5,688 5,688 Accumulated depletion and impairment (398,678 ) (326,474 )Property, net 2,537,879 2,547,673 Deferred tax asset (net of allowance) ? 142,466 Other assets 8,057 22,823 Total assets $ 2,600,700 $ 2,785,626 Liabilities and Unitholders? Equity Current liabilities: Accounts payable $ 95 $ ? Accounts payable?related party ? 150 Accrued liabilities 20,831 13,282 Derivative instruments 23,263 ? Total current liabilities 44,189 13,432 Long-term debt, net 597,880 586,774 Derivative instruments 5,487 ? Total liabilities 647,556 600,206 Commitments and contingencies Unitholders? equity: General partner 829 889 Common units (67,850,632 units issued andoutstanding as of September30, 2020 and 725,625 929,116 67,805,707 units issued and outstanding as ofDecember 31, 2019)Class B units (90,709,946 units issued andoutstanding September30, 2020 and December 31, 1,055 1,130 2019)Total Viper Energy Partners LP unitholders? 727,509 931,135 equityNon-controlling interest 1,225,635 1,254,285 Total equity 1,953,144 2,185,420 Total liabilities and unitholders? equity $ 2,600,700 $ 2,785,626

Viper Energy Partners LPConsolidated Statements of Operations(unaudited, in thousands, except per unit data) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Operating income: Royalty income $ 62,584 $ 71,080 $ 171,857 $ 201,950 Lease bonus income 40 698 1,685 3,607 Other operating income 318 10 761 15 Total operating income 62,942 71,788 174,303 205,572 Costs and expenses: Production and ad valorem 5,049 4,731 14,306 12,812 taxesDepletion 24,780 18,697 72,204 51,408 General and administrative 1,811 1,805 6,160 5,223 expensesTotal costs and expenses 31,640 25,233 92,670 69,443 Income from operations 31,302 46,555 81,633 136,129 Other income (expense): Interest expense, net (8,238 ) (3,827 ) (24,870 ) (11,089 )Gain (loss) on derivative (5,084 ) ? (47,469 ) ? instruments, netGain (loss) on revaluation (1,984 ) 336 (8,661 ) 3,978 of investmentOther income, net 188 553 1,111 1,756 Total other expense, net (15,118 ) (2,938 ) (79,889 ) (5,355 )Income (loss) before 16,184 43,617 1,744 130,774 income taxesProvision for (benefit ? (7,480 ) 142,466 (41,908 )from) income taxesNet income (loss) 16,184 51,097 (140,722 ) 172,682 Net income (loss)attributable to 16,948 43,151 23,963 128,692 non-controlling interestNet income (loss)attributable to Viper $ (764 ) $ 7,946 $ (164,685 ) $ 43,990 Energy Partners LP Net income (loss)attributable to common limited partner units:Basic $ (0.01 ) $ 0.13 $ (2.43 ) $ 0.73 Diluted $ (0.01 ) $ 0.13 $ (2.43 ) $ 0.73 Weighted average number ofcommon limited partner units outstanding:Basic 67,847 62,645 67,832 60,267 Diluted 67,847 62,678 67,832 60,296

Viper Energy Partners LPConsolidated Statements of Cash Flows(unaudited, in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Cash flows from operating activities:Net income (loss) $ 16,184 $ 51,097 $ (140,722 ) $ 172,682 Adjustments to reconcilenet income (loss) to net cash provided by operatingactivities:Provision for (benefit ? (7,541 ) 142,466 (42,077 )from) income taxesDepletion 24,780 18,697 72,204 51,408 (Gain) loss on derivative 5,084 ? 47,469 ? instruments, netNet cash payments on (16,164 ) ? (18,718 ) ? derivatives(Gain) loss on 20 ? 6 ? extinguishment of debt(Gain) loss on revaluation 1,984 (336 ) 8,661 (3,978 )of investmentAmortization of debt 578 235 1,730 676 issuance costsNon-cash unit-based 275 449 945 1,326 compensationChanges in operating assets and liabilities:Royalty income receivable 10 3,531 25,981 (4,465 )Royalty income (13,994 ) (4,995 ) (4,335 ) (10,544 )receivable?related partyAccounts payable and 8,476 1,417 7,644 (821 )accrued liabilitiesAccounts payable?related ? ? (150 ) ? partyIncome tax payable ? 61 ? 169 Other current assets 110 (107 ) 25 (148 )Net cash provided by (used 27,343 62,508 143,206 164,228 in) operating activitiesCash flows from investing activities:Acquisitions of oil and 764 (194,465 ) (64,508 ) (319,696 )natural gas interestsFunds held in escrow ? 5,715 ? (7,500 )Proceeds from sale of 2,098 ? 2,098 ? assetsProceeds from the sale of 5,262 ? 5,262 ? investmentsNet cash provided by (used 8,124 (188,750 ) (57,148 ) (327,196 )in) investing activitiesCash flows from financing activities:Proceeds from borrowings 3,000 197,000 95,000 368,000 under credit facilityRepayment on credit (30,000 ) ? (65,000 ) (369,500 )facilityDebt issuance costs (46 ) (91 ) (90 ) (349 )Repayment of senior notes (5,910 ) ? (19,697 ) ? Proceeds from public ? ? ? 340,860 offeringsPublic offering costs ? ? ? (221 )Units purchased for tax (1 ) ? (384 ) (353 )withholdingDistributions to General (20 ) (20 ) (60 ) (60 )PartnerDistributions to public (2,015 ) (29,099 ) (38,943 ) (78,590 )Distributions to (2,764 ) (34,400 ) (53,112 ) (99,543 )DiamondbackNet cash provided by (used (37,756 ) 133,390 (82,286 ) 160,244 in) financing activitiesNet increase (decrease) in (2,289 ) 7,148 3,772 (2,724 )cashCash and cash equivalents 9,663 12,804 3,602 22,676 at beginning of periodCash and cash equivalents $ 7,374 $ 19,952 $ 7,374 $ 19,952 at end of period Supplemental disclosure of cash flow information:Interest paid $ 1,278 $ 8,500 $ 19,196 $ 10,882

