8-K: Viper Energy Addresses Stockholder Lawsuits with Supplemental Disclosures Amid Endeavor Energy Acquisition

Viper Energy supplements its proxy statement to address stockholder lawsuits challenging disclosures related to the pending acquisition of Endeavor Energy Resources, aiming to avoid delays and costs.

Summary

• Viper Energy is supplementing its proxy statement related to the proposed acquisition of Endeavor Energy Resources due to demand letters and lawsuits from purported stockholders.
• The lawsuits allege material omissions in the proxy statement.
• To avoid delays, costs, and distraction, Viper is providing supplemental disclosures without admitting any wrongdoing or the necessity of the disclosures.
• The supplemental disclosures include additional details regarding the background of the Drop Down, specifically the engagement of Hunton Andrews Kurth LLP, and further information on the financial analyses conducted by Evercore.
• Evercore's financial analyses include net asset value analysis, discounted cash flow analysis, selected publicly traded companies analysis, equity research analysts price targets, and Endeavor Mineral and Royalty Interests standalone analyses.
• The company believes the original disclosures comply with applicable law and exchange rules.
• A special meeting of Viper's stockholders will be held on May 1, 2025, to vote on matters necessary to complete the Pending Drop Down.

Sentiment

Score: 4

Explanation: The sentiment is neutral to slightly negative due to the legal challenges and the need for supplemental disclosures, although the company is taking proactive steps to address the issues.

Positives

• Viper Energy is proactively addressing stockholder concerns to mitigate potential disruptions to the Endeavor Energy Resources acquisition.
• The company is providing additional transparency through supplemental disclosures.
• Viper believes the original disclosures comply with applicable law and exchange rules.

Negatives

• Viper Energy is facing legal challenges from stockholders, indicating potential dissatisfaction with the proposed acquisition or its disclosures.
• The need for supplemental disclosures suggests possible deficiencies or areas of concern in the original proxy statement.
• The lawsuits and demand letters could potentially delay or complicate the acquisition process.

Risks

• The Pending Drop Down may not be completed on anticipated terms and timing or at all, including obtaining the requisite stockholder approvals for the Pending Drop Down.
• There are uncertainties as to whether the Pending Drop Down, if consummated, will achieve the anticipated benefits within the expected time periods or at all.
• The company faces risks described in Item 1A of Viper's Annual Report on Form 10-K, filed with the SEC on February 26, 2025, subsequent Forms 10-Q and 8-K and other filings Viper makes with the SEC, which can be obtained free of charge on the SEC's website at and Viper's website at as well as those risks that will be more fully described in the Proxy Statement.

Future Outlook

The company's future outlook is tied to the completion of the Pending Drop Down and achieving the anticipated benefits, as well as Vipers operating and financial expectations following such acquisition, including existing and future production on the mineral and royalty acreage subject to the Pending Drop Down and Diamondbacks plans with respect to such Diamondback-operated acreage.

Management Comments

• Viper believes that the disclosures set forth in the Proxy Statement comply fully with applicable law and exchange rules, that no further disclosure beyond that already contained in the Proxy Statement is required under applicable law or exchange rules and that the allegations asserted in the Demand Letters and the Complaints are entirely without merit.

Industry Context

The document references several comparable companies in the oil and gas mineral and royalty sector, including Black Stone Minerals, Freehold Royalties, Kimbell Royalty, PrairieSky Royalty, and Sitio Royalties, providing context for Viper Energy's valuation and performance within the industry.

Comparison to Industry Standards

• The document compares Viper Energy to selected publicly traded companies like Black Stone Minerals, Freehold Royalties, Kimbell Royalty, PrairieSky Royalty and Sitio Royalties based on metrics like TEV/EBITDAX and Price/CFPS.
• The median TEV/EBITDAX (2025E) for the benchmark selected companies is 8.3x, while the median TEV/EBITDAX (2026E) is 8.0x.
• The median Price/CFPS (2025E) for the benchmark selected companies is 8.4x, while the median Price/CFPS (2026E) is 7.9x.
• The document also references selected precedent transactions involving oil and gas mineral and royalty assets or companies with operations focused in the Permian Basin with transaction values equal to or greater than $150 million announced since January 1, 2019.
• These transactions are analyzed based on metrics like TEV / LQA EBITDAX, TEV / NTM EBITDAX, and TEV / NRA (8/8ths).

Legal Proceedings

• Viper Energy is facing three demand letters and three complaints from purported stockholders alleging material omissions in the proxy statement related to the Endeavor Energy Resources acquisition.
• The Complaints are captioned as Garfield vs. Viper Energy, Inc . Case No. 25000481CA (Fla. 20th Cir. Ct. Apr 14, 2025), Thomas v. Viper Energy, Inc . et. al. Case No. 652281/2025 (Sup. Ct. New York Cnty. 2025), and Miller v. Viper Energy, Inc. et. al . Case No. 652286/2025 (Sup. Ct. New York Cnty. 2025).

Stakeholder Impact

• The lawsuits and supplemental disclosures could impact shareholders by potentially delaying or altering the terms of the Endeavor Energy Resources acquisition.
• The outcome of the acquisition could affect the company's financial performance and stock price.

Next Steps

• Viper will hold a special meeting of stockholders on May 1, 2025, to vote on matters related to the Pending Drop Down.
• The company will continue to address the demand letters and lawsuits from stockholders.
• Viper will monitor for any additional demand letters or complaints.

Key Dates

Keywords

Viper Energy, Endeavor Energy Resources, acquisition, proxy statement, stockholder lawsuits, supplemental disclosures, merger, VNOM, Diamondback Energy, oil and gas