Viper Energy Partners LPSelected Operating Data(unaudited) Three Three Months Three Months Months Ended Ended Ended September June 30, 2020 September 30, 2020 30, 2019Production Data: Oil (MBbls) 1,456 1,315 1,258 Natural gas (MMcf) 3,111 2,685 1,710 Natural gas liquids (MBbls) 455 467 413 Combined volumes (MBOE)^(1) 2,430 2,230 1,956 Average daily oil volumes (BO/d)^ 15,829 14,453 13,674 (2)Average daily combined volumes (BOE 26,409 24,508 21,266 /d)^(2) Average sales prices^(2): Oil ($/Bbl) $ 36.80 $ 21.00 $ 51.53 Natural gas ($/Mcf) $ 1.07 $ 0.46 $ 1.28 Natural gas liquids ($/Bbl) $ 12.44 $ 7.69 $ 9.84 Combined ($/BOE)^(3) $ 25.76 $ 14.55 $ 36.33 Oil, hedged ($/Bbl)^(4) $ 27.65 $ 22.39 $ 51.53 Natural gas, hedged ($/Mcf)^(4) $ 0.16 $ (1.01 ) $ 1.28 Natural gas liquids ($/Bbl)^(4) $ 12.44 $ 7.69 $ 9.84 Combined price, hedged ($/BOE)^(4) $ 19.11 $ 13.60 $ 36.33 Average Costs ($/BOE): Production and ad valorem taxes $ 2.08 $ 1.39 $ 2.42 General and administrative - cash 0.63 0.63 0.69 component^(5)Total operating expense - cash $ 2.71 $ 2.02 $ 3.11 General and administrative - $ 0.11 $ 0.13 $ 0.23 non-cash stock compensation expenseInterest expense, net $ 3.39 $ 3.44 $ 1.96 Depletion $ 10.20 $ 10.21 $ 9.56

(1) Bbl equivalents are calculated using a conversion rate of six Mcf per one Bbl.(2) Average daily volumes and average sales prices presented are based on actual production volumes and not calculated utilizing the rounded production volumes presented in the table above.(3) Realized price net of all deducts for gathering, transportation and processing.(4) Hedged prices reflect the effect of our matured commodity derivative transactions on our average sales prices. Our calculation of such effects includes realized gains and losses on cash settlements for commodity derivatives, which we do not designate for hedge accounting. We did not have any derivative contracts prior to February of 2020.(5) Excludes non-cash stock compensation for the respective periods presented.

NON-GAAP FINANCIAL MEASURES

Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Viper defines Adjusted EBITDA as net income (loss) plus interest expense, net, non-cash unit-based compensation expense, depletion, (gain) loss on revaluation of investments, non-cash (gain) loss on derivative instruments, (gain) loss on extinguishment of debt and provision for (benefit from) income taxes, if any. Adjusted EBITDA is not a measure of net income as determined by United States generally accepted accounting principles (GAAP). Management believes Adjusted EBITDA is useful because it allows them to more effectively evaluate Vipers operating performance and compare the results of its operations from period to period without regard to its financing methods or capital structure. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income, royalty income, cash flow from operating activities or any other measure of financial performance or liquidity presented as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a companys financial performance, such as a companys cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Viper defines cash available for distribution generally as an amount equal to its Adjusted EBITDA for the applicable quarter less cash needed for income taxes payable, debt service, contractual obligations, fixed charges and reserves for future operating or capital needs that the board of directors of Vipers general partner may deem appropriate, common units repurchased for tax withholding, dividend equivalent rights and preferred distributions. Vipers computations of Adjusted EBITDA and cash available for distribution may not be comparable to other similarly titled measures of other companies or to such measure in its credit facility or any of its other contracts.

The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA and cash available for distribution to the GAAP financial measure of net loss.

Viper Energy Partners LP(unaudited, in thousands, except per unit data) Three Months Ended September 30, 2020Net income (loss) $ 16,184 Interest expense, net 8,238 Non-cash unit-based compensation expense 275 Depletion 24,780 (Gain) loss on revaluation of investment 1,984 Non-cash (gain) loss on derivative instruments (11,080 )(Gain) loss on extinguishment of debt 20 Consolidated Adjusted EBITDA 40,401 Less: Adjusted EBITDA attributable to non-controlling interest^ 23,113 (1)Adjusted EBITDA attributable to Viper Energy Partners LP $ 17,288 Adjustments to reconcile Adjusted EBITDA to cash available for distribution:Debt service, contractual obligations, fixed charges and $ (3,297 )reservesUnits repurchased for tax withholding (1 )Units - dividend equivalent rights (2 )Preferred distributions (45 )Cash available for distribution to Viper Energy Partners LP $ 13,943 unitholders Common limited partner units outstanding 67,851 Cash available for distribution per limited partner unit $ 0.21 Cash per unit approved for distribution $ 0.10

(1) Does not take into account special income allocation consideration.

Adjusted net income (loss) is a non-GAAP financial measure equal to net income (loss) attributable to Viper adjusted for non-cash (gain) loss on derivative instruments, (gain) loss on revaluation of investments, (gain) loss on extinguishment of debt, valuation for deferred tax asset and related income tax adjustments, if any. The Companys computation of adjusted net income may not be comparable to other similarly titled measures of other companies or to such measure in our credit facility or any of our other contracts.

The following table presents a reconciliation of adjusted net income (loss) to net income (loss):

Viper Energy Partners LPAdjusted Net Income (Loss)(unaudited, in thousands, except per unit data) Three Months Ended September 30, 2020Net income (loss) $ 16,184 Non-cash (gain) loss on derivative instruments, net (11,080 )(Gain) loss on revaluation of investments 1,984 (Gain) loss on extinguishment of debt 20 Adjusted net income (loss) 7,108 Less: Adjusted net income (loss) attributed to 7,317 non-controlling interestsAdjusted net income (loss) attributable to Viper $ (209 )Energy Partners LP Adjusted net income (loss) attributable to limited $ (0.003 )partners per common unit

RECONCILIATION OF LONG-TERM DEBT TO NET DEBT

The Partnership defines net debt as debt less cash equivalents. Net debt should not be considered an alternative to, or more meaningful than, total debt, the most directly comparable GAAP measure. Management uses net debt to determine the Partnership's outstanding debt obligations that would not be readily satisfied by its cash and cash equivalents on hand. The Partnership believes this metric is useful to analysts and investors in determining the Partnership's leverage position because the Partnership has the ability to, and may decide to, use a portion of its cash and cash equivalents to reduce debt.

Net Q3 September Principal June 30, March 31, December 31, September 30, 2020 Borrowings/ 2020 2020 2019 30, 2019 (Repayments) (in thousands)Totallong-term $ 606,438 $ (33,000 ) $ 639,438 $ 673,500 $ 596,500 $ 409,500 debt^(1)Cash andcash (7,374 ) (9,663 ) (40,271 ) (3,602 ) (19,952 )equivalentsNet debt $ 599,064 $ 629,775 $ 633,229 $ 592,898 $ 389,548

(1) Excludes debt issuance, discounts & premiums.

Derivatives

As of the filing date, the Company had the following outstanding derivative contracts. The Companys derivative contracts are based upon reported settlement prices on commodity exchanges, with crude oil derivative settlements based on New York Mercantile Exchange West Texas Intermediate pricing and Crude Oil Brent and with natural gas derivative settlements based on the New York Mercantile Exchange Henry Hub pricing. When aggregating multiple contracts, the weighted average contract price is disclosed.

Crude Oil (Bbls/day, $/Bbl) Q4 2020 FY 2021Swaps - WTI (Cushing) 1,000 ? $ 27.45 $ ? Collars - WTI (Cushing) 14,000 10,000 Floor Price $ 28.86 $ 30.00 Ceiling Price $ 32.33 $ 43.05 Deferred Premium Call Options - WTI (Cushing) 8,000 ? Premium $ (1.89 ) $ ? Strike Price ($/Bbl) $ 45.00 $ ? Basis Swaps - WTI (Midland-Cushing) 4,000 ? $ (2.60 ) $ ?

Natural Gas (Mmbtu/day, $/Mmbtu) Q4 2020 FY 2021Natural Gas Basis Swaps - Waha Hub 25,000 ? $ (2.07 ) $ ?

Investor Contacts:Adam Lawlis+1 432.221.7467alawlis@viperenergy.com

Austen Gilfillian+1 432.221.7420agilfillian@viperenergy.com

Source: Viper Energy Partners LP; Diamondback Energy, Inc